Certain information contained within this Announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 ("MAR"). Upon publication of this Announcement, this information is considered to be in the public domain.

18 August 2020

Bidstack Group Plc 

("Bidstack" or the "Company")

Interim Results for the six months ended 30 June 2020

Further strategic progress made and momentum accelerating

Bidstack Group plc (AIM: BIDS.L), the native in-game advertising group, announces its unaudited Interim Results for the six months ended 30 June 2020. The Interim Results for the period ended 30 June 2020 will be published on the Company's website - www.bidstackgroup.com today.

Financial Highlights

●     Revenue of £0.3m (period ended 30 June 2019: £0.03m);

●     Period end cash balance of £5.9m (period ended 30 June 2019: £6.0m);

●     Loss per share has increased to 1.18 pence (period ended 30 June 2019: loss of 0.83 pence per share);

●     Oversubscribed placing of 142.5 million shares at 4 pence per share to raise £5.7m (before expenses) for the Company completed on 10 June 2020.

Operational Highlights

·    Advertising campaigns attracted from the United States, mainland Europe and the UK;

·    Initial small spend campaigns run for brands including Activision Blizzard, Audi, BBC, Football Index, JBL, MG Motors, Penguin Random House, Shell, Subway, Unilever, Vodafone, VW and Warner Music;

·    Appointment of Andrew House, former Group CEO of Sony Interactive Entertainment, to the Advisory Committee;

·    Programmatic media buying agreement with Gfinity plc (AIM: GFIN) and Venatus Media to sell advertising space on Gfinity's web platforms;

·    Bidstack's proprietary technology used to insert the message "Stay Home Save Lives" in Codemasters' Dirt Rally 2.0. video game;

·    Lumen Research Study commissioned by Bidstack demonstrated the value of in-game advertising and how it affects brand perception and recall when benchmarked against other advertising channels;

·    Exclusive agreement with Codemasters, to deliver native in-game advertising for DIRT 5™ scheduled for launch in October 2020 on the next generation Xbox Series X and PlayStation®5;

·    First multi-device in-game advertising platform to be awarded the Internet Advertising Bureau's ("IAB") Gold Standard Certification;

●     Expanded from 49 employees on 31 December 2019 to 62 at 30 June 2020.

James Draper, Chief Executive, said: 

"We have continued to make further progress towards our goal of becoming a leading platform to deliver in-game advertising and remain at the forefront of the creation of in-game advertising as a new advertising category. 

"This includes progress on the demand side, where we are now experiencing advertising customers moving beyond initial test spends, as well as the supply side where we continue to work with and engage a number of the world's largest video games developers and publishers.  The award of the IAB's Gold Standard certificate 1.1 opens additional opportunities to become involved with additional international advertising agencies. 

"Following our oversubscribed placing in June 2020, Bidstack has a healthy cash position and is making material progress in its approach to building a strong foundation on which to grow and create value for shareholders.  As announced on 28 May 2020, the Board continues to expect revenues for 2020 to be very significantly second half weighted and in line with market expectations for the full year."

-ends-

For further information, please contact:

Chairman's Statement

Business Review

The first half of 2020 has seen Bidstack continue to progress towards its goal of becoming a leading platform to deliver in-game advertising and the Company remains at the forefront of the creation of in-game advertising as a new advertising category.  As previously stated, this evolution comes with many technical, regulatory and commercial hurdles.

I am pleased to report that disruption to the business caused by the COVID-19 pandemic has largely been contained from an operational point of view.  Our staff have worked tremendously well, and their performance and dedication has been outstanding.

Advertising

The Company has made material progress on the demand-side of the business in the first half and we are now seeing advertisers moving beyond initial test spends. Advertisers are now proposing significantly larger advertising campaigns as they become comfortable with the new medium of in-game advertising.

Bidstack has also started our own network of certified partner agencies in Europe, Africa and South America, which now extends to nine companies.

Video Games Strategy

Our supply-side strategy continues to be focussed on working with a number of the world's largest video games developers and publishers to incorporate our software into their games.  These ongoing commercial and technical discussions with some of the major players in the video games industry, who have and continue to publish highly successful "household name" titles, are extensive and complex and require significant amounts of due diligence.  The Board believes this strategy will establish Bidstack as one of the leaders in this part of the advertising industry.

Our strategy has had some successes to date as, during the period, we ran our first campaign in a well-known sports game from a global leader in digital interactive entertainment.  We have also been actively selling advertising into a title from a leading creator, publisher and distributor of interactive entertainment and services.

Technical Developments

Our proprietary AdConsole, the platform that enables games publishers and advertisers to access real time data on the performance of their games, is being regularly updated and developed in line with customer and commercial requirements.

We continue to make progress for the next generation of consoles expected to be launched in late 2020.  In addition, we are working hard on the streaming platforms which the Directors believe are likely to be major players in the future of high fidelity gaming and to capture the extensive secondary viewing market.

Industry Developments

Our work with the Internet Advertising Bureau ("IAB"), the UK industry trade body which sets technical standards and best practices for the digital advertising industry, to create a recognised advertising category for "native in-game advertising" remains important as it will, eventually, allow programmatic advertisers to access in-game advertising on a self-serve basis in the same way they currently access display and video inventory.

The award of the IAB's Gold Standard certificate 1.1 is important for Bidstack as it opens additional opportunities with global agency holding groups.  Bidstack is the first multi-device in-game advertising platform to be awarded the IAB Gold Standard Certification.

Financial Developments

The Company's significantly oversubscribed placing, the results of which were announced on 5 June 2020, raised gross proceeds of £5.7m for the Company leaving Bidstack in a healthy cash position to continue to pursue its business plans.

Advisory Committee

In February 2020 we were delighted to welcome Andrew House to Bidstack's Advisory Committee following his impressive career at Sony.  As the former CEO of Sony Interactive Entertainment before leading as Group CEO, one of Andrew's career highlights was the record breaking launch of PlayStation 4 in 2013.

The members of Bidstack's Advisory Committee and Board comprise an impressive list of key players in the computer games and advertising industries.  The Company will seek to add further high calibre members to the Advisory Committee and the Board with appropriate skills and experience to advance Bidstack's growth prospects.

Future Prospects

The Board believes that the addressable market for video game advertising is currently going through a period of substantial change which is likely to continue over the next three to five years.  We are confident that Bidstack is well placed to take advantage of these changes with new console launches, the growth of cloud-gaming and e-sports, coupled with legislative restrictions affecting targeting via app and web-based advertising.  We believe these developments should all work in Bidstack's favour as we believe that Bidstack is currently the only player in the industry with an end-to-end proprietary and fully programmatic in-game advertising platform.

As a result of the COVID-19 environment, the video games industry has been experiencing record numbers of daily active users and hours played and Bidstack has experienced high levels of inbound demand from advertising agencies and others.  However, Bidstack's strategy of continuing to work with some of the world's largest video games developers and publishers will take time to come to fruition. Nevertheless, the Board remains confident that the Company's strategy for creating a sound footing on which to grow the business and create future value for shareholders is robust.

The Board continues to take a highly conservative view on revenue prospects in its planning for the remainder of 2020 and believes it is right to do so, particularly given the currently unknown duration and impact of COVID-19 related restrictions on movement and face to face meetings.  In line with its strategy, for the second half of 2020 Bidstack's focus remains on securing significant commercial and technological deals with games publishers and others that will position the Company well for growth in the medium and longer term.

The Board continues to expect revenues for 2020 to be very significantly second half weighted and in line with market expectations for the year ending 31 December 2020.
 

Chief Executive's Statement and Trading Update

I am pleased with the Company's progress in the first half of 2020.

The COVID-19 pandemic caused some disruption to the business during the first half, primarily due to a number of trade shows having been cancelled and the economic consequences of the crisis. This has clearly had an impact on the face to face meetings that had been scheduled to take place during those events. Despite this, the systems, procedures and technology we have put in place have meant that our business has largely been able to proceed operationally as normally as possible with our staff working remotely. 

As announced on the 7 April 2020, I am proud of the partnership with Codemasters and the Department for Digital, Culture, Media and Sport as we delivered the "Stay Home Save Lives" message within DiRT Rally 2.0.

The disruption to the advertising industry has led to media buyers turning away from traditional means of advertising and focusing increasingly on emerging digital options. Bidstack's platform is well-positioned to capitalise on the increase in demand for our native in-game advertising inventory.

Over the first half of 2020 the levels of demand side interest we experienced from media agencies and brands increased significantly.

During the period, the Company received its first advertising bookings from the US and has worked with and run campaigns for 11 major advertising agency groups.  The recent award of the IAB's Gold Standard certificate 1.1 has increased the scope of opportunities available to Bidstack for inclusion in media planning by international advertising agencies.

Although initial spends have been small, the Company has run campaigns for many international brands including Activision Blizzard, Audi, BBC, Football Index, JBL, MG Motors, Penguin Random House, Shell, Subway, Unilever, Vodafone, VW and Warner Music.

Over the period, the levels of demand side interest we are experiencing from media agencies and brands has increased significantly and our experience is that customers are now providing us with briefs which go beyond initial test spends and the size and scope of proposed advertising campaigns has increased substantially.

During the first half of 2020 the Company received its first bookings from its own network of certified partner agencies in Europe, Africa and South America, which now extends to nine companies.

We are continuing progress with a range of content developers to construct the depth of supply which will enable us to fully exploit the demand we are starting to generate.

Discussions are ongoing with a number of the world's largest video games developers and publishers to incorporate our software into their games.  These ongoing commercial discussions and the due diligence we are undergoing, are far-reaching, multifaceted and complex.  However the Board believes this strategy will bear fruit and will establish Bidstack as one of the leaders in this corner of the advertising industry.

In summary, we are executing on our strategy which leverages our talent and technology to bring our advertising partners the best-in-market opportunities to reach gamers in a non-intrusive and immersive way and are establishing a strong foundation with the global agency holding groups which is further strengthened by our IAB Gold Standard certification.

While our plan to become a leading platform to deliver in-game advertising is a longer term ambition, together with the Board I believe it is the right strategy to create future shareholder value.

Consolidated statement of comprehensive income

for the six months ended 30 June 2020

The above consolidated statement of profit and loss and other comprehensive loss for the period relates to continuing operations for the Group.