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Zamano PLC (ZMNO)

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Thursday 19 May, 2011

Zamano PLC

EGM Statement

RNS Number : 8621G
Zamano PLC
19 May 2011
 



 

 

zamano plc ("zamano" or the "Company")

 

EGM Statement

 

19 May 2011

 

 

 

 

The following statement will be given at the Company's EGM at 11.00am on the 19th May at the Conrad Hotel, Earlsfort Terrace, Dublin 2.

 

The Notice convening this meeting was publicised on April 26th. This meeting has been convened in accordance with Section 40, Sub-Section 1 of the Companies (Amendment) Act 1983. For your information that Section of the Companies Act states as follows: "Where the net assets of a Company are half or less of the amount of the Company's called up share capital the Directors of the Company shall, not later than 28 days from the earliest date on which the fact is known to a Director of the Company, duly convene an Extraordinary General Meeting of the Company for a date not later than 56 days from that date, for the purpose of considering whether any, and if so what, measures should be taken to deal with the situation"

 

This Meeting is therefore convened as a consequence of the Company's net assets in the 2010 Financial Statements being less than half the amount of the called up share capital.

 

I propose therefore to outline the measures which the Directors and management of the Company have been taking and are continuing to take, to deal with the financial situation now facing the Group.

 

As explained in market updates over the last two years, the mobile content sector has witnessed very significant changes, driven by more rigorous  regulation, the increase in smartphone penetration and resulting changes in the value chain. The traditional routes to market and business models operated by zamano and many of its customers have been completely disrupted, with the result that many companies have exited the market completely.

 

The trading loss reported in 2010 was almost entirely  due to the Directors taking an informed view of the carrying value of the goodwill on the balance sheet. A total of €12.7M was deducted from the intangible assets, leaving a goodwill valuation of €6.2M remaining, which the Board feels is an accurate reflection of the cash generation capabilities of the main income generating unit over the next number of years.

 

In response to the declines noted in the markets, the Company has taken a number of steps, which have resulted in zamano's core business now trading  with stronger EBITDA results before investment activities.

 

Zamano is now focused on selling mobile content directly to consumers in four territories, namely Ireland, UK, USA and Spain. The company has migrated the majority of its marketing spend away from traditional TV and Print routes to focusing now on web and mobile marketing. Zamano is now a leading mobile marketer and has built a very extensive set of relationships with major mobile publishers worldwide.

 

In Ireland, the Company has stabilised revenues for the last 10 months and is focusing on maximising margin through its marketing channels. After a long period of decline in the UK, brought about by very considerable regulatory changes and the mandating of a non-functioning mobile payment mechanism, Payforit, the Company has finally begun to experience a stabilisation in revenues and moderate growth levels. In the USA, progress continues to be made in opening up new routes to market, but there are still many challenges to be overcome. The Company continues to invest in Spain and is satisfied with ongoing progress in this market.

 

In parallel with the refocusing of marketing and development resources on the core territories referenced above, the Company has also brought about very significant cost reductions, through a combination of wage cuts, wage freezes and headcount reductions. Overheads on an ongoing monthly basis are down nearly  30% on levels from one year ago, before investment activities.

 

A re-structuring of the debt was completed in December 2010 which meant that zamano continues to perform in line with its covenants, and allocate some funds towards investment acvities.

 

The position of the business today is that the core mobile content business has stabilised and is delivering reasonable levels of EBITDA over the last 3 months, before re-structuring costs. Zamano is now re-positioning the core mobile content business for moderate levels of growth, and is also investing in related growth opportunities, the results of which we hope to share with the market in due course.

 

To conclude, the Directors and managers of the Company have experienced very significant challenges in the last three years, but are now confident that a degree of stability has been achieved which positions zamano to take advantage of growth opportunities as they arise.

 

Against the backdrop of the foregoing, the Directors believe that no further measures are appropriate or required at this point.

 

I'd like to thank you for your attendance today, and look forward to updating you with more information at our AGM on 14 July 2011

 

 

 

Mike Watson

Chairman

- Ends -

For further information, please contact:

zamano plc


John O'Shea, Chief Executive Officer

Tel: +353 1 488 5830

 

NCB Corporate Finance


Conor McCarthy / Shane Lawlor

Tel: +353 1 611 5100

 

Cenkos Securities


Jon Fitzpatrick / Ken Fleming

Tel: +44 (0) 20 7107 8000

 

Media enquiries:

Edelman

Tel +353 1 678 9333

 

Donnchadh O'Leary

www.edelman.com

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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