Velocity Comp Regulatory News (VEL)

3 May 2006 07:01

Velti PLC03 May 2006 FOR IMMEDIATE RELEASE WEDNESDAY, 3 May 2006 VELTI PLC - FIRST GREEK BASED TECHNOLOGY COMPANY ADMITTED TO AIM ATHENS - Velti plc ("Velti"), a provider of software platforms, applications andservices for mobile network operators, media and retailer brands in Greece andthe Balkan region, announces the start today of dealings in its ordinary shareson AIM under the ticker symbol "VEL". The company has raised £10 million before expenses, via a placing, to fundexpansion. Details of the placing Placing price 100 pence Total number of new ordinary shares placed on behalf of theCompany 10,000,000 Total number of ordinary shares placed on behalf of sellingshareholders 350,000 Number of ordinary shares in issue following the placing 29,091,335 Percentage of enlarged issued share capital subject to the 34.4 per centplacing Gross proceeds of the placing to be received by the Company £10 million Estimated net proceeds of the placing receivable by the £8.5 millionCompany Market capitalisation of the Company at the placing price £29.1 million Oriel Securities is the nominated adviser and broker to the company. Alexandros Moukas, Chief Executive Officer of Velti, commented: "We are delighted with the strong support Velti has received from investors inthe UK and Greece. Based on its strengths and position, we have the opportunityto become a leading provider of content platforms, applications and services tothe mobile telecommunications and e-business markets in Greece and the Balkanregion. Following the successful placing, we now have the funds to implement ourstrategy to achieve sustained, growth in revenue, profit and cash flow." ENDS CONTACTS Velti:Oriel Securities 020-7100-7600Andrew Edwards Bankside: 020-7367-8888Simon Bloomfield or Steve Liebmann NOTES Background on Velti Headquartered in Athens and founded in 2000, with initial financing provided bya group of individual investors from Europe and the USA, Velti operates as aprovider of: • software platforms and managed services to the telecommunications sector enabling Value Added Services (clients include Vodafone (Greece) and OTE Group) • mobile application services to media, retail brands (including promotions, ringtones and wallpaper) allowing clients to access the mobile marketing channel (clients include Hello! Magazine). • software platforms to other sectors such as financial services and government (Clients include National Bank of Greece and Omega Bank). The Group employs 90 people, having complemented its 64 strong workforce ofengineers in Greece with a team of experienced sales professionals and supportstaff, both in the Balkan region and in the USA through Velti North America("VNA"). VNA only employs business development staff and all softwaredevelopment and production is done in Greece. In addition, the Velti Centre forInnovation, ("VCI"), is a group company established to invest in research anddevelopment through a portfolio of small and focused investments. The Group is profitable and experiencing good growth in both revenue andprofits. Revenue for the year ended December 2005 increased by 31% to €4.9million (2004: €3.7 million) and pre-tax profit to €1.1 million (2004: €29,000). Growth drivers of mobile content market The directors believe the key drivers to growth in the market in which the Groupoperates are: • increased demand in the mobile content market, estimated to be worth $2.5 billion worldwide in 2003 and growing to $25 billion in 2008: • increased interest in non-voice Value Added Services from MNO's operating in Balkan countries; • continuous advancement of mobile handset technology, whereby mobile internet becomes an increasingly standard feature. This is expected to be enhanced by deployment of high-speed, next generation digital networks ("3G"); • telecommunication customers such as Vodafone and OTE International having expansion strategies for the Balkan region; and • increased demand from MNO's for third party ASP's. This demand is driven by the need for MNO's to outsource its services and operations to ASP's. This is known in the industry as the movement from a walled garden or on-portal approach to Value Added Services to an off-portal approach. It has been predicted by a provider of research, advisory and consulting services and to the global information, communication and technology sectors that by 2007, more than 40% of the global mobile content market will be serviced by third party operators such as Velti. Velti's strengths The Directors believe the key strengths of the company are: •a highly skilled management team with diverse marketing experience working for multi-nationals such as Vodafone, McKinsey, Oracle and IBM; •good relationships with telecommunication companies allowing Velti to leverage off the expansion of Greek telecommunication companies and to drive Velti's own regional expansion; •the "off-portal" trend plays to Velti's strengths and position in the market as an ASP; •Velti's experience as a provider of MNO platforms provides a breadth of expertise to customers in the mobile content market •the ASP role that Velti assumes minimal customer acquisition/advertising costs as these are assumed by the customer •a scalable business model that generates recurrent subscription revenue as well as a share of content revenues Strategy and use of proceeds Velti's objective is to achieve sustained growth in revenue, profit and cashflow by becoming a leading provider of mobile content platforms, applicationsand services to the Balkan mobile telecommunications and e-business markets. Thekey elements of management's strategy, to be funded by the proceeds from theplacing, are: •expansion of the platforms and managed services through increasing operational know-how and augmenting its skilled workforce •use the Group's experience in a number of projects within the OTE Group and Vodafone (Greece) to expand in the Balkan region (primarily in Romania, Bulgaria and Turkey) by exploiting the presence that these companies have in the region and by creating new partnerships with local MNOs. Board Velti has a strong board: •David Mann, 61, is non-executive Chairman. He was CEO of Logica plc and is Non-Executive Chairman of Charteris plc and Flomerics Group plc and a non-executive director of Aveva plc. He is a Past President of the British Computer Society. •Nicholas Negroponte, 63, Non-Executive Director. Professor Negroponte is a founding investor in Velti, a founder of MIT Media Lab and on the Board of Directors of Motorola Inc. He is also the driving force behind the OLPC / $100 laptop initiative. •David Hobley, 59, Non-Executive Director. He has spent more than 35 years in investment banking with SG Warburg/SBC Warburg and Deutsche Bank. He is an independent director of Orange SA and a Fellow of the Institute of Chartered Accountants in England and Wales. •Jerome Goldstein, 69, Non-Executive Director. He has over 32 years investment banking experience and was formerly Executive Director and a Board Member of Citicorp Investment Bank in London (formerly Citicorp International Bank). He was Chairman of the Council for Reporting Directors. •Alexandros Moukas, 34, is Chief Executive Officer. He is a co-founder of Velti and was a co-founder and Chief Scientist of US strategic sourcing software provider, FCI. He is a graduate of MIT, the University of Edinburgh and the American College of Greece. •Chris Kaskavelis, 38, is Chief Operating Officer. He is a co-founder of Velti and has been responsible for enterprise software systems for Pratt & Whitney, Analog Devices, General Electric and Lucent Technologies. He is a graduate of Boston University and Brown University. •Menelaos Scouloudis, 32 is Sales Director. He was previously at McKinsey and holds degrees from Harvard Business School, MIT and NTUA in Athens. • Pantelis Papageorgiou, 35 is Finance Director. He was previously at Allianz Finance and Arthur Andersen with a MBA degree from Boston University Major shareholders after the placing Shareholder Number of shares Proportion of total %Alexandros Moukas 4,137,078 14.22Chris Kaskavelis 4,643,181 15.96Menelaos Scouloudis 1,877,638 6.45Other directors 1,158,700 3.98F&C Asset Managers Limited 3,780,000 12.99UBS Global asset management (UK) Ltd 1,000,000 3.44Other shareholders 12,494,738 42.96 Total 29,091,335 100.0 All directors and certain employees are subject to "lock-in" agreements underwhich they cannot dispose of their holdings for a minimum of 12 months withoutthe consent of Oriel Securities. This information is provided by RNS The company news service from the London Stock Exchange