Velocity Comp Regulatory News (VEL)

2 Jul 2009 07:00



Velti plc

Pre-close trading update

Velti plc is the global technology leader in the provision of mobile marketing and advertising solutions for advertising agencies, brands, mobile operators and media. Velti has continued to achieve strong growth in revenues and profits for the six months ended 30 June 2009. Total revenues are expected to exceed €20m and net revenues (revenues minus third-party costs) to increase by more than 50%, over the comparable period last year, delivering higher margins.

The Board is pleased by the financial performance in the first half of 2009. Velti's revenues have traditionally been stronger in the second half. The Board is confident that this seasonality will continue and the company is on course to post a further year of profitable growth.

The momentum in revenue growth reflects increasing repeat business from existing clients, as well as significant new client wins across our geographic footprint in Europe, Asia and the Americas.

The company is experiencing strong demand from mobile network operators seeking to strengthen customer relationships and loyalty, and has won new contracts during the period with Vodafone, Orange, Batelco, COSMOTE, AVEA, Orascom-WIND, PT Smart Telecom, Vivatel, and Telefonica's Movistar. Agencies and Brands are continuing to increase the allocation of marketing and advertising budgets to the mobile channel and this was reflected during the period in the acquisition of new customers like Honda, Coca Cola, Nutella and Colgate. The overall economic conditions have caused some delays in the roll out of certain mobile marketing projects, but our pipeline continues to be very robust and we already see signs of acceleration.

Velti is pleased to announce the collaboration with Telefonica's Movistar in Mexico, where the operator will be using Velti's award winning MMP. Movistar is one of the largest mobile operators in Mexico with over 16.3 million subscribers. This is Velti's first multi-million dollar engagement in Mexico and demonstrates that its measurable mobile marketing technology can provide results even in today's challenging environment.

In 2008, Velti invested heavily in its Software as a Service (SaaS) infrastructure across five global data centers. In 2009, capital expenditure has been much lower with net capital expenditure (capital expenditure minus depreciation and amortisation) of about €1.5m, compared with €5m in the corresponding period in 2008, and we expect this trend to continue. Overall there has been a cash outflow for the period, which included the acquisition of Ad Infuse announced in May.

Because of its timing, the acquisition of Ad Infuse had no material effect on our results for the first half of the year. Integration of Velti and Ad Infuse to provide improved services to clients is well underway and the first results are very encouraging.

To provide funding for Ad Infuse and general financing for the future, Velti has secured two new medium term facilities totaling approximately €10 million. The facilities are being provided by a special purpose vehicle backed by a group of institutional investors. The company has issued 875,000 new shares of 5p each to the group in lieu of arrangement fee. Application has been made for these shares to be admitted to trading on AIM, which is expected to occur on or about Friday 3 July 2009.

David Mann, Non-Executive Chairman, said: "I am delighted that we have secured new medium term facilities and demonstrated our ability to tap different financing markets. These new facilities, together with our existing credit lines, are allowing us to take advantage of key opportunities for the further development of the business.

Alex Moukas, Chief Executive added: "As a result of investments in the past, Velti has already become the largest and most profitable player in the global mobile marketing and advertising space; able to offer solutions for campaign planning, execution, analysis and reporting. We believe that this uniquely positions the company at an inflection point between ad agencies, brands and mobile operators, which are all critical elements of the industry. We see the skills brought to us by Ad Infuse as being important in our plan to achieve this."

The company will announce interim results for the 6 months ended 30 June 2009 in mid-September 2009.

END

For further information, please contact: