LONDON (Alliance News) - Mobile technology company IMImobile PLC Monday reiterated it is confident of meeting its full-year profit targets, at the same time it announced it has acquired cloud-based, mobile messaging business TxtLocal Ltd, for which it will pay a combination of cash and shares.
The company, which listed in June, said it will pay up to a total of GBP13.15 million for TxtLocal, comprising an initial consideration of GBP10 million in cash and GBP1 million by issuing 707,564 shares at a price of 141.33 pence. It said it will make additional deferred payments, split over two years, of up to a maximum of GBP2.15 million. It said the initial cash consideration will be met from the group's existing cash resources.
IMImobile shares were down 1.9% Monday morning, trading at 139.25 pence.
TxtLocal is a cloud based, mobile messaging business predominantly targeting small and medium sized businesses in the UK. In the year ended November 30, 2013, it generated GBP7 million in revenue and a net profit of GBP1 million.
IMImobile said it expects the acquisition to be earnings enhancing from the second half of the financial year ending March 31, 2015, and said it also will benefit from a number of cost synergies.
It said there are significant opportunities to leverage IMI's footprint to introduce TxtLocal's offering into new international markets.
"TextLocal has a best-in class product that addresses the small and medium sized businesses segments that we do not currently serve and we see opportunities to cross-sell capabilities as well as an opportunity to leverage our global distribution and operator relationships. We expect to integrate the acquisition rapidly into the group over the next six months," said Chief Executive Jay Patel in a statement.
In Monday's statement, the company also said trading for the six months ended September 30 was in line with management expectations, and it is "highly confident" of achieving full-year profit targets for the existing business.
It said trading in its core European activities, which account for roughly 50% of the business, has been strong with significant gross profit growth in the region from a higher margin mix of sales. However it said some of the growth was offset by challenging trading conditions in its Indian operations, which account for less than 20% of the group's business.
"The board remains highly confident about the group's prospects for the remainder of the year and the achievement of profit expectations for the enlarged group for the full year ending March 2015," it said.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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