21 Oct 2019 07:00
The information communicated in this announcement includes inside information for the purposes of Article 7 Regulation 596/2014.
Mporium Group plc
("Mporium", the "Company" or the "Group")
Statement re adjournment of GM & suspension of trading
Mporium announces that its directors have taken the difficult decision to seek an indefinite adjournment of the Company's forthcoming general meeting (as detailed in the Company's announcement of 30 September 2019) and to request a suspension in the trading of its shares on AIM in view of a critical uncertainty with regard to its financial position.
On 25 January 2019, the Company entered into a Strategic Collaboration Agreement with Allay (UK) Ltd ("Allay") pursuant to which the Company was appointed by Allay as the exclusive supplier to Allay of customers and leads for Allay's business in seeking redress for breaches of consumer regulation (particularly, payment protection insurance ("PPI")). As part of this arrangement, Allay paid Mporium for selected leads acquired from the Company's partners and the Company would in turn "pass through" these payments to its partners.
The Company understood until recently that the nature of the services provided by Mporium and Allay in these circumstances were exempt for VAT purposes but, following recent discussions with HM Revenue & Customs ("HMRC") and the Company's tax advisers, it is understood that this may not be the case. The Company has received advice that HMRC's position is informed by findings in recent unconnected VAT Tribunal cases that may be subject to further challenge but, as the Company is not a party to these disputes, there can be no certainty that these findings would indirectly favour the Company's position or their timing.
HMRC have not to date issued a formal notification to Mporium requiring payment and further submissions to HMRC are planned. The Company estimates that the potential liability, were it to arise, would be in the region of £3.5 million (in respect of transactions totalling approximately £18 million). The Company does not expect that it would have the resources to meet such a liability. In light of this and the associated uncertainty, the Company's directors have concluded that it would not be appropriate to finalise the fundraising described in the announcement of 30 September 2019.
As stated in that announcement, this fundraising was needed (amongst other things) to support the Group in meeting its short-term working capital requirements and that further external financial support was also expected to be needed in the next financial year. In the absence of this fundraising, and aside from the uncertainty with regard to the potential VAT liability described above, the directors believe they have no choice but to conclude that there is a fundamental uncertainty regarding the Company's ability to continue as a going concern. The Company is taking specialist advice on the most appropriate course of action in these circumstances.
The Company will provide an update as soon as possible.
Charles Pendred, chairman of the Company commented: "It is extremely frustrating that this matter has arisen so unexpectedly at a time when the forward vision for the Company looked so promising. The leadership of the Company has changed, the cost base had been substantially reduced, the new strategy with its complementary acquisition was being implemented and current trading was encouraging. The lead generation business with Allay had also ceased. The Board are deeply upset at this outcome and every effort has been, and is being made, to find a solution."
Enquiries
Mporium: | 020 3841 8411 |
Tom Smith, Chief Executive Officer |
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finnCap (NOMAD / joint broker) | 020 7220 0500 |
Henrik Persson / Anthony Adams (Corporate Finance) Andrew Burdis (Corporate Broking) | |
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Novum Securities Limited (joint broker) | 020 7399 9427 |
Colin Rowbury (Corporate Broking) |
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Yellow Jersey PR: | 020 3004 9512 |
Joseph Burgess |
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About Mporium Group PLC
Mporium is a software company delivering high performance advertising campaigns through its proprietary technology platform, IMPACT. Mporium delivers automation and innovation to the advertising industry and the IMPACT platform enables customers to identify and leverage moments when there are significant changes in the levels of consumer engagement. Advertisers using the platform can optimise their campaigns through event-driven marketing, targeting audiences at the exact moments when consumer interest is at its highest. Further information can be found at www.mporium.com