Company Registration No. 07239735 (England and Wales)
TEADS LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
TEADS LIMITED
COMPANY INFORMATION
Directors
Betrand-Romain Quesada
Justin Taylor
Company number
07239735
Registered office
2nd Floor, 201 Great Portland Street
Marylebone
London
W1W 5AB
Auditor
Shaw Gibbs (Audit) Limited
264 Banbury Road
Oxford
OX2 7DY
Business address
3rd & 4th Floor
70 New Oxford Street
London
WC1A 1EU
TEADS LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4
Directors' responsibilities statement
5
Independent auditor's report
6 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Statement of cash flows
11
Notes to the financial statements
12 - 22
TEADS LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 1 -
The directors present the strategic report for the year ended 31 December 2019.
Fair review of the business
We aim to present a fair review of the development and performance of our business during the year and its position at the year end.
Principal risks and uncertainties
Our business environment is fast paced and dynamic which inherently brings challenges. The directors manage exchange risk by reviewing exposure in the context of the group and by using group treasury management where appropriate. Risks are reviewed by the directors and actions taken to mitigate them.
Development and performance
The principal activity of the company continued to be advertising campaigns. Our programmatic business with DSPs (Demand Side Platforms) represents 40% of our total revenue in 2019 , TAM (Teads Ad Manager), 30% and managed services business represent 30% We have also focused our business on Mobile campaigns. Mobile delivery represented 60% of our total turnover. Our vision and strategies for the future include aiming for a continued growth on Mobile and TAM Self-Serve business.
Key performance indicators
The company considers that its key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, the turnover and gross margin. In the year to 31 December 2019, turnover was £61.5 million, compared to £51.4 million in the year ended 2018, a growth of 19.6%. The operational Gross Margin decreased by 5 points from 2018 (47%) to 2019 (42%), due to our increase in cost of sale to £35.6million in 2019 vs £27.2million in 2018 (31% increase YOY), this change was dictated by competitive market conditions. Despite a lower margin, we feel confident in our strategy as we expect a significant higher volume on Programmatic and TAM activity as opposed to Managed Services. UK Market currently indicates that clients are shifting more budget through the Programmatic and TAM funnels. Our administrative expenses increased by 16.4% in order to sustain scaling of revenue increase.
Promoting the success of the company
The Board of Teads Limited consider that they have adhered to the requirements of section 172 of the Companies Act 2016 and have, in good faith, acted in a way they consider would be most likely to promote the success of the company for the benefit of its shareholders, and in doing so have had regards to and recognised the importance of considering stakeholders and other matters in its decision-making.
In performing their duties under S172, the directors of the Company have had regard to the matters set out in S172 as follows
:
Teads’ mission is to foster a sustainable advertising and media ecosystem by funding quality journalism and respectfully connecting brands to consumers. Through direct and exclusive integrations with premium publishers, both in the UK and around the world, Teads delivers digital advertising at scale within the heart of editorial content. This guarantees brand safe, fraud free and totally viewable ad experiences that drive business results for advertisers. Teads’ demand-side, sell-side and creative technology delivers effective and engaging advertising experiences for consumers, guaranteed outcomes for brands, and ultimately powers publishers with better monetization solutions to fund quality journalism.
As the business is built around editorial content, data practices are naturally privacy focused and not based around 3rd party cookies. Teads supports the move to greater regulation around data privacy for consumers.
Business results are measured against revenue and EBITDA targets, on a quarterly and annual basis. Since Teads started trading in the UK over 10 years ago, the business has delivered consistent growth in both areas and outperformed industry benchmarks in terms of overall advertising industry, as well as digital and video markets more specifically.
TEADS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 2 -
Teads is a technology business of entrepreneurs, with employees encouraged to innovate and create at a fast pace to solve market challenges and drive excellence for advertisers, media agencies and publishers.
Teads is a board member of the Interactive Advertising Bureau (IAB) for both the UK and Europe, and is a founding member of the IAB UK’s Gold Standard, currently certified at latest edition - Gold Standard 2.0. Teads has been independently audited and certified to JICWEBS’ DTSG (Digital Trading Standards Group) and TAG Certified Against Fraud standards.
Our People
Teads is a company of entrepreneurs. We ensure all employees share our core values of Innovation, Hard work, Passion, Trust, A love of media, Team Spirit, Dedication to Clients
We encourage all employees to work collaboratively and communicate effectively in order to deliver our shared business goals.
Clients
Teads works with the largest and most well known brands in the UK, alongside the 6 biggest marketing holding groups in the world (WPP, Omnicom, Dentsu, Publicis, IPG, Havas and various independent agencies) to deliver outstanding media results for advertisers.
Having clients at the heart of Teads’ business means that innovation and progress is made in delivering solutions and over-indexing against industry benchmarks. Teads’ Performance Product, introduced in 2018, guarantees quality business results and visitors to site. Meaning advertisers are no longer paying for accidental clicks or landing pages that don’t load.
Teads’ creative arm, Teads Studio, delivers best-in-class formats that engage rather than enrage consumers when reading editorial content.
Suppliers
Teads’ suppliers are the most recognised publisher brands in the UK and around the world, including The Guardian, ESI, The Telegraph, Conde Nast, Hearst
, Buzzfeed and The BBC (internationally). By driving incremental revenue to their sites and supporting best-in-market ad formats, Teads is directly creating a more sustainable future for quality journalism.
Business impact
Teads understands the wider implications of advertising on socio-economic issues including Diversity, Equity and Inclusion, the Environment and the recent impact of COVID-19 on society at large. Teads is supporting the government’s Kickstart Scheme, bringing in 16 to 24 year olds on Universal Credit who are at risk of long term unemployment.
Teads has recently implemented a global Teads Together Council to work on global Diversity, Equity and Inclusion initiatives, and this has been replicated at a local level in the UK with the Culture Committee driving awareness and action for causes that are most important to the team.
We are conscious of the needs of the environment and currently looking at offsetting our carbon footprint by planting trees for every new starter. We are also undergoing market-leading research into our carbon footprint at a global level - taking into account emissions within Scope 1, Scope 2 and Scope 3 and therefore what measures can be taken to counteract those emissions.
TEADS LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 3 -
Justin Taylor
Director
22 April 2021
TEADS LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 4 -
The directors present their annual report and financial statements for the year ended 31 December 2019.
Results and dividends
The results for the year are set out on page 8.
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Directors
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
Betrand-Romain Quesada
Justin Taylor
Auditor
In accordance with the company's articles, a resolution proposing that Shaw Gibbs (Audit) Limited be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
On behalf of the board
Justin Taylor
Director
22 April 2021
TEADS LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2019
- 5 -
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
-
select suitable accounting policies and then apply them consistently;
-
make judgements and accounting estimates that are reasonable and prudent;
-
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
TEADS LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TEADS LIMITED
- 6 -
Opinion
We have audited the financial statements of Teads Limited (the 'company') for the year ended 31 December 2019 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 31 December 2019 and of its profit for the year then ended;
-
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
-
have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
TEADS LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF TEADS LIMITED
- 7 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:
-
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
-
the financial statements are not in agreement with the accounting records and returns; or
-
certain disclosures of directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company
'
s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Stephen Howard Neal (Senior Statutory Auditor)
For and on behalf of Shaw Gibbs (Audit) Limited
22 April 2021
Chartered Certified Accountants
Statutory Auditor
264 Banbury Road
Oxford
OX2 7DY
TEADS LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2019
- 8 -
2019
2018
Notes
£
£
Turnover
3
61,468,754
51,426,022
Cost of sales
(35,621,064)
(27,166,721)
Gross profit
25,847,690
24,259,301
Administrative expenses
(23,259,013)
(19,982,617)
Operating profit
4
2,588,677
4,276,684
Interest receivable and similar income
70,265
17
Interest payable and similar expenses
7
(7,539)
(20,094)
Profit before taxation
2,651,403
4,256,607
Tax on profit
8
(446,629)
(1,094,264)
Profit for the financial year
2,204,774
3,162,343
The profit and loss account has been prepared on the basis that all operations are continuing operations.
TEADS LIMITED
BALANCE SHEET
AS AT 31 DECEMBER 2019
31 December 2019
- 9 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
9
99,179
232,606
Investments
10
5,001
5,001
104,180
237,607
Current assets
Debtors
11
36,928,963
30,160,800
Cash at bank and in hand
2,156,358
1,242,712
39,085,321
31,403,512
Creditors: amounts falling due within one year
12
(28,583,127)
(23,064,219)
Net current assets
10,502,194
8,339,293
Total assets less current liabilities
10,606,374
8,576,900
Creditors: amounts falling due after more than one year
13
(636,264)
(799,483)
Provisions for liabilities
(16,921)
(29,002)
Net assets
9,953,189
7,748,415
Capital and reserves
Called up share capital
16
1,040,340
1,040,340
Profit and loss reserves
8,912,849
6,708,075
Total equity
9,953,189
7,748,415
The financial statements were approved by the board of directors and authorised for issue on 22 April 2021 and are signed on its behalf by:
Justin Taylor
Director
Company Registration No. 07239735
TEADS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2019
- 10 -
Share capital
Profit and loss reserves
Total
£
£
£
Balance at 1 January 2018
1,040,340
3,545,732
4,586,072
Year ended 31 December 2018:
Profit and total comprehensive income for the year
-
3,162,343
3,162,343
Balance at 31 December 2018
1,040,340
6,708,075
7,748,415
Year ended 31 December 2019:
Profit and total comprehensive income for the year
-
2,204,774
2,204,774
Balance at 31 December 2019
1,040,340
8,912,849
9,953,189
TEADS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 11 -
2019
2018
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
22
1,947,978
956,654
Interest paid
(7,539)
(20,094)
Income taxes paid
(1,058,545)
(1,346,595)
Net cash inflow/(outflow) from operating activities
881,894
(410,035)
Investing activities
Purchase of tangible fixed assets
(39,571)
(128,099)
Proceeds on disposal of tangible fixed assets
1,058
Interest received
70,265
17
Net cash generated from/(used in) investing activities
31,752
(128,082)
Net increase/(decrease) in cash and cash equivalents
913,646
(538,117)
Cash and cash equivalents at beginning of year
1,242,712
1,780,829
Cash and cash equivalents at end of year
2,156,358
1,242,712
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2019
- 12 -
1
Accounting policies
Company information
Teads Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
2nd Floor, 201 Great Portland Street, Marylebone, London, W1W 5AB. The principal place of business is 3rd & 4th Floor, 70 New Oxford Street, London, WC1A 1EU.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
A
true
t the time of approving the financial statements
,
t
he directors have a reasonable expectation that the
company
has adequate resources to continue in operational existence for the foreseeable future. Thus
t
he directors continue to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Turnover
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business
, and
is shown net of VAT and other sales related taxes
.
The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Leasehold land and buildings
at 33% at cost
Computer equipment
at 33% at cost
Fixtures and fittings
at 33% at cost
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
1.5
Fixed asset investments
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
The investments are assessed for impairment at each reporting date
and
any
impairment
losses or reversals of impairment losses are recognised immediately in profit or loss.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 13 -
1.6
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
1.7
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets
Basic financial assets, which include debtors and loans to fellow group companies and cash and bank balances, are initially measured at transaction price including transaction costs
.
Financial assets classified as receivable within one year are not amortised.
Other financial assets
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Impairment of financial assets
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected.
If an asset is impaired, the impairment loss is the difference between the carrying amount and the recoverable amount. The impairment loss is recognised in profit or loss.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when
the company
transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Basic financial liabilities
Basic financial liabilities, including creditors, bank loans, loans from
fellow group companies that are classified as debt, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities
.
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 14 -
Other financial liabilities
Derivatives, including interest rate swaps and forward foreign exchange contracts,
are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are
s
ubsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as
being measured at
fair value th
r
ough profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Derecognition of financial liabilities
Financial liabilities are derecognised when the company’s contractual obligations
expire or are discharged or cancelled.
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
1.8
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
1.9
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
1.10
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
1
Accounting policies
(Continued)
- 15 -
1.11
Leases
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.12
Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation
in the period
are included in profit or loss.
2
Judgements and key sources of estimation uncertainty
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In the directors' opinion there are no significant judgements, estimates or assumptions which require disclosure.
3
Turnover and other revenue
An analysis of the company's turnover is as follows:
2019
2018
£
£
Turnover analysed by class of business
Online marketing
29,935,321
18,577,301
Recharged expenses
31,533,433
32,848,721
61,468,754
51,426,022
2019
2018
£
£
Other significant revenue
Interest income
70,265
17
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
3
Turnover and other revenue
(Continued)
- 16 -
2019
2018
£
£
Turnover analysed by geographical market
United Kingdom
28,007,656
19,105,311
Rest of Europe
26,669,544
30,997,074
Rest of the world
6,791,554
1,323,637
61,468,754
51,426,022
4
Operating profit
2019
2018
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(153,810)
(133,613)
Fees payable to the company's auditor for the audit of the company's financial statements
25,000
Depreciation of owned tangible fixed assets
172,291
226,282
Profit on disposal of tangible fixed assets
(351)
Operating lease charges
886,653
859,713
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2019
2018
Number
Number
Sales and publishing
60
61
Marketing
7
6
Finance and administration
40
29
Management
1
1
Total
108
97
Their aggregate remuneration comprised:
2019
2018
£
£
Wages and salaries
9,472,159
8,114,902
Social security costs
1,297,610
1,013,259
Pension costs
537,036
313,822
11,306,805
9,441,983
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 17 -
6
Directors' remuneration
2019
2018
£
£
Remuneration for qualifying services
826,793
295,243
Company pension contributions to defined contribution schemes
15,509
11,777
842,302
307,020
Remuneration disclosed above include the following amounts paid to the highest paid director:
2019
2018
£
£
Remuneration for qualifying services
826,793
295,243
Company pension contributions to defined contribution schemes
15,509
11,777
7
Interest payable and similar expenses
2019
2018
£
£
Other finance costs:
Interest on finance leases and hire purchase contracts
750
Other interest
6,789
20,094
7,539
20,094
8
Taxation
2019
2018
£
£
Current tax
UK corporation tax on profits for the current period
458,710
1,044,057
Adjustments in respect of prior periods
45,129
Total current tax
458,710
1,089,186
Deferred tax
Origination and reversal of timing differences
(12,081)
5,078
Total tax charge
446,629
1,094,264
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
8
Taxation
(Continued)
- 18 -
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
2019
2018
£
£
Profit before taxation
2,651,403
4,256,607
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2018: 19.00%)
503,767
808,755
Tax effect of expenses that are not deductible in determining taxable profit
271,532
216,838
Group relief
(341,685)
Under/(over) provided in prior years
45,129
Depreciation add back
32,735
42,994
Capital allowances
(7,639)
(24,530)
Provision for deferred tax
(12,081)
5,078
Taxation charge for the year
446,629
1,094,264
9
Tangible fixed assets
Leasehold land and buildings
Computer equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 January 2019
546,324
234,498
248,041
1,028,863
Additions
37,675
1,896
39,571
Disposals
(1,058)
(1,058)
At 31 December 2019
546,324
272,173
248,879
1,067,376
Depreciation and impairment
At 1 January 2019
458,835
152,155
185,267
796,257
Depreciation charged in the year
81,115
50,802
40,374
172,291
Eliminated in respect of disposals
(351)
(351)
At 31 December 2019
539,950
202,957
225,290
968,197
Carrying amount
At 31 December 2019
6,374
69,216
23,589
99,179
At 31 December 2018
87,489
82,343
62,774
232,606
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 19 -
10
Fixed asset investments
2019
2018
£
£
Other investments
5,001
5,001
Movements in fixed asset investments
Other
£
Cost or valuation
At 1 January 2019 & 31 December 2019
5,001
Carrying amount
At 31 December 2019
5,001
At 31 December 2018
5,001
11
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
14,403,311
9,313,105
Corporation tax recoverable
101,235
Amounts owed by group undertakings
13,717,034
13,408,036
Other debtors
249,660
241,617
Prepayments and accrued income
8,457,723
7,198,042
36,928,963
30,160,800
12
Creditors: amounts falling due within one year
2019
2018
£
£
Trade creditors
4,666,305
3,763,995
Amounts owed to group undertakings
9,571,296
6,940,497
Corporation tax
498,600
Other taxation and social security
516,662
614,548
Other creditors
27,654
40,042
Accruals and deferred income
13,801,210
11,206,537
28,583,127
23,064,219
HSBC Factoring (France) holds a fixed and floating charge over the undertaking and all property and assets present and future of Teads Limited.
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 20 -
13
Creditors: amounts falling due after more than one year
2019
2018
£
£
Amounts owed to group undertakings
636,264
799,483
14
Deferred taxation
Deferred tax assets and liabilities are offset where the company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
Liabilities
Liabilities
2019
2018
Balances:
£
£
Accelerated capital allowances
16,921
29,002
2019
Movements in the year:
£
Liability at 1 January 2019
29,002
Credit to profit or loss
(12,081)
Liability at 31 December 2019
16,921
15
Retirement benefit schemes
2019
2018
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
537,036
313,822
The company operates a defined contribution pension scheme for all qualifying employees.
The assets of the scheme are held separately from those of the company in an independently administered fund.
Contributions totalling £44,059 (2018: £28,450) were payable to the fund at the reporting date and are included in accruals.
16
Share capital
2019
2018
Issued and fully paid
1,410,000 ordinary shares of 1 euro each
1,040,340
1,040,340
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 21 -
17
Financial commitments, guarantees and contingent liabilities
A revolving credit agreement was entered into by Teads SA, the immediate parent company on 27 December 2012 with a lender for between Euros 5M to Euros 8M.
The company has jointly provided security by way of legal charge on its assets.
18
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2019
2018
£
£
Within one year
606,244
386,697
Between two and five years
151,461
733,371
757,705
1,120,068
19
Events after the reporting date
The implications of the ongoing Covid-19 pandemic, especially in light of going concern, have been carefully considered. The directors believe that the company will be able to meet its liabilities as they fall due, for a period of at least 12 months from the date of approval of these financial statements using existing working capital and government support.
20
Related party transactions
The company has taken advantage of the exemption in FRS 102 not to disclose transactions with other group companies which are wholly owned within the group.
21
Ultimate controlling party
The ultimate parent company is Altice N.V. registered in Netherlands. The ultimate controlling party is considered to be Mr. Patrick Drahi by virtue of his shareholding in Altice N.V.
The largest group for which accounts are prepared is that headed by Altice N.V. The smallest group for which accounts are prepared is that headed by Altice International S.à r.l.
TEADS LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2019
- 22 -
22
Cash generated from operations
2019
2018
£
£
Profit for the year after tax
2,204,774
3,162,343
Adjustments for:
Taxation charged
446,629
1,094,264
Finance costs
7,539
20,094
Investment income
(70,265)
(17)
Gain on disposal of tangible fixed assets
(351)
Depreciation and impairment of tangible fixed assets
172,291
226,282
Movements in working capital:
Increase in debtors
(6,666,928)
(10,499,278)
Increase in creditors
5,854,289
6,952,966
Cash generated from operations
1,947,978
956,654
23
Analysis of changes in net funds
1 January 2019
Cash flows
31 December 2019
£
£
£
Cash at bank and in hand
1,242,712
913,646
2,156,358
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CCH Software
CCH Accounts Production 2021.100
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