Interim Results

RNS Number : 0026Q

Mirada PLC

24 November 2016

 

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

24 November 2016

Mirada plc

 ("Mirada", the "Company" or the "Group")

Interim results for the six months to 30 September 2016

Mirada plc (AIM: MIRA), a leading audio-visual content interaction specialist, announces its unaudited interim results for the six months to 30 September 2016.

This was a key period for the Company, which saw the deployment of Mirada's full Iris Inspire platform over the five cable networks of Izzi, the telecom branch of the Televisa Group. This deployment has allowed the Group to significantly improve its financial sustainability.

In addition, Mirada has established a strong Sales and Marketing team, which is committed to replicating similar deployments worldwide, starting with potential customers in Europe, Asia and Latin America. This strategy is supported by a reinforced operational team, to ensure the timely execution of future projects.

Operational Highlights

·    Full commercial rollout across the five cable networks of the Televisa Group, achieved with exemplary execution and technical performance.

·    Televisa has experienced significant growth in Video on Demand consumption via Mirada's solution.

·    Expansion of Sales and Marketing team, with new local presence in India, Southeast Asia, Eastern Europe and Americas.

·    Increased global pipeline with 50% of new opportunities in Eastern Europe, India and Southeast Asia.

Financial Highlights

·    Revenue of £2.78 million during the six months to 30 September 2016 (H1 2015: £2.26 million, a 23% increase).

·    Adjusted EBITDA* loss of £0.01 million (H1 2015: £0.18 million profit) predominantly due to increased sales, marketing and operational activities.

·    Higher margins from subscriber-based licence fees anticipated in the second half of the year, as the full commercial launch at Televisa took place at a midway point in the first half of the financial year.

*Adjusted EBITDA is defined as earnings before interest, tax, depreciation, amortisation and share based payment charges

Post period highlights

·    On 28 October 2016, the Company announced that it has achieved the milestone of 500,000 set-top boxes deployed by Izzi with Mirada's technology. As of 31 October 2016, in excess of 525,000 set-top boxes had been deployed.

·    Increased pipeline of potential revenue in new geographical areas.

Commenting on the outlook for the Group, José Luis Vázquez, CEO of Mirada, said:

"Thanks to the successful commercial rollout of the Iris solution for Televisa in July, we are currently enjoying our strongest position in the market in the Company's history. We have reinforced our sales and marketing team in order to capitalise on the exceptional reference our work with Televisa provides and this has enabled us to build a solid pipeline in Asia, Europe and Latin America. We are confident that this should result in new customers, further strengthening our position as one of the leading providers of state-of-the-art technology for Pay TV."

Enquiries:

Mirada plc José Luis Vázquez, Chief Executive Officer Gonzalo Babío, Finance Director	[phone]
Newgate Communications Bob Huxford Helena Bogle Ed Treadwell	[phone] [e-mail]
Allenby Capital Limited (Nominated Adviser  and Broker) Jeremy Porter / Alex Brearley / Liz Kirchner (Corporate Finance) Graham Bell (Equity Sales)	[phone]

Chief Executive Officer's Statement

Overview

I am pleased to present the Group's interim financial results for the six months ended 30 September 2016.

We defined three major goals to progress this financial year: the successful rollout of our product across the entire Izzi network; financial sustainability (i.e. not requiring any further equity fundraising for recurrent business); and most importantly, new customer wins. I am glad to say that the Company is steadily working towards fulfilling these goals.

Successful rollout

This period saw the launch of our Iris Inspire platform across the five cable networks of Televisa Group's Izzi. This represents the largest deployment that Mirada has undertaken in the history of the Company. After a successful initial deployment of the Iris platform over Cablevision Monterrey last year, followed by the integration of the five cable networks under a common Izzi brand and technical facilities, Televisa proceeded to deploy Mirada's technology, accompanied by an extensive marketing campaign in the Mexican market. In October 2016, we announced that the number of set-top boxes deployed using Mirada's technology surpassed the 500,000 milestone, which, with a further six million Televisa set-top boxes in the field, should provide for a steady, long-term revenue stream for Mirada.

Financial sustainability

In terms of the balance sheet, even with the intense working capital requirements of a deployment as large as Televisa, the Group has been able to carefully manage its cash, and is now benefitting from the cash inflows from the licensing of our software to cover a rapidly growing base of end-user subscribers. The steadily growing revenue stream from subscriber-based license fees has significantly improved our operating cash flow, giving the Board confidence that the Group's existing business is not currently expected to require further equity fundraising.  The Board will evaluate the working capital requirements of new projects on a case-by-case basis, as and when appropriate.

New customer wins

Over the half-year period, the Company was predominantly focused on the priority of securing new customers. At present, Mirada's position in the market has never been stronger. We are not only benefitting from the excellent reference deployment via the successful Televisa launch, but also from the very promising performance ratios of our product, including higher levels of Video on Demand consumption by users, when compared to the legacy platforms. The latter is one of the most appealing arguments in favour of our product, as higher Video on Demand consumption has a materially positive impact on Pay TV operators' average revenue per user (ARPU) -, which is a significant KPI for such operators.

In order to capitalise on this favourable situation, we also made significant enhancements to our Sales and Marketing strategy. Mirada recruited several sales representatives and resellers to cover Eastern Europe, India, South East Asia and Americas more effectively, and we now have a local presence within these regions. Our presence at key industry events increased over the last year, and we have seen our pipeline greatly improve to a better position than ever before. Client decision-making processes in our industry tend to be lengthy, taking on average from six months to two years for a deal to be signed.  The Board believes that the Group is now well prepared to replicate the Televisa success in other territories and we expect to see several of our new client discussions advance over the shorter to medium term. In terms of geography, out of the 12 most likely opportunities that we are currently working on, six are situated in Eastern Europe, India and South East Asia, which indicates a healthy trend towards diversifying our business into these promising regions.

Financial Overview

Turnover was £2.78 million (H1 2015: £2.26 million), representing a 23% increase over last year. Notwithstanding this healthy growth in revenues, it is worth noting that the vast majority of the subscriber-based licence fees from the Televisa rollout will be recognised in the second half of the financial year. Most of the revenues in the first half relate to professional services, which continue to be a relevant source of income for the Company. The second half of the year, which is traditionally stronger than the first half, will also benefit from the licence fees of the Televisa rollout and further professional services which have already been requested by this customer.

Over the half-year period, the Americas accounted for 75% of total revenues (H1 2015: 77%), which was in line with management's expectations. The Board expects for the majority of revenues to be derived from the Americas until the Group secures new business in Europe and Asia.

Adjusted EBITDA loss was £0.01 million (H1 2015: £0.18 million profit) due to the increased sales, marketing and operational activities. Adjusted EBITDA in this context is defined as earnings before interest, tax, depreciation, amortisation and share based payment charges. Operating Losses were £1.02 million (H1 2015: loss of £0.61 million).

Loans and borrowings increased by £0.91 million to £5.10 million (March 2016: £4.19 million) to provide the working capital required for the commercial rollout at Televisa. Of these facilities, £1.24 million were long-term bank loans, £0.42 million were zero-coupon long-term facilities from Spanish Government entities, £1.59 million were short-term bank loans and £1.84 million were short-term invoice discounting facilities. Cash and cash equivalents increased to £0.81 million at the end of the period (March 2016: £0.71 million).

Appointments

During the half-year period, we were pleased to appoint Allenby Capital as our AIM nominated adviser and sole broker. We believe that Allenby Capital and Newgate Communications have a sound understanding of our business and will be of great support in achieving our goals.

Outlook

One of the most important assets of this Group is customer loyalty. We have a track record of establishing long-term relationships, with long-standing recurrent revenues from license fees and professional services. We continue to provide services for customers who initially deployed our technology over 15 years ago, and our aim is to continue nurturing high-quality standards that make our customers request our services, year after year. This gives us confidence that the revenues from existing and future customers should extend significantly beyond the initial contract's scope, to provide additional revenues on a year-on-year basis.

The Group has been able to deliver its largest ever commercial rollout without any technical issues. The revenues from this deployment should significantly improve the turnover and profitability of the Company. Most importantly, our increased sales and marketing activities are benefitting from the exceptional reference of our Televisa success story, which we are committed to replicating in several other international territories, through our healthily growing pipeline in areas such as Eastern Europe and Asia. We expect some of these deals to advance significantly over the shorter to medium term and we look forward to updating the market in due course.

Jose Luis Vazquez

Chief Executive Officer

24 November 2016

Consolidated income statement

	Note	6 months ended  30 September 2016 (Unaudited)	6 months ended  30 September 2015 (Unaudited)
		£000	£000
Revenue		2,779	2,264
Cost of sales		(150)	(107)
Gross profit		2,629	2,157
Depreciation		(11)	(8)
Amortisation		(977)	(755)
Share-based payment charge		(27)	(27)
Other administrative expenses		(2,636)	(1,973)
Total administrative expenses		(3,651)	(2,763)
Operating loss	2	(1,022)	(606)
Finance income		-	-
Finance expense		(200)	(206)
Loss before taxation		(1,222)	(812)
Taxation		30	12
Loss for period		(1,192)	(800)

The above amounts are attributable to the equity holders of the parent Company.

Consolidated statement of comprehensive income

	6 months ended  30 September 2016 (Unaudited)	6 months ended  30 September 2015 (Unaudited)
	£000	£000
(Loss) for the period	(1,192)	(800)
Other comprehensive loss:
Currency translation differences	292	33
Total other comprehensive profit	292	33
Total comprehensive loss for the period	(900)	(767)

Consolidated statement of financial position

			6 months ended  30 September 2016 (Unaudited)	6 months ended  30 September 2015 (Unaudited)	Year ended  31 March 2016 (Audited)
			£000	£000	£000
Goodwill			6,946	6,946	6,946
Other Intangible assets			4,462	3,407	3,890
Property, plant and equipment			103	45	94
Deferred Tax Assets			427	551	395
Other Receivables			207	-	191
Non-current assets			12,144	10,949	11,516
Trade & other receivables			2,313	3,356	3,839
Cash and cash equivalents			812	352	714
Current assets			3,125	3,708	4,553
Total assets			15,269	14,657	16,069
Loans and borrowings			(3,496)	(2,180)	(2,419)
Trade and other payables			(750)	(2,108)	(1,570)
Provisions			-	(499)	-
Current liabilities			(4,246)	(4,788)	(3,989)
Net current (liabilities)/assets			(1,121)	(1,082)	564
Total assets less current liabilities			11,023	9,867	12,080
Interest bearing loans and borrowings			(1,607)	(1,588)	(1,772)
Other non-current liabilities			-	(42)	(18)
Non-current liabilities			(1,607)	(1,630)	(1,790)
Total liabilities			(5,853)	(6,417)	(5,779)
Net assets			9,417	8,237	10,290
Issued share capital and reserves attributable to equity holders of the company
Share capital			1,391	1,141	1,391
Share premium			9,859	8,748	9,859
Other reserves			3,326	2,763	3,033
Retained earnings			(5,159)	(4,415)	(3,994)
Equity			9,417	8,237	10,290

Consolidated statement of cash flows

	6 months ended  30 September 2016 (Unaudited)	6 months ended  30 September 2015 (Unaudited)
	£000	£000
Cash flows from operating activities
Loss after tax	(1,192)	(800)
Adjustments for:
Depreciation of property, plant and equipment	11	8
Amortisation of intangible assets	977	755
Share-based payment charge	27	27
Finance expense	200	206
Taxation	(30)	-
Operating cash flows before movements in working capital	(7)	196
Decrease in trade and other receivables	1,526	256
Decrease in trade and other payables	(838)	270
Decrease in defered tax asset	(16)	-
Net cash (used in)/generated from operating activities	665	722
Cash flows from investing activities
Purchases of property, plant and equipment	(18)	(13)
Purchases of other intangible assets	(985)	(1,259)
Net cash used in investing activities	(1,003)	(1,272)
Interest and similar expenses paid	(200)	(206)
Loans received	2,788	1,379
Repayment of loans	(1,875)	(484)
Net cash from financing activities	713	689
Net increase in cash and cash equivalents	375	139
Cash and cash equivalents at the beginning of the period	714	206
Exchange losses on cash and cash equivalents	(277)	6
Cash and cash equivalents at the end of the year	812	352

Cash and cash equivalents comprise cash at bank less bank overdrafts.

1. Basis of Preparation

These interim financial statements have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC Interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. They do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 31 March 2016 Annual Report. The financial information for the half- years ended 30 September 2016 and 30 September 2015 does not constitute statutory accounts within the meaning of Section 434 (3) of the Companies Act 2006 and both periods are unaudited.

The annual financial statements of Mirada plc are prepared in accordance with IFRS as adopted by the European Union. The comparative financial information for the year ended 31 March 2016 included within this report does not constitute the full statutory Annual Report and Financial Statements for that period. The statutory Annual Report and Financial Statements for the year to 31 March 2016 have been filed with the Registrar of Companies. The independent Auditors' Report on that Annual Report and Financial Statement for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498 (2) or 498 (3) of the Companies Act 2006.

After making enquiries, the directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

The same accounting policies, presentation and methods of computation are followed in these interim consolidated financial statements as were applied in the Group's latest annual audited financial statements.  In addition, the IASB have issued a number of IFRS and IFRIC amendments or interpretations since the last Annual Report was published. It is not expected that any of these will have a material impact on the Group. The Board of Directors approved this interim report on 23 November 2016.

2. Earnings before interest, taxation, depreciation, amortisation and share-based payment charge

Reconciliation of operating loss to profit before interest, taxation, depreciation, amortisation and share-based payment charge:

	6 months ended  30 September 2016 (Unaudited)	6 months ended  30 September 2015 (Unaudited)
	£000	£000
Operating (loss)	(1,022)	(606)
Depreciation	11	8
Amortisation	977	755
Profit on disposal	-	-
Operating (loss)/profit before interest, taxation, depreciation and amortisation (EBITDA)	(34)	157
Share-based payment charge	27	27
Operating (loss)/profit before interest, taxation, depreciation, amortisation and share-based payment charge (Adjusted EBITDA)	(7)	184

3. (Loss) per share

		6 months ended 30 September 2016		6 months ended 30 September 2015
		(Unaudited)		(Unaudited)
Loss for period		£(1,191,894)		£(799,540)
Weighted average number of shares		139,057,695		114,057,695
Basic loss per share		£(0.009)		£(0.007)
Diluted loss per share		£(0.009)		£(0.007)

Adjusted (loss)/earning per share

Adjusted earnings per share is calculated by reference to the (loss)/profit from continuing activities before interest, taxation, amortisation and depreciation and share-based payment charge (see note 2).

		6 months ended 30 September 2016		6 months ended 30 September 2015
		(Unaudited)		(Unaudited)
Adjusted EBITDA		£(7,000)		£184,058
Weighted average number of shares		139,057,695		114,057,695
Basic adjusted EBITDA per share		£0.000		£0.002
Diluted adjusted EBITDA per share		£0.000		£0.002

The Company may issue up to 4,697,166 (2015: 5,602,238) additional ordinary shares arising in connection with existing share options granted to staff, management and directors.

4. Related party transactions

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

5. Cautionary statement

The Company has made forward-looking statements in this announcement, including statements about the market for and benefits of its products and services, financial results, the potential benefits of business relationships with third parties and business strategies. These statements about future events are subject to risks and uncertainties that could cause the Company's actual results to differ materially from those that might be inferred from the forward-looking statements. The Company and its Directors can make no assurance that any forward-looking statements will prove correct.

6. Other

Copies of unaudited interim results have not been sent to shareholders. However, copies will shortly be available from the Company's website: www.mirada.tv/public-documents and will also be available on request from the Company Secretary at the Company's registered office, 68 Lombard Street, London, EC3V 9LJ.

 

END

 

 

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