24 Dec 2010 07:00
24 December 2010
mirada plc
Interim results for the six months to 30 September 2010
mirada plc ("mirada" or "the Group"), the AIM quoted leading audiovisual content interaction specialist, announces its interim results for the six months to 30 September 2010.
Highlights
§ Increase in the Group's sales pipeline, particularly for Digital TV operations
§ Additional bank financing successfully secured totalling €0.85m (£0.73m)
§ Development loan of €0.50m (£0.43m)
§ Extension of the Group's Digital TV commercial activities in Latin America
§ Partnership agreement with Ericsson creating a strong pipeline of global royalty-based opportunities in the IPTV market
§ Commitment to investment in new products to herald strong second half
Post period end highlights:
§ Former CEO of Grupo Corporativo ONO S.A., Richard Alden appointed as Non-Executive Chairman
Jose Luis Vazquez, Chief Executive Officer of mirada, commented:
"The first six months of this financial year clearly reflect the progress achieved in consolidating the Group's business model. We have improved our efficiency, diversified our business overseas and have cemented strong relationships with powerful partners. This, in turn, has increased our capability to reach a much wider international market.
"A reduction in revenue during these six months signals our commitment to investing in the development of the Group's Digital TV products in particular. We have a strong pipeline of new products, most notably NAVI, which led to the Group's global partnership deal with Ericsson. The benefit of this investment, we believe, will reveal itself by a marked increase in revenues in the second half of the year.
"An increase in the Group's sales pipeline, particularly for its Digital TV operations, has helped enable the Group to secure the additional bank financing. This financing will be used to help working capital and to invest in the continued development of our products. We believe that the Group has a solid platform on which to achieve strong growth and we are look forward to updating the market on any future developments in due course"
--END--
Enquiries:
mirada plc Jose Luis Vazquez, Chief Executive Officer
| +44 (0) 207 608 4370 |
Bishopsgate Communications Gemma O'Hara/Duncan McCormick mirada@bishopsgatecommunications.com
| +44 (0) 207 562 3350 |
Seymour Pierce Limited (Nominated Advisor & Broker) Mark Percy (Corporate Finance) David Banks (Corporate Broking)
| +44 (0) 207 107 8000 |
Rivington Street Corporate Finance (Joint Broker) Jon Levinson | +44 (0) 207 562 3351 |
Chief Executive Officer's Statement
Business overview
I am pleased to present the Group's financial results for the six months to 30 September. The period under review has represented a period of consolidation of the business model. During the first half of the year, we have secured important partnership and distribution agreements which have in turn increased our capability to reach a much wider international market. The Group has also improved efficiency through the optimisation of its resources, as well as, focusing on and enhancing sales and technical skills in order to satisfy the increasing market demand - especially within the Digital TV and Broadcast industry.
Significant resources were allocated to the development of new and existing products during the period, notably NAVI, which led to a global partnership deal with Ericsson, announced in September 2010. We expect a high return on this investment, starting as soon as the second half of this year. In order to help fund this development, the Group sought the support of the financial market, and it is very encouraging to report that post period end mirada successfully secured additional bank financing totalling €0.85 million (£0.73 million) and a development loan of €0.50 million (£0.43 million). This is particularly encouraging when you consider the fact that the banks are still reluctant to lend.
On 10 December 2010 we announced that Richard Alden, previously a Non-Executive Director of the Company, was appointed as Non-Executive Chairman. From 2000 to 2009 Richard was the Chief Executive Officer of Grupo Corporativo ONO S.A. ("ONO"), the largest alternative telecoms (broadband/telephone/digital TV) operator in Spain. He is a prominent industry figure with a proven track record and a number of international contacts that will be invaluable as the Group progresses with its international expansion.
Financial overview
Revenue for the period equalled £2.61 million, compared to £3.12 million for the six months ended 30 September 2009. A major reason for this reduction in revenue is that during the period the Group allocated a lot of its resources to the development of its Digital TV products, an area which we believe will show a return on investment during the second half of the year.
Loss before interest, tax, amortisation and depreciation was £0.25 million (six months ended 30 September 2009: £0.10 million). The loss for the period after discontinued activities equalled £0.52 million (six months ended 30 September 2009: £0.50 million), the discontinued activities relate to the cessation of the Group's studios and playout operations.
Over recent months the Group has experienced an increase in its sales pipeline, particularly for its Digital TV operations. The contracts secured during this period, the benefits of which are expected to flow through to the income statement in 2011, have helped enable the Group to secure the additional bank financing mentioned above. The cost of the financing is extremely competitive at under 6% per annum and the facilities will be used to help working capital and to invest in the continued development of our products.
Review of Operations
Digital TV
This period has seen an extension of our commercial activities in Latin America where we have an increased number of opportunities, particularly in Uruguay, Argentina, Chile and Mexico. We expect to make announcements of deals in these areas in the near future.
The partnership agreement with Ericsson, which was publicly announced in September during the IBC trade show, is starting to create a strong pipeline of global royalty-based opportunities in the IPTV market which has given us confidence that there will be an increasing level of revenues generated from this agreement.
Gaming
The Group is gradually moving its reliance away from the highly competitive UK market and is focusing more on the international B2B market. The evolution of a legal framework in Western Europe, while promising, is still in progress, and the Group is looking to develop its relationships with media partners (digital TV platforms and broadcasters) so that they are able to complement their existing activities under the new anticipated gambling regulations.
Broadcast and Content
The main focus of this area is based on our synchronisation technologies, which have a strong presence in the UK market with customers including Redbee, BBC, UKTV and Channel 4. Our xplayer product has experienced an increasing demand in this market due to the generalisation of HD and Green Button services. The Group is currently in discussions to provide this technology to broadcasters overseas including Europe and the US where we foresee important opportunities arising.
Interactive Marketing
mirada has increased its activity with loyal partners like Britvic, and we have achieved new milestones in the period with customers in Latin America and Southern Europe using our advertising tools. This business area has not seen its full potential due to its focus on the UK market. We believe that the increasing presence we are experiencing within the international Digital TV market will lead to new opportunities to develop our interactive marketing activities.
Outlook
The first six months of this financial year clearly reflect the progress achieved in consolidating the Group's business model. We have improved our efficiency, diversified our business overseas to reduce our exposure and risk in a single geographic market and have cemented strong relationships with powerful partners. This, in turn, has increased our capability to reach a much wider international market.
A reduction in revenue during these six months signals our commitment to investing in the development of the Group's Digital TV products in particular. We have a strong pipeline of new products, most notably NAVI, which led to the Group's global partnership deal with Ericsson. The benefits of this investment, we believe, will reveal itself by a marked increase in revenues in the second half of the year.
The Group has experienced an increase in its sales pipeline, particularly for its Digital TV operations, which has helped enable the Group to secure the additional bank financing. This financing will be used to help working capital and to invest in the continued development of our products. We believe that the Group has a solid platform on which to achieve strong growth and we are look forward to updating the market on any future developments in due course.
Finally, we are delighted that Richard Alden was appointed as Non-Executive Chairman of the Group. Richard has first rate sector international experience at the highest levels and is the perfect candidate to help the Group progress with its international expansion.
Jose Luis Vazquez
Chief Executive Officer
23 December 2010
Consolidated income statement for the six months to 30 September 2010
Note | 6 months ended 30 September 2010 | 6 months ended 30 September 2009 | Year ended 31 March 2010 | |
(Unaudited) £000's | (Unaudited) £000's | (Audited) £000's | ||
Revenue | 2,611 | 3,119 | 5,740 | |
Cost of sales | (651) | (901) | (2,028) | |
Gross profit | 1,960 | 2,218 | 3,712 | |
Net gaming income | 15 | 78 | 102 | |
Depreciation | (60) | (134) | (254) | |
Amortisation of deferred development costs | (284) | (186) | (455) | |
Impairment of goodwill | - | - | (5,157) | |
Share-based payment charge | - | (35) | (95) | |
Other administrative expenses | (2,230) | (2,397) | (4,306) | |
Total administrative costs | (2,574) | (2,752) | (10,267) | |
Operating loss | 3 | (599) | (456) | (6,453) |
Finance income | - | - | 172 | |
Finance expense | (122) | (34) | (74) | |
Loss before taxation | (721) | (490) | (6,355) | |
Taxation | - | - | - | |
Loss for the financial period from continuing operations | (721) | (490) | (6,355) | |
Discontinued operations | ||||
Profit/(loss) for financial period from discontinued operations | 199 | (8) | (1,112) | |
Loss for period | (522) | (498) | (7,467) | |
Loss per share | ||||
- basic & diluted | 4 | (£0.03) | (£0.03) | (£0.38) |
The above amounts are attributable to the equity holders of the parent.
Consolidated statement of comprehensive income and expense
Six months to 30 September 2010
6 months ended 30 September 2010 | 6 months ended 30 September 2009 | Year ended 31 March 2010 | |
(Unaudited) £000's | (Unaudited) £000's | (Audited) £000's | |
Currency translation differences | (183) | (514) | (310) |
Net expense recognised directly in equity | (183) | (514) | (310) |
Loss for period | (522) | (498) | (7,467) |
Total recognised expense for the period | (705) | (1,012) | (7,777) |
Attributable to equity holders of the parent | (705) | (1,012) | (7,777) |
Consolidated statement of changes in equity
Six months to 30 September 2010
| Share capital £000 |
Shares to be issued £000 | Share option reserve £000 | Foreign exchange reserve £000 | Other reserves £000 | Profit and loss account £000 | Total £000 |
|
|
|
|
|
|
|
|
At 1 April 2010 | 34,923 | - | 2,109 | 891 | 2,472 | (29,457) | 10,938 |
Loss for the financial period | - | - | - | - | - | (522) | (522) |
Movement in foreign exchange reserve | - | - | - | (183) | - | - | (183) |
At 30 September 2010 | 34,923 | - | 2,109 | 708 | 2,472 | (29,979) | 10,233 |
| Share capital £000 |
Shares to be issued £000 | Share option reserve £000 | Foreign exchange reserve £000 | Other reserves £000 | Profit and loss account £000 | Total £000 |
|
|
|
|
|
|
|
|
At 1 April 2009 | 34,923 | 281 | 2,014 | 1,201 | 2,472 | (22,271) | 18,620 |
Loss for the financial period | - | - | - | - | - | (498) | (498) |
Share based payment | - | - | 35 | - | - | - | 35 |
Movement in foreign exchange reserve | - | - | - | (514) | - | - | (514) |
At 30 September 2009 | 34,923 | 281 | 2,049 | 687 | 2,472 | (22,769) | 17,643 |
Consolidated statement of financial position as at 30 September 2010
Note | 30 September 2010 | 30 September 2009 | 31 March 2010 | |
(Unaudited) £000's | (Unaudited) £000's | (Audited) £000's | ||
Non-current assets | ||||
Property, plant and equipment | 181 | 879 | 228 | |
Goodwill | 12,417 | 17,574 | 12,417 | |
Intangible assets | 1,272 | 1,183 | 1,313 | |
Total non-current assets | 13,870 | 19,636 | 13,958 | |
Trade and other receivables | 1,540 | 2,108 | 2,095 | |
Cash and cash equivalents | 12 | 71 | 103 | |
Current assets | 1,552 | 2,179 | 2,198 | |
Total assets | 15,422 | 21,815 | 16,156 | |
Loans and borrowings | (546) | (433) | (536) | |
Trade and other payables | (3,030) | (2,791) | (2,760) | |
Current liabilities | (3,576) | (3,224) | (3,296) | |
Net current liabilities | (2,024) | (1,045) | (1,098) | |
Total assets less current liabilities | 11,846 | 18,591 | 12,860 | |
Interest bearing loans and borrowings | (1,073) | (28) | (960) | |
Embedded conversion option derivative | (339) | - | (339) | |
Other non-current payables | (201) | (920) | (623) | |
Non-current liabilities | (1,613) | (948) | (1,922) | |
Net assets | 10,233 | 17,643 | 10,938 | |
Equity attributable to equity holders of the company | ||||
Share capital | 5 | 34,923 | 34,923 | 34,923 |
Shares to be issued | - | 281 | - | |
Other reserves | 5,289 | 5,208 | 5,472 | |
Accumulated losses | (29,979) | (22,769) | (29,457) | |
Equity | 10,233 | 17,643 | 10,938 | |
Consolidated statement of cash flows six months to 30 September 2010
6 months ended 30 September 2010 (Unaudited) | 6 months ended 30 September 2009 (Unaudited) | Year ended 31 March 2010 (Audited) | |
£000's | £000's | £000's | |
Cash flows from operating activities | |||
Loss for the period | (522) | (498) | (7,467) |
Adjustments for: | |||
Depreciation of property, plant and equipment | 60 | 134 | 254 |
Impairment of property, plant and equipment | - | - | 556 |
Amortisation of intangible assets | 284 | 186 | 455 |
Impairment of goodwill | - | - | 5,157 |
Profit on disposal of subsidiaries | (488) | - | - |
Foreign exchange | 3 | (457) | - |
Share-based payment charges | - | 35 | 95 |
Finance income | - | - | (172) |
Finance expense | 122 | 34 | 74 |
Operating cash flows before movements in working capital | (541) | (566) | (1,048) |
Decrease in trade and other receivables | 237 | 610 | 669 |
Increase/(decrease) in trade and other payables | 517 | (1,064) | (1,693) |
Cash generated from/(used in) operations | 213 | (1,020) | (2,072) |
Interest and similar expenses paid | (34) | (34) | (74) |
Net cash generated from/(used in) used in operating activities | 179 | (1,054) | (2,146) |
Cash flows from investing activities | |||
Interest and similar income received | - | - | 172 |
Purchases of property, plant and equipment | (38) | (33) | (56) |
Purchases of other intangible assets | (318) | (343) | (720) |
Net cash used in investing activities | (356) | (376) | (604) |
Cash flows from financing activities | |||
Issue of convertible loans | - | - | 1,220 |
Loans received | 103 | 85 | 60 |
Repayment of loans | - | - | - |
Repayment of capital element of finance leases | (11) | (46) | (57) |
Net cash generated from financing activities | 92 | 39 | 1,223 |
Net decrease in cash and cash equivalents | (85) | (1,391) | (1,527) |
Cash and cash equivalents at the beginning of the period | (433) | 1,137 | 1,137 |
Exchange (losses)/gains on cash and cash equivalents | 14 | - | (43) |
Cash and cash equivalents at the end of the period | (504) | (254) | (433) |
Cash and cash equivalents comprise cash at bank less bank overdrafts.
Notes to the Accounts
1. Basis of Preparation
This interim report was approved by the Directors on 23 December 2010. The condensed interim financial statements comprise the unaudited results for the six months to 30 September 2010 and 30 September 2009 and the audited results for the year ended 31 March 2010. The financial information for the year ended 31 March 2010 does not constitute the full statutory accounts for the period. The Annual Report and Financial Statements for the year ended 31 March 2010 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for the year ended 31 March 2010 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The information included in these condensed interim financial statements for the six months ending 30 September 2010 does not include all the information and disclosures made in the annual financial statements. The condensed interim financial statements have been prepared in a manner consistent with the accounting policies set out in the group financial statements for the year ended 31 March 2010 and on the basis of the International Financial Reporting Standards (IFRS) as adopted for use in the EU that the Group expects to be applicable as at 31 March 2011. IFRS are subject to amendment and interpretation by the International Accounting Standards Board (IASB) and there is an ongoing process of review and endorsement by the European Commission. 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.
The condensed interim financial information for the six months ended 30 September 2010 and 30 September 2009 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
2. Accounting policies
The accounting policies adopted are consistent with those set out in the financial statements for the year ended 31 March 2010 and that are expected to apply for the year ended 31 March 2011.
3. Operating loss
Reconciliation of operating loss to loss before interest, taxation, depreciation, amortisation and share-based payment charges:
| 6 months ended 30 September 2010 (Unaudited) £000's | 6 months ended 30 September 2009 (Unaudited) £000's | Year ended 31 March 2010 (Audited) £000's |
|
|
|
|
Operating loss | (599) | (456) | (6,453) |
Depreciation | 60 | 134 | 254 |
Amortisation of deferred development costs | 284 | 186 | 455 |
Impairment of goodwill | - | - | 5,157 |
Share based payment charge | - | 35 | 95 |
|
|
|
|
Loss before interest, taxation, depreciation, amortisation and share-based payment charges | (255) | (101) | (492) |
4. Loss per share
| 6 months ended 30 September 2010 (Unaudited) | 6 months ended 30 September 2009 (Unaudited) | Year ended 31 March 2010 (Audited) |
Loss for period | (£522,000) | (£498,000) | (£7,467,000) |
Weighted average number of shares | 19,805,485 |
19,805,485 | 19,805,485 |
|
|
|
|
Basic & diluted loss per share | (£0.03) | (£0.03) | (£0.38) |
For the periods ended 30 September 2010, 31 March 2010 and 30 September 2009 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.
5. Share capital
A breakdown of the authorised and issued share capital in place as at 30 September 2010, 30 September 2009 and 31 March 2010 is as follows:
| Number | £000 |
Authorised |
|
|
Ordinary shares of £1 each | 25,789,822 | 25,790 |
A Deferred shares of 0.1p each | 8,210,178,477 | 8,210 |
Deferred shares of 1p each | 900,000,000 | 9,000 |
|
|
|
Total | 9,135,968,299 | 43,000 |
|
|
|
Allotted, called up and fully paid |
|
|
Ordinary shares of £1 each | 19,805,485 | 19,805 |
A Deferred shares of 0.1p each | 8,210,178,477 | 8,210 |
Deferred shares of 1p each | 690,822,639 | 6,908 |
| ||
Total | 8,920,806,601 | 34,923 |
6. 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.
In March 2010 Naropa Cartera S.L.U., which owns 19.3% of the issued share capital, and Baring Iberia II Inversión en Capital F.C.R., which owns 17.7% of the issued share capital, subscribed for convertible loans totalling £480,000 and £215,000 respectively. Interest is charged on these convertible loans at 10% per annum.
7. Post balance sheet events
A notice of a General Meeting of mirada plc and notices of Extraordinary General Meetings of the holders of A Deferred Shares and Deferred Shares were sent to shareholders on 9 December 2010. These meetings will be held on 12 January 2011 from 12.00 pm at Bishopsgate Communications Ltd, 3 London Wall Buildings, London Wall, London EC2M 5SY, and will seek the authority to undertake a capital reorganisation and capital cancellation.
The capital reorganisation will have the effect of reducing the nominal value of the ordinary shares from £1.00 to 1 pence per ordinary share. In order to maintain the same number of fully participating ordinary shares after the capital reorganisation as there were before such reorganisation, each ordinary share will be subdivided into one new ordinary share (fully participating) and ninety-nine B Deferred Shares (with limited rights).
The capital cancellation will comprise the cancellation of the existing A Deferred Shares, Deferred Shares and the new B Deferred Shares created by the capital reorganisation. The capital cancellation will result in the creation of a new reserve of £34,725,835 against which the Company expects to credit its profit and loss account, subject to High Court approval.
Further details of the capital reorganisation and cancellation are set out in the circular sent to shareholders on 9 December 2010.
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, Bentima House, 168-172 Old Street, London, EC1V 9BP.