MIRA.L Regulatory News (MIRA)

28 September 2012

mirada plc

(AIM: MIRA)

("mirada" or "the Company" or "The Group")

Results for the year ended 31 March 2012

mirada plc, the AIM-quoted leading audiovisual content interaction specialist, announces its preliminary results for the year ended 31 March 2012.

Financial Highlights

·; Revenue: £4.35 million (2011: £5.11 million)

·; Gross profit: £3.78 million (2011: £3.95 million)

·; Gross profit margins increased to 86% (2011: 77%)

·; EBITDA lossreduced to £0.37 million from £1.01 million

Operational Highlights

·; Successful transition from a professional services to a product and licence fee based model

·; Percentage of licence fee revenue represented 18% of Digital TV turnover - this is expected to nearly double during the present year

·; Revenues generated from overseas activities (outside of UK and Spain) increased by 79% to £2.84 million and amounted to 65% of the Group's total revenues compared to 31% in the prior year

·; Completed development of core products, iris and navi (main Digital TV products)

·; Sold first xplayer (main broadcast product) licences in the USA

·; Secured several new contacts, most notably Global Village Telecom (GVT) in Brazil through partnership with Ericsson and Cablecom in Mexico who are launching mirada's brand new multi-screen product, iris

·; Successfully deployed three new Digital TV platforms

·; Pending deployment of another new IPTV service in Central America

·; Secured new banking facilities to fund our transition

·; Raised £1.1 million by way of a placing in December (directors and managers invested £0.29m)

Post Period Highlights

·; Renegotiated short term bank loans and overdrafts totalling £381,000 so they are now repayable between one and two years after the balance sheet date

·; Secured a multi-national agreement with a major telecommunications operator which we expect to lead to further new contracts during the current fiscal year

·; GVT acquired additional advanced licences over 400,000 subscribers

Commenting on the results, José-Luis Vázquez, Chief Executive Officer of mirada plc, said:

"We have proved that a transition from a professional services based company to a product and licence fees based model was possible in the middle of, probably, the worst economic environment we will experience during our professional lives.

"We have expanded our activities overseas, with a significant increase in revenues earned from the Central and South American markets, this has reduced our exposure to Western Europe."

--END --

Enquiries:

About mirada

mirada creates and manages services which enable consumers to interact with and purchase digital content on television, mobile, online and bespoke devices. mirada's products and solutions are used worldwide to deliver interactive TV, VOD, multi-player gaming, digital marketing and payment services. Its products and services have been deployed by some of the biggest names in digital media and broadcasting including Disney International TV, Sky, ITV and MTV Networks. Headquartered in London, mirada has commercial offices across Europe and Latin America and operates technical centres in the UK and Spain. For more information, visit www.mirada.tv.

Overview

I am pleased to report on the Group financial results for the year ended 31 March 2012. This has been a very important year for the company, in which we have continued to focus on our main business area, Digital TV. More importantly, we have proved that a transition from a professional services based company to a product and licence fees based model was possible in the middle of, probably, the worst economic environment we will experience during our professional lives. We have expanded our activities overseas, with a significant increase in revenues earned from the Central and South American markets, this has reduced our exposure to Western Europe.

During the year under review mirada secured several new contracts, most notably GVT in Brazil through our partnership with Ericsson, and Cablecom in México who are launching our brand new multi-screen product, iris. Both these contracts have led to a significant increase in the licence fee revenue earned post year end as GVT and Cablecom sign up new subscribers to their services. During the year mirada also successfully deployed three new Digital TV platforms, and we are about to announce another new IPTV deployment in Central America. Post the year end we are proud to have secured a multi-national agreement with a major telecommunication operator which we expect to lead to further new contracts during the current fiscal year.

During the period we have been able to secure new banking facilities to fund our transition, and in December mirada completed a placing in which certain directors and managers joined our main shareholders participated which we believe demonstrates their commitment and support to the vision of a growing media business based on talent, expertise and hard work.

I want to thank again our employees, customers, shareholders and partners for their continued support in the evolution of our business.

Trading review

During the year management focused on the expansion of our main area of business, Digital TV. Having completed development of the core products, iris and navi, the Sales and Technical teams were able to concentrate on deploying services to existing customers and securing new contracts. The major new contracts are based on a product-based model that comprises set-up fees plus licence fees based on the number of subscribers signing up to our customers' digital television services. We are very satisfied with the results. During the year mirada earned set-up fees and guaranteed licences for up to 110,000 subscribers from GVT in Brazil. Post the year end, GVT acquired additional advance licences over 400,000 subscribers, and since March 2012 they have been deploying new services at a rate exceeding 30,000 subscribers a month. If this growth is sustained this would lead to mirada earning licence fees in excess of €1.3m a year in relation to this contract, in addition to recurrent support and maintenance fees. The Cablecom deployment was close to completion at the year end, and it sucessfully launched its HD (High Definition) product based on our iris technology on July this year which will further increase the licence fees earned in the current year.

The Group was also able to secure new customers in the UK broadcast market through the evolution of its xplayer product, and we were able to sell our first licences of this product in the USA. Although the evolution of xplayer (our main Broadcast product) will need an increased sales activity to achieve the same momentum we have on iris and navi (our main Digital TV products), the capability of the company to extend its reach to non-UK markets like Continental Europe and the Americas looks promising.

Having concentrated our activities on the Digital TV market, this area of activity experienced a significant increase in revenues, improving by 39% from £2.41 million in the year ended 31 March 2011 to £3.35 million in the year under review. We forecast this growth rate to be sustained or even surpassed in the current year due to the licence fees being earned from both our current navi and iris deployments noted above and future deployments in Latin America.

The international activities of the Group (everything outside of the UK and Spain) continued to expand during the year under review, and we expect this momentum to be sustained into the current year. The revenues from these markets increased by 79% to £2.82 million in the year ended 31 March 2012 compared to £1.58 million in the prior year.

Financial overview

During the period revenues were £4.35 million, down from £5.11 million in the previous year, and gross profit reduced from £3.95 million to £3.78 million. This reduction was principally due to the Group concentrating on its most profitable activity, Digital TV, and the impact of exiting certain business activities activities - most notably the gaming division which contributed revenues of £0.89 million in 2011 but none in the current year. Restructuring and control over costs helped reduce other administrative expenses by £0.81 million, resulting in the loss from continuing activities before interest, tax, depreciation, amortisation, impairment of goodwill and restructuring costs reducing to £0.37 million compared to £1.01 million in the previous year. It should be noted that the increased licence fees gross earned from March 2012 will lead to a further increase in the gross margin percentage earned and will lead to significantly improved results in the current year.

Loss from continuing activities before interest, tax, depreciation, amortisation , impairment of goodwill and restructuring costs is a key performance indicator ("KPI") used by management and removes the impact of one-off and non-cash transactions (see note 4). Other KPIs used by management are as follows:

- Gross profit margin: The Group's continued move towards a product based has led to an increase in the gross profit margin from 77% in the year ended 31 March 2011 to 86% in the year under review.

- Overseas activities (outside of UK and Spain): During the year revenues generated from these international customers increased by 79% to £2.82 million and amounted to 65% of the Group's total revenues compared to 31% in the prior year. This was mainly due to an increase on the Latin American activities, and the management believes that this growth is reflecting the success of the product strategy on the growing markets.

- Royalties-based turnover: Revenues from licence fees have higher margins and allow the Group to benefit from multi-year agreements with customers. During the year the percentage of revenues coming from licence fees represented 18% of the Digital TV turnover. We expect this percentage to nearly double during the present year.

Loss for the year equalled £3.16 million (£7.1 million), however this was after deducting a charge for the impairment of goodwill of £0.6 million.

During the year mirada secured additional banking facilities of £1.2 million, supported by the evolution of the Digital TV business and the strength of the agreements in place. Additionally in December 2011 the Group raised a further £1.1 million by way of a placing, participants in this placing included directors and managers who invested £0.29 million.

Post the year end certain short term bank loans and overdrafts totalling £381,000, which are currently included in loans and borrowings repayable within one year, have been reneogotiated so that they are now repayable between one and two years after the balance sheet date.

Areas of business

mirada is an audiovisual interaction technology company providing both interactive products and software development services. We trade in complementary areas around the media business, with some smaller independent activities in certain other markets:

Digital TV operators:

We have more than 10 years of experience in technologies from Interactive TV to advanced navigational services. We have a solid network of partners and we are internationally recognised for our skill base. Our products comprise user interfaces for content navigation and consumption over Digital TV receivers (TV and set-top boxes), Personal Computers (PCs) and companion devices (tablets and smartphones). Our major products are navi, integrated over the Ericsson IAP IPTV platform, and iris, our multiscreen proposition mainly addressed to the cable television markets.

Broadcasters:

Our focus is the distribution and support of our xplayer product, a successful synchronisation tool for Channels that allows them to link the live programming to interactive services, from EPG information to PVR reminders or second screen (PC, companion devices) applications.

Other areas:

mirada has experience and business activities in other areas: interactive marketing and mirada connect which provides cashless payment solutions for the car parking market. Whilst these activities are expected to contribute towards Group profitability in the medium term management believe that the main areas of growth for the business will be in the Digital TV and Broadcast activities. Accordingly an impairment provision of £560,000 has been made against the goodwill relating to interactive marketing.

The Digital TV Business now represents 77% of the Group turnover and 84% of the Group gross margin. Year to year growth of the gross margin of this unit was 28% in the year ended 31 March 2011 and 33% in the year ended 31 March 2012. We expect this growth to be surpassed during the current year due to the evolution of the product-based deals, which are allowing the Group to earn recurrent, high margin revenue. Our international expansion continues, with a 79% growth on overseas turnover, and now less than 35% of our turnover comes from our original Spanish and UK markets.

The management continued its policy of cost control and reduced the annual overheads by 16% during the period, and continue optimising the efficiency during the present year. Our Directors, managers and major shareholders have continued to invest into the business, which we believe shows an increased level of confidence in the success of our strategy.

Our Brazilian and Mexican markets represented last year a 23% of the total turnover, due to our change of strategy based on product development and licence fee based revenue. We expect this percentage to increase substantially during the following periods, as our customers deploy our product to their subscriber base and we mutually benefit from their growth. Added to these countries, we secured further solid relationships Latin American in Uruguay, Argentina, Chile, Peru and Colombia which we expect to lead a further increase in revenues from Digital TV.

We believe that the Group is now benefiting from a return from its investment made in its products, and we expect to give our shareholders positive news about our financial situation during the coming months.

José-Luis VázquezChief Executive Officer28 September 2012

Consolidated income statement

Year ended 31 March 2012

The above amounts are attributable to the equity holders of the parent.

Consolidated statement of comprehensive income

Year ended 31 March 2012

Consolidated statement of changes in equity

Year ended 31 March 2012

Consolidated statement of financial position

31 March 2012

Consolidated statement of cash flows

Year ended 31 March 2012

Cash and cash equivalents comprise cash at bank less bank overdrafts.

Notes to the consolidated financial statements

1. General information

mirada plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is New City Cloisters, 196 Old Street, London EC1V 9FR. 

The financial information set out in this document does not constitute the company's statutory accounts for 2011 or 2012. Statutory accounts for the years ended 31 March 2011 and 31 March 2012 have been reported on by the Independent Auditors. The Independent Auditors' Reports on the Report and Financial Statements for each of 2011 and 2012 were unqualified and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006. The Independent Auditors' Reports on the Report and Financial Statements for 2011 and 2012 drew attention to an emphasis of matter due to the uncertainty over going concern.

The statutory accounts for the year ended 31 March 2011 have been filed with the Registrar of Companies. The statutory accounts for the year ended 31 March 2012 will be delivered to the Registrar in due course.

The financial information set out in these preliminary results has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 March 2012. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 31 March 2011. New standards, amendments and interpretations to existing standards, which have been adopted by the group have not been listed, since they have no material impact on the financial statements.

2. Significant accounting policies

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive Officer's Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Director's report. In addition, note 20 to the financial statements includes the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and exposures to credit risk and liquidity risk.

The consolidated statement of financial position as at 31 March 2012, being the Company's year-end, shows a net current liability position of £2,824,000 (2011: £1,793,000). Subsequent to the balance sheet date, the Board has been able renegotiate payment terms in connection with loans and overdrafts amounting to £381,000. The company is, however, reliant on its continuing ability to manage the timing of settlement of its current and future liabilities and if the revenue projections are not met in the short term further funds may be required. As such, the Directors intend to strengthen the Company's financial position through a combination of securing additional financing and subsequently from proceeds generated from trading activities. The Directors are currently at an advanced stage of negotiation with a number of possible lenders and are confident that these will be concluded satisfactorily.

The Directors have concluded that the need to generate future funds from either further financing or from trading activities to satisfy the settlement of its ongoing and future liabilities represents a material uncertainty, which may cast significant doubt upon the Group's and the Company's ability to continue as a going concern. 

Nevertheless after making enquiries and considering this uncertainty and the measures that can be taken to mitigate the uncertainty, the Directors have a reasonable expectation that the Group and the Company will have adequate resources to continue in existence for the foreseeable future. For these reasons they continue to adopt the going concern basis in preparing the annual report and accounts. The financial statement do not include any adjustments that would result if the Group and Company was unable to continue as a going concern

3. Segmental reporting

Reportable segments

For management purposes the Group is currently organised into three (previously four) operating divisions based upon the varying products and services provided by the Group -Digital TV, Broadcast & Content and Mobile (which includes Interactive Marketing and Mirada Connect). The products and services provided by each of these divisions are described in the CEO Statement. The segment headed other relates to corporate overheads, assets and liabilities.

Segmental results for the year ended 31 March 2012 are as follows:

The segmental results for the year ended 31 March 2011 are as follows:

There is no significant inter-segment revenue included in the segments which is required to be eliminated.

The Group has three major customers in the Digital TV segment (a major customer being one that generates revenues amounting to 10% or more of total revenue) that account for £0.79 million (2011: £0.81 million), £0.63 million (2011: £0.72 million) and £0.47 million (2011: £0.56 million) of the total Group revenues respectively.

The segment assets and liabilities at 31 March 2012 are as follows:

Capital expenditure comprises additions to property, plant and equipment and intangible assets.

The segment assets and liabilities at 31 March 2011 are as follows:

Segment assets and liabilities are reconciled to the Group's assets and liabilities as follows:

Assets allocated to a segment consist primarily of operating assets such as property, plant and equipment, intangible assets, goodwill and receivables.

Liabilities allocated to a segment comprise primarily trade payables and other operating liabilities.

Geographical disclosures

4. Operating loss

The operating loss is stated after charging/(crediting) the following:

Analysis of auditors' remuneration is as follows:

Reconciliation of operating loss for continuing operations to loss before interest, taxation, depreciation, amortisation and share-based payment charges:

Adjusted loss before interest, taxation, depreciation, amortisation and share-based payment charges has been presented to provide additional information to the reader.

During the year the Group incurred restructuring costs of £528,000 comprising £440,000 relating to an onerous lease commitment and £88,000 relating to redundancy costs.

5. Loss per share

Adjusted loss per share

Adjusted loss per share is calculated by reference to the loss from continuing activities before interest, taxation, impairment of goodwill, depreciation and amortisation (see note 4).

The Company has 302,370 (2011: 302,540) potentially dilutive ordinary shares arising from share options issued to staff. The Company also has potentially dilutive ordinary shares arising from the convertible loan, see note 20. These have not been included in calculating the diluted earnings per share as the effect is anti-dilutive.

The deferred shares are not included in the earnings per share or diluted earnings per share. These shares have no voting rights and are non-convertible and therefore do not form part of the ordinary share capital used for the loss per share calculation.

Basic and diluted loss per share from discontinued operations was £Nil (2011: £0.007).

6. Share capital

A breakdown of the authorised and issued share capital in place as at 31 March 2012 is as follows:

Share issue

On 15 December 2011 the Company raised £1,066,794 via the issue of 10,667,938 £0.01 ordinary shares at a price of £0.10 each. The issue of shares consisted of a placing for cash raising gross proceeds of £842,517 by the issue of 8,425,172 shares and 2,242,766 shares were issued to capitalise certain creditor balances totalling £224,277. The directors who participated in this fund raising and the number of ordinary shares subscribed for were, Richard Alden; 314,187 shares, José-Luis Vázquez; 942,766 shares, and Francis Coles; 263,873 shares.

7. Notes supporting cash flow statement

Cash and cash equivalents comprise:

There were no significant non-cash transactions in the year.

Cash and cash equivalents

Cash and cash equivalents are held in the following currencies:

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

8. Related parties

On 15 December 2011 the Company raised £1,066,794 via the issue of 10,667,938 £0.01 ordinary shares at a price of £0.10 each. The directors who participated in this fund raising and the number of ordinary shares subscribed for were, Richard Alden; 314,187 shares, José-Luis Vázquez; 942,766 shares, and Francis Coles; 263,873 shares.

As at 31 March 2012 Naropa Cartera S.L.U., which owns 23.6% of the issued share capital of the Company, and Baring Iberia II Inversion en Capital F.C.R., which owns 17.9% of the issued share capital of the Company, had convertible loans outstanding of £480,000 and £215,000 respectively. During both the current year and prior year interest was accrued but unpaid at a rate of 10% per annum.

9. Events after the balance sheet date

Post year end certain short term bank loans and overdrafts totalling £381,000, which are currently included in loans and borrowings repayable within one year, have been reneogotiated so that they are now repayable between one and two years after the balance sheet date.

10. Availability of Report and accounts

The Company's report and accounts for the year ended 31 March 2012 will be available on www.mirada.tv today and will be posted to shareholders today. Copies of the report and accounts for the year ended 31 March 2012 are available from the Company's registered address.