Last checked at 30 Sep 2010 10:30
Messaging International Plc / Market: AIM / Epic: MES / Sector: Technology
30 September 2010
Messaging International Plc ('Messaging International' or 'the Company')
Interim Results
Messaging International Plc, the AIM traded company and provider of converged messaging products and services, announces its results for the six months ended 30 June 2010.
Highlights
·; Strengthened global market position as a leading provider of converged messaging services
·; Pre and post tax profit of £25,628 for 6 months to 30 June 2010 (2009: loss £173,224)
·; Total revenues for the period totalled £1,234,842 (2009: £1,122,326)
·; Steady trading resulting in 10% increase in gross revenue
·; Expanding geographic footprint - established new clients in North America for 'Text to Landline' messaging products
·; Launched a number of new products such as the new 'Internet Video Download' application and the 'Messaging Gateway' to enhance the Company's offering in the messaging services arena
Chairman's Statement
The Company has achieved positive trading over the period and this has been reflected in steadily improving financial results as our revenues and profitability continue to increase. We have a robust business model and an innovative product pipeline which greatly adds to our ability to maintain and strengthen relationships with our existing and developing client base. Importantly, we have also been successful in expanding our reach, particularly in North America, demonstrating the commerciality of our products.
Financial Results
The results for the six months ended 30 June 2010 show a pre-tax profit of £25,628 (2009: loss £173,224) on a turnover of £1,234,842. The Company's cash position at 30 June 2010 was £235,483, which is an increase in funds of £32,792 in the six month period.
The Board does not recommend the payment of an interim dividend.
Operations Review
We have a strong presence within the mobile telecoms sector which includes major international mobile operators such as Sprint Nextel ('Sprint') and Bell Canada, and we continue to work closely with them so that we can develop new products to meet their users' needs.
The functionality of our applications is continually recognised by those operating within the sector and our technology has claimed a large amount of interest, particularly as mobile users rely more on their handsets for communication and entertainment purposes. Our 'Text-to-Landline' application continues to gain traction as it extends our client base and we are now working with three new Tier 3 clients in the USA, including Golden State Cellular and Panhandle Telecommunication Systems, Inc., a wholly owned subsidiary of Panhandle Telephone Cooperative, Inc. This has provided us with a further foothold and established new relationships in the North American market place from which to build upon.
In Q1 2010 we launched a number of new products designed to enhance our current offering. One such example is an 'Internet Video Download' application which allows users to download and stream videos to their mobile phones, and a 'File to Mobile' application which allows users to save PC content onto their mobile phone in a similar way to a portable disk.
Included within our new products is a 'Messaging Gateway' which reduces integration costs and improves margins for mobile operators by providing them with a secure multi-channel entry point for external messaging content and social networking sites. This has received a substantial amount of interest and has been sold to a customer in North America.
Prospects
We remain focussed on strengthening our position amongst the leading providers in the rapidly growing multimedia messaging market and we are committed to investing in our products and services, as well as extending our geographic reach in order to achieve this aim.
Our products appeal to mobile phone users around the world, as illustrated by our relationships with many major international mobile operators covering a broad range of geographic regions including Russia, the USA, Australia and South America, where it is our aim to strengthen our presence by continuing to provide products that satisfy the needs of operators and users.
H Furman
Chairman
29 September 2010
For further information visit www.telemessage.com or contact:
| Guy Levit | Messaging International Plc | Tel: + 972 3 9225252 |
| Mark Percy | Seymour Pierce Limited | Tel: +44 (0) 20 7107 8000 |
| Catherine Leftley | Seymour Pierce Limited | Tel: +44 (0) 20 7107 8000 |
| Elisabeth Cowell | St Brides Media & Finance Ltd | Tel: +44 (0) 20 7236 1177 |
Consolidated statement of comprehensive income for the six months ended 30 June 2010
|
|
Notes |
| Unaudited six months ended 30 June 2010 |
| Unaudited six months ended 30 June 2009 |
| Audited year ended 31 December 2009 |
|
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
| Revenues | 2 |
| 1,234,842 |
| 1,122,326 |
| 2,274,080 |
| Cost of revenue |
|
| (540,472) |
| (581,425) |
| (980,879) |
|
|
|
|
|
|
|
|
|
| Gross profit |
|
| 694,370 |
| 540,901 |
| 1,293,201 |
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
| Research and development |
|
| (222,261) |
| (182,266) |
| (366,762) |
| Sales and marketing |
|
| (251,529) |
| (296,251) |
| (508,716) |
| Administrative costs |
|
| (175,065) |
| (216,124) |
| (390,415) |
|
|
|
|
|
|
|
|
|
| Total operating expenses |
|
| (648,855) |
| (694,641) |
| (1,265,893) |
|
|
|
|
|
|
|
|
|
| Operating profit/(loss) |
| 45,515 |
| (153,740) |
| 27,308 | |
|
|
|
|
|
|
|
|
|
| Finance costs |
|
| (19,887) |
| (19,484) |
| (60,404) |
|
|
|
|
|
|
|
|
|
| Profit/(loss) before taxation |
|
| 25,628 |
| (173,224) |
| (33,096) |
|
|
|
|
|
|
|
|
|
| Taxation | 3 |
| - |
| - |
| - |
|
|
|
|
|
|
|
|
|
| Profit/(loss) for the financial period |
|
|
25,628 |
|
(173,224) |
|
(33,096) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Foreign exchange difference on translation of foreign operations |
|
|
|
|
|
|
(29,029) |
|
|
|
|
|
|
|
|
|
| Foreign exchange difference arising from restating the carrying value of goodwill associated with foreign operations |
|
|
(1,155) |
|
39,609 |
|
(343,945) |
|
|
|
|
|
|
|
|
|
|
|
|
| (1,155) |
| 39,609 |
| (372,974) |
|
|
|
|
|
|
|
|
|
| Total comprehensive profit/(loss) |
|
| 24,473 |
| (133,615) |
| (406,070) |
|
|
|
|
|
|
|
|
|
| Earnings/(Loss) per share |
|
|
|
|
|
|
|
| Basic and diluted earnings/(loss) per share |
4 |
| 0.01p |
| (0.07)p |
| (0.15)p |
|
|
|
|
|
|
|
|
|
Consolidated statement of changes in equity for the six months ended 30 June 2010
|
| Share | Share | Translation | Revenue |
|
|
|
| capital | premium | reserve | reserves |
| Total |
|
| £ | £ | £ | £ |
| £ |
| As at 1 January 2010 | 1,179,400 | 4,298,727 | 336,730 | (1,881,674) |
| 3,933,183 |
|
|
|
|
|
|
|
|
| Profit for the period |
|
|
| 25,628 |
| 25,628 |
|
|
|
|
|
|
|
|
| Share based payments |
|
|
| 1,816 |
| 1,816 |
|
|
|
|
|
|
|
|
| Foreign currency translation changes |
|
|
(1,155) |
|
|
(1,155) |
|
As at 30 June 2010 |
1,179,400 |
4,298,727 |
335,575 |
(1,854,230) |
|
3,959,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As at 1 January 2009 | 1,176,900 | 4,266,227 | 709,704 | (1,881,126) |
| 4,271,705 |
|
|
|
|
|
|
|
|
| Loss for the period |
|
|
| (173,224) |
| (173,224) |
|
|
|
|
|
|
|
|
| Share based payments |
|
|
| 21,156 |
| 21,156 |
|
|
|
|
|
|
|
|
| Foreign currency translation changes |
|
|
39,609 |
|
|
39,609 |
|
As at 30 June 2009 |
1,176,900 |
4,266,227 |
749,313 |
(2,033,194) |
|
4,159,246 |
|
|
|
|
|
|
|
|
|
As at 1 January 2009 |
1,176,900 |
4,266,227 |
709,704 |
(1,881,126) |
|
4,271,705 |
|
|
|
|
|
|
|
|
| Issue of shares | 2,500 | 32,500 |
|
|
| 35,000 |
|
|
|
|
|
|
|
|
| Loss for the year | (33,096) | (33,096) | ||||
|
|
|
|
|
|
|
|
| Share based payments |
|
|
| 32,548 |
| 32,548 |
|
|
|
|
|
|
|
|
| Foreign currency translation changes for goodwill |
|
|
(343,945) |
|
|
(343,945) |
|
|
|
|
|
|
|
|
| Other foreign currency translation changes |
|
|
(29,029) |
|
|
(29,029) |
|
|
|
|
|
|
|
|
| As at 31 December 2009 |
1,179,400 |
4,298,727 |
336,730 |
1,881,674 |
|
3,933,183 |
Consolidated Statement of financial position as at 30 June 2010
|
|
|
| Unaudited as at 30 June 2010 |
| Unaudited as at 30 June 2009 |
| Audited as at 31 December 2009 |
|
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
|
| Non current assets |
|
|
|
|
|
|
|
| Goodwill |
|
| 3,562,317 |
| 3,906,262 |
| 3,562,317 |
| Property, plant and equipment |
|
| 62,042 |
| 48,313 |
| 56,067) |
| Other investments |
|
| 165,909 |
| 118,927 |
| 157,562 |
|
|
|
| 3,790,268 |
| 4,073,502 |
| 3,775,946 |
|
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
| 235,483 |
| 297,669 |
| 626,106 |
| Trade and other receivables |
|
| 611,863 |
| 484,791 |
| 202,691 |
|
|
|
| 847,346 |
| 782,460 |
| 828,797 |
|
|
|
|
|
|
|
|
|
| Total assets |
|
| 4,637,614 |
| 4,855,962 |
| 4,604,743 |
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
| Trade and other payables |
|
| (354,630) |
| (288,235) |
| (292,418) |
| Borrowings |
|
| (133,731) |
| (165,830) |
| (169,679) |
|
|
|
| (488,361) |
| (454,065) |
| (462,097) |
|
|
|
|
|
|
|
|
|
| Non current liabilities |
|
|
|
|
|
|
|
| Borrowings |
|
| - |
| (96,879) |
| (8,466) |
| Deferred income |
|
| - |
| - |
| (20,764) |
| Employee provisions |
|
| (189,781) |
| (145,772) |
| (180,233) |
|
|
|
| (189,781) |
| (242,651) |
| (209,463) |
|
|
|
|
|
|
|
|
|
| Total liabilities |
|
| (678,142) |
| (696,716) |
| (671,560) |
|
|
|
|
|
|
|
|
|
| Net assets |
|
| 3,959,472 |
| 4,159,246 |
| 3,933,183 |
|
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
| Share capital |
|
| 1,179,400 |
| 1,176,900 |
| 1,179,400 |
| Share premium account |
|
| 4,298,727 |
| 4,266,227 |
| 4,298,727 |
| Foreign currency translation reserve |
|
| 335,575 |
| 749,313 |
| 336,730 |
| Revenue reserves |
|
| (1,854,230) |
| (2,033,194) |
| (1,881,674) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders' equity |
|
| 3,959,472 |
| 4,159,246 |
| 3,933,183 |
|
|
|
|
|
|
|
|
|
Consolidated cash flow statement for the six months ended 30 June 2010
|
|
|
|
|
|
|
|
|
|
| Unaudited six months ended 30 June 2010 |
| Unaudited six months ended 30 June 2009 |
| Audited year ended 31 December 2009 |
|
|
| £ |
| £ |
| £ |
| Cash flow from operating activities |
|
|
|
|
|
|
| Profit/(loss) before taxation |
| 45,515 |
| (153,740) |
| 27,308 |
| Adjustments for: |
|
|
|
|
|
|
| Share based payments |
| 1,815 |
| 21,156 |
| 33,798 |
| Depreciation and amortisation |
| 4,326 |
| 12,234 |
| 25,677 |
| Amortised finance costs |
| - |
| 19,201 |
| - |
| Foreign currency translation adjustments |
| (2,927) |
| 23,938 |
| (39,440) |
|
|
| 3,214 |
| 76,529 |
| 20,035 |
| Operating cash flow before working capital movements |
| 48,729 |
| (77,211) |
| 47,343 |
|
|
|
|
|
|
|
|
| Decrease/(increase) in receivables |
| 14,243 |
| 92,116 |
| (15,449) |
| (Decrease)/increase in payables |
| 41,449 |
| (94,621) |
| (69,673) |
| Decrease in provisions |
| - |
| - |
| 28,960 |
|
|
| 55,692 |
| (2,505) |
| (56,162) |
|
|
|
|
|
|
|
|
| Cash inflow/(outflow) from operating activities |
| 104,421 |
| (79,716) |
| (8,819) |
|
|
|
|
|
|
|
|
| Investing activities |
|
|
|
|
|
|
| Investments |
| - |
| - |
| (34,148) |
| Purchase of property, plant and equipment |
| (7,328) |
| (14,195) |
| (33,645) |
| Net cash used in investing activities |
| (7,328) |
| (14,195) |
| (67,793) |
|
|
|
|
|
|
|
|
| Financing activities |
|
|
|
|
|
|
| Net borrowings/(repayments) |
| (44,414) |
| 110,411 |
| (2,228) |
| Interest paid |
| (19,887) |
| (19,484) |
| (19,122) |
| Net cash from financing activities |
| (64,301) |
| 90,927 |
| (21,350) |
|
|
|
|
|
|
|
|
| Net change in cash and cash equivalents |
| 32,792 |
| (2,984) |
| (97,962) |
|
|
|
|
|
|
|
|
| Cash and cash equivalents at the beginning of the period/year |
| 202,691 |
| 300,653 |
| 300,653 |
|
|
|
|
|
|
|
|
| Cash and cash equivalents at the end of the period/year |
| 235,483 |
| 297,669 |
| 202,691 |
Notes to the interim report
For the six months ended 30 June 2010
1. Basis of preparation and consolidation
The financial information contained in the interim results has been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union. It has been prepared in accordance with IAS 34 - Interim Financial Reporting and does not include all of the information required for full annual financial statements.
The financial information contained in these interim results for the six months ended 30th June 2010 and 30th June 2009 are un-audited. The comparative figures for the year ended 31st December 2009 do not constitute statutory financial statements of the group within the definition of S434 of the Companies Act 2006. Full audited accounts of the group in respect of that financial period prepared in accordance with IFRS, which we received an unqualified audit opinion have been delivered to Registrar of Companies.
The accounting policies used in the interim statement are consistent with those used in the financial statements for the year ended 31 December 2009 and are in accordance with International Financial Reporting Standards.
The statement of comprehensive income, statement of changes in equity and financial position include the financial statements of the company and its subsidiary undertakings up to 30 June 2010.
The consolidated interim financial statements do not include all the information required for full annual financial statements and therefore cannot be construed to be in full compliance with IFRS.
The consolidated interim financial statements were approved by the board and authorised for issue on 29 September 2010.
2. Turnover
|
|
| Unaudited six months ended 30 June 2010 |
| Unaudited six months ended 30 June 2009 |
| Audited year ended 31 December 2009 |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
| North America |
| 1,123,814 |
| 980,939 |
| 1,946,603 |
| Rest of the World |
| 111,028 |
| 141,387 |
| 327,477 |
|
|
| 1,234,842 |
| 1,122,326 |
| 2,274,080 |
Notes to the interim report
For the six months ended 30 June 2010 (continued)
3. Taxation
No provision has been made for taxation as the group has losses available to carry forward against future trading profits. No deferred tax asset has been recognised in accordance with International Accounting Standard 12.
4. Basic and diluted loss per share
The calculation of the earnings per ordinary share is based on the profit after taxation for the six month period to 30 June 2010 of £25,628 (2008: Loss of £173,224) and 235,880,000 ordinary shares being the weighted average number of shares in the period. (2009: 235,380,000).