Mirriad losses narrow as it works to bring down cash burn

In-content advertising specialist Mirriad reported first-half revenue of £0.59m on Tuesday, making for a modest increase from the prior year's £0.58m.

The AIM-traded firm said that growth was achieved despite significant market challenges in the US.

Additionally, due to the cyclical tendencies of major advertising markets coupled with the sales pipeline, Mirriad said it expected more robust revenue numbers for the second half. May saw gross proceeds from a placing and open offer of £6.3m, netting £5.7m for the company.

Mirriad said it also undertook a restructuring initiative, recognising a change cost of £0.19m.

With that programme, Mirriad said it was poised to trim its net cash burn by nearly 35%, decreasing from £1.1m for the year to June 2023, to an estimated £0.7m monthly for the 12 months leading to June 2024.

Significantly, Mirriad made the decision to end its operations in China by the end of the first quarter of 2023.

As at 30 June, the company had a cash balance of £9.8m, down from £17.7m the previous year, but notably it remained debt-free.

That financial position was projected to sustain the company until the end of August next year.

Despite seeing a marginal uptick in cash consumption to £7m from £6.7m year-on-year, the firm reduced its operating loss to £7.5m for the period, from the £8.5m it recorded in the first six months of 2022.

Additionally, the loss per share now stood at 2p, compared to 3p in the first half last year.

“Our growing momentum with the biggest entertainment companies in the US and Europe shows Mirriad is now leading the in-content advertising category and that the overall market environment is turning in our direction because of the pressing need for new revenue streams,” said chief executive officer Stephan Beringer.

“Our collaboration with Microsoft, which we announced in May 2023, has accelerated the development of our platform as an enterprise level solution that is ready for programmatically sold inventory - a key building block for tier one partnerships and prerequisite for the increased scale we've been working towards.

“On the demand side, the company is focusing on a key account strategy for advertisers.”

Beringer explained that, even before enabling programmatic trading, the company already worked with nine of the top 20 US advertisers, which account for more than $10bn in total combined annual advertising spend.

“We are also pleased to see an increase in repeat bookings in the first half from large customers in the automotive, retail, FMCG, food and beverage, healthcare and financial services industries.

“We are now moving from market building to growth phase, which we expect to kick in with programmatic revenues in 2024.

“This will move the company from its current manual sales process to an automated sales process, facilitating scale.”

So far in 2023, Stephan Beringer said Mirriad had seen improvements across the majority of its key performance indicators, despite continuing advertising market headwinds in the US and the fact that it was its first year without meaningful revenue from China.

“We expect materially higher revenues in the second half based on the seasonality of the advertising business.

“The recent cost-cutting measures required some difficult decisions but, following a successful equity fundraise and the strong focus on platform, programmatic and partnerships, we are confident the business is now on a strong footing moving into the second half and beyond.”

At 1151 BST, shares in Mirriad Advertising were down 5.48% at 1.28p.

Reporting by Josh White for Sharecast.com.