Yeoman accelerates commercial exploitation of mobile navigation
Unaudited Interim Results for the half year to 31 March 2002
London, 27 June 0700: Yeoman Group plc ("the Company") announces today
commercial arrangements with a number of third parties to increase
market penetration of its mobile navigation service, as well as the
Group's unaudited Interim Results for the half year to 31 March 2002.
Highlights include:
· Following the public launch of a fully commercial mobile navigation
service in December 2001, early customer adoption has demonstrated the
viability of the service and provided the basis for negotiations with
third parties
· The Company announces marketing agreements with:
* ITIS, the telematics company
* Caudwells, the Phones4U company
* Hertz - full contract signed for the UK
to provide co-branded versions of the service to their customers
·Recent independent study of navigation systems by MVA Consulting
rated the Yeoman mobile navigation system the best for business driver use
·Detroit Telematics conference (May 2002) supports Yeoman view that
future in-car navigation will be delivered to the mobile phone by
specialist technology companies
·Research and development costs of £1.9 million have passed their
peak (2001 first half: £2.3 million).
·Losses primarily reflect initial launch and marketing costs of
mobile navigation.
Gordon Owen, Chairman remarked:
"We believe that we are establishing a global lead in the provision of
mobile navigation and traffic information delivered via the mobile
handset. Third party agreements, starting with those that we have
announced today, will accelerate the commercial exploitation of our
proven technical infrastructure. We are confident that Yeoman has
positioned itself in the right place at the right time in this market."
For further information, please contact:
Yeoman Group plc
Hugh Agnew, Chief Executive Tel: 01590 679777
Charles Marshall, Finance Director Tel: 01590 679777
Vincent Geake, Executive Director Tel: 01590 679777
Brewin Dolphin Securities Limited
James Matheson Tel: 0141 221 7733
Chancery Communications
David Waller Tel: 0207 269 6940
Call Yeoman TravelM8 (pronounced TravelMate), the world's first mobile
navigation service, on 09050 50 50 50 for journey planning, traffic
information and turn-by-turn directions to your mobile phone
Background
The main aim of the Group is to position itself as a leading provider of
mobile navigation services. This objective is based on the Board's long-
held view that the navigation and traffic services will largely be
supplied into cars through mobile phones accessing information from
central computers with extensive and continually updated data-bases.
Substantial progress has been made towards this goal. Specific
achievements include:
January 2000 announcement of the Group's mobile navigation strategy
and commitment to the development of a mobile navigation
demonstration system.
May 2000 acquisition of Laser-Scan for a total consideration of
£13.4 million to provide core technologies and software
resources to advance the development of the mobile
navigation system.
December 2000 demonstration of a mobile navigation system, delivering
real-time, detailed, turn-by-turn voice navigation
instructions through a location-enabled mobile handset.
March 2001 placing and open offer raising £10.5 million to finance
the continued development and implementation of a full-
scale commercial mobile navigation service and to fund an
initial marketing and sales programme.
December 2001 public launch of a full-scale commercial mobile
navigation service throughout Great Britain, delivering
routing, real-time traffic information and navigation
instructions by voice to any GSM mobile handset.
The current service, accessed through premium rate number 09050 50 50 50
on all networks, provides best routing, taking into account traffic
conditions, time of arrival and stored turn-by-turn instructions which
can be accessed at any time by the user. The user gives a journey start
and destination to a call-centre operator and the rest of the service is
delivered by computer and voice synthesis.
Yeoman has also developed a low cost GPS unit which plugs into a mobile
telephone hands free kit and which then transmits the phone's location
to the central server utilising a proprietary protocol. This
automatically defines the journey start point and provides real-time
turn-by-turn navigation instructions to existing model GSM phones when
in such GPS hands free kit.
Current Trading
The Group's Interim Results are set out below.
Sales decreased in the half-year to 31 March 2002 to £6.5 million
against £7.8 million in the equivalent period in 2001. Marine sales were
slightly affected by economic conditions at 92% of the equivalent period
in 2001, while Laser-Scan saw weaker government sales reduce turnover to
72% for the same period. Operational EBITDA, before research and
development costs, fell to a loss of £1.1 million compared to a profit
of £0.5 million in the same period in 2001. This primarily arose because
the Mobile Navigation division was included as an operational activity
for the first time - initial launch and marketing costs (including
overheads) were £0.9 million in the half-year to 31 March 2002.
Research and development costs have, as expected, passed the peak of
2001 - £1.9 million for the half-year to 31 March 2002 against
£2.3 million in the equivalent period in 2001. The Board expects that
these costs will reduce further in the second half of the current
financial year. The declared loss for the half-year to 31 March 2002 was
£6.8 million against a loss of £5.4 million in the equivalent period of
2001. This included a further write-off of goodwill from the acquisition
of Laser-Scan. This goodwill will be entirely written off by the end of
the current financial year.
The Board considers that recent trading and cash-flow in the Marine
Navigation division has been satisfactory and as the process of
strengthening of the management team there continues, a stronger
performance is expected during the course of 2003.
Mobile navigation is still at an early stage of commercialisation and
the fixed costs of maintaining the core operation, technical team and
sales and marketing activities are unlikely to be matched by revenues in
the near term.
Mobile Navigation - Market
Yeoman has completed the necessary technology development to deliver, at
full commercial scale, voice instructions to a mobile handset covering
route planning, time of arrival and turn-by-turn instructions all taking
into account predicted as well as real time traffic data.
The current commercial service, provided throughout Great Britain, was
launched on 5 December 2001. It is accessed on a premium rate number at
a charge of up to 60p per minute available across all UK mobile networks
on 09050 50 50 50 and additionally a short code 1577 is available for
Vodafone subscribers.
The Directors believe that Yeoman has established both a technical and
commercial lead in the provision of mobile navigation and traffic
information services delivered via the mobile handset. A recent study
compared the Yeoman service to a number of alternatives, including a
leading in-car navigation system, and rated the Yeoman system the best
for business driver use. (source: MVA Consulting, February 2002).
There have been a number of recent indications that the motor industry
recognises that the preferred method of access to such services will be
via a mobile handset. Further, there is a growing industry belief that
these services will be provided by independent specialist companies such
as Yeoman. This view is supported by Yeoman's own discussions with a
number of major car manufacturers. A recent report from a conference in
May 2002, "Telematics Detroit", included the conclusions:
· "The wireless manufacturer will be the deliverers, and the
automakers will be the enablers, based on the irrefutable view that the
cell phone is king."
· "Many experts urged automakers...to cede the young (telematics)
market to wireless providers and technology start-ups, lest they lose
focus on their core business of designing and manufacturing vehicles."
Whilst initial work is focused in Great Britain, it is the Group's
intention to extend the marketing and demonstration facilities into
Europe. The Yeoman mobile technology platform is designed to work with
data sets and languages for different countries.
Strategy and Objectives
Yeoman's strategy for the further commercialisation of mobile navigation
is based on a sequence of steps:
·Yeoman's own brand service sold directly by Yeoman to the end users
with revenues deriving from premium rate calls. Much is learnt in this
process about product, marketing and customer service. It demonstrates
the viability of the service and forms the basis for negotiation with
third parties
·Yeoman's service sold through third parties possessing substantial
customer bases to whom mobile navigation and traffic information
services and products can be sold. The service may be marketed under the
Yeoman or third party label or may be co-branded. Such organisations
include:
- telecommunications companies
- motoring organisations
- car-hire companies
- mobile phone retailers
- mapping and routing web-sites
- directory enquiry companies
· Roll-out of similar services across Europe
Following the continuing implementation of third party agreements and
development of technical infrastructure, the Board is confident that the
Group will be well positioned to exploit further opportunities to
provide server-based navigation and traffic information services through
an evolving range of delivery methods and hardware devices.
Progress
Since the launch of Yeoman's commercial mobile navigation service in
December 2001, a variety of marketing methods have been used, including
radio advertising, motorway service area advertising, direct mail and
telephone sales. Over 2,000 direct customers have been recruited and
marketing messaging and methods have been refined. Importantly, the
average user spend per route is higher then shown in initial pilot
studies at over 5 minutes connect time.
Based on this early market take-up and service availability, marketing
has been conducted with suitable organisations possessing large customer
bases with a view to offering Yeoman's service to these customers.
Specifically the following projects have been progressed during the
first quarter of 2002. In each of these the financial terms are based
on a revenue share with the major proportion accruing to Yeoman.
· ITIS Holdings plc through its subsidiary NavTrak Limited
("NavTrak")
NavTrak has installed some 8,000 GPS/GSM NavTrak units in cars and
commercial vehicles for security purposes. The heads of agreement
provide for Yeoman and ITIS to co-operate to market and provide a
located version of Yeoman's mobile navigation service for use by
NavTrak's customers.
· Hertz (U.K.) Limited ("Hertz")
Agreement has been entered into for Yeoman to provide a co-branded
Yeoman service which Hertz will promote to its rental car customers in
Great Britain. A Hertz customer will call a dedicated telephone number
to access the Yeoman service.
· Caudwell Group through its subsidiary Corporate 4U Limited
("Corporate 4U")
Corporate 4U provides mobile telephones and airtime to a
substantial corporate customer base. Heads of agreement have been signed
for Corporate 4U to market the Yeoman service to this customer base.
· Vodafone Limited ("Vodafone")
Since the beginning of March 2002, Vodafone subscribers have been able
to access the Yeoman mobile navigation service on a short code 1577
under an agreement signed with Vodafone on 22 February 2002.
With regard to mainland Europe, Yeoman is in initial discussions with a
number of mobile telecommunications companies, car manufacturers, hand-
set manufacturers and motoring organisations with a view to supplying
mobile navigation and traffic services to their customers on a revenue
share basis.
In conjunction with this work Yeoman has been reviewing the product name
for the mobile navigation services in conjunction with a marketing
organisation with substantial experience in related areas. As a result
the Yeoman mobile navigation service and co-branded versions will, as of
1 July 2002, be called TravelM8 (pronounced 'travelmate') with the GPS
located version called TravelM8 active. Applications for suitable
trademarks are pending.
Outlook
The Directors believe that the marketing arrangements that the Company
has put in place to date give it a strong platform to deliver its
service on a larger commercial scale. More encouragingly the growing
industry belief that such services will be provided by independent
specialist companies such as Yeoman, and that such services will be
provided via a mobile phone, gives us confidence in the strategy that we
have so consistently followed. The Company has reached a new milestone
in the last 6 months with the launch and early exploitation of a full-
scale commercial mobile navigation service throughout Great Britain. The
new arrangements in place with Hertz, ITIS, Caudwells and Vodafone will,
the directors believe, be followed by other agreements of a similar
nature which together will see the Company establish in the next 12 to
18 months a significant share of the market for the provision of mobile
navigation and traffic information services.
I thank the management and staff for their efforts and achievements
towards establishing Yeoman as a world leader.
G M W Owen
Chairman
27 June 2002
INTERIM RESULTS OF YEOMAN GROUP PLC
The following are unaudited Interim Results of the Yeoman Group for the
half year to 31 March 2002.
Consolidated Trading Results for the 6 months to 31 March 2002
Unaudited Unaudited Audited
6 months 6 months 12 months
to 31/3/02 to 31/3/01 to 30/9/01
£,000 £,000 £,000
Sales 6,542 7,801 14,891
Cost of sales (3,394) (4,247) (8,609)
Gross profit 3,148 3,554 6,282
Administrative expenses
Amortisation of goodwill (2,754) (2,754) (5,696)
Research and development (1,948) (2,344) (4,872)
Other (5,271) (3,891) (8,346)
Total administrative expenses (9,973) (8,989) (18,914)
Operating loss (6,825) (5,435) (12,632)
Interest receivable 88 44 191
Interest payable (31) (8) (41)
Taxation (4) (1) (23)
Loss on ordinary activities after tax (6,772) (5,400) (12,505)
Loss per share - basic (45.3p) (45.9p) (95.7p)
Loss per share - diluted (45.3p) (44.2p) (95.7p)
Consolidated Balance Sheet as at 31 March 2002
Unaudited Unaudited Audited
As at As at As at
31/3/02 31/3/01 30/9/01
£,000 £,000 £,000
Fixed assets
Intangible 2,807 8,393 5,595
Tangible 1,397 1,412 1,512
4,204 9,805 7,107
Current assets
Stocks 1,785 1,636 1,517
Debtors 2,281 3,289 2,465
Cash at bank and in hand 3,387 311 6,728
7,453 5,236 10,710
Deduct: Creditors
Amounts falling due within one year (5,512) (5,061) (4,699)
Net current assets/(liabilities) 1,941 175 6,011
Total assets less current liabilities 6,145 9,980 13,118
Creditors: amounts falling due after
more than one year (65) (105) (103)
Provisions for liabilities and charges (342) (553) (561)
Net assets 5,738 9,322 12,454
Capital and reserves
Called up share capital 3,738 2,946 3,729
Share premium account 27,550 18,213 27,511
Merger reserve 692 692 692
Profit and loss (26,242) (12,529) (19,478)
5,738 9,322 12,454
Notes:
1. The Directors do not intend to pay an interim dividend
2. The basic loss per share is 45.3p (6
months to 31 March 2001 - 45.9p) based on a loss for the period of
£6,772,000, divided by the weighted average number of ordinary shares in
issue of 14,935,854 shares (6 months to 31 March 2001 -11,772,033)
during the period. There are no dilutive potential ordinary shares for
the six months to 31 March 2002 (6 months to 31 March 2001 - 44.2p,
based on a loss of £5,400,000 divided by the average number of shares
and options issued of 12,230,121 during the period).
3. Additional copies of these Interim
Results are available from the Company's Head Office at The Shipyard,
Bath Road, Lymington, Hampshire SO41 3YL.
The interim accounts have been prepared under the historic cost
convention and are unaudited. The comparatives for the 12 months ended
30 September 2001, which do not constitute statutory accounts, were
extracted from the Group financial statements which have been filed with
the Registrar of Companies, together with an unqualified audit report.