Final Results

RNS Number : 1176I

MobilityOne Limited

28 June 2013

 



28 June 2013

MobilityOne Limited

("MobilityOne", "Company" or the "Group")

Audited results for the year ended 31st December 2012

MobilityOne (AIM: MBO), an e-commerce infrastructure payment solutions and platform provider in Malaysia, Indonesia, Cambodia and the Philippines via its subsidiaries MobilityOne Sdn Bhd ("MobilityOne Malaysia"), Netoss Sdn Bhd, PT MobilityOne Indonesia and MobilityOne Philippines Inc. announces its full year results for the year ended 31st December 2012.

A copy of the annual report and audited financial statements, along with notice of the Company's annual general meeting, to be held at 9.00 a.m. Malaysia time on 26 July 2013 at Malaysian Petroleum Club, Level 42, Tower 2, Petronas Twin Towers, Kuala Lumpur City Centre, 50088 Kuala Lumpur, Malaysia, has been posted to shareholders and is available on the Company's website, www.mobilityone.com.my.

Highlights

·      Revenue increased by 35.8% to £43.3 million (2011: £31.9 million)

·      Loss after tax of £0.27 million (2011: profit after tax £0.01 million)

·      New subsidiary in the Philippines focusing on electronic payment services is expected to contribute revenue in the second half of 2013

·      The Company is exploring other business areas to diversify its revenue stream

For further information, please contact:

MobilityOne Limited	[phone]
Dato' Hussian A. Rahman, CEO	www.mobilityone.com.my
[e-mail]
Allenby Capital Limited (Nominated Adviser and Broker)	[phone]
Nick Athanas/James Reeve
Newgate Threadneedle	[phone]
Robyn McConnachie/Alex White

Chairman's Statement

For the year ended 31 December 2012

Introduction

The Directors are pleased to present the audited consolidated financial statements for MobilityOne Limited for the year ended 31 December 2012.

In 2012, even though the Group reported a 35.8% growth in revenue, it recorded a loss, mainly due to higher administration expenses from its existing operations in Malaysia, Indonesia and Cambodia as well as the costs of setting up a new 95%-owned subsidiary in the Philippines, namely MobilityOne Philippines Inc. 

Like previous years, most revenue was generated from the Group's existing mobile phone prepaid airtime reload business via its banking channels (such as mobile banking, internet banking and ATMs) and its electronic data capture terminal base throughout Malaysia.  The Group's international remittance services in Malaysia did not grow in 2012 at the expected rate and the number of outlets remains at 6.

The businesses in Cambodia and Indonesia did not provide a significant contribution to the Group's overall revenue in 2012.  Nevertheless, to continue to expand the Group's overseas operations, the Group has incorporated a new subsidiary in the Philippines. This subsidiary will focus on electronic payment services and it has initiated several tests and pilots with several financial institutions and telecommunications companies in the Philippines.

Results

For the financial year ended 31 December 2012, the revenue of the Group grew by 35.8% (2011 revenue: £31.9 million). This increase was mainly generated by the Group's existing mobile phone prepaid airtime reload business.  However, the Group recorded a net loss of £0.27 million (2011 profit after tax: £0.01 million). This loss was due to higher administration expenses from its existing mobile phone prepaid airtime reload business and international remittance business in Malaysia, the expenses incurred in Cambodia and Indonesia, and of the set up costs of a newly incorporated subsidiary in the Philippines which has yet to generate any revenue.

As at 31 December 2012, the Group had cash and cash equivalents of £1.13 million (31 December 2012: cash and cash equivalents of £1.15 million). As at 31 December 212, the secured loans and borrowings were £2.33 million (31 December 2011: £3.01 million).  During the year, the Company raised £105,000 from a subscription from Datuk Yahaya  bin Mat Ghani, an existing shareholder, the proceeds of which were used for working capital purposes. In addition, Dato' Hussian A. Rahman (CEO) and LMS, a company in which Dato' Hussian A. Rahman (CEO) is a director and major shareholder, agreed to convert outstanding loans and director fees totalling approximately £340,000 into new equity which has assisted in reducing the Group's borrowings.

Current trading and outlook

For 2013, the Directors expect the Group to deliver an improved performance from its existing areas of expertise, notably the Directors expect:

(i)                the mobile phone prepaid airtime reloads business to continue to grow;

(ii)               the international remittance business to contribute a higher revenue through the opening of new outlets, which is subject to the central bank of Malaysia's approval; and

(iii)              a maiden contribution from the Philippines market via MobilityOne Philippines Inc.

Notwithstanding that the Group has invested in research and development to develop and grow the existing businesses, the Group has not been able to deliver significant levels of profitability over the last few years.  As such, the Group is also currently exploring other business areas to diversify the revenue stream and to reduce the Group's dependency on its existing businesses.   

.............................................

Dato' Dr. Wan Azmi bin Ariffin

Chairman

Consolidated Income Statement

For the year ended 31 December 2012

						2012			2011
						£			£
Continuing Operations
Revenue						43,261,999			31,860,274
Cost of sales						(40,499,071)			(29,464,977)
GROSS PROFIT						2,762,928			2,395,297
Other operating income						95,840			142,262
Administration expenses						(2,471,778)			(1,856,629)
Other operating expenses						(493,302)			(501,279)
OPERATING (LOSS)/PROFIT						(106,312)			179,651
Finance costs						(162,693)			(150,849)
(LOSS)/PROFIT BEFORE TAX						(269,005)			28,802
Tax						(1,784)			(27,584)
(LOSS)/PROFIT FOR THE YEAR						(270,789)			1,218
Attributable to:
Owners of the parent						(259,650)			(1,341)
Non-controlling interests						(11,139)			2,559
						(270,789)			1,218
EARNINGS PER SHARE
Basic earnings per share (pence)						(0.267)			(0.001)
Diluted earnings per share (pence)						(0.267)			(0.001)
	(LOSS)/PROFIT FOR THE YEAR						(270,789)			1,218
	OTHER COMPREHENSIVE LOSS:
	Foreign currency translation						(78,248)			(76,536)
	TOTAL COMPREHENSIVE LOSS						(349,037)			(75,318)
	Total comprehensive loss attributable to:
	Owners of the parent						(337,898)			(77,877)
	Non-controlling interests						(11,139)			2,559
							(349,037)			(75,318)

Consolidated Statement of Changes in Equity

For the year ended 31 December 2012

			Non-Distributable						Distributable
					Reverse		Foreign Currency						Non- controlling Interests
	Share Capital		Share Premium		Acquisition Reserve		Translation Reserve		Retained Earnings		Total					Total Equity
	£		£		£		£		£		£		£			£
As at 1 January 2011	2,339,374		782,234		708,951		985,244		(1,655,089)		3,160,714		(469)			3,160,245
Comprehensive (loss)/income
(Loss)/profit for the year	-		-		-		-		(1,341)		(1,341)		2,559			1,218
Foreign currency translation			-		-		(76,536)		-		(76,536)		477			(76,059)
Total comprehensive (loss)/ income for the year	-		-		-		(76,536)		(1,341)		(77,877)		3,036			(74,841)
At 31 December 2011	2,339,374		782,234		708,951		908,708		(1,656,430)		3,082,837		2,567			3,085,404

Consolidated Statement of Changes in Equity (continued)

For the year ended 31 December 2012

			Non-Distributable						Distributable
					Reverse		Foreign Currency						Non- controlling Interests
	Share Capital		Share Premium		Acquisition Reserve		Translation Reserve		Retained Earnings		Total					Total Equity
	£		£		£		£		£		£		£			£
As at 1 January 2012	2,339,374		782,234		708,951		908,708		(1,656,430)		3,082,837		2,567			3,085,404
Comprehensive loss
Loss for the year	-		-		-		-		(259,650)		(259,650)		(11,139)			(270,789)
Foreign currency translation	-		-		-		(78,248)		-		(78,248)		(187)			(78,435)
Total comprehensive loss for the year	-		-		-		(78,248)		(259,650)		(337,898)		(11,326)			(349,224)
Transactions with owners
Issuance of shares	318,096		127,238		-		-		-		445,334		-			445,334
Acquisition of subsidiary company	-		-		-		-		-		-		6,402			6,402
Total transactions with owners for the year	318,096		127,238		-		-		-		445,334		6,402			451,736
At 31 December 2012	2,657,470		909,472		708,951		830,460		(1,916,080)		3,190,273		(2,357)			3,187,916

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 Statement of Financial Position

As at 31 December 2012

			2012				2011
			£				£
ASSETS
Non-current assets
Intangible assets			2,196,305				2,641,303
Property, plant and equipment			682,808				860,429
			2,879,113				3,501,732
Current assets
Inventories			879,280				1,021,579
Trade and other receivables			1,267,355				1,641,352
Cash and cash equivalents			1,130,315				1,154,665
Tax recoverable			13,401				11,125
			3,290,351				3,828,721
LIABILITIES
Current liabilities
Trade and other payables			495,265				910,518
Amount due to Directors			69,731				217,097
Loans and borrowings - secured			2,328,266				3,009,043
Tax payable			23,903				26,517
			2,917,165				4,163,175
NET CURRENT ASSETS/(LIABILITIES)			373,186				(334,454)
Total assets less current liabilities			3,252,299				3,167,278
Non-current liability
Loans and borrowings - secured			64,383				81,874
NET ASSETS			3,187,916				3,085,404
SHAREHOLDERS' EQUITY
Equity attributable to owners of the parent:
Called up share capital			2,657,470			2,339,374
Share premium			909,472			782,234
Reverse acquisition reserve			708,951			708,951
Foreign currency translation reserve			830,460			908,708
Retained earnings			(1,916,080)			(1,656,430)
Shareholders' equity			3,190,273			3,082,837
Non-controlling interests			(2,357)			2,567
TOTAL EQUITY			3,187,916			3,085,404

Consolidated Statement of Cash Flows

For the year ended 31 December 2012

			2012		2011
			£		£
Cash flow from operating activities
Cash generated from/(depleted in) operations			763,963		(28,695)
Interest paid			(162,693)		(150,849)
Interest received			26,574		18,816
Tax paid			(4,276)		(8,947)
Net cash generated from/(used in) operating activities			623,568		(169,675)
Cash flow from investing activities
Purchase of property, plant and equipment			(13,554)		(56,716)
Proceeds from disposal of short term investments			-		1,733
Proceeds from disposal of property, plant and equipment			-		5,382
Additions to development costs			-		(351,997)
Net cash used in investing activities			(13,554)		(401,598)
Cash flows from financing activities
(Repayment)/drawdown of short term borrowings			(292,559)		372,703
Repayment of finance lease payables			(15,821)		(14,948)
Proceeds from issuance of shares			105,000		-
Net cash (used in)/generated from financing activities			(203,380)		357,755
Increase/(decrease) in cash and cash equivalents			406,634		(213,518)
Effect of foreign exchange rate changes			(65,610)		24,373
Cash and cash equivalents at beginning of year			543,291		732,436
Cash and cash equivalents at end of year			884,315		543,291

Notes to the Financial Statements

For the year ended 31 December 2012

1.     Basis of preparation

These 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

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in Chairman's statement on page 2. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the financial statements and associated notes. In addition, Note 3 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.

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 expects an increase in revenue and will have 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. 

In addition, a shareholder has also undertaken to provide support to enable the group to meet its debts as and when they fall due.

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.

The financial statement does not include any adjustments that would result if the forecast were not achieved and shareholder support was withdrawn.

3.     Functional currency translation

(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 Statement of Financial Position date	Average for year
Year ended 31 December 2012	4.94	4.91
Year ended 31 December 2011	4.90	4.91

4.     Segmental Analysis

The information reported to the Group's chief operating decision maker to make decisions about resources to be allocated and for assessing their performance is based on the nature of the products and services, and has three reportable operating segments as follows:-

(a)     Telecommnication services and electronic commence solutions

(b)     Hardware

(c)     Remittance services

Except as above, no other operating segment has been aggregated to form the above reportable operating segments.

Segment information is prepared in conformity with the accounting policies adopted for preparing and presenting the consolidated financial statements.

No segment assets and capital expenditure are presented as they are mostly unallocated items which comprise corporate assets and liabilities.

No geographical segment information is presented as the Group mainly trades and provides services in only one region - the Far East.

5.     Taxation

Taxation on the income statement for the financial period comprises current and deferred tax. Current tax is the expected amount of taxes payable in respect of the taxable profit for the financial period and is measured using the tax rates that have been enacted at the Statement of Financial Position date.

Deferred tax is recognised on the liability method for all temporary differences between the carrying amount of an asset or liability in the Statement of Financial Position and its tax base at the Statement of Financial Position date. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted by the Statement of Financial Position date. The carrying amount of a deferred tax asset is reviewed at each Statement of Financial Position date and is reduced to the extent that it becomes probable that sufficient future taxable profit will be available.

Deferred tax is recognised in the income statement, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also charged or credited directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or negative goodwill.

6.     Earnings per share

The basic earnings per share is calculated by dividing the loss of £259,650 (2011: loss of £1,341) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which is 97,130,651 (2011: 93,574,951).

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 2012, 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

Save as disclosed below, the Group has no contingent liabilities arising in respect of legal claims arising from the ordinary course of business and it is not anticipated that any material liabilities will arise from the contingent liabilities other than those provided for.

	Group
	2012		2011
	£		£
Limit of guarantees
Corporate guarantees given to a licensed bank by the Company for credit facilities granted to a subsidiary company	4,148,118		4,186,920
Amount utilised
Banker's guarantee in favour of third parties	373,482		356,552

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 10 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.

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.

Research and development costs

All research costs are recognised in the income statement as incurred.

Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.

Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised through other operating expenses in the income statement using the straight-line basis over the commercial lives of the underlying products not exceeding five years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each Statement of Financial Position date.

-Ends-

 

END

 

 

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