Velocity Comp Regulatory News (VEL)

1 Jul 2008 07:00



Velti plc

Strong performance in the first half of 2008

LONDON - Velti plc ("Velti"), a leading provider of software platforms, applications and services for advertising agencies, mobile operators and media, announces that it has achieved a positive trading performance for the six months ended 30 June 2008. 

The company has delivered a financial performance for the period at the top end of the Board's expectations with revenue growth of 100 per cent to circa €15 million (H1 2007: €7.4m) and adjusted operating margin of approximately 16% (H1 2007: 19%).

Growth in the first half of 2008 has been driven by mobile operator projects as well as advertising agency and brand engagements in Europe, the US and Asia. Velti has expanded its services and customer base in Europe by renewing contracts with Wind, Vodafone, Cosmote, Cosmofon, MTEL, Vivatel, Singtel and Verizon. Following the launch of its new Mobile Marketing and Advertising platform v4.0 in February, Velti is executing mobile marketing projects for brands such as Intel, Bayer and General Motors out of its New York office, and has acquired brands such as Wrigleys, Mastercard, TMP and Western Union, as customers in Europe.

In response to companies allocating substantial budgets to mobile marketing and advertising campaigns on an increasingly global basis, the company has invested in extending its international footprint as well as continuously developing its market leading Mobile Marketing Platform. This has included net capital expenditure (capital expenditure minus depreciation and amortisation) of about €5m in the first half of the year. Such investment will continue in the second half but at a much lower level. 

Today, Velti announced a new contract originated from its recently established Moscow office, which has led to the launch of a key mobile marketing and branding project with Mobile TeleSystems (MTS, NYSE: MTB) the largest mobile phone operator in Russia and the CIS. Together with its subsidiaries, MTS services over 85 million subscribers. This is Velti's first multi-million euro contract in Russia and validates Velti's strategy of expanding in BRIC countries (Brazil, Russia, India, China) in 2008 and 2009. 

A major strategic move was the establishment in July 2007 of Ansible, Velti's joint venture with Interpublic Group. The Board is pleased with the traction achieved by Ansible with clients, although the implementation of contracts has been slower than originally anticipated. As a result, Ansible revenues in 2008 will be lower than projected, but the reduction will partly be offset by lower costs. During the last quarter of 2008 and in 2009 the Board expects Ansible to become a significant contributor to financial performance. 

In April this year Velti entered the Chinese market with an investment to acquire up to 50% of CASEE, China's largest mobile advertising exchange, currently serving more than 750 million ads to mobile phones every month (a 50% growth just in the last quarter). CASEE will provide Velti with the ability to execute mobile campaigns in the fast-growing Chinese market and also provides additional technology knowhow and regional capabilities to the whole company. 

So far in 2008, Velti has continued to experience strong demand for its products and services and the Board is confident about the outlook for the remainder of 2008. Longer term, it is clear from the collective experience of the Board and management across the business that the mobile marketing and advertising sector is entering a phase of substantial and rapid growth. Although it is difficult to predict the precise timing of the market's development, the Board sees good prospects that the investments now being made will ensure the Company is well placed to benefit from this market growth.

The Board is very pleased by the financial performance in the first half of 2008. Velti's revenues have traditionally been stronger in the second half. The Board is confident that this seasonality will continue and the company will meet its financial targets for the year.

The announcement of interim results is expected to be made in mid-September 2008.

END

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About Velti

Velti's market-leading mobile marketing technology platform, coupled with its experience in the mobile advertising industry, enables clients around the world to deliver an extensive range of highly targeted marketing campaigns. With operations in 18 countries, and a mobile marketing joint venture with the Interpublic group, a top global holding group of advertising agencies, Velti has the ability to reach through its platform an estimated 1.4 billion consumers. 

Velti's unique Mobile Marketing and Advertising Platform (version 4.0) manages the full cycle of planning, execution and monitoring of multiple campaigns across differing mobile formats and channels, offering customers more than 70 mobile marketing and advertising templates, which can be managed from one user interface. 

For more information, visit www.velti.com.