Trading Statement

RNS Number : 4351D

Mobile Streams plc

29 January 2015

 

Trading Statement

Mobile Streams plc ("Mobile Streams" or the "Company") (AIM: MOS)

29th January 2015

Mobile Streams updates its shareholders on its trading for the six months ended 31 December 2014:

·      Revenues of c. £18.5m (H1 2014: £27m).

Although the Company's revenues suffered as a consequence of the continued devaluation of the Argentinian Peso, revenues denominated in Argentine Pesos were in line with the same period last year. The Argentine peso devaluation (against the GBP) was 31% for the year, almost exactly equivalent to the revenue decline when dominated in GBP.

More than 98% of the Company's revenue was derived from the Mobile Internet segment with the sale of content directly to consumers.

The Company's geographical revenue split remains broadly consistent with H2 2013. Argentina generated 86% of the revenues during the period and Mexico generated 11%.

·      The Company expects to report positive EBITDA* although adverse currency movements will result in significantly reduced EBITDA compared to the prior year period (H1 2014: £1.2m).

·      Cash of £3.4m (H1 2014: £4.6m), with no debt.

The Company continues to deliver its previously stated strategy to mitigate capital risk and diversity its sources of cash generation, with £2.5m (or 77%) of the Company's cash located outside of Argentina at the end of the period.

·      Trading was in line with market expectations.

Business Update

The Company has continued to deliver its strategy of launching Mobile Internet services in emerging markets. We have continued to make progress in Brazil where services can now be billed and marketed to consumers on all four major Brazilian mobile carriers and active subscribers have now exceeded 35,000**.

With opportunities in the formerly core regions of the U.S. and Europe limited due to the high penetration of Apple and mobile operator billing partnerships with Google Play, the decision was taken by the Company to invest in India and Africa, two regions with a relatively nascent smartphone market and a significant addressable market in the form of large and growing populations.

In India, we instigated discussions with the top three mobile operators in the country in order to utilise their carrier billing services, and the Company expects to launch mobile internet services before the end of the current financial year. We have also signed agreements with two partners which provide games services for local phone manufacturers in India.

In Africa, the initial focus has been on the countries with what we think is the most potential: Nigeria, Kenya and Ghana. In January 2015, we signed an agreement to provide apps and games for a Nigerian mobile operator. Additionally, we extended our agreement with an existing partner to provide all of our mobile content on another Nigerian mobile operator's platform. We have also signed a strategic agreement to distribute mobile content for mobile internet services in Africa, developing our data intelligence of consumer habits and trends in the region.

Commenting, Simon Buckingham, CEO of Mobile Streams said:

"The sudden devaluation of the Argentinian Peso in January 2014 presented operational challenges in Argentina which significantly reduced our reported revenues and profits but which we have now confronted. Our strategy to offer our mobile internet services in large emerging markets is progressing. We remain excited about opportunities to grow our presence during calendar year 2015, particularly in Brazil and India".

* Earnings before interest, tax, depreciation, amortisation and share compensation

** Active subscribers are defined as customers who have paid to use one of the Company's Mobile Internet services in the past two months.

Enquiries:

Mobile Streams
Simon Buckingham, Chief Executive Officer	[phone]
Enrique Benasso,  Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)
Jonny Franklin-Adams	[phone]
Richard Salmond

 

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