Final Results

RNS Number : 1192X

MobilityOne Limited

20 June 2008

 



MobilityOne Limited

('MobilityOne' or the 'Company')

Full year results for the financial year ended 31 December 2007

MobilityOne (AIM : MBO), an e-commerce infrastructure payment solutions and platform provider in Malaysia via its subsidiaries MobilityOne Sdn Bhd ('MobilityOne Malaysia') and Netoss Sdn Bhd (collectively known as 'Group'), announces its full year results for the financial year ended 31 December 2007.

Highlights: 

• Revenue up 43% to £16.6 million (2006 : £11.6 million)
• Profit before taxation up 24% to £765k (2006 : £618k)
• Earnings per share up 20% to 0.84 pence (2006 : 0.70 pence)
• Banking payment channels increased through further agreements with banks
• Additional technology solutions developed to diversify revenue streams
• Operations expanded into Indonesia and Cambodia  
• Admission to AIM in July 2007 raising £1.5 million

Commenting on the results, Hussian A. Rahman, Chief Executive Officer said: 'We are pleased to report a significant improvement in revenues and profits over the previous full year. The Group remains commited to continuing this growth, by developing more innovative technologies and expanding our presence through an increased number of networks and organisations, whilst at the same time expanding our range of products and services. Our business in Malaysia is expected to continue to grow while further revenue contribution is expected in the 2nd half of this year from our overseas ventures, such as Cambodia and Indonesia.' 

The Annual Report and Audited Financial Statements for the financial year ended 31 December 2007 is intended to be sent to shareholders by 26 June 2008 and will be available on the Company's website from this date.

About the Group:

MobilityOne is the holding company of an established group of companies in the business of providing e-commerce infrastructure payment solutions and platforms through their proprietary technology solutions, which are marketed under the brands MoCS and ABOSSE.

The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices such as EDC terminals, short messaging services, automated teller machines, and Internet banking. 

The Group's technology platform is flexible, scalable and has been designed to facilitate cash, debit card and credit card transactions from multiple devices while controlling and monitoring the distribution of different products and services.

For more information, please refer to our website at www.mobilityone.com.my.

For further information, please contact:

MobilityOne                                                                                              [phone]

Hussian A. Rahman, CEO                                                                       www.mobilityone.com.my

[e-mail]

HB Corporate                                                                                            [phone]

Luke Cairns                                                                                               www.hbcorporate.co.uk

  Threadneedle Communications                                                             [phone]

Graham Herring                                                                                        www.threadneedle.co.uk

Josh Royston

Chairman's statement

2007 has been a highly satisfactory year for the Group, with both top line and bottom line growth and a successful listing on AIM of the London Stock Exchange on 5 July 2007.  We experienced further growth in our existing operations of the banking payment channels with CIMB Bank Berhad and RHB Bank Berhad in Malaysia, as well as entering into a number of new agreements with other banks in Malaysia, such as Bank Kerjasama Rakyat Malaysia Berhad and Affin Bank Berhad. These new agreements mean that our wide range of electronic based products and services will be made available to the banks' customers through their established payment channels, such as Internet banking and ATMs. 

The Group's strategy for growth remains focused on three principal areas:  firstly, by increasing the range of products and services; secondly, by expanding our existing solution offerings by introducing complementary solutions to our current solution range; and finally, by expanding the business into further geographical markets. We are pleased to report that in view of our technological competitive strengths, we have developed additional solutions such as a payment system that supports various delivery channels like point of sale terminals, ATMs, self-service kiosks, web, mobile banking and interactive voice response system. 

In terms of overseas expansion, the Group has made inroads into the Indonesian market, where we have set up a 95%-owned subsidiary earlier this year, namely PT. MobilityOne Indonesia in Jakarta, to market our solutions to banks and telecommunication companies and a Memorandum of Understanding has been entered into with PT. Finnet Indonesia to develop an electronic mobile wallet in Indonesia. Earlier this year, we also expanded into Cambodia where we have been appointed by Telekom Malaysia International (Cambodia) Co., Ltd, one of the major telecommunications companies in Cambodia, as its technology partner to provide the e-voucher and credit transfer platform for its telecommunications operations in Cambodia.  We expect revenue contributions from Cambodia and Indonesia to start in the third quarter and fourth quarter of this year, respectively.  In addition to the above countries, we are also in negotiations to extend our presence into Brunei, the Middle East and selected countries in the African continent. 

Financial performance

The Group's revenues for the year ended 31 December 2007 were £16.6 million, up 43% from the corresponding period in 2006 of £11.6 million. This was mainly driven by the increase in transaction volumes and also the encouraging results from the transactions via the banks' payment channels.

In tandem with the revenue growth, the Group's operating profit increased by 21% to £820k (2006 : £679k), net profit after tax improved 29% to £733k (2006 : £568k) and earnings per share increase by 20% to 0.84 pence (2006 : 0.70 pence).

Current trading and outlook

In the first half of the current year, the performance of the Group has been affected by the slowing down of the global economy whereby some of the Group's projects and business expansion have been delayed.  In addition, the Group had incurred higher operating costs and expenses to explore new business opportunities in the overseas markets and to set up a new subsidiary in Indonesia. Nevertheless, we expect the performance of the Group to improve in the second half of the current year as some of the delayed projects would materialise and we will continue to expand upon our range of products and services, widen our solution range which, coupled with our overseas expansion, provides confidence for the future performance of the Group. 

Conclusion

Once again, I am pleased with the commendable performance of MobilityOne Limited for the financial year ended 31 December 2007.

On behalf of the Board of Directors, I would like to record my appreciation to the management and staff for their efforts and commitment over the year.  None of these achievements would have been possible without their hard work. 

YB Dato' Dr Wan Azmi Bin Ariffin

Chairman 

18 June 2008

  CONSOLIDATED INCOME STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

	Financial year	Financial year	Nine months
	ended	ended	ended
	31 December	31 December	31 December
	2007	2006	2006
	Unaudited	Unaudited (for comparison purpose)	Audited
	£	£	£
Revenue	16,573,813	11,625,574	8,597,494
Cost of sales	(14,448,152)	(9,872,086)	(7,267,468)
Gross profit	2,125,661	1,753,488	1,330,026
Other operating income	46,002	21,848	21,815
Administrative expenses	(835,968)	(675,498)	(519,699)
Distribution costs	(516,020)	(420,649)	(305,737)
Operating profit	819,675	679,189	526,405
Finance costs	(54,418)	(61,233)	(52,454)
Profit before taxation	765,257	617,956	473,951
Taxation	(32,168)	(49,738)	(32,033)
Net profit for the financial period	733,089	568,218	441,918
Attributable to:
Equity holders	733,089	568,218	441,918
Earnings per share attributable to
equity holders of the Group (pence):
Basic	0.84	0.70	0.54
Diluted	0.84	0.70	0.54

Note:

A reverse acquisition took place on 22 June 2007.  The financial information for the current and comparative years/period has been presented as if MobilityOne had been the parent company of the group throughout (see Notes 1 and 2).

  CONSOLIDATED BALANCE SHEETS

AS AT 31 DECEMBER 2007

		At		At
		31 December		31 December
		2007		2006
		Unaudited		Audited
		£		£
Assets
Non-current assets
	Intangible assets	1,303,983		1,181,990
	Property, plant and equipment	1,506,937		940,148
	Prepaid lease payments	167,555		162,967
		2,978,475		2,285,105
Current assets
	Inventories	918,118		646,062
	Trade receivables	160,799		726,172
	Other receivables & deposits	1,572,723		139,805
	Tax recoverable	6,754		-
	Available for sale financial assets	45,514		-
	Cash and cash equivalents	348,476		868,167
		3,052,384		2,380,206
Liabilities
Current liabilities
	Trade payables	6,280		384,991
	Other payables	196,462		256,473
	Amount due to director	-		144,625
	Borrowings -secured	359,678		500,865
		562,420		1,286,954
Net current assets		2,489,964		1,093,252
Total assets less current liabilities		5,468,439		3,378,357
Non-current liabilities
	Redeemable cumulative convertible preference shares	-		289,250
	Borrowings - secured	150,137		152,608
	Deferred tax liabilities	34,588		2,829
		184,725		444,687
Net assets		5,283,714		2,933,670
Shareholders' equity
Equity attributable to equity holders of the Company
	Called up share capital	2,348,430		2,017,021
	Share premium	782,234		911
	Rerverse acquisition reserve	708,951		-
	Foreign currency translation reserve	71,567		(162,608)
	Retained earnings	1,372,532		1,078,346
Total shareholders' equity		5,283,714		2,933,670

Note:

A reverse acquisition took place on 22 June 2007. The financial information for the current and comparative years has been presented as if MobilityOne had been the parent company of the group throughout (see Notes 1 and 2).

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

			Non-Distributable			Distributable
	Share	Share Premium		Reverse  Acquisition	Translation	Retained
	Capital	Reserve		Reserve	Reserve	Earnings	Total
	£	£		£	£	£	£
At 1 January 2007	2,017,021	911		-	(162,608)	1,078,346	2,933,670
Capitalised as bonus issue in subsidiary company	438,905	-		-	-	(438,903)	2
Conversion of redeemable preference shares in subsidiary company	293,044	-		-	-	-	293,044
Reverse acquisition	(708,040)	(911)		708,951	-	-	-
Issue of shares in MobilityOne	-			-	-	-	-
Issuance of additional shares	307,500	782,234		-	-	-	1,089,734
Translation adjustment	-	-		-	202,524	-	202,524
Profit for the financial year	-	-		-	31,651	733,089	764,740
At 31 December 2007	2,348,430	782,234		708,951	71,567	1,372,532	5,283,714
At 1 January 2006	2,017,021	911		-	45,254	636,428	2,699,614
Translation reserve	-	-		-	(160,019)	-	(160,019)
Profit for the financial period	-	-		-	(47,843)	441,918	394,075
At 31 December 2006	2,017,021	911		-	(162,608)	1,078,346	2,933,670

Share capital (deferred and ordinary) is the amount subscribed for shares at nominal value.

Share premium represents the excess of the amount subscribed for share capital over the nominal value of the respective shares net of share issue expenses. 

Retained earnings represent the cumulative profit of the Group attributable to equity shareholders. 

Translation reserve relates to exchange differences arising as a result of changes in equity.

The reserve acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with International Financial Reporting Standard 3. 

  CONSOLIDATED CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

	Financial year ended	Financial year ended	Period ended
	31 December	31 December	31 December
	2007	2006	2006
	Unaudited	Unaudited (for comparison purpose)	Audited
	£	£	£
Cash flows from operating activities
Profit before taxation	765,257	617,956	473,951
Adjustments for :-
Depreciation of property, plant and equipment	145,341	144,484	96,254
Amortisation of prepaid lease rental	2,719	1,518	1,263
Interest expenses	51,260	52,454	52,454
Interest income	(625)	(343)	(343)
Operating profit before working capital changes	963,952	816,069	623,579
Increase in inventories	(243,088)	(387,634)	(152,553)
(Increase)/decrease in receivables & deposits	(775,449)	(161,891)	(648,812)
(Decrease)/increase in payables	(618,595)	259,121	372,489
Cash generated from operating activities	(673,180)	525,665	194,703
Interest paid	(51,260)	(52,454)	(52,454)
Tax paid	-	-	(31,124)
Interest received	625	343	343
Net cash (used in)/ from operating activities	(723,815)	473,554	111,468
Cash flows from investing activities
Purchase of property, plant and equipment	(669,977)	(383,591)	(35,157)
Development costs	(68,994)	(129,757)	(87,831)
Purchase of marketable securities	(45,514)	-	-
Net cash used in investing activities	(784,485)	(513,348)	(122,988)
Cash flows from financing activities
Net proceeds from issuance of share capital	1,089,734	-	-
(Repayment)/drawdown of loan	(172,960)	699,443	653,473
Net cash from financing activities	916,774	699,443	653,473
Net (decrease)/increase in cash and cash equivalents	(591,526)	659,649	641,953
Currency translation differences	71,835	-	-
Cash and cash equivalents at beginning of financial year/period	868,167	208,518	226,214
Cash and cash equivalents at end of  financial year/period	348,476	868,167	868,167

Note:

A reverse acquisition took place on 22 June 2007. The financial information for the current and comparative years/period has been presented as if MobilityOne had been the parent company of the group throughout (see Notes 1 and 2).

NOTES TO THE FINANCIAL STATEMENTS

1.          Basis of preparation

The Group's financial statements for the financial year ended 31 December 2007 were authorised for issue by the Board of Directors on 17 June 2008.

The financial statements are unaudited and whilst the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), it does not include sufficient information to comply with IFRS. The Group expects to publish full financial statements which comply with IFRS by 26 June 2008.  The financial statements do not constitute full statutory accounts within the meaning of Article 104 Companies (Jersey) Law 1991. 

    The comparative figures for the nine month period ended 31 December 2006 have been extracted from MobilityOne Malaysia's audited consolidated financial statements.

Full details of the accounting policies adopted which are consistent with those disclosed in the Company's AIM Admission Document will be included in the audited financial statements for the year ending 31 December 2007.

The acquisition by MobilityOne of the entire issued share capital of MobilityOne Malaysia meets the criteria of a reverse takeover. The consolidated accounts have therefore been prepared under reverse accounting principles of IFRS 3 and show comparative information for MobilityOne Malaysia. For financial reporting purposes, MobilityOne Malaysia (the legal subsidiary) is the acquired and MobilityOne (the legal parent) the acquiree. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

2.             Changes in the structure of the Group

As explained in Note 1 to the financial statements, the acquisition by MobilityOne of the entire issued share capital of MobilityOne Malaysia has been accounted for as a reverse acquisition under IFRS 3.   Consequently, the previously recognised book values for assets and liabilities have been retained and the consolidated financial statements have been presented as if MobilityOne had always been the parent company of the Group. 

The share capital for the year covered by the financial statements and the comparative years/period is stated at the nominal value of the shares issued pursuant to the share swap agreement dated 22 June 2007.  Any differences between the nominal value of these shares and previously reported nominal values of shares and applicable share premium issued by MobilityOne Malaysia has been transferred to 'reverse acquisition reserves'.

3.             Functional and presentation currency

 Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ('functional currency'). The functional currency of the Group is Ringgit Malaysia ('RM'). The consolidated financial information is presented in Great Britain Pounds Sterling ('£'), which is the Group's presentational currency as this is the currency used in the country in which the entity is listed.

Assets and liabilities are translated into £ at foreign exchange rates ruling at the balance sheet date. Results and cash flows are translated into £ using average rates of exchange for the years/period.

The highlighted financial information has been translated using the exchange rate as follows:

	Exchange rate (RM : £)
	At balance sheet date	Average for year/period
Year ended 31 December 2007	6.62	6.87
Year/period ended 31 December 2006	6.90	6.85

4.            Segmental reporting

For management reporting purposes, the Group's activities are treated as a single class of business, all arising from goods and services provided in the Far East. Accordingly, no segmental analysis of revenues, profits, assets and liabilities is available for presentation.

5.             Taxation

MobilityOne Malaysia has been awarded a MSC status by Multimedia Development Corporate Sdn Bhd and is entitled to tax-free incentives in Malaysia until 2015. 

6.             Earnings per share

Earnings per share is calculated by dividing the profit attributable to equity shareholders in the year ended 31 December 2007 of £733,089 (31 December 2006 : £568,218) by the weighted average number of shares in issue at 31 December 2007 of 87,669,255 (31 December 2006 : 81,637,204).  As explained in Note 2, the share capital for the current and comparative years have been stated as the number of shares issued pursuant to the share swap agreement dated 22 June 2007. As the exercise price of the outstanding share options are above the market price there is no dilutive effect of the options. 

7.             Material events subsequent to the end of the financial year

Subsequent to the end of the year under review, MobilityOne had on 15 January 2008 repurchased a total of 14,962,253 shares for cancellation. After the share buyback, the issued share capital of the Company reduced to 78,974,951 ordinary shares at 2.5 pence each.

On 2 January 2008, MobilityOne Malaysia declared and paid a first interim dividend of 55% exempted from income tax under the single tier system in respect of the financial year ending 31 December 2008.

On 23 January 2008, MobilityOne Malaysia acquired 100% equity interest in Versatel Sdn Bhd at £0.30 (RM2.00) and the name was subsequently changed to Pay Station Sdn Bhd on 29 January 2008 and is dormant as at to-date.

On 12 March 2008, MobilityOne Malaysia incorporated a new subsidiary, PT.MobilityOne Indonesia, in Jakarta for the purpose of business expansion with a cash consideration of £49,564 (USD100,000), representing 95% of issued and paid up share capital of PT.MobilityOne Indonesia, 

8.         Significant accounting policies 

               Intangible Fixed Assets ( excluding Goodwill )

Intangible assets acquired separately are capitalized at cost and those acquired as part of a business combination are capitalized separately from goodwill if the fair value can be measured reliably on initial recognition. The costs relating to internally generated intangible assets are capitalized if the criteria for recognition as assets are met. Other expenditure is charged against income statement in the year in which the expenditure is incurred. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are assessed to be either finite or indefinite.   Where amortisation is charged on assets with finite lives, this expense is taken to the income statement. Useful lives are also reviewed on an annual basis. Intangible assets with indefinite lives are tested for impairment annually, either on an individual or cash generated unit level.

               Impairment of non-financial assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered any impairment are reviewed for possible reversal of the impairment at each reporting date.

Goodwill

Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the separately identifiable assets, liabilities and contingent liabilities of a subsidiary at the date of acquisition. In accordance with IFRS 3 Business Combinations, goodwill is not amortised but reviewed annually for impairment and as such, is stated at cost less any provision for impairment of value. Any impairment is recognised immediately in the income statement and is not subsequently reversed. On acquisition, any goodwill acquired is allocated to cash generating units for the purposes of impairment testing. Where goodwill forms part of a cash generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation.

               Development

Development expenditure is capitalised when it is considered that there is a commercially and technically viable product, the related expenditure is separately identifiable and there is reasonable expectation that the related expenditure will be exceeded by future revenues. 

Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of these intangible assets are assessed to be finite. Where amortisation is charged on assets with finite lives, this expense is taken to the income statement. Useful lives are also reviewed on an annual basis. Currently useful lives of 5 years are being used.

               Research

Research expenditure that does not meet the above recognition criteria for development is expensed to the income statement in the period incurred.

-Ends-

 

END

 

 

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