Mirriad Advertising (MIRI), the in-content advertising company, issued a trading update for the 6 months to 30 June 2023 (H1 23). Total revenues increased a modest 2.6% to £592k from £577k in H1 22,following the company's exit from China, while revenues from continuing operations saw a significant 26% uplift to £576k compared to £458k a year ago.
Mirriad raised £6.3m (net £5.7m) in a placing in May 2023, resulting in closing cash at the end of June 2023 of £9.8m. Also in May 2023, the company completed its restructuring plan to substantially reduce monthly net cash burn.
The year-on-year increase in revenue is encouraging considering the backdrop of US advertising market pressure, which began in Q4 22 and continued into the first half, resulting in campaigns taking longer to book. The US market has shown a year-on-year decline for each of the 10 months to April 2023, impacting Mirriad's US revenues.
However, Mirriad's revenues in EMEA increased substantially to £252k from £37k last year, driven by growth in the company's German business and the acquisition of a new client in the Middle East.
As mentioned, Mirriad undertook significant restructuring in the first half to reduce recurring costs. This involved the final closure of Chinese operations, and a comprehensive cost reduction programme. The restructuring resulted in a reduction of headcount from 112 at end of April to 91 at end of June 2023. Altogether, the restructuring cost £311k.
Looking ahead, despite ongoing challenges in North America, Mirriad's growing forward sales pipeline in the US should result in a pick-up of US activity in the second half. So far, Mirriad's model has been based on manual sales, but the company has begun to transition to programmatic selling, which should result in an economies-of-scale effect and significant increase in revenues in FY24.
Mirriad also said it is in discussions with "multiple large entertainment companies in the US", expecting "one or more" to sign contracts before the end of 2023. So far in FY23, Mirriad's performance has been in line with its internal revenue expectations. It should be noted that advertising revenue is highly seasonal, with second half revenues historically about double that of the first due to the holiday season.
Mirriad's KPIs for FY22 released last month painted a bright picture for future revenue generation. On the supply side, Mirriad's active partnerships increased by 48% year-on-year to 37, supply partners represented increased by 33% to 61, and seconds of content available increased by 38% to 651,990. On the demand side, the number of advertisers placing campaigns increased by 31% to 59.
Among Mirriad's recent large deals was a collaboration with Microsoft announced in May to develop an API incorporating Microsoft's Azure AI. The company also extended its 3-year agreement with Univision, the US' largest Spanish-language TV network. Mirriad is funded until at least June 2024 after raising £6.3m in May.
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