Velocity Comp Regulatory News (VEL)

20 Sep 2007 07:01

Velti PLC20 September 2007 20 September 2007 Velti 2007 Interim Results Financial Highlights Six months Six months ended ended 30 June 2007 30 June 2006 (unaudited) (unaudited) % •'000 •'000 ChangeRevenue 7,408 4,041 83% EBITDA 2,338 1,346 74% Operating profit 1,219 838 45%Adjusted operating profit 1,401 838 67% Profit after tax 952 480 98%Adjusted profit after tax 1,134 480 136% Basic EPS (in eurocents) 3.3 2.2 50%Adjusted EPS (in eurocents) 3.9 2.2 77% Profit after tax and adjusted profit after tax are attributable to the equityshareholders of the company (after minority rights.) Adjusted figures statedbefore cost of share award. • Solid customer pipeline and momentum in Velti's traditionally stronger second-half • Positive operating cash flows of €1.15m (2006: negative €0.85m) Operational Highlights • Formed Ansible, a joint venture with the Interpublic group, the first global mobile marketing company. • Won key operator contracts from Vodafone, Orange, Orascom's Wind, Cosmote, M-Tel, SingTel's Globe. • Won key mobile marketing contracts from MTV, CBS, Real, LVMH, PepsiCo's Tasty Foods. • Expanded footprint with key customer wins in Europe, North America and Asia. Product Development • Launched version 3.5 of Mobile Marketing Platform • Launched version 4.0 of Messaging, Content Aggregation and Syndication Platforms David Mann, Chairman of Velti commented: "The Board is delighted with Velti'sperformance in the first half. The company has achieved considerable momentumand the Directors believe this will be maintained during the traditionallystronger second half. We are confident that the company will meet its financialtargets for the year as a whole" Alexandros Moukas, Chief Executive, added: "We are very pleased to report strongfinancial performance in revenue growth and profitability in the first half of2007. The company made significant progress in expanding its geographicalfootprint in North America and Asia through key customer wins. This expansion,coupled with the launch of Ansible, a key global joint venture with theInterpublic group establishes Velti as a leading provider of mobile marketingand advertising services, a market which is projected to experience dramaticgrowth." CONTACTS Velti:Alexandros Moukas, Chief Executive Officer +44 (0) 20 7633 5000 Pantelis Papageorgiou, Finance Director Bankside: +44 (0) 20 7367 8888 Simon Bloomfield or Steve Liebmann Royal Bank of Canada:Sarah Wharry +44 (0) 20 7653 4667 Chairman's and Chief Executive's Statement The first half of 2007 was a very successful period for Velti. The company madeits mark globally in terms of customer wins and strategic alliances. We are alsopleased to report strong financial performance in both revenue growth andprofitability. Overall financial performance for the six month period ended 30 June 2007 was atthe top end of management's expectations. Velti achieved revenue growth of 83per cent to €7.41 million whilst profit before tax increased 63 per cent to€1.16million and profit after tax grew by 94 per cent to €0.84 million. Veltialso had an operating cash inflow of €1.15 million (compared with an outflow of€0.85 million in the first half of 2006). The key drivers of this positive performance were successful repeat businessfrom major customers and demand from new customers, as well as the extendedgeographical footprint of the company. It is worth noting that these resultswere achieved despite increased product development, sales and marketing costsincurred as part of the aggressive expansion and growth plan of the company. In terms of market positioning, Velti's main focus is on providing mobileplatforms and services to mobile operators, advertising agencies, media groupsand other large enterprises. Velti is enabling these organisations to market andadvertise effectively through the mobile channel. Velti has a very stronggeographical presence in South Eastern Europe, the UK and (through Ansible, itsJoint Venture with the Interpublic Group), aims to achieve this in NorthAmerica. Since the beginning of the year Velti has expanded its business with existingmobile operator customers Vodafone, Orascom's Wind, Cosmote and Q-Telecom, aswell as winning key new mobile operator customers Orange and SingTel's Globe.New contracts were also won with MTV, CBS, Real Networks, LVMH's Hennessy in theUSA and Motorola and Pepsico's Tasty Foods in Europe. 2007 is proving to be the year when the global Mobile Marketing and Advertisingmarket is coming into the spotlight as the next major business opportunity inmobile services. Velti had anticipated a significant growth in the market andhad already aligned its strategy accordingly. This led to the creation ofAnsible, a joint venture between Velti and Interpublic, one of the world'sleading groups of advertising agencies and marketing services companies. Basedin New York, Ansible is a provider of mobile marketing solutions to Interpublicagencies and clients. The company works with brands, agencies and contentproviders to develop and deploy mobile advertising and marketing campaigns.Ansible offers mobile strategy, creative development and campaign management,leveraging best-in-class technology and expertise. Ansible will operate in NorthAmerica, Europe and Asia and will utilise Velti's proprietary services andmobile marketing technology in all markets. On product development, Velti is continuing to expand its Mobile MarketingPlatform, building world-leading capabilities as a 'one-stop shop' foradvertising agencies, mobile operators and media. The product developmentinvestment that started three years ago, coupled with the proven track record inexecuting projects for mobile operators, provides Velti with the competitiveadvantage necessary to achieve high growth in a market with global potentialwhich is now beginning to develop. There has been a very positive response to the launch of Ansible and the Boardsees good prospects for the joint venture to become a significant driver for thegrowth and profitability of the company in 2008 and beyond. The Board is very pleased with Velti's performance in the first half. Thecompany has achieved considerable momentum and the Directors believe this willbe maintained during the traditionally stronger second half. We are confidentthat the company will meet its financial targets for the year as a whole, and weexpect to generate positive free cash flows. David Mann Alexandros MoukasNon-Executive Chairman Chief Executive Officer Operational Review Market development Velti's experience so far in 2007 confirms management's view that MobileMarketing and Advertising will offer the strongest growth opportunities for thecompany in the Mobile Value Added Services (VAS) market. For a number of years,mobile VAS has been a market characterised by increasing mobile contentconsumption. The market, with strong interest from Mobile Operators, Media,Advertising Agencies, Brands and Enterprises, is now poised for growth. The market has grown significantly this year and is forecasted to reach $19billion by 2011 (source: ABI Research). The number of mobile devices in themarketplace already exceeds the number of PCs and TV sets combined, making themobile device the dominant 'first screen' in a consumers' life. A key driver of the substantial growth expected in this market is that mobileoperators and advertising agencies are now adopting the capabilities necessaryfor offering and executing a very large number of mobile marketing campaigns fordifferent brands. Velti is at the heart of this evolution; since its inception it has been workingwith a variety of leading world operators on delivering mobile platforms andvalue added services. Following the company's IPO in 2006, significantinvestment has been made in creating the software platforms and managed servicesinfrastructure to enable mobile operators, media and advertising agencies todevelop and operate within this market. During this period, it has become clearthat advertising agencies are a key factor in accelerating the development ofmobile advertising and marketing growth. This is because the mobile phone is notjust the first screen in consumer lives but also the ideal form ofcross-interaction with all other traditional media (TV, print, radio, outdoor,interactive), and a future key enabler of dialogue between brands and theconsumer. Consequently, mobile marketing campaigns are expected to become anintegral part of a multichannel brand strategy rather than being used inisolation. Against this background, Interpublic and Velti announced in July 2007 theformation of Ansible, a 50:50 joint venture dedicated mobile marketing companyutilising Velti's technology and managed services capabilities. Ansible is basedin New York and staffed with proven talent from the advertising and mobilemarketing space. The company currently operates in North America and Europe butwill start to develop globally by the end of 2007. Interpublic is one of theworld's leading groups of advertising agencies and marketing services companies,with more than $25 billion in annual customer billings, $6 billion in sales and40,000 employees in 100 countries. As Bant Breen, Executive Vice President and head of the Futures Marketing Groupof Interpublic stated: "We evaluated more than 40 mobile services providers anddecided to work with Velti because of their best-of-breed technology platformand their extensive operator experience." Customer growth Reflecting Velti's capabilities in terms of platforms and services, newcustomers have been signed in the fields of media and advertising. Some of thebest known names include MTV, Real Networks and LVMH's Hennessy, as well asbrands like Motorola and PepsiCo's Tasty Foods in Europe. Customers in the area of financial services and government agencies have alsocontributed to growth. For example, Intralot, one of the world's top threeGaming and Transaction Processing services for State Lotteries, is using Veltifor its mobile services strategy. Since the formation of Ansible was announced in July 2007, initial staffing andoperational integration with Velti's platforms and services has been completed,making the new Joint Venture a fully functional organisation with earlyindications from potential customers confirming management's optimism aboutfuture prospects. Progress continued in the market for Mobile Operators platforms and servicesduring the first half of 2007. Velti was awarded key contracts from newcustomers including Orange (UK), Orascom Group (Wind?) Greece), Vivatel(Bulgaria) and SingTel's Globe (Philippines). Together, these groups capture asubscriber base exceeding 280 million customers. New contracts have also beenawarded by Vodafone, Cosmote, M-Tel, OTE Group and Q-Telecom. In line with theevolution of the market, these contracts have stronger elements of mobilemarketing and advertising and are in significant growth areas, such as mobilecommunities, mobile commerce and user generated content. Velti is providing innovative business solutions and software platforms toenable mobile advertising through Mobile Operator branded or white labelled WAPportals, mobile TV, as well as MMS and SMS mediums. These solutions also havestrong capabilities in terms of enabling Operator Communities that enhancecustomer retention and brand loyalty. As a result, the Mobile Operator valuefrom Velti solutions results in increased data ARPU, new revenue streams frommobile advertising and strong customer retention and acquisition benefits. The second half of 2007 has traditionally been a stronger half for MobileOperator solutions, and we are experiencing a strong demand for our products andservices Geographic development In Southeastern Europe the company continues to expand and completed theacquisition of M-Telecom in late March 2007. M-Telecom is a leading mobilemarketing and content provider in Bulgaria and provides Velti with a strongfootprint within the Eastern Europe region. Following the acquisition ofM-Telecom, contracts with major Bulgarian operators were signed to capitalise onVelti's local presence through M-Telecom. Our announcement of 2006 results highlighted the offices in New York and Londonas spearheading developments and future growth in the mobile marketing area. Thecompany is expanding both its sales and delivery capabilities to ensure that itcan execute on a much larger geographical scale. Investment in technology and customer services Velti has made a significant investment in software technology that automates,executes and assures ease and quality in the creation of mobile marketing andadvertising campaigns. We continually analyse the results of the campaignsconducted on behalf of customers with a view to improving the performance of ourMobile Marketing and Advertising Platform, now in its third generation. Throughour experience and development of our capabilities, and the scalability of ourinfrastructure, we are now able to achieve a very fast time to market as well ascontinuing to decrease operational costs as a proportion of revenue. This isreflected in the increase of gross profit by 92 per cent, compared to revenuegrowth of 83 per cent during the first half of 2007. Financial Review In the first half of 2007 the Group delivered a solid financial performance thatis reflected in robust top line growth, stable profit margins, positiveoperating cash flows and entry into new geographic areas, while significantlyreducing net capital expenditure compared to last year. In the six month period ended 30 June 2007 revenue reached €7.41 million, an 83per cent increase on the same period in 2006 (€4.04 million). The increase inrevenue stemmed mainly from organic growth in professional and mobile valueadded services coupled with the initial contribution from the acquisition ofM-Telecom with effect from 1 April 2007. Repeat business with existing clientsremained strong while new business was initiated in the south Asian market. Gross profit increased by 92 per cent to €4.10 million (€2.13 million in firsthalf of 2006) delivering a margin of 55 per cent (53 per cent in 2006). Operating profit, after the recognition of a share awards' cost of €0.18million, increased by 45 per cent to €1.22 million (€0.84 million in first halfof 2006) delivering a margin of 16 per cent (21 per cent in 2006). The operatingmargin, net of cost of share awards, was 19 per cent and the decrease comparedto 2006 is due to the doubling of depreciation and amortisation charges (€1.12million in 2007, €0.51 million in 2006) that in turn reflects the significantproduct development and infrastructure projects undertaken both in 2005 and2006. Earnings before interest, taxation, depreciation, amortisation and thecost of share awards increased by 87 per cent to €2.52 million (€1.35 million infirst half of 2006) delivering a margin of 34 per cent (33 per cent in 2006). Profit before tax reached €1.16 million, posting an increase of 63 per cent over2006 (€0.71 million). The taxation charge of the period represents an effectivetax rate of 27 per cent, marking a significant drop compared to the respectiveperiod in 2006 (39 per cent). Basic earnings per share grew by 50 per cent to3.3 eurocents (2.2 eurocents in 2006), while earnings per share adjusted for thenon-cash share award expense grew 77 per cent to 3.9 eurocents. Velti's balance sheet, as at 30 June 2007, reflects a strong net asset positionof €17.64 million and a net cash position of €2.25 million. The significantprofitability coupled with balanced working capital requirements resulted in anoperating cash inflow of €1.15 million (outflow of €0.85 million in 2006). CONSOLIDATED INCOME STATEMENTS Six months Six months Year ended 30 June ended 30 June ended 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Revenue 7,408 4,041 10,816Cost of revenue (3,307) (1,910) (3,907) Gross profit 4,101 2,131 6,909 Other income - 36 25 Selling expenses (1,452) (562) (1,974) Administrative expenses (1,430) (719) (1,947) Other expenses - (48) (4) Operating profit 1,219 838 3,009 Finance expense, net (90) (127) (169)Share of profit (loss) ofassociates 27 - (108) Profit before tax 1,156 711 2,732Tax (313) (277) (603)Profit after tax 843 434 2,129 Attributable to:Equity shareholders of thecompany 952 480 2,246Minority Interest (109) (46) (117) 843 434 2,129 Basic earnings per share (in Eurocents): 3.3 2.2 8.7Diluted earnings per share( in Eurocents): 3.1 2.2 8.5 CONSOLIDATED BALANCE SHEETS 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •' 000ASSETSNon -current assetsProperty, plant and equipment 1,471 592 1,342Intangible assets 5,648 3,197 4,841Investments 704 180 448Goodwill 2,492 963 599Other assets 138 - -Deferred tax assets - 121 - 10,453 5,053 7,230Current assetsReceivables and prepayments 11,435 4,797 8,968Restricted investments 27 26 27Cash and cash equivalents 4,585 9,301 5,867 16,047 14,124 14,862Total assets 26,500 19,177 22,092 SHAREHOLDERS' EQUITYShare capital 2,125 2,125 2,125Share premium account 11,610 11,772 11,613Share-based payment reserve 248 - 66Merger reserve 1,071 1,071 1,071Accumulated profit /(losses) 1,693 (1,002) 741Total shareholders' equity 16,747 13,966 15,616Minority interest 893 726 663Total Equity 17,640 14,692 16,279 LIABILITIESNon-current liabilitiesBorrowings 42 750 -Retirement benefit obligations 120 88 102Deferred tax liabilities 583 - 229Other liabilities 562 - - 1,307 838 331Current liabilitiesTrade and other payables 5,265 2,729 3,651Borrowings 2,288 918 1,831 7,553 3,647 5,482Total liabilities 8,860 4,485 5,813Total equity and liabilities 26,500 19,177 22,092 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Share Based Accumulated Share Share Payment Minority Merger Profits Capital Premium Reserve Interests Reserve /(Losses) Total •'000 •'000 •'000 •'000 •'000 •'000 •'000 Balance at 1,375 - - - 1,071 (1,481) 9651 January2006(audited)Sharecapital 750 11,772 - - - - 12,522issuedMinorityinterest - - - 772 - - 772Profit forthe - - - (46) - 479 433periodBalance at 2,125 11,772 - 726 1,071 (1,002) 14,69230 June 2006(unaudited)Issue ofshare - - 66 - - - 66awardsDeferred Taxadjustment - - - - - (24) (24)Costs ofshare - (159) - - - - (159)issueProfit for - - (63) - 1,767 1,704the periodBalance at 2,125 11,613 66 663 1,071 741 16,27931 December2006(audited)Issue ofshare - - 182 - - - 182awardsMinorityinterest - - - 339 - - 339Costs of share - (3) - - - - (3)issueProfit forthe - - (109) - 952 843periodBalance at 2,125 11,610 248 893 1,071 1,693 17,64030 June 2007(unaudited) CONSOLIDATED CASH FLOW STATEMENTS Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000Cash flows from operating activitiesCash generated fromoperations 1,147 (850) (713)Interest paid (82) (127) (348)Tax paid (10) (159) (178) Net cash (used in)/generatedfrom operating activities 1,055 (1,136) (1,239) Cash flows from investing activitiesPurchase of property, plantand equipment (294) (339) (1,181)Purchase of Intangible Assets (1,778) (1,304) (3,747)Purchase of available-forsale investments (736) (199) (556)Interest received 53 - 148 Net cash used in investingactivities (2,755) (1,842) (5,336) Cash flows from financing activitiesLong-term borrowings - (1,681) (1,681)Net proceeds from issue ofordinary shares - 12,521 12,521Borrowings 418 (1,028) (865) Net cash from financingactivities 418 9,812 9,975 (Decrease) /Increase in cashand cash equivalents (1,282) 6,834 3,400Movement in cash and cash equivalentsAt beginning of period 5,867 2,467 2,467(Decrease)/ Increase (1,282) 6,834 3,400At end of period 4,585 9,301 5,867 Notes 1. Accounting policies and basis of preparation The interim consolidated financial statements of Velti plc (the Company) havebeen prepared under the historical cost convention and in accordance with theaccounting policies set out in the financial statements for the year ended 31December 2006. The interim consolidated financial statements do not constitutestatutory accounts within the meaning of Section 240 of the Companies Act 1985. The consolidated financial statements include the results of Velti plc andentities controlled by Velti plc (its subsidiaries) forming the Group (see note6.). 2. Segment information The Group's main sources of revenue are development of mobile platforms/applications and managed services serving customers in the telecommunicationsindustry, advertising agencies, brands and media (Telco, Agencies, Brands andMedia) and other sectors such as banking and e-government (Other Enterprises) Revenue by business segment: Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Telco, Agencies, Brands andMedia 6,296 3,354 7,586Other Enterprises 1,112 687 3,230 Total 7,408 4,041 10,816 Operating profit by business segment: Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Telco, Agencies, Brands andMedia 1,160 806 2,711Other Enterprises 59 32 277 Unallocated operating income - - 21 Total 1,219 838 3,009 3. Borrowings 30 June 2007 30 June 2006 31 December 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000Current Current portion of long-termdebt (within 1 year) 510 80 750Short-term loans 1,778 838 1,081 2,288 918 1,831Non - current Long-term portion oflong-term debt 42 750 - Total borrowings 2,330 1,668 1,831 4. Deferred shares award plan The Group adopted a share incentive plan on 26 April 2006. Under this plan, anyemployed director or any employee of the Group is eligible to receive awardsunder the plan. The deferred shares award (DSA) entitles the participant toacquire shares when the DSA vests by paying an amount of no less than thenominal value per share. The vesting period is 2 years. Deferred shares areforfeited if the participant leaves the Group before the DSA vests. Details of the awards outstanding at the end of the period are as follows. Weighted average Number of awards exercise price (in •)Outstanding at the beginning of period 810,000 0.07Granted during the period 695,500 0.07Forfeited during the period - -Exercised during the period - -Expired during the period - -Outstanding at the end of the period 1,505,500 0.07 In the period ended 30 June 2007, the Group recognised total expense in relationto the plan of €182,000 (six months ended 30 June 2006: •nil; year ended 31December 2006: €66,000). 5. Earnings per share Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 (unaudited) (unaudited) (audited)Profit attributable to equityholders of the Company(•'000) 952 480 2,246Weighted average number ofordinary shares in issue 29,091,335 22,241,557 25,721,472Weighted average number ofordinary shares includingdilutive effect ofoutstanding share awards 30,599,335 22,241,557 26,531,472Basic earnings per share(Eurocents per share) 3.3 2.2 8.7Diluted earnings per share(Eurocents per share) 3.1 2.2 8.5Adjusted earnings per share(1) (Eurocents per share) 3.9 2.2 9.0 (1) Figures stated before cost of share awards (see note 4) 6. Subsidiaries Velti Plc owns 100% of the share capital of Velti SA (incorporated in Greece),100% of the share capital of Velti dR Limited (incorporated in the UnitedKingdom) and 100% of Velti M Telecom Limited (incorporated in the UnitedKingdom), the sole shareholder of M-Telecom OOD ("M -Telecom" incorporated inBulgaria). Velti SA owns 79.51% of the share capital of Velti North America Inc(formerly Retaine Inc, incorporated in the USA) and 99.99% of the share capitalof Velti Center for Innovation S.A. ("VCI") (incorporated in Greece). In turnVCI has a 50% holding in mPoint SA, 45% holding in N Squared SA, 50% holding inTagem SA and 50% holding in Digital Rum SA (all incorporated in Greece) whichare consolidated on the basis of majority control of the Board of Directors ofthose companies. During the six months period ended 30 June 2007, Velti Plc andVCI paid an amount of €658,000 for acquisitions. The post-acquisition profit ofthe subsidiaries acquired during the period was €46,000. Subsidiaries are consolidated from the date on which control is transferred tothe Group. They are de-consolidated from the date that control ceases. Goodwillarising upon acquisition of subsidiaries and associates during the periodamounted to €1,893,000. This includes goodwill on the acquisition of M-TelecomLimited of €1,619,000 (see note 7); the balance arose on the acquisitions ofTagem S.A. and Digital Rum S.A. The Directors have assessed the carrying valueof goodwill at 30 June 2007 and consider no impairment is necessary. Companies Proportion Country of held operation Velti Plc consolidatedVdR 100.00% UKVelti M-Telecom 100.00% Bulgaria Velti SA consolidatedVNA 79.51% USA VCI SA consolidatedN Squared SA 45.00% GreeceMpoint SA 50.00% GreeceDigital Rum SA 50.00% GreeceTagem SA 50.00% Greece AssociatesAmplus SA 45.83% GreeceEvorad S.A. 33.34% Greece 7. Acquisition of Velti M - Telecom Limited On 20 March 2007, the Company acquired the entire share capital of VeltiM-Telecom Limited (formerly Rekanak Limited), the sole shareholder of M-TelecomOOD ("M-Telecom"), a leading mobile value added services provider in Bulgaria.The total consideration shall range between €1,010,000 and €2,560,000 dependingon M-Telecom achieving certain profitability targets for 2007 and 2008. Theconsideration will be satisfied a) partially in cash at acquisition date, by apayment of €480,000, and b) the remaining in cash or Velti shares (at thecompany's discretion) in two instalments, payable on 30 April 2008 and on 30 May2009. This transaction has been accounted for by the purchase method ofaccounting. Book Value Fair Value •'000 •'000Net assets acquired Property, plant and aquipment 12 12Receivables and prepayments 195 195Cash and cash equivalents 13 13Borrowings (42) (42)Trade and other payables (103) (103)Borrowings (36) (36) Total 39 39 Goodwill 1,619 Total consideration 1,658 Cash 480Directly attributable costs 40Deferred consideration 1,138 1,658Net cash outflow arising on the acquisition 480 The goodwill arising on the acquisition of M Telecom is attributable to theanticipated profitability of the roll out of its business plan and theanticipated future operating and cross selling synergies from the combination. 8. Cash generated from / (used in) operations Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 (unaudited) (unaudited) (audited) •'000 •'000 •'000 Net profit 843 434 2,129Adjustments for:Tax expense 313 277 603Interest income (53) - (148)Interest expense 143 127 348Depreciation 177 59 151Amortisation of intangibleassets 941 449 1,151Amortisation of grants - - (666)Foreign exchange gain 3 3 -Share of (profit) / loss ofassociates (27) - 108Non cash provisions 176 - 349 2,516 1,349 4,025 Changes in working capital:Receivables and prepayments (2,605) (2,214) (6,274)Trade and other payables 1,219 (3) 1,497Pensions and otherpost-retirement obligations 17 18 39 (1,369) (2,199) (4,738) Cash generated from / (usedin) operations 1,147 (850) (713) 9. Post balance sheet event On 5 July 2007, the Company, through its wholly owned subsidiary Velti NorthAmerica Holdings, Inc, entered into a limited liability company agreement toform Ansible Mobile LLC ("Ansible"). Ansible is a joint venture between theCompany and the Interpublic Group of Companies, Inc ("IPG") that will providecomprehensive mobile marketing solutions. Each of the two members of the jointventure will contribute 50% of the initial capital. The Company will use theproportionate consolidation method (IAS 31) in accounting for the results ofAnsible, on the basis of joint control. This information is provided by RNS The company news service from the London Stock Exchange