LONDON (Alliance News) - IMIMobile PLC, which listed on AIM in June, Tuesday said its pretax profit nearly doubled in its last financial year, driven by its expansion into the Middle East and Africa, continued growth in Europe, and as margins were buoyed by the falling costs of network infrastructure.
It also said the current financial year has started well, with trading in line with its expectations and several major customer contract renewals across the company.
IMIMobile, which provides mobile communication software and services, is growing on the back of the back of the expansion of mobile operator networks and their data carrying capacity. Its software and services provides clients with products like mobile customer relationship management and customer engagement channels.
It reported a pretax profit of GBP5.3 million for the year to end-March, compared with a profit of GBP2.7 million a year earlier, as revenue rose to GBP43.4 million, from GBP38.5 million, and its earnings before interest, tax, depreciation and amortisation margin, adjusted to exclude IPO costs, disposals and share-based payments, rose to 16.6%, from 15.8%.
"Underpinned by strong repeat and recurring revenue streams, we will continue to build on the organic growth achieved to date, whilst seeking additional growth opportunities in new regions such as the US and also complementary acquisitions," Chief Executive Jay Patel said in a statement.
The company's major growth markets are currently in the Middle East and Africa. Gross profit was up 149% to GBP10.7 million in the region, while recurring revenue was up 68% as it launched further services, and in more countries, after signing agreements with mobile network operators Orange and MTN. It launched in Ivory Coast, Democratic Republic of Congo, Botswana and Senegal.
Gross profit was up 8% in Europe's more mature markets, while margins grew in the region due to the falling cost of network infrastructure, a trend it expects to continue.
India is the company's problem country, as new regulation on mobile operators in the country takes its toll. Gross profit was down 29% on the year in India and south east Asia, with the depreciation of the Indian Rupee contributing a 10% reduction.
"The decline reflects a fall of 12% in revenues measured in local currency and is a direct consequence of the implementation of new consumer protection regulation that has impacted our customers, chiefly the mobile network operators," it said.
"In India our main activity is managing certain content and value added telecom services for mobile operators and tighter regulation requiring operators to seek additional consents to sign customers up to these services led to a period of transition as new third party consent gateways have been implemented," it added.
IMIMobile has also started opening offices in the US and is hoping to grow this business after winning its first major deal with a US prepay mobile operator.
"The US market is undergoing considerable change currently and increasing competition amongst the US carriers is driving the need for US carriers to increase customer retention and loyalty," it said. "We expect to make significant commercial progress in the next 12 months and in view of the scale of the opportunity, we will continue to invest for long- term growth."
The company also expects to act as a consolidator in the fragmented mobile software and services market, and is seeking acquisitions "which offer complementary product lines or customer bases".
IMIMobile shares were up 0.4% at 133.50 pence Tuesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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