Final Results

RNS Number : 4009O

MobilityOne Limited

29 June 2010

 



29 June 2010

MobilityOne Limited

("MobilityOne" or the "Company")

Audited results for the financial year ended 31 December 2009

MobilityOne (AIM : MBO), an e-commerce infrastructure payment solutions and platform provider via its subsidiaries MobilityOne Sdn Bhd ("MobilityOne Malaysia"), Netoss Sdn Bhd and PT MobilityOne Indonesia (collectively known as "Group"), announces its full year audited results for the financial year ended 31 December 2009.

Highlights:

·          Revenue increased by 10.2% to £13.7 million (12 months ended 31 December 2008: £12.5 million)

·          Loss after tax of £920k (12 months ended 31 December 2008: loss after tax of £880k)

·          New agreements signed with Carrefour Malaysia and Telekom Malaysia Berhad in Malaysia, several telecommunications companies in Cambodia and PT Citra Multi Services in Indonesia

Notice of Annual General Meeting

The Company will today send to shareholders the Company's Annual Report for the financial year ended 31 December 2009 together with notice of the Company's Annual General Meeting to be held at 9.00 am (Malaysian time) on 21 July 2010 at Malaysian Petroleum Club, Level 42, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia.

The Annual Report will be available today on the Company's website: www.mobilityone.com.my.

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]
Dato' Hussian A. Rahman, CEO	www.mobilityone.com.my
[e-mail]
Allenby Capital Limited	[phone]
Nick Athanas/James Reeve

Chairman's statement

The year 2009 was a challenging year for the Group with the global financial crisis and weak market conditions continuing to have an impact on the Group's operations.  These combined events have directly affected the Group's overall financial performance.  Even though the Group saw an increase in revenue for its mobile phone's prepaid airtime reloads, several higher profit margin projects and expansion plans have been deferred.  Despite a difficult global economic backdrop, the Group has continued to focus on developing its existing businesses and to introduce new revenue streams for its future growth.

During the year, the Group continued to develop additional payment channels for its wide range of electronic based products and services to be made available to its customers via active new channel acquisitions.  For the Group's international remittance services, MobilityOne Malaysia has entered into an agreement with M. Lhuillier, a financial services company in the Philippines, to provide money transfer service from the Group's outlets in Malaysia to any of M. Lhuillier's branches in the Philippines. This is in addition to the existing agreement signed with G‐Xchange, Inc., a wholly‐owned subsidiary of Globe Telecom of the Philippines, as well as the agreements with PT. Finnet Indonesia and PT Telekomunikasi Selular in Indonesia for the money transfer service to Indonesia. 

During the challenging period, the Group took several measures to reduce costs and focused on the reorganisation of its business operations in Malaysia in order to cushion the impact of the slowdown.

Financial performance

For the financial year ended 31 December 2009, the Group registered a revenue of £13.7 million, representing an increase of 10.2% as compared to £12.5 million for the 12 months ended 31 December 2008 and a loss after tax of £0.92 million (12 months ended 31 December 2008: loss after tax of £0.88 million).  The increase in revenue was mainly contributed by higher demand for our existing mobile phone's prepaid airtime reload business.  Despite the increase in revenue, the Group continued to record a loss, which was due to higher operating costs and expenses to explore new business opportunities, depreciation and amortisation of intangible assets and development costs of £0.32 million, as well as a write off of bad debts and development costs of £0.12 million.

Current trading and outlook

As a result of the continuing global economic uncertainties and prevailing market conditions, we envisage the financial performance of the Group for the year ending 31 December 2010 to remain challenging.  However, barring any unforeseen circumstances, the Group is anticipating an upturn in the 4^th quarter of 2010 in the markets in which it operates in particularly in consideration of the following recent developments (details of which were announced on 10 June 2010):

(i)            MobilityOne Malaysia has signed an agreement with Carrefour Malaysia (www.carrefour.com.my) to roll out approximately 300 EDC terminals for mobile phone's prepaid airtime reloads across Carrefour Malaysia's 23 hypermarkets and 20 express stores throughout Malaysia;

(ii)           MobilityOne Malaysia has been awarded a contract from Telekom Malaysia Berhad (www.tm.com.my) with the value of RM22.7 million (equivalent to c. £4.8 million) to supply telecommunication hardware over a period of 3 years;

(iii)          In Cambodia, MobilityOne Malaysia has entered into agreements with 4 telecommunications companies, namely Hello Axiata Company Limited (Hello Mobile - www.hello.com.kh), Latelz Co. Ltd (Smart Mobile - www.smart.com.kh), Combodia Advance Communications Co. Ltd (QB Mobile - www.qbmore.com) and Viettel (Cambodia) Pte Ltd (Metfone Mobile - www.metfone.com.kh) to sell their prepaid reloads via EDC terminals and banking channels.  In addition, MobilityOne Malaysia is in discussion with several banks in Cambodia to provide prepaid reloads via ATMs, Internet banking and mobile banking; and

(iv)          In Indonesia, MobilityOne Malaysia has entered into an agreement with PT Citra Multi Services (www.cms701.com) to provide up to 100,000 units of EDC terminals throughout Indonesia over a period of 7 years. MobilityOne Malaysia is currently working with PT Citra Multi Services on the technical aspects of the system and is evaluating the funding options and requirements for the EDC terminals.

Whilst entry into new markets has not resulted in immediate revenue growth, the Directors believe that it will provide good opportunities for the Group in the long term. In addition, the Group will continue to strengthen its existing core business and continuously develop innovative solutions and tap into new business opportunities in order to expand the earnings base for long term growth.

Conclusion

On behalf of the Board of Directors, I would like to take this opportunity to thank the management and staff for their efforts and commitment over the year.

Dato' Dr. Wan Azmi bin Ariffin

Chairman

29 June 2010

CONSOLIDATED INCOME STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

		2009		2008
		£		£
Revenue		13,733,773		12,460,925
Cost of sales		(12,719,917)		(11,608,785)
GROSS PROFIT		1,013,856		852,140
Other operating income		71,713		136,014
Administration expenses		(1,496,741)		(1,343,110)
Other operating expenses		(435,114)		(512,744)
OPERATING LOSS		(846,286)		(867,700)
Finance costs		(71,057)		(48,347)
LOSS BEFORE TAX		(917,343)		(916,047)
Tax		-		36,895
LOSS AFTER TAX		(917,343)		(879,152)
Attributable to:
Equity holders of the Company		(916,220)		(876,818)
Minority interest		(1,123)		(2,334)
		(917,343)		(879,152)
EARNINGS PER SHARE
Basic earnings per share (pence)		(1.15)		(1.10)
Diluted earnings per share (pence)		(1.15)		(1.10)

CONSOLIDATED BALANCE SHEETS

AS AT 31 DECEMBER 2009

			At		At
			31 December 2009		31 December 2008
			£		£
Assets
Non-current assets
	Intangible assets		1,829,400		2,272,547
	Property, plant and equipment		988,465		1,105,264
			2,817,865		3,377,811
Current assets
	Inventories		728,094		878,777
	Trade receivables		333,737		415,289
	Other receivables		81,976		48,233
	Tax recoverable		7,434		8,179
	Cash and cash equivalents		400,304		410,085
			1,551,545		1,760,563
	Non-current assets held for sale		375,442		413,084
			1,926,987		2,173,647
Liabilities
Current liabilities
	Trade payables		135,470		325,394
	Other payables		314,092		222,259
	Amount due to Directors		29,047		106,129
	Borrowings - secured		1,182,498		688,273
			1,661,107		1,342,055
	Liability relating to non-current assets held for sale		71,090		36,808
			1,732,197		1,378,863
Net current assets			194,790		794,787
Total assets less current liabilities			3,012,655		4,172,595
Non-current liabilities
	Borrowings - secured		70,318		180,045
Net assets			2,942,337		3,992,550
Shareholders' equity
Equity attributable to equity holders of the Company
	Called up share capital		2,339,374		1,974,374
	Share premium		784,234		782,234
	Reverse acquisition reserve		708,951		708,951
	Foreign currency translation reserve		552,141		1,049,357
	Retained earnings		(1,439,436)		(523,216)
Shareholders' equity			2,943,264		3,991,700
Minority interest			(927)		850
Total Equity			2,942,337		3,992,550

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

		Non-Distributable			Distributable
				Foreign
			Reverse	currency
	Share	Share	acquisition	translation	Retained		Minority
	capital	premium	reserve	reserve	earnings	Total	interest	Total
	£	£	£	£	£	£	£	£
As at 1 January 2008	2,348,430	782,234	708,951	71,567	1,372,532	5,283,714	-	5,283,714
Comprehensive income/(loss)
Loss for the year	-	-	-	147,084	(876,818)	(729,734)	(2,334)	(732,068)
Foreign currency translation	-	-	-	830,706	-	830,706	-	830,706
Total comprehensive income for the year	-	-	-	977,790	(876,818)	100,972	(2,334)	98,638
Transactions with owners
Acquisition of subsidiary company	-	-	-	-	-	-	3,184	3,184
Share buyback in MobilityOne Limited	(374,056)	-	-	-	(1,018,930)	(1,392,986)	-	(1,392,986)
Total transactions with owners for the year	(374,056)	-	-	-	(1,018,930)	(1,392,986)	3,184	(1,389,802)
As at 31 December 2008	1,974,374	782,234	708,951	1,049,357	(523,216)	3,991,700	850	3,992,550

		Non-Distributable			Distributable
				Foreign
			Reverse	currency
	Share	Share	acquisition	translation	Retained		Minority
	capital	premium	reserve	reserve	earnings	Total	interest	Total
	£	£	£	£	£	£	£	£
As at 1 January 2009	1,974,374	782,234	708,951	1,049,357	(523,216)	3,991,700	850	3,992,550
Comprehensive income/(loss)
Loss for the year	-	-	-	60,159	(916,220)	(856,061)	(1,123)	(857,184)
Foreign currency translation	-	-	-	(557,375)	-	(557,375)	(654)	(558,029)
Total comprehensive income for the year	-	-	-	(497,216)	(916,220)	(1,413,436)	(1,777)	(1,415,213)
Transactions with owners
Issue of shares in MobilityOne Limited	365,000	-	-	-	-	365,000	-	365,000
Total transactions with owners for the year	365,000	-	-	-	-	365,000	-	365,000
As at 31 December 2009	2,339,374	782,234	708,951	552,141	(1,439,436)	2,943,264	(927)	2,942,337

Share capital 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.

The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS 3.

The Company's assets and liabilities stated in the Statement of Financial Position were translated into Pound Sterling (£) using the closing rate as at the Statement of Financial Position date and the income statements were translated into £ using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.

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

CONSOLIDATED CASH FLOW STATEMENTS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2009

		2009		2008
		£		£
Cash flows from operating activities
Cash (depleted in)/generated from operations		(489,661)		2,060,020
Interest paid		(71,057)		(48,347)
Interest received		1,902		14,963
Net cash (used in)/generated from operating activities		(558,816)		2,026,636
Cash flows from investing activities
Purchase of property, plant and equipment		(57,804)		(152,253)
Proceeds from disposal of property, plant and equipment		-		9,053
Proceeds from disposal of available for sale financial asset		-		60,252
Addition to development costs		-		(178,289)
Net cash used in investing activities		(57,804)		(261,237)
Cash flows from financing activities
Drawdown of  short term borrowings		472,719		126,028
Drawdown of term loan		-		136,030
Repayment of term loan		(89,122)		(68,649)
Repayment of finance lease payables		(4,662)		-
Share buyback		-		(1,392,986)
Proceeds from issuance of ordinary shares		365,000		-
Net cash generated  from/(used in) financing activities		743,935		(1,199,577)
Increase in cash and cash equivalents		127,315		565,822
Effect of foreign exchange rate changes		(137,096)		(504,213)
Cash and cash equivalents at beginning of year		410,085		348,476
Cash and cash equivalents at end of year		400,304		410,085

NOTES TO THE FINANCIAL STATEMENTS

1.	Basis of preparation
	The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), as adopted by the European Union, and with those parts of the Companies (Jersey) Law 1991 applicable to companies preparing their financial statements under IFRS. The financial statements have been prepared under the historical cost convention.
2.	Going concern
3.	In order to assess the going concern of the Group, the Directors have prepared cashflow forecasts for companies within the Group. These cashflow forecasts show the Group will have increased sales based primarily on signed contracts and having sufficient headroom over available banking facilities. The Group has obtained banking facilities sufficient to facilitate the growth forecast in future periods. No matters have been drawn to the Directors' attention to suggest that future renewals may not be forthcoming on acceptable terms.  After making enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the financial statements. Functional and presentation currency (i)         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 (the functional currency). The functional currency of the Group is Ringgit Malaysia (RM). The consolidated financial statements are presented in Pound Sterling (£), which is the Company's presentational currency as this is the currency used in the country in which the entity is listed. Assets and liabilities are translated into Pound Sterling (£) at foreign exchange rates ruling at the Statement of Financial Position date. Results and cash flows are translated into Pound Sterling (£) using average rates of exchange for the period. (ii)        Transactions and balances Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.               The financial information set out below has been translated at the following rates: Exchange rate (RM: £) At balance sheet date Average for year/period Year ended 31 December 2009 5.50 5.53 Year ended 31 December 2008 5.00 6.16

4.	Segmental reporting
	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
	The direct subsidiary company, MobilityOne Malaysia, was granted a MSC status (Pioneer Status) by Multimedia Development Corporate Sdn Bhd and is entitled to tax-free incentives in Malaysia for a period of five years effective from 27 April 2005 to 26 April 2010.
6.	Earnings per share
	The basic earnings per share is calculated by dividing the loss of £916,220 (2008: loss of £876,818) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which is 79,934,951 (2008: 79,547,278). The diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.  For the year ended 31 December 2009, the diluted earnings per share is equivalent to the basic earnings per share as the exercise price of the share options is above the current market price.
7.	Contingent liabilities
	Corporate guarantees of £1,109,090 given to a licensed bank by a subsidiary company, MobilityOne Malaysia, for credit facilities granted to a third party.
8.	Significant accounting policies
	Amortisation of intangible assets Software is amortised over its estimated useful life. Management estimated the useful life of this asset to be within 5 years. Changes in the expected level of usage and technological development could impact the economic useful life therefore future amortisation could be revised. The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units ("CGU") to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The research and development costs are amortised on a straight-line basis over the life span of the developed assets. Management estimated the useful life of these assets to be within 5 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash flows forecasts. If an indication exists an impairment review is carried out. At the year end, there was no indication of impairment of the value of goodwill on consolidation or of development costs. During the financial year, the Group did not recognise any impairment loss in respect of the goodwill on consolidation
	Impairment of goodwill on consolidation The Group's cash flow projections include estimates of sales. However, if the projected sales do not materialise there is a risk that the value of goodwill would be impaired. The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering the net present value of discounted cash flows forecasts which have been discounted at 8.5%. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored. At the period end, based on these assumptions there was no indication of impairment of the value of goodwill or of development costs. However, if the projected sales do not materialise there is a risk that the value of the intangible assets shown above would be impaired. Development costs
	Development costs will not be amortised if the product is still in its development phase. The amortisation of the development costs is over 5 years period, which in the opinion of the Directors is adequate.
	-Ends-

 

END

 

 

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