31 Dec 2009 10:51
mirada plc Interim results for the six months to 30 September 2009
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 2009.
Highlights
* Completed final stages of complex turnaround plan resulting in a complete transformation of the Group * Change in media and advertising markets due to economic climate plays to the strengths of mirada * Consolidation of areas of expertise and revamped strategy for the Group * Significant increase in gross margins - 72% (2008: 48%) * Large reduction in administrative expenses to 2.6 million (2008: 3.6 million) * Loss before interest, tax, amortisation and depreciation of 109,000 (2008: GBP525,000) * Historical second half bias to financial results * New global contracts announced in targeted key growth regions: Europe, Latin America and Eastern Europe * More expected to follow in the coming period as mirada grows its global partnerships based on its niche strengths and expertise
Jose Luis Vazquez, Chief Executive Officer of mirada, commented:
"We have concluded the long process of implementing the Group's turnaround plan, which clearly defines a path for the international growth of our activities. This is being reflected in the successful conclusion of deals with customers and partners worldwide, and we expect this growth to have a clear impact on our financial results in the future. We have a growing activity in Western and Eastern Europe, and in Latin America, and we expect to announce an increasing news flow of contract wins during the coming months to add to the recently won deals."
31 December 2009Enquiries:mirada PLC +44 (0) 207 942 7942 Jose Luis Vazquez, Chief Executive Officer Graham Duncan, Chief Financial Officer Haggie Financial LLP +44 (0) 207 417 8989 Nicholas Nelson/Kathy Boate Nicholas.nelson@haggie.co.uk Seymour Pierce Limited (Nominated Advisor & +44 (0) 207 107 8000Broker) Mark Percy/Christopher Howard
Chief Executive Officer's Statement
Business overview
We are pleased to report on a period that encompassed the final stages of a long and complex turnaround plan that saw a total transformation of the Group. We accomplished this during very adverse economic conditions that led to a large reduction in activities by important players in the digital media arena. However, at the same time, these changes in the media and advertising business models are leading to the rapid growth of online alternatives and the increasing migration of budgets to interactive audiovisual models - this being an ideal opportunity to exploit mirada's specialist understanding of the market.
After some customers ceased their broadcast activities due to severe budgetary restrictions, mirada continued to focus on improving its gross margins whilst at the same time further reducing its overheads. One of our big milestones in this period has been the cessation of our direct involvement in the B2C satellite channels, a loss making business that was interfering with our focus on being a strong technology company and jeopardising possible relationships with potential B2C gaming customers.
We finished developing our business units' strategies and differentiation, while consolidating our four areas: digital tv, gaming, broadcast and content, and interactive marketing. We also saw the successful separation of our parking business into `mirada connect' as an independent company fully owned by the Group.
Financial overview
Although revenue has reduced in the period to 3.3 million (6 months ended 30 September 2008: 5.7 million) there has been a significant increase in the gross margins earned, 72% in the current period compared to 48% in the 6 months ended 30 September 2008, and a large reduction in other administrative expenses, 2.6 million compared to 3.6 million. When combined, the effect being that the Group made a loss before interest, tax, amortisation and depreciation of 109,000 which shows an improvement to the loss of 525,000 reported in the 6 months ended 30 September 2008.
The Group historically experiences distinct seasonality in its earnings, especially in the Digital TV area where many of the Group's customers concentrate a large proportion of their development budgets to the second half of the year. Notwithstanding our focus on developing a solid product base and recurring revenues, we still have an exposure to this seasonality through our service based activities.
Over the last few months we have announced several significant new contracts. The negotiations for these contracts took longer than expected, which will mean that the majority of the revenues from the new contracts will be recognised in the second half of the year. This impact has led to the results for the period being below management's expectations, however they leave the Group in a good position for the remainder of the year.
Review of Operations
Gaming
As outlined above, mirada has ceased its activities in the B2C satellite market and we are now able to focus on B2B products and customers, as well as increasing our activity in the internet-based audiovisual gaming area.
The division has targeted the sales and marketing of our gaming products and services to international third parties. An early achievement in the area has been the agreement for mirada to deliver its Monte Carlo Roulette product into the Eastern European market which was announced in September 2009. For the very first time mirada was able to win a major gaming deal outside of the UK, supporting our strategy of delivering our cutting-edge skills born in the UK to the international market.
Digital TV
The Digital TV unit has been the fastest-growing unit in the Group, due mainly to the successful integration of the products and services obtained from the acquisition of Fresh Interactive Technologies. During this period the Group continued developing its international activities in Europe, Middle East and Latin America, leading to the announcement in August 2009 of our first major contract with the Uruguayan Government in Latin America, followed by smaller transactions that support our activity in the region. In addition the business expansion to other countries in Western Europe has led to growing activity, particularly in Italy and Portugal.
In terms of product development, the presentation of our NAVI set of digital tv products during the International Broadcasting Convention in Amsterdam was very successful and we expect to announce some important international partnerships during the coming months.
Broadcast and Content
One of the major moves in the media strategy was to split the activities between the Digital TV platforms and the Broadcasters and Content providers. During this period Carlos Zalve joined the company to drive mirada's activities into the content market, helping to develop our technology and expertise into multilayer (TV, internet and mobile) enhanced content experiences. We have progressed partnerships with leading content providers at an international level, and we expect that our synchronisation technologies and our expertise will open new business opportunities that the market is increasingly demanding in the convergent media world.
Interactive Marketing
The period under review has seen the consolidation of our relationship with major partners in the market like Britvic, for whom we successfully deployed campaigns for its brands including Pepsi and Tango. The Interactive Marketing business unit has surpassed our initial expectations in a clearly unfavourable market for advertising, managing to expand its activities to new countries like Italy. We have recently won a set of new international deals, and we expect this area to grow through our worldwide expansion and new product agreements with media agencies, broadcasters, content providers and advertisers.
Outlook
We have concluded the long process of implementing the Group's turnaround plan, which clearly defines a path for the international growth of our activities. This is being reflected in the successful conclusion of deals with customers and partners worldwide, and we expect this growth to have a clear impact on our financial results in the future. We have a growing activity in Western and Eastern Europe, and in Latin America, and we expect to announce an increasing news flow of contract wins during the coming months to add to the recently won deals.
Jose Luis VazquezChief Executive Officer31 December 2009
Consolidated income statement for the six months to 30 September 2009
Note 6 months 6 months Year ended ended ended 31 March 30 September 30 September 2009 2009 2008 (Unaudited) (Unaudited) (Audited) GBP000's GBP000's GBP000's Revenue 3,276 5,757 10,465 Cost of sales (901) (2,956) (4,492) Gross profit 2,375 2,801 5,973 Net gaming income 78 278 462 Depreciation (134) (189) (349) Amortisation of deferred (186) (79) (251)development costs Restructuring costs - (91) (117) Share-based payment charge (35) (83) (165) Other administrative expenses (2,562) (3,604) (7,100) Total administrative costs (2,917) (4,046) (7,982) Operating loss 4 (464) (967) (1,547) Finance income - 99 117 Finance expense (34) (25) (825) Loss on ordinary activities (498) (893) (2,255)before taxation Taxation - - - Loss for the financial period (498) (893) (2,255) Loss per share - basic & diluted 5 ( 0.03) ( 0.05) ( 0.11)
The above amounts are attributable to the equity holders of the parent.
Consolidated statement of recognised income and expense
Six months to 30 September 2009
6 months 6 months Year ended ended ended 31 March 30 September 30 September 2009 2009 2008 (Unaudited) (Unaudited) (Audited) GBP000's GBP000's GBP000's Currency translation differences (514) 127 941 Net income recognised directly in (514) 127 941equity Loss for period (498) (893) (2,255)
Total recognised income and expense (1,012) (766) (1,314) for the period
Attributable to equity holders of the (1,012) (766) (1,314) parent
Consolidated balance sheet as at 30 September 2009
Note 30 September 30 September 31 March 2009 2008 2009 (Unaudited) (Unaudited) (Audited) GBP000's GBP000's GBP000's Non-current assets Property, plant and equipment 879 976 990 Goodwill 17,574 17,574 17,574 Intangible assets 1,183 776 1,096 Total non-current assets 19,636 19,326 19,660 Trade and other receivables 2,108 3,942 2,833 Cash and cash equivalents 71 1,921 1,508 Current assets 2,179 5,863 4,341 Total assets 21,815 25,189 24,001 Loans and borrowings (433) (349) (371) Trade and other payables (2,791) (5,094) (4,089) Current liabilities (3,224) (5,443) (4,460) Net current (liabilities)/assets (1,045) 420 (119) Total assets less current 18,591 19,746 19,541liabilities Interest bearing loans and (28) - (39)borrowings Other non-current payables (920) (660) (882) Non-current liabilities (948) (660) (921) Net assets 17,643 19,086 18,620 Equity attributable to equity holders of the company Share capital 34,923 34,923 34,923 Shares to be issued 281 281 281 Other reserves 6 5,208 4,791 5,687 Accumulated losses 6 (22,769) (20,909) (22,271) Equity shareholders' funds 17,643 19,086 18,620
Consolidated statement of cash flows six months to 30 September 2009
6 months 6 months Year ended ended ended 31 March 30 September 30 September 2009 2009 2008 (Audited) (Unaudited) (Unaudited) GBP000's GBP000's GBP000's Cash flows from operating activities Loss for the period (498) (893) (2,255) Adjustments for: Depreciation of property, plant and 134 189 349equipment Amortisation of intangible assets 186 79 251 Foreign exchange (457) 28 1,392 Share-based payment charges 35 83 165 Finance income - (99) (117) Finance expense 34 25 72 Operating cash flows before movements (566) (588) (143)in working capital Decrease/(increase) in trade and other 610 (603) 369receivables
Decrease in trade and other payables (1,064) (3,108) (4,388)
Cash used in operations (1,020) (4,299) (4,162) Interest and similar expenses paid (34) (25) (72)
Net cash used in operating activities (1,054) (4,324) (4,234)
Cash flows from investing activities Interest and similar income received - 99 117 Purchases of property, plant and (33) (345) (435)equipment Purchase of other intangible assets (343) (303) (719) Net cash used in investing activities (376) (549) (1,037) Cash flows from financing activities Loans received 85 - - Repayment of loans - - (300)
Repayment of capital element of finance (46) (126) (212) leases
Net cash generated from/(used in) 39 (126) (512)financing activities Net decrease in cash and cash (1,391) (4,999) (5,783)equivalents Cash and cash equivalents at the 1,137 6,920 6,920beginning of the period
Cash and cash equivalents at the end of (254) 1,921 1,137 the period
Cash and cash equivalents comprise cash at bank less bank overdrafts.
Notes to the Accounts1. General information
The information for the period ended 30 September 2009 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 31 December 2009. The condensed interim financial information has been prepared on the basis of the accounting policies set out in the 2009 Report and Financial Statements using accounting policies consistent with International Reporting Standards. The condensed interim financial information for the six months ended 30 September 2009 and 30 September 2008 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 April 2008 to 31 March 2009 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 year ended 31 March 2009 and that are to apply for the year ended 31 March 2010.
4. Operating loss
Reconciliation of operating loss to loss before interest, taxation, depreciation, amortisation, restructuring and share-based payment charges:
6 months 6 months Year ended ended ended 31 March 2009 30 September 30 September 2009 2008 (Audited) (Unaudited) (Unaudited) GBP000's GBP000's GBP000's Operating loss (464) (967) (1,547) Depreciation 134 189 349 Amortisation of deferred development 186 79 251costs Restructuring costs - 91 117 Share based payment charge 35 83 165 Loss before interest, taxation, (109) (525) (665)depreciation, restructuring, and share-based payment charges 5. Loss per share 6 months 6 months Year ended ended ended 31 March 2009 30 September 30 September 2009 2008 (Unaudited) (Unaudited) (Audited) Loss for period ( 498,000) ( 893,000) ( 2,255,000)
Weighted average number of shares 19,805,485 19,805,485 19,805,485
Basic & diluted EPS ( 0.03) ( 0.05) ( 0.11)
For the periods ended 30 September 2009, 31 March 2009 and 30 September 2008 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.
6. Reserves and changes in equity
Share option Foreign Merger Profit & reserve exchange reserve loss account reserve GBP000's GBP000's GBP000's GBP000's At 1 April 2009 2,014 1,201 2,472 (22,271) Loss for financial period - - - (498) Share based payment 35 - - - Movement in foreign exchange - (514) - -reserve At 30 September 2009 2,049 687 2,472 (22,769)7. 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.
8. 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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