Mobile Tornado Regulatory News (MBT)

28 Mar 2007 07:01

Mobile Tornado Group PLC28 March 2007 For Immediate Release 28 March 2007 Mobile Tornado Group plc ("Mobile Tornado" or "the Group") Interim Results Mobile Tornado, one of the leading providers of convergent, presence-basedinstant communications announces its results for the six month period to 31December 2006. Highlights • Balance sheet strengthened in October 2006 with subscription by InTechnology plc for 80 million ordinary shares issued at 5p raising £4 million • Management team strengthened with appointment of new board members on 24 November 2006 • First US operator deal announced with Revol Wireless • 'Push to Video' application launched at the CTIA Wireless exhibition • Group well positioned for growth in 2007 Commenting on the interim results Peter Wilkinson, Non executive Chairman, said: "Since taking over in November 2006, the new board has worked hard to improvethe sales operation of the business. We now have sales offices in the UK, US,France, Germany, Israel, India and China. The increased levels of interest thatwe are seeing as a result of these initiatives will, I am confident, bring usenhanced levels of business over the coming months, and at the same timeestablish Mobile Tornado as a key player in the rapidly developing market formobile instant communications." For further information please contact: Mobile Tornado plcJeremy Fenn, Chief Financial Officer Tel: +44 (0)1423 511900 Buchanan Communications Tel: +44 (0)20 7466 5000James Strong About Mobile Tornado Mobile Tornado extends "push-to-talk" technology beyond just voice. With itspatented IP-based 'IPRS' platform, service providers can provide users withunique presence based push-to-talk along with many other revenue generatingservices such as: presence-based Instant Messaging; text messaging; pictures;real-time streaming video or any other data content. All of which areinteroperable between any enabled mobile device, fixed handset or desktop PC,and on any network infrastructure. Leading mobile operators and enterprises worldwide currently use Mobile Tornadosolutions through infrastructure vendors such as Nortel, alongside key channeland managed services partners in the Americas, EMEA and Asia Pacific. For moreinformation on Mobile Tornado, please visit www.mobiletornado.com. Financial Results Turnover in the six month period to 31 December 2006 amounted to £53k (2005:£98k). Operating losses reduced to £1,449k (2005: £1,824k). After net interestreceivable of £28k (2005: net interest payable - £304k) the loss on ordinaryactivities before taxation was £1,421k (2005: £2,128k). Net cash outflow fromoperating activities increased slightly in the period to £1,199k (2005:£1,158k). The Group consolidated balance sheet has improved significantly following thefundraising completed during the period. Net assets at 31 December 2006 were£843k compared to a net deficit of £1,622k at 30 June 2006. Cash at bank was£2,826k at 31 December 2006 compared to £192k at 30 June 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 a 31December period end date in light of the period end date of other Groupcompanies. Consequently, the next accounting period of the Group will be 1 July2006 to 31 December 2007. The Board recognises that the first set of accounts ofthe Group that will be prepared under IFRS are those for the period 1 January2008 to 31 December 2008 and that this will require the Group to develop acorporate reporting structure and policies to meet this requirement. Review of operations As I have stated previously, the Group's primary focus during the period underreview was to put the business onto a stable financial platform. This wasachieved on 23 October 2006 with the £4 million investment by InTechnology plc.Following this a number of key board appointments were made with Jeremy Fennjoining the Company as Chief Financial Officer, David Parry as VP SalesWorldwide and Eyal Fishler as Chief Technical Officer. The new management team have since concentrated on establishing a clear salesstrategy to increase the sale of the Group's current products and services tomobile operators and enterprises. Good progress has been made on this front andI am delighted to report that the first results of these efforts have comethrough with the announcement today of a deal with Revol Wireless, a USprivately held telecommunications company with headquarters in Independence,Ohio. By integrating Mobile Tornado's Instant Communications technologyplatform, Revol Wireless will be offering its users Push To Talk (PTT) on itsCDMA network. I am confident that this deal is an important first step in ourefforts to become a key player in the US, a market certain to be leading thegrowth in mobile instant communications. Earlier this month the Group attended the 3GSM World Congress in Barcelona, thebiggest trade show in the mobile calendar, where an estimated 55,000 visitorsattended from around the world. I am pleased to report that mobile operators areshowing great interest in mobile instant communications as they seek to enhancetheir product offering to their customers. I am greatly encouraged with theinterest shown in the Group's product portfolio and discussions are progressingwith operators from all parts of the world. I hope to make further announcementson new deals and collaborations in the near future. As well as selling directly to mobile operators, we are also in the process ofestablishing an indirect sales model and distribution network to sell enterprisesolutions to businesses, utilising the Group's core technology platform. TheGroup currently has distribution agreements with partners in the US, Germany,and the Netherlands who are providers of mobile data solutions and managedmobile services to customers in the market sectors to which PTT is attractive.Further potential distribution partners have been identified and we are in theprocess of concluding contractual arrangements with them. The Group has continued to invest in its research and development operation. Theteam is working on a number of applications to complement our existing range ofservices and I am delighted to announce that our 'Push to Video' service isbeing launched at CTIA this week. Branded as 'You see what I see', this realtime streaming application has already generated great interest amongstoperators and I am confident that this new launch will further enhance theGroup's reputation for developing solutions capable of transforming mobilecommunication services. Current trading and future prospects Since taking over in November 2006, the new board has worked hard to improve thesales operation of the business. We now have sales offices in the UK, US,France, Germany, Israel, India and China. The increased levels of interest thatwe are seeing as a result of these initiatives will, I am confident, bring usenhanced levels of business over the coming months, and at the same timeestablish Mobile Tornado as a key player in the rapidly developing market formobile instant communications. Once again, I would like to record my appreciation for the continuing commitmentof all our team members throughout the business and thank them for their supportduring a year of significant change. Peter WilkinsonNon executive Chairman28 March 2007 Consolidated profit and loss accountFor the 6 months ended 31 December 2006 Group Group Group 6 mths to 6 mths to 12 mths to 31 December 31 December 30 June 2006 2005 2006 (Restated) (Restated) Note £'000 £'000 £'000TurnoverContinuing operations 53 98 289 53 98 289 Cost of salesContinuing operations - (50) (68)Gross profit 53 48 221 Net operating expenses before depreciationand amortisation (1,173) (1,534) (2,955)Depreciation (34) (37) (77)Amortisation (295) (301) (602) Administrative expenses (1,502) (1,872) (3,634) Group operating loss (1,449) (1,824) (3,413) Interest receivable/(payable) 28 (304) (469)Loss on ordinary activities before tax (1,421) (2,128) (3,882)Taxation 2 - - -Loss sustained for the financial year (1,421) (2,128) (3,882) EBITDA (1,120) (1,486) (2,734) Loss per share (pence)Basic and diluted 3 (1.16) (2.72) (4.83) Consolidated balance sheetAs at 31 December 2006 31 December 31 December 30 June 2006 2005 2006 (Restated) (Restated) £'000 £'000 £'000Fixed assetsIntangible assets 1,253 1,881 1,580Tangible assets 36 111 67 1,289 1,992 1,647 Current assetsDebtors 233 256 336Cash at bank and in hand 2,826 118 192 3,059 374 528Creditors - amounts fallingdue within one year (1,188) (4,734) (1,334) Net current assets 1,871 (4,360) (806) Total assets less current liabilities 3,160 (2,368) 841 Creditors - amounts fallingdue after more than one year (2,317) (2,945) (2,463)Net assets 843 (5,313) (1,622) Capital and reservesShare capital 3,444 3 1,844Share premium 3,845 1,359 1,624Reverse acquisition reserve (7,620) - (7,620)Merger reserve 10,938 - 10,938Share option reserve 37 11 32Profit and loss account (9,801) (6,686) (8,440) 843 (5,313) (1,622) Consolidated cash flow statementFor the 6 months ended 31 December 2006 6 mths to 6 mths to 12 mths to 31 December 31 December 30 June 2006 2005 2006 (Restated) (Restated) Note £'000 £'000 £'000 Net cash outflow from operating activities 4 (1,199) (1,158) (1,649) Returns on investments and servicing of financeInterest received 28 - 4Interest paid - (304) (473) Net cash inflow/(outflow) from returns oninvestments and servicing of finance 28 (304) (469) Capital expenditure and financial investmentPurchase of tangible fixed assets (8) (29) (37)Net cash outflow from capital expenditurefinancial investment (8) (29) (37) AcquisitionsNet cash at bank acquired with purchaseof subsidiary undertakings - - 584Net cash inflow from acquisitions - - 584 Net cash outflow before financing (1,179) (1,491) (1,571) FinancingIssue of ordinary share capital 4,000 - 1,298 Share Issue costs (179) - (391)Issue of convertible loan notes - 753 -Net cash inflow from financing 3,821 753 907 Increase/(decrease) in cash in the period 5 2,642 (738) (664) Consolidated statement of total recognised gains and lossesFor the 6 months ended 31 December 2006 31 December 31 December 30 June 2006 2005 2006 (Restated) (Restated) £'000 £'000 £'000 Loss sustained for the financial year (1,421) (2,128) (3,882)Exchange gain on translation of overseas subsidiaries 60Total recognised gains and losses relating to the period (1,361) (2,128) (3,882) Notes to the interim financial InformationFor the 6 months ended 31 December 2006 1 Basis of preparation The financial information included in this interim statement for the 6 monthsended 31 December 2006 does not constitute statutory accounts within the meaningof section 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 2005As previously stated 1,861 - (6,674)Restated 1,872 11 (6,686) Year ended 30 June 2006As 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 £1,421,000 (31 December 2005: £2,128,000, 30 June 2006:£3,882,000) by the weighted average number of ordinary shares in issue duringthe period of 122,614,879 (31 December 2005: 78,130,096, 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 mths to 6 mths to 12 mths to 31 December 2006 31 December 2005 30 June 2006 Basic and diluted Basic and diluted Basic and diluted (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ earnings earnings earnings earnings earnings earnings per share per share per share (Restated) (Restated) (Restated) (Restated) £'000 pence £'000 pence £'000 penceLoss attributable toordinary shareholders (1,421) (1.16) (2,128) (2.72) (3,882) (4.83)FRS 20 share option charge 5 0.00 11 0.01 32 0.04Amortisation of goodwill 295 0.24 301 0.39 602 0.75Adjusted basic loss per share (1,121) (0.92) (1,816) (2.32) (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 mths to 6 mths to 12 mths to 31 December 31 December 30 June 2006 2005 2006 (Restated) (Restated) £'000 £'000 £'000 Operating loss (1,449) (1,824) (3,413)Depreciation of tangible fixed assets 34 37 77Amortisation of intangibles 295 301 602Loss on disposal of tangible fixed assets - - 12Share option non cash charge 5 11 32Decrease in debtors 79 250 126(Decrease)/Increase in creditors and provisions (163) 67 915Net cash outflow from operating activities (1,199) (1,158) (1,649) 5 Reconciliation of movement in net funds 6 mths to 6 mths to 12 mths to 31 December 31 December 30 June 2006 2005 2006 £'000 £'000 £'000 Increase/(decrease) in cash in the period 2,642 (738) (664)Net cash inflow from issue of convertible loan notes - (753) - Change in net debt resulting from cash flows 2,642 (1,491) (664) Non-cash changes:Exchange movements (8) - -Conversion of Convertible Loan Notes - - 2,213Movement in net funds in the year 2,634 (1,491) 1,549Net debt at start of year 192 (1,357) (1,357) Net funds/(debt) at end of year 2,826 (2,848) 192 6 Shareholder information The interim announcement will be posted to shareholders on 23 March 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