Mobile Streams Regulatory News (MOS)

19 Sep 2006 07:02

Mobile Streams plc19 September 2006 19 September 2006 Mobile Streams Plc - Maiden Interim Results Announcement for the six months to30 June 2006 Financial highlights: - Revenue increased 67% to £3.4m (2005: £2.0m).- Revenue growth in North America and Latin America of 216% and 157% respectively versus same period 2005- Operating Loss £1.9m (2005: (£0.1m))- Trading EBITDA loss* for the period was (£0.3m) (2005: (£0.1m))- Cash at 30 June 2006 £6.1m (2005: £0.26m) *Calculated as profit before tax, amortisation of goodwill, depreciation, sharecompensation expense and fund raising and floatation costs Operational highlights - Mobile Streams is now a global business with presence in UK, Europe, Asia Pacific, North America and Latin America - Successful implementation of acquisition strategy to extend distribution and enhance content offering - New revenue agreements with Vodafone Ireland, Vodafone Australia, Vodafone New Zealand, CSL Hong Kong, Comcel Colombia, Movistar Chile and Alltel, the 5th largest operator in the US - Successful commercialisation of technology platform Vuesia - Strategic investment from Liberty Media in January, purchasing 22% of Mobile Streams' shares - Completion in February of Placing and Admission to AIM. Commenting on today's inaugural interim results, Mobile Streams Chairman RogerParry, said: "Mobile Streams has set itself the goal of being one of the world'sleading "mobilisers of media" and we feel we have made good progress to this endover the past six months. I am sure we will consolidate these achievements goingforward. Therefore, the Board is confident of a satisfactory outcome for theyear and believe that we are creating shareholder value for the future". Simon Buckingham, CEO of Mobile Streams, added: "In the first half of 2006,Mobile Streams has put in place solid foundations which will enable the companyto fully participate in the growth in the mobile phone content and servicesmarket that we expect in the coming months and years. The year to date can becharacterised by some well timed acquisitions to enable Mobile Streams' growthto continue as demand for mobile media grows". Enquiries: Mobile StreamsSimon Buckingham, Chief ExecutiveJitesh Sodha, Chief Financial Officer Brunswick Group LLPTim Burt Telephone: 020 7404 5959 Chairman's Statement In our first six months as a listed company we have delivered on the objectivesset out at the time of the IPO. Mobile Streams has put in place the financial and business building blocks thatwill allow us to capitalise on the growth of mobile media during 2007 andbeyond. Revenue grew to £3.4m, up 67% on the same period in 2005, whilst TradingEBITDA* losses were £0.3m (2005 (£0.1m)). The cash balance as at the end of thefirst half was £6.1m. The first half of 2006 has seen Mobile Streams transform from an unlisted UKbusiness, which funded itself out of cashflow, into an international operationwith cash reserves. The company came to market in January 2006 with a listing onthe AIM market, in the process being supported by a major strategic mediainvestor in Liberty Media. Since then, the company either further developed orestablished operations in the UK, North America, Latin America, Europe and AsiaPacific. Growth is coming from three key areas:- Additional content and distribution- Licensing of Vuesia, a proprietary technical platform- 'Bolt-on' acquisitions, which add distribution, exclusive content and management talent. Growth in a growing market The first six months as a listed company have seen Mobile Streams develop thebusiness with new content and distribution deals and leverage the relationshipwith Liberty Media and its subsidiary Connectid. We also strengthened our Boardwith the appointment of Mark Carleton, a senior Liberty Media executive, as anon-executive director. Mobile Streams has completed a number of complementary acquisitions this year.Our acquisition strategy is to find entrepreneurial businesses to 'bolt-on'where they can add specific value to our content and/or distribution. Thesuccess of this strategy is evident in the three acquisitions completed, two ofwhich were with companies where we had existing business relationships, allowingus to identify a suitable cultural and management fit. This approach reduces therisk of the acquisitions and has enabled swift integration. Outlook With these developments in mind, the Board look forward to a satisfactoryoutcome to the year in line with our expectations at the time of the IPO andremain confident of creating shareholder value for the future. Chief Executive's Statement Our business has three main components: Mobile Distribution, Mobile Content andthe proprietary Vuesia Platform. Distribution: Mobile Streams now has truly global distribution. Leveraging ourexpertise and technology platform across multiple operating regions bothincreases our return on technology investment and assists our global customerswith the implementation of their mobile strategies. Our global footprint andgeographical scale will also enable us to reduce our dependence on any onecustomer or region, and facilitate our growth. Having grown organically with subsidiaries in North America, Mexico, Brazil,Argentina, Colombia and Chile, we have now added a presence in Germany,distribution across mainland Europe and subsidiaries in Hong Kong, Australia andSingapore, providing a strong base for distribution across Asia Pacific. Our organic business has successfully developed with new distribution launches.We now run a comedy channel for Vodafone in UK, Ireland, Australia and NewZealand. In Latin America we have launched exclusive Playboy services inColombia, Mexico and Argentina. In addition we have become the white labelprovider for Movistar in Chile. We have recently created a new subsidiary inVenezuela to expand our footprint in this fast growing region still further. Inthe US we have launched services on several Qualcomm BREW carriers, includingAlltel, the fifth largest US operator. Mobilemode Limited was acquired in July 2006. Founded in 1999, Mobilemodedelivers mobile entertainment content and services to mobile phone operators andportals in the Asia Pacific region. The acquisition of Mobilemode gives MobileStreams a comprehensive position in Asia Pacific, with a particularly strongfocus on Australia, New Zealand, Malaysia, Singapore and Hong Kong. In addition,the acquisition offers Mobile Streams the immediate benefit of Mobilemode'sexperienced management team, and their strong relationships in the region.Mobilemode is currently in the process of being renamed Mobile Streams Asia. Content: Pre-IPO, Mobile Streams had organically developed a strong position inthe UK and Latin America. However, we believed that we needed to strengthen ourexisting North American business to take full advantage of this sizeable market,and add significant scale to our embryonic Asian and European businesses. Thisled to the three transactions we have completed post IPO and positions thecompany well for growth across multiple regions. We acquired Cyoshi Mobile GmbH in April 2006. Based in Germany, Cyoshi is aleading independent producer and distributor of mobile media - especially videocontent - across Europe. The acquisition strengthens Mobile Streams' footprintacross mainland Europe and provides us with direct access to exclusive mobilecontent. Cyoshi, now renamed Mobile Streams Europe, was a supplier to MobileStreams, and is already well integrated into the company. We recently launched FunkySexyCool (FSC). FSC is a social networking toolallowing users to create profiles of themselves through their mobile and text,flirt and vote for each other as either Funky, Sexy or Cool. The product will bepromoted by MTV across the German speaking region (Germany, Austria andSwitzerland) and by network operators including Vodafone Germany and MobilcomAustria. Mobile Streams has exclusive distribution rights for FSC in Europe. We acquired The Nickels Group in August 2006. The Nickels Group was also asupplier to Mobile Streams. The California-based mobile production companyspecialises in the licensing and distribution of urban music, currently thehighest selling genre of music in the US. The deal significantly strengthensMobile Streams' music content generation and distribution business as well asproviding a strategic foothold on the west coast of the US. Vuesia: We have continued to invest in our Vuesia platform. Because of itsflexibility in handling all mobile media types from text to video, Vuesia is asingle integrated technology platform. This platform is already used within theMobile Streams business to deliver mobile content services at a 'carrier grade'level. We have been enhancing and 'productising' Vuesia to support the externalsales process. The recent agreement with Sony Pictures Entertainment, whereMobile Streams has delivered mobile assets for films such as The Da Vinci Code,is an example of where our proprietary flexible and future-proof technology iscreating links with a leading media company, as we are chosen to bring theircontent into the mobile arena. The strategic investment from Liberty Media highlights the importance of themobile content sector and has already resulted in the relationship with themobile tracking business Connectid. Since the beginning of the year, Connectidhas successfully signed several agreements with network operators, handsetsuppliers and software suppliers to provide location based services.Furthermore, Mobile Streams and Connectid have integrated their platforms sothat Vuesia also supports location sensitive mobile content and are jointlypitching this unique offer to carriers and media companies. The relationshipbetween Mobile Streams and Liberty Media has exceeded the company'sexpectations, with relationships established or developing with severalcompanies in the Liberty family. As a result of these developments, we are strongly positioned to capitalise onthe benefits that they will bring and build on the first half of the year. Financial Review Group turnover in the six months was £3.35m, a 67% increase on 2005 (£2.0m).Trading EBITDA* losses for the period were (£0.3m) (2005: £0.1m). Loss beforetax was £1.78m including fund raising/floatation costs and share compensation expense (2005: loss of £0.1m). The Group has applied Financial Reporting Standard 20 - 'Share Based Payment'for the first time. This requires the recognition of a charge in the Profit andLoss Account in respect of share options. The impact of this policy is detailedin note 1. A prior year adjustment has not been made as the adjustment was notmaterial. The Group incurred a net cash outflow from operations of £245,000 (2005: inflow£149,000). The cash balance at 30 June 2006 was £6,143,000. Basic earnings per share amounted to a loss of 5.75p per share (2005: loss of0.422p restated). This reflects the additional goodwill amortisation charge inthe period and the revised treatment of share compensation expense. Adjusted earnings per share (excluding flotation/fund raising costs and sharecompensation expense) amounts to a loss of 0.86p (2005: loss of 0.42p). MOBILE STREAMS PLC CONSOLIDATED BALANCE SHEET For the period ended 30 June 2006 (Unaudited) (Unaudited) (Audited) At 30 June At 30 June At 31 December Note 2006 2005 2005 £'000 £'000 £'000 Fixed assetsTangible assets 907 140 247Intangible assets 1,986 - -Investments 165 - - --------- --------- --------- 3,058 140 247 --------- --------- --------- Current AssetsDebtors 1,691 983 1,524Cash at bank and in hand 6,143 263 268 --------- --------- --------- 7,834 1,246 1,792 Creditors: amountsfalling due within one year (2,661) (1,618) (2,170) Net current assets 5,173 (372) (378) Provisions for liabilities and charges - - (18) Net assets/(liabilities) 8,231 (232) (149) ========= ========= ========= Capital and reservesCalled up share capitals 65 1 1Shares to be issued 496 - -Share premium 9,593 100 165Profit and loss account (1,923) (333) (315) --------- --------- ---------Equity shareholders' funds/(deficit) 5 8,231 (232) (149) ========= ========= ========= MOBILE STREAMS PLC CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT For the period ended 30 June 2006 (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to Note 30 June 2006 30 June 2005 31 December 2005 £'000 £'000 £'000 Group turnover 3,353 2,013 5,071 Cost of sales (1,329) (870) (2,197) --------- --------- ---------Gross profit 2,024 1,143 2,874 --------- --------- ---------Flotation/fund raising costs (1,292) - -Other administration expenses (2,631) (1,237) (2,812) --------- --------- --------- Operating (loss)/profit (1,899) (94) 62 Net interest 121 (9) (31) --------- --------- --------- (Loss)/profit on ordinary activities before taxation 2 (1,778) (103) 31 Tax on profit on ordinary activities 28 - (159) --------- --------- --------- (Loss) retained (1,750) (103) (128) ========= ========= ========= Pence per Pence per Pence per share share share Basic earnings per share 3 (5.747) (0.422) (0.519) Adjusted earnings per share 3 (0.857) (0.422) (0.520) MOBILE STREAMS PLC CONSOLIDATED SUMMARISED CASH FLOW STATEMENT For the period ended 30 June 2006 (Unaudited) (Unaudited) (Audited) Note 6 months to 30 6 months to 30 12 months to 31 June 2006 June 2005 December 2005 £'000 £'000 £'000Net cash (outflow)/inflow from operatingactivities 6 (1,204) 149 259 Returns on investment and servicing of financeNet interest received/(paid) 121 (9) (31) Taxation (124) - (47) Capital expenditure and financial investmentCapital expenditure (813) (117) (257)Investments in subsidiaries (net of cash acquired) (1,375) - -Trade investments (165) - - FinancingIssue of share capital (net of expenses paid) 9,492 - 65 --------- ---------- ----------Increase/(decrease) in cash 5,932 23 (11) --------- ---------- ---------- Reconciliation from net cash flow to movementto net fundsIncrease/(decrease) in net cash 5,932 23 (11)Foreign currency movements (57) (18) 21 --------- ---------- ----------Change in net funds resulting fromcash flows 5,875 5 10 Net funds brought forward 268 258 258 --------- ---------- ----------Net funds carried forward 6,143 263 268 ========= ========== ========== MOBILE STREAMS PLC OTHER PRIMARY STATEMENTS AND NOTES For the period ended 30 June 2006 1 BASIS OF PREPARATION The interim financial information has been prepared in accordance with principalaccounting policies of the Group as set out in the Group's 2005 annual reportand financial statements except for the adoption of Financial Reporting Standard20, "Share based payment". The impact of this change in accounting policy hasbeen reflected in the profit and loss account and gave rise to a charge of£197,000 for the period. A prior year adjustment has not been made as theadjustment was not material. The change in policy did not result in any changein Shareholders' equity. 2 PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION The loss/profit on ordinary activities before taxation is stated after charging: (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to 30 June 2006 30 June 2005 31 December 2005 £'000 £'000 £'000Auditors' remuneration:Audit services 19 - 26Other services 124 - 34 Depreciation 98 9 44Amortisation of goodwill 17 - - Share compensation expense 197 - - ========== ========== ========== Auditor's remuneration for other services is in relation to tax compliance,advisory work and acting as Reporting Accountant. 3 EARNINGS PER SHARE The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders divided by the weighted average number ofshare in issue during the period. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below. (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to 30 June 2006 30 June 2005 31 December 2005 Pence per share Pence per share Pence per shareBasic and Diluted earnings per share (5.747) (0.422) (0.520) MOBILE STREAMS PLC OTHER PRIMARY STATEMENTS AND NOTES For the period ended 30 June 2006 3 EARNINGS PER SHARE (continued) (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to 30 June 2006 30 June 2005 31 December 2005 £'000 £'000 £'000 Loss for the financial period (1,750) (103) (128) ========== ========== ========== For Adjusted earnings per share Loss for the financial period (1,750) (103) (128) Add back: exceptional floatation/fund raising costs 1,292 - -Add back: share compensationexpense 197 - - ---------- ---------- ----------Adjusted loss for the period (261) (103) (128) ========== ========== ========== Weighted average number of shares Number of Number of Number of shares shares shares For basic earnings per share 30,452,061 24,298,630 24,531,997 Number of dilutive shares underoption 2,595,300 1,163,350 1,168,250 The adjusted EPS has been calculated to reflect the underlying profitability ofthe business by excluding the exceptional floatation and fund raising costs. 4 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to 30 June 2006 30 June 2005 31 December 2005 £'000 £'000 £'000 Loss for the period (1,750) (103) (128) Currency differences on foreigncurrency net investments (55) (18) 25 ---------- ---------- ----------Total recognised losses for theperiod (1,805) (121) (103) ========== ========== ========== MOBILE STREAMS PLC OTHER PRIMARY STATEMENTS AND NOTES For the period ended 30 June 2006 5 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS (Unaudited) (Unaudited) (Audited) 6 months to 6 months to 12 months to 30 June 2006 30 June 2005 31 December 2005 £'000 £'000 £'000 Loss for the period (1,750) (103) (128) Other recognised gains and losses (55) (18) 25Issues of shares 9,492 - 65Share compensation expense 197Shares to be issued 496 - - ---------- ---------- ----------- Net increase/(decrease)in shareholders' funds 8,380 (121) (38) Shareholders' funds at1 January 2006 (149) (111) (111) ---------- ---------- -----------Shareholders' funds at30 June 2006 8,231 (232) (149) ========== ========== =========== 6 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES Operating (loss)/profitbefore tax and interest (1,899) (94) 62 Depreciation 98 9 44Amortisation of goodwill 17 - -Share compensation expense 197 - -Decrease in debtors (167) (337) (877)Increase in creditors 550 571 1,030 ---------- ---------- -----------Net cash (outflow)/inflow fromoperating activities (1,204) 149 259 ---------- ---------- ----------- GEOGRAPHICAL & BUSINESS ANALYSIS UK/Asia/Europe----------------------- ------------ ------------ ----------Six months ended 30 June 2006 30 June 2005 % change £'000 £'000Turnover 1,494 1,362 10%Gross Profit 895 720 24%Gross margin 60% 53% 13%----------------------- ------------ ------------ ---------- North America----------------------- ------------ ------------ ----------Six months ended 30 June 2006 30 June 2005 % change £'000 £'000Turnover 1,004 318 216%Gross Profit 670 202 232%Gross margin 67% 64% 5%----------------------- ------------ ------------ ---------- Latin America----------------------- ------------ ------------ ----------Six months ended 30 June 2006 30 June 2005 % change £'000 £'000Turnover 855 333 157%Gross Profit 459 221 108%Gross margin 54% 66% -19%----------------------- ------------ ------------ ---------- Connectid*----------------------- ------------ ------------ ----------Six months ended 30 June 2006 30 June 2005 % change £'000 £'000Turnover 276 - -Gross Profit 276 - -Gross margin 100% - ------------------------ ------------ ------------ ---------- *included in North America geographic analysis This information is provided by RNS The company news service from the London Stock Exchange