Mobile Streams Regulatory News (MOS)

20 Mar 2007 07:02

Mobile Streams plc20 March 2007 Mobile Streams Plc- Full Year Results Announcement 20 March 2007 Mobile Streams (AIM: MOS) today announces its maiden full year results as apublic company for the year ending 31 December 2006, following its listing on 15February 2006. Financial highlights: - Revenue increased by 62% to £8.2m (2005: £5.1m) - UK GAAP Loss before tax £1.8m, including IPO costs - Profitability achieved at the Trading EBITDA* level since August 2006 - Trading EBITDA* profitable in the second half of 2006 (First half 2006 loss of £0.3m) - Breakeven achieved at Trading EBITDA* level for the year (2005: £0.1m) - Organic revenue growth in North America and Latin America of 124% and 84% from 2005 - Cash at 31 December 2006 of £4.1m (2005: £0.3m) *Calculated as profit before tax, interest, amortisation of goodwill,depreciation, share compensation expense and fund raising and floatation cost. Strategic highlights: - Strategic investment from Liberty Media, including the establishment of its Connectid subsidiary under the management of Mobile Streams - Successful development and commercialisation of proprietary technology platform Vuesia - 3 acquisitions to extend distribution and content offering in US, Asia Pacific and Europe - Mobile Streams is now a global business with subsidiaries in North America, Latin America, Asia Pacific and Europe - New operator portal distribution agreements with major carrier groups, including Cingular Wireless, Telefonica and America Movil - Content licensing agreements including Playboy, Private Media Group, Warner Music, Mondo Media's Happy Tree Friends and Electronic Arts - Creation of proprietary content properties including Suicidal Squirrels and neXXt Mobile - Launch of consumer division with brands including ringtones.com marketed through search engines such as Google and Yahoo! Commenting on today's inaugural full year results, Mobile Streams Chairman RogerParry said: "It is very pleasing to be able to report that for the financialyear of 2006, Mobile Streams has achieved the goals set by the Board at the timeof the listing on AIM in February 2006. Sales, profits and cash generation haveall met or exceeded expectations." Simon Buckingham, CEO, added: "2006 was a year of rapid evolution for MobileStreams as a company. Our people, technology, processes and content have allsignificantly improved. Interest in mobile content services from media companiesis strong and growing. Mobile operators are gradually opening up access to theirconsumers to trusted content providers. Simultaneously there has been arestructuring in the competitive environment. The timing of our IPO andinvestment from Liberty Media enabled us to invest at the right time in ourtechnology and content and acquire like-minded complementary companies. Thesecircumstances have combined to provide Mobile Streams with a solid platform forgrowth in revenue and profits. The extent to which we are successful now dependsupon our ability to leverage our longstanding operating knowledge, credibilityand expertise in the mobile sector. Our twin advantages of technology andgeography give us a great opportunity to create the leading global mobile mediaspecialist." Enquires: Mobile Streams (020 7395 2000)Simon Buckingham, Chief Executive OfficerJitesh Sodha, Chief Financial Officer Chairman's Statement - Roger Parry Mobile Streams is at the centre of the rapidly growing new markets of mobilemedia and mobile internet. Sales in 2006 were £8.2m which was up from £5.1m in 2005. This increase of 62%was achieved two-thirds from organic growth and one-third from acquisitions.Trading EBITDA* was breakeven compared to a profit of £0.1m in 2005. Thisperformance was as planned and Mobile Streams demonstrated profitable tradingduring the second half of 2006. At the end of the year, Mobile Streams had cash balances of £4.1m. At IPO weraised a net £6.0m of new money. Cash investments during the year were primarilymade in acquisitions and in the Vuesia platform. In line with policies set at the time of the listing the Board is notrecommending a dividend for 2006. Acquisitions During the year, Mobile Streams acquired Cyoshi Mobile, The Nickels Group andMobilemode. The acquisition of Cyoshi Mobile, based in Germany, provided accessto unique content and distribution in mainland Europe. The Nickels Group, basedin Los Angeles, also provided access to unique animated cartoon content, thistime in the music genres of hip hop and Reggaeton. Mobilemode, based in HongKong and Australia, added distribution and relationships in the Asia Pacificregion from its bases in Australia and Hong Kong. Management are happy with theperformance of all three acquisitions Board and Management In February 2006, Mobile Streams appointed Mark Carleton, Senior Vice Presidentof Liberty Media to our Board. Liberty Media owns approximately 17% of theequity through their subsidiary TruePosition Inc. In addition to Mr. Carleton, the Board now consists of two Executive Directors(Simon Buckingham CEO and Jitesh Sodha CFO), three non executives and myself asChairman. Outlook and Trading Since the beginning of the new financial year in 2007, Mobile Streams has wonand launched several new operator contracts including being selected as thecomedy channel partner for Hutchison 3G in the UK. The company has also beenawarded projects to mobilise some major content properties on a global basis,such as Spider-Man 3 from Sony Pictures Entertainment. Additionally, theconsumer business is continuing to build as mobile search volumes grow at arapid rate, with site launches in several markets including Germany, Spain, theUS and Australia. Selling our proprietary content through mobile and otherdistribution channels is also looking promising, following the success of thebroadcast of Suicidal Squirrels on MTV in Germany. As the market is constantlychanging and new business models and business opportunities appear, projectionsfor full year's trading are difficult to make. However, management believe weare well positioned strategically to achieve our growth objectives and as suchwe look forward to 2007 with confidence. Chief Executive's Statement - Simon Buckingham Our business has four lines of operation, all powered by the Vuesia technologyplatform: - Platforms: helping content owners mobilise their media - Operators: providing operators with extra sources of revenue - Content: creating proprietary mobile content - Consumer: selling content directly to consumers Platforms As media companies invest in digital distribution strategies, they are lookingat mobile as a growing and important medium. Unlike the internet, distributionon mobile phones is technically complex with thousands of differing handsettypes, standards, protocols, screen sizes and networks. Mobile Streams has madeit possible for media companies to reduce this complexity through utilising ourproprietary platform Vuesia. Through Vuesia, media companies can make the necessary mobile copies of theoriginal digital assets. Vuesia will also manage the identification of a user'shandset and will provide the most appropriate 'mobile copy' for that customer.In this way, a customer with a high end handset on a 3G network will receive alarger file in higher quality than one on a 2G network with a lower end device. As well as using Vuesia internally within Mobile Streams, in 2006 we sold theVuesia platform externally for the first time. Customers have included SonyPictures Entertainment, where we mobilised films such as Casino Royale and theDa Vinci Code. Operators Mobile Streams now has direct distribution with over 70 operators in more than20 countries. During 2006 we continued to improve our direct distribution bothorganically and through acquisition. We won new business with many operators including E-Plus Germany, VodafoneAustralia, Vodafone New Zealand, COMCEL (America Movil) Colombia, Movistar(Telefonica) Chile, Cingular Wireless in USA and Bell Mobility in Canada. The acquisition of Mobilemode Ltd in July 2006 provided additional distributionwith a number of mobile network operators, particularly in Australia, NewZealand, Singapore and Hong Kong. Content Access to exclusive and proprietary content can help to secure distribution,improve sales and margins. With our experience of the mobile market we are ableto invest in securing exclusive rights to properties that appeal directly to theright consumer segments. We have the exclusive European mobile distributionrights for animated series Happy Tree Friends, which has gained popularitythrough the internet and is being shown on MTV. In Latin America we distributecontent from the likes of Playboy, Warner Music, Private Media Group, and Maximmagazine. The acquisition of Cyoshi Mobile in Germany has given us the access to animatedcontent such as Suicidal Squirrels that has been created and commissioned byMobile Streams. We have already secured broadcast distribution for SuicidalSquirrels on MTV Germany. This allows us to capture the IP owner's share of themargins as well as benefit from non-mobile rights such as DVD, broadcast andinternet. The acquisition in August 2006 of the Nickels Group, based in Los Angeles, hasalso provided access to unique content, this time in the music genres ofReggaeton and hip hop, where the Company now has mobile rights for Tupac Shakur,one of the world's best selling artists. Consumer Mobile network operators are increasingly changing the structure of theircontent portals. In addition to continuing to market their own mobile contenton portal, they are auctioning off some of their portal space and trafficthrough partnerships with search engines such as Google, Yahoo and others. Thishas created a new "on operator, off portal" business model in which MobileStreams acquires traffic generated on the operator portals and delivers contentdirectly to consumers based on the consumer's keyword preferences. This areainitially launched during the 2006 financial year. Liberty Media The strategic investment from Liberty Media highlights the importance of themobile content sector for media companies. The investment has already resultedin the establishment of a Liberty Media subsidiary, Connectid LLC. Connectid isreadying the launch of innovative mobile location services for launch later in2007. As well as earning fees for managing and operating Connectid, MobileStreams holds warrants over 10% of the company's equity. Additional relationships have been established with several companies in theLiberty Media family. For example, Mobile Streams is the mobile platform companyfor Discovery Communications in Asia Pacific and mobilises the popular StarzEntertainment internet property 30-Second Bunnies Theatre globally. Financial Review Group turnover for the year was £8.2m, a 62% increase on 2005 (£5.1m). TradingEBITDA* was breakeven for the period (2005: £0.1m). Loss before tax was £1.8mafter fund raising/floatation cost (£1.3m) and share compensation expenserequired under FRS 20 (£0.3m). Overall gross margin improved to 58.6% (2005:56.7%). We now have a genuine global distribution footprint with 12 subsidiaries on 4continents. Leveraging our expertise and technology platform across multipleoperating regions both increases our return on technology investment and assistsour global customers with the implementation of their mobile strategies. Ourglobal footprint and geographical scale will enable us to reduce our dependenceon any one customer or region, and facilitate our growth. Europe now represents43% of our turnover, down from 59% in 2005 as other geographies grow. NorthAmerica representing 23% (2005 17%) and Latin America representing 28% (200525%) grow in importance to the group, and the acquisition of Mobilemode has nowprovided a meaningful presence in Asia Pacific (6% of turnover). The Group has applied Financial Reporting Standard 20 "Share Based Payment" forthe first time. This requires the recognition of a charge in the Profit and LossAccount in respect of share options. The impact of this policy is detailed innote 1. A prior year adjustment has not been made as the adjustment was notmaterial. A charge of £0.3m has been made in respect of FRS 20. £1.1m was invested during the year on tangible fixed assets. This waspredominantly for the further development of the Vuesia platform, and associatedhardware. £3.8m of intangible assets were added onto the balance sheet, of which£3.7m was goodwill relating to the three acquisitions made during the period.The group continues to invest in the development of the Vuesia platform andcontent assets. The Group incurred a net cash outflow from operations** of £0.2m (2005: inflow£0.3m). The cash balance at 31 December 2006 was £4.1m. A tax charge of £0.1m has been included mostly for UK corporation tax as IPOcosts are not allowable for tax purposes. A deferred tax charge of £67,000 hasbeen taken on timing differences for capital allowances. The group hasapproximately £2.0m of trading losses to offset against future profits invarious countries and a further £172,000 of deferred tax asset against stockoption grants in the UK that has not been recognised due to the uncertain timingof exercise and potential movement of the share price. Basic earnings per share amounted to a loss of 3.056p per share (2005: loss of0.519p ) Adjusted earnings per share (excluding floatation /fund raising costs and sharecompensation expense) amounted to a loss of 0.559p (2005: loss of 0.519p). * Calculated as profit before tax, interest, amortisation of goodwill, depreciation, share compensation expense and fund raising and floatation cost. ** Cash outflow from operations is calculated before deducting IPO / fundraising costs MOBILE STREAMS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT YEAR ENDED 31 DECEMBER 2006 2006 2005 Continuing Acquisitions Total £000's £000's £000's £000's Group turnover 7,301 922 8,223 5,071 Cost of sales (2,896) (506) (3,402) (2,197) Gross profit 4,405 416 4,821 2,874 Flotation/fund raising costs (1,296) - (1,296) -Share based compensation (325) - (325) -Other administration expenses (4,654) (577) (5,231) (2,812) Operating (loss)/profit (1,870) (161) (2,031) 62 Net interest 223 (31) (Loss)/profit on ordinary activities (1,808) 31before taxation Tax on profit on ordinary activities (176) (159) Loss on ordinary activities after (1,984) (128)taxation Loss retained (1,984) (128) Pence per Pence per share share Basic and diluted earnings per share (3.056) (0.519) There were no discontinued operations during the year. MOBILE STREAMS PLC STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES For the year ended 31 DECEMBER 2006 2006 2005 £000's £000's Loss for the period (1,984) (128) Currency differences on foreign currency net investments (153) 25 Total recognised losses for the period (2,137) (103) MOBILE STREAMS PLC CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2006 2006 2005 £000's £000's Fixed assetsIntangible assets 3,701 -Tangible assets 1,112 247Investments 382 - 5,195 247 Current AssetsDebtors 2,742 1,524Cash at bank and in hand 4,073 268 6,815 1,792 Creditors: amounts falling due (3,399) (2,170)within one year Net current assets/(liabilities) 3,416 (378) Provisions for liabilities (85) (18) Net assets/(liabilities) 8,526 (149) Capital and reservesCalled up share capital 69 1Share premium 10,290 165Shares to be issued 294 -Profit and loss account (2,127) (315)Shareholders' funds/(deficit) 8,526 (149) The financial statements were approved by the Board of Directors on 19 March2007. J Sodha - Director MOBILE STREAMS PLC CASHFLOW STATEMENT For the year ended 31 DECEMBER 2006 2006 2005 £000's £000's Net cash (outflow)/inflow from operating activities (1,529) 260 Returns on investment and servicing of finance Interest received 216 6Interest paid (14) (37) Taxation (192) (48) Capital expenditure and financial investmentCapital expenditure (1,256) (257)Trade investments (382) - AcquisitionsInvestments in subsidiaries (net of cash acquired) (2,379) - Financing Issue of share capital (net of expenses paid) 9,494 65 Increase/(decrease) in cash 3,958 (11) Reconciliation from net cash flow to movement to net funds Increase/(decrease) in net cash 3,958 (11) Foreign currency movements (153) 21Change in net funds resulting from cash flows 3,805 10 Net funds brought forward 268 258 Net funds carried forward 4,073 268 mobile streams plc SEGMENTAL analysis Year ended 31 DECEMBER 2006 The directors consider there to be one class of business, being the creation andpublication of mobile phone content. 2006 2005 % change £000's £000's Turnover by origin and destination of sales:Europe 3,539 2,968 19North America 1,882 839 124Latin America 2,324 1,264 84Asia 479 - - 8,224 5,071 62 Gross profit by origin and destination of sales:Europe 2,180 1,510 44North America 1,171 487 140Latin America 1,310 877 49Asia 160 - 4,821 2,874 68 Connectid revenue and gross margin of £540,000 (2005: nil) is included in Europeangeographical analysis This information is provided by RNS The company news service from the London Stock Exchange