Half-yearly Report
Mirada plc
Interim results for the six months to 30 September 2008
Mirada plc ("Mirada" or "the Company" or "the Group"), the AIM quoted
interactive media and games group, announces interim results for the six months
to 30 September 2008.
Highlights
* Successful restructuring of enlarged group and renewed strategy
* Move to new UK headquarters complete with state-of-the-art equipment and
custom-built studios
* New commercial offices opened in Milan and Montevideo to accommodate
growing international client partnerships
* New relationship with ITV - successful launch of Bingo Night Live on ITV1
* Continued progress in primary markets of UK and Spain with new client wins
and product development
* New contract win for major cable operator in the Middle East
* Gross profit has increased to £2,801,000 (2007: £2,252,000)
* Improvement in trading: loss before interest, tax, depreciation,
amortisation, and restructuring of £525,000 (2007: £1,632,000)
* Effective cost reduction programme and restructuring:
* Other administrative expenses reduced to £3,604,000 (2007: £4,373,000)
Jose Luis Vazquez, Chief Executive Officer of Mirada, commented:
"We have finally integrated our operational and commercial teams into a global
organisation, and the expansion of the Media business unit is very promising.
Our gaming division is launching innovative new products and forging new
partnerships, placing us at the forefront of the interactive media sector.
"Mirada's positive new developments as well as increasing international reach
have been achieved while successfully implementing a company restructuring and
cost reduction plan, which has led to significant savings for the Group.
"We have exciting new opportunities to pursue in Asia, Europe, North America
and South America, and we expect to report positive news arising from these
during the coming months."
22 December 2008
Enquiries:
Mirada PLC +44 (0) 207 942 7942
Jose Luis Vazquez, Chief Executive Officer
Graham Duncan, Chief Financial Officer
Haggie Financial LLP +44 (0) 207417 8989
Nicholas Nelson/Kathy Boate Nicholas.nelson@haggie.co.uk
Seymour Pierce Limited (Nominated Advisor & +44 (0) 207 107 8000
Broker)
Mark Percy/Christopher Howard
Old Park Lane Capital Ltd (Joint Broker) +44 (0) 207 493 8188
Michael Parnes/Lisa Ahlas/Forbes Cutler
Chief Executive Officer's Statement
Business overview
I am pleased to report on a period of continuing strong progress. Numerous
changes implemented over the last six months have served to transform the
Company and positioned it strongly within the interactive media industry.
The first half of the financial year has been an exciting period, during which
time the Company demonstrated its capability to develop its international
strategy and implement the objectives defined in the restructuring plan, which
was formulated as part of the merger with Fresh Interactive Technologies S.A.
("Fresh"). Trading has been very encouraging and we will strive further to
drive the business over the coming months.
Mirada is a leader in the interactive audiovisual field, where the focus is on
the digital consumer, via, for example, the internet, Digital TV and mobile
telephony, through different product platforms and devices. Following the
company wide restructuring exercise, our products and services are defined
through four operating divisions: Mirada Gaming, Media, Touch and Connect.
Mirada moved to new London headquarters in July 2008, consolidating the UK
operations and providing a state-of-the-art location, complete with
custom-built studios, post production facilities and full editing suites. Being
a truly multinational business, Mirada also has offices in Madrid, Exeter,
Milan and Montevideo, to service the growing global clientele. New customer
wins have been a result of a new sales team with large-scale vision and
extensive international experience.
Financial overview
The Group recorded revenue for the period of £5,757,000 compared to £5,753,000
for the 6 months ended 30 September 2007. The gross profit has increased to £
2,801,000 (2007: £2,252,000). This improvement is mainly due to the results of
Fresh which are not included in the income statement for the 6 months ended 30
September 2007.
Net gaming income which represents the revenues of the Group's B2C fixed odds
gaming business, fell from £489,000 to £278,000 and was adversely affected by a
£100,000 winner in one of the interactive games. The remaining decrease relates
to the fact the Group is focusing on supplying other brand owners through its
B2B gaming business and as part of this strategic decision Mirada sold a gaming
channel operating on the Sky platform in May 2008. The sale of this channel has
reduced the gaming division's cost of sales by approximately £25,000 a month.
Despite the inclusion of the costs of Fresh, the other administrative expenses
reduced to £3,604,000 for the 6 months ended 30 September 2008 (2007: £
4,373,000). This decrease is due to the implementation of cost reductions which
were identified as part of the February 2008 restructuring. Management are
confident that the results for the coming 6 months will show a continued
reduction in administrative expenses.
The loss before interest, tax depreciation, amortisation, restructuring and
share-based payment charges for the period equalled £525,000 (2007: loss £
1,632,000). This represents an encouraging improvement in trading considering
that the acquisition of Fresh and the Group restructuring was only completed on
25 February 2008. Loss before interest, tax, depreciation, amortisation,
restructuring and share-based payment charges is a performance measure used
internally by management to manage the operations of the Group and removes the
impact of one-off and non-cash items (see note 4 of the financial statements
for a reconciliation of this measure to statutory captions).
Overall the Group recorded a retained loss of £893,000, compared to £15,422,000
for the 6 months ended 30 September 2007, however, it should be noted that the
retained loss recorded for the 2007 is after deducting a goodwill impairment
charge of £12 million.
Review of Operations
Gaming
Mirada has made recent significant progress in this sector, most notably in the
UK:
* The launch of Bingo Night Live on ITV1, which signals the start of a new
relationship with ITV. Bingo Night Live had more than 70,000 concurrent
users playing bingo on ITV1 (which we understand is a new Guinness World
Record). We have received extremely encouraging feedback from broadcasters
across the world with regards to this format. We expect to work with the
key operators in this field to further develop the format with new
functionalities and launch broadcasted Bingo overseas.
* Mirada launched the new version of Monte Carlo Roulette (Sky channel 863,
and http://www.montecarloroulette.tv) in early October, being the first
development in our planned Virtual Dealer games offering. The benefits of
this product are its low production costs, excellent broadcast quality,
near-live performance perception, and the availability of user interaction
in communities through our own chat capabilities. A user can play the same
spin on Sky and on the internet simultaneously. We are currently involved
in discussions with various major gaming players to integrate our Virtual
Dealer Roulette and new Virtual Dealer games into their TV and on-line
proposals.
Media
The performance of the media business unit in the UK has surpassed our
expectations. Mirada increased its presence in Digital TV broadcasters, and our
xPlayer technology (which allows synchronization between the audiovisual
content and the interactive services) is the leading reference in its field. We
have integrated xPlayer into the leading broadcasters in the UK and we expect
that sales of this product will continue to grow with the addition of new
broadcasters - both in the UK and internationally - and with the future
versions of xPlayer integrated into internet and mobile phone environments.
Spanish Market
The performance of the Spanish operation since the merger has been most
encouraging, with an expected increase in turnover of approximately 50% for
this full financial year. Mirada now has a competitive position in the
international Digital TV market, and the expertise accumulated over the last
eight years is now being rewarded in the marketplace.
Our relationship with Ono, the largest Spanish digital cable operator,
continues to develop successfully and we are now exploring new generation
services for the Spanish cable and IPTV space. In the gaming field, Mirada has
been appointed the main technology supplier for a large Spanish gaming
organisation. The deal includes up to eight games to be integrated into the
major Digital TV platforms in the Spanish market, with an option to extend the
number of games and platforms in the future. We believe that this positions
Mirada as a leading player in the Spanish market for interactive gaming
solutions.
Global Expansion
Mirada opened two new commercial offices in the period. The Italian office in
Milan started its operations by way of a deal with Universal McCann for
Mastercard earlier this year, and good progress has been made in terms of
relationship building and possible deals. Following this we are pleased to
announce a new deal with a major Italian web company to run an innovative viral
Christmas campaign based on Mirada's scratch card solution.
Mirada has established a permanent presence in Latin America via the opening of
an office in Montevideo, Uruguay. Fresh was central to the decision made by the
Uruguayan government to choose the European DVB-T standard for Digital
Terrestrial Television transmissions, and will look to capitalise on this
further throughout the region. The Group has been awarded several new grants
commencing later this year from the Spanish Ministry of Industry for the
integration of interactive TV services in Uruguay and Chile.
In keeping with our global growth, we are pleased to announce that Quative
Limited, a Kudelski Group Company, has selected Mirada for the provision of its
Video on Demand (VOD) application (including catalogue servers) for a large
cable operator in the Middle East. The project was awarded in May and is
currently in its delivery phase - Quative is acting as the overall system
integrator. This project is the fourth VOD application successfully deployed by
Mirada and the first integration of Mirada with Quative VOD backend servers.
Share Performance
Under the present market conditions our share price has not reflected the
improvement in our financial results. On the contrary our share price has
experienced a significant reduction during the period, much in line with what
has happened with other media and technology stocks around the globe.
Outlook
We have finally integrated our operational and commercial teams into a global
organisation, and the international expansion of the Media business unit is
very promising. Our gaming division is launching innovative new products and
forging new partnerships, placing us at the forefront of the interactive media
sector.
Mirada's positive new developments as well as increasing international reach
have been achieved while successfully implementing a company restructuring and
cost reduction plan, which has led to significant savings for the Company.
We have exciting new opportunities to pursue in Asia, Europe, North America and
South America, and we expect to report positive news arising from these during
the coming months.
Jose-Luis Vazquez
Chief Executive Officer
Consolidated income statement for the six months to 30 September 2008
Note 6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)*
£000's £000's £000's
Revenue 5,757 5,753 13,553
Cost of sales (2,956) (3,501) (8,727)
Gross profit 2,801 2,252 4,826
Net gaming income 278 489 1,304
Other income - profit on disposal - - 576
Depreciation (189) (682) (1,491)
Amortisation of deferred (79) - (10)
development costs
Impairment of goodwill - (12,000) (12,000)
Restructuring costs (91) (128) (1,036)
Share-based payment charge (83) (187) (205)
Other administrative expenses (3,604) (4,373) (10,930)
Total administrative costs (4,046) (17,370) (25,672)
Operating loss 4 (967) (14,629) (18,966)
Finance income 99 - 2
Finance expense (25) (793) (1,599)
Loss on ordinary activities before (893) (15,422) (20,563)
taxation
Taxation - - -
Loss for the financial period (893) (15,422) (20,563)
Loss per share
- basic & diluted 6 (£0.05) (£18.37) (£8.96)
* The results for the 15 months ended 31 March 2008 include discontinued
operations, refer to note 5.
The above amounts are attributable to the equity holders of the parent.
Consolidated statement of recognised income and expense
Six months to 30 September 2008
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)
£000's £000's £000's
Loss for period (893) (15,422) (20,563)
Currency translation differences 127 - 260
Total recognised income and expense (766) (15,422) (20,303)
for the period
Attributable to equity holders of (766) (15,422) (20,303)
the parent
Consolidated balance sheet as at 30 September 2008
Note 30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)
£000's £000's £000's
Non-current assets
Property, plant and equipment 976 1,310 822
Goodwill 17,574 13,520 17,574
Intangible assets 776 - 557
Investments - 18 -
Total non-current assets 19,326 14,848 18,953
Trade and other receivables 3,942 2,802 3,149
Cash and cash equivalents 1,921 358 7,154
Current assets 5,863 3,160 10,303
Total assets 25,189 18,008 29,256
Loans and borrowings (349) (5,297) (234)
Trade and other payables (5,094) (10,729) (8,776)
Provisions - (1,076) -
Current liabilities (5,443) (17,102) (9,010)
Net current assets/(liabilities) 420 (13,942) 1,293
Total assets less current 19,746 906 20,246
liabilities
Interest bearing loans and - (91) (19)
borrowings
Provisions - - (8)
Other non-current payables (660) (450) (450)
Non-current liabilities (660) (541) (477)
Net assets 19,086 365 19,769
Equity attributable to equity
holders of the company
Share capital 34,923 16,031 34,923
Shares to be issued 281 281 281
Share premium 7 - 78,332 79,731
Other reserves 7 4,791 2,761 5,036
Accumulated losses 7 (20,909) (97,040) (100,202)
Equity shareholders' funds 19,086 365 19,769
Consolidated statement of cash flows six months to 30 September 2008
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)
£000's £000's £000's
Cash flows from operating activities
Loss for the period (893) (15,422) (20,563)
Adjustments for:
Depreciation of property, plant and 189 682 1,491
equipment
Amortisation and impairment of goodwill & 79 12,000 12,010
intangible assets
Impairment of investments - - (18)
Foreign exchange 28 - 225
Profit on disposal of subsidiary - - (576)
Profit on disposal of property, plant and - - (7)
equipment
Share-based payment charges 83 187 205
Finance income (99) - (2)
Finance expense 25 793 1,599
Operating cash flows before movements in (588) (1,760) (5,636)
working capital
(Increase)/decrease in trade and other (603) 1,066 1,609
receivables
(Decrease)/increase in trade and other (3,108) 88 (2,611)
payables
Cash used in operations (4,299) (606) (6,638)
Interest and similar expenses paid (25) (99) (303)
Net cash used in operating activities (4,324) (705) (6,941)
Cash flows from investing activities
Interest and similar income received 99 - 2
Costs of acquisition of subsidiary - - (442)
Net cash held in acquired subsidiary - - 4,330
Disposal of subsidiary, net of overdrafts - - 253
disposed
Purchases of property, plant and (345) (1) (96)
equipment
Proceeds from disposal of property, plant - - 8
and equipment
Purchase of other intangible assets (303) - -
Net cash (used in)/generated from (549) (1) 4,055
investing activities
Cash flows from financing activities
Issue of ordinary share capital - 875 10,009
Costs of issue of ordinary share capital - (23) (61)
Issue of convertible loans - 650 650
Repayment of loans - (664) (664)
Repayment of capital element of finance (126) (52) (267)
leases
Net cash (used in)/generated from (126) 786 9,667
financing activities
Net (decrease)/increase in cash and cash (4,999) 80 6,781
equivalents
Cash and cash equivalents at the 6,920 278 139
beginning of the period
Cash and cash equivalents at the end of 1,921 358 6,920
the period
Cash and cash equivalents (which are presented as a single class of assets on
the face of the balance sheet) comprise cash at bank and other short-term
highly liquid investments with a maturity of three months or less.
Notes to the Accounts
1. General information
The information for the period ended 30 September 2008 does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
Group has not adopted IAS 34: "Interim Financial Reporting" as the AIM Rules
for Companies and related regulations do not require half-yearly financial
reports to be prepared in accordance with IAS 34.
2. Basis of Preparation
This interim report was approved by the Directors on 19 December 2008. The
condensed interim financial information has been prepared on the basis of the
accounting policies set out in the 2008 Report and Financial Statements using
accounting policies consistent with International Reporting Standards. The
condensed interim financial information for the six months ended 30 September
2008 and 30 September 2007 has neither been audited nor reviewed pursuant to
guidance issued by the Auditing Practices Board.
The financial information contained in this interim report does not constitute
statutory accounts. The comparatives for the period from 1 January 2007 to 31
March 2008 are derived from but are not the Company's full statutory accounts
for that period. The auditors' report on those accounts was unqualified and did
not include references to any matters to which the auditors drew attention by
way of emphasis without qualifying their report(s) and did not contain a
statement under section 237(2)-(3) of the Companies Act 1985.
3. Accounting policies
The accounting policies adopted are consistent with those set out in the
financial statements for the 15 months ended 31 March 2008 and that are to
apply for the year ended 31 March 2009.
4. Operating loss
Reconciliation of operating loss for continuing operations to loss before
interest, taxation, depreciation, amortisation, restructuring and share-based
payment charges:
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)
£000's £000's £000's
Operating loss (967) (14,629) (19,119)
Depreciation 189 682 1,486
Amortisation of deferred development 79 - 10
costs
Impairment of goodwill - 12,000 12,000
Restructuring costs 91 128 960
Share based payment charge 83 187 205
Loss before interest, taxation, (525) (1,632) (4,458)
depreciation, restructuring, and
share-based payment charges
5. Discontinued operations
The discontinued operations in the 15 months ended 31 March 2008 relate to the
Group ceasing all its operations in the dating sector which had previously
traded through its subsidiaries Yoomedia Dating Group Ltd and Finlaw 532 Ltd.
The table below shows the split between continuing and discontinued operations
in the 15 months ended 31 March 2008.
15 months ended 31 March 2008
Continuing Discontinued Total
operations operations
£000's
£000's £000's
Revenue 12,504 1,049 13,553
Cost of sales (8,242) (485) (8,727)
Gross profit 4,262 564 4,826
Net gaming income 1,304 - 1,304
Other income - profit on disposal - 576 576
Depreciation (1,486) (5) (1,491)
Amortisation of deferred (10) - (10)
development costs
Impairment of goodwill (12,000) - (12,000)
Restructuring costs (960) (76) (1,036)
Share-based payment charge (205) - (205)
Other administrative expenses (10,024) (906) (10,930)
Total administrative costs (24,685) (987) (25,672)
Operating loss (19,119) 153 (18,966)
Finance income 2 - 2
Finance expense (1,575) (24) (1,599)
Loss on ordinary activities before (20,692) 129 (20,563)
taxation
Taxation - - -
Loss for the financial period (20,692) 129 (20,563)
6. Loss per share
6 months 6 months 15 months
ended ended ended
30 September 30 September 31 March
2008 2007 2008
(Unaudited) (Unaudited) (Audited)
Loss for period (£893,000)(£15,422,000)(£20,563,000)
Weighted average number of shares 19,805,485 839,578 2,295,329
Basic & diluted EPS (£0.05) (£18.37) (£8.96)
The weighted average number of shares in issue in the periods has been adjusted
to reflect the share consolidation which took place on 25 February 2008.
For the periods ended 30 September 2008, 31 March 2008 and 30 September 2007
the diluted loss and earnings per share is calculated on the same basis as
basic loss and earnings per share because the effect of the potential ordinary
shares reduces the net loss per share and is therefore anti-dilutive.
The deferred shares are not included in the earnings per share or diluted
earnings per share. These shares have no voting rights and are non-convertible
and therefore do not form part of the ordinary share capital used for the loss
per share calculation.
7. Reserves and changes in equity
Capital Share Foreign Merger Share Profit &
redemption option exchange reserve premium loss
reserve reserve reserve account account
£000 £000 £000 £000 £000 £000
At 1 April 2008 455 1,849 260 2,472 79,731 (100,202)
Loss for financial - - - - - (893)
period
Share based payment - 83 - - - -
Movement in foreign - - 127 - - -
exchange reserve
Cancellation of share - - - - (79,731) 79,731
premium account
Cancellation of capital (455) - - - - 455
redemption reserve
At 30 September 2008 - 1,932 387 2,472 - (20,909)
On 23 April 2008, as confirmed by the High Courts of Justice, Mirada cancelled
its share premium account and its capital redemption reserve against its profit
and loss reserve.
8. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. There were no material transactions between the Group and the related
parties during the period.
9. Other
Copies of unaudited interim results have not been sent to shareholders, however
copies are available on request from the Company Secretary at the Company's
registered office, 6 & 7 Princes Court, Wapping Lane, London, E1W 2DA.
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