Having read through the update in detail over the last few days, it looks to me like the board are doing quite good job turning the company around. Yes there's still a long way to go, but it's Communications PLC
21 December 2006
For immediate release 21 December 2006
Vyke Communications Plc.
('Vyke' or 'the Company')
Trading Update
Vyke Communications Plc. (AIM: VYKE), the Voice over Internet Protocol ('VoIP')
service provider, announces an update for activities in Q3 2006.
Highlights
• The Company's strategy to replace traditional calling cards with
enhanced services has accelerated in Q3. Revenue from Vyke enhanced services
now represents a substantial portion of the Company's revenue (21.65% in Q3)
with further revenue and margin growth expected in Q4.
• Turnover for Q3 increased to £2.4 million and operating loss decreased
to £777,000 (£ 4.4 million and loss of £ 2.1 million for first half 2006).
Comparison is made to H1 2006, due to a change in product mix from
traditional calling cards to enhanced services.
• The number of unique customers of enhanced services represented by PINs
sold direct and through resellers demonstrates quarter by quarter growth of
172% and 66% respectively for the first three quarters of 2006.
• Revenues for the full year 2006 expected to be between £9 million - £10
million, slightly behind broker 06 expectations, with an EBITDA loss of
circa £2.4 million, reflecting a slow down in sales of traditional calling
cards as envisaged and increased sales in the higher margin, enhanced
services.
• 50% Acquisition of Telesupercom AS (as announced on 10 July 2006).
• £1.5 million funding provided by way of bonds and warrants (as announced
on 10 July 2006)
• Change of name to Vyke Communications Plc
Update of current users
The decision of the Board to focus on enhanced services has been further
vindicated by the decline seen in the traditional calling cards side of the
business, due to lower rates, a declining market as consumers look to
alternatives such as VoIP, and increasing pricing pressure from competitors.
Because of this, the overall number of unique PINs fell slightly in Q3. However,
in line with the Group's focus, the sale of PINs increased in the following
areas:
Growth in unique PINs from Q2 to Q3:
• PC-to-phone, up 72%
• Mobile SMS, up 155%
• Mobile (Java & web), up 464%
A full breakdown of unique PIN sales is provided at the end of the statement.
The high margin enhanced service products sold under the company's brands - Vyke
Mobile IP, Vyke PC, Vyke Mobile (including the SMS version) and Vyke Web - have
all seen double-digit growth quarter by quarter in 2006. The Board expects the
trend of increasing enhanced services sales to continue in the future. Enhanced
services have contributed up to four times the gross margin of traditional
calling cards, which have historically been the Group's main source of revenue.
Post period developments and future prospects
In early October, Vyke agreed to acquire 100% of Genme Services ShD BhD. in
Malaysia, which continues to demonstrate further benefits in the technology and
sales divisions.
Vyke CEO Hans-Arne L'orange commented:
'Vyke's continued growth in Q3 has demonstrated the potential of VoIP services,
particularly in the wireless space. With 2007 predicted to be the first year of
deployment of multiple millions of dual radio handsets enabling wireless VoIP
services to reach the mass market, the Board remains positive that Vyke's growth
will continue.'
ENDS
For further information please contact:
Vyke Communications Plc. HB Corporate Threadneedle Communications
Hans-Arne L'orange Imran Ahmad Graham Herring
Chief Executive Officer Luke Cairns Josh Royston
Cecil Jordaan
+47 92426437 +44 (0) 20 7510 8600 +44 (0) 20 7936 9605
Notes to editors
+----------------------------------------------------------------------------------------------------+
|Q3 2006 Unique PINs |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
| | | Traditional | | Mobile | Mobile |Enhanced Serv. |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
| | ALL |Calling Cards |PC to Phone | SMS |(java & web) | Total |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
|Unique | 1,507,652 | 1,362,113 | 51,946 | 44,086 | 65,040 | 161,072 |
|Pins | | | | | | |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
|Total | 13,796,407 | 11,146,475 | 1,672,870 | 280,863 | 696,197 | 2,649,930 |
|Calls | | | | | | |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
|Total | | | | | | |
|Retail | $6,476,017.58 |$5,073,973.95 |$550,763.47 |$343,691.85 | $507,588.31 | $1,402,043.63 |
|Dollars| | | | | | |
+-------+----------------+---------------+-------------+-------------+--------------+----------------+
| |
+----------------------------------------------------------------------------------------------------+
|Q2 2006 Unique PINs |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
| | | Traditional | | Mobile | Mobile |Enhanced Serv. |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
| | ALL |Calling Cards |PC to Phone | SMS |(java & web) | Total |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Unique | 1,578,638 | 1,526,219 | 30,280 | 17,259 | 11,528 | 59,067 |
|Pins | | | | | | |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Total | 13,282,522 | 12,273,354 | 816,805 | 100,780 | 91,583 | 1,009,168 |
|Calls | | | | | | |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Total | | | | | | |
|Retail |$6,117,498.93 |$5,536,624.64 |$325,900.68 |$143,822.57 | $111,151.04 | $580,874.29 |
|Dollars | | | | | | |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
| |
+----------------------------------------------------------------------------------------------------+
|Q1 2006 Unique PINs |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
| | | Traditional | | Mobile | Mobile |Enhanced Serv. |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
| | ALL |Calling Cards |PC to Phone | SMS |(java& web) | Total |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Unique | 1,567,705 | 1,536,355 | 19,629 | 7,971 | 8,073 | 35,673 |
|Pins | | | | | | |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Total | 12,657,184 | 12,010,386 | 529,230 | 49,509 | 68,059 | 646,798 |
|Calls | | | | | | |
+--------+---------------+---------------+-------------+-------------+--------------+----------------+
|Total | | | | | | |
|Retail |$5,966,270.85 |$5,616,416.67 |$210,555.68 | $66,417.60 | $72,880.90 | $349,854.18 |
|Dollars | | | | | | |
+-------++---------------+---------------+-------------+-------------+--------------+----------------+
+-------++---------------+---------------+-------------+-------------+--------------+----------------+
* Total Retail Dollars is end user value, not all to Vyke, when sold through
resellers.
Company objectives
The Group's objective is to become a leading provider of a single communication
interface that offers low cost voice, messaging and advanced data services
regardless of the user's location. By way of example, a Vyke subscriber who
travels abroad anywhere in the world with Vyke, can reduce their roaming charges
by up to 50% for voice, messaging and data transfer. Vyke also intends to
develop Vyke further by making selective acquisitions of complementary products,
customers, software and further telecommunications infrastructure.
heading in the right direction.
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