18 Aug 2009 15:14
18 August 2009 iPoint-media plc ("iPoint" or "the Company") Interim Results For the six month period ended 30 June 2009
iPoint (AIM: IPNT), a leading provider of live interactive video calling applications and delivery platforms for web, mobile and media, announces its interim results for the six month period ended 30 June 2009 (the "period"). These interim results are unaudited and not reviewed by an external auditors.
Chairman's Statement
During the period, the Company focused on implementing projects with mobile operators and developing new projects for Vitrage, its leading video application platform for 3G mobile devices, in particular working closely with Telefonaktiebolaget L M Ericsson ("Ericsson") and Ericsson's market units globally. Several projects were delivered to telecom's operators during the period.
.Financial highlightsThe Company generated unaudited revenue of 619,571 for the six month periodended 30 June 2009 compared to 446,037 for the period ended 30 June 2008 andgross profit for the period of 543,839 compared to 358,434 in 2008. Theresults represent an increase of 39 per cent. in revenue and 52 per cent. ingross profit. The delivery of several projects to mobile operators throughEricsson's market units during the period was a key factor in the improvementof the results.The six month period ended 30 June 2009 produced a net loss of 307,214compared to 798,418 for the period ended 30 June 2008. The reduction in netloss in the six month period ended 30 June 2009 compared to the previous periodwas achieved principally due to the increase in revenue and a 30 per centreduction in operating expenses.Although revenues were still relatively modest, the Company has commencedcertain projects already which are due to complete in the second half of theyear and the Directors believe that there are good growth prospects in iPoint'skey markets and that the Company's products and capabilities are well-matchedto market requirements.The Company has a credit facility (up to NIS 3.5 million) with United MizrahiBank Ltd ("the Bank"). The repayment of the Company's debt to the Bank iscurrently guaranteed by Nisko Projects Investments Ltd. ("Nisko"), theCompany's largest shareholder. By a deed dated 25 August 2006 (as amended on 12December 2008), Nisko agreed that it would not withdraw or otherwise impair theguarantee before 31 December 2009. The Company is currently examiningalternative financing options which will enable it to meet the cash flowrequirements of the Company.In light of current economic conditions, the directors implemented a costcutting plan during 2008 and in the first six months of 2009, which resulted ina reduction in expenses of approximately 30 per cent. The cost reduction planwas based mainly on the reduction of salaries and in the number of employees inorder to allow the Company to operate with lower costs while still supportingthe performance of major contracts.
iPoint's business
iPoint's business is developing live interactive video calling service creationplatforms that enable telecom and media companies to deploy a wide variety ofapplications and services over broadband internet and mobile networks. iPointhas developed a `Telco grade' video application platform that incorporates apowerful service creation environment (SCE). The SCE is based on a suite ofsoftware building blocks and pre-configured application templates that enablequick and easy deployment of video calling services over IP and 3G networks.
iPoint's business strategy is based on delivery to three verticals: telecoms, media and content aggregation. The Group's core technology and intellectual property are common to all these verticals.
During 2009, iPoint executed its strategy in the telecoms vertical by workingclosely with Ericsson and implemented signed projects and submitted proposals,together with Ericsson's market units, to tenders issued by leading telecomoperators worldwide. Ericsson is the world's leading vendor for the telecomsindustry and the directors believe that by working closely with Ericsson, itspresence can be leveraged to generate sales of iPoint's video applicationplatform known as Vitrage, which complements the Video Gateway (VIG) ofEricsson. To date Ericsson has secured three tenders (two of them alreadydelivered) issued by telecom operators in Europe in which the Vitrage platformis used. In addition, iPoint, together with Ericsson, built a pipeline of 25potential tenders for projects with telecom operators in the CIS, Latin America(including Brazil) and Mexico and Southern Europe (including Turkey). TheEricsson channel comprises approximately 25 distinct underlying projects (invarious phases of quotation/implementation) with revenues to the Company fromeach project in the range of $250,000 to $600,000.
The directors expect some of these tenders to take place in 2009 although some will be delayed until 2010 because of the impact of the global recession.
iPoint has been in discussions with IBM and the media vertical has beenexpanded to provide user generated content and applications for the printingindustry, in addition to TV and mobile services already provided. iPoint'soffering will become a standard part of IBM's `Media Hub' solution in additionto video calling applications. Based on the cooperation with IBM, the Israelichief scientist office and IBM jointly granted iPoint the sum of NIS 500,000 ina special ,`Tafnit' , program to cover the research and development costs ofintegrating Vitrage into IBM's Media Hub.As a result of the economic slowdown in the media market and the restructuringat IBM, iPoint did not succeed in achieving a significant proportion of therevenues expected from the media sector for the period under review. Theslowdown in advertising revenues has had a significant impact on the mediasector as a whole and budgets for new projects in particular. Consequently, thedirectors believe that revenues derived from the media vertical will continueto be affected during 2009.iPoint continued to pursue opportunities in the content aggregation vertical,primarily in the UK, Belgium and Germany. The Company has developed atechnology called `Glaze', creating an interface to existing web-based videochat and content delivery platforms, which enables subscriber connections from3G mobile to these services. As a result, the amount of work required tointroduce a 3G mobile service for this market is reduced and the overall valueproposition is more attractive.
Operational highlights
Material achievements for the Company in the six months ended 30 June 2009 were:
* On 27 January 2009 the Company issued an aggregate of 8,208,000 Ordinary
Shares at a price of 5p per share to raise 380,000, net of expenses.
* Ericsson and iPoint-media jointly demonstrated new 'GOliveCare' product at
the Mobile World Congress 2009. GOliveCare is a new live interactive mobile
video solution for healthcare providers. * The Company announced that following an extensive trial period, a major mobile operator has selected the Company's vitrage platform to provide
interactive video calling services over its newly deployed 3G/UMTS network
through the Company's partnership with Ericsson Turkey & Israel.
* During the first half of 2009 the Company succeeded to deliver, through the
Ericsson's marketing channel, two projects with European's mobile
operators.
Outlook and Strategy
The results for the full year to 31 December 2009 are largely dependent on contracts that are expected to be signed in the second half of the year, particularly through the Ericsson channel.
In the second half of 2009, iPoint will be focusing on completing the salescycle and deploying its solutions with several operators through Ericsson.Several trials with Ericsson are ongoing or have been concluded successfully.The directors believe that several projects through Ericsson will materialiseduring the second half of 2009.
The outlook of the media vertical is more difficult to assess. With the collaboration with IBM, the Company expects new opportunities to be presented.
Existing business with content aggregators is slowly gaining pace and newcontracts are expected to contribute to the revenue stream in the comingmonths. With the introduction of a new facility for content servicesprovisioning, the Company expects that its content vertical will grow toapproximately 30 per cent. of its total revenues in the next two to threeyears. This projected growth is supported by the forecasts of industry analystsfor the consumption of content services in all media, but especially throughmobile networks.I should like to thank all of our team for their commitment, professionalismand creativity, which has placed iPoint as a frontier technology pioneer in thebroadcast and media sector.iPoint remains utterly committed to its core values: total quality andinnovation, increasing its revenues and developing its relationships withpartners and customers.E SagiChairman18 August 2009Further Enquiries:iPoint-media plc Muki Geller Tel: (0) 972 544 450 667 Simon Marks Tel: (0) 972 3 606 1600
John East & Partners Limited, a subsidiary of Merchant Securities plc David Worlidge/Bidhi Bhoma Tel: 020 7628
2200
Income Statement
For the six months ended 30 June 2009
Six months Six months Year ended ended ended 31 December 2008 30 June 30 June (audited) 2009 2008 (unaudited) (unaudited) GBP GBP GBP Revenue 619,571 446,037 871,802 Cost of sales (75,732) (87,603) (164,875) Gross profit 543,839 358,434 706,927 Research and development (337,752) (363,878) (695,499) Selling and marketing (231,360) (415,945) (822,551) Administrative expenses (234,780) (349,956) (507,058) Impairment to goodwill - - (1,293,900) Loss from ordinary activities before income (260,053) (771,345) (2,612,081)tax and finance costs Net finance costs (39,961) (20,807) (813) Loss before income tax (300,014) (792,152) (2,612,894)
Tax on loss on ordinary activities (7,200) (6,266)
-
Net loss from ordinary activities (307,214) (798,418)
(2,612,894)
Basic and diluted earnings per share (0.22p) (0.71p)
(2.3p)
The income statement has been prepared on the basis that all operations arecontinuing operations.Balance SheetAs at 30 June 2009 As at As at As at 31 December 30 June 30 June 2008 2009 2008 (audited) (unaudited) (unaudited) GBP GBP GBP Assets Non-current Assets Intangible assets 157,871 1,451,771 157,871 Property, plant & equipment 48,613 92,534 63,249 Non-current receivables - - - 206,484 1,544,305 221,120 Current assets Trade receivables 261,504 164,075 157,896 Other receivables 30,512 14,554 55,171 Cash & cash equivalents 159,974 388,121 65,163 451,990 566,750 278,230 Total assets 658,474 2,111,055 499,350 Equity and liabilities
Share capital and reserves
Issued capital 551,315 530,445 530,789 Share premium account 3,410,251 3,040,629 3,050,777 Other reserves 322,760 331,568 322,760 Reverse acquisition reserves 1,098,894 1,098,894 1,098,894 Merger reserve 854,146 854,146 854,146 Retained earnings (6,518,509) (4,405,627) (6,211,295) Translation reserve (9,342) (62,510) (152,161) Total equity (290,485) 1,387,545 (506,090) Non-current liabilities 55,462 66,010 51,008 Current liabilities Trade & other payables 416,698 560,102 380,983 Related party 19,760 - 25,513 Deferred income 137,250 85,914 71,136 Short term borrowing 319,789 - 476,800 Finance lease obligations - 11,484 - Total current liabilities 893,497 657,500 954,432 Total liabilities 948,959 723,510 1,005,440 Total equity and liabilities 658,474 2,111,055
499,350
Cash Flow Statement
For the six months ended 30 June 2009
Six months Six months Year ended ended ended 31 December 30 June 30 June 2008 2009 2008 (audited) (unaudited) (unaudited) GBP GBP GBP
Cash flows from operating activities
Cash receipts from customers 604,574 565,654 920,320 Cash paid to suppliers and employees (865,398) (1,307,210) (2,355,388) (260,824) (741,556) (1,435,068) Cash absorbed by operations Interest paid (7,063) (2,922) (1,845) Interest received 170 13,829 21,564 Net cash outflow from operating (267,717) (730,649) (1,415,349)activities
Cash flow from investing activities
Acquisition of subsidiary - - - Purchase of equipment (23,859) (4,260) (23,886) Proceeds from sale of equipment - 2,380
(13,982)
Exchange differences on fixed assets 20,579 (17,201) 4,459depreciation/cost Net cash outflow used in investing (3,280) (19,081) (33,389)activities
Cash flows from financing activities
Proceeds from issue of shares 380,000 - - Less: costs of issue - (3,285) (3,286) Exercise of share option - 6,323 6,708 Payment of finance lease - (17,215) (28,699) Net cash flows used in financing 380,000 (14,177) (25,277)activities Exchange differences 142,819 18,204 (71,446)
Net increase in cash and cash equivalents 251,822 (745,703) (1,545,461)
Cash and cash equivalents brought forward (411,637) 1,133,824 1,133,824
Cash and cash equivalents carried forward (159,815) 388,121 (411,637) Represented by: Positive cash balance 159,974 388,121 65,163 Short term borrowing (319,789) - (476,800) (159,815) 388,121 (411,637)
Unaudited Group Statement of Changes in Equity
For the six months ended 30 June 2009
Share Share Share-based Translation Reverse Merger Retained Total capital premium payments reserve acquisition reserve earnings reserve GBP GBP GBP GBP GBP GBP GBP GBP At 1 January 528,418 3,039,066 395,564 (80,714) 1,098,894 854,146 (3,671,205) 2,164,1692008 Shares issued 19 533 - - - - - 552on acquisition of ANV Exercise of 2,008 4,315 (63,996) - - - 63,996 6,323share options Costs of share - (3,285) - - - - - (3,285)issue Exchange - - - 18,204 - - - 18,204adjustments Loss for the - - - - - - (798,418) (798,418)period At 30 June 530,445 3,040,629 331,568 (62,510) 1,098,894 854,146 (4,405,627) 1,387,5452008 At 1 January 530,789 3,050,777 322,760 (152,161) 1,098,894 854,146 (6,211,295) (506,090)2009 Shares issued 20,520 359,480 - - - - - 380,000in period for cash Shares issued 6 (6) - - - - - -on acquisition of ANV Exchange - - - 142,819 - - - 142,819adjustments Loss for the - - - - - - (307,214) (307,214)period
At 30 June 551,315 3,410,251 322,760 (9,342) 1,098,894 854,146 (6,518,509) (290,485) 2009
Notes to the Interim Financial Statements for the six months ended 30 June 2009
1. Basis of preparation
The interim financial statements include the financial position of the Companyand its subsidiaries iPoint USA Corporation, iPoint-media Limited, All NewVideo Plc (in liquidation since 21 December 2007) and All New Video (UK)Limited (together "the Group") as at 30 June 2009 and the results of itsoperations for the six months then ended. They have been prepared on accountingbases and policies that are consistent with those used in the preparation ofthe financial statements for the year ended 31 December 2008.
The interim financial statements have not been audited or reviewed by external Auditors.
The interim financial statements do not comprise statutory accounts for the purpose of Section 240 of the Companies Act 1985. The figures for the year ended 31 December 2008 have been extracted from the statutory accounts filed with the Registrar of Companies on which the auditors gave an unqualified report.
2. Goodwill
No impairment review has been carried out on the Company's goodwill as at 30June 2009. In accordance with IAS36 an impairment review is to be carried outannually. As no review has been carried out, it is possible that the goodwillfigure could be impaired as at 30 June 2009.3. TaxCorporation tax: Six months Six months Year ended ended ended 31 December 30 June 2008 30 June 2008 2008 (unaudited) (unaudited) (audited) Income statement
Current tax on income for the period 7,200 6,266
-
Factors affecting the tax charge Loss on ordinary activities before (300,014) (792,152) (2,612,894)taxation Aggregate of loss on ordinary (70,858) (215,573) (744,675)
activities before taxation multiplied
by domestic tax rates Effects of: Expenditure not allowable for tax 15,300 30,598 777,097purpose Unrelieved tax losses and other 55,558 184,975
(32,422)
deductions arising in the period
- - -4. Loss per share
The basic loss per share is calculated by dividing the loss attributable toequity shareholders by the weighted average number of shares in issue. Incalculating the diluted loss per share, share options outstanding have beentaken into account where the impact of these is diluted. Options were excludedfrom the calculation of the total diluted number of shares, as the impact ofthese is anti-dilutive.
The weighted average number of shares in the period was:
Six months Six months Year ended ended ended 31 December 30 June 30 June 2008 2009 2008 (audited) (unaudited) (unaudited) Total 121,326,848 113,220,439 113,162,943 Loss attributable to equity (307,214) (798,418) (2,612,894)shareholders of the parent Basic and diluted earnings per share (0.22p) (0. 7p) (2.3p) 5. Equity fundraising
On 27 January 2009 the Company issued an aggregate of 8,208,000 Ordinary Shares in respect of 380,000.
6. Dividends
No dividends have been declared for the six months ended 30 June 2009.
7. Copies of the Interim Results
Copies of the Interim Results are available on the Company's website www.ipoint-media.com.
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