Mirriad Advertising : Results for the six months ended 30 June 2022

Mirriad Advertising plc

("Mirriad" or the "Company")

Unaudited interim results

Mirriad, the leading in-content advertising company, today announces unaudited interim results for the six months ended 30 June 2022 (the "Period" or "H1").

H1 2022 highlights:

Strategic developments

• Improvements recorded across all non-financial KPIs on supply and demand sides
• Growing client roster in the US, including top tier brands and active work with all major agency groups
• Contract signed with Magnite on 30 May 2022 to initiate path to scale and automation of the in-content advertising format via programmatic ad campaigns across multiple platforms, channels and markets
• Decision to make orderly wind down of Chinese operations by the end of the Tencent contract in March 2023, which will deliver annualised cost savings of approximately £1m
• New Non-Executive Directors appointed in June and July 2022
• Research shows in-content advertising increases campaign reach compared to conventional spot advertising in March 2022
• First campaign in Canada in February 2022

Financial headlines

• Revenue for H1 of £577k (H1 2021: £1.1m). Due to seasonal nature of key advertising markets and the sales pipeline, higher revenues are expected in H2
• US revenues grew by 57% to £418k (H1 2021: £266k), now accounting for 72% of total revenue
• China revenue down 85% in the Period from £820k in H1 2021 to £120k, due to stringent lockdowns and a challenging ongoing macro environment
• Cost control programme to deliver a total of £2.5m annualised savings, with vast majority to be achieved in 2023
• Closing cash at the end of June 2022 of £17.7m (30 June 2021: £29.8m)
• Cash consumption increased to £6.7m (H1 2021: £5.5m) as the Company invests in key US commercial roles and technology
• Operating loss of £8.5m (H1 2021: loss of £5.9m)
• Loss per share 3p (H1 2021: loss 2p)

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KPIs
KPI		H1 2021	H1	Change
			2022
Supply side
1.	Active supply partnerships	13	18	+38%
2.	Supply partners represented	34	61	+79%
3.	Seconds of content available	265,165	337,862	+27%
Demand side			No
1.	Active agency relationships	9	9	change
2.	Number of advertisers who have run	17	23	+35%
	campaigns	2	3	+50%

3. Strategic and commercial partnership agreements with advertisers and agencies

Stephan Beringer, CEO of Mirriad, said: "Mirriad is continuing to build a proposition that will be a key pillar for the future of the video and TV advertising market. Advertisers, content owners and broadcasters all face significant challenges in their markets and the ability to better respond to these challenges will shape the next generation of advertising.

"Mirriad's format offers new revenue opportunities to the media industry and high performance and returns to advertisers. Our positive US momentum demonstrates our burgeoning opportunities in the world's largest advertising market, with campaigns for new and recurring advertiser clients, and a steadily growing partner roster. Work is ongoing to further improve conversion and deal sizes of our pipeline.

"Elsewhere, we have taken action to mitigate disappointing revenue in China, resulting from stringent lockdowns and a challenging macro environment overall. We expect this specific decision will deliver annualised cost savings of approximately £1m from 2023 and ensure we continue to focus on the scale that will be achieved by integrating effectively into the wider advertising ecosystem.

"We are tracking strongly against the KPIs and are seeing a very clear acceleration of interest in the in-content format. As previously guided, we expect a stronger revenue-generating activity to be backloaded towards the end of the year, and we are within the Company's expectations of cash consumption and cash balance."

Enquiries:

For further information please visit www.mirriad.com or contact:

Mirriad Advertising plc

Stephan Beringer, Chief Executive Officer

David Dorans, Chief Financial Officer

Tel: [phone]

Financial Adviser, Nominated Adviser and Broker:

Panmure Gordon

Alina Vaskina / James Sinclair-Ford (Corporate Advisory)

Erik Anderson (Corporate Broking)

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Tel: [phone]

Financial Communications:

Charlotte Street Partners

Tom Gillingham Tel: [phone]

Andrew Wilson Tel: [phone]

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR.

About Mirriad

Mirriad's award-winning solution unleashes new revenue for content producers and distributors by creating new advertising inventory in content. Our patented, AI and computer vision technology dynamically inserts products and innovative signage formats after content is produced. Mirriad's market-first solution seamlessly integrates with existing subscription and advertising models, and dramatically improves the viewer experience by limiting commercial interruptions.

Mirriad currently operates in the US, Europe and China.

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Chairman's Statement

Our Interim Results underline how, despite a renewed period of global uncertainty, strategic focus on the US can unlock long-term future growth for Mirriad. Fully realising the potential of a market of this size will require further effort, but our established fundamentals mean the Company is well-placed to scale. We are tracking strongly against the KPIs agreed by the Board and I look forward to providing further updates on this important measure of progress.

As outlined in the 2021 Full Year Results, we have strategically invested to maximise our strength in the US, and I was pleased to recently welcome new members to our expanded Board. Nicole McCormack and JoAnna Foyle both bring high-levelUS-focused experience across advertising supply and demand, while Lois Day brings extensive fundraising and capital markets expertise. I would also like to thank Kelsey Lynn Skinner for her contribution before standing down from the Board for maternity reasons, and her responsibility for Mirriad's ESG approach will pass to Lois Day.

Hot on the heels of the business challenges born of the pandemic, we now face another moment of global uncertainty as inflation looks set to continue to rise for most, with inevitable knock-on effects on consumer confidence. These conditions - now reported across the board following inflated growth expectations from some quarters - are already affecting ad conversion cycles across the world.

Specifically in China, the stringent Covid-19 lockdowns in key cities undoubtedly had more of an effect on the advertising industry than expected, and Mirriad revenues in the first half of 2022 are considerably lower in China than anticipated. We are alive to the varying considerations in all our markets and have taken the decision to exit this market when our current Tencent contract ends in Q1 2023.

Right now, we will continue to focus our spend in the areas which will have most impact, whilst reducing and reprioritising expenditure away from areas with less immediate revenue generating potential.

The advertising market is changing. Global insecurities are feeding through to advertising budget decisions, the privacy landscape is altering and consumers are ad-fatigued. Despite this backdrop, Mirriad delivers something different for marketers. The results we drive both in consumer preference and brand consideration are why we have seen key clients return to us.

There is also rising awareness of in-content as an essential and revolutionary next-generation approach to advertising. We welcome the fact that Amazon has turned its attention, albeit in a limited fashion, to in-content within its own platform. While it has taken that company three years to get to the point they are at now, it underlines the huge potential of the format where we have extensive experience, and strong patent protection, as the market leader.

Netflix too is considering how to diversify away from subscription-only income with the introduction of ads in partnership with Microsoft. These significant moves by some of the largest players in the streaming space, combined with the need for broadcasters and content owners/creators to find new revenue streams, further highlight the significant $149bn Total Addressable Market for Mirriad that exists in the 94% of content that is currently out of reach of traditional ad formats.

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We will continue our hard work to convert what is a promising and high-quality pipeline, whilst further raising awareness of how our category-leading approach to in-content advertising can make a crucial difference to brands, content creators and broadcasters.

John Pearson

Non-executive Chairman

11 August 2022

Chief Executive Officer's Statement

Since our 2021 Final Results announcement in May 2022, we have continued to execute against our strategy of adoption and integration of Mirriad 's technology with several important developments. The new collaboration with Magnite is one of the many steps towards our ability to activate in-content insertions programmatically, integrating with the media and content ecosystem based on a standardised approach.

The new developments come at a time when we are experiencing a significant rise of interest in the in-content format, evidenced by Amazon's recent announcement to enter the market. We see Amazon's move as a pivotal validation of the new ad category that Mirriad is leading, and we are confident that our platform and our established roster of quality partnerships put us in a very strong position.

We are currently performing well against the KPIs the Company agreed to report against, underlining progress in all key areas across both the supply and demand sides of the business.

Revenue in the US continues to grow and has increased by 57% year-on-year, however overall H1 revenue for the Company is £577k, approximately half of the previous year's H1 revenue. The main cause of this decline is the significant reduction from China where revenues have fallen by over 85% year-on-year, as the H1 2021 comparator included the final recognition of minimum guaranteed revenue in the first Tencent contract.

The severe impact of Covid restrictions in China have led to unprecedented cuts and lingering uncertainty across the entire advertising market in China, which is combined with a challenging ongoing macro environment. We have therefore taken the strategic decision to wind down our operations in China at the end of our current contract which ends on 31 March 2023.

We expect this decision will deliver annualised cost savings of around £1m from 2023, allowing more immediate focus in the company's other markets and especially in the US, where we're experiencing the most encouraging developments both on the supply-partner side and with advertisers and their agencies.

It has become apparent this year that audience attention and ad relevance are quickly rising as the headline themes for the advertising and content industry, who are facing the ever-growing ad escapism as a threat to everyone's growth agendas. In this context, I firmly believe that content owners and advertisers will now begin prioritising format diversification to drive higher campaign ROIs whilst countering the growing ad-aversion. The gains in reach and impact that Mirriad's in-content approach can deliver, as extensively proven by Nielsen, BARB and Kantar, offer a decisive new option at a time of recalibration for the advertising industry.

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