Mirriad Advertising (MIRI ) announced this morning unaudited results for the 6 months ended 30 June 2022 (H1 2022).
Strategic developments
The in-content advertising company continued to score clients in the US, including top tier brands. As a result, US revenues grew by 57% in H1. The company reported active engagement with all major agency groups in the US.
Notably, Mirriad began a collaboration with Magnite, the world's largest independent sell-side ad platform. Mirriad said the partnership would enable it to scale up and automate in-content advertising via programmatic ad campaigns across multiple platforms, channels, and markets.
Mirriad had its first campaign in Canada in February 2022. At the same time, the company decided to wind down Chinese operations by the end of its Tencent contract, expiring in March 2023. The company said the decision will deliver annualised cost savings of approximately £1m.
Mirriad recorded improvements across all non-financial key performance indicators during the period on both supply and demand sides. See View from Vox below for details.
Financial performance
Revenue in H1 was £577K, down from £1.1M in H1 2021. The company expects revenues to pick up significantly in H2 due to the seasonal nature of key advertising markets and scheduling of its sales pipeline.
US revenues grew 57% to £418K from £266K, now accounting for 72% of total revenue. Unfortunately, revenue in China decreased 85% in the period to £120K, due to stringent lockdowns, and a challenging ongoing macro environment, the company said. This prompted the aforementioned decision to wind down Chinese operations by March 2023.
Mirriad said its cost control programme delivered £2.5m of annualised savings, with the vast majority to be realised in 2023. Closing cash at the end of June was £17.7m, with cash consumption increasing to £6.7m as the company invests in key US commercial roles and technology.
Stephan Beringer, CEO, commented:
"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."
View from Vox
While Mirriad recorded a notable decline in revenues in H1, a closer examination of its financial and operational performance reveals the company is in good health and set to continue growing.
Nearly all of the decline can be attributed to poor performance in China. Stringent Covid-19 lockdowns in key Chinese cities had more of an effect on the advertising industry in the country than Mirriad anticipated. In addition, difficult macroeconomic conditions and inherent market challenges made it difficult to break through in the Chinese market. As a result, Mirriad made the decision to exit China early next year.
As a result of this decision, we expect performance to improve substantially in H2 2023 and beyond. Performance should bounce back starting in H2 2022 due to the seasonal nature of the US market, in addition to new contracts kicking in.
Meanwhile, Mirriad's US business is thriving. The company has a long pipeline of clients, including major brands, and its US business grew 57% in the period, now accounting for 72% of revenue. In May's FY21 results, the company reported an impressive 182% increase in US sales. Mirriad also expanded into Canada in H1, a further testament to its success in the region.
Moreover, Mirriad recorded improvements in all non-financial key performance indicators in H1, on both supply and demand sides. Active supply partnerships grew 38%, supply partners represented increased 79%, and seconds of content available grew 27%. On the demand side, the number of advertisers who ran campaigns increased 35%, and commercial partnership agreements with advertisers and agencies increased 50%.
The company remains well-funded with £17.7m in cash after its cost control programme delivered £2.5m in annualised savings during the period. Overall, the company is well-positioned for continued growth in North America and Europe.
Newly appointed Non-Executive Director Nicole McCormack spoke with Vox's Justin Waite this morning regarding her sector experience and path to Mirriad, as well as the company's pioneering approach to in-content advertising. Click here for that conversation.
And in July, Stephan Beringer, CEO of Mirriad, spoke with Vox's John Hughman regarding trends in the advertising industry. Click here for that conversation.
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