Last close As at 05/08/2026
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Research: TMT
Mirriad Advertising’s innovative methodology to insert high-impact advertising inventory into content is gaining traction with platforms, agencies and advertisers. Conversion into revenues was slow but is now building. The group’s two-year exclusive contract with Tencent in China is clear validation and it is now in advanced talks with several top-tier US entertainment majors. COVID-19 is seriously impacting advertising spend, but Mirriad’s approach potentially redefines the value equation and it looks well placed. Last summer’s £16.2m fund-raise put the group on a sound financial footing, with end April 2020 net cash of £15.8m (lease debt only).
Mirriad Advertising |
Embedded on-screen innovation
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12 May 2020 |
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Mirriad Advertising’s innovative methodology to insert high-impact advertising inventory into content is gaining traction with platforms, agencies and advertisers. Conversion into revenues was slow but is now building. The group’s two-year exclusive contract with Tencent in China is clear validation and it is now in advanced talks with several top-tier US entertainment majors. COVID-19 is seriously impacting advertising spend, but Mirriad’s approach potentially redefines the value equation and it looks well placed. Last summer’s £16.2m fund-raise put the group on a sound financial footing, with end April 2020 net cash of £15.8m (lease debt only).
Strong revenue build in FY19
FY19 figures show a big percentage step up in revenue from £0.4m to £1.1m and a reduction in operating loss from £14.4m to £12.2m. In March 2019, the new CEO, Stephan Beringer (ex Publicis and Omnicom), announced a significant strategic reset, concentrating on fewer markets with greater potential profitability. This led to a greater focus on China (73% FY19 revenues by customer) and the US (14% FY19 revenues). While employee costs are 61% of cost of sales, headcount has been reduced and is now more heavily focused on technology, product and sales. R&D costs of £2.3m (unchanged on prior year) were expensed.
COVID-19 may accelerate adoption
The global pandemic has had a major impact on industry adspend, with campaigns pulled or postponed. Mirriad’s Tencent contract includes minimum guarantees that have protected the top line (and cash). Tencent’s operations have now resumed and Mirriad reports that demand from existing and new brand advertisers (including Enterprise WeChat, Huawei, China Mobile, Saint Laurent and TAL Education) has picked up strongly in recent weeks, which may set a precedent for other territories.
Outlook: Substantial market opportunity
The addressable market is very large, with North American TV and video ad spend alone estimated at $70bn in 2019 (Statista). Monetisation of the back catalogue for content providers such as Disney, ITV and Netflix, gives a key near-term revenue opportunity, as does their new content. Driving adoption is key, then translating this into profitable contracts with repeatable revenues. It will need to continue to invest to build scale and technology to better integrate with existing industry infrastructure. Cash burn is now below £1m per month, which should improve with top line progression. Market forecasts show revenues doubling in FY20 and near trebling in FY21, with a gradual reduction in forecast operating loss.
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Consensus estimates
Source: Refinitiv |
Mirriad Advertising is a research client of Edison Investment Research Limited
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Research: Metals & Mining
On 23 March, the South African government made the decision to lockdown the country for all but ‘essential services’ for a period of three weeks, which it later extended to the end of April. Since the lockdown, Pan African’s group surface mining operations (which account for the majority of its profitability) have been working at c 70% of normal capacity, while Barberton Mines produced enough from certain high-grade sections of its Fairview operation in order to ensure the required minimum feed for its BIOX® processing plant. While it is very early days as South Africa eases its lockdown protocols and Pan African recalls workers, it has estimated that production for FY20 will be c 176,000oz cf the 185,000oz it estimated prior to the coronavirus crisis (a 4.9% decline). Nevertheless, during the same period, the gold price has risen by 12.4% while the value of the rand has fallen by 23.9% versus the US dollar. For the moment, we are placing our forecasts and valuation for Pan African under review. In Exhibit 3 however, we provide a discussion and scenario analysis of how we believe the current crisis might affect PAF’s results to 30 June 2020, given information known to date.