MIRA.L Regulatory News (MIRA)

10 December 2013 mirada plc (AIM: MIRA) ("mirada", "the Company" or "the Group") Interim results for the six months to 30 September 2013 New contract win mirada plc, the AIM quoted leading audiovisual content interaction specialist,announces its unaudited interim results for the six months to 30 September2013. At the same time the Group is pleased to announce that it has signed anagreement with a new customer, Millicom, a multi-national group which offersdigital lifestyle products and services in Latin America and Africa under theirTigo brand. Millicom will use mirada's technology to replace the software in its Arris(formerly Motorola) High Definition DTA decoders in Honduras, Guatemala, ElSalvador and Costa Rica. The Group expects the roll-out to commence during thefirst quarter of 2014 and, while mirada does not expect substantial revenuesfrom the contract during the first year, it is the first project in which theGroup will have the chance to replace the software in Motorola boxes in LatinAmerica. Key Points - Revenue for the period is £2.30 million, compared to £2.46 million for the six months ended 30 September 2012 - Revenues earned from subscriber-based licence fees continued to grow showing an increase to £0.97 million from £0.80 million in the period ended 30 September 2012 - The Group recorded EBITDA of £0.51 million in the period and an operating profit of £61,000, compared to EBITDA of £0.61 million and an operating profit of £0.26 million in the six months to 30 September 2012 Operational Highlights - US$1.4 million contract secured with an established Latin American digital television operator to deploy mirada's multi-screen product, iris, across its network - Digital TV activities account for over 85% of total revenues and are the key driver for the future growth of the business - GVT, the Brazilian telecommunications operator owned by the Vivendi group, launched a new satellite television service using mirada's technology in August of this year. This service is experiencing considerable growth. Post period highlights - The Company completed a £2.1 million fund raising via placings with both existing shareholders and new institutional investors. - Group's balance sheet strengthened - Company to further grow its revenues from emerging markets Commenting on the future outlook of the Group, José Luis Vázquez, CEO ofmirada, said: "The Company has achieved a high level of recognition in the digital TVindustry, especially in the fast growing Latin American market. In the last twoyears there have been four new digital TV services launched in the region whichutilise mirada's technology, more than any of our competitors. These areproving to be very important references for us, notably in the region's largesteconomies, Mexico and Brazil. This has positioned us to win substantial newdeals with Tier 1 operators, which should significantly increase both turnoverand margins in the coming years." Enquiries: mirada plc +44 (0) 207 549 5678Jose Luis Vazquez, Chief Executive Officer Bishopsgate Communications +44 (0) 207 562 3350Nick Rome/Sam Allenmirada@bishopsgatecommunications.com Cantor Fitzgerald Europe (Nomad and Joint Broker) +44 (0) 207 894 7000Mark Percy (Corporate Finance)David Banks (Corporate Broking) Peterhouse Corporate Finance (Joint Broker) +44 (0) 207 469 0937Jon LevinsonLucy Williams Chief Executive Officer's Statement Overview I am pleased to present the Group's financial results for the six months ended30 September 2013. During this period the Company has been working onincreasing its presence in the Latin American market, and we continue to beinvolved in negotiations with a number of leading digital TV platforms in theregion. As previously announced, the major new contract win in the first half of theyear was with an established Latin American digital television operator withwhom we have secured an agreement for the deployment of mirada's multi-screenproduct, iris, across their network. The Company will receive in excess ofUS$1.4 million in professional service fee income for the integration of theproduct and the adaption of inspire, mirada's most advanced user interface. Weexpect to complete the work on this project by the first half of 2014. As theoperator has several million existing installed customers, if the product isrolled out across their subscriber base, we anticipate that the licence feesearned will significantly increase the Group's revenues over the next three tofive years. It is important to note that the split of revenues has changed during theperiod, as revenues earned from professional services will be lower in thefirst half of the year compared to those we expect to earn in the second half.This is a result of the commercial and technical investment made in the firsthalf of the year in securing the above contract and the fact that most of therevenues from this contract will be recognised during the final six months ofthe year. Furthermore, the margins the Group will earn from the professionalservice fee income on this deployment are lower than average; however, thesubscriber-based licence fees we expect to earn once the solution iscommercially deployed should far outweigh this temporary reduction in margin. Post period end the Company completed a £2.1 million fund raising via placingswith both existing shareholders and new institutional investors. This newfunding has strengthened the Group's balance sheet and also allowed mirada torecruit new sales and technical staff which will enable the Group to takeadvantage of some significant opportunities which we currently have in thepipeline. I want to again recognise the outstanding support from our employees, directorsand shareholders. We are reaching the goal of becoming a leading player in themarket, and this would not have been possible without their continuedcommitment and hard work. Review of operations The Company is fully concentrated on the growth of its digital TV activities,which now represent more than 85% of the total revenues of the Group and is thekey driver for the future growth of the business. Following on from thesuccessful transition to the product-based model, the Group is now less relianton revenue received from professional services. This is demonstrated by thefact that even after taking into account the reduction in professional servicefee income in the period the Group was still able to generate EBITDA of £0.51million and an operating profit of £61,000. This was due to subscriber-basedlicence fee revenue increasing to £0.97 million in the period, compared to £0.80 million in the 6 months ended 30 September 2012. At the period end we had four digital TV services from which licence fees aregenerated, compared to three services at the end of the last financial year.Our largest customer continues to be GVT, the Brazilian telecommunicationsoperator owned by the Vivendi group. GVT now has two fully operational digitalTV services utilising mirada's technology; an IPTV service, which was launchedin November 2011 (a deal which was secured through our partnership agreementwith Ericsson), and a new satellite television service which was launched inmid August 2013. The new satellite service is experiencing considerable growth.Although it has only just launched, we expect that, due to the nature of theBrazilian market, the take-up of the satellite television service will besubstantial, as GVT will be able to deploy this service over large areas ofBrazil, which are currently out of the reach of their IPTV service. I am pleased to announce that mirada signed an agreement with a new customer,Millicom, a multi-national group, which offers digital lifestyle products andservices in Latin America and Africa under their Tigo brand. Millicom will usemirada's technology to replace the software in their Arris (formerly Motorola)High Definition DTA decoders. The agreement covers deployments in Honduras,Guatemala, El Salvador and Costa Rica, and we expect the roll-out to take placeduring the first quarter of 2014. Although we do not expect substantialrevenues arising from this contract during the first year, it is the firstproject in which we will have the chance to replace the software in Motorolaboxes in Latin America. Motorola are the dominant suppliers in the region within excess of 15 million units currently deployed. We believe that this projectwill be an important reference for mirada and will prove to be highlybeneficial for other operators in the region looking to replace their software. Financial overview Revenue for the period equalled £2.30 million compared to £2.46 million for thesix months ended 30 September 2012. As outlined above the reduction in revenueis because of the decreased professional service fee income earned, but weexpect this income to increase in the second half of the year. The revenuesearned from subscriber-based licence fees continued to grow showing an increaseto £0.97 million from £0.80 million in the period ended 30 September 2012. TheGroup recorded EBITDA of £0.51 million in the period and an operating profit of£61,000, compared to EBITDA of £0.61 and an operating profit of £0.26 millionin the six months to 30 September 2012. The net current liabilities at 30 September 2013 equalled £2.3 million, asimilar level to those shown at 31 March 2013. This position, however, has nowbeen dramatically improved following the £2.1 million placing which took placepost period end. The funds raised will enable management to harvest thecommercial opportunities available to the Group, and should be sufficient toallow the Group to achieve the aggressive targets we have set ourselves. Outlook The Company has achieved a high level of recognition in the digital TVindustry, especially in the fast growing Latin American market. In the last twoyears there have been four new digital TV services launched in the region whichutilise mirada's technology, more than any of our competitors. These areproving to be important references for us, notably in the region's largesteconomies, Mexico and Brazil. This has allowed us to be in a position to winsubstantial new deals with Tier 1 operators, which should significantlyincrease both turnover and margin in the coming years. The most important task we have in the short term is to complete the deploymentof our iris product into the network of an existing digital TV operator. If, aswe expect, we are successful and our technology is rolled out across theirexisting subscriber base, the Group will experience a substantial increase inthe annual licence fees, starting in the next financial year. In the meantimethe recent injection of new funds from shareholders has increased ourresources, improving our ability to win new contracts and take advantage of theexciting opportunities available to the Group. Jose Luis VazquezChief Executive Officer9 December 2013 Consolidated income statement for the six months to 30 September 2013 Note 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Revenue 2 2,300 2,457 4,837 Cost of sales (95) (109) (207) Gross profit 2,205 2,348 4,630 Depreciation (22) (33) (58) Amortisation of deferred (429) (317) (683)development costs Other administrative expenses (1,693) (1,743) (3,649) Total administrative costs (2,144) (2,093) (4,390) 3 61 255 240Operating profit Finance income - 3 137 Finance expense (234) (233) (617) (Loss)/profit before taxation (173) 25 (240) Taxation - - - (Loss)/profit for period (173) 25 (240) (Loss)/earnings per share - basic 4 (0.3p) 0.1p (0.7p) The above amounts are attributable to the equity holders of the parent. Consolidated statement of comprehensive incomeSix months to 30 September 2013 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 (Loss)/profit for the financial period (173) 25 (240) Currency translation differences 4 90 (28) Total comprehensive (expense)/income (169) 115 (268)for the period Consolidated statement of changes in equitySix months to 30 September 2013 Profit Share Foreign and Share Share option exchange Merger loss capital premium reserve reserve reserve account Total £000 £000 £000 £000 £000 £000 £000 At 1 April 2013 519 3,059 140 509 2,472 (3,234) 3,465 Loss for the financial - - - - - (173) (173)period Conversion of 31 284 - - - (17) 298convertible loans intoshares Movement in foreign - - - 4 - - 4exchange reserve At 30 September 2013 550 3,343 140 513 2,472 (3,424) 3,594 Profit Share Foreign and Share Share option exchange Merger loss capital premium reserve reserve reserve account Total £000 £000 £000 £000 £000 £000 £000 At 1 April 2012 319 1,216 140 537 2,472 (3,026) 1,658 Profit for the financial - - - - - 25 25period Movement in foreign - - - 90 - - 90exchange reserve At 30 September 2012 319 1,216 140 627 2,472 (3,001) 1,773 Share Foreign Profit Share Share option exchange Merger and capital premium reserve reserve reserve loss Total £000 £000 £000 £000 £000 account £000 £000 At 1 April 2012 319 1,216 140 537 2,472 (3,026) 1,658 Loss for the financial - - - - - (240) (240)period Conversion of 45 400 - - - 32 477convertible loans intoshares Issue of shares 155 1,457 - - - - 1,612 Share issue costs - (14) - - - - (14) Movement in foreign - - - (28) - - (28)exchange reserve At 31 March 2013 519 3,059 140 509 2,472 (3,234) 3,465 Consolidated statement of financial position as at 30 September 2013 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Property, plant and equipment 48 79 61 Goodwill 6,946 6,946 6,946 Intangible assets 1,955 1,442 1,719 Non-current assets 8,949 8,467 8,726 Trade and other receivables 1,314 1,615 1,292 Cash and cash equivalents 3 3 94 Current assets 1,317 1,618 1,386 Total assets 10,266 10,085 10,112 Loans and borrowings (616) (674) (697) Trade and other payables (2,874) (3,207) (2,725) Provisions (121) (240) (141) Current liabilities (3,611) (4,121) (3,563) Net current liabilities (2,294) (2,503) (2,177) Total assets less current 6,655 5,964 6,549liabilities Interest bearing loans and (2,854) (3,058) (2,767)borrowings Embedded conversion option (44) (292) (65)derivative Other non-current liabilities (163) (525) (181) Provisions - (316) (71) Non-current liabilities (3,061) (4,191) (3,084) Net assets 3,594 1,773 3,465 Issued share capital and reservesattributable to equity holders ofthe company Share capital 550 319 519 Share premium 3,343 1,216 3,059 Other reserves 3,125 3,239 3,121 Accumulated losses (3,424) (3,001) (3,234) Equity 3,594 1,773 3,465 Consolidated statement of cash flows six months to 30 September 2013 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Cash flows from operating activities (Loss)/profit for the period (173) 25 (240) Adjustments for: Depreciation of property, plant and 22 33 58equipment Amortisation of intangible assets 429 317 683 Finance income - (3) (137) Finance expense 234 233 617 Operating cash flows before 512 605 981movements in working capital (Increase)/decrease in trade (34) (340) 44and other receivables Increase in trade and other 82 587 21payables Decrease in provisions (90) (113) (356) Net cash generated from 470 739 690operating activities Cash flows from investingactivities Interest and similar income - 3 3received Purchases of property, plant (11) (2) (8)and equipment Purchases of other intangible (683) (514) (1,116)assets Net cash used in investing (694) (513) (1,121)activities Cash flows from financingactivities Interest and similar expense (103) (126) (341)paid Issue of share capital - - 1,014 Costs of share issue - - (14) Loans received 292 604 913 Repayment of loans (196) (570) (735) Repayment of capital element (5) (5) (10)of finance leases Net cash (used in)/generated (12) (97) 827fromfinancing activities Net (decrease)/increase in (236) 129 396cash and cash equivalents Cash and cash equivalents at 94 (299) (299)the beginning of the period Exchange gains on cash and (1) 13 (3)cash equivalents Cash and cash equivalents at (143) (157) 94the Cash and cash equivalents comprise cash at bank less bank overdrafts. Notes to the Accounts 1. Basis of Preparation These interim financial statements have been prepared using policies based onInternational Financial Reporting Standards (IFRS and IFRIC Interpretations)issued by the International Accounting Standards Board ("IASB") as adopted foruse in the EU. They do not include all disclosures that would otherwise berequired in a complete set of financial statements and should be read inconjunction with the 31 March 2013 Annual Report. The financial information forthe half years ended 30 September 2013 and 30 September 2012 do not constitutestatutory accounts within the meaning of Section 434 (3) of the Companies Act2006 and has neither been audited nor reviewed pursuant to guidance issued bythe Auditing Practices Board. The annual financial statements of mirada plc are prepared in accordance withIFRS as adopted by the European Union. The comparative financial informationfor the year ended 31 March 2013 included within this report does notconstitute the full statutory Annual Report for that period. The statutoryAnnual Report and Financial Statements for 31 March 2013 have been filed withthe Registrar of Companies. The Independent Auditors' Report on that AnnualReport and Financial Statement for 31 March 2013 was unqualified, but didinclude a reference to the uncertainties surrounding going concern, to whichthe auditors drew attention by way of emphasis, and did not contain a statementunder 498 (2) or 498 (3) of the Companies Act 2006. After making enquiries, the directors have concluded that the Group haveadequate resources to continue operational existence for the foreseeablefuture. Accordingly, they continue to adopt the going concern basis inpreparing the half-yearly consolidated financial statements. The same accounting policies, presentation and methods of computation arefollowed in these interim consolidated financial statements as were applied inthe Group's latest annual audited financial statements. In addition, the IASB have issued a number of IFRS and IFRIC amendments orinterpretations since the last Annual Report was published. It is not expectedthat any of these will have a material impact on the Group. 2. Segmental reporting For management purposes the Group is currently organised into three operatingdivisions based upon the varying products and services provided by the Group-Digital TV, Broadcast and Mobile (which includes Interactive Marketing andMirada Connect). The segment headed other relates to corporate overheads. Segmental results for the 6 months ended 30 September 2013 are as follows: Digital TV Broadcast Mobile Other Group £000 £000 £000 £000 £000 Revenue - external 1,971 102 227 - 2,300 Gross profit 1,955 98 152 - 2,205 Profit/(loss) before 850 73 9 (420) 512interest, tax,depreciation &amortisation Depreciation (11) - - (11) (22) Amortisation (398) - (14) (17) (429) Finance income - - - - - Finance expense - - - (234) (234) Segmental profit/(loss) 441 73 (5) (682) (173) Segmental results for the 6 months ended 30 September 2012 are as follows: Digital TV Broadcast Mobile Other Group £000 £000 £000 £000 £000 Revenue - external 2,119 120 218 - 2,457 Gross profit 2,116 106 126 - 2,348 Profit/(loss) before 958 84 13 (450) 605interest, tax,depreciation &amortisation Depreciation (19) - - (14) (33) Amortisation (282) - (19) (16) (317) Finance income - - - 3 3 Finance expense - - - (233) (233) Segmental profit/(loss) 657 84 (6) (710) 25 Segmental results for the year ended 31 March 2013 are as follows: Digital TV Broadcast Mobile Other Group £000 £000 £000 £000 £000 Revenue - external 4,094 273 470 - 4,837 Gross profit 4,074 257 299 - 4,630 Profit/(loss) before 1,761 213 57 (1,050) 981interest, tax,depreciation &amortisation Depreciation (33) - - (25) (58) Amortisation (615) - (34) (34) (683) Finance income - - - 137 137 Finance expense - - - (617) (617) Segmental profit/(loss) 1,113 213 23 (1,589) (240) Revenue by location of customer 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 UK 329 338 743 Spain 278 210 473 Continental Europe 136 288 465 Americas 1,557 1,621 3,156 Total 2,300 2,457 4,837 3. Operating profit Reconciliation of operating profit to profit before interest, taxation,depreciation and amortisation: 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Operating profit 61 255 240 Depreciation 22 33 58 Amortisation of deferred development 429 317 683costs Profit before interest, taxation, dep 512 605 981reciation and amortisation 4. (Loss)/earnings per share 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) (Loss)/profit for period (£173,000) £25,000 (£240,000) Weighted average number of shares 52,592,314 31,973,423 34,612,552 Basic earnings/(loss) per share (0.3p) 0.1p (0.7p) Adjusted earnings per share Adjusted earnings per share is calculated by reference to the profit fromcontinuing activities before interest, taxation, amortisation and depreciation(see note 3). 6 months 6 months Year ended ended ended 30 September 30 September 31 March 2013 2012 2013 (Unaudited) (Unaudited) (Audited) Adjusted profit for period £512,000 £605,000 £981,000 Basic adjusted earnings per share 1.0p 1.9p 2.8p Diluted adjusted earnings per share 0.9p 1.3p 2.2p At each period end the Company had 301,327 potentially dilutive ordinary sharesarising from share options issued to staff. The Company also has 6,600,000 (30September 2012: 14,200,000 and 31 March 2013: 9,750,000) potentially dilutiveordinary shares arising from the convertible loan. These have not been includedin calculating the diluted earnings per share as the effect is anti-dilutive,although they have been included in calculating the adjusted earnings pershare. 5. Related party transactions Transactions between the company and its subsidiaries, which are relatedparties, have been eliminated on consolidation and are not disclosed in thisnote. There were no material transactions between the Group and the relatedparties during the period. 6. Other Copies of unaudited interim results have not been sent to shareholders, howevercopies are available on request from the Company Secretary at the Company'sregistered office, New City Cloisters, 196 Old Street, London, EC1V 9FR.