NPT.L Regulatory News (NPT)

30 Jun 2006 07:02

Stream Group PLC30 June 2006 STREAM GROUP PLC ("Stream" or the "Company") Trading Update Stream has three key components to its business; fixed line telephone content,mobile content and a contract to deliver services in connection with theMONILINK mobile banking network. Whilst our fixed line telephone contentbusiness remains strong we have, in line with the rest of the UK mobile contentindustry, experienced a recent sharp down turn in the revenues of our UK mobilecontent business, brought about by damaged consumer confidence in the industryand the consequent increase in regulatory control. We do have several strong ventures close to fruition, in particular our USacquisition made earlier this year, which will shortly begin generating revenuesin the US market. In addition, our mobile gaming product "PockitBingo",developed in conjunction with EGET (European Game and Entertainment TechnologyLtd Ab) of Finland, is due to launch in the second half of 2006 following atechnical delay in ensuring that the game interfaces with the majority of mobilehandsets. Whilst we achieved budget in the first quarter, we experienced a sharp downturnin April and May UK mobile revenues coupled with the delay in the launch ofmobile bingo. Due to the standard reporting cycle of the mobile networkoperators, we do not yet have confirmation of June figures, but expect profitbefore tax and amortisation for the six months to 30 June to be approximately£650,000 on revenue of approximately £6.1m. Due to the lack of visibility of thelikely revenues from our US venture and our UK gaming products for the next sixmonths, we are unable to accurately assess their contribution to the business.Whilst we are optimistic about these businesses prudence dictates that we assumelimited contribution for the current year. Therefore, at this stage, we expectthat revenue for the second half of 2006 will be largely in the line with thefirst half. We will keep shareholders updated on developments and performanceover the coming months. Stream's subsidiary, MChex Limited, has a 10 year agreement with mobileATMLimited (a joint venture between Morse PLC and LINK, the operator of the UK ATMnetwork) associated with the delivery of the MONILINK mobile banking network.The intention to launch this application imminently has been announced by FirstDirect and HSBC and we will keep shareholders updated as UK "High Street" bankslaunch the service to their customers over the coming months. We have strongexpectations for this business over the coming years. This contract assuresStream a long term future in the emerging mobile banking market. Stream remains profitable, cash generative and has more than sufficient cash,which currently stands at over £3m, to meet its requirements. The Boardannounces its intention to utilise some of the Company's surplus funds to buyback up to 15% of its issued share capital. A circular will be sent toshareholders next week giving notice of an Extraordinary General Meeting torequest this authority. The Board remains confident of Stream's longer term prospects. In addition tothe planned share buy back programme, the Board is committed to the payment of adividend in respect of the current and future years. Contacts: Stream Group plc Tel: 020 7299 2880Gordon Robson, Executive ChairmanPat Greene, Finance Director Flagship Tel: 020 7886 8441Diana Soltmann END This information is provided by RNS The company news service from the London Stock Exchange