TIDMMBT
RNS Number : 9967X
Mobile Tornado Group PLC
12 May 2016
Mobile Tornado Group plc
("Mobile Tornado", the "Company" or the "Group")
Final results
Mobile Tornado Group plc, the leading provider of instant
communication mobile applications to the enterprise market,
announces its results for the year ended 31 December 2015.
Financial Highlights
-- Total revenue up by 29% to GBP2.26m (2014: GBP1.75m)
o Recurring revenues up by 33% to GBP1.68m (2014: GBP1.26m)
o Professional service sales up by 74% to GBP0.5m (2014:
GBP0.29m)
o Hardware and 3(rd) party software sales reduced to GBP0.08m
(2014: GBP0.20m)
-- Group operating loss of GBP1.45m (2014: GBP2.66m)
-- Adjusted EBITDA* loss of GBP1.26m (2014: GBP2.50m)
-- Adjusted operating loss* of GBP1.38m (2014: GBP2.65m)
-- Loss after tax of GBP1.66m (2014: GBP2.95m)
-- Basic loss per share of 0.69p (2014: 1.31p)
-- Cash at bank of GBP0.11m (2014: GBP0.04m) with net debt of GBP6.81m (2014: GBP6.56m)
*Earnings before interest, tax, depreciation, amortization and
excluding exchange differences
Operating highlights
-- Strong recurring revenue growth of 33% reflecting increased
momentum within Mobile Network Operator customers across the
Americas
-- Restructure of business to focus on key markets and customers
resulted in operating expenses savings of GBP0.59m compared to
2014
-- New commercial contract agreed with an independent
communications service provider in Israel for commercial launch of
services
-- Commercial partnership agreed with independent communications
service provider within the global oil and gas sector
-- Push to Talk ('PTT') deployment completed with a transportation customer in Brazil
-- 3GPP committee engagement
-- R&D tax credit of GBP0.37m in 2015 (2014:GBP0.22m)
reduced operating expenses further to GBP3.01m (2014:GBP3.75m)
Jeremy Fenn, Chief Executive Officer of Mobile Tornado, said:
"We were satisfied with the performance of the business in 2015
with the financial results showing a marked improvement over the
prior year. At the adjusted EBITDA level, losses were halved from
GBP2.50m in 2014 to GBP1.26m in 2015, the improvement being
delivered through a combination of reduced cost-base and increased
recurring license revenues.
The business has made good progress and whilst we are frustrated
that the momentum is not quite at the levels we would have liked,
there are grounds for optimism given the customers we are working
with and the opportunities currently presented. We look forward to
the rest of the year with cautious optimism."
Enquiries:
Mobile Tornado Group plc www.mobiletornado.com
Jeremy Fenn, Chief Executive +44 (0)7734 475 888
Investec Bank plc (Nominated
Adviser & Broker) +44 (0)20 7597 4000
Dominic Emery / Carlton
Nelson
Walbrook PR Ltd +44 (0)20 7933 8780 or mobiletornado@walbrookpr.com
Paul Cornelius
Helen Cresswell
Financial results and key performance indicators
Total revenue for the year ended 31 December 2015 increased by
29% to GBP2.26m (2014: GBP1.75m). Encouragingly, recurring revenue,
a key performance indicator for the business, was up by 33% to
GBP1.68m (2014: GBP1.27m). Non-recurring revenue, comprising
installation fees, hardware and professional services, increased
slightly to GBP0.58m (2014: GBP0.48m).
Gross profit increased to GBP2.12m (2014: GBP1.47m) as a result
of the growth in higher margin recurring revenue. Operating
expenses declined by 15% to GBP3.38m (2014: GBP3.97m) during the
year, primarily due to the lower staffing levels following the
restructure during 2014. The Group received an income tax credit in
respect of our qualifying investment in R&D activities of
GBP0.37m (2014: GBP0.22m) further reducing our net operating
expenses. As a result, the loss after tax for the year reduced
significantly to GBP1.66m (2014: Loss GBP2.95m). This resulted in a
reduced basic loss per share of 0.69p (2014: 1.31p).
The net cash outflow from operating activities was GBP1.23m
(2014: GBP2.75m). At 31 December 2015, the Group had GBP0.11m cash
at bank (31 December 2014: GBP0.04m) and net debt of GBP6.81m
(2014: GBP6.56m).
Results and dividends
The Directors are unable to recommend the payment of a dividend
in respect of the year ended 31 December 2015 (year ended 31
December 2014: nil). The Company currently intends to reinvest
future earnings to finance the growth of the business over the near
term.
Review of operations
Mobile network operators ('MNOs')
Our engagement with Tier 1 MNOs across the world continues, with
commercial contracts now in place with ten customers. The growth in
recurring revenues was driven principally by the commercial roll
out of services by our customers in the Americas. This territory,
particularly South America, represents the principal target for
growth in the business over the coming years. As the iDEN
technology platform reaches the end of its life, we expect many of
these customers will look to switch their instant communication
requirements to PTT. Our business development team has worked hard
during the period to engage with new partners in these territories
as we look to widen our commercial reach in these markets.
During the period, our Tier 1 customer in mainland Europe
extended its contract for a further three years. Our technical team
continues to work to optimise the platform prior to full commercial
launch.
As previously reported, our partner in South Africa has secured
agreement to provide PTT services to the three domestic Tier 1
MNOs. Commercial deployment by the operators has been delayed as a
result of technical integration issues, principally around location
of server hosting, although it appears that these are now close to
being resolved. We anticipate resolution and launch of services in
the second half of this financial year.
During 2015, we reviewed the various options open to us for
launching services in Israel, an established PTT market. We
concluded an agreement with a company focused on the deployment of
value added services to the corporate market. Our exclusive
agreement was successfully launched in January 2016 and we are
pleased to report it has already secured some important customers
in the commercial market: leading enterprises in the Israeli
banking, logistics and security sectors have already committed to
the service and we anticipate increasing sales momentum through the
rest of this financial year.
Independent Solution Vendors ('ISVs')
Whilst MNOs represent a valuable channel to market given their
ability to forward sell our services to a wide customer base, the
inherent uncertainty arising from our inability to exert full
control over the sales and marketing strategies make it very
difficult to predict with any certainty how our customer base will
grow and with it, expand our recurring revenue base.
We have continued to seek out partners keen to integrate our
communication solution to an existing software application. Our
partner in the transportation sector successfully concluded the
installation of its solution, incorporating our communication
platform, with a transportation company in Brazil. As a result we
are now engaged in a number of other tenders with this partner.
We have also established a partnership with an ISV serving the
global oil and gas sector and are currently participating in a
number of tenders. We are also seeking a similar engagement in the
mining sector.
The workforce management sector offers numerous opportunities to
deploy our service across applications that have already been sold
into significant customer bases. Our technical team is working
towards delivering a more sophisticated and usable interface to
allow wider adoption of our technology by other software
application providers.
Hardware manufacturers
We have worked extensively with all of the major rugged handset
and accessory manufacturers during the period. As a result, we are
cooperating with these partners on tenders to both mobile operators
and enterprises.
Public sector
Whilst our focus across 2015 has been to develop our recurring
revenue streams with our Tier 1 MNOs, we continue to be invited to
tender for significant projects within the public sector. We are
currently engaged on trials with potential customers in India,
Africa and Asia. The nature of the deals is such that we give the
customer the right to use our platform for a fixed period of time
in return for an upfront capital sum. Whilst the profitability and
cash-flow impact of these deals can be significant, the trials and
negotiations can take place over an extended period of time, and
predicting with any certainty when they might close if extremely
difficult. Nevertheless, we continue to develop these opportunities
since successful closure of any of them would bring material
financial upside.
Management
As announced separately, we are delighted to confirm the
appointment of Avi Tooba as Chief Operating Officer with immediate
effect.
Avi will lead our technical and operations teams and bring huge
experience to our business as we continue to engage Tier 1 MNOs,
major global enterprises and public sector bodies. Having worked
across all major radio platforms, his inputs as we develop our
strategy for next generation critical communication platforms will
be invaluable.
Technical development
We continue to invest in our technical platform to ensure
services can be deployed more effectively to customers across the
world. At the same time we are monitoring closely the development
of Mission Critical PTT, where the industry is seeking to leverage
the strengths of LTE through the addition of a comprehensive set of
features needed for public safety communications. We are
participating members of the 3GPP committee tasked with setting
these standards and will ensure that our future strategy is
developed in line with the market. We believe the recruitment of
Avi Tooba to our team will be invaluable in this respect.
Principal risks and uncertainties
The management of the business and the nature of the Group's
strategy are subject to a number of risks.
The Directors have set out below the principal risks facing the
business. The Directors are of the opinion that a thorough risk
management process is adopted, which involves the formal review of
all the risks identified below. Where possible, processes are in
place to monitor and mitigate such risks.
Product obsolescence
Due to the nature of the market in which the Group operates,
products are subject to technological advances and as a result,
obsolescence. The Directors are committed to the research and
development strategy in place, and are confident that the Group is
able to react effectively to the developments within the
market.
Indirect route to market
As described above, one of the Group's primary channels to
market are MNOs reselling our services to their enterprise
customers. Whilst MNOs are ideally positioned to forward sell our
services and are likely to possess material resources for doing so,
there remains an inherent uncertainty arising from the Group's
inability to exert full control over the sales and marketing
strategies of these customers.
Going concern and funding
On 15 April 2015, the Company completed a placing of 22.5m
million shares at 6p to raise a total of GBP1.35m. InTechnology Plc
and the Directors subscribed for 18,581,907 shares comprising 82.6%
of the issue. The placing was used to fund the working capital
requirements of the Company.
The Directors believe the Group has sufficient working capital
for the foreseeable future given its contracted revenues,
anticipated contracts and continuing support from its principal
shareholder, InTechnology Plc. They have therefore concluded that
the financial statements are appropriately prepared on a going
concern basis.
Outlook
We were satisfied with the performance of the business in 2015
with the financial results showing a marked improvement over the
prior year. At the adjusted EBITDA level, losses were halved from
GBP2.50m in 2014 to GBP1.26m in 2015, the improvement being
delivered through a combination of reduced cost-base and increased
recurring license revenues.
However, as we have moved into 2016, recurring revenues from our
Tier 1 MNO customers continue to grow more slowly, as highlighted
in the half-year statement. Given the relative sizes of these
businesses, it is a more difficult area for us to control and
influence. The continued flat performance of this part of our
business remains below market expectations although we anticipate
that the strengthening of our management team will help to improve
this in the coming months.
The Group continues to see a range of opportunities in the
homeland security markets. However, contracts in these markets are
typically capital expenditure in nature for our clients and their
impact is difficult to predict with any certainty.
The Board therefore currently anticipates that the Company's
revenue performance will be at least in line with 2015, with the
opportunity to surpass this dependent on securing homeland security
opportunities.
We would like to record our appreciation for the exceptional
contribution made by our team during 2015. The business has made
good progress and whilst we are frustrated that the momentum is not
quite at the levels we would have liked, there are grounds for
optimism given the customers we are working with and the
opportunities currently presented. We look forward to the rest of
the year with cautious optimism.
Peter Wilkinson
Chairman
12 May 2016
Consolidated income statement
For the year ended 31 December 2015
2015 2014
GBP'000 GBP'000
Continuing operations
Revenue 2,259 1,746
------------------------------ ----------------- ---------------
Cost of sales (137) (280)
------------------------------ ----------------- ---------------
Gross profit 2,122 1,466
Operating expenses
Administrative expenses (3,384) (3,969)
Group operating loss before
exchange
differences & depreciation
expense (1,262) (2,503)
------------------------------ ----------------- ---------------
Exchange differences (68) (13)
Depreciation expense (115) (146)
------------------------------ ----------------- ---------------
Total operating expenses (3,567) (4,128)
Group operating loss (1,445) (2,662)
Finance costs (586) (513)
Finance income - 7
------------------------------ ----------------- ---------------
Loss before tax (2,031) (3,168)
Income tax credit 371 220
Loss for the year (1,660) (2,948)
------------------------------ ----------------- ---------------
Loss per share (pence)
Basic and diluted (0.69) (1.31)
------------------------------ ----------------- ---------------
Consolidated statement of comprehensive income
For the year ended 31 December 2015
2015 2014
GBP'000 GBP'000
Loss for the year (1,660) (2,948)
Other comprehensive loss
Item that will subsequently
be reclassified
to profit or loss:
Exchange differences on
translation
of foreign operations (19) (18)
Total comprehensive loss
for the period (1,679) (2,966)
------------------------------- -------- --------
Attributable to:
Equity holders of the parent (1,679) (2,966)
------------------------------- -------- --------
Consolidated statement of changes in equity
For the year ended 31 December 2015
Foreign
Reverse currency
Share Share acquisition Merger translation Accumulated Total
capital premium reserve reserve reserve Loss equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2014 4,499 11,225 (7,620) 10,938 (2,146) (24,634) (7,738)
Equity settled
share-based
payments - - - - - (10) (10)
Issue of share
capital
on exercise
of options 2 - - - - - 2
Transactions
with owners 2 - - - - (10) (8)
Loss for the
year - - - - - (2,948) (2,948)
Exchange
differences
on translation
of foreign
operations - - - - (18) - (18)
Total
comprehensive
loss for the
year - - - - (18) (2,948) (2,966)
Balance at 31
December
2014 4,501 11,225 (7,620) 10,938 (2,164) (27,592) (10,712)
--------------- ------------- --------------- ----------------- --------------- ------------------ -------------------- ----------------
Foreign
Reverse currency
Share Share acquisition Merger translation Accumulated Total
capital premium reserve reserve reserve Loss equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2015 4,501 11,225 (7,620) 10,938 (2,164) (27,592) (10,712)
Equity settled
share-based
payments - - - - - 13 13
Issue of share
capital 450 787 - - - - 1,237
Transactions
with owners 450 787 - - - 13 1,250
Loss for the
year - - - - - (1,660) (1,660)
Exchange
differences
on translation
of foreign
operations - - - - (19) - (19)
Total
comprehensive
loss for the
year - - - - (19) (1,660) (1,679)
Balance at 31
December
2015 4,951 12,012 (7,620) 10,938 (2,183) (29,239) (11,141)
--------------- ------------- --------------- ----------------- --------------- ------------------ -------------------- ----------------
Consolidated statement of financial position
As at 31 December 2015
2015 2014
GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 315 213
Intangible assets 107 -
422 213
------------------------------- --------- -------------------
Current assets
Trade and other receivables 1,268 1,472
Inventories 28 109
Cash and cash equivalents 107 41
-------------------------------- --------- -------------------
1,403 1,622
------------------------------- --------- -------------------
Liabilities
Current liabilities
Trade and other payables (3,535) (3,303)
Borrowings (1,380) (1,047)
Net current liabilities (3,512) (2,728)
-------------------------------- --------- -------------------
Non-current liabilities
Trade and other payables (2,514) (2,643)
Borrowings (5,537) (5,554)
(8,051) (8,197)
------------------------------- --------- -------------------
Net liabilities (11,141) (10,712)
-------------------------------- --------- -------------------
Equity attributable to
the owners of the parent
Share capital 4,951 4,501
Share premium 12,012 11,225
Reverse acquisition reserve (7,620) (7,620)
Merger reserve 10,938 10,938
Foreign currency translation
reserve (2,183) (2,164)
Accumulated loss (29,239) (27,592)
Total equity (11,141) (10,712)
-------------------------------- --------- -------------------
Consolidated statement of cash flows
For the year ended 31 December 2015
2015 2014
GBP'000 GBP'000
Operating activities
Cash used in operations (1,233) (2,751)
Tax received 371 220
Interest received - 7
--------------------------------- -------------------
Net cash used in operating
activities (862) (2,524)
--------------------------------- ------------------ -------------------
Investing activities
Purchase of property, plant
& equipment (206) (148)
Purchase of intangible
assets (107) -
Net cash used in investing
activities (313) (148)
--------------------------------- ------------------ -------------------
Financing
Issue of ordinary share
capital 1,350 2
Share issue costs (113) -
Proceeds from borrowings - 270
Net cash inflow from financing 1,237 272
------------------ -------------------
Effects of exchange rates
on cash
and cash equivalents 4 4
--------------------------------- ------------------ -------------------
Net increase/(decrease)
in cash and
cash equivalents in the
period 66 (2,396)
Cash and cash equivalents
at beginning of period 41 2,437
Cash and cash equivalents
at end of period 107 41
--------------------------------- ------------------ -------------------
1 Financial information
The financial information set out in this final results
announcement does not constitute statutory accounts within the
meaning of s495(2) or s495(3) of the Companies Act 2006. Statutory
accounts for the year ended 31 December 2015 will be dispatched to
shareholders for approval at the Annual General Meeting to be held
on 6 July 2016. The statutory accounts contain an unqualified audit
report, which did not include a statement under s498(2) or s498(3)
of the Companies Act 2006, and will be delivered to the Registrar
of Companies.
The statutory accounts for the year ended 31 December 2014 which
have been delivered to the Registrar of Companies, contained an
unqualified audit report and did not include a statement under
s498(2) or s498(3) of the Companies Act 2006.
2 Segmental analysis
The Group presents its results in accordance with internal
management reporting information to the chief operating decision
maker (Board of Directors). At 31 December 2015 the Board continued
to monitor operating results by category of revenue within a single
operating segment, the provision of instant communication
solutions. Under IFRS 8 the Group has only one operating segment.
Therefore the results presented in the income statement are the
same as those required under IFRS 8, save for the year end entry of
IFRS 2 share option charge of GBP13,000 (year ended 31 December
2014: GBP10,000 credit).
Revenue by category
2015 2014
GBP'000 GBP'000
Licences 1,279 981
Hardware &
software 81 196
Professional
services 499 287
Other 400 282
Total 2,259 1,746
----------------- ------------------ -------------------
Revenue is reported by geographical location of customers.
Non-current assets are reported by geographical location of
assets.
2015 2015 2014 2014
Non-current Non-current
Revenue assets Revenue assets
GBP'000 GBP'000 GBP'000 GBP'000
UK 125 11 169 19
Europe 476 - 546 -
North America 764 15 440 46
South America 271 - 112 -
Israel 105 396 48 148
Africa 483 - 379 -
Asia/Pacific 35 - 52 -
---------------
Total 2,259 422 1,746 213
--------------- -------- --------------------- -------- ----------------------
Our mobile network operator customer in Canada represents
GBP729,000 (2014: GBP418,000) of the total revenue of the
Group.
3 Loss per share
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders of GBP1,660,000 (2014:
GBP2,948,000) by the weighted average number of ordinary shares in
issue during the year of 240,710,723 (2014: 224,990,775).
2015 2014
Basic and Basic and
diluted diluted
Loss Loss Loss Loss
per per
share share
GBP'000 pence GBP'000 pence
Loss attributable
to
ordinary shareholders (1,660) (0.69) (2,948) (1.31)
Adjusted basic loss
per share (1,660) (0.69) (2,948) (1.31)
----------------------- ---------- ----------- ----------- --------------
The loss attributable to ordinary shareholders and the weighted
average number of ordinary shares for the purpose of calculating
the diluted earnings per ordinary share are identical to those used
for basic earnings per ordinary share. This is because the exercise
of share options are anti-dilutive under the terms of IAS 33.
4 Annual General Meeting
The Annual General Meeting of the Company will be held at
Cardale House, Cardale Court, Beckwith Head Road, Harrogate, HG3
1RY on 6 July 2016 at 9.00 a.m. The audited results for the year
ended 31 December 2015 will be posted to shareholders shortly and
will be available on the Company's website at www.mobiletornado.com
at the same time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFSESFFMSEDI
(END) Dow Jones Newswires
May 12, 2016 02:00 ET (06:00 GMT)
Mobile Tornado (LSE:MBT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Mobile Tornado (LSE:MBT)
Historical Stock Chart
From Apr 2023 to Apr 2024