Interim Results
Velti PLC
20 September 2007
20 September 2007
Velti 2007 Interim Results
Financial Highlights
Six months Six months
ended ended
30 June 2007 30 June 2006
(unaudited) (unaudited) %
€'000 €'000 Change
Revenue 7,408 4,041 83%
EBITDA 2,338 1,346 74%
Operating profit 1,219 838 45%
Adjusted operating profit 1,401 838 67%
Profit after tax 952 480 98%
Adjusted profit after tax 1,134 480 136%
Basic EPS (in eurocents) 3.3 2.2 50%
Adjusted EPS (in eurocents) 3.9 2.2 77%
Profit after tax and adjusted profit after tax are attributable to the equity
shareholders of the company (after minority rights.) Adjusted figures stated
before cost of share award.
• Solid customer pipeline and momentum in Velti's traditionally stronger
second-half
• Positive operating cash flows of €1.15m (2006: negative €0.85m)
Operational Highlights
• Formed Ansible, a joint venture with the Interpublic group, the first
global mobile marketing company.
• Won key operator contracts from Vodafone, Orange, Orascom's Wind,
Cosmote, M-Tel, SingTel's Globe.
• Won key mobile marketing contracts from MTV, CBS, Real, LVMH, PepsiCo's
Tasty Foods.
• Expanded footprint with key customer wins in Europe, North America and
Asia.
Product Development
• Launched version 3.5 of Mobile Marketing Platform
• Launched version 4.0 of Messaging, Content Aggregation and Syndication
Platforms
David Mann, Chairman of Velti commented: 'The Board is delighted with Velti's
performance in the first half. The company has achieved considerable momentum
and the Directors believe this will be maintained during the traditionally
stronger second half. We are confident that the company will meet its financial
targets for the year as a whole'
Alexandros Moukas, Chief Executive, added: 'We are very pleased to report strong
financial performance in revenue growth and profitability in the first half of
2007. The company made significant progress in expanding its geographical
footprint in North America and Asia through key customer wins. This expansion,
coupled with the launch of Ansible, a key global joint venture with the
Interpublic group establishes Velti as a leading provider of mobile marketing
and advertising services, a market which is projected to experience dramatic
growth.'
CONTACTS
Velti:
Alexandros Moukas, Chief Executive Officer +44 (0) 20 7633 5000
Pantelis Papageorgiou, Finance Director
Bankside: +44 (0) 20 7367 8888
Simon Bloomfield or Steve Liebmann
Royal Bank of Canada:
Sarah Wharry +44 (0) 20 7653 4667
Chairman's and Chief Executive's Statement
The first half of 2007 was a very successful period for Velti. The company made
its mark globally in terms of customer wins and strategic alliances. We are also
pleased to report strong financial performance in both revenue growth and
profitability.
Overall financial performance for the six month period ended 30 June 2007 was at
the top end of management's expectations. Velti achieved revenue growth of 83
per cent to €7.41 million whilst profit before tax increased 63 per cent to
€1.16million and profit after tax grew by 94 per cent to €0.84 million. Velti
also had an operating cash inflow of €1.15 million (compared with an outflow of
€0.85 million in the first half of 2006).
The key drivers of this positive performance were successful repeat business
from major customers and demand from new customers, as well as the extended
geographical footprint of the company. It is worth noting that these results
were achieved despite increased product development, sales and marketing costs
incurred as part of the aggressive expansion and growth plan of the company.
In terms of market positioning, Velti's main focus is on providing mobile
platforms and services to mobile operators, advertising agencies, media groups
and other large enterprises. Velti is enabling these organisations to market and
advertise effectively through the mobile channel. Velti has a very strong
geographical presence in South Eastern Europe, the UK and (through Ansible, its
Joint Venture with the Interpublic Group), aims to achieve this in North
America.
Since the beginning of the year Velti has expanded its business with existing
mobile operator customers Vodafone, Orascom's Wind, Cosmote and Q-Telecom, as
well as winning key new mobile operator customers Orange and SingTel's Globe.
New contracts were also won with MTV, CBS, Real Networks, LVMH's Hennessy in the
USA and Motorola and Pepsico's Tasty Foods in Europe.
2007 is proving to be the year when the global Mobile Marketing and Advertising
market is coming into the spotlight as the next major business opportunity in
mobile services. Velti had anticipated a significant growth in the market and
had already aligned its strategy accordingly. This led to the creation of
Ansible, a joint venture between Velti and Interpublic, one of the world's
leading groups of advertising agencies and marketing services companies. Based
in New York, Ansible is a provider of mobile marketing solutions to Interpublic
agencies and clients. The company works with brands, agencies and content
providers to develop and deploy mobile advertising and marketing campaigns.
Ansible offers mobile strategy, creative development and campaign management,
leveraging best-in-class technology and expertise. Ansible will operate in North
America, Europe and Asia and will utilise Velti's proprietary services and
mobile marketing technology in all markets.
On product development, Velti is continuing to expand its Mobile Marketing
Platform, building world-leading capabilities as a 'one-stop shop' for
advertising agencies, mobile operators and media. The product development
investment that started three years ago, coupled with the proven track record in
executing projects for mobile operators, provides Velti with the competitive
advantage necessary to achieve high growth in a market with global potential
which is now beginning to develop.
There has been a very positive response to the launch of Ansible and the Board
sees good prospects for the joint venture to become a significant driver for the
growth and profitability of the company in 2008 and beyond.
The Board is very pleased with Velti's performance in the first half. The
company has achieved considerable momentum and the Directors believe this will
be maintained during the traditionally stronger second half. We are confident
that the company will meet its financial targets for the year as a whole, and we
expect to generate positive free cash flows.
David Mann Alexandros Moukas
Non-Executive Chairman Chief Executive Officer
Operational Review
Market development
Velti's experience so far in 2007 confirms management's view that Mobile
Marketing and Advertising will offer the strongest growth opportunities for the
company in the Mobile Value Added Services (VAS) market. For a number of years,
mobile VAS has been a market characterised by increasing mobile content
consumption. The market, with strong interest from Mobile Operators, Media,
Advertising Agencies, Brands and Enterprises, is now poised for growth.
The market has grown significantly this year and is forecasted to reach $19
billion by 2011 (source: ABI Research). The number of mobile devices in the
marketplace already exceeds the number of PCs and TV sets combined, making the
mobile device the dominant 'first screen' in a consumers' life.
A key driver of the substantial growth expected in this market is that mobile
operators and advertising agencies are now adopting the capabilities necessary
for offering and executing a very large number of mobile marketing campaigns for
different brands.
Velti is at the heart of this evolution; since its inception it has been working
with a variety of leading world operators on delivering mobile platforms and
value added services. Following the company's IPO in 2006, significant
investment has been made in creating the software platforms and managed services
infrastructure to enable mobile operators, media and advertising agencies to
develop and operate within this market. During this period, it has become clear
that advertising agencies are a key factor in accelerating the development of
mobile advertising and marketing growth. This is because the mobile phone is not
just the first screen in consumer lives but also the ideal form of
cross-interaction with all other traditional media (TV, print, radio, outdoor,
interactive), and a future key enabler of dialogue between brands and the
consumer. Consequently, mobile marketing campaigns are expected to become an
integral part of a multichannel brand strategy rather than being used in
isolation.
Against this background, Interpublic and Velti announced in July 2007 the
formation of Ansible, a 50:50 joint venture dedicated mobile marketing company
utilising Velti's technology and managed services capabilities. Ansible is based
in New York and staffed with proven talent from the advertising and mobile
marketing space. The company currently operates in North America and Europe but
will start to develop globally by the end of 2007. Interpublic is one of the
world's leading groups of advertising agencies and marketing services companies,
with more than $25 billion in annual customer billings, $6 billion in sales and
40,000 employees in 100 countries.
As Bant Breen, Executive Vice President and head of the Futures Marketing Group
of Interpublic stated: 'We evaluated more than 40 mobile services providers and
decided to work with Velti because of their best-of-breed technology platform
and their extensive operator experience.'
Customer growth
Reflecting Velti's capabilities in terms of platforms and services, new
customers have been signed in the fields of media and advertising. Some of the
best known names include MTV, Real Networks and LVMH's Hennessy, as well as
brands like Motorola and PepsiCo's Tasty Foods in Europe.
Customers in the area of financial services and government agencies have also
contributed to growth. For example, Intralot, one of the world's top three
Gaming and Transaction Processing services for State Lotteries, is using Velti
for its mobile services strategy.
Since the formation of Ansible was announced in July 2007, initial staffing and
operational integration with Velti's platforms and services has been completed,
making the new Joint Venture a fully functional organisation with early
indications from potential customers confirming management's optimism about
future prospects.
Progress continued in the market for Mobile Operators platforms and services
during the first half of 2007. Velti was awarded key contracts from new
customers including Orange (UK), Orascom Group (Wind?) Greece), Vivatel
(Bulgaria) and SingTel's Globe (Philippines). Together, these groups capture a
subscriber base exceeding 280 million customers. New contracts have also been
awarded by Vodafone, Cosmote, M-Tel, OTE Group and Q-Telecom. In line with the
evolution of the market, these contracts have stronger elements of mobile
marketing and advertising and are in significant growth areas, such as mobile
communities, mobile commerce and user generated content.
Velti is providing innovative business solutions and software platforms to
enable mobile advertising through Mobile Operator branded or white labelled WAP
portals, mobile TV, as well as MMS and SMS mediums. These solutions also have
strong capabilities in terms of enabling Operator Communities that enhance
customer retention and brand loyalty. As a result, the Mobile Operator value
from Velti solutions results in increased data ARPU, new revenue streams from
mobile advertising and strong customer retention and acquisition benefits.
The second half of 2007 has traditionally been a stronger half for Mobile
Operator solutions, and we are experiencing a strong demand for our products and
services
Geographic development
In Southeastern Europe the company continues to expand and completed the
acquisition of M-Telecom in late March 2007. M-Telecom is a leading mobile
marketing and content provider in Bulgaria and provides Velti with a strong
footprint within the Eastern Europe region. Following the acquisition of
M-Telecom, contracts with major Bulgarian operators were signed to capitalise on
Velti's local presence through M-Telecom.
Our announcement of 2006 results highlighted the offices in New York and London
as spearheading developments and future growth in the mobile marketing area. The
company is expanding both its sales and delivery capabilities to ensure that it
can execute on a much larger geographical scale.
Investment in technology and customer services
Velti has made a significant investment in software technology that automates,
executes and assures ease and quality in the creation of mobile marketing and
advertising campaigns. We continually analyse the results of the campaigns
conducted on behalf of customers with a view to improving the performance of our
Mobile Marketing and Advertising Platform, now in its third generation. Through
our experience and development of our capabilities, and the scalability of our
infrastructure, we are now able to achieve a very fast time to market as well as
continuing to decrease operational costs as a proportion of revenue. This is
reflected in the increase of gross profit by 92 per cent, compared to revenue
growth of 83 per cent during the first half of 2007.
Financial Review
In the first half of 2007 the Group delivered a solid financial performance that
is reflected in robust top line growth, stable profit margins, positive
operating cash flows and entry into new geographic areas, while significantly
reducing net capital expenditure compared to last year.
In the six month period ended 30 June 2007 revenue reached €7.41 million, an 83
per cent increase on the same period in 2006 (€4.04 million). The increase in
revenue stemmed mainly from organic growth in professional and mobile value
added services coupled with the initial contribution from the acquisition of
M-Telecom with effect from 1 April 2007. Repeat business with existing clients
remained strong while new business was initiated in the south Asian market.
Gross profit increased by 92 per cent to €4.10 million (€2.13 million in first
half of 2006) delivering a margin of 55 per cent (53 per cent in 2006).
Operating profit, after the recognition of a share awards' cost of €0.18
million, increased by 45 per cent to €1.22 million (€0.84 million in first half
of 2006) delivering a margin of 16 per cent (21 per cent in 2006). The operating
margin, net of cost of share awards, was 19 per cent and the decrease compared
to 2006 is due to the doubling of depreciation and amortisation charges (€1.12
million in 2007, €0.51 million in 2006) that in turn reflects the significant
product development and infrastructure projects undertaken both in 2005 and
2006. Earnings before interest, taxation, depreciation, amortisation and the
cost of share awards increased by 87 per cent to €2.52 million (€1.35 million in
first half of 2006) delivering a margin of 34 per cent (33 per cent in 2006).
Profit before tax reached €1.16 million, posting an increase of 63 per cent over
2006 (€0.71 million). The taxation charge of the period represents an effective
tax rate of 27 per cent, marking a significant drop compared to the respective
period in 2006 (39 per cent). Basic earnings per share grew by 50 per cent to
3.3 eurocents (2.2 eurocents in 2006), while earnings per share adjusted for the
non-cash share award expense grew 77 per cent to 3.9 eurocents.
Velti's balance sheet, as at 30 June 2007, reflects a strong net asset position
of €17.64 million and a net cash position of €2.25 million. The significant
profitability coupled with balanced working capital requirements resulted in an
operating cash inflow of €1.15 million (outflow of €0.85 million in 2006).
CONSOLIDATED INCOME STATEMENTS
Six months Six months Year
ended 30 June ended 30 June ended 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Revenue 7,408 4,041 10,816
Cost of revenue (3,307) (1,910) (3,907)
Gross profit 4,101 2,131 6,909
Other income - 36 25
Selling expenses (1,452) (562) (1,974)
Administrative expenses (1,430) (719) (1,947)
Other expenses - (48) (4)
Operating profit 1,219 838 3,009
Finance expense, net (90) (127) (169)
Share of profit (loss) of
associates 27 - (108)
Profit before tax 1,156 711 2,732
Tax (313) (277) (603)
Profit after tax 843 434 2,129
Attributable to:
Equity shareholders of the
company 952 480 2,246
Minority Interest (109) (46) (117)
843 434 2,129
Basic earnings per share
(in Eurocents): 3.3 2.2 8.7
Diluted earnings per share
( in Eurocents): 3.1 2.2 8.5
CONSOLIDATED BALANCE SHEETS
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €' 000
ASSETS
Non -current assets
Property, plant and equipment 1,471 592 1,342
Intangible assets 5,648 3,197 4,841
Investments 704 180 448
Goodwill 2,492 963 599
Other assets 138 - -
Deferred tax assets - 121 -
10,453 5,053 7,230
Current assets
Receivables and prepayments 11,435 4,797 8,968
Restricted investments 27 26 27
Cash and cash equivalents 4,585 9,301 5,867
16,047 14,124 14,862
Total assets 26,500 19,177 22,092
SHAREHOLDERS' EQUITY
Share capital 2,125 2,125 2,125
Share premium account 11,610 11,772 11,613
Share-based payment reserve 248 - 66
Merger reserve 1,071 1,071 1,071
Accumulated profit /(losses) 1,693 (1,002) 741
Total shareholders' equity 16,747 13,966 15,616
Minority interest 893 726 663
Total Equity 17,640 14,692 16,279
LIABILITIES
Non-current liabilities
Borrowings 42 750 -
Retirement benefit obligations 120 88 102
Deferred tax liabilities 583 - 229
Other liabilities 562 - -
1,307 838 331
Current liabilities
Trade and other payables 5,265 2,729 3,651
Borrowings 2,288 918 1,831
7,553 3,647 5,482
Total liabilities 8,860 4,485 5,813
Total equity and liabilities 26,500 19,177 22,092
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share
Based Accumulated
Share Share Payment Minority Merger Profits
Capital Premium Reserve Interests Reserve /(Losses) Total
€'000 €'000 €'000 €'000 €'000 €'000 €'000
Balance at 1,375 - - - 1,071 (1,481) 965
1 January
2006
(audited)
Share
capital 750 11,772 - - - - 12,522
issued
Minority
interest - - - 772 - - 772
Profit for
the - - - (46) - 479 433
period
Balance at 2,125 11,772 - 726 1,071 (1,002) 14,692
30 June 2006
(unaudited)
Issue of
share - - 66 - - - 66
awards
Deferred Tax
adjustment - - - - - (24) (24)
Costs of
share - (159) - - - - (159)
issue
Profit for - - (63) - 1,767 1,704
the period
Balance at 2,125 11,613 66 663 1,071 741 16,279
31 December
2006
(audited)
Issue of
share - - 182 - - - 182
awards
Minority
interest - - - 339 - - 339
Costs of
share - (3) - - - - (3)
issue
Profit for
the - - (109) - 952 843
period
Balance at 2,125 11,610 248 893 1,071 1,693 17,640
30 June 2007
(unaudited)
CONSOLIDATED CASH FLOW STATEMENTS
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Cash flows from operating activities
Cash generated from
operations 1,147 (850) (713)
Interest paid (82) (127) (348)
Tax paid (10) (159) (178)
Net cash (used in)/generated
from operating activities 1,055 (1,136) (1,239)
Cash flows from investing activities
Purchase of property, plant
and equipment (294) (339) (1,181)
Purchase of Intangible Assets (1,778) (1,304) (3,747)
Purchase of available-for
sale investments (736) (199) (556)
Interest received 53 - 148
Net cash used in investing
activities (2,755) (1,842) (5,336)
Cash flows from financing activities
Long-term borrowings - (1,681) (1,681)
Net proceeds from issue of
ordinary shares - 12,521 12,521
Borrowings 418 (1,028) (865)
Net cash from financing
activities 418 9,812 9,975
(Decrease) /Increase in cash
and cash equivalents (1,282) 6,834 3,400
Movement in cash and cash equivalents
At beginning of period 5,867 2,467 2,467
(Decrease)/ Increase (1,282) 6,834 3,400
At end of period 4,585 9,301 5,867
Notes
1. Accounting policies and basis of preparation
The interim consolidated financial statements of Velti plc (the Company) have
been prepared under the historical cost convention and in accordance with the
accounting policies set out in the financial statements for the year ended 31
December 2006. The interim consolidated financial statements do not constitute
statutory accounts within the meaning of Section 240 of the Companies Act 1985.
The consolidated financial statements include the results of Velti plc and
entities controlled by Velti plc (its subsidiaries) forming the Group (see note
6.).
2. Segment information
The Group's main sources of revenue are development of mobile platforms/
applications and managed services serving customers in the telecommunications
industry, advertising agencies, brands and media (Telco, Agencies, Brands and
Media) and other sectors such as banking and e-government (Other Enterprises)
Revenue by business segment:
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Telco, Agencies, Brands and
Media 6,296 3,354 7,586
Other Enterprises 1,112 687 3,230
Total 7,408 4,041 10,816
Operating profit by business segment:
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Telco, Agencies, Brands and
Media 1,160 806 2,711
Other Enterprises 59 32 277
Unallocated operating income - - 21
Total 1,219 838 3,009
3. Borrowings
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Current
Current portion of long-term
debt (within 1 year) 510 80 750
Short-term loans 1,778 838 1,081
2,288 918 1,831
Non - current
Long-term portion of
long-term debt 42 750 -
Total borrowings 2,330 1,668 1,831
4. Deferred shares award plan
The Group adopted a share incentive plan on 26 April 2006. Under this plan, any
employed director or any employee of the Group is eligible to receive awards
under the plan. The deferred shares award (DSA) entitles the participant to
acquire shares when the DSA vests by paying an amount of no less than the
nominal value per share. The vesting period is 2 years. Deferred shares are
forfeited if the participant leaves the Group before the DSA vests.
Details of the awards outstanding at the end of the period are as follows.
Weighted average
Number of awards exercise price
(in €)
Outstanding at the beginning of period 810,000 0.07
Granted during the period 695,500 0.07
Forfeited during the period - -
Exercised during the period - -
Expired during the period - -
Outstanding at the end of the period 1,505,500 0.07
In the period ended 30 June 2007, the Group recognised total expense in relation
to the plan of €182,000 (six months ended 30 June 2006: €nil; year ended 31
December 2006: €66,000).
5. Earnings per share
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
Profit attributable to equity
holders of the Company
(€'000) 952 480 2,246
Weighted average number of
ordinary shares in issue 29,091,335 22,241,557 25,721,472
Weighted average number of
ordinary shares including
dilutive effect of
outstanding share awards 30,599,335 22,241,557 26,531,472
Basic earnings per share
(Eurocents per share) 3.3 2.2 8.7
Diluted earnings per share
(Eurocents per share) 3.1 2.2 8.5
Adjusted earnings per share
(1) (Eurocents per share) 3.9 2.2 9.0
(1) Figures stated before cost of share awards (see note 4)
6. Subsidiaries
Velti Plc owns 100% of the share capital of Velti SA (incorporated in Greece),
100% of the share capital of Velti dR Limited (incorporated in the United
Kingdom) and 100% of Velti M Telecom Limited (incorporated in the United
Kingdom), the sole shareholder of M-Telecom OOD ('M -Telecom' incorporated in
Bulgaria). Velti SA owns 79.51% of the share capital of Velti North America Inc
(formerly Retaine Inc, incorporated in the USA) and 99.99% of the share capital
of Velti Center for Innovation S.A. ('VCI') (incorporated in Greece). In turn
VCI has a 50% holding in mPoint SA, 45% holding in N Squared SA, 50% holding in
Tagem SA and 50% holding in Digital Rum SA (all incorporated in Greece) which
are consolidated on the basis of majority control of the Board of Directors of
those companies. During the six months period ended 30 June 2007, Velti Plc and
VCI paid an amount of €658,000 for acquisitions. The post-acquisition profit of
the subsidiaries acquired during the period was €46,000.
Subsidiaries are consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases. Goodwill
arising upon acquisition of subsidiaries and associates during the period
amounted to €1,893,000. This includes goodwill on the acquisition of M-Telecom
Limited of €1,619,000 (see note 7); the balance arose on the acquisitions of
Tagem S.A. and Digital Rum S.A. The Directors have assessed the carrying value
of goodwill at 30 June 2007 and consider no impairment is necessary.
Companies Proportion Country of
held operation
Velti Plc consolidated
VdR 100.00% UK
Velti M-Telecom 100.00% Bulgaria
Velti SA consolidated
VNA 79.51% USA
VCI SA consolidated
N Squared SA 45.00% Greece
Mpoint SA 50.00% Greece
Digital Rum SA 50.00% Greece
Tagem SA 50.00% Greece
Associates
Amplus SA 45.83% Greece
Evorad S.A. 33.34% Greece
7. Acquisition of Velti M - Telecom Limited
On 20 March 2007, the Company acquired the entire share capital of Velti
M-Telecom Limited (formerly Rekanak Limited), the sole shareholder of M-Telecom
OOD ('M-Telecom'), a leading mobile value added services provider in Bulgaria.
The total consideration shall range between €1,010,000 and €2,560,000 depending
on M-Telecom achieving certain profitability targets for 2007 and 2008. The
consideration will be satisfied a) partially in cash at acquisition date, by a
payment of €480,000, and b) the remaining in cash or Velti shares (at the
company's discretion) in two instalments, payable on 30 April 2008 and on 30 May
2009.
This transaction has been accounted for by the purchase method of
accounting.
Book Value Fair Value
€'000 €'000
Net assets acquired
Property, plant and aquipment 12 12
Receivables and prepayments 195 195
Cash and cash equivalents 13 13
Borrowings (42) (42)
Trade and other payables (103) (103)
Borrowings (36) (36)
Total 39 39
Goodwill 1,619
Total consideration 1,658
Cash 480
Directly attributable costs 40
Deferred consideration 1,138
1,658
Net cash outflow arising on the acquisition 480
The goodwill arising on the acquisition of M Telecom is attributable to the
anticipated profitability of the roll out of its business plan and the
anticipated future operating and cross selling synergies from the combination.
8. Cash generated from / (used in) operations
Six months Six months Year
ended ended ended
30 June 2007 30 June 2006 31 December 2006
(unaudited) (unaudited) (audited)
€'000 €'000 €'000
Net profit 843 434 2,129
Adjustments for:
Tax expense 313 277 603
Interest income (53) - (148)
Interest expense 143 127 348
Depreciation 177 59 151
Amortisation of intangible
assets 941 449 1,151
Amortisation of grants - - (666)
Foreign exchange gain 3 3 -
Share of (profit) / loss of
associates (27) - 108
Non cash provisions 176 - 349
2,516 1,349 4,025
Changes in working capital:
Receivables and prepayments (2,605) (2,214) (6,274)
Trade and other payables 1,219 (3) 1,497
Pensions and other
post-retirement obligations 17 18 39
(1,369) (2,199) (4,738)
Cash generated from / (used
in) operations 1,147 (850) (713)
9. Post balance sheet event
On 5 July 2007, the Company, through its wholly owned subsidiary Velti North
America Holdings, Inc, entered into a limited liability company agreement to
form Ansible Mobile LLC ('Ansible'). Ansible is a joint venture between the
Company and the Interpublic Group of Companies, Inc ('IPG') that will provide
comprehensive mobile marketing solutions. Each of the two members of the joint
venture will contribute 50% of the initial capital. The Company will use the
proportionate consolidation method (IAS 31) in accounting for the results of
Ansible, on the basis of joint control.
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