Interim Results
Mobile Tornado Group PLC
28 March 2007
For Immediate Release 28 March 2007
Mobile Tornado Group plc
('Mobile Tornado' or 'the Group')
Interim Results
Mobile Tornado, one of the leading providers of convergent, presence-based
instant communications announces its results for the six month period to 31
December 2006.
Highlights
• Balance sheet strengthened in October 2006 with subscription by
InTechnology plc for 80 million ordinary shares issued at 5p raising £4
million
• Management team strengthened with appointment of new board members on 24
November 2006
• First US operator deal announced with Revol Wireless
• 'Push to Video' application launched at the CTIA Wireless exhibition
• Group well positioned for growth in 2007
Commenting on the interim results Peter Wilkinson, Non executive Chairman, said:
'Since taking over in November 2006, the new board has worked hard to improve
the sales operation of the business. We now have sales offices in the UK, US,
France, Germany, Israel, India and China. The increased levels of interest that
we are seeing as a result of these initiatives will, I am confident, bring us
enhanced levels of business over the coming months, and at the same time
establish Mobile Tornado as a key player in the rapidly developing market for
mobile instant communications.'
For further information please contact:
Mobile Tornado plc
Jeremy Fenn, Chief Financial Officer Tel: +44 (0)1423 511900
Buchanan Communications Tel: +44 (0)20 7466 5000
James Strong
About Mobile Tornado
Mobile Tornado extends 'push-to-talk' technology beyond just voice. With its
patented IP-based 'IPRS' platform, service providers can provide users with
unique presence based push-to-talk along with many other revenue generating
services such as: presence-based Instant Messaging; text messaging; pictures;
real-time streaming video or any other data content. All of which are
interoperable between any enabled mobile device, fixed handset or desktop PC,
and on any network infrastructure.
Leading mobile operators and enterprises worldwide currently use Mobile Tornado
solutions through infrastructure vendors such as Nortel, alongside key channel
and managed services partners in the Americas, EMEA and Asia Pacific. For more
information on Mobile Tornado, please visit www.mobiletornado.com.
Financial Results
Turnover in the six month period to 31 December 2006 amounted to £53k (2005:
£98k). Operating losses reduced to £1,449k (2005: £1,824k). After net interest
receivable of £28k (2005: net interest payable - £304k) the loss on ordinary
activities before taxation was £1,421k (2005: £2,128k). Net cash outflow from
operating activities increased slightly in the period to £1,199k (2005:
£1,158k).
The Group consolidated balance sheet has improved significantly following the
fundraising completed during the period. Net assets at 31 December 2006 were
£843k compared to a net deficit of £1,622k at 30 June 2006. Cash at bank was
£2,826k at 31 December 2006 compared to £192k at 30 June 2006.
The accounts have been prepared in accordance with UK Generally Accepted
Accounting Practice. The Board continues to consider the implications and
timetable for implementing International Financial Reporting Standards (IFRS).
As an AIM listed Group the Board recognises that IFRS is expected to apply to
the Group from the first accounting period commencing after 1 January 2007. The
Directors have elected to change the accounting period of the Group to a 31
December period end date in light of the period end date of other Group
companies. Consequently, the next accounting period of the Group will be 1 July
2006 to 31 December 2007. The Board recognises that the first set of accounts of
the Group that will be prepared under IFRS are those for the period 1 January
2008 to 31 December 2008 and that this will require the Group to develop a
corporate reporting structure and policies to meet this requirement.
Review of operations
As I have stated previously, the Group's primary focus during the period under
review was to put the business onto a stable financial platform. This was
achieved on 23 October 2006 with the £4 million investment by InTechnology plc.
Following this a number of key board appointments were made with Jeremy Fenn
joining the Company as Chief Financial Officer, David Parry as VP Sales
Worldwide and Eyal Fishler as Chief Technical Officer.
The new management team have since concentrated on establishing a clear sales
strategy to increase the sale of the Group's current products and services to
mobile operators and enterprises. Good progress has been made on this front and
I am delighted to report that the first results of these efforts have come
through with the announcement today of a deal with Revol Wireless, a US
privately held telecommunications company with headquarters in Independence,
Ohio. By integrating Mobile Tornado's Instant Communications technology
platform, Revol Wireless will be offering its users Push To Talk (PTT) on its
CDMA network. I am confident that this deal is an important first step in our
efforts to become a key player in the US, a market certain to be leading the
growth in mobile instant communications.
Earlier this month the Group attended the 3GSM World Congress in Barcelona, the
biggest trade show in the mobile calendar, where an estimated 55,000 visitors
attended from around the world. I am pleased to report that mobile operators are
showing great interest in mobile instant communications as they seek to enhance
their product offering to their customers. I am greatly encouraged with the
interest shown in the Group's product portfolio and discussions are progressing
with operators from all parts of the world. I hope to make further announcements
on new deals and collaborations in the near future.
As well as selling directly to mobile operators, we are also in the process of
establishing an indirect sales model and distribution network to sell enterprise
solutions to businesses, utilising the Group's core technology platform. The
Group currently has distribution agreements with partners in the US, Germany,
and the Netherlands who are providers of mobile data solutions and managed
mobile services to customers in the market sectors to which PTT is attractive.
Further potential distribution partners have been identified and we are in the
process of concluding contractual arrangements with them.
The Group has continued to invest in its research and development operation. The
team is working on a number of applications to complement our existing range of
services and I am delighted to announce that our 'Push to Video' service is
being launched at CTIA this week. Branded as 'You see what I see', this real
time streaming application has already generated great interest amongst
operators and I am confident that this new launch will further enhance the
Group's reputation for developing solutions capable of transforming mobile
communication services.
Current trading and future prospects
Since taking over in November 2006, the new board has worked hard to improve the
sales operation of the business. We now have sales offices in the UK, US,
France, Germany, Israel, India and China. The increased levels of interest that
we are seeing as a result of these initiatives will, I am confident, bring us
enhanced levels of business over the coming months, and at the same time
establish Mobile Tornado as a key player in the rapidly developing market for
mobile instant communications.
Once again, I would like to record my appreciation for the continuing commitment
of all our team members throughout the business and thank them for their support
during a year of significant change.
Peter Wilkinson
Non executive Chairman
28 March 2007
Consolidated profit and loss account
For the 6 months ended 31 December 2006
Group Group Group
6 mths to 6 mths to 12 mths to
31 December 31 December 30 June
2006 2005 2006
(Restated) (Restated)
Note £'000 £'000 £'000
Turnover
Continuing operations 53 98 289
53 98 289
Cost of sales
Continuing operations - (50) (68)
Gross profit 53 48 221
Net operating expenses before depreciation
and amortisation (1,173) (1,534) (2,955)
Depreciation (34) (37) (77)
Amortisation (295) (301) (602)
Administrative expenses (1,502) (1,872) (3,634)
Group operating loss (1,449) (1,824) (3,413)
Interest receivable/(payable) 28 (304) (469)
Loss on ordinary activities before tax (1,421) (2,128) (3,882)
Taxation 2 - - -
Loss sustained for the financial year (1,421) (2,128) (3,882)
EBITDA (1,120) (1,486) (2,734)
Loss per share (pence)
Basic and diluted 3 (1.16) (2.72) (4.83)
Consolidated balance sheet
As at 31 December 2006
31 December 31 December 30 June
2006 2005 2006
(Restated) (Restated)
£'000 £'000 £'000
Fixed assets
Intangible assets 1,253 1,881 1,580
Tangible assets 36 111 67
1,289 1,992 1,647
Current assets
Debtors 233 256 336
Cash at bank and in hand 2,826 118 192
3,059 374 528
Creditors - amounts falling
due within one year (1,188) (4,734) (1,334)
Net current assets 1,871 (4,360) (806)
Total assets less current liabilities 3,160 (2,368) 841
Creditors - amounts falling
due after more than one year (2,317) (2,945) (2,463)
Net assets 843 (5,313) (1,622)
Capital and reserves
Share capital 3,444 3 1,844
Share premium 3,845 1,359 1,624
Reverse acquisition reserve (7,620) - (7,620)
Merger reserve 10,938 - 10,938
Share option reserve 37 11 32
Profit and loss account (9,801) (6,686) (8,440)
843 (5,313) (1,622)
Consolidated cash flow statement
For the 6 months ended 31 December 2006
6 mths to 6 mths to 12 mths to
31 December 31 December 30 June
2006 2005 2006
(Restated) (Restated)
Note £'000 £'000 £'000
Net cash outflow from operating activities 4 (1,199) (1,158) (1,649)
Returns on investments and servicing of finance
Interest received 28 - 4
Interest paid - (304) (473)
Net cash inflow/(outflow) from returns on
investments and servicing of finance 28 (304) (469)
Capital expenditure and financial investment
Purchase of tangible fixed assets (8) (29) (37)
Net cash outflow from capital expenditure
financial investment (8) (29) (37)
Acquisitions
Net cash at bank acquired with purchase
of subsidiary undertakings - - 584
Net cash inflow from acquisitions - - 584
Net cash outflow before financing (1,179) (1,491) (1,571)
Financing
Issue of ordinary share capital 4,000 - 1,298
Share Issue costs (179) - (391)
Issue of convertible loan notes - 753 -
Net cash inflow from financing 3,821 753 907
Increase/(decrease) in cash in the period 5 2,642 (738) (664)
Consolidated statement of total recognised gains and losses
For the 6 months ended 31 December 2006
31 December 31 December 30 June
2006 2005 2006
(Restated) (Restated)
£'000 £'000 £'000
Loss sustained for the financial year (1,421) (2,128) (3,882)
Exchange gain on translation of overseas subsidiaries 60
Total recognised gains and losses relating to the period (1,361) (2,128) (3,882)
Notes to the interim financial Information
For the 6 months ended 31 December 2006
1 Basis of preparation
The financial information included in this interim statement for the 6 months
ended 31 December 2006 does not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985 and is not audited or reviewed. In
preparing this interim statement, management have adopted FRS 20 'share-based
payment'.
Share Based Payments
The adoption of this standard represents a change in accounting policy and the
prior year comparatives have been restated accordingly. The effects of the
change on administrative expenses for the period ended 31 December 2005 and the
year ended 30 June 2006 and Group reserves at those dates are summarised as
follows:
The Group operates a number of equity-settled, share-based compensation plans.
The fair value of the employee services received in exchange for the grant of
the options is recognised as an expense. The total amount to be expensed over
the vesting period is determined by reference to the fair value of the options
granted, excluding the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are
included in assumptions about the number of options that are expected to vest.
At each balance sheet date, the group revises its estimates of the number of
options that are expected to vest. It recognises the impact of the revision to
original estimates, if any, in the profit and loss account, with a corresponding
adjustment to equity. The proceeds received net of any directly attributable
transaction costs are credited to share capital (nominal value) and share
premium when the options are exercised.
administrative Share option Profit
expenses reserve and loss
£'000 £'000 £'000
Period ended 31 December 2005
As previously stated 1,861 - (6,674)
Restated 1,872 11 (6,686)
Year ended 30 June 2006
As previously stated 3,602 - (8,408)
Restated 3,634 32 (8,440)
There have been no other changes to the accounting policies as set out in the
2006 Report and Accounts. The financial information relating to the year ended
30 June 2006 has been extracted from the statutory accounts for that year, with
the exception of the prior period adjustment described above, which have been
filed with the Registrar of Companies and on which the auditors gave an
unqualified opinion.
2 Tax on loss on ordinary activities
No charge to UK corporation tax arose in the period (31 December 2005: nil, 30
June 2006: nil) due to group trading losses incurred.
3 Loss per share
Basic loss per share is calculated by dividing the loss attributable to ordinary
shareholders of £1,421,000 (31 December 2005: £2,128,000, 30 June 2006:
£3,882,000) by the weighted average number of ordinary shares in issue during
the period of 122,614,879 (31 December 2005: 78,130,096, 30 June 2006:
80,339,651).
The adjusted basic earnings per share has been calculated to provide a better
understanding of the underlying performance of the Group as follows:
6 mths to 6 mths to 12 mths to
31 December 2006 31 December 2005 30 June 2006
Basic and diluted Basic and diluted Basic and diluted
(Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/ (Loss)/
earnings earnings earnings earnings earnings earnings
per share per share per share
(Restated) (Restated) (Restated) (Restated)
£'000 pence £'000 pence £'000 pence
Loss attributable to
ordinary shareholders (1,421) (1.16) (2,128) (2.72) (3,882) (4.83)
FRS 20 share option charge 5 0.00 11 0.01 32 0.04
Amortisation of goodwill 295 0.24 301 0.39 602 0.75
Adjusted basic loss per share (1,121) (0.92) (1,816) (2.32) (3,248) (4.04)
The loss attributable to ordinary shareholders and the weighted average number
of ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for basic earnings per ordinary
share. This is because the share options are anti-dilutive under the terms of
FRS 22 'Earnings per share'.
4 Reconciliation of operating loss to net cash (outflow)/ inflow from operating
activities
6 mths to 6 mths to 12 mths to
31 December 31 December 30 June
2006 2005 2006
(Restated) (Restated)
£'000 £'000 £'000
Operating loss (1,449) (1,824) (3,413)
Depreciation of tangible fixed assets 34 37 77
Amortisation of intangibles 295 301 602
Loss on disposal of tangible fixed assets - - 12
Share option non cash charge 5 11
32
Decrease in debtors 79 250 126
(Decrease)/Increase in creditors and provisions (163) 67 915
Net cash outflow from operating activities (1,199) (1,158) (1,649)
5 Reconciliation of movement in net funds
6 mths to 6 mths to 12 mths to
31 December 31 December 30 June
2006 2005 2006
£'000 £'000 £'000
Increase/(decrease) in cash in the period 2,642 (738) (664)
Net cash inflow from issue of convertible loan notes - (753) -
Change in net debt resulting from cash flows 2,642 (1,491) (664)
Non-cash changes:
Exchange movements (8) - -
Conversion of Convertible Loan Notes - - 2,213
Movement in net funds in the year 2,634 (1,491) 1,549
Net debt at start of year 192 (1,357) (1,357)
Net funds/(debt) at end of year 2,826 (2,848) 192
6 Shareholder information
The interim announcement will be posted to shareholders on 23 March 2007.
Further copies are available on request from the Company at Central House,
Beckwith Knowle, Harrogate HG3 1UG
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 day ago IntegraFin Holding
- 1 day ago Spirent Communications
- 1 day ago CRH (CDI)
- 1 day ago Bezant Resources
- 1 day ago EJF Investments Ltd NPV