Final Results

RNS Number : 8513E

Mobile Tornado Group PLC

07 June 2012

 



Mobile Tornado Group plc

("Mobile Tornado" or the "Company")

Final Results

Chairman's report

Introduction

Mobile Tornado Group plc, the leading provider of instant communication mobile applications to the enterprise market, announces its results for the twelve month period to 31 December 2011.

Highlights

·      Revenues increased by 43% and operating losses reduced to £816k

·      Deal closed with America Movil, one of largest mobile operators in the world to supply Instant Communications to Mexico and Brazil

·      Deal closed with Telecom Italia to access enterprise markets in Italy, Argentina and Brazil

·      Exclusive partnership signed in South Africa with NECO

·      Deal agreed with G4S in the Nordics covering Sweden, Denmark and Finland

·      Android client developed and to be launched in second half 2012

Financial results

Through a combination of increased sales activity and reduced costs we have recorded a loss for the year of £1,092,000 compared to £1,569,000 in the previous year. Revenues of £2,047,000 were 43% higher than the £1,432,000 recorded in 2010 and Group operating losses reduced to £816,000 compared to £1,297,000 in the previous year. The financial results reflect the continued progress we are making in our pursuit of profitability.  

Business review

I am delighted to report another 12 months of progress across the business, which is reflected in an improving set of financial results. Sales are up by 43% which has driven a 37% fall in operating losses. As headline figures these represent the measures against which we are judged. However, I can assure you that the market in which we operate is increasingly receptive to the proposition we have developed and the efficiencies we are able to deliver to enterprise customers. This is borne out by the deals we have announced and the quality of engagement we are currently working on.

Workforce management encompasses all the activities, processes and tools needed to manage a workforce. A comprehensive system will include tools for planning, forecasting, scheduling and tracking workers to optimise the balance of customer, employee and organisational needs, within the boundaries of prevailing laws. We specialise in the provision of Instant Communication applications for mobile devices, with an absolute focus on enterprise workforce management.

We split our sales activities into three primary channels; mobile operators, device manufacturers and independent software vendors (ISV's). We work with country partners across each of these channels, and have delivered increasing momentum across each one.

Mobile operators have been notoriously reluctant to embrace Push to Talk ('PTT') services through a misplaced fear that the functionality would cannibalise their traditional voice revenues. There are clearly exceptions to this, most notably in the Americas, where operators such as Nextel were created to deliver dedicated PTT services. There has been a clear shift in sentiment within the last 18 months amongst the mobile operators, as the advent of the smartphone, the inexorable decline in traditional voice revenues, and the increasing interest in 'apps' has encouraged them to seek out new services that they can provide to their customers. Since enterprise customers comprise the most lucrative segment of the operators' markets, we have seen revived interest in our suite of applications. The announcement in February 2012 of deals with two mobile operators, America Movil in South America and Telecom Italia in Italy, highlighted this new development.

America Movil is a Fortune 500 Company, providing services to over 200 million wireless subscribers in the Americas, primarily in Latin America and the Caribbean. We have partnered with Atencion en Comunicaciones, a business that works with America Movil to integrate technology solutions, and have now successfully installed the server platform in Mexico, integrating our software with their billing and provisioning systems. The service will launch initially across the Telcel network in Mexico and the Claro network in Brazil. There are plans to extend the service across all territories within the America Movil group, which operates across 14 countries in South America. We anticipate commercial launch of services in the second half of this financial year.

The deal with Telecom Italia was delivered through our partnership with Softec S.p.A an Italian leader in mobile computing, specialising in the creation of software to facilitate and improve the use of mobile devices, integrating them with applications and back-end systems. The deal provides for our Instant Communication services to be delivered to enterprise markets in Italy, Brazil and Argentina.

Device manufacturers represent another primary channel to market for us and once again, dramatic changes are taking place in this space. The functionality we take for granted with consumer handsets, triggered by the launch of the iphone in 2007, is now being embraced by the enterprise device manufacturers. As the devices get more sophisticated, the manufacturers are getting more interested in capturing an increasing share of the value proposition. We are engaged with increasing numbers of hardware manufacturers who are keen to embed our software applications on the device at source, and to share in revenues that are generated when the application is deployed.

The strong relationships we are building with hardware suppliers was evidenced with the deal we announced with Honeywell Scanning and Mobility, one of the major global suppliers of handheld devices, where we have agreed to offer our proposition through their ISV Store. This is a site dedicated to helping enterprises identify the software applications that best fit their business needs. Our solution allows for the removal of multiple communication devices such as two-way radios and panic alert devices, with all remote worker requirements converged into one Honeywell device.

Our third channel to market is through ISV's, where we integrate our own applications into their workforce management solution, thereby allowing them to offer their customers an integrated communication platform, and the opportunity to generate incremental revenues through an existing customer base. We announced in the early part of 2011 a deal with Pocket Mobile, a supplier of B2B mobile enterprise solutions in the Nordic region, where our joint proposition was delivered into G4S, the world's leading provider of security solutions. This solution has now been deployed into their operations in Denmark, Sweden and Finland, and we are now in the process of upgrading the technical platform configuration to allow them to deliver the services across their wider customer base.   

The lifeblood of our business is the quality of the technical platform that has been built over the last 12 years. We employ some of the finest engineers in mobile telecommunications and they are continually striving to maintain our position in the marketplace. We have recently launched our Android application, and this will be the primary client when our service launches in South America. Our engineers have also adapted the client to meet the slightly different demands of the consumer, as certain mobile operators are keen to deploy the application into the consumer market. To facilitate this we have added a viral capability, facilitating the rapid spread through social and family groups.

Outlook

Mobile devices are rapidly becoming the primary tool of business. Their presence both inside and outside the workplace makes them the perfect channel for the delivery of information and media between the various functions of a business and between organisations and the customers which sustain them. The majority of companies are no longer focused solely on building applications for consumers, but have started to look closely at ways in which they can make their own employees more effective, embracing mobile technologies to deliver efficiencies across their business.

Mobile operators, device manufacturers and ISV's are all engaged in this revolution in the workplace. They are recognising, in increasing numbers, the added value and increased personal efficiency that results from faster voice and message access, simplified message handling, and new voice messaging capabilities that our platform delivers. We are working with major companies across each of these key channels, and in every part of the world, having demonstrated clearly that our technology platform delivers the quality and robustness that Tier 1 mobile operators demand. I now look forward to working with our partners and customers to deliver these services to end users.  

I would like to finish by acknowledging the contribution of every member of staff for their efforts over the last 12 months. It is only through their dedication and hard work that we find ourselves in such a strong position. Our prospects for the coming 12 months are exciting and I look forward to reporting our progress in due course

Peter Wilkinson

Chairman

7 June 2012

Mobile Tornado Group plc
Jeremy Fenn, Chief Executive Officer	[phone]
Northland Capital Partners Limited	[phone]
Shane Gallwey

Consolidated income statement

For the year ended 31 December 2011

		Year ended		Year ended
		31 December		31 December
		2011		2010
		£'000		£'000
Continuing operations
Revenue		2,047		1,432
Cost of sales		(695)		(350)
Gross profit		1,352		1,082
Operating expenses		(2,170)		(1,866)
Exchange differences		21		(32)
Depreciation and amortisation expense		(19)		(35)
Exceptional costs of Israeli subsidiary		-		(446)
Total administrative expenses		(2,168)		(2,379)
Group operating loss		(816)		(1,297)
Finance costs		(398)		(335)
Loss before tax		(1,214)		(1,632)
Income tax credit		122		63
Loss for the year		(1,092)		(1,569)
Attributable to:
Equity holders of the parent		(1,092)		(1,569)
Loss per share (pence)
Basic and diluted		(0.59)		(0.85)

The accompanying accounting policies and notes form an integral part of these financial statements.

Consolidated statement of comprehensive income                           

For the year ended 31 December 2011

		Year ended		Year ended
		31 December		31 December
		2011		2010
		£'000		£'000
Loss for the year		(1,092)		(1,569)
Other comprehensive income
Exchange differences on translation
of foreign operations		(3)		(7)
Total comprehensive income for the period		(1,095)		(1,576)

Consolidated statement of changes in equity

For the year ended 31 December 2011

	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 2010	3,699	4,449	(7,620)	10,938	-	(2,153)	(18,004)	(8,691)
Equity settled share-based payments	-	-	-	-	-	-	3	3
Transactions with owners	-	-	-	-	-	-	3	3
Loss for the year	-	-	-	-	-	-	(1,569)	(1,569)
Exchange differences on translation
of foreign operations	-	-	-	-	-	(7)	-	(7)
Total comprehensive income for the year	-	-	-	-	-	(7)	(1,569)	(1,576)
Balance at 31 December 2010	3,699	4,449	(7,620)	10,938	-	(2,160)	(19,570)	(10,264)
	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 year	-	-	-	-	-	-	(1,092)	(1,092)
Exchange differences on translation
of foreign operations	-	-	-	-	-	(3)	-	(3)
Total comprehensive income for the year	-	-	-	-	-	(3)	(1,092)	(1,095)
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)

Consolidated statement of financial position

As at 31 December 2011

		2011		2010
		£'000		£'000
Assets
Non-current assets
Property, plant & equipment		104		46
		104		46
Current assets
Trade and other receivables		1,437		703
Tax debtor		-		63
Cash and cash equivalents		77		54
		1,514		820
Liabilities
Current liabilities
Trade and other payables		(5,538)		(4,511)
Borrowings		(267)		(3,000)
Net current liabilities		(4,291)		(6,691)
Non-current liabilities
Trade and other payables		(2,923)		(2,754)
Borrowings		(1,858)		(865)
Net liabilities		(8,968)		(10,264)
Shareholders' equity
Share capital		3,699		3,699
Share premium		4,449		4,449
Reverse acquisition reserve		(7,620)		(7,620)
Merger reserve		10,938		10,938
Preference shares		2,390		-
Share option reserve		50		49
Foreign currency translation reserve		(2,163)		(2,160)
Retained earnings		(20,711)		(19,619)
Total equity		(8,968)		(10,264)

Consolidated statement of cash flows

For the year ended 31 December 2011

		Year ended		Year ended
		31December		31December
		2011		2010
		£'000		£'000
Operating activities
Cash used in operations		(592)		(935)
Net cash used in operating activities		(592)		(935)
Investing activities
Purchase of property, plant & equipment		(35)		(36)
Net cash used in investing activities		(35)		(36)
Financing
Issue of loans		650		865
Net cash inflow from financing		650		865
Net increase/(decrease) in cash and
cash equivalents in the period		23		(106)
Cash and cash equivalents at beginning of period		54		160
Cash and cash equivalents at end of period		77		54

Notes to the financial statements

For the year ended 31 December 2011

1          Financial information

The financial information set out in this preliminary announcement does not constitute statutory accounts within the meaning of s435 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2011 will be dispatched to shareholders for approval at the Annual General Meeting to be held on 30 June 2012. The statutory accounts contain an unqualified audit report, which did not include a statement under s498(2) or s498(3) of the Companies Act 2006, and will be delivered to the Registrar of Companies.

The statutory accounts for the year ended 31 December 2010 have been delivered to the Registrar of Companies, contained an unqualified audit report and did not include a statement under s498(2) or (3) of the Companies Act 2006.

2          Segmental analysis

The Group presents its results in accordance with internal management reporting information. Under IFRS 8, the Group has only one operating segment. Therefore the results presented in the income statement are the same as those required under IFRS 8, save for the year end entry of IFRS 2 share option charge of £1,000 (year ended 31 December 2010: £3,000).

Revenue is reported by geographical location of customers. Non-current assets are reported by geographical location of assets.

	Year ended	At		Year ended
	31 December	31 December		31 December	At 31 December
	2011	2011		2010	2010
		Non-current			Non-current
	Revenue	assets		Revenue	assets
	£'000	£'000		£'000	£'000
UK	-	-		9	-
Europe	608	-		333	-
North America	-	16		8	27
South America	225	-		37	-
Middle East	354	88		69	19
Africa	837	-		280	-
Asia/Pacific	23	-		696	-
Total	2,047	104		1,432	46

Total revenue comprises £691,000 relating to the sale of goods (2010: £327,000) and £1,356,000 relating to the sale of services (2010: £1,104,000).

 

3          Loss per share

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of £1,092,000 (2010: £1,569,000) by the weighted average number of ordinary shares in issue during the year of 184,953,708 (2010: 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:

	Year ended			Year ended
	31 December 2011			31 December 2010
	Basic and diluted			Basic and diluted
	Loss	Loss		Loss	Loss
		per share			per share
	£'000	pence		£'000	pence
Loss attributable to
ordinary shareholders	(1,092)	(0.59)		(1,569)	(0.85)
Adjusted basic loss per share	(1,092)	(0.59)		(1,569)	(0.85)

 

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          Annual General Meeting

The Annual General Meeting of the Company will be held at Central House, Beckwith Knowle, Harrogate, HG3 1UG on 30 June 2012 at 9.00 a.m.  The audited results for the year ended 31 December 2011 will be posted to shareholders today and can be obtained from the Company's website at www.mobiletornado.com.

 

END

 

 

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