Interim results

RNS Number : 2694N

Mobile Tornado Group PLC

27 September 2012

 



Mobile Tornado Group plc

("Mobile Tornado" or the "Company")

 

Interim Results

Introduction

Mobile Tornado Group plc, the leading provider of instant communication mobile applications to the enterprise market, announces its unaudited results for the six month period to 30 June 2012.

Financial Results

Turnover in the six month period to 30 June 2012 amounted to £1,004,000 (30 June 2011: £885,000). Group operating loss reduced to £458,000 (30 June 2011: £499,000 loss). After finance costs of £221,000 (30 June 2011: £189,000) and a tax credit of £101,000 (30 June 2011: £122,000) the net loss for the period was £578,000 (30 June 2011: £566,000). The net cash outflow from operating activities was £469,000 (30 June 2011: £172,000).

The Group consolidated balance sheet shows net liabilities at 30 June 2012 of £9,530,000 compared to net liabilities of £10,823,000 at 30 June 2011. Cash at bank was £21,000 at 30 June 2012 compared to £14,000 at 30 June 2011. During the period the Group received loans from InTechnology plc of £667,000 (30 June 2011: £140,000). The Directors believe that the Group has sufficient working capital for the foreseeable future given its contracted revenue, anticipated contracts and continued support from its principal shareholder, InTechnology plc.

Review of operations

The momentum we have generated in the last 12 months has continued, with the announcement today of a further contract with a Tier 1 Mobile Operator, this one based in France. This deal was secured after an extremely tough trial process, where our solution was tested by one of the world's leading technology consultancies, for its functionality, resilience and scalability. Our success in coming through this process has demonstrated once again that we own a carrier class platform, which the world's leading mobile operators are now embracing to deliver instant communication services to their customers. Our technical team has worked hard to install the solution and we expect to announce the commercial launch of services later in the year, at which point more details as to the identity of the carrier may be disclosed.

Our technical team has also been engaged during the period on installing our platform in Telcel (Mexico) and Claro (Brazil), the first two operators scheduled to launch the Push to Talk service under the American Movil umbrella. We are now very close to satisfying all the requirements of the customer, and I expect that we will be able to announce a full commercial launch before the end of the year.

We continue to explore strategic relationships with handset manufacturers and during the period announced a deal with Handheld Group, a fast growing manufacturer of rugged PDAs. As the demand for Instant Communications increases in the workplace, we expect to see an increasing number of rugged handset manufacturers looking to install the application on the device at source. We are well placed to capitalize on this trend.

We have recently opened up a new market opportunity through the partnership agreement we have signed with Cellhire, a global service provider specializing in the delivery of short term communication solutions for major global events. These events are traditionally served by Private Mobile Radio ('PMR'), a heavy duty, costly network designed for near universal coverage and availability, with very quick call set up and group communications. We have already been able to demonstrate the functionality, versatility and cost benefits of our solution compared to PMR. We look forward to developing this new channel to market with Cellhire over the coming months.

Current trading and future prospects

The announcement of our contract today with another Tier 1 mobile operator is excellent news since it further validates the trends we have seen develop in our market during the last 12 months. Mobile operators are seeking out applications that will help to grow revenues and retain customers. The increased sophistication of handsets, the reduced data tariffs and the related emergence of the workforce management sector is driving more mobile operators to explore the opportunity that Instant Communication solutions can offer.

We now have customers in every corner of the world; Mexico, Brazil, USA, Germany, France, Italy, India, South Africa, Denmark, Sweden and the UK of course. There are negotiations and trials being conducted with potential customers in several other countries. The message is that we have great momentum and an increasing pipeline of opportunity. The key requirement now, is that our customers launch the services to their own customers, and that these services are taken up in large numbers. I believe we are approaching this stage with many of them and look forward to reporting over the coming months on the results.

Peter Wilkinson

Chairman

27 September 2012

For further details please contact:

Mobile Tornado Group plc
Jeremy Fenn, Chief Executive	[phone]
Northland Capital Partners Limited	[phone]
Edward Hutton/Gavin Burnell

Consolidated income statement

For the six months ended 30 June 2012

		Six months		Six months		Year
		ended		ended		ended
		30 June		30 June		31 December
		2012		2011		2011
		Unaudited		Unaudited		Audited
	Note	£'000		£'000		£'000
Continuing Operations
Revenue		1,004		885		2,047
Cost of sales		(233)		(234)		(695)
Gross profit		771		651		1,352
Operating expenses		(1,280)		(1,090)		(2,170)
Exchange differences		97		(51)		21
Depreciation and amortisation expense		(46)		(9)		(19)
Total administrative expenses		(1,229)		(1,150)		(2,168)
Group operating loss		(458)		(499)		(816)
Finance costs		(221)		(189)		(398)
Loss before tax		(679)		(688)		(1,214)
Income tax credit		101		122		122
Loss for the period		(578)		(566)		(1,092)
Attributable to:
Equity holders of the parent		(578)		(566)		(1,092)
Loss per share (pence)
Basic and diluted	3	(0.31)		(0.31)		(0.59)

Consolidated statement of comprehensive income              

For the six months ended 30 June 2012

		Six months		Six months		Year ended
		ended		ended		ended
		30 June		30 June		31 December
		2012		2011		2011
		Unaudited		Unaudited		Audited
		£'000		£'000		£'000
Loss for the period		(578)		(566)		(1,092)
Other comprehensive income
Exchange differences on translation
of foreign operations		4		6		(3)
Total comprehensive income for the period		(574)		(560)		(1,095)

Consolidated statement of changes in equity

For the six months ended 30 June 2012

	Share	Share	Reverse acquisition	Merger	Preference	Translation	Retained	Total
	capital	premium	reserve	reserve	Shares	reserve	earnings	equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2011	3,699	4,449	(7,620)	10,938	-	(2,160)	(19,570)	(10,264)
Equity settled share-based payments	-	-	-	-	-	-	1	1
Transactions with owners	-	-	-	-	-	-	1	1
Loss for the period	-	-	-	-	-	-	(566)	(566)
Exchange differences on translation
of foreign operations	-	-	-	-	-	6	-	6
Total comprehensive income
for the period	-	-	-	-	-	6	(566)	(560)
Balance at 30 June 2011	3,699	4,449	(7,620)	10,938	-	(2,154)	(20,135)	(10,823)
	Share	Share	Reverse acquisition	Merger	Preference	Translation	Retained	Total
	capital	premium	reserve	reserve	Shares	reserve	earnings	equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 July 2011	3,699	4,449	(7,620)	10,938	-	(2,154)	(20,135)	(10,823)
Equity settled share-based payments	-	-	-	-	-	-	-	-
Transactions with owners	-	-	-	-	-	-	-	-
Loss for the period	-	-	-	-	-	-	(526)	(526)
Exchange differences on translation
of foreign operations	-	-	-	-	-	(9)	-	(9)
Total comprehensive income
for the period	-	-	-	-	-	(9)	(526)	(535)
Preference Shares	-	-	-	-	2,390	-	-	2,390
Balance at 31 December 2011	3,699	4,449	(7,620)	10,938	2,390	(2,163)	(20,661)	(8,968)
	Share	Share	Reverse acquisition	Merger	Preference	Translation	Retained	Total
	capital	premium	reserve	reserve	Shares	reserve	earnings	equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2012	3,699	4,449	(7,620)	10,938	2,390	(2,163)	(20,661)	(8,968)
Equity settled share-based payments	-	-	-	-	-	-	12	12
Transactions with owners	-	-	-	-	-	-	12	12
Loss for the period	-	-	-	-	-	-	(578)	(578)
Exchange differences on translation
of foreign operations	-	-	-	-	-	4	-	4
Total comprehensive income
for the period	-	-	-	-	-	4	(578)	(574)
Balance at 30 June 2012	3,699	4,449	(7,620)	10,938	2,390	(2,159)	(21,227)	(9,530)

Consolidated balance sheet

As at 30 June 2012

		30 June		30 June		31 December
		2012		2011		2011
		Unaudited		Unaudited		Audited
	Note	£'000		£'000		£'000
Assets
Non-current assets
Property, plant & equipment		269		43		104
		269		43		104
Current assets
Inventories		108		-		-
Trade and other receivables		1,371		770		1,437
Tax debtor		101		122		-
Cash and cash equivalents		21		14		77
		1,601		906		1,514
Liabilities
Current liabilities
Trade and other payables		(6,206)		(5,039)		(5,538)
Borrowings		(267)		(3,000)		(267)
Net current liabilities		(4,872)		(7,133)		(4,291)
Non-current liabilities
Trade and other payables		(2,745)		(2,728)		(2,923)
Borrowings		(2,182)		(1,005)		(1,858)
Net liabilities		(9,530)		(10,823)		(8,968)
Shareholders' equity
Share capital	4	3,699		3,699		3,699
Share premium	4	4,449		4,449		4,449
Reverse acquisition reserve		(7,620)		(7,620)		(7,620)
Merger reserve		10,938		10,938		10,938
Preference shares		2,390		-		2,390
Share option reserve		62		50		50
Foreign currency translation reserve		(2,159)		(2,154)		(2,163)
Retained earnings		(21,289)		(20,185)		(20,711)
Total equity		(9,530)		(10,823)		(8,968)

Consolidated cash flow statement

For the six months ended 30 June 2012

		Six months		Six months		Year
		ended		ended		ended
		30 June		30 June		31 December
		2012		2011		2011
		Unaudited		Unaudited		Audited
	Note	£'000		£'000		£'000
Operating activities
Cash used in operations	5	(469)		(235)		(655)
Tax credit received		-		63		63
Net cash used in operating activities		(469)		(172)		(592)
Investing activities
Purchase of property, plant & equipment		(254)		(7)		(35)
Net cash used in investing activities		(254)		(7)		(35)
Financing
Issue of loans		667		140		650
Net cash inflow from financing		667		140		650
Effects of exchange rates on cash
and cash equivalents		-		(1)		-
Net (decrease)/increase  in cash and
cash equivalents in the period		(56)		(40)		23
Cash and cash equivalents at beginning of period		77		54		54
Cash and cash equivalents at end of period		21		14		77

Notes to the interim report

For the six months ended 30 June 2012

1          General information

The financial information set out in this interim report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006.  The financial information for the year ended 31 December 2011 is an extract from the latest audited financial statements on which the auditors gave an unqualified audit report that did not contain statements under section 498 (2) or (3) of the Companies Act 2006 and which have been filed with the Registrar of Companies

2          Basis of preparation

These interim financial statements are for the six months ended 30 June 2012. They have been prepared using the recognition and measurement principles of IFRS.

The interim financial statements have been prepared under the historical cost convention.

The interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2011. The accounting policies have been applied consistently throughout the Group for the purpose of preparation of the interim financial statements.

3          Loss per share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of £578,000 (30 June 2011: £566,000, 31 December 2011: £1,092,000) by the weighted average number of ordinary shares in issue during the period of 184,953,708 (30 June 2011: 184,953,708, 31 December 2011: 184,953,708).

The adjusted basic loss per share has been calculated to provide a better understanding of the underlying performance of the Group as follows:

	Six months ended			Six months ended			Year ended
	30 June 2012			30 June 2011			31 December 2011
	Unaudited			Unaudited			Audited
	Basic and diluted			Basic and diluted			Basic and diluted
	Loss	Loss		Loss	Loss		Loss	Loss
		per share			per share			per share
	£'000	pence		£'000	pence		£'000	pence
Basic and adjusted
loss per share	(578)	(0.31)		(566)	(0.31)		(1,092)	(0.59)

 

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 exercise of share options are anti-dilutive under the terms of IAS 33.

4          Share capital and share premium

	Number of	Share	Share	Total
	shares	capital	premium
	'000	£'000	£'000	£'000
At 30 June 2011, 31 December 2011 and 30 June 2012	184,953	3,699	4,449	8,148

Non-voting preference shares

			Number of	Value
			shares
			'000	£'000
At 30 June 2011, 31 December 2011 and 30 June 2012			37,500	3,000

Following the change of rights attaching to the preference shares on 31 December 2010, the shares are deemed to be compound financial instruments, with the debt component calculated to be £610,000 (£343,000 due after more than one year) and the £2,390,000 balance reclassified as equity. The 10% annual preference share dividend of £300,000 (2010: £300,000) has been accrued within current liabilities.

 

 

5          Cash used in operations

	Six months	Six months	Year
	ended	ended	ended
	30 June	30 June	31 December
	2012	2011	2011
	Unaudited	Unaudited	Audited
	£'000	£'000	£'000
Loss before taxation	(679)	(688)	(1,214)
Adjustments for:
Depreciation	46	9	19
Share based payment charge	12	1	1
Net finance costs	221	189	398
Changes in working capital
Increase in inventories	(108)	-	-
Decrease/(Increase) in trade and other receivables	64	(71)	(609)
(Decrease)/Increase in trade and other payables	(25)	325	750
Net cash used in operations	(469)	(235)	(655)

 

6          Shareholder information

The interim announcement will be published on the company's website www.mobiletornado.com on 27 September 2012.

 

END

 

 

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