TIDMBIRD
RNS Number : 8806K
Blackbird PLC
27 April 2020
27 April 2020
Blackbird plc
(the "Company")
Audited full year results for the year ended 31 December
2019
Blackbird (AIM: BIRD), the developer and seller of the
market-leading cloud video editing platform, Blackbird , announces
its audited full year results for the year ended 31 December
2019.
Ian McDonough, CEO of Blackbird, commented:
"The overriding theme for the Company in 2019 was upwards
momentum. The Company made very good progress against its renewed
strategy and the focus on sports and news led to the Company
booking record revenues for the period. By the end of 2019, our
deferred revenue and contracted order book had trebled when
compared to 31 December 2018.
"During the year Blackbird clearly demonstrated and communicated
that it can be a market-leading product for blue-chip global
Enterprises. In 2020 I look forward to building on these
direct-sale wins and accelerating growth by striking deals with
Original Equipment Manufacturers ("OEMs") where Blackbird will be
sold as an integral part of a larger end-to-end media solution.
This will mean that well-established OEM companies and their
requisite sales teams will be selling Blackbird to a larger volume
of global customers.
"The successful equity fundraise in November 2019 means the
Company is well capitalised for multiple years and gives us the
chance to build market share as more businesses that create video
move to flexible and remote working.
"Finally, during these challenging times with COVID-19, I am
delighted and excited that Blackbird has quickly enabled both
existing and new customers to have their staff working safely and
remotely editing video even at low or variable bandwidths - all
while our own teams are distributed and working remotely
themselves."
Operational highlights (post period end)
-- Expansion of A + E Networks deal, doubling volume edited through Blackbird
o Showing, once again, Blackbird's ability to 'land and expand'
within large organisations
-- Deals signed with Arsenal F.C. and Liverpool F.C. for content
creation and enabling remote working for their editors
o Reaffirming the Company's strategic focus on the Sports
market
-- Partnership announced with Zixi, the award-winning architect
of the Software-Defined Video Platform
o Integral part of the Company's OEM strategy
-- Expansion of TownNews deal, bringing the total to 49 stations across the US
-- 2020 secured revenue* at 31 March 2020 already matches 2019 revenue
-- Contracted but unrecognised revenue of GBP2,045k* at 31 March
2020. GBP757k of this balance is to be recognised in 2020 (included
in 2020 secured revenue), GBP598k in 2021, GBP345k in 2022 and
GBP345k in 2023 and beyond
-- The Company to showcase ultra-efficient video editing with
Zixi, Amazon Web Services and Google at virtual customer events
(replacing the cancelled NAB)
-- Prototype of Blackbird built in Public Cloud to be launched
at virtual customer events
o Demonstrating Blackbird's ability to offer even larger
scalable cloud-based solutions
-- SOC2 Type 1 security accreditation obtained
o Building further trust with existing and new customers
particularly in the US
*Unaudited and subject to exchange rate fluctuations
Operational highlights (during the year)
-- Trebling of deferred revenue and contracted order book compared to 31 December 2018
-- Significant multi-year deal signed in November with a global
news organisation built on the customer's AWS infrastructure
-- Multi-year deal signed with A+E Networks in June to provide
solutions across multiple workflows
-- Long term tender won in September for video production with
U.S. Department of State
-- Eleven Sports chose Blackbird for rapid editing and
publishing of sports content for the next two years
-- Expansion and three-year extension of deal with IMG Media, a
leading global producer and distributor of sports media
-- Extension of contracts with leading media rights companies
Deltatre, MSG Networks and Gfinity
-- Blackbird selected by global fitness technology leader
Peloton to edit its daily virtual spin classes across all four
global studios
-- Two-year contract signed with Australia's National Rugby
League, for live video clipping and publishing
-- Successful equity fundraise generating GBP5,238k to
strengthen the Balance Sheet and help the Company execute its
strategy
-- Implementation of Blackbird Productions Partnership Program
("BP3") with 24 post-production houses signed up to date
-- Achieved Microsoft Azure Co-Sell Partner status
-- Improved Blackbird platform with JavaScript web-based
editing/clipping and enhanced social media publishing
-- Company name change to Blackbird plc
-- Board strengthened with appointment of Andrew Bentley as
Chairman, Dawn Airey as Non-Executive Director and Stephen White as
Chief Operating and Financial Officer. Former Chairman, David Main
remains as a Non-Executive Director
Financial highlights
-- Record revenues of GBP1,078k for the 12 months to 31 December
2019, up 24% year-on-year (12
months to 31 December 2018: GBP870k)
-- Trebling of North American revenues to GBP469k (12 months to
31 December 2018: GBP158k)
-- Contracted but unrecognised revenue increased by 232% to
GBP1,881k from GBP566k at 31 December 2018. GBP797k of the 2019
year-end balance is to be recognised in 2020, GBP462k in 2021,
GBP304k in 2022 and GBP318k in 2023 and beyond.
-- Operating costs of GBP2,689k (12 months to 31 December 2018: GBP2,739k)
-- Net loss after tax GBP2,129k (12 months to 31 December 2018: GBP2,575k)
-- At 31 December 2019 the Company had cash of GBP7,965k (2018: GBP5,032k) and no debt
Enquiries:
Blackbird plc Tel: +44 (0)20 8879
7245
Ian McDonough, Chief Executive Officer
Stephen White, Chief Operating and Financial
Officer
Allenby Capital Limited (Nominated Adviser Tel: +44 (0)20 3328
and Broker) 5656
Nick Naylor
Nicholas Chambers
About Blackbird plc
Blackbird plc operates in the fast-growing SaaS and cloud video
market. It has created Blackbird, the world's most advanced suite
of cloud-native computing applications for video, all underpinned
by its lightning-fast codec. Blackbird plc's patented technology
allows for frame accurate navigation, playback, viewing and editing
in the cloud. Blackbird underpins multiple applications, which are
used by rights holders, broadcasters, sports and news video
specialists, esports, live events and content owners,
post-production houses, other mass market digital video channels
and corporations.
Since it is cloud-native, Blackbird removes the need for costly,
high end workstations and can be used from almost anywhere on
almost any device. It also allows full visibility on multi-location
digital content, improves time to market for live content such as
video clips and highlights for social media distribution, and
ultimately results in much more effective monetisation.
Blackbird(R) is a registered trademark of Blackbird plc.
Websites
www.blackbird.video
Social media
www.linkedin.com/company/blackbird-cloud
www.twitter.com/blackbirdcloud
www.facebook.com/blackbirdplc
Chief Executive Officer's Statement
Even during these uncertain times with the Coronavirus outbreak,
I am very happy that as we look back on 2019 and forward to 2020 we
have much to be proud about and even more to be excited about.
With a 24% increase in revenues we have for the first time
broken through the million pounds level with a total for the year
of GBP1,077,643 (2018: GBP870,310). In 2019 some of the world's
most prestigious and high-profile entities including the US
Government and A+E Networks chose Blackbird to improve or even
replace workflows provided by long established and much larger
competitors.
North America has been a focus of our strategy since I joined
the Company and this year happily saw almost a trebling in business
there. Revenues are up 197% to GBP468,714 and now make up almost
half of total revenues in the year. This is up from just 18% of
revenues last year.
The highlights of a transformational year in the US start with
expansion of our TownNews business from 20 local news stations at
the end of 2018 to the impressive 49 we have today. TownNews have
deployed Blackbird in every single video customer they have and
continue to be a very satisfied with the Blackbird workflow. We
will continually seek to expand our services with them. As a
result, our news business has leapt a massive 285% to
GBP233,547.
We also closed a three-year deal with A+E Networks which at the
time was our largest single deal. This deal was a step change for
the business not only in scale and length but also in the
associated improvements we made to our company and product in terms
of security that have made us so much fitter and stronger to make
inroads into this US media sector. A+E use us for many different
workflows including live clipping to social, where we replaced
SnappyTV for assembling Live PD - the most watched TV programme on
US TV - and adding value to their enormous archive, where we are
enhancing traditional on-premise workflows.
That was followed by us winning another long-term contract with
the US State Department in a publicly contested tender, beating
other established industry players. The Office of Global Affairs
will use Blackbird to turn all of their fast-turnaround news, news
conferences and events to social and OTT - and there has been an
eventful news cycle for them.
We capped off the year by closing a very exciting long-term deal
with a global provider of financial news based in New York. Working
through this deal has again driven Blackbird to new standards of
speed and functionality. Our ability to integrate seamlessly with
AWS (Amazon Web Services) public cloud is increasingly a factor in
larger deals.
A significant change I have brought to the business is moving
from annual or project deals to multiyear or long-term deals. The
fact that our customers have been happy to agree to this
demonstrates a great deal of faith in Blackbird and our ability to
stay ahead of our competition over a sustained period. It has also
meant our contracted but unrecognised revenue is at its highest
level ever - up by 232% to GBP1,881,133 since this time last
year.
Outlook
While 2019 was a fantastic year for demonstrating the attraction
of Blackbird to large scale global customers, the true scale
opportunity for our world leading software will be our OEM
opportunity - the 'Blackbird inside' model. In April 2020, we
announced a partnership with Zixi, the award-winning architect of
the Software-Defined Video Platform, and industry leader for live
broadcast-quality video over any IP network. The global public
clouds have positioned us in this area and we are also in
discussions with some other large global infrastructure companies
who are very interested to wholesale Blackbird for themselves for
strategic reasons.
These strategic reasons are built around the following two
tenets.
1. Firstly, Blackbird allows end users to work with their
original high-quality content in situ, without the need to upload
or download as happens with traditional on-premise systems. This
means infrastructure companies can retain this high-quality content
within their eco-system and generate further monetisation.
2. Secondly, we provide the leading climate friendly solution.
The fact that high resolution content does not need to be uploaded,
downloaded or transported in order to be edited means no heavy-duty
bandwidth is required; and because end users can work remotely
without bespoke hardware, they can reduce travel, so we help to
make them energy efficient. Overall, we are an incredibly green
technology - and this contributes to the customers' sustainability
credentials. This is something that the team are working on in more
detail now but will undoubtedly be a factor that grows in
importance in the coming years for partners and customers
alike.
Finally, in these challenging times with the COVID-19 outbreak,
I am delighted that Blackbird has assisted both existing and new
customers to have their staff working safely and remotely editing
video even at low or variable bandwidths. In the last month, we
have been able to aid A+E Networks in enabling their New York based
editors to safely work from home. This has resulted in a doubling
of capacity and increased revenue from A+E Networks in 2020.
Additionally, we have also signed new deals with Arsenal helping
their team work collaboratively and remotely from multiple
locations and turning around high-quality content quickly and cost
effectively and with Liverpool F.C. to access their centrally
stored file-based archives from any browser or laptop and to
continue to engage their global fanbase.
Ian McDonough
Chief Executive Officer
Chairman's Statement
2019 was an eventful year for the Company as sales momentum
behind our growth strategy started to yield results. Even more
exciting than the 24% year on year revenue growth was ending the
year with contracted but unrecognised revenue up 232% compared to
31 December 2018. This demonstrates our growth momentum. Targeted
sales and marketing efforts, focusing on the real competitive
advantages of the Blackbird platform, delivered important contract
wins from several major broadcasters. Most notably, one of the
world's foremost financial news organisations transitioned to the
Blackbird platform on a significant multi-year deal. Other notable
deals included a major US broadcast network, and the US Department
of State. Each of these important contract wins offers a major
endorsement of the proprietary technology that powers the Blackbird
platform and the credibility of Blackbird's client solutions.
Our strategy is working. We have been strengthening our focus on
News and Sports clients, where our objective is to be a key
component in our end customers technology stacks (via direct B2B
sales) as well as establishing ourselves as a vital component in
the technology stacks of solutions providers (Original Equipment
Manufacturers or OEMs). OEMs provided real leverage to our sales
strategy as they sell our solution as part of their total service.
The net effect of this SaaS business model is a significant growth
in our average deal size and contract length, growth in our average
revenue per client and growth in our repeatable revenue per
client.
The Board believes that our successful and oversubscribed net
equity fundraising of GBP5,217,390 towards the end of last year
will ensure the ongoing growth of the company by providing the
resources to execute against our strategy and to continue to win
meaningful contracts.
Our results for the year show the early outcomes of these
activities. The Company recorded revenues growth of 24% to
GBP1,077,643 (2018: GBP870,310). We also grew the size of our North
American business, which now comprises 43% of our revenues. Our
revenue mix continues to improve and 94% of revenues (2018: 54%)
came from infrastructure (37%) and OEM sales (57%).
Our contracted but unrecognised revenue at the end of the year
was GBP1,881,133 up 232% vs GBP566,104 in 2018. This clearly
demonstrates the improved quality of our business and the strength
and growth potential of our business as we entered 2020.
Finally, we finished the year with a loss for the year of
GBP2,128,638 (2018: loss of GBP2,574,618), in a year where good
progress was made against our strategy.
The Board believes that the Company is now well positioned to
grow and succeed in the large, high-growth, cloud video market. We
have put the core organisation, technology and capabilities in
place and have started to build growth momentum.
Consolidated income statement and consolidated statement of
financial position
In the year ended 31 December 2019, the Company recorded revenue
of GBP1,077,643 (2018: GBP870,310), which represented an increase
of 24% year on year. Deferred revenue increased year on year by 28%
to GBP295,221 from GBP230,361 at 31 December 2018, while contracted
but uninvoiced revenue increased year on year by 472% to
GBP1,585,912 from GBP335,743 as at 31 December 2018.
Operating costs during the year to 31 December 2019 were down 2%
to GBP2,688,821 compared to GBP2,738,515 in the corresponding
period in 2018. This decrease was the result of higher development
costs capitalised to support the platform development partially
offset by an increase in staff costs from strengthening the
management team and higher legal costs to close new deals and
change the company name.
The loss before interest, taxation, depreciation and
amortisation was GBP1,771,822 (2018: GBP1,993,284). The net loss
for the year of GBP2,128,639 compares to a loss of GBP2,574,618 in
2018.
Board changes
In April we welcomed Stephen White to the Board in the newly
created Chief Operating and Financial Officer role. Stephen joined
us from Comcast's NBC Universal where he spent five years in senior
finance roles in their EMEA Networks division. Stephen took over
from Jonathan Lees who has left the Company to pursue other
opportunities and the Board would like to thank Jonathan for his
invaluable service. At the AGM in May, I was delighted to be
appointed Chairman, taking over from David Main. I would like to
thank David, for his valuable contribution as Chairman over the
past three years. David continues to serve on the Board and we
continue to benefit from his vast experience.
In May 2019 the Company welcomed Dawn Airey as a new
Non-Executive Director to the Board. Dawn has extensive experience
in the media and entertainment industry having held senior board
positions in several major broadcasters and content businesses.
Dawn is also an experienced NED in both public and private
companies. Towards the end of the year, the board said goodbye to
Jim Irving, who stepped down from his role as Non-Executive
Director to concentrate on his own business Fanview. The Board
would like to welcome Dawn to the company and to thank Jim for his
years of service.
Blackbird platform development
The core focus of our development efforts is the continuous
improvement of the Blackbird platform to support our infrastructure
and OEM strategy. This focus combines improving performance, adding
new functionality, increasing the ease of adoption and upgrading
the user interface. Integral to this has been the shift of our web
applications to JavaScript. JavaScript allows access and use of
Blackbird products on virtually any device without configuration.
This transition is significant as configuration has been one of the
big obstacles to wider adoption of our services. Rolling out
JavaScript applications is essential for delivering a successful
OEM strategy.
We are committed to maintaining the superiority of our video
production codec including working on the next generation of our
Blackbird codec. Furthermore, we are ensuring that Blackbird can be
integrated with third party functionality such as Artificial
Intelligence ("AI") and data-feeds working with market-leading
specialists in their field.
Current trading and outlook
As noted earlier, we start the year in a strong financial
position, with contracted but unrecognised revenue of GBP1,881,133
at 31 December 2019. GBP797,373 of this balance relates to revenue
to be recognised in 2020, versus a comparative figure of GBP448,488
at 31 December 2018.
During these testing times with the COVID-19 outbreak, I am also
pleased that our platform provides Enterprises with solutions to
work remotely. The expansion of our deal with A+E Networks who will
double the volume edited through the Blackbird platform will both
enable a significant expansion of remote video production
capability, and ensure the overall safety of its editors who will
now be able to work even more effectively, remotely. We have also
secured new deals with Arsenal to assist their team to continue to
produce high-quality output from their team working remotely in
multiple locations and with Liverpool F.C. for remote video editing
and publishing.
Finally, the Board and Management team are confident that with
our excellent team in place, we have the platform and strategy to
grow our business successfully.
Andrew Bentley
Chairman
Consolidated income statement and statements of comprehensive
income for the year ended 31 December 2019
2019 2018
GBP GBP
CONTINUING OPERATIONS
Revenue 1,077,643 870,310
Cost of Sales (161,269) (125,079)
==================================================== ============ ============
GROSS PROFIT 916,374 745,231
Other income 625 -
Operating costs (2,688,821) (2,738,515)
==================================================== ============ ============
EARNINGS BEFORE INTEREST, TAXATION, DEPRECIATION,
AMORTISATION AND EMPLOYEE SHARE OPTION COSTS (1,771,822) (1,993,284)
Depreciation (93,130) (44,432)
Amortisation (267,734) (544,889)
Employee share option costs (46,774) (32,445)
------------ ------------
(407,638) (621,766)
OPERATING LOSS (2,179,460) (2,615,050)
Net Finance income 18,397 15,898
==================================================== ============ ============
LOSS BEFORE INCOME TAX (2,161,063) (2,599,152)
Income tax 32,424 24,534
LOSS FOR THE YEAR (2,128,639) (2,574,618)
Other comprehensive income - -
TOTAL COMPREHENSIVE LOSS FOR THE YEAR (2,128,639) (2,574,618)
Earnings per share expressed in pence per share
Basic - continuing and total operations (0.71p) (1.07p)
Consolidated and company statements of financial position as at
31 December 2019
Group Company
2019 2018 2019 2018
GBP GBP GBP GBP
ASSETS
NON-CURRENT ASSETS
Intangible assets 972,245 748,062 972,245 748,062
Property, plant and
equipment 391,044 32,816 391,044 32,816
Investments - - - 641
------------------------------- ------------- ------------- ------------- -------------
1,363,289 780,878 1,363,289 781,519
CURRENT ASSETS
Trade and other receivables 503,037 301,742 503,037 306,062
Stock 661 - 661 -
Current tax assets 32,424 24,534 32,424 24,534
Cash and bank balances 7,965,491 5,032,087 7,965,491 5,026,622
------------------------------- ------------- ------------- ------------- -------------
8,501,613 5,358,363 8,501,613 5,357,218
------------------------------ ------------- ------------- ------------- -------------
TOTAL ASSETS 9,864,902 6,139,241 9,864,902 6,138,737
=============================== ============= ============= ============= =============
EQUITY AND LIABILITES
CAPITAL AND RESERVES
Issued share capital 2,681,913 2,363,890 2,681,913 2,363,890
Share premium 26,371,502 21,456,572 26,371,502 21,456,572
Capital contribution
reserve 125,000 125,000 125,000 125,000
Retained earnings (20,457,091) (18,375,226) (20,457,091) (18,374,946)
------------------------------- ------------- ------------- ------------- -------------
TOTAL EQUITY 8,721,324 5,570,236 8,721,324 5,570,516
NON-CURRENT LIABILITIES
Lease and other payables 323,134 - 323,134 -
323,135 323,135
CURRENT LIABILITIES
Trade and other payables 820,443 569,005 820,443 568,221
------------------------------- ------------- ------------- ------------- -------------
TOTAL LIABILITIES 1,143,578 569,005 1,143,578 568,221
------------------------------- ------------- ------------- ------------- -------------
TOTAL EQUITY AND LIABILITIES 9,864,902 6,139,241 9,864,902 6,138,737
=============================== ============= ============= ============= =============
Consolidated statement of changes in equity for the year ended
31 December 2019
Issued Retained Share Capital Total
share earnings premium contribution equity
capital reserve
GBP GBP GBP GBP GBP
Balance at 1 January
2018 1,443,890 (15,832,255) 16,935,301 125,000 2,671,936
Changes in equity
Issue of share capital 920,000 - 4,830,000 - 5,750,000
Share issue expenses - - (308,729) - (308,729)
Share based payment - 32,445 - - 32,445
Total comprehensive loss for
the year - (2,575,136) - - (2,575,136)
=============================== ========== ============= =========== ============== ============
Balance at 31 December
2018 2,363,890 (18,374,946) 21,456,572 125,000 5,570,516
Changes in equity
Issue of share capital 318,023 - 5,234,945 - 5,552,968
Share issue expenses - - (320,015) - (320,015)
Share based payment - 46,774 - - 46,774
Total comprehensive loss for
the year - (2,128,919) - - (2,128,919)
=============================== ========== ============= =========== ============== ============
Balance at 31 December
2019 2,681,913 (20,457,091) 26,371,502 125,000 8,721,324
Consolidated and company statements of cash flows for the year
ended 31 December 2019
Group Company
2019 2018 2019 2018
Notes GBP GBP GBP GBP
Cash flows from operating
activities
Cash used in operations A (1,870,521) (1,919,634) (1,865,056) (1,918,863)
Interest paid on lease
liabilities (13,449) - (13,449) -
Tax received 24,534 25,268 24,534 25,268
----------------------------------------- ------------ ------------ ------------ ------------
Net cash from operating
activities (1,859,436) (1,894,366) (1,853,971) (1,893,595)
----------------------------------------- ------------ ------------ ------------ ------------
Cash flows from investing
activities
Payments for intangible
fixed assets (434,167) (254,856) (434,167) (254,856)
Payments for property,
plant and equipment (19,370) (17,498) (19,370) (17,498)
Interest received 30,586 11,036 30,586 11,036
----------------------------------------- ------------ ------------ ------------ ------------
Net cash from investing
activities (422,951) (261,318) (422,951) (261,318)
----------------------------------------- ------------ ------------ ------------ ------------
Cash flows from financing
activities
Share issues (net of expenses) 5,271,478 5,441,271 5,271,478 5,441,271
Payment of lease liabilities (53,250) - (53,250) -
Repayment of finance leases (2,437) (5,849) (2,437) (5,849)
----------------------------------------- ------------ ------------ ------------ ------------
Net cash from financing
activities 5,215,791 5,435,422 5,215,791 5,435,422
----------------------------------------- ------------ ------------ ------------ ------------
Increase in cash and cash
equivalents 2,933,404 3,279,738 2,938,869 3,280,509
Cash and cash equivalents
at beginning of year 5,032,087 1,752,349 5,026,622 1,746,113
----------------------------------------- ------------ ------------ ------------ ------------
Cash and cash equivalents
at end of year 7,965,491 5,032,087 7,965,491 5,026,622
========================================= ============ ============ ============ ============
A. Reconciliation of loss before income tax to cash (used in)/generated from operations
Group Company
2019 2018 2019 2018
GBP GBP GBP GBP
Loss before income tax (2,161,063) (2,599,152) (2,161,342) (2,599,670)
Depreciation 93,130 44,432 93,129 44,432
Amortisation charges 267,734 544,889 267,734 544,889
Employee share option costs 46,774 32,445 46,774 32,445
Finance income (18,397) (15,898) (18,397) (15,898)
-------------------------------- ------------ ------------ ------------ ------------
Earnings before interest,
taxation, depreciation and
amortisation (1,771,822) (1,993,284) (1,772,102) (1,993,802)
-------------------------------- ------------ ------------ ------------ ------------
Movements in working capital:
Decrease in trade and other
receivables (209,845) (75,785) (205,527) (74,452)
Increase in trade and other
payables 111,146 149,435 112,573 149,391
-------------------------------- ------------ ------------ ------------ ------------
Cash (used in)/generated from
operations (1,870,521) (1,919,634) (1,865,056) (1,918,863)
================================ ============ ============ ============ ============
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END
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