Zamano PLC Update on changes to Payforit initiative in the UK (3627L)
September 30 2016 - 7:22AM
UK Regulatory
TIDMZMNO
RNS Number : 3627L
Zamano PLC
30 September 2016
zamano plc
("zamano" of the "Company")
Update on changes to Payforit initiative in the UK
zamano plc , a leading European provider of interactive
applications and services to mobile devices, has been informed that
the mobile network operators ("MNOs") who process the Company's
revenues in the United Kingdom have updated their existing Payforit
mandates. As a result, zamano will no longer be able to avail of
previous exemptions with regard to its UK revenues and with effect
for zamano on 1 November 2016.
Payforit is a joint initiative of MNOs in the UK to further
regulate mobile payments and represents a significant regulatory
change in the operating environment in the UK. As previously
announced, the Company has planned for the implementation of
Payforit, but its impact on the Company, and the industry in
general, would only be known once the initiative has been fully
implemented.
UK sales in the half year to 30 June 2016 were EUR16.987M, a
105% increase on the EUR8.285M recorded during H1 2015. These sales
translated into an actual gross profit contribution of EUR1.985M
which was 2.5% above H1 2015 (EUR1.937M). However, the contribution
of third party revenues together with increased advertising spend
resulted in a decrease in the UK gross margin percentage during H1
2016 (11.7%) compared to H1 2015 (23.4%).
At the time of the Company's interim results on 25 August 2016,
the Company reported that it anticipated an improvement in
operating performance during the second half of the year as a
result of advertising spend in the first half and continuing strong
UK sales performance. Whilst performance in the second half of the
year has been encouraging to date, it is now expected that changes
introduced by MNOs will significantly impact the Company's and its
B2B customers' ability to acquire new subscribers on the Payforit
platform in the UK with effect from 1 November 2016. Consequently
the anticipated improvement in operating performance in H2 2016
referred to in our previous announcement will not be achieved.
Furthermore these changes will, it is anticipated, have a material
adverse impact on the Company's revenues in the UK going
forward.
In view of the anticipated impact of these changes in the UK
operating environment, the Company continues to focus on M&A
activity and pursue higher value-added business which will open
additional avenues for growth. As previously announced, a small
number of potential acquisition targets have been identified and
the Company is currently actively evaluating these acquisition
opportunities. Zamano continues to operate existing business lines
as efficiently as possible to maximise shareholder value.
For further information, please contact:
zamano plc
Michael Connolly, Chief Tel: +353 1 554 7261
Financial Officer
Investec Corporate Finance
Shane Lawlor/Ian McGreal Tel: + 353 1 4210000
Cenkos Securities
Derrick Lee/Neil McDonald Tel: + 44 (0) 131 220
6939
MCOMM Communications Consultants
Richard Moore Tel: +353 1 661 9428
Mob: +353 87 241 4751
Email: ir@zamano.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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