LONDON, and SAN FRANCISCO, California, November 14, 2012 /PRNewswire/ --
Reports
record results for first half, revenues up 84% to $82.0m, with adjusted* profits before taxation of
$8.4m
blinkx's interim period conference
call will be webcast live
at http://www.blinkx.com on
14 November, 2012, at 9:30
a.m. GMT/4:30 a.m.
EST/1:30 a.m. PST
blinkx PLC (BLNX.L), the world's largest video search engine,
today reported financial results for the six months ended
30 September 2012.
Financial Highlights
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
$000 $000
Revenues 81,971 44,569
Profit from operations - adjusted* 7,855 4,892
Profit from operations 1,966 1,421
Profit before taxation - adjusted* 8,370 4,953
Profit before taxation 2,481 1,482
Earnings per share Cents Cents
Basic - adjusted* 2.38 1.64
Basic 0.75 0.63
Diluted - adjusted* 2.34 1.60
Diluted 0.74 0.62
*Adjusted for acquisition costs of
$1.4m (2011:$1.9m), exceptional charges of $1.8m and amortization of purchased intangibles
of $2.6m (2011: $1.6m)
Business Highlights
- Revenues increased by 84% to $82.0m, from $44.6m
in H1 2012
- Adjusted* profit from operations increased by 61% to
$7.9m compared with $4.9m for H1 2012
- Adjusted* profit before tax of $8.4m, compared with $5.0m for H1 2012
- Cash balance was $41.6m up from
$38.4m on 31
March 2012
- Sales and product integrations of Burst and PVMG acquisitions
are ahead of schedule
- Introduced next generation blinkx.com, designed to enhance
video discovery and viewing, optimized for mobile use, with
powerful personalization capabilities and social graph
integration
- Established new distribution agreements with Sony and Popbox in
the Connected TV space
- Secured content partnerships including Kiplinger, Hulu, and Fox
Sports
- Added new brand advertising clients including Google, Asda and
Gillette
Commenting on the period, S. Brian
Mukherjee, CEO of blinkx, said today: "This has been an
exceptional first half for blinkx. The business demonstrated
strong underlying growth, which was accelerated by the
ahead-of-schedule integration of Burst and PVMG. The progress
of this integration enabled us to serve a greater number of high
value ads to a wider audience at robust monetization rates.
During the period, we also benefitted from increased advertising
spend allocated to specific events - the summer Olympics and the US
presidential elections. These one-time events provided us
with a better-than-expected boost to revenues during the
traditionally slower summer months.
We have continued to build on our leadership position in the
online video ecosystem over the past six months, increasing our
audience reach through distribution deals with Sony and Popbox,
while adding premium content partners including Kiplinger, Hulu and
Fox Sports. This compelling combination of top tier
professional content and broad distribution with our patented video
advertising platform attracted new and repeat marquee brand
advertisers, such as Microsoft, Volkswagen and Colgate.
This half, we were also proud to unveil the next generation of
our flagship video search and discovery site, blinkx.com.
With an eye to the flourishing mobile market, the new site
was built from the ground up for use on connected devices, with a
simple, elegant user interface that is optimized for video
discovery and viewing, and offers easy integration with social
networks across desktop, tablet and mobile devices."
Outlook
Commenting on current trading, Mr Mukherjee added: "There are
powerful secular trends driving the growth of video advertising:
the proliferation of broadband and connected devices, and the
accelerating migration and consumption of video online. This
market momentum underscores the vitality of the sector and our
business model. Overall trading remains in line with the
comments made in our trading update of 29
October 2012 and based on our performance this period and
the fundamentals of the sector, we remain confident in our outlook
for the rest of the year."
Customer and Business Development
In the first half of our financial year, blinkx's patented video
advertising platform continued to attract global brand advertisers.
With the Internet claiming an increasingly significant
share of ad budgets, leaders from across a breadth of
industries, such as Gillette, Microsoft and Toyota capitalized on
blinkx's unique offering, booking campaigns through top global
agencies, including Carat, Starcom and Neo
Ogilvy.
blinkx also progressed its cross-platform distribution strategy
during the period, striking new deals in the Connected TV space
with Sony and Popbox, and introducing the new blinkx.com, built
using responsive design and optimized for use on mobile
devices.
On the content front, blinkx expanded its roster of premium
media partners, signing content agreements with a diverse array of
industry leaders including Hulu, Kiplinger and Fox Sports, among
others.
Management Changes
On 19 July 2012, blinkx announced
that Suranga Chandratillake, the Founder and Chief Executive
Officer of the Company, was assuming the role of President and
Chief Strategy Officer and would continue to serve as an Executive
Member on its Board. Subhransu ("Brian") Mukherjee, who was the
Chief Operating Officer of blinkx, was appointed CEO of blinkx and
an Executive Member of its Board of Directors effective as of that
date.
blinkx also announces that Jonathan
Spira has announced his intention to step down as Chief
Financial Officer of the Company with effect from 30 November 2012. Mr. Spira has served as
the head of blinkx's global finance team since 2008, and has been
instrumental in building the company into a dynamic and profitable,
$150+m revenue enterprise. The Board extends its gratitude to
Mr. Spira for his contribution to growth of the Group and wishes
him the best.
Edward Reginelli, aged 41,
currently Senior Vice President and Group Controller at blinkx,
will step up to succeed Mr. Spira as Chief Financial Officer and
they have been working together to ensure a smooth transition.
Mr. Reginelli joined blinkx in April
2012. He has over 15 years of experience, managing all
aspects of financial accounting, controls, analysis, operations and
reporting in complex corporate environments. Before joining blinkx,
he was Vice President of Finance and Corporate Controller at Purple
Communications, Inc., a company that specialized in technology
enabled interpreting and telecommunication services. Prior to
this he served as Chief Financial Officer and a Director of Burke
Industries, Inc. and held other senior financial positions at
Compass Aerospace, PPG Industries and Nestle USA.
Mr. Reginelli holds a B.S in Business Administration and
Accounting from John Carroll
University, Ohio and is a
registered Certified Public Accountant.
The Company confirms there is no other information required to
be disclosed pursuant to Schedule 2 paragraph (g) of the AIM
Rules.
Products
In September, blinkx unveiled an open beta of the next
generation of its flagship product, blinkx.com. The new site is
designed to enhance the video discovery and viewing experience for
audiences, with powerful personalization and recommendation
capabilities, and easy integration across users' social graph. It
was built from the ground up for use on mobile devices, with a
simple, elegant user interface that is touch-optimized for easy
navigation. New features of the next-generation blinkx.com
include customized channels, Facebook and Twitter integration and a
unique "Pause and Pick Up" capability, which allows users to start
watching video on one device, hit pause and pick it up again at the
same point on a different device.
During the period, blinkx made significant progress on the
integration of advertising technology and processes from Burst
Media and Prime Visibility Media Group (PVMG). This
integration allows the group to function as a single entity, giving
it access to a broader and more substantial set of products and
solutions for its advertisers, publishers and content partners.
This enables the company to apply its patented Concept
Recognition Engine (CoRE) to both video and non-video assets across
all sources, thereby serving the most relevant ad, at the optimum
time, with the highest monetization rate, to a wider audience.
Financial Highlights
For the six months ended 30 September
2012 (H1 2013), revenues totaled $82.0 million, an increase of 84% over the
$44.6 million in revenues reported
for the 6 months ended 30 September
2011 (H1 2012). Adjusted net profit before acquisition,
exceptional and integration costs and amortisation of purchased
intangibles for H1 2013 was $8.6
million (H1 2012: $5.7
million). Net profit for H1 2013 was $2.7 million (H1 2012: $2.2 million). Earnings per share for H1 2013 was
2.38 cents adjusted basic (H1 2012:
1.64 cents), 0.75 cents basic (H1 2012: 0.63 cents), 2.34 adjusted fully diluted (H1
2012: 1.60 cents) and 0.74 cents fully diluted (H1 2012: 0.62 cents). blinkx's cash balance at
30 September 2012 was $41.6 million (30
September 2011: $52.9
million).
About blinkx PLC
blinkx (London AIM: BLNX) is the world's most comprehensive
video search engine. Today, blinkx has indexed more than 35 million
hours of audio, video, viral and TV content, and made it fully
searchable and available on demand. blinkx's founders set out to
solve a significant challenge - as TV and user-generated content on
the Web explode, keyword-based search technologies only scratch the
surface. blinkx's patented search technologies listen to - and even
see - the Web, helping users enjoy a breadth and accuracy of search
results not available elsewhere. In addition, blinkx powers the
video search for many of the world's most frequented sites. blinkx
is based in San Francisco and
London. More information is
available at http://www.blinkx.com
BLINKX PLC
CONDENSED
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
Results for the
six months to 30 September 2012
(in thousands,
except per share amounts)
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
Note $000 $000
Revenue: continuing operations 81,971 44,569
Cost of revenue 9 (39,903) (18,139)
Gross profit 42,068 26,430
Operating expenses
Research and development (6,726) (4,033)
Sales and marketing 9 (22,814) (15,506)
Administrative expenses (4,673) (1,999)
Profit from operations before acquisition
and exceptional costs* 7,855 4,892
Amortisation of purchased intangibles (2,642) (1,550)
Acquisition and exceptional costs (3,247) (1,921)
Profit from operations 1,966 1,421
Other income 505 -
Net investment revenue 10 61
Profit before taxation 2,481 1,482
Tax 3 235 711
Profit for the period attributable to
equity holders of the parent before
acquisition and exceptional costs* 8,605 5,664
Profit for the period attributable to
equity holders of the parent 2,716 2,193
Earnings per share (cents) Cents Cents
Adjusted basic* 4 2.38 1.64
Basic 4 0.75 0.63
Adjusted diluted* 4 2.34 1.60
Diluted 4 0.74 0.62
*Adjusted for acquisition costs of
$1.4m (2011:$1.9m), exceptional charges of $1.8m and amortization of purchased intangibles
of $2.6m (2011: $1.6m
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
For six months
ended 30 September 2012
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
$000 $000
Profit for the period 2,716 2,193
Exchange difference on translation of foreign operations 301 (1,358)
Total comprehensive income for the period 3,017 835
BLINKX PLC
CONDENSED
CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 30 September 2012
(in thousands)
As at As at
30 September 30 September
2012 2011
(unaudited) (unaudited)
Note $000 $000
ASSETS
Non-current assets
Goodwill 49,080 26,779
Intangible assets 27,654 20,813
Property, plant and equipment 2,014 1,801
Other receivables 250 250
Deferred tax asset 8,498 2,107
87,496 51,750
Current assets
Trade receivables 24,147 19,613
Other receivables 3,515 3,756
Cash and cash equivalents 41,627 52,928
69,289 76,297
Total assets 156,785 128,047
LIABILITIES
Current liabilities
Trade and other payables (25,762) (21,452)
Non-current liabilities
Deferred tax liability (1,732) -
Other payables (453) (263)
(2,185) (263)
Total liabilities (27,947) (21,715)
Net assets 128,838 106,332
Shareholders' equity
Share capital 5 6,845 6,713
Share premium account 5 101,809 87,072
Shares to be issued 6 750 831
Stock compensation reserve 12,880 10,906
Currency translation reserve (7,536) (8,900)
Merger reserve 33,089 33,047
Retained loss (18,999) (23,337)
Total equity 128,838 106,332
BLINKX PLC
CONDENDSED
CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
For the six months
to 30 September 2012
(in thousands)
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
$000 $000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit from operations 1,966 1,421
Adjustments for:
Depreciation and amortization 4,206 2,345
Share based payments 942 494
Other income 505 -
Foreign exchange gains / (losses) 11 (61)
Operating cash flows before movements in working capital 7,630 4,199
Changes in operating assets and liabilities:
Increase in trade and other receivables (1,743) (4,160)
Increase in trade and other payables 375 2,110
Net cash generated by operations 6,262 2,149
Income taxes paid (1,555) -
Net cash generated by operating activities 4,707 2,149
CASH FLOWS FROM INVESTMENT ACTIVITIES
Interest received 10 61
Purchase of property, plant and equipment and intangibles (1,948) (2,288)
Acquisitions, net of cash acquired - 705
Net cash used by investment activities (1,938) (1,522)
CASHFLOWS FROM FINANCING ACTIVITIES
Net payments on finance lease (99) (45)
Proceeds from issuance of shares 261 623
Net cash generated by financing activities 162 578
Net increase in cash and cash equivalents 2,931 1,205
Beginning cash and cash equivalents 38,406 52,809
Effect of foreign exchange on cash and cash equivalents 290 (1,086)
Ending cash and cash equivalents 41,627 52,928
BLINKX PLC
CONDENSED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
For the six months
to 30 September 2012
(in thousands)
Share Shares Stock
Share premium to be compensation
Capital account issued reserve
$000 $000 $000 $000
Balance as at 1 April 2011 6,398 86,443 - 9,968
Issue of shares 315 629 - -
Current period profit - - - -
Exchange differences on translation - - - -
Equity to be issued - acquisition related - - 831 -
Share based payments - - - 938
Balance as at 30 September 2011 6,713 87,072 831 10,906
Share Shares Stock
Share premium to be compensation
Capital account issued reserve
$000 $000 $000 $000
Balance as at 1 April 2012 6,837 101,552 754 11,938
Issue of shares 8 257 (4) -
Current period profit - - - -
Exchange differences on translation - - - -
Share based payments - - - 942
Balance as at 30 September 2012 6,845 101,809 750 12,880
Table continued below…
Currency
Translation Merger Retained
reserve reserve earnings Total
$000 $000 $000 $000
Balance as at 1 April 2011 (7,542) (4,323) (25,530) 65,414
Issue of shares - 37,370 - 38,314
Current period profit - - 2,193 2,193
Exchange differences on translation (1,358) - - (1,358)
Equity to be issued - acquisition related - - - 831
Share based payments - - - 938
Balance as at 30 September 2011 (8,900) 33,047 (23,337) 106,332
Currency
Translation Merger Retained
reserve reserve earnings Total
$000 $000 $000 $000
Balance as at 1 April 2012 (7,837) 33,089 (21,715) 124,618
Issue of shares - - - 261
Current period profit - - 2,716 2,716
Exchange differences on translation 301 - - 301
Share based payments - - - 942
Balance as at 30 September 2012 -7,536 33,089 -18,999 128,838
BLINKX PLC
NOTES TO THE
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of preparation
The condensed interim financial statements have been prepared
using accounting policies and methods of computation consistent
with those used in the audited statutory financial statements for
the year ended 31 March 2012 and
International Financial Reporting Standards ("IFRSs") as adopted
for use in the European Union. While the financial information
included in this interim announcement has been compiled in
accordance with the recognition and measurement principles of
IFRSs, this announcement does not itself contain sufficient
information to comply with IFRSs. These interim financial
statements do not constitute statutory financial statements within
the meaning of section 435 of the Companies Act 2006.
Statutory financial statements for the year ended 31 March 2012 are available on the blinkx plc's
(the "Group's") website http://www.blinkx.com and have been filed
with the Registrar of Companies. The Group's auditor issued a
report on those financial statements that was unqualified, did not
contain a statement under section 498(2) or section 498(3) of the
Companies Act 2006 and did not draw attention to any matters by way
of emphasis.
The information for the six month period ended 30 September 2012 is unaudited, but reflects all
normal adjustments which are, in the opinion of management,
necessary to provide a fair statement of results and the Group's
financial position for and as at the period presented. The results
of operations for the period ended 30
September 2012 are not necessarily indicative of the
operating results for future operating periods.
The directors have considered the financial resources of the
Group and the risks associated with doing business in the current
economic climate and believe the Group is well placed to manage
these risks successfully. The directors have reviewed management's
business plan setting out key business assumptions and considered
it to be reasonable and are satisfied that the Group has adequate
resources to continue in operational existence for the foreseeable
future being a period of no less that 12 months from the date of
signing of this interim report. Accordingly, they continue to adopt
the going concern basis in preparing this interim announcement.
2. Share-based payments
Included within operating expenses are the following amounts in
respect of share based payments:
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
$000 $000
Sales and marketing 566 312
Research and development 247 115
Administrative expenses 129 67
942 494
3. Taxation
Tax for the period is charged at a composite tax rate of -9.4
percent (half year to 30 September
2011: -48.0 percent, year to 31 March
2011 : -101.9 percent), representing the best estimate of
the average annual effective income tax rate expected for the full
year plus the effect of discrete items recognised in the
period.
4. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following information.
Six months to Six months to
30 September 30 September
2012 2011
(unaudited) (unaudited)
$000 $000
Earnings
Adjusted* profit (used in calculation
of basic and diluted loss per share) 8,605 5,664
Profit (used in calculation of basic
and diluted loss per share) 2,716 2,193
Number Number
Number of shares
Weighted average number of shares for
the basic earnings per share 361,728,496 345,815,693
Weighted average number of shares for
the diluted earnings per share 368,280,824 353,518,944
*Adjusted for acquisition costs of
$1.4m (2011:$1.9m), exceptional charges of $1.8m and amortization of purchased intangibles
of $2.6m (2011: $1.6m)
5. Share capital
The issuance of shares in the period relates to the issuance of
1,637 shares to the shareholders of Burst Media Corporation and
481,943 shares on the exercise of employee share options.
6. Shares to be issued
The shares to be issued reserve relates to shares which are
expected to be issued to Burst shareholders, as part of the
consideration, who have not yet submitted the paperwork to effect
the exchange of Burst shares for blinkx shares.
7. Acquisition and exceptional
costs
Acquisition costs of $1.4 million
and exceptional charges of $1.8
million have been separately identified on the face of the
income statement. These charges included post acquisition
remuneration, one time write down of a prepaid distribution charge,
onerous facility, severance and professional services.
8. Acquisition of subsidiaries
On 9 November 2011 the group
acquired 100% of the issued share capital of Prime Visibility Media
Group Inc., an online advertising network and digital advertising
agency headquartered in New York,
USA. The integration of the blinkx video search engine with
PVMG's text search platform will enable the group to tap into a new
audience of intent-driven consumers and deliver TV-style brand
advertising to them.
Fair values of purchased assets and liabilities:
Provisional Adjustment to
FV @ date FV @ Final
of purchase November 2012 Fair Value
$ million $ million $ million
Intangibles 12.6 12.6
Other assets 5.7 5.7
Deferred tax asset 1.7 (0.2) 1.5
Cash 0.7 0.7
Trade & other payables (7.3) (7.3)
Total identifiable assets 13.4 (0.2) 13.2
Goodwill 21.4 0.2 21.6
Total consideration 36.0 * - 36.0 *
*The fair value of the $36.0
million consideration paid comprises of: cash paid of
$31 million; deferred consideration
provisionally determined of $3.8
million; and prepaid post acquisition remuneration of
$1.2 million.
The $0.2 million adjustment to
fair values relates to a deferred tax asset valuation
adjustment.
The measurement period relating to the PVMG acquisition is now
completed so no further purchase adjustments will be posted to the
fair values.
9. Standardisation of expense
classifications on integration
As part of the process of integrating those companies acquired
in fiscal year 2012, the company has been aligning its accounting
policies to ensure consistent expense classifications across the
expanded Group. Whilst this exercise has been concluded for the
current period certain prior year marketing and advertising
expenses may not have been consistently classified according to
blinkx accounting policies. This expense reclassification will not
impact revenue, operating profits or earnings per share as
reported. Management is currently working to analyse the full
effect of the expense classification differences in the prior
period, but prior to this announcement it has been impracticable to
determine fully the extent of the reclassifications required.
Management intends to disclose the outcome of this exercise, to the
extent material, in its annual report for the year ended
31 March 2013.
10. Related party transactions
For the purposes of IAS 24 Related Party Disclosures, the
directors are considered to be the Group's key management
personnel. Their remuneration is disclosed within the Directors'
Report as reported in the Statutory financial statements for the
year ended 31 March 2012. There were
no other related party transactions in either the current year or
prior year.
INDEPENDENT REVIEW REPORT TO BLINKX
PLC
We have been engaged by the company to review the interim set of
financial statements in the half-yearly
financial report for the six months ended 30 September 2012 which comprises the condensed
consolidated income statement, the condensed consolidated statement
of comprehensive income, the condensed consolidated balance sheet,
the condensed consolidated cash flow statement, the condensed
consolidated statement of changes in equity and related notes 1 to
10. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim set of financial statements.
This report is made solely to the company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board. Our work has been
undertaken so that we might state to the company those matters we
are required to state to them in an independent review report and
for no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
company, for our review work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules of the London Stock Exchange.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The interim set of financial statements included in
this half-yearly financial report have been prepared in accordance
with the accounting policies the group intends to use in preparing
its next annual financial statements.
Our responsibility
Our responsibility is to express to the company a conclusion on
the interim set of financial statements in the half-yearly
financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of the Entity"
issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying
analytical and other review procedures. A review is substantially
less in scope than an audit conducted in accordance with
International Standards on Auditing (UK and Ireland) and consequently does not enable us
to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the interim set of financial statements
in the half-yearly financial report for the six months ended
30 September 2012 is not prepared, in
all material respects, in accordance with the AIM Rules of the
London Stock Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditor
Cambridge, United Kingdom
14 November 2012
For further information please contact:
Financial Media Contacts
Edward Bridges/Charles Palmer
FTI Consulting
(UK) +44(0)20-7831-3113
NOMAD and Broker for blinkx plc
Charles Lytle/Christopher Wren
Citigroup Global Markets Ltd
(UK) +44(0)20-7986-9756
Analyst and Investor Contact
Jonathan Spira, CFO
blinkx plc
(US) +1-415-655-1450
SOURCE blinkx plc
