Mobile Tornado Regulatory News (MBT)

28 Sep 2007 07:03

Mobile Tornado Group PLC28 September 2007 Mobile Tornado Group plc ("Mobile Tornado" or "the Company") Interim results for the 6 months to 30 June 2007 Mobile Tornado, one of the leading providers of convergent, presence-basedinstant communications announces its results for the six month period to 30 June2007. Highlights • £2.3m funding announced to support further investment in technology platform and European roll out of managed service proposition • Trials with two operators in United States for 'Push to Video' • New operator deal announced in Argentina • Managed service proposition launched in UK with InTechnology plc Financial Results Turnover in the six month period to 30 June 2007 amounted to £234k (2006:£191k). Operating losses increased to £1,895k (2006: £1,589k). After netinterest receivable of £38k (2005: net interest payable - £165k) the loss onordinary activities before taxation was £1,857k (2006: £1,754k). Net cashoutflow from operating activities increased in the period to £1,663k (2006:£1,244k). The Group consolidated balance sheet shows a net deficit at 30 June 2007 of£984k compared to a net deficit of £1,622k at 30 June 2006. Cash at bank was£1,195k at 30 June 2007 compared to £2,826k at 31 December 2006. The accounts have been prepared in accordance with UK Generally AcceptedAccounting Practice. The Board continues to consider the implications andtimetable for implementing International Financial Reporting Standards (IFRS).As an AIM listed Group the Board recognises that IFRS is expected to apply tothe Group from the first accounting period commencing after 1 January 2007. TheDirectors have elected to change the accounting period of the Group to 31December period end date in light of the period end date of other Groupcompanies. Consequently, the next annual accounting period of the Group will be1 July 2006 to 31 December 2007. The Board recognises that the first set of accounts of the Group that will beprepared under IFRS are those for the period 1 January 2008 to 31 December 2008and that this will require the Group to develop a corporate reporting structureand policies to meet this requirement. Review of operations Although there is some disappointment with the level of sales recorded duringthe period, I am confident that the progress we have made in a number of areashas put the Group in a strong position as it enters its next phase ofdevelopment. To ensure that we are able to fully exploit the current opportunities it hasbeen announced that further financing of £2.3million has been secured through acombination of the issue of the 12,251,333 shares held in treasury and the issueof £1.5million of cumulative redeemable preference shares. InTechnology plc haveshown continued support for the Company's plans by subscribing for the majorityof the treasury shares, thereby taking their shareholding to 49.9% and taking upthe full issue of preference shares. I have stated in the past that the injection of cash last year allowed thebusiness to continue investing in its technology platform whilst at the sametime strengthening the sales team and focussing on the key market opportunitiesfor our technology. Following on from the deal we announced earlier this yearwith Revol Wireless, an operator in Ohio, United States, I am pleased toannounce our first deal in South America with TecnoVoz, an operator inArgentina. The full details of this deal have been dealt with in a separateannouncement. I am hopeful that this deal will be the precursor to increasinglevels of activity in other South American countries. We are in trials with manyother operators throughout the world and I anticipate there being further dealclosures in the coming months. During the period under review, we have established an indirect sales model anddistribution network to sell enterprise solutions to businesses, utilising theGroup's core technology platform. InTechnology plc, our principal shareholderand managed services partner, has launched a managed service proposition in theUK where we receive a monthly royalty stream for each subscriber that utilisesour technology platform. The initial offering will be 'Push to Talk', althoughit is intended that as the subscriber base becomes established further 'Push toX' services will be added, including 'Push to Video' and 'Instant Messaging'.Initial sales efforts have been focussed on several key industry sectors,including security, distribution and local government. The early feedback hasbeen very positive and I anticipate that by the end of this year InTechnologyplc will have made their first sales and we will begin to receive royalties. We strongly believe that the managed service model is one that enterprisesthroughout the world will embrace. Utilising the managed service proposition, itis our intention to extend this service throughout Europe. We have an existingchannel partner in Germany and are in the process of putting in place similararrangements in Portugal and Greece. Our objective over the next 9 months is toestablish partners in every major European territory. We continue to invest in our core technology platform and the 'Push to X' suiteof services. Having showcased our 'Push to Video' technology at the CTIA showearlier this year I can now confirm that through our partnership with NortelNetworks in the United States, we are currently in the middle of trials with two'tier one' (greater than 2 million subscribers) operators for our 'Push toVideo' application. The trials have progressed well and I hope to be in aposition to give a further update before the end of the year. Current trading and future prospects The Company has made good progress during the period under review. Although thishas not yet been translated into sales I am confident that we are nowpenetrating a number of significant markets with our technology. We havesignificant levels of activity in the United States and South America and I amconfident further tangible sales progress will be made in coming months. I anticipate that sales generation within Europe will be delivered through theCompany's new managed services proposition and our objective over the nextfinancial period is to increase the number of partners in key Europeanterritories to ensure that as many enterprises as possible are exposed to thebenefits of instant communications. A key objective over the next few months is to establish strong and productivepartnerships in China and India, two of the fastest growing economies in theworld. There has already been great interest shown in our technology in theseterritories and we hope to secure relationships that will ensure that ourpotential in these markets is maximised. We continue to rely on the skill and commitment of our employees around theworld and I would like to thank them for their contribution this year and lookforward to these efforts producing increased tangible results over comingmonths. Peter WilkinsonNon executive Chairman28 September 2007 For further details please contact: Mobile Tornado Group plcJeremy Fenn, Chief Financial Officer Tel: +44 (0) 7734 475888 Blue Oar Securities PlcRomil Patel / Rhod Cruwys Tel: +44 (0)20 7448 4400 Buchanan CommunicationsCharles Ryland / James Strong Tel: +44 (0)20 7466 5000 Consolidated profit and loss accountFor the 6 months ended 30 June 2007 Consolidated profit and loss accountfor the 6 months ended 30 June 2007 6 months to 6 months to 12 months to 12 months to 30 June 30 June 30 June 30 June 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) (Restated) (Restated) Note £'000 £'000 £'000 £'000TurnoverContinuing operations 234 191 287 289 234 191 287 289 Cost of salesContinuing operations (61) (18) (61) (68) Gross profit 173 173 226 221 Net operating expenses beforedepreciationand amortisation (1,766) (1,421) (2,938) (2,955)Depreciation (7) (40) (41) (77)Amortisation (295) (301) (590) (602) Administrative expenses (2,068) (1,762) (3,569) (3,634) Group operating loss (1,895) (1,589) (3,344) (3,413) Interest receivable/(payable) 38 (165) 66 (469)Loss on ordinary activities before tax (1,857) (1,754) (3,278) (3,882) Taxation 2 - - - -Loss sustained for the financial year (1,857) (1,754) (3,278) (3,882) EBITDA (1,593) (1,248) (2,713) (2,734) Loss per share (pence)Basic and diluted 3 (1.08) (2.13) (2.23) (4.83) Consolidated balance sheetAs at 30 June 2007 30 June 30 June 31 December 2007 2006 2006 (Unaudited) (Audited) (Unaudited) (Restated) £'000 £'000 £'000Fixed assetsIntangible assets 958 1,580 1,253Tangible assets 33 67 36 991 1,647 1,289 Current assetsDebtors 403 336 233Cash at bank and in hand 1,195 192 2,826 1,598 528 3,059Creditors - amounts fallingdue within one year (1,256) (1,334) (1,188) Net current assets 342 (806) 1,871 Total assets less current liabilities 1,333 841 3,160 Creditors - amounts fallingdue after more than one year (2,317) (2,463) (2,317)Net assets (984) (1,622) 843 Capital and reservesShare capital 3,444 1,844 3,444Share premium 3,845 1,624 3,845Reverse acquisition reserve (7,620) (7,620) (7,620)Merger reserve 10,938 10,938 10,938Share option reserve 50 32 37Profit and loss account (11,641) (8,440) (9,801) (984) (1,622) 843 Consolidated cash flow statementFor the 6 months ended 30 June 2007 6 months to 6 months to 12 months to 12 months to 30 June 30 June 30 June 30 June 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) (Restated) (Restated) Note £'000 £'000 £'000 £'000 Net cash outflow from operating 4 (1,663) (1,244) (2,862) (1,649)activities Returns on investments and servicing of finance Interest received 47 4 74 4 Interest paid (9) (169) (9) (473) Net cash inflow/(outflow) from returnsoninvestments and servicing of finance 38 (165) 65 (469) Capital expenditure and financialinvestment Purchase of tangible fixed assets (4) (8) (12) (37)Net cash outflow from capitalexpenditure financial investment (4) (8) (12) (37) AcquisitionsNet cash at bank acquired with purchaseof subsidiary undertakings - 584 - 584 Net cash inflow from acquisitions - 584 - 584 Net cash outflow before financing (1,629) (833) (2,809) (1,571) Financing Issue of ordinary share capital - 1,298 4,000 1,298 Share Issue costs - (391) (179) (391) Net cash inflow from financing - 907 3,821 907 Increase/(decrease) in cash in the 5 (1,629) 74 1,012 (664)period Consolidated statement of total recognised gains and lossesFor the 6 months ended 30 June 2007 6 months to 6 months to 12 months to 12 months to 30 June 30 June 30 June 30 June 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) (Restated) (Restated) £'000 £'000 £'000 £'000 Loss sustained for the financial period (1,857) (1,754) (3,278) (3,882)Exchange gain on translation of overseas 17 77subsidiaries - -Total recognised gains and losses relating (1,840) (1,754) (3,201) (3,882)to the period Notes to the interim financial InformationFor the 6 months ended 30 June 2007 1 Basis of preparation The financial information included in this interim statement for the 6 monthsended 30 June 2007 does not constitute statutory accounts within the meaning ofsection 240 of the Companies Act 1985 and is not audited or reviewed. Inpreparing this interim statement, management have adopted FRS 20 'share-basedpayment'. Share Based Payments The adoption of this standard represents a change in accounting policy and theprior year comparatives have been restated accordingly. The effects of thechange on administrative expenses for the period ended 31 December 2005 and theyear ended 30 June 2006 and Group reserves at those dates are summarised asfollows: The Group operates a number of equity-settled, share-based compensation plans.The fair value of the employee services received in exchange for the grant ofthe options is recognised as an expense. The total amount to be expensed overthe vesting period is determined by reference to the fair value of the optionsgranted, excluding the impact of any non-market vesting conditions (for example,profitability and sales growth targets). Non-market vesting conditions areincluded in assumptions about the number of options that are expected to vest.At each balance sheet date, the group revises its estimates of the number ofoptions that are expected to vest. It recognises the impact of the revision tooriginal estimates, if any, in the profit and loss account, with a correspondingadjustment to equity. The proceeds received net of any directly attributabletransaction costs are credited to share capital (nominal value) and sharepremium when the options are exercised. Administrative Share option Profit expenses reserve and loss £'000 £'000 £'000 Period ended 31 December 2005 As previously stated 1,751 - (6,674) Restated 1,762 11 (6,686) Year ended 30 June 2006 As previously stated 3,602 - (8,408) Restated 3,634 32 (8,440) There have been no other changes to the accounting policies as set out in the2006 Report and Accounts. The financial information relating to the year ended30 June 2006 has been extracted from the statutory accounts for that year, withthe exception of the prior period adjustment described above, which have beenfiled with the Registrar of Companies and on which the auditors gave anunqualified opinion. 2 Tax on loss on ordinary activities No charge to UK corporation tax arose in the period (31 December 2005: nil, 30June 2006: nil) due to group trading losses incurred. 3 Loss per share Basic loss per share is calculated by dividing the loss attributable to ordinaryshareholders of £1,857,000 (six months to 30 June 2006: £1,754,000, twelvemonths to 30 June 2007: £3,278,000, twelve months to 30 June 2006: £3,882,000)by the weighted average number of ordinary shares in issue during the period of172,180,096 000 (six months to 30 June 2006: 82,513,180, twelve months to 30June 2007:147,193,795, twelve months to 30 June 2006: 80,339,651) The adjusted basic earnings per share has been calculated to provide a betterunderstanding of the underlying performance of the Group as follows: 6 months to 6 months to 12 months to 12 months to 30 June 2007 30 June 2006 30 June 2007 30 June 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) Basic and diluted Basic and diluted Basic and diluted Basic and diluted (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ earnings earnings earnings earnings earnings earnings earnings earnings per share per share per share per share (Restated) (Restated) (Restated) (Restated) £'000 pence £'000 pence £'000 pence £'000 penceLoss attributabletoordinary (1,857) (1.08) (1,754) (2.13) (3,278) (2.23) (3,882) (4.83)shareholdersFRS 20 share option charge 13 0.01 11 0.01 18 0.01 32 0.04Amortisation of goodwill 295 0.17 301 0.36 590 0.40 602 0.75Adjusted basic loss per share (1,549) (0.90) (1,442) (1.76) (2,669) (1.81) (3,248) (4.04) The loss attributable to ordinary shareholders and the weighted average numberof ordinary shares for the purpose of calculating the diluted earnings perordinary share are identical to those used for basic earnings per ordinaryshare. This is because the share options are anti-dilutive under the terms ofFRS 22 'Earnings per share'. 4 Reconciliation of operating loss to net cash (outflow)/ inflow from operatingactivities 6 months to 6 months to 12 months to 12 months to 30 June 30 June 30 June 30 June 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) (Restated) (Restated) £'000 £'000 £'000 £'000 Operating loss (1,895) (1,589) (3,344) (3,413)Depreciation of tangible fixed assets 7 39 41 77Amortisation of intangibles 295 301 590 602Loss on disposal of tangible fixed assets - 12 - 12Share option non cash charge 13 21 18 32(Increase)/Decrease in debtors (301) 276 (222) 126Increase/(Decrease) in creditors and provisions 218 (304) 55 915Net cash outflow from operating activities (1,663) (1,244) (2,862) (1,649) 5 Reconciliation of movement in net funds 6 months to 6 months to 12 months to 12 months to 30 June 30 June 30 June 30 June 2007 2006 2007 2006 (Unaudited) (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 £'000 Increase/(decrease) in cash in the period (1,629) 74 1,012 (664)Net cash inflow from issue of convertible loan notes - - - - Change in net debt resulting from (1,629) 74 1,012 (664)cash flows Non-cash changes: Exchange movements (2) - (9) -Conversion of Convertible Loan Notes - 2,213 - 2,213Movement in net funds in the year (1,631) 2,287 1,003 1,549 Net debt at start of year 2,826 (2,095) 192 (1,357) Net funds at end of year 1,195 192 1,195 192 6 Shareholder information The interim announcement will be posted to shareholders on 26 September 2007.Further copies are available on request from the Company at Central House,Beckwith Knowle, Harrogate HG3 1UG This information is provided by RNS The company news service from the London Stock Exchange