The directors consider that given the strong opening cash position relative to the 2020 underlying EBITDA loss, the expected performance over the next 12-18 months and the level of fixed and non-discretionary costs, that the Group will be able to continue realising its assets and discharging its liabilities in the normal course of business and it is therefore appropriate to prepare the financial statements on a going concern basis.

3. Segmental analysis

IFRS 8, "Operating Segments", requires operating segments to be determined based on the Group's internal reporting to the Chief Operating Decision Maker (the Board). The Chief Operating Decision Maker has been determined to be the executive board and the primary segmental reporting format of the Group is geographical by customer location, based on the Group's management and internal reporting structure.

The board assesses the performance of each segment based on revenue, gross profit and profit after distribution expenses, payment fees and marketing expenses. Payment fees and marketing expenses are presented within administrative expenses on the statement of profit and loss and other comprehensive income.

For the year ended 31 December 2020 


                                                          UK&I        France      Rest of     Rest of      Total 
                                                                                  Europe      World 
Revenue                                                   20,501,151  4,586,988   130,411     -            25,218,550 
Cost of Sales                                             (8,692,158) (2,071,350) -           -            (10,763,508) 
Gross Profit                                              11,808,993  2,515,638   130,411     -            14,455,042 
Distribution expenses                                     (2,658,227) (842,746)   57          -            (3,500,916) 
Payment fees                                              (461,143)   (70,214)    (15,760)    -            (547,117) 
Marketing expenses                                        (5,138,937) (964,248)   806         -            (6,102,379) 
Segment Results                                           3,550,686   638,430     115,514     -            4,304,630 
Administrative Expenses (excluding payment fees and                                                        (6,744,895) 
marketing expenses) 
Net Finance Income/(Expense)                                                                               1,641 
Taxation                                                                                                   414,541 
Total                                                                                                      (2,024,083)

For the year ended 31 December 2019 


                                                          UK&I        France      Rest of     Rest of      Total 
                                                                                  Europe      World 
Revenue                                                   18,548,073  5,345,076   (45,141)    4,923        23,852,931 
Cost of Sales                                             (8,385,865) (2,751,453) -           (39,587)     (11,176,905) 
Gross Profit                                              10,162,208  2,593,623   (45,141)    (34,664)     12,676,026 
Distribution Expenses                                     (1,809,692) (1,014,775) 94,185      964          (2,729,317) 
Payment fees                                              (352,702)   (90,180)    5,418       245          (437,219) 
Marketing Expenses                                        (9,703,321) (2,357,403) 6,346       -            (12,054,377) 
Segment Results                                           (1,703,507) (868,734)   60,808      (33,454)     (2,544,887) 
Administrative Expenses (excluding payment fees and                                                        (9,962,304) 
marketing expenses) 
Net Finance Income/(Expense)                                                                               18,022 
Taxation                                                                                                   352,239 
Total                                                                                                      (12,136,930)

4. Earnings per share

The basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Group by the weighted average number of ordinary shares in issue during the year. 


                                                      2020        2019 
Weighted average shares in issue                      269,819,716 246,739,240 
Loss attributable to the owners of the parent company (2,024,083) (12,136,930) 
Basic loss per share (pence)                          (0.75)      (4.92) 
Diluted loss per share (pence)                        (0.75)      (4.92)

For the periods presented, the weighted average number of shares used for calculating the diluted loss per share are identical to those for the basic loss per share. This is because the outstanding share options would have the effect of reducing the loss per share and would not be dilutive under IAS 33.

At 31 December 2020, options outstanding amounted to 15,803,099. Given the loss for the year of GBP2,024,083 (2019 loss: GBP12,136,930) these options are anti-dilutive.

5. Share Capital

Allotted, issued and fully paid: 


                            Nominal Value 31 December 2020 31 December 2019 
                Number 
                            GBP             GBP                GBP 
Ordinary Shares 272,569,414 GBP0.001        272,569          263,445 
Total                                     272,569          263,445

The table below summarises the movements in number of shares at the beginning and end of the period: 


                                                Ordinary Shares 
 
Share capital 31 December 2019                  263,444,823 
Nominal Value GBP                                 GBP0.001 
Value of Share capital GBP                        GBP263,445 
 
Summary of Movements 
Issue of shares                                 5,390,479 
Exercise of share options over ordinary shares  3,734,112 
Share capital 31 December 2020                  272,569,414 
Nominal Value GBP                                 GBP0.001 
Value of Share capital GBP                        GBP272,569

The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

During 2020, 5,390,479 shares were issued and 3,734,112 share options were exercised bringing the total share capital of the Company to 272,569,414 at 31 December 2020.

6. Share based payments

The Group recognised a charge of GBP0.5m (2019: GBP1.1m) related to share-based payments during the year to 31 December 2020, all of which relates to equity-settled schemes and are presented within administrative expenses.

The charge is made up of two components: share-based payment charges connected with employee remuneration totalling GBP0.2m and share-based payment charges relating to the equity settlement of liabilities due to Channel 4 totalling GBP0.3m, of which GBP0.2m were satisfied with the issue of share capital during the period.

The Company issues equity-settled share-based payments to certain employees, whereby employees render services in exchange for shares or rights over shares of the parent company. Equity-settled awards are measured at fair value at the date of grant. The fair value is calculated using an appropriate option pricing model and is expensed to the consolidated statement of profit and loss on a straight-line basis over the vesting period after allowing for an estimate of shares that will ultimately vest.

The Company operates an HMRC approved executive management incentive plan (EMI). Under length of service criteria, options typically vest over a 3 year period in equal monthly amounts. For those options with performance based condition, the options will vest when the conditions are met. All options are equity settled.

The terms and conditions of the grants are as follows: 


              Number of                   Exercise 
Grant Date              Number of Options          Performance Conditions Expiry Date 
              Contracts                   Price 
10/04/2017    1         251,000           GBP0.001   Length of service      10/04/2027 
01/04/2019    7         6,679,364         GBP0.001   Length of service      01/04/2029 
17/12/2019    4         6,850,000         GBP0.001   Length of service      17/12/2019 
17/02/2020    2         550,000           GBP0.001   Length of service      17/02/2030 
01/06/2020    3         1,750,000         GBP0.001   Length of service      01/06/2030 
01/06/2020    2         2,650,000         GBP0.001   Performance Based      01/06/2030

The Company operates an unapproved executive incentive plan. The vesting conditions for grants made on 26 January 2016 and 1 April 2019 are based on length of service with 100% of the options vesting on 36-month anniversary of the grant date. All options are equity settled.

The terms and conditions of the grants are as follows: 


              Number of                   Exercise 
Grant Date              Number of Options          Performance Conditions Expiry Date 
              Contracts                   Price 
26/01/2016    1         12,550            GBP0.001   Length of service      26/01/2026 
01/04/2019    1         150,000           GBP0.001   Length of service      01/04/2029

(MORE TO FOLLOW) Dow Jones Newswires

March 18, 2021 03:00 ET (07:00 GMT)