22 Dec 2008 07:00
Mirada plc Interim results for the six months to 30 September 2008
Mirada plc ("Mirada" or "the Company" or "the Group"), the AIM quoted interactive media and games group, announces interim results for the six months to 30 September 2008.
Highlights
* Successful restructuring of enlarged group and renewed strategy * Move to new UK headquarters complete with state-of-the-art equipment and custom-built studios * New commercial offices opened in Milan and Montevideo to accommodate growing international client partnerships * New relationship with ITV - successful launch of Bingo Night Live on ITV1 * Continued progress in primary markets of UK and Spain with new client wins and product development * New contract win for major cable operator in the Middle East * Gross profit has increased to ‚£2,801,000 (2007: ‚£2,252,000) * Improvement in trading: loss before interest, tax, depreciation, amortisation, and restructuring of ‚£525,000 (2007: ‚£1,632,000) * Effective cost reduction programme and restructuring: * Other administrative expenses reduced to ‚£3,604,000 (2007: ‚£4,373,000)
Jose Luis Vazquez, Chief Executive Officer of Mirada, commented:
"We have finally integrated our operational and commercial teams into a global organisation, and the expansion of the Media business unit is very promising. Our gaming division is launching innovative new products and forging new partnerships, placing us at the forefront of the interactive media sector.
"Mirada's positive new developments as well as increasing international reach have been achieved while successfully implementing a company restructuring and cost reduction plan, which has led to significant savings for the Group.
"We have exciting new opportunities to pursue in Asia, Europe, North Americaand South America, and we expect to report positive news arising from theseduring the coming months." 22 December 2008Enquiries:Mirada PLC +44 (0) 207 942 7942 Jose Luis Vazquez, Chief Executive Officer Graham Duncan, Chief Financial Officer Haggie Financial LLP +44 (0) 207417 8989 Nicholas Nelson/Kathy Boate Nicholas.nelson@haggie.co.uk
Seymour Pierce Limited (Nominated Advisor & +44 (0) 207 107 8000 Broker)
Mark Percy/Christopher Howard Old Park Lane Capital Ltd (Joint Broker) +44 (0) 207 493 8188 Michael Parnes/Lisa Ahlas/Forbes Cutler
Chief Executive Officer's Statement
Business overview
I am pleased to report on a period of continuing strong progress. Numerous changes implemented over the last six months have served to transform the Company and positioned it strongly within the interactive media industry.
The first half of the financial year has been an exciting period, during which time the Company demonstrated its capability to develop its international strategy and implement the objectives defined in the restructuring plan, which was formulated as part of the merger with Fresh Interactive Technologies S.A. ("Fresh"). Trading has been very encouraging and we will strive further to drive the business over the coming months.
Mirada is a leader in the interactive audiovisual field, where the focus is on the digital consumer, via, for example, the internet, Digital TV and mobile telephony, through different product platforms and devices. Following the company wide restructuring exercise, our products and services are defined through four operating divisions: Mirada Gaming, Media, Touch and Connect.
Mirada moved to new London headquarters in July 2008, consolidating the UK operations and providing a state-of-the-art location, complete with custom-built studios, post production facilities and full editing suites. Being a truly multinational business, Mirada also has offices in Madrid, Exeter, Milan and Montevideo, to service the growing global clientele. New customer wins have been a result of a new sales team with large-scale vision and extensive international experience.
Financial overview
The Group recorded revenue for the period of ‚£5,757,000 compared to ‚£5,753,000 for the 6 months ended 30 September 2007. The gross profit has increased to ‚£ 2,801,000 (2007: ‚£2,252,000). This improvement is mainly due to the results of Fresh which are not included in the income statement for the 6 months ended 30 September 2007.
Net gaming income which represents the revenues of the Group's B2C fixed odds gaming business, fell from ‚£489,000 to ‚£278,000 and was adversely affected by a ‚£100,000 winner in one of the interactive games. The remaining decrease relates to the fact the Group is focusing on supplying other brand owners through its B2B gaming business and as part of this strategic decision Mirada sold a gaming channel operating on the Sky platform in May 2008. The sale of this channel has reduced the gaming division's cost of sales by approximately ‚£25,000 a month.
Despite the inclusion of the costs of Fresh, the other administrative expenses reduced to ‚£3,604,000 for the 6 months ended 30 September 2008 (2007: ‚£ 4,373,000). This decrease is due to the implementation of cost reductions which were identified as part of the February 2008 restructuring. Management are confident that the results for the coming 6 months will show a continued reduction in administrative expenses.
The loss before interest, tax depreciation, amortisation, restructuring and share-based payment charges for the period equalled ‚£525,000 (2007: loss ‚£ 1,632,000). This represents an encouraging improvement in trading considering that the acquisition of Fresh and the Group restructuring was only completed on 25 February 2008. Loss before interest, tax, depreciation, amortisation, restructuring and share-based payment charges is a performance measure used internally by management to manage the operations of the Group and removes the impact of one-off and non-cash items (see note 4 of the financial statements for a reconciliation of this measure to statutory captions).
Overall the Group recorded a retained loss of ‚£893,000, compared to ‚£15,422,000 for the 6 months ended 30 September 2007, however, it should be noted that the retained loss recorded for the 2007 is after deducting a goodwill impairment charge of ‚£12 million.
Review of OperationsGaming
Mirada has made recent significant progress in this sector, most notably in the UK:
* The launch of Bingo Night Live on ITV1, which signals the start of a new relationship with ITV. Bingo Night Live had more than 70,000 concurrent users playing bingo on ITV1 (which we understand is a new Guinness World Record). We have received extremely encouraging feedback from broadcasters across the world with regards to this format. We expect to work with the key operators in this field to further develop the format with new functionalities and launch broadcasted Bingo overseas. * Mirada launched the new version of Monte Carlo Roulette (Sky channel 863, and http://www.montecarloroulette.tv) in early October, being the first development in our planned Virtual Dealer games offering. The benefits of this product are its low production costs, excellent broadcast quality, near-live performance perception, and the availability of user interaction in communities through our own chat capabilities. A user can play the same spin on Sky and on the internet simultaneously. We are currently involved in discussions with various major gaming players to integrate our Virtual Dealer Roulette and new Virtual Dealer games into their TV and on-line proposals.
Media
The performance of the media business unit in the UK has surpassed our expectations. Mirada increased its presence in Digital TV broadcasters, and our xPlayer technology (which allows synchronization between the audiovisual content and the interactive services) is the leading reference in its field. We have integrated xPlayer into the leading broadcasters in the UK and we expect that sales of this product will continue to grow with the addition of new broadcasters - both in the UK and internationally - and with the future versions of xPlayer integrated into internet and mobile phone environments.
Spanish Market
The performance of the Spanish operation since the merger has been most encouraging, with an expected increase in turnover of approximately 50% for this full financial year. Mirada now has a competitive position in the international Digital TV market, and the expertise accumulated over the last eight years is now being rewarded in the marketplace.
Our relationship with Ono, the largest Spanish digital cable operator, continues to develop successfully and we are now exploring new generation services for the Spanish cable and IPTV space. In the gaming field, Mirada has been appointed the main technology supplier for a large Spanish gaming organisation. The deal includes up to eight games to be integrated into the major Digital TV platforms in the Spanish market, with an option to extend the number of games and platforms in the future. We believe that this positions Mirada as a leading player in the Spanish market for interactive gaming solutions.
Global Expansion
Mirada opened two new commercial offices in the period. The Italian office in Milan started its operations by way of a deal with Universal McCann for Mastercard earlier this year, and good progress has been made in terms of relationship building and possible deals. Following this we are pleased to announce a new deal with a major Italian web company to run an innovative viral Christmas campaign based on Mirada's scratch card solution.
Mirada has established a permanent presence in Latin America via the opening of an office in Montevideo, Uruguay. Fresh was central to the decision made by the Uruguayan government to choose the European DVB-T standard for Digital Terrestrial Television transmissions, and will look to capitalise on this further throughout the region. The Group has been awarded several new grants commencing later this year from the Spanish Ministry of Industry for the integration of interactive TV services in Uruguay and Chile.
In keeping with our global growth, we are pleased to announce that Quative Limited, a Kudelski Group Company, has selected Mirada for the provision of its Video on Demand (VOD) application (including catalogue servers) for a large cable operator in the Middle East. The project was awarded in May and is currently in its delivery phase - Quative is acting as the overall system integrator. This project is the fourth VOD application successfully deployed by Mirada and the first integration of Mirada with Quative VOD backend servers.
Share Performance
Under the present market conditions our share price has not reflected the improvement in our financial results. On the contrary our share price has experienced a significant reduction during the period, much in line with what has happened with other media and technology stocks around the globe.
Outlook
We have finally integrated our operational and commercial teams into a global organisation, and the international expansion of the Media business unit is very promising. Our gaming division is launching innovative new products and forging new partnerships, placing us at the forefront of the interactive media sector.
Mirada's positive new developments as well as increasing international reach have been achieved while successfully implementing a company restructuring and cost reduction plan, which has led to significant savings for the Company.
We have exciting new opportunities to pursue in Asia, Europe, North America and South America, and we expect to report positive news arising from these during the coming months.
Jose-Luis VazquezChief Executive Officer
Consolidated income statement for the six months to 30 September 2008
Note 6 months 6 months 15 months ended ended ended 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited)* ‚£000's ‚£000's ‚£000's Revenue 5,757 5,753 13,553 Cost of sales (2,956) (3,501) (8,727) Gross profit 2,801 2,252 4,826 Net gaming income 278 489 1,304 Other income - profit on disposal - - 576 Depreciation (189) (682) (1,491) Amortisation of deferred (79) - (10)development costs Impairment of goodwill - (12,000) (12,000) Restructuring costs (91) (128) (1,036) Share-based payment charge (83) (187) (205) Other administrative expenses (3,604) (4,373) (10,930) Total administrative costs (4,046) (17,370) (25,672) Operating loss 4 (967) (14,629) (18,966) Finance income 99 - 2 Finance expense (25) (793) (1,599) Loss on ordinary activities before (893) (15,422) (20,563)taxation Taxation - - - Loss for the financial period (893) (15,422) (20,563) Loss per share - basic & diluted 6 (‚£0.05) (‚£18.37) (‚£8.96)
* The results for the 15 months ended 31 March 2008 include discontinued operations, refer to note 5.
The above amounts are attributable to the equity holders of the parent.
Consolidated statement of recognised income and expense
Six months to 30 September 2008
6 months 6 months 15 months ended ended ended 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Loss for period (893) (15,422) (20,563) Currency translation differences 127 - 260 Total recognised income and expense (766) (15,422) (20,303)for the period Attributable to equity holders of (766) (15,422) (20,303)the parent
Consolidated balance sheet as at 30 September 2008
Note 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Non-current assets Property, plant and equipment 976 1,310 822 Goodwill 17,574 13,520 17,574 Intangible assets 776 - 557 Investments - 18 - Total non-current assets 19,326 14,848 18,953 Trade and other receivables 3,942 2,802 3,149 Cash and cash equivalents 1,921 358 7,154 Current assets 5,863 3,160 10,303 Total assets 25,189 18,008 29,256 Loans and borrowings (349) (5,297) (234) Trade and other payables (5,094) (10,729) (8,776) Provisions - (1,076) - Current liabilities (5,443) (17,102) (9,010) Net current assets/(liabilities) 420 (13,942) 1,293 Total assets less current 19,746 906 20,246liabilities Interest bearing loans and - (91) (19)borrowings Provisions - - (8) Other non-current payables (660) (450) (450) Non-current liabilities (660) (541) (477) Net assets 19,086 365 19,769 Equity attributable to equity holders of the company Share capital 34,923 16,031 34,923 Shares to be issued 281 281 281 Share premium 7 - 78,332 79,731 Other reserves 7 4,791 2,761 5,036 Accumulated losses 7 (20,909) (97,040) (100,202) Equity shareholders' funds 19,086 365 19,769
Consolidated statement of cash flows six months to 30 September 2008
6 months 6 months 15 months ended ended ended 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Cash flows from operating activities Loss for the period (893) (15,422) (20,563) Adjustments for: Depreciation of property, plant and 189 682 1,491equipment Amortisation and impairment of goodwill & 79 12,000 12,010intangible assets Impairment of investments - - (18) Foreign exchange 28 - 225 Profit on disposal of subsidiary - - (576) Profit on disposal of property, plant and - - (7)equipment Share-based payment charges 83 187 205 Finance income (99) - (2) Finance expense 25 793 1,599
Operating cash flows before movements in (588) (1,760) (5,636) working capital
(Increase)/decrease in trade and other (603) 1,066 1,609receivables (Decrease)/increase in trade and other (3,108) 88 (2,611)payables Cash used in operations (4,299) (606) (6,638) Interest and similar expenses paid (25) (99) (303)
Net cash used in operating activities (4,324) (705) (6,941)
Cash flows from investing activities Interest and similar income received 99 - 2 Costs of acquisition of subsidiary - - (442) Net cash held in acquired subsidiary - - 4,330 Disposal of subsidiary, net of overdrafts - - 253disposed Purchases of property, plant and (345) (1) (96)equipment Proceeds from disposal of property, plant - - 8and equipment Purchase of other intangible assets (303) - - Net cash (used in)/generated from (549) (1) 4,055investing activities Cash flows from financing activities Issue of ordinary share capital - 875 10,009 Costs of issue of ordinary share capital - (23) (61) Issue of convertible loans - 650 650 Repayment of loans - (664) (664)
Repayment of capital element of finance (126) (52) (267) leases
Net cash (used in)/generated from (126) 786 9,667financing activities Net (decrease)/increase in cash and cash (4,999) 80 6,781equivalents Cash and cash equivalents at the 6,920 278 139beginning of the period
Cash and cash equivalents at the end of 1,921 358 6,920 the period
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
Notes to the Accounts1. General information
The information for the period ended 30 September 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The Group has not adopted IAS 34: "Interim Financial Reporting" as the AIM Rules for Companies and related regulations do not require half-yearly financial reports to be prepared in accordance with IAS 34.
2. Basis of Preparation
This interim report was approved by the Directors on 19 December 2008. The condensed interim financial information has been prepared on the basis of the accounting policies set out in the 2008 Report and Financial Statements using accounting policies consistent with International Reporting Standards. The condensed interim financial information for the six months ended 30 September 2008 and 30 September 2007 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
The financial information contained in this interim report does not constitute statutory accounts. The comparatives for the period from 1 January 2007 to 31 March 2008 are derived from but are not the Company's full statutory accounts for that period. The auditors' report on those accounts was unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report(s) and did not contain a statement under section 237(2)-(3) of the Companies Act 1985.
3. Accounting policies
The accounting policies adopted are consistent with those set out in the financial statements for the 15 months ended 31 March 2008 and that are to apply for the year ended 31 March 2009.
4. Operating loss
Reconciliation of operating loss for continuing operations to loss beforeinterest, taxation, depreciation, amortisation, restructuring and share-basedpayment charges: 6 months 6 months 15 months ended ended ended 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited) ‚£000's ‚£000's ‚£000's Operating loss (967) (14,629) (19,119) Depreciation 189 682 1,486 Amortisation of deferred development 79 - 10costs Impairment of goodwill - 12,000 12,000 Restructuring costs 91 128 960 Share based payment charge 83 187 205 Loss before interest, taxation, (525) (1,632) (4,458)depreciation, restructuring, and share-based payment charges
5. Discontinued operations
The discontinued operations in the 15 months ended 31 March 2008 relate to the Group ceasing all its operations in the dating sector which had previously traded through its subsidiaries Yoomedia Dating Group Ltd and Finlaw 532 Ltd.
The table below shows the split between continuing and discontinued operations in the 15 months ended 31 March 2008.
15 months ended 31 March 2008 Continuing Discontinued Total operations operations ‚£000's ‚£000's ‚£000's Revenue 12,504 1,049 13,553 Cost of sales (8,242) (485) (8,727) Gross profit 4,262 564 4,826 Net gaming income 1,304 - 1,304 Other income - profit on disposal - 576 576 Depreciation (1,486) (5) (1,491) Amortisation of deferred (10) - (10)development costs Impairment of goodwill (12,000) - (12,000) Restructuring costs (960) (76) (1,036) Share-based payment charge (205) - (205) Other administrative expenses (10,024) (906) (10,930) Total administrative costs (24,685) (987) (25,672) Operating loss (19,119) 153 (18,966) Finance income 2 - 2 Finance expense (1,575) (24) (1,599) Loss on ordinary activities before (20,692) 129 (20,563)taxation Taxation - - - Loss for the financial period (20,692) 129 (20,563) 6. Loss per share 6 months 6 months 15 months ended ended ended 30 September 30 September 31 March 2008 2007 2008 (Unaudited) (Unaudited) (Audited) Loss for period (‚£893,000)(‚£15,422,000)(‚£20,563,000)
Weighted average number of shares 19,805,485 839,578 2,295,329
Basic & diluted EPS (‚£0.05) (‚£18.37) (‚£8.96)
The weighted average number of shares in issue in the periods has been adjusted to reflect the share consolidation which took place on 25 February 2008.
For the periods ended 30 September 2008, 31 March 2008 and 30 September 2007 the diluted loss and earnings per share is calculated on the same basis as basic loss and earnings per share because the effect of the potential ordinary shares reduces the net loss per share and is therefore 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.
7. Reserves and changes in equity
Capital Share Foreign Merger Share Profit & redemption option exchange reserve premium loss reserve reserve reserve account account ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 ‚£000 At 1 April 2008 455 1,849 260 2,472 79,731 (100,202) Loss for financial - - - - - (893)period Share based payment - 83 - - - - Movement in foreign - - 127 - - -exchange reserve Cancellation of share - - - - (79,731) 79,731premium account Cancellation of capital (455) - - - - 455redemption reserve At 30 September 2008 - 1,932 387 2,472 - (20,909)
On 23 April 2008, as confirmed by the High Courts of Justice, Mirada cancelled its share premium account and its capital redemption reserve against its profit and loss reserve.
8. Related party transactions
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There were no material transactions between the Group and the related parties during the period.
9. Other
Copies of unaudited interim results have not been sent to shareholders, however copies are available on request from the Company Secretary at the Company's registered office, 6 & 7 Princes Court, Wapping Lane, London, E1W 2DA.
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