Brave Bison Group (LSE:BBSN) — Annual General Meeting

0:00 Good morning, and welcome to the BRAVE BISON GROUP PLC Annual General Meeting Proceedings. Throughout this recorded meeting, attendees will be in listen only mode. Shareholders have the ability to pre submit questions to the company in advance, and therefore, questions will only be taken from those physically attending today. I'd now like to hand you over to Oliver Green, executive chairman. Good morning. Thank you, Paul. Ladies and gentlemen, good morning. I would like to welcome you to the annual general meeting of BRAVE BISON GROUP PLC. I am Oliver Green, chairman of the company, and I will act as chair of this meeting. It is now 10AM. I have been advised that a quorum being

0:31 two members present in person or by proxy is present, and I declare the annual general meeting open. I would now like to introduce the board, Theo Green, chief chief growth officer, Philip Norridge, our CFO, Matt Law, our non nonexecutive director, and Gordon Ruff, also our nonexecutive director. We released the following trading update to the London Stock Exchange this morning at 7AM. Trading in the first five months of the year has continued in line with expectations, and the board reaffirms its ongoing confidence in meeting full year market forecasts. The integration of Social Social Chain, which we acquired in February 2023, is now well advanced. The delivery teams have been restructured, and central functions, including HR, IT, finance, and marketing, have all been merged with BRAVE BISON.

1:23 New engagements have been won with the likes of ASDA, Pinterest, Team GB, and Warner Brothers. At BRAVE BISON Performance, our digital advertising practice, contracts have been renewed and or expanded with major customers, including Azuz and Furniture Village. New business wins during the first half include a US insurance company under NDA with revenues of of approximately 12,000,000,000, GHD, a consumer products company, and Manual, a male wellness company. At BRAVE BISON Commerce, our digital commerce practice, customers are continuing to invest in their digital platforms. Existing customer, Muller, ramped up activity in h one, and new customers include a Finnish retailer under under NDA with revenues of approximately $2,000,000,000.

2:16 In the BRAVE BISON media network, our portfolio of around 650 channels across YouTube, Snapchat, Facebook, TikTok, and Instagram, contracts have been renewed in respect of partner channels for the PGA Tour, the DP World Tour, and Alafoque, each for twenty four months. The board would like to thank shareholders for their support over the past twelve months, and we look forward to updating on further progress in September of this year on the publication of the company's interim results for the period to the June 30. Turning to the formal proceedings. The business of today's meeting is set out in the notice of annual general meeting, which was published and sent to shareholders on the eighteenth of May this year. As shareholders have had the notice in their hands for the requisite period, I propose that the notice is taken as read. Are there any objections?

3:11 I would like to proceed by dealing with all questions from shareholders on any matters relevant to the business of the meeting at the outset before we move on to the voting on the resolutions themselves. We'll also do questions at the end. This is because we have a number of resolutions, and in my view, we will be able to deal with the voting more quickly in this manner while still giving shareholders time to ask all the questions they may have. Please leave your name, and if you are a proxy or corporate representative, the name of the shareholder you you are representing when asking any questions.

3:43 I would like to point out that resolutions one to seven will be proposed as ordinary res requiring a simple majority to be passed, and resolutions eight to nine will be proposed as special resolutions, which to be passed require a majority of 75% in favor of the resolution. The board confirms that in its opinion, the proposed resolutions are in the best interests of the shareholders of the company as a whole and recommends that shareholders vote in favor of the resolutions. To more accurately reflect the views of the shareholders of the company, voting today will be done by way of a poll on each of the resolutions put to the meeting rather than a show of hands. I'm appointing our registrar, Link Group, to act as scrutineer.

4:29 All eligible shareholders, all their appointed proxies would have been handed a poll card at registration. If you require a poll card or have a query on completing the poll card, please raise your hand, and a representative from Link will attend you. Once all votes have been taken on the resolutions, please sign the poll card and hand this to the link Link representative at the end of the meeting. Please note that there is no need for you to complete a poll card if you've already submitted a proxy vote and do not wish to change the way you voted. Since we are conducting a poll, the resolutions will not be read out individually. I would now like to pro propose that all resolutions as set out in the notice of meeting be put to the meeting. The poll is now closed. The poll results will be scrutinized and collated by the company's registrar.

5:20 The final result of the voting will be published on RNS later today. We will also be published with the results on our website as soon as possible.

5:28 Now we did have a few questions submitted, prior to this call. The first is you mentioned companies are tightening their spending in your last statement. How much tougher is it for BRAVE BISON currently? So if I take that one, I think things are definitely more difficult than last year. We are seeing customers be quite careful, not necessarily in how much they spend, but in where they spend it. We think of marketing, sometimes in a funnel where some activity is related to brand love and to awareness and to how a customer feels about a brand, and some activity is related to last click. It's making sure that an advert is in the right place to ensure that traffic and conversion is delivered for a specific product. We are definitely seeing customers be more interested in that lower funnel.

6:25 They're interested in advertising that drives sales directly as opposed to advertising that drives sales indirectly. And that shift has, in some ways, been positive for BRAVE BISON. We have a very active performance marketing division, but at the same time, parts of our business are more related to more brand love campaigns. So we've seen a changing in the way people spend, and that has changed year on year. There was there was more budget going out last year, but that doesn't mean we are in a difficult position. We still feel comfortable that BRAVE BISON performance is doing what it needs to do and is still winning new customers, some of which we talked about in our statement today.

7:06 Are there any further questions from anyone in the audience today? Well, I was reading your AGM statement this morning. I realized, you know, obviously, in reading my mind last night since I was working at what I was gonna ask you this morning precisely what was in there. But, when I saw you last, which I think was another event, maybe about a year ago Yes. You talked about, I think,

7:31 an aim of trying to win a greater share of client budgets or grow your share of client budgets. I think the figure was 1,500,000 you mentioned. Obviously, you've just described the the difficulties in certain aspects of the of, business at the moment. I was wondering if you could just comment generally about how you feel, things have worked out with regards to that over the last year. Why don't you repeat the question? Just the microphone. So I think the question is around to what extent are we satisfied with how we've been able to win bigger customers with bigger budgets over the last twelve months. Is that is that fair? Yeah. Yeah.

8:18 Well, I think that we're in a really interesting place right now because we have each of our four business units that goes to market and certainly does attract big customers. So for example, in BRAVE BISON performance, we work with the likes of New Balance, Currys, and Azuz. And Azuz is a is a new client for us, and those are, you know, three very big companies, global companies, in fact. But I think what's really interesting with where we are now is we're thinking about, actually sort of taking our four services to market in a much more connected approach. So whilst we whilst we want individually our business units to fight and win new business, we're also taking our businesses business units together, sort of to market in a much more connected approach. And when we do that, I think we're able to answer some much tougher briefs and fight for much bigger budgets.

9:13 In very sort of simple terms, I think you've got, you know, our four services that together could actually be be sold as more of a solution than a service. And when you do that, you can target your CEOs, your CFOs, and your CMOs, and your CTOs as opposed to, let's say, your brand managers or your SEO managers and the sort of people a little bit lower down the the the chain. So I think that, to answer your question, we are happy with our ability to win and onboard new customers and big customers, But I think there's definitely more to go in terms of connecting all of our business units up together, selling a much more integrated solution, and therefore winning bigger contracts that span both marketing and technology. Because don't forget, BRAVE BISON Commerce isn't it sells into the sort of CTO office, whereas Social Chain and BRAVE BISON performance performance sell more into the marketing office.

10:10 I I believe you rebranded everything under BRAVE BISON social chain presumably, social chain or BRAVE BISON company. I'm just wondering in general how that was working out and the recognition in the marketplace you were getting from the BRAVE BISON name? So we we relaunched the BRAVE BISON brand in h two of last year, and that involved bringing together the likes of Greenlight Digital, Greenlight Commerce, and Best Response Media. And we think we've done a really good job of of of creating a brand that is professional and is sort of nods to the fact that we are a bit of a challenger company. I think there's definitely still a way to go in terms of, you know, creating demand in in the different sort of offices that we sell to.

10:58 But I think that we we have done a good job over the past, so nine months or so. Anything you want to add to that? No. Nothing nothing nothing sort of significant. Do you wanna answer this, Sam? Can I ask, in terms of, I guess, recent acquisitions over over the last two or three years, the business has really deemphasized if you will, by media networks side of business, much more fee based? Given acquisitions going forward, what you're sort of likely to want, you think that likely to continue, or would you ever see yourself actually interested in buying further channels? Can you repeat the question? Just said one last. So the question is, to what extent have we sort of deprioritized the media network part of the business, and to what extent have we prioritized the fee based part of our business? And moving forward from an acquisitions perspective, we focus on buying more fee based businesses, more agency style business rather than channel management businesses and and sort of social publishing businesses.

12:01 I think that there are definitely less media networks and social publishing businesses available. I think that especially in sort of 2021, sort of moving into thousand twenty two, we still saw valuations attached to those social publishing businesses being very, very high, and so it was much more difficult to go in and acquire them. Obviously, we did buy the hook in, 2020, so we haven't sort of we have done all acquisition in that space. I think that we've wanted to bolster our fee based services, and we have done that quite significantly. It it it's nice to be a distributed business. It's nice to sell into different types of office. I talked before about selling into chief marketing officers as well as selling into chief technology officers. What we found at the moment actually is that CTOs, their budgets actually haven't changed even in the last twelve months because they still need to, deliver those digital transformation programs for their businesses.

13:03 And just because business is cooled for them, they need to basically keep their apps and their websites live, and they need to constantly make changes. So we quite we quite like developing these sort of different pillars in our business. I still think that media networks are interesting. We we looked at one last year, but decided not to move forward because we felt it was very, very one platform sort of focused, and that platform has actually had some some some trouble over the past six months. And so we we when we look at media networks, we look at, you know, who are the audiences that are are are engaged within those networks, but also specifically, which platforms are those audiences on? Is it Facebook? Is it TikTok? Is it Instagram? Is it YouTube? Because depending on those platforms, the monetization can be very, very different. So for example, TikTok is not a monetized platform.

13:56 So those companies that are that big on building out TikTok audiences over the past two years have not yet seen a a big sort of monetization of that audience, which is unfortunate for for them. But, you you know, thankfully, we didn't invest enormously into building out big, big TikTok audiences. So just to just to summarize, we are still interested, but we're we're selective. And I think that that because of the sort of them because the business is a a little bit more rare, you have it takes a little bit more time to find them and also negotiate terms that would be acceptable to us. Okay. If I could just follow on from that, six fifty is quite a big number for a company of your size. Otherwise, I'm guessing that that is possibly the same media property over the various Yeah. Distribution channels.

14:53 Two things. Can you split that between your own brands and ones that you're running for third parties? And whether you would consider some kind of rationalization going forwards Yeah. Depending on what that split is to really optimize individual brands such as who which I'm sure in its own right could become a very valuable media property. Sure. So the question was related to the number of media properties we have, which is currently around 650, and and how we would potentially rationalize those. So if I think about our our our properties, the vast majority of those properties are channels that we run under contract, and that doesn't necessarily have an indication directly towards revenues.

15:51 So when we think about 650 channels, what we really prioritize is is is the revenue from an individual channel. Some channels generate very little revenue. Some channels generate a lot of revenue. So we have a a pretty substantial tail within that six fifty, and the the distribution really is more on a platform basis. So of those six fifty, the majority of them will be on YouTube. That will be a lower percentage than our overall split versus YouTube and and Snapchat. So I think that would we rationalize the channels? Probably not because the way our business is set up is to service a broader collection of channels. We don't like having too much dependence on any one channel. Some of our competitors such as Lad Bible, or some of the other publishers, they have one or two major properties, And any kind of issue with those properties, either on a platform side or from a reputation side, causes quite a big problem because you tarnish a brand. We like having multiple properties with no overdependence on one single property, and that's actually served us quite well in the past.

17:00 I think as well, we we we we often look at some data regarding the channels that don't produce very much revenue, and, actually, the level of effort required is actually very small. So we don't feel as though it's necessary to call those channels. And, also, what we've seen over sort of a a four year period is sometimes channels sort of go quiet, and then, actually, they get reinvented. They get someone takes them over, and they can sort of become to be quite valuable. So it wouldn't make sense for us to necessarily rationalize, especially on YouTube. On Snapchat, we do we have about 25 shows roughly on Snapchat. And if a show is underperforming, we'll we'll stop investing in it, and we'll invest in our our our our more our our stronger performers. So to answer your question, it kind of it's sort of platform specific.

17:46 On Snapchat, we probably would rationalize. On YouTube, we probably wouldn't rationalize. Just on the most recent acquisition, the social chain. Again, in general terms, can you explain just roughly where the revenue allocation would go between the actual influencer parts and the rest of the business? And, obviously, the influencer term is very common. Most people in the world would have heard of it. What is the commercial relationship between yourselves through the the social chain with the, pool of influencers out there? Sure. So media costs and and and influencer costs would go into media costs.

18:43 Media costs sit in between the gross revenue number and the net revenue or gross profit number. So I think this year, our SendCost market forecast is to do around $4,344,000,000, and our and our net revenue will be around $22.23. In between that, we you'd have influencer costs as well as wide immediate costs and revenue associated for with partner payments that we pay out to our channel partners. That's the first the first part of the question. In terms of where the value is for us, So a client will come to us and say, you know, I wanna launch a new product. I've got this product. I'm interested in it in influencer marketing. Where they will engage us is to basically run the end to end process. So we will be responsible for identifying which influencers to use, and, obviously, there are lots of influencers out there. And so influencer identification is a bit of an art, and we pride ourselves on picking the right influencers to target the right audience.

19:44 And depending on what your product is, we will look for a particular type of influencer. If you think about these sorts of people as well, they're often quite distributed, and you might have up to sort of 50 or even a 100 influencers in any one campaign. And so managing when they post and what they post on platforms like Instagram and TikTok is, again, a little bit of an art, and we'll use technology that we license to both manage the campaign, but also report on the effectiveness and the performance of the campaign while it's actually ongoing. And we'll we'll we'll report back to our clients, and we'll often also optimize performance based on what we're sort of seeing in real time. So I think that our expertise is picking the right influencer, is it managing the influencers, often supporting them with sort of creative and strategic ideas because they're usually quite creative people in their own right, but we need to, sort of sync that creativity up with our with our brand's purpose, our client's purpose, and sort of the mission that they're on as a as a company. And then we'll do a lot of reporting and optimization of the campaign in real time to make sure that the brand, our client, is getting really good value for money.

20:58 Does that answer your question? Yeah. So there's no there's no permanent ties No. Yeah. Influence? We don't manage influences. Some companies, basically, sort of manage talent and will have an agreement with an influencer whereby they take, let's say, 20% of all fees that go through them. What we found in our business is that, actually, that sort of makes us a little bit biased, and clients get a little bit uncomfortable when we're promoting them you them using our own influences when, actually, there's hundreds and thousands of influences out there. We should be using the right influences for the right campaign. Thank you. Can I can I just ask about, the organic growth of the business, which is always I find a little bit difficult to discern from the numbers? Obviously, you've got huge acquisitive growth.

21:50 How you know, given that you've I feel there should be a market that's growing, you know, still fairly rapidly, do you feel you're keeping market share or your your your organic growth is is a. Yeah. I mean, I think that's the way we calculate organic growth, we've had to look at a couple of times because, typically, we buy these businesses, we rebrand them, and we stuff them full of our employees, and then we market them under our brand. So it's been quite difficult to sort of agree on something exactly over the last eighteen months that we can track month to month to month. I think if I if I think about it generally, we are in an exciting market. That market has expanded and and looks like it will continue to expand.

22:36 I think that particularly in social, yes, that's that's something that we absolutely aim to achieve. I think 2021 to 2022, we did post double digit organic growth by all of the different ways of calculating it that we could. We're very pleased with that. For 2023, I think we have a a lower forecast out there, but that's certainly something that we would we would seek to achieve. I think within our respective markets, we have a good offering. We have a a a a exciting, fresh, and modern proposition for each of those business units, and we certainly would hope to grow at least in line with the market if not more. I just asked some financial questions.

23:22 Mhmm. I saw in the annual report that you have, I believe, 49,900,000 tax losses going forwards, offset considerable sum. Yeah. Absolutely. Just wondering if you expect those all to be utilized more? And so we've got a bit of a mixture. There's some of the more recent tax losses that we can use more flexibly around the group. Mhmm. So that is, I think, around about 7,000,000 that we should be able to use against profits in any part of the group pretty much. The remainder, we will need to use against profits of the same trade, because of when they were built up. So we're looking at, you know, how best to structure the group and so that we can make the most efficient use of those losses moving forward. Yeah.

24:09 So does that could that result in effectively influencing your acquisition strategy? Because, obviously, that's quite significant asset to have in your balance sheet? It is significant. I don't think we're as far as it actually influencing our acquisition strategy, however, at the moment. I think, certainly, for the next couple of years, the losses should mean that we're paying very low levels of corporation tax anyway. And the existing sort of structure of the group should mean that our corporation tax levels are significantly lower, but I don't think we would want it to to determine our acquisition strategy. And just on trade debts, I noticed you have about 700,000 sitting in debts due for one year, albeit reduced from the previous year. Your provisions cover majority of that.

25:04 You know, it's an unfortunate part of business life, but it's a particularly painful one. I just wonder if you can comment on whether that's a specific debt and what the recovery prospects are there. Yeah. So there is a specific debt which sits in that bucket of over one year, which actually nets off against other balances on our balance sheet. So we are looking to clear that up. We're sort of working with our auditors to basically clear that off the balance sheet completely. Essentially, the net position is pretty much zero. I think the net position is around £30,000. So, so those balances over one year, think there was a note in the annual report about it. We don't consider that to be an issue because they just net off against other balances. But it's a specific data that matches with a specific creditor Yep. And the balance between the two is zero. Okay. We've held it on our accounts for a long time. Think about five years. Five years. We've we've we've long wanted to write it off, but it's as an audit issue, we've had to keep it there.

26:03 Well, it's breaking a letter from the other party to Quite. Yeah. But they're they're not asking us for the money. We're not asking them for the money. It's it's held in in That's obviously very good news just from the presentation waiting. Absolutely. Yeah. Good. Just finally, I was intrigued to see you you were getting some r and d tax credits back Yep. From the government, which tells me how, on the one hand, how technical aspects of your business are. I just wonder if you could comment what these specifically are, which area of the business, and whether you see this kind of thing going forward or whether it relates to just a a once off perhaps related to one of your recent acquisitions.

26:55 So it was definitely higher in 2022 than it will be going forward. There's a couple of reasons for that. Firstly, 2022 included a couple of years claims for some of the companies. The bulk of the r and d tax credits that we claim relate to, BRAVE BISON and GROUP Commerce because, obviously, that is the part of the business that is most sort of technical, most focused on development. Although we do have claims relating to all of the companies because in all areas, we're doing some little bits of r and d, internal, and and for external clients. In terms of going forward, I think that is we expect there to be some going forward, but it is going to become slightly trickier. One of the key reasons for that is that the rules have been changed to make it harder to claim for overseas subcontractors who are doing that r and d work.

27:43 So for instance, a lot of our most of our developers are based over in Brave Bison, Bulgaria, who we use as an initial hub. We also have, obviously, have the Egypt hub, within Brave Bison Commerce. So, it's going to be harder for us to claim r and d tax credits in relation to the work that is done in those hubs going forward. So that is going to come down, but we would do anticipate, still making some claims. Any other questions? Alright. Okay. Well, that concludes the business of this annual general meeting, and I declare the meeting closed. Thank you for your continued support of the company, and I look forward to updating shareholders on progress at our interim period and throughout the rest of the year. Thank you.

28:32 Thank you. Thank you. Sorry. Go ahead. Thank you very much for thank you very much for indeed for updating attendees today on behalf of the board of BRAVE BISON GROUP PLC. Like to thank you for attending today's annual general proceedings, and good morning. Thank you.