Prior to publication, the information contained
within this announcement was deemed by the Company to constitute
inside information for the purposes of Regulation 11 of the Market
Abuse (Amendment) (EU Exit) Regulations 2019/310. With the
publication of this announcement, this information is now
considered to be in the public domain.
SEEEN
plc
("SEEEN",
the "Group" or the "Company")
Trading
and Operational Update
Board
Change
SEEEN plc (AIM: SEEN), the global media and
technology platform that delivers Key Video Moments to drive Video
Commerce and transform its clients' video profitability, is pleased
to provide an operational and trading update for the year ended 31
December 2023 ("2023") together with its 2024 outlook. The
Company also announces a Board change as it launches the next stage
of its growth plan.
Overview
The Group completed a fundraising in December
2022, principally to execute a tightly focused Go to Market sales
plan, leveraging the proprietary technology that the Group created
over the prior three years, supplemented by two product releases in
2023. During the year, SEEEN reinforced its competitive
positioning as an AI-led video commerce platform with sales
traction in large and growing addressable markets.
Today's proposed appointment to the Board of
Michael Zigman as an independent non-executive director will add
significant experience in structuring strategic partnerships and
providing domain expertise in a key vertical market around which
the Group plans to add sales, in particular use cases for education
and training (short-form "How To" videos). He will replace Akiko
Mikumo, who is retiring from the Board, but will remain as a member
of the Group's Advisory Board.
As highlighted below, the Group successfully
delivered progress during 2023 and has momentum for 2024
with: 40 customers (2022: 21) - 28 customers in growing
vertical markets such as sports and services with recurring income
for 2024 and beyond, 6 customers for e-commerce applications and 6
strategic customers in publishing. The Board believes that
this base of customers will enable the Group to accelerate sales in
2024 by leveraging existing customer case studies and adding
managed services to existing customers. The Group advanced
its technology profile with approximately 37% of revenue being
technology related, up from 30% in 2022, with the balance of
revenue coming from an increasingly profitable YouTube Creator
Services Partner business ("CSP"). The Group has established
a strong sales pipeline for 2024 and has hired more sales
personnel. Continued execution against the sales pipeline will
enable the Group to achieve cash flow breakeven with its current
cash resources.
To strengthen its customer offering, a key part
of the Group's strategy was to strengthen its technology
differentiation by launching two new technology products based on
its proprietary AI: CreatorSuite 2.0 and ShortsCut. The Board believes that
these unique, proprietary products will drive long-run sustainable
value for SEEEN's shareholders.
SEEEN's execution during 2023 has increased
gross margins, narrowed operating losses and put the Group on track
for cross-over to cash flow positive. Given the sales
traction driven by SEEEN's unique technology offering for the video
commerce market, the Group is also looking to accelerate beyond
organic growth through both strategic partnerships to advance
product distribution, and potential accretive acquisitions. The
proposed appointment of Michael Zigman, will provide additional
capability on the Board through his experience of concluding
strategic partnerships and acquisitions in the technology and
digital media sectors.
Significant 2023 Customer
Wins and 2024 Pipeline
·
Market traction with 40 total customers at end of
2023 (2022: 21), including:
o 28 vertical
market customers in financial publishing, sports, retail and
services markets
o 6 strategic
customers, 5 in the publishing industry
o 6 e-commerce
customers
·
2023 Key Wins
o First FAST
(Free Advertising Supported Television) channel client, as part of
the Group's YouTube CSP, expected to be worth approximately $1
million in revenues per year at a blended gross margin of
approximately 15%
§ Additional up-sell
achieved during 2023 to drive further growth from its back
catalogue to create Shorts using SEEEN's ShortsCut product
§ Further sale made to
a FAST customer in the US, leveraging the current
relationship
o Major financial
publisher in the US, expected to be worth approximately $100K per
annum, to leverage events videos with Key Video Moments to drive
sign-ups for ongoing events (physical and online)
§ Potential for further
sales, both for wider video opportunities and to sister
publications, as well as YouTube
o Appointed video
commerce and website partner for London Broncos, a Rugby League
Super League side, generating both monthly recurring income and a
share of profits generated from video commerce
§ Builds on momentum in
the sports vertical, having signed up various football, rugby
league and rugby union clubs - provides a strong reference customer
for further video commerce integrations, including potential deals
with larger sports clubs
·
Strong growth pipeline for 2024
o Customers with
potential for approximately $2 million in annual revenue for
CSP
o Expressions of
interest for 2024 strategic distribution partnerships, joint
ventures and acquisitions
2023 Operating
Highlights
·
AI-led video technology products developed for recurring
revenues
o Release of
CreatorSuite 2.0 in July
2023, incorporating both fully customisable Shoppable Video Prompts
and advertising
o Beta version of
ShortsCut, a tool for
rapid clipping of Shorts from a large video back catalogue,
currently being used by the Group's CSP to drive Shorts for creator
partners
·
Technology demo day held for customers and investors with
videos from the event available at www.seeen.com/techday/videos
· CSP
increasingly profitable
o Increasing
focus on targeting publishers with large video back catalogues to
optimise historic and new video content through "Key Video Moments"
and perform social media management
o Shedding of
lower margin, higher volume legacy creator partners who had minimal
cross-sell opportunities now complete
·
Strong pipeline of business (both Technology licensing and
CSP), driven from customer case studies and increased sales
team
Unaudited FY 2023 Financial
Highlights
Profitability
·
Improved gross margin of above 20% (2022: 15.2%), reflecting
increasing mix of technology sales and higher margin CSP channel
partners
·
Adjusted Group EBITDA* loss expected to be
approximately $0.6 million (2022: loss of $0.8 million), reflecting
increased investment in sales team, offset by increased
profitability from technology and CSP businesses
Revenues
·
Changing mix of revenue, reflecting technology
commercialisation
·
Revenues from customers using CreatorSuite, the Group's primary
technology product, of approximately $0.8 million, representing
approximately 37% of Group's revenues (2022: 30%)
o Recurring
technology revenues of more than $0.2 million (2022: $0.1
million)
·
Total Group revenues for the year ended 31 December 2023
expected to be approximately $2.1 million (2022: $3.3 million).
Reduction reflects shifting priority away from lower value CSP
business towards higher value media technology business: (i)
completion of elimination of unprofitable revenue from CSP channel
partners with no technology upselling potential; (ii) weaker than
expected advertising rates in 2H 2023 for CSP
Balance Sheet
·
Cash position of $1.2 million as at 31 December 2023,
following one-off development costs of CreatorSuite 2.0, considered
sufficient to reach cash flow profitability given the Group's
current pipeline
Board Change and Proposed
Director Appointment
SEEEN announces that Akiko Mikumo is retiring
from the Board with immediate effect and the Board proposes the
appointment of Michael Zigman as an independent non-executive
director to replace Ms. Mikumo. Ms. Mikumo will join the
Group's Advisory Board. Mr. Zigman is currently CEO of NYC
First, an educational non-profit that promotes Science, Technology,
Engineering, and Mathematics (STEM) learning including Artificial
intelligence (AI) and robotics. Michael has spent over 25
years operating, scaling and advising technology companies.
Prior to NYC First, Michael was a managing director at
Soundview Technology Group and WR Hambrecht & Co., both
technology-focused U.S. investment banks. He is a graduate of
Dartmouth College. The Board believes that Mr. Zigman's experience
in education and technology will be synergistic both in advancing
SEEEN's customer use cases for training (short-form "How To"
videos) and in financial advisory matters that support SEEEN's
growth plan. Mr. Zigman's appointment to the Board is subject
to approval from the Company's Nominated Adviser after the
customary director due diligence process to satisfy itself as to
Board composition and independence and the suitability of a
potential director for the purposes of the AIM Rules for Nominated
Advisers.
2024
Outlook
Having made investments during 2023 in the
sales team and refining the Group's products, the Board considers
that SEEEN is now well positioned to take advantage of two key
trends in the market; video commerce and the continued preference
across the web for short form, 'snackable' video over longer form
content. Snackable videos are increasingly used for education and
training to reinforce skills. The video commerce and
snackable video markets are both expected to grow at CAGRs of
over 30% and 10% over the next five and seven years
respectively.1
SEEEN's products can benefit customers across
all vertical markets by driving increased views, advertising
revenues and engagement rates, driving directly to product and
service sales for the Group's customers. SEEEN's technology does
this by identifying and creating the Key Video Moments from a
customer's video collection that will drive viewer purchases and
engagement. This is reflected in strong clickthrough rates for
SEEEN-enhanced videos of more than 10%, versus industry standards
typically around 3-5%. This strong engagement also means that
viewers shop for more of SEEEN's customers' products because they
are being served relevant content, allowing customers to "double
dip" by generating both advertising and e-commerce or affiliate
revenues. This directly increases their return on investment from
videos.
As the market has moved increasingly towards
short form video content and video commerce, SEEEN's technology
platform allows customers to capture these trends. SEEEN's unique
technology can be used by customers both on their own websites, as
well as through the creation of short form content for social
media, which directly benefits the Group's CSP business (formerly
MCN). SEEEN's platform deploys more than 20 different AI
models, including natural language processing, visual, activity and
optical character recognition. SEEEN combines these results to find
the best segments of video to maximise customers' views and income.
Having now established traction in key target markets, the Group
will continue to execute against the sales pipeline to achieve cash
flow breakeven.
Adrian
Hargrave, CEO of the Group, stated:
"We have progressed our 2023
Go-to-Market plan. We have also released two new products that
leverage our AI and Key Video Moments to drive revenues for both
ourselves and our customers. These products have been well received
across all our core vertical markets. The results from
implementations, including 10% clickthrough rates and enhanced
on-site engagement and sales, demonstrate the value that our
products deliver.
The market is
increasingly shifting towards video commerce and we are well
positioned to capitalise on this, whilst recognising that we have
to be opportunistic and aggressive in this fast moving
industry."
Dr. Patrick
DeSouza, Chairman, added: "We would like to thank Akiko Mikumo for her
service to the Company and its shareholders. Akiko's prior
experience in execution and focus as a leader at one of the world's
leading law firms has been instrumental in helping our team
transition from its founding group to advance SEEEN's corporate
development towards being a profitable, growing technology
company. We would also like to welcome Michael Zigman's
proposed appointment to the board. He has a wealth of
operating and financial advisory experience that will help SEEEN
now that we have gained sales traction and technology
differentiation as a platform to leverage with strategic
partners."
Notes
* EBITDA adjusted for share-based
payments and one-time costs
1. Sources include: Reportlinker for
global video commerce market (May 2023) and Grand View Research for
short video platforms market (March 2023).
SEEEN,
seeen.com
|
Tel: +44 (0)7775 701 838
|
Adrian Hargrave, CEO
|
|
|
|
Dowgate
Capital (Joint Broker)
|
Tel: +44 (0)20 3903
7721
|
Stephen Norcross
|
|
|
|
Allenby
Capital Limited
(Nominated
Adviser and Joint Broker)
|
Tel: +44 (0)20 3328
5656
|
Alex Brearley / George Payne (Corporate
Finance)
Tony Quirke / Amrit Nahal (Sales and Corporate
Broking)
|
|
|
|
focusIR
(Investor Relations)
|
Tel: +44(0) 07866 384
707
|
Paul Cornelius / Kat Perez
|
seeen@focusir.com
|