TIDMMOS
RNS Number : 3988U
Mobile Streams plc
29 March 2019
29 March 2019
Mobile Streams plc ("Mobile Streams" or the "Company") (AIM:
MOS)
Interim Results
Mobile Streams announces its unaudited interim results for the
six months ended 31 December 2018.
Highlights
-- Unaudited revenues were GBP0.9m (31 December 2017: GBP1.83m).
All revenue is from continuing operations.
-- GBP0.55m of cash and cash equivalents at 31 December 2018
(GBP1.46m as at 31 December 2017), with no debt.
Post-period end update
-- GBP0.29m of cash and cash equivalents as at 20 March 2019,
with no debt. The cash balance includes GBP0.13m of net funds
raised via the subscription which was announced on 27 February
2019.
-- The Company is currently working with some of the largest
carriers in the India market: Vodafone-Idea, Jio and BSNL.
Commenting, Simon Buckingham, CEO of Mobile Streams said:
"Progress in India remained steady over the recent period as the
market settles in response to the consolidation amongst the mobile
telecom operators. Since tighter marketing regulations were
imposed, revenue targets have continued to be impacted. Looking
ahead to the rest of 2019, we anticipate increased performance from
our relationship with the newest entrant to the Indian telecom
market, however, investment is on hold with Airtel, our leading
partner. In Argentina, trading has been steady in 2019, whilst
operations in Indonesia have been delayed until the latter half of
the calendar year."
India
The majority of revenue in India during the period, was
generated from our HTML5 games service, mobilegaming.com, through
our billing relationship with Airtel, one of the leading mobile
operators in the country. These operations are currently on
hold.
Airtel was recently usurped as the largest network by the
Vodafone - Idea merger. Vodafone and Idea remain as individual
entities with regards to our relationship with them, this
development has prevented us increasing our business with these
parties.
Argentina
Trading in Argentina remained stable with a small decline during
the period. We continue with Movistar subscribers acquired via
Google AdWords at declining volumes.
OPERATING REVIEW
During the period, both the Group's Mobile Internet revenues and
its Mobile Operator revenues decreased. This was primarily due to
increased regulation in the Indian telecom market. Devaluation of
both the Argentine Peso and Indian Rupee against the British Pound
was an additional factor in this decrease. On a like-for-like
basis, revenues from Argentina during the period were ARS$20.8m (6
months ended 31 December 2017: ARS$38.8m) with India generating
revenue of INR$38.8m (6 months ended 31 December 2017: INR$
28.1m).
Mobile internet
Mobile Streams' performance during the six months ended 31
December 2018 was driven primarily from its Mobile Internet sales
in India. During the period, Mobile Streams has continued with its
strategy to develop a content offering direct to consumers across a
wide range of mobile devices.
Mobile operator sales
Despite the recent signing of an agreement in India, with the
third largest telecom operator Jio, this revenue stream has
significantly reduced as consumer preference has moved from the
operator branded stores to other third party channels such as
iTunes, Google Play and our own service mobilegaming.com
FINANCIAL REVIEW
Group revenue for the six months ended 31 December 2018 was
GBP0.92m, a decrease of 50% to the comparative period's figure of
GBP1.83m. The gross profit was GBP0.41m which decreased by 39%
during the period (2017: GBP0.67m). The gross profit margin
increased from 36.7% to 44.2% as a result of decreased marketing
(direct to consumer) costs related to the Mobile Internet
division.
The Group recorded a loss after tax of GBP317k for the 6 months
ended 31 December 2018 (2017: loss GBP587k), generating a loss per
share of 0.32 pence per share (2017: 0.64 pence loss per
share).
Adjusted loss per share (excluding depreciation, amortisation,
impairments and share compensation expense) was 0.32 pence per
share (2017: 0.63 pence adjusted loss per share).
Cash and cash equivalents
During the period, the Argentine Peso depreciated by
approximately 22% against the British Pound. Current cash balances
(as at 20 March 2019) are GBP 0.29m.
OUTLOOK
The Directors have some reservations about the short term
opportunities in India given the current developments amongst the
telecom operators and increased regulations. Management's strategy
is to offset revenue decline in India by expanding operations into
Indonesia. It is expected that trading conditions in Argentina will
remain consistent and therefore revenues in the second half of the
financial year will be lower than originally expected.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 ended 31 ended 30
December December June
2018 2017 2018
GBP000's GBP000's GBP000's
Revenue 919 1,833 3,046
Cost of sales (513) (1,162) (1,868)
------------------------------------- --------------------- ------------------------ -------------------------
Gross profit 406 671 1,178
Selling and marketing costs (198) (440) (638)
Administrative expenses ** (570) (879) (1,724)
Operating Loss (362) (648) (1,184)
Finance income 63 82 255
Finance expense - (2) (2)
--------------------- ------------------------ -------------------------
Loss before tax (299) (568) (931)
Tax expense (18) (19) (84)
Loss for the period (317) (587) (1,015)
===================================== ===================== ======================== =========================
Attributable to:
Attributable to equity shareholders
of Mobile Streams Plc (317) (587) (1,015)
===================================== ===================== ======================== =========================
Earning Per Share
Pence per Pence per Pence per
share share share
Basic loss per share (0.324) (0.641) (1.007)
Diluted loss per share (0.324) (0.641) (1.007)
* *Administrative expenses include depreciation, amortisation,
impairment and share based compensation.
CONSOLIDATED STATEMENT OF COMPRENHENSIVE LOSS
Unaudited Unaudited Audited
6 months ended 6 months 12 months
31 December ended 31 ended 30 June
December
2018 2017 2018
GBP000's GBP000's GBP000's
Loss for the period (317) (587) (1,015)
Exchange differences on translating
foreign operations (168) (145) (533)
Total comprehensive loss for
the period (485) (732) (1,548)
===================================== ========================== ======================== =========================
Total comprehensive loss for the period attributable
to:
Equity shareholders of Mobile
Streams Plc (485) (732) (1,548)
------------------------------------- -------------------------- ------------------------ -------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2018 2017 2018
GBP000's GBP000's GBP000's
Assets
Non- Current
Intangible assets - - -
Property, plant and equipment 4 12 7
Deferred tax asset 74 - 74
------------- ------------- ----------- ----
78 167 81
Current
Trade and other receivables 852 1,261 904
Cash and cash equivalents 554 1,466 1,039
1,406 2,727 1,943
Total assets 1,484 2,894 2,024
=============================== ============= ============= =========== ====
Equity
Equity attributable to equity holders of
Mobile Streams Plc
Called up share capital 200 182 200
Share Premium 12,550 12,463 12,550
Translation reserve (3,954) (3,398) (3,786)
Retained earnings (8,878) (8,136) (8,563)
------------------------------- ------------- -------------
Total equity (82) 1,111 401
------------------------------- ------------- ------------- ----------- ----
Liabilities
Current
Trade and other payables 1,384 1,516 1,410
Current tax liabilities 182 267 213
------------------------------- ------------- ------------- ----------- ----
1,566 1,783 1,623
Total liabilities 1,566 1,783 1,623
------------------------------- ------------- ------------- ----------- ----
Total equity and liabilities 1,484 2,894 2,024
=============================== ============= ============= =========== ====
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called Share premium Translation Retained Total
up share reserve earnings Equity
capital
GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1 July
2017 182 12,463 (3,253) (7,552) 1,839
Credit for share
based payments - - - 4 4
Transactions with
owners - - - 4 4
--------------------- ---------------- ------------------- --------------------- ----------------- --------------
Loss for the 6
months ended
31 December 2017 - - - (317) (317)
Exchange differences
on translating
foreign operations - - (145) - (145)
Total comprehensive
income for
the period - - (145) (317) (462)
Balance at 31
December 2017 182 12,463 (3,398) (7,865) 1,381
--------------------- ---------------- ------------------- --------------------- ----------------- --------------
Balance at 1 January
2018 182 12,463 (3,398) (7,865) 1,381
New Equity 18 87 - - 105
Credit for share
based payments - - - 1 1
Transactions with
owners 18 87 - 1 106
--------------------- ---------------- ------------------- --------------------- ----------------- --------------
Loss for the 6
months ended
30 June 2018 - - - (429) (429)
Exchange differences
on translating
foreign operations - - (388) (270) (658)
Balance at 30 June
2018 200 12,550 (3,786) (8,563) 401
--------------------- ---------------- ------------------- --------------------- ----------------- --------------
Balance at 1 July
2018 200 12,550 (3,786) (8,563) 401
Credit for share
based payments - - - 3 3
Transactions with
owners - - - 3 3
--------------------- ---------------- ------------------- --------------------- ----------------- --------------
Loss for the 6
months ended
31 December 2018 - - - (317) (317)
Exchange differences
on translating
foreign operations - - (168) - (168)
Total comprehensive income for the
period - (168) (317) (485)
Balance at 31
December 2018 200 12,550 (3,954) (8,878) (82)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The interim results of Mobile Streams PLC are prepared in
accordance with the requirements of IAS 34 Interim Financial
Reporting as adopted by the EU and prepared in accordance with the
accounting policies set out in the last financial statements for
the 12 months ended 30 June 2018.
The interim results, which are not audited, do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The comparative financial information for the twelve months
ended 30 June 2018 has been extracted from the statutory accounts
for that period. In addition, the financial information for the 6
months ended 31 December 2018 has been extracted from the unaudited
Interim results. The full audited accounts of the Group for the 12
months ended 30 June 2018 were prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and have been delivered to the Registrar of
Companies.
The auditor's report on these financial statements was
unqualified and did not contain statements under S498 (2) or S498
(3) of the Companies Act 2006.
2. SEGMENT REPORTING
As at 31 December 2018, the Group was organised into four
geographical segments: Europe, North America, Latin America, and
Asia Pacific. Revenues were from external customers only and
generated from three principal business activities: the sale of
mobile content through MNO s (Mobile Operator sales), the sale of
mobile content over the internet (Mobile Internet sales) and the
provision of consulting and technical services (Other Service
Fees).
All operations are continuing and all inter-segment transfers
are priced and carried out at arm's length.
The segmental results for the 6 months ended 31
December 2018 were as follows:
GBP000's Europe Asia Pacific North Latin Group
America America
Mobile operator sales 1 (1) 6 - 6
Mobile internet sales - 422 - 491 913
Other service fees - - -
Total Revenue 1 421 6 491 919
Cost of sales - (197) (3) (314) (513)
Gross profit 1 224 2 179 406
Operating expenses (302) (210) (21) (233) (765)
EBITDA* (301) 13 (19) (54) (360)
Depreciation, amortisation - - (1) (1)
Share based compensation (3) - - - (3)
Finance income 0 - 63 63
Profit/(Loss) before tax (303) 13 (18) 8 (300)
Income tax expense - - - (17) (17)
Profit/(Loss) after tax (303) 13 (18) (10) (317)
The segmental results for the year ended 30 June
2018 were as follows:
GBP000's Europe Asia Pacific North Latin Group
America America
Mobile Operator
Services 2 1 31 - 34
Mobile Internet
Services - 543 - 2,463 3,006
Other Service
fees 5 - 1 - 6
---------------- ------------------ ------------------------ ------------------- ------------------- --------------------
Total Revenue 7 544 32 2,463 3,046
0 0 0 0
Cost of sales (2) (305) (15) (1,546) (1,868)
---------------- ------------------ ------------------------ ------------------- ------------------- --------------------
Gross profit 5 239 17 917 1,178
Selling,
marketing and
administration
expenses (4,364) 198 (98) 1,913 (2,351)
Trading EBITDA* (4,359) 437 (81) 2,830 (1,173)
---------------- ------------------ ------------------------ ------------------- ------------------- --------------------
Depreciation,
amortisation
and impairment - - - (6) (6)
Share based
compensation (5) - - - (5)
Finance income - - - 255 255
Finance expense (39) - 39 (2) (2)
---------------- ------------------ ------------------------ ------------------- ------------------- --------------------
Loss before tax (4,403) 437 (42) 3,077 (931)
Taxation - - - (84) (84)
Loss after tax (4,403) 437 (42) 2,993 (1,015)
================ ================== ======================== =================== =================== ====================
The segmental results for the 6 months ended 31 December
2017 were as follows:
GBP000's Europe Asia Pacific North Latin Group
America America
Mobile operator sales 1 1 25 - 28
Mobile internet sales - 329 - 1,471 1,800
Other service fees 4 - 2 - 5
Total Revenue 5 331 27 1,471 1,833
Cost of sales (1) (220) (13) (929) (1,162)
------------------------------ ------- ------------- --------- --------- --------
Gross profit 4 111 13 543 671
Operating expenses (540) (251) (38) (484) (1,314)
EBITDA* (537) (140) (25) 58 (643)
Depreciation, amortisation - - (3) (3)
Share based compensation (4) - - - (4)
Revenue/expense intercompany 0 - - - 0
Finance income 0 - 80 80
Profit/(Loss) before tax (541) (140) (25) 135 (570)
Income tax expense - - - (18) (19)
Profit/(Loss) after tax (541) (140) (25) 118 (588)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. EARNINGS PER SHARE
Earnings per share
Earnings per share is calculated by dividing the(loss)/profit
attributable to equity holders of the Company by the weighted
average number of ordinary shares in issue during the period.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended 31 December ended 31 ended 30
2018 December June 2018
2017
Loss for the period (GBP000's) (317) (587) (1306)
------------------------ ------------------------- ------------------------
Loss earnings per share (pence):
Basic (0.324) (0.641) (3.519)
Diluted (0.324) (0.641) (3.519)
Adjusted earnings per share
Adjusted earnings per share is calculated to reflect the underlying
profitability of the business by excluding non-cash charges for
depreciation, amortisation, impairments and share compensation
charges.
6 months 6 months 12 months
ended 31 December ended 31 ended 30
2018 December June 2018
2017
GBP000's GBP000's GBP000's
Loss for the period (317) (587) (1727)
Add back: share compensation expense 3 4 118
Add back: depreciation and amortisation 1 3 19
Adjusted Loss for the period (312) (578) (1590)
Pence per Pence per Pence per
share share share
Adjusted loss per share (0.320) (0.633) (2.414)
Adjusted diluted loss per share (0.320) (0.633) (2.414)
Weighted average number of shares
6 months 6 months 12 months
ended 31 December ended 31 ended 30
2018 December June 2018
2017
Basic 97,992,286 91,593,533 65,910,376
Exercisable share options - - -
------------------------ ------------------------- ------------------------
Diluted 97,992,286 40,507,910 65,910,376
------------------------ ------------------------- ------------------------
Diluted (loss)/earnings per share is calculated adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has only one category of ordinary shares.
The adjusted EPS has been calculated to reflect the underlying
profitability of the business by excluding non-cash charges for
depreciation, amortisation, impairments and share compensation
charges.
4. GOING CONCERN
The Group had cash balances of GBP0.55m at 31 December 2018 (30
June 2018: GBP1.04m) and no borrowings. Having reviewed cash flow
forecasts and budgets for a year ahead the Directors have a
reasonable expectation that the Group has resources to continue in
operational existence for the foreseeable future. The Directors are
analyzing further financing initiatives and a cost reduction
program.
As at 31 December 2018, GBP0.45m (including short-term
investments of GBP0.40m) of the Group's cash balance was held in
Argentina. The Argentine Government has released the currency
restrictions in December 2015. Since then, the Peso has remained
relatively stable, although we cannot predict future movements in
the currency and the impact on our financial performance.
5. FOREIGN CURRENCY TRANSLATION
(a) Presentational currency
The consolidated financial statements are presented in British
Pounds: the functional currency of the parent entity is also
British Pounds.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date the
transaction occurs. Any exchange gains or losses resulting from
these transactions and from the translation of monetary assets and
liabilities at the balance sheet date are reported in the income
statement except when these represent a net investment in a
subsidiary when they are charged or credited to equity
.
Foreign currency balances are translated at the balance sheet
date using exchange rates prevailing at the period end.
(c) Group companies
The financial results and position of all group entities that
have a functional currency different from the presentational
currency of the Group are translated into the presentational
currency as follows:
i - assets and liabilities for each balance sheet are translated
at the closing exchange rate at the date of the balance sheet
ii - income and expenses for each income statement are
translated at average exchange rates (unless it is not a reasonable
approximation to the exchange rate at the date of transaction)
iii - all resulting exchange differences are recognised as a
separate component of equity (translation reserve)
The exchange rates used in respect of Argentinean Pesos are the
official published exchange rates.
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END
IR LLFFTVSITFIA
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