Half-year Report

Mobile Streams plc

25 March 2024

 

25 March 2024

Mobile Streams plc

("MOS" or "the Company")

Interim Results

Mobile Streams plc, the AIM quoted mobile content and data intelligence company, is pleased to announce its unaudited interim results for the six months ended 31 December 2023.

Highlights 

Our focus during the half year to 31 December 2023 was primarily on the commercialisation of the NFT technology platform (NTP) and preparation to create the media, publishing and on-line casino and sports book business in Mexico. Significant progress was made with Capital Media Sports SA and related key partners in Mexico in shaping the commercial terms of the various agreements whilst in parallel, certain refinements, tailoring and ongoing development of our NTP took place in order to optimise it for working in this new setting.  The Company has also significantly reduced costs and focused on improving operating efficiency.

Operations in our legacy mobile data businesses are now producing a modest gross profit and this helps to absorb a portion of the group's overhead expenses.

We remain optimistic that the NTP revenues can grow in line with the commercial agreements signed and announced The NFT products will be a key part of the online casino and sports book business with the delivery of a loyalty programme for Bet and we estimate that significant revenue could be generated by providing this service. Whilst we continue to bridge across from our legacy business activities associated with on-line gaming into new business activities arising from commercialisation of the NTP we have worked hard to  review and reduce our operating expenditures.

Revenue for the period reduced in line with expectations following the completion of our partnership with International Gaming systems (IGS), as detailed in the 2023 Annual Report. We have focused on our goal of transitioning to a media, publishing and online betting and sports book businesses, whilst also driving efficiencies across the Company in order to reach operationally profitability on a monthly  basis during this calendar year. The success of this strategy resulted in the pre-tax loss for the 6 months being £289k, substantially lower than the loss of £1,231k in the 6 months to December 2022 (improvement by 76.52%) and £2,558k in the 6 months to June 2023 (improvement by 88.70%)

The NTP has been recorded as an intangible asset in the financial statements under IFRS with a net book value at 31 December 2023 of £421k. We believe, however, that its trade sale value would be significantly higher based on market comparables.

Outlook

The Company is now well positioned as a business, with a strong suite of proprietary technology platforms and investments The Directors believe that the actions taken over the six months to December 2023 will enable the business to fully capitalise on the opportunities in Mexican Sports publishing, ,media and online casino and sports book services. We are now also looking to create synergies driving revenue opportunities to the betting business from our existing platform portfolio, including both the NTP and LiveScores sites. Accordingly, we remain on track to reach operational profitability on a monthly basis during this year.

Mark Epstein, CEO, said:

"We are very pleased with the progress that the organisation has made in the past 6 months in the start-up of the Mexican sports betting business and transformation of our business.  This has only been possible due to the quality and capability of our Streams Technology platform combined with the dedication and skills of our team.  Our Company is now well positioned to emerge from this period of transition and develop into a growing and profitable business."

CONSOLIDATED INCOME STATEMENT

	Unaudited		Unaudited	Audited
	6 months ended 31 December		6 months ended 31 December	12 months ended 30 June
	2023		2022	2023
	£000's		£000's	£000's
Revenue	169		1,069	1,824
Cost of sales	(21)		(629)	(1,812)
Gross profit	148		440	12
Selling and marketing costs	(34)		(98)	(876)
Administrative expenses **	(414)		(1,574)	(2,928)
Operating Loss	(300)		(1,232)	(3,792)
Finance income	11		1	3
Finance expense	-		-	-
Loss before tax	(289)		(1,231)	(3,789)
Tax expense	-		-	-
Loss for the period	(289)		(1,231)	(3,789)
Attributable to:
Attributable to equity shareholders of Mobile Streams Plc	(289)		(1,231)	(3,789)
	(289)		(1,231)	(3,789)
		Pence per share	Pence per share	Pence per share
Basic loss per share		(0.006)	(0.032)	(0.093)
Diluted loss per share		(0.006)	(0.032)	(0.093)
* *Administrative expenses include depreciation, amortisation, impairment and share based compensation.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Unaudited	Unaudited	Audited
	31-Dec-23	31-Dec-22	30-Jun-23
	£000's	£000's	£000's
Assets
Non- Current
Goodwill	-	360	-
Intangible assets	422	396	-
Other investments	-	-	-
	422	756	-
Current
Trade and other receivables	395	649	148
Unsettled share subscription monies**	407	-	-
Cash and cash equivalents	337	1,597	913
	1,139	2,246	1,061
Total assets	1,561	3,002	1,061
Equity
Equity attributable to equity holders of Mobile Streams plc
Called up share capital	864	757	768
Share Premium	21,909	20,752	21,331
Translation reserve	(3,050)	(3,050)	(3,050)
Share Based Payment Reserve	62	13	25
Retained earnings	(18,832)	(15,983)	(18,541)
Total equity	955	2,489	533
Trade and other payables	565	469	487
Bank debt	40	44	41
	605	513	528
Total liabilities	605	513	528
Total equity and liabilities	1,561	3,002	1,061

** The unsettled share subscription monies at 31 December 2023 in the amount of £407,000 were received in full in the first four days of January 2024.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Equity attributable to equity holders of Mobile Streams plc
			Called up share capital	Share premium	Translation reserve	Share-based payment reserve	Retained earnings	Non- Controlling Interest	Total Equity
			£000's	£000's	£000's	£000's	£000's	£000's	£000's
	Balance at 1 July 2021		567	16,765	(3,050)	13	(11,480)	1	2,816
	Loss for the 6 months		-	-	-	-	(639)	-	(639)
	Warrants charge		-	-	-	-	-	-	-
	Issue of shares		18	510	-	-	-	-	528
	Balance at 31 December 2021		585	17,275	(3,050)	13	(12,119)	-	2,705
	Loss for the 6 months		-	-	-	-	(2,125)	-	(2,125)
	Warrants charge		-	-	-	255	-	-	255
	Issue of shares		74	2,059	-	-	-	-	2,133
	Acquisition of 51% of KrunchData Limited		-	-	-	-	(763)	(1)	(764)
	Balance at 30 June 2022		659	19,334	(3,050)	268	(15,007)	-	2,204
	Prior Year Adjustment		-	-	-	(255)	255	-	-
	Balance at 1 July 2022		659	19,334	(3,050)	13	(14,752)	-	2,204
	Loss for the 6 months		-	-	-	-	(1,231)	-	(1,231)
	Share Options charge		-	-	-	-	-	-	-
	Issue of shares		98	1,418	-	-	-	-	1,516
	Balance at 31 December 2022		757	20,752	(3,050)	13	(15,983)	-	2,489
	Loss for the 6 months		-	-	-	-	(2,558)	-	(2,558)
	Share Options charge		-	-	-	12	-	-	12
	Issue of shares		11	579	-	-	-	-	590
	Balance at 30th June 2023		768	21,331	(3,050)	25	(18,541)	-	533
	Loss for the 6 months		-	-	-	-	(289)	-	(289)
	Share Options charge		-	-	-	37	-	-	37
	Issue of shares		96	579	-	-	-	-	675
	Balance at 31st December 2023		864	21,909	(3,050)	62	(18,832)	-	955

CONSOLIDATED CASH FLOW STATEMENT

	Unaudited	Unaudited	Audited
	6 months ended 31 December 2023	6 months ended 31 December 2022	12 months ended 30        June              2023
	£000's	£000's	£000's
Operating activities
Profit before taxation	(289)	(1,231)	(3,789)
Adjustments:
Amortisation of intangible assets	-	111	296
Impairment of Intangible assets	(305)	-	708
Impairment of receivables	-	-	(15)
Share based payments expense	37	-	12
Profit on disposal of investment	-	(22)	(22)
Remuneration paid to Senior managers in shares	100	67	67
Consultant fees paid in shares	-	129	719
Interest received	(11)	(1)	(3)
Changes in Trade and other receivables	(246)	(489)	28
Changes in Trade and other payables	78	27	45
Total cash utilised in operating activities	(636)	(1,409)	(1,954)
Investing Activities
Additions to intangible assets	(116)	(177)	(318)
Proceeds from sale of Gfinity shares	-	192	192
Interest received	11	1	3
Interest paid	-	-	-
Net Cash used in investing activities	(105)	16	(123)
Issue of share capital (net of expenses paid)	168	1,320	1,320
Bank loan	(1)	(3)	(6)
Net Cash generated from financing activities	167	1,317	1,314
Net change in cash and cash equivalents	(575)	(76)	(763)
Cash and cash equivalents at beginning of period	913	1,675	1,675
Exchange (loss)/ gain on cash and cash equivalents	(1)	(2)	1
Cash and cash equivalents at end of period	337	1,597	913

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 2023.

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 2023 has been extracted from the statutory accounts for that period. In addition, the financial information for the 6 months ended 31 December 2022 has been extracted from the unaudited Interim results which were published on 27 March 2023.

The full audited accounts of the Group for the 12 months ended 30 June 2023 were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the UK and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS and have been delivered to the Registrar of Companies. All references to IFRS in these statements refer to IFRS as adopted by the UK.   

The auditor's report on the financial statements for the 12 months ended 30 June 2023 was unqualified and did not contain statements under S498 (2) or S498 (3) of the Companies Act 2006.

2. SEGMENTAL REPORTING

As at 31 December 2023, 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 MNOs (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) which includes the opening revenues pertaining to the new on-line sports betting and on-line casino business segment.

All operations are continuing and all inter-segment transfers, if any, are priced and carried out at arm's length.  The segmental results for the 6 months ended 31 December 2023 were as follows:

£000's		Europe		Asia Pacific		North America		Latin America		Group
Mobile operator sales	-		-		-		36		36
Mobile internet sales	-		-		-		-		-
Other service fees	133		-		-		-		133
Total Revenue	133		-		-		36		169
Cost of sales	-		-		-		(21)		(21)
Gross profit	133		-		-		15		148
Operating expenses	(570)		(4)		-		(142)		(717)
EBITDA*	(438)		(4)		-		(127)		(568)
Depreciation, amortisation	305		-		-		-		305
Share based compensation	(37)		-		-		-		(37)
Finance income	-		-		-		11		11
Profit/(Loss) before tax	(170)		(4)		-		(116)		(289)
Income tax expense	-		-		-		-		-
Profit/(Loss) after tax	(170)		(4)		-		(116)		(289)
*Calculated as profit before tax, interest, amortization, depreciation, share compensation expense and impairment of assets.

The segmental results for the 6 months ended 31 December 2022 were as follows:

£000's	Europe	Asia Pacific	North America		Latin America	Group
Mobile operator sales	-	2	-		139	141
Streams Data (IGS and NFT)	823	-	-		105	928
Other service fees (NFT)		-	-		-	-
Total Revenue	823	2	-		244	1,069
Cost of sales	(573)	-	-		(56)	(629)
Gross profit	250	2	-		188	440
Operating expenses	(1,377)	(8)	-		(176)	(1,561)
EBITDA*	(1,127)	(6)	-		12	(1,121)
Depreciation, amortisation	(111)	-	-		-	(111)
Share based compensation	-	-	-		-	-
Finance income	-	-	-		1	1
Profit/(Loss) before tax	(1,238)	(6)	-		13	(1,231)
Income tax expense	-	-	-		-	-
Profit/(Loss) after tax	(1,238)	(6)	-		13	(1,231)
*Calculated as profit before tax, interest, amortization, depreciation, share compensation expense and impairment of assets.
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 ended 31 December 2023  6 months ended 31 December 2022  12 months ended 30 June 2023 £000's £000's £000's Loss for the period (289) (1,231) (3,789) Loss earnings per share (pence): Basic (0.006) (0.032) (0.093) Diluted (0.006) (0.032) (0.093)
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 ended 31 December 2023 6 months ended 31 December 2022 12 months ended 30 June 2023 £000's £000's £000's Loss for the period (289) (1,231) (3,789) Add back: share compensation expense 72 - 12 Add back: depreciation and amortisation (305) 111 296 Adjusted Loss for the period (557) (1,120) (3,481) Pence per share Pence per share Pence per share Adjusted loss per share (0.012) (0.029) (0.085) Adjusted diluted loss per share (0.012) (0.029) (0.085) Weighted average number of shares 6 months ended 31 December 2023 6 months ended 31 December 2022 12 months ended 30 June 2023 Basic 4,469,228,885 3,830,848,477 4,079,984,110 Exercisable share options - - - Diluted 4,469,228,885 3,830,848,477 4,079,984,110

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 £0.3m at 31 December 2023 (30 June 2022: £1m).  Having reviewed cash flow forecasts and budgets for the year ahead the Directors have a reasonable expectation that the Group has resources to continue in operational existence for the foreseeable future.

5. FOREIGN CURRENCY TRANSLATION

(a) Presentational currency

The consolidated financial statements are presented in British Pounds, which is also the functional currency of the parent entity.

(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)

iv.    The exchange rates used in respect of Argentinean Pesos are the official published exchange rates.

6. Intangible assets

	Intangibles acquired:  Platform Development & Software	Intangibles added internally Streams	Subtotal	Goodwill	Total
	£'000	£'000	£'000	£'000	£'000
Cost or valuation:
At 1 July 2022	485	308	793	360	1,153
Additions	-	177	177	-	177
Disposals	-	-	-	-	-
At 31 December 2022	485	485	970	360	1,330
Additions	-	141	141	-	141
Disposals	-	-	-	-	-
At 30 June 2023	485	626	1,111	360	1,471
Additions	-	116	116	-	116
Disposals	-	-	-	-	-
At 31 December 2023	485	742	1,227	360	1,587
Amortisation:
At 1 July 2022	274	193	467	-	467
Charge for the period	50	61	111	-	111
Disposals	-	-	-	-	-
At 31 December 2022	324	254	578	-	578
Charge for the period	117	68	185		185
Disposals	-	-	-		-
Impairment	44	304	348	360	708
At 30 June 2023	485	626	1,111	360	1,471
Charge for the period	-	-	-	-	-
Disposals	-	-	-	-	-
Reversal of Impairment	(36)	(269)	(305)	-	(305)
31 December 2023	449	369	818	360	1,178
Carrying amount:
At 31 December 2022	161	235	396	360	756
At 30 June 2023	-	-	-	-	-
At 31 December 2023	36	390	422	-	422

The Directors of Mobile Streams plc reviewed the recoverable amount pertaining to the company's Streams Data platform in the light of an increase in the estimated service potential of the asset arising in recent months since the previous assessment and recognition of impairment at 30th June 2023.  The recoverable amount was determined from value in use calculations using key assumptions derived from the most recent financial forecast and with a discount rate of 15% which is a based on comparative businesses weighted average cost of capital.

As a result of this exercise, the Directors concluded at 31st December 2023 that the asset was no longer impaired and a reversal of the previously recognised impairment loss of £348,000 has been recognised in the Statement of Comprehensive Income, adjusted by the quantity of amortisation (£43,000) that would otherwise have arisen during the 6 months to 31^st December 2023 had the asset not been impaired at all.

During the 6 months to 31^st December 2023 the group recognised further capitalised development costs on this asset in the amount of £116,000.

7. Other Investments

The group has no other investments at 31 December 31 2023 (30 June 2022: Nil).

8. Share Capital and Reserves

	31 Dec 2023	31 Dec 2022	30 June 2023
	£000s	£000's	£000's
Ordinary Share capital	864	757	768
Share premium	21,909	20,752	21,331
Translation Reserve	(3,050)	(3,050)	(3,050)
Share Based Payment reserve	62	13	25
Retained earnings	(18,832)	(15,983)	(18,541)
	955	513	533

The total number of Ordinary Shares in issue as at 31 Dec 2023 was 5,333,941,619 with a par value of 0.01 pence per share (31 Dec 2023: 4,267,146,922 with a par value of 0.01 pence per share).  In addition, there are 140,753,533 Deferred Shares of 0.19 pence nominal value each in issue. The Deferred Shares, as their name suggests, have very limited rights which are deferred to the Ordinary Shares and effectively carry no value as a result.

Allotted, called up and fully paid	6 months ended 31 Dec 2023	6 months ended  31 Dec 2022	Year ended  30 June 2023
In issue at start of period	4,369,655,903	3,285,590,326	3,285,590,326
Issued during the period	964,285,716	981,556,596	1,084,065,577
In issue at end of period	5,333,941,619	4,267,146,922	4,369,655,903

The balance in the share premium account represents the proceeds received above the nominal value on the issue of the Company's equity share capital.

On 12 December 2023 the Group issued 964,285,716 shares at 0.07 pence per share via a direct subscription, raising £675,000 of which £168,000 was received prior to 31 December 2023, £100,000 was in lieu of senior management services supplied in the 6 months to 31 December 2023 and £407,000 was received in early January 2024.  

9.  Post Balance Sheet Event

On 12 January 2024 the Group issued 191,259,992 shares at 0.06 pence per share via a retail offer, raising £114,756 with all subscription monies duly received.   

On 18 March 2024 the Group issued 777,737,695 shares at 0.0425 pence per share via a Placing and Subscription, raising £330,359 with all subscription monies duly received.  

On 22 March 2024 the Group issued 58,823,529 shares at 0.0425 pence per share via a Broker Offer, raising £25,000 with all subscription monies duly received.  

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic Law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information, please contact:

Mobile Streams plc

Nigel Burton, Adviser

[phone]

www.mobilestreams.com

Beaumont Cornish (Nominated Adviser)

James Biddle and Roland Cornish

[phone]

Panmure to be added

Simon French

Peterhouse Capital Limited (Joint Broker)

Lucy Williams and Duncan Vasey

[phone]

 

END