blinkx plc Announces Results for the Six Months Ended 30 September 2010
CAMBRIDGE, England and SAN FRANCISCO, November 9, 2010 /PRNewswire-FirstCall/ --
- blinkx Achieves Profitability and Positive Operating Cash Flow, Doubles Revenue Year on Year
- blinkx's Interim Period Conference Call Will be Webcast Live at http://www.blinkx.com on 9 November, 2010, at 11:00 a.m. GMT/6:00 a.m. EST/3:00 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 2010.
Financial Highlights
Six months
Six months to to 30
30 September September
2010 2009
(unaudited) (unaudited)
$'000 $'000
Revenues 27,363 13,092
Gross profit 17,712 8,483
Profit / (Loss) before taxation 2,024 (7,346)
Profit / (Loss) for the period 2,024 (6,962)
Earnings / (Loss) per share (cents) Cents Cents
Basic 0.66 (2.5)
Diluted 0.64 (2.5)
$'000 $'000
Cash generated / (used ) by operating activities 2,221 (8,061)
Cash balance as at 30 September 16,867 10,753
Highlights:
- Revenue more than doubled to $27.4m from $13.1m in H1 FY10
- Gross profit up 109% to $17.7m from H1 FY10. Gross margin was 65 %
(unchanged from H1 FY10)
- Operating profit of $2.0m, compared with an operating loss of $7.4m for
H1 FY10
- Profit before tax of $2.0m, compared with a loss before tax of $7.3m
for H1 FY10
- $2.3m cash generated during the period resulting in a closing balance
of $16.9m
- Video streams in the US grew by 107% from September 2009 to September
2010 (comScore)
- Average Daily Search run rate during the period was 31.6
million searches per day, compared with 13.1 million per day in H1 FY10
- Average deal size for video advertising bookings increased
by 40% from the H2 FY10
- New premium content partnerships, including the BBC, Bloomberg and
AccuWeather
- Strategic entry-points established in the mobile market, significantly
extending addressable market
- Continued growth of AdHoc advertising platform, with new clients
including Nokia, McDonalds, Mercedes and American Express
- $31m placing of new shares in October 2010 to provide additional
funding to support blinkx's growth strategy
Commenting on the interim results Suranga Chandratillake, founder and CEO of blinkx, said: "The six months ending September 30, 2010 have been game-changing. blinkx transitioned into profitability and generated cash as we more than doubled revenue from the same period last year. Since our IPO, we have clearly and consistently demonstrated the strength of blinkx's business model.
Our video search offering continues to draw an ever larger global audience, through an ever increasing number of distribution points - video streams in the US grew by 107% over the past year. We established the foundation to take blinkx to mobile users on a variety of devices, and saw continued growth in searches from desktop applications. At the same time, the unique value proposition of our online video advertising platform, AdHoc, has attracted larger budgets from a growing roster of brand advertisers with the average size of video advertising deals up by 40% from the previous half."
Mr. Chandratillake continued: "With video advertising forecast to increase almost 500% over the next four years, per IDC, reaching $11.3 billion by 2014, blinkx is perfectly positioned to profit from the increasing dominance of online media and the continued momentum towards ROI-driven advertising. Given this strong industry backdrop and our market position, we remain confident of the outlook."
Financial Highlights
For the six months ended 30 September 2010 (H1 2011), revenues totaled $27.4 million, an increase of 109% over the $13.1 million in revenues reported for the 6 months ended 30 September 2009 (H1 2010). Gross profit for H1 2011 was $17.7 million representing a gross margin of 65%. Gross profit for H1 2010 was $8.5 million, representing a gross margin of 65%. Net profit for H1 2011 was $2.0 million. Net loss for H1 2010 was $7.0 million. Earnings per share for H1 2011 was 0.66 cents (basic) and 0.64 cents (fully diluted). Loss per share for H1 2010 was 2.5 cents (basic and fully diluted). blinkx's cash balance at 30 September 2010 was $16.9 million (30 September 2009: $10.8 million).
Customer and Business Developments
blinkx made significant advances in its distribution strategy during the period, including further expansion of its partnership with ITN to deliver advertising around ITN content on a variety of news-oriented websites, and a joint initiative with Microsoft to release blinkx-powered Accelerators for Internet Explorer 8, which embedded blinkx functionality into the browser.
Over the past six months, blinkx's targeted advertising products continued to attract global brand advertisers. As the Internet claimed a growing share of ad budgets, leaders from across a breadth of industries, such as Nokia, McDonalds, Mercedes and American Express, capitalized on blinkx's unique video advertising platform, booking campaigns through top agencies, including Universal McCann, Ogilvy and Grey Group.
On the content front, blinkx continued to expand its roster of premier media partners, including the addition of programming from diverse industry leaders, such as the BBC, Bloomberg and AccuWeather.
Product and Technology Developments
On-going research & development (R&D) spend increased by18%. On-going R&D expenditure was $4.7m in the period, which includes $0.6m of capitalized R&D ($nil H1 FY10), compared with $4.0m in the H1 FY10, excluding the $1.4m of one-time R&D costs reported at the time. While economies of scale allowed the company to reduce infrastructure costs, blinkx emphasized its commitment to the research and development of cutting edge technology by increasing engineering headcount by 17%.
During the period, blinkx made a strong entrance into the mobile arena, establishing strategic entry-points in the market with the launch of m.blinkx.com, the release of its first mobile application, and the introduction of an API to open its index of mobile video to application developers and distribution partners. blinkx's Video Search engine is now available on the iPhone and Android-based devices.
Over the past six months, blinkx also continued its beta release programme for Cheep, the transaction hijacker product, including a successful closed test with external users and bloggers.
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 2010
(in thousands, except per share amounts)
Six months Six months
to 30 to 30
September September
2010 2009
(unaudited) (unaudited)
$'000 $'000
Revenue: continuing operations 27,363 13,092
Cost of revenue (9,651) (4,609)
Gross profit 17,712 8,483
Operating expenses
Research and development (4,086) (5,397)
Sales and marketing (10,311) (9,373)
Administrative expenses (1,311) (1,079)
Profit / (loss) from operations 2,004 (7,366)
Investment revenues 20 20
Profit / (loss) before taxation 2,024 (7,346)
Tax - 384
Profit / (loss) for the year attributable
to equity holders of the parent 2,024 (6,962)
Earnings /(loss) per share (cents) Cents Cents
Basic 0.66 (2.5)
Diluted 0.64 (2.5)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
For six months ended 30 September 2010
Six months Six months
to 30 to 30
September September
2010 2009
(unaudited) (unaudited)
$'000 $'000
Profit / (loss) for the period 2,024 (6,962)
Exchange difference on translation
of foreign operations 507 1,527
Total comprehensive income for the year 2,531 (5,435)
BLINKX PLC
CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
As at 30 September 2010
(in thousands)
As at
As at
30
September 30 September
2010 2009
(unaudited) (unaudited)
$'000 $'000
ASSETS
Non-current assets
Goodwill 2,417 2,381
Intangible assets 3,978 5,035
Property, plant and equipment 560 745
Other receivables 250 630
7,205 8,791
Current assets
Trade receivables 9,053 3,563
Other receivables 2,709 3,402
Cash and cash equivalents 16,867 10,753
28,629 17,718
Total assets 35,834 26,509
LIABILITIES
Current liabilities
Trade and other payables (6,989) (6,560)
Non current liabilities
Other payables (90) (455)
Total Liabilities (7,079) (7,015)
Net assets 28,755 19,494
Shareholders' equity
Share capital 6,000 5,509
Share premium account 56,694 49,126
Stock compensation reserve 9,616 8,568
Currency translation reserve (7,906) (7,589)
Merger reserve (4,323) (4,323)
Retained earnings (31,326) (31,797)
Total equity 28,755 19,494
BLINKX PLC
CONDENDSED CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED)
Results for six months to 30 September 2010
(in thousands)
Six months Six months
to to
30 September 30 September
2010 2009
(unaudited) (unaudited)
$'000 $'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit / (loss) from operations 2,004 (7,366)
Adjustments for:
Depreciation and amortisation 1,018 1,514
Share based payments 336 705
Foreign exchange gains / (losses) 5 (455)
Operating cash flows before movements
in working capital 3,363 (5,602)
Changes in operating assets and liabilities:
(Increase) / Decrease in trade and other
receivables (3,196) 1,060
Increase / (Decrease) in trade and
other payables 1,611 (3,519)
Net cash generated / (used) by operations 1,778 (8,061)
Income taxes received 443 -
Net cash generated / (used) by operating activities 2,221 (8,061)
CASH FLOWS FROM INVESTMENT ACTIVITIES
Interest received 20 20
Purchase of property, plant and equipment
and intangibles (839) (379)
Cash paid to purchase net assets - (3,892)
Costs incurred to purchase net assets - (305)
Net cash used by investment activities (819) (4,556)
CASHFLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of shares 385 22
Net cash generated by financing activities 385 22
Net increase / (decrease) in cash and
cash equivalents 1,787 (12,595)
Beginning cash and cash equivalents 14,579 21,366
Effect of foreign exchange on cash and
cash equivalents 501 1,982
Ending cash and cash equivalents 16,867 10,753
BLINKX PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
For the six months ended 30 September 2010
(in thousands)
Ordinary Share Stock
share premium compensation
Capital account reserve
$'000 $'000 $'000
Balance as at 1 April 2009 5,487 49,126 7,863
Issue of shares 22 - -
Current period losses - - -
Exchange differences on translation - - -
Share based payments - - 705
Balance as at 30 September 2009 5,509 49,126 8,568
Ordinary Share Stock
share premium compensation
Capital account reserve
$'000 $'000 $'000
Balance as at 1 April 2010 5,964 56,345 9,280
Issue of shares 36 349 -
Current period profit - - -
Exchange differences on translation - - -
Share based payments - - 336
Balance as at 30 September 2010 6,000 56,694 9,616
(continued)
BLINKX PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(UNAUDITED)
For the six months ended 30 September 2010
(in thousands)
Currency
Translation Merger Retained
Reserve reserve earnings Total
$'000 $'000 $'000 $'000
Balance as at 1 April 2009 (9,116) (4,323) (24,835) 24,202
Issue of shares - - - 22
Current period losses - - (6,962) (6,962)
Exchange differences on translation 1,527 - - 1,527
Share based payments - - - 705
Balance as at 30 September 2009 (7,589) (4,323) (31,797) 19,494
Currency
Translation Merger Retained
Reserve reserve earnings Total
$'000 $'000 $'000 $'000
Balance as at 1 April 2010 (8,413) (4,323) (33,350) 25,503
Issue of shares - - - 385
Current period profit - - 2,024 2,024
Exchange differences on translation 507 - - 507
Share based payments - - - 336
Balance as at 30 September 2010 (7,906) (4,323) (31,326) 28,755
BLINKX PLC
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of preparation
The interim financial statements have been prepared using accounting policies consistent with those used in the statutory financial statements for the year ended 31 March 2010 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 2010 are available on the Group's website http://www.blinkx.com and have been filed with the Registrar of Companies. The Group's auditors 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 2010 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 2010 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 environment and believe the Group is well placed to manage these risks successfully. In doing this they have prepared a business plan setting out key business assumptions. The directors have considered these assumptions to be reasonable and that the Group has adequate resources to continue in operational existence for the foreseeable future. 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
2010 2009
(unaudited) (unaudited)
$'000 $'000
Sales and marketing 155 283
Research and development 139 371
Administrative expenses 42 51
336 705
3. Taxation
No research and development tax credit has been recognised in the income statement in the period (6 months to 30 September 2009: $384,000 tax credit).
4. Earnings / (loss) per share
For the six months to 30 September 2009, the loss per ordinary share and
diluted loss per share are equal because share options are only included in
the calculation of diluted earnings per share if their issue would decrease
the net earnings per share or increase the net loss per share. The
calculation of the basic and diluted earnings per share is based on the
following information.
Six months Six months
to to
30 September 30 September
2010 2009
(unaudited) (unaudited)
$'000 $'000
Earnings
Profit / (loss) (used in calculation
of basic and diluted loss per share) 2,024 (6,962)
Number of shares
Weighted average number of shares
for the basic earnings per share 308,147,175 278,470,242
Weighted average number of shares
for the diluted earnings per share 315,128,776 278,470,242
5. Share capital
The issuance of shares in the year relates to the exercise of employee share options.
6. Post balance sheet events
On 15 October 2010 blinkx plc placed 23,213,763 new ordinary shares raising gross proceeds of approximately $31.2 million.
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 2010 which comprises the condensed consolidated income statement, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 6. 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 2010 is not prepared, in all material respects, in accordance with the AIM Rules of the London Stock Exchange.
Deloitte LLP
Chartered Accountants and Statutory Auditors
Cambridge, United Kingdom
9 November 2010
For further information please contact:
Financial Media Contacts Analyst and Investor Contact
Edward Bridges/Charles Palmer/ Jonathan Spira, CFO
Haya Herbert-Burns blinkx PLC
Financial Dynamics Tel: (US) +1-415-655-1450
Tel: (UK) +44(0)20-7831-3113
NOMAD and Broker for blinkx plc
Charles Lytle
Christopher Wren
Citigroup Global Markets Ltd
+44-207-986-9756
SOURCE blinkx plc
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