11 Jun 2008 07:00
UBC Media Group plc
UBC Media Group reduces expenditure on Cliq by closing mobile phone consumer service
London 11th June, 2008: UBC Media Group plc ("UBC" or "the Company") has today announced the closure of the loss-making mobile phone version of its Cliq music downloading service and will instead concentrate on providing a business-to-business solution to manufacturers of connected devices, including Wi-Fi digital radios like Imagination Technologies, with whom it has an existing relationship.
Consumer take-up of the mobile phone service since its launch in December 2007 has been slower than expected and availability of mobile phones with built in DAB radios continues to be restricted. The Company has encountered greater than expected technical difficulties with the interim solution of a JAVA application on UK handsets and networks.
In its accounts to March 31st 2008, UBC will impair previously capitalised development costs of £2 million.
In the current financial year, to March 31st 2009, UBC expects to make savings of £1.2million after closure costs of approximately £1.1million. No further funds will be invested in Cliq.
As at today's date, UBC has a cash balance of £4.35 million.
In the current market UBC is focused on reducing risks and costs and increasing profitability. UBC will continue to own the intellectual property developed in connection with the Cliq service. The Company will now incorporate this IP within the Unique Interactive division ("UI") and use this, and the technical infrastructure it has developed, to offer the Cliq solution in the same way UI has successfully marketed its other digital radio software products.
Commenting on the closure of the Cliq mobile service, Chief Executive Simon Cole said:
"I remain convinced that transactional revenues will be an important part of the radio industry in the future. For a variety of reasons, including the delay by manufacturers in bringing DAB connected devices to market, we have tried to lead this process in the interim on the JAVA mobile phone platform and have not succeeded. However, the technology, intellectual property and pending patents that we have developed during this process remain within the business. We believe we can exploit these without the need for the high risk, high cost exposure to a consumer service "
UBC announced on May 8th 2008 that it had signed a letter of intent with Global Traffic Network, Inc., under which Global Traffic Network agreed, subject to contract and UBC shareholder approval, to acquire the Commercial Division of UBC for £15 million. The transaction is expected to close on or before 31st July 2008 and is progressing satisfactorily towards exchange of contracts.
Ends
Enquiries
Simon Cole, CEO, UBC Media Group plc. Tel: 020 7453 1600
Verity Williams, Portland for UBC. Tel: 020 7842 0134 or 07877 767 710 Email: verity.williams@portlandpr.co.uk
Mark Percy or Sarah Jacobs, Seymour Pierce Limited. Tel: 020 7107 8000
Notes to Editors
About UBC Media Group
UBC is quoted on the London Stock Exchange's AIM market. UBC is the market leader in the supply of audio content to the radio industry in the UK. In addition to the entertainment, traffic & travel and national news services provided to commercial radio, the Group is the largest independent producer of radio programming for the BBC. It is part of the MXR Regional Multiplex and the 4Digital National multiplex consortium.
www.ubcmedia.com