Corporate Governance
This is my first statement since becoming Chairman of Bidstack in September 2022 and I would like to thank Donald Stewart, the outgoing Chair for all his hard work during his tenureship since the public listing in August 2018 and I am pleased that he remains a Non-Executive Director of Bidstack.
Looking back at 2022, it has been a year in which Bidstack has strengthened its position in many important areas as a leading platform in native in-game advertising activation technology. It has also been a year, where, coming into 2023, Bidstack has set itself up to become more strategic, more predictable in terms of earnings and profit and more in control of its commercial operations through direct sales to its clients and partners thus maximising global growth opportunities.
The 2022 financial numbers speak for themselves:
(*Gross billings including all gross revenues and gross Azerion minimum revenue guarantee for FY22 were £9.3m (FY21: £2.6m), in line with our contractual arrangements.)
(** Gross margin arising as a result of the net accounting treatment of revenues and corresponding costs of sales towards servicing the Azerion contract in accordance with IFRS15. Excluding this treatment the Board believe that adjusted gross margin would be closer to 40%)
There are a considerable number of key highlights on which I will comment:
At a time when fundraising was generally very difficult in the industry:
Making huge strides by:
Expanding, commercial activity in North America where a significant portion of Bidstack’s potential business exists by:
At the same time, making significant inroads into all UK and European markets by:
Expanding Bidstack’s global reach by:
In the area of advancing technology and standardisation in the industry:
The road in 2022 has not, however, been without obstacles on the way.
I will comment on the principal one.
The appointment of Azerion in 2021, as a global reseller of Bidstack’s offerings, boosted Bidstack’s sales capabilities in Europe but Azerion materially underperformed against mutual expectations in North America as well as across the rest of the world. Bidstack took immediate action to mitigate Azerion’s shortfall by appointing its own experienced US sales team.
Azerion failed to remit properly invoiced sums due to Bidstack under the terms of the contract between the parties, resulting in Bidstack being awarded attachments (freezing injunctions) against Azerion in December 2022 and then defending Azerion’s petition to have these removed in the Court of Amsterdam in January 2023. Following the judgement of the Dutch court in January, Azerion has provided Bidstack with bank guarantees for the amounts due to Bidstack under its initial claims. Azerion’s purported termination of the contract on 30 December 2022 increased the quantum of Bidstack’s claims materially. Following advice, the Board believes that, unfortunately, a court hearing on these claims is not likely to occur before Q4 2023.
Whilst this legal action is regrettable, it has meant that Bidstack now has far greater control over enabling the Company to become more agile globally.
With Bidstack’s improving revenue visibility and a growing client list, the Board is confident in Bidstack’s ability to operate independently of any Azerion relationship.
As previously stated, Bidstack intends to vigorously continue pursuing Azerion in respect of its claims for unpaid invoices and breaches of contract.
As a Board we are excited by the future of the industry the Company has helped create, the use-cases for our technology. The management team, led by our Founder and Chief Executive James Draper, are focused on achieving our commercial and financial objectives.
Finally, thank you to our loyal and ‘cornerstone’ institutional and retail investors and our dedicated employees and partners for your support throughout 2022.
Dr David Reeves
Chairman