Final Results

RNS Number : 5091G

MobilityOne Limited

29 June 2012

 



29 June 2012

MobilityOne Limited

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

Audited results for the year ended 31st December 2011 and change of registered office address

MobilityOne (AIM: MBO), an e-commerce infrastructure payment solutions and platform provider in Malaysia, Indonesia and Cambodia via its subsidiaries MobilityOne Sdn Bhd ("MobilityOne Malaysia"), Netoss Sdn Bhd and PT MobilityOne Indonesia announces its full year results for the year ended 31st December 2011.

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 23 July 2012 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.

The Company also announces that its registered office address has changed to 28-30 The Parade, St Helier, Jersey JE1 1EQ, Channel Islands.

Highlights

·      Revenue increased by 36.8% to £31.8m (2010: £23.3m)

·      Revenue driven by:

o  fast growing mobile phone pre-paid airtime reload business via banking channels

o  electronic data capture terminal base

·      Return to profits after 3 years of losses

o  Operating profits of £179,651 (2010: Loss £122,436)

o  Pre-tax profit of £28,802 (2010: Loss £206,079)

·      Entered agreement with Felda Trading to provide mobile phone prepaid airtime reloads at Felda's 200 plus retail chain within its oil palm estates in Malaysia

·      International remittance services made progress but awaits central bank approval to increase approved outlets

·      Directors anticipate improved results in 2012

Dato' Dr. Wan Azmi bin Ariffin, Chairman, commented: "2011 was a good year for the Group. Revenue grew by 36% and we once again became profitable. The business in Malaysia is producing strong revenue and growing at a healthy rate.  We are also increasing regional expansion into the Indonesian and Cambodian markets and preparing to expand into the Philippines. With our strong R & D programme continuing, the Directors are looking to the future with confidence."

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 2011

Introduction

2011 was an encouraging year, with the Group achieving a 36.8% growth in revenue and a small profit after tax, compared to losses in the 3 previous years.

Most revenue was contributed by two of the Group's offerings. Firstly its fast growing mobile phone prepaid airtime reload business, via the banking channels (such as mobile banking, Internet banking and ATMs). Secondly its electronic data capture ("EDC") terminal base, which includes those at Carrefour Malaysia's 23 hypermarkets and 20 express stores throughout the country. 

During the year, MobilityOne Malaysia entered into an agreement with Felda Trading Sdn Bhd ("Felda Trading") (http://www.felda.net.my) to provide mobile phone prepaid airtime reloads at Felda Trading's 200 plus retail chain stores throughout Malaysia. Felda Holdings Bhd (http://www.feldaholdings.com), based in Malaysia, is one of the world's largest plantation operators and employs approximately 50,000 people, the majority of whom are migrant workers.  It operates retail chain stores at most of its oil palm estates. Migrant workers have been identified by MobilityOne as a key demographic of potential users of its prepaid airtime reloads.

The Group's international remittance services also grew but less rapidly as it is awaiting approval from the central bank of Malaysia to allow it to increase the number of approved outlets from its current 6.    However, the Directors remain confident that this business area will contribute positively to the Group's financial performance in the long term, with the opening of more outlets and distribution channels.

Cambodia and Indonesia were not aggressively targeted for expansion as the Group was focusing its time and investments on expanding its business operations in Malaysia. However, it will continue to look out for further opportunities to forge business partnerships in these countries in the near future.

Results

For the financial year ended 31 December 2011, the Group recorded a revenue of £31.9 million, representing an increase of 36.8%  (2010 revenue: £23.3 million). With the strong revenue growth, the Group made a profit after tax of £1k compared to a loss after tax of £0.2 million for 2010.  The increase in revenue was mainly due to higher sales for the Group's existing mobile phone's prepaid airtime reload business through its banking channels (i.e., mobile banking, ATM and Internet banking) and EDC terminals.

Current trading and outlook

The Directors expect an improved performance in 2012, the main contribution coming from the growing business in Malaysia and new regional expansion plans, with the following highlights:

(i)      Continued revenue growth from prepaid airtime reloads for mobile phones and bill payment services via the Group's banking channels and EDC terminals, either organically or through strategic partnerships;

(i)      A higher contribution from the Company's international remittance services, through the opening of new channels and continued development with the Group's existing partners such as Felda; and

(ii)     Increased regional expansion, particularly from PT MobilityOne Indonesia and the Cambodian market, with a higher expected contribution to revenues from these areas.  In addition, the Group has started preliminary preparation to expand into the Philippines market.

The Group maintains its strong investment in research and development, allowing it to continue to innovate. Notwithstanding the difficult economic conditions, the Group is now in profit and views the future with optimism.

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

Dato' Dr. Wan Azmi bin Ariffin

Chairman

Date: 28 June 2012

Consolidated Income Statement

For the year ended 31 December 2011

			2011		2010
			£		£
Continuing Operations
Revenue			31,860,274		23,291,599
Cost of sales			(29,464,977)		(21,353,213)
GROSS PROFIT			2,395,297		1,938,386
Other operating income			142,262		179,433
Administration expenses			(1,856,629)		(1,807,137)
Other operating expenses			(501,279)		(433,118)
OPERATING PROFIT/(LOSS)			179,651		(122,436)
Finance costs			(150,849)		(83,643)
PROFIT/(LOSS) BEFORE TAX			28,802		(206,079)
Tax			(27,584)		(9,039)
PROFIT/(LOSS) AFTER TAX			1,218		(215,118)
Attributable to:
Owners of the parent			(1,341)		(215,653)
Non-controlling interest			2,559		535
			1,218		(215,118)
EARNING PER SHARE
Basic earnings per share (pence)			0.001		(0.23)
Diluted earnings per share (pence)			0.001		(0.23)
PROFIT/(LOSS) AFTER TAX			1,218			(215,118)
OTHER COMPREHENSIVE (LOSS)/INCOME:
Foreign currency translation			(76,536)			433,103
TOTAL COMPREHENSIVE (LOSS)/INCOME			(75,318)			217,985
Total comprehensive (loss)/income attributable to:			(77,877)			217,450
Owners of the parent			2,559			535
Non-controlling interest
			(75,318)			217,985

Consolidated Statement of Changes in Equity

For the year ended 31 December 2011

				Non-Distributable						Distributable
		Share capital		Share premium		Reverse acquisition reserve		Foreign currency translation reserve		Retained earnings			Total		Non-controlling interest		Total
		£		£		£		£		£			£		£		£
As at 1 January 2010		2,339,374		782,234		708,951		552,141		(1,439,436)			2,943,264		(927)		2,942,337
Comprehensive (loss)/income
Loss for the year		-		-		-		-		(215,653)			(215,653)		535		(215,118)
Foreign currency translation		-		-		-		433,103		-			433,103		(77)		433,026
Total comprehensive income/(loss) for the year		-		-		-		433,103		(215,653)			217,450		458		217,908
As at 31 December 2010		2,339,374		782,234		708,951		985,244		(1,655,089)			3,160,714		(469)		3,160,245

Consolidated Statement of Changes in Equity (continued)

For the year ended 31 December 2011

				Non-Distributable						Distributable
		Share capital		Share premium		Reverse acquisition reserve		Foreign currency translation reserve		Retained earnings			Total		Non-controlling interest		Total
		£		£		£		£		£			£		£		£
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 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)
As at 31 December 2011		2,339,374		782,234		708,951		908,708		(1,656,430)			3,082,837		2,567		3,085,404

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 2011

			2011		2010
			£		£
ASSETS
Non-current assets
Intangible assets			2,641,303		2,232,506
Property, plant and equipment			860,429		1,012,644
			3,501,732		3,245,150
Current assets
Inventories			1,021,579		1,349,058
Trade and other receivables			1,641,352		1,258,128
Short term investment			-		1,778
Cash and cash equivalents			1,154,665		732,436
Tax recoverable			11,125		3,428
			3,828,721		3,344,828
LIABILITIES
Current liabilities
Trade and other payables			910,518		1,020,279
Amount due to Directors			217,097		238,698
Loans and borrowings - secured			3,009,043		2,070,533
Tax payable			26,517		-
			4,163,175		3,329,510
NET CURRENT (LIABILITIES)/ASSETS			(334,454)		15,318
Total assets less current liabilities			3,167,278		3,260,468
Non-current liability
Loans and borrowings - secured			81,874		100,223
NET ASSETS			3,085,404		3,160,245
SHAREHOLDERS' EQUITY
Equity attributable to equity holders of the Company:
Called up share capital			2,339,374		2,339,374
Share premium			782,234		782,234
Reverse acquisition reserve			708,951		708,951
Foreign currency translation reserve			908,708		985,244
Retained earnings			(1,656,430)		(1,655,089)
Shareholders' equity			3,082,837		3,160,714
Non-controlling interest			2,567		(469)
TOTAL EQUITY			3,085,404		3,160,245

Consolidated Statement of Cash Flows

For the year ended 31 December 2011

								2011			2010
								£			£
Cash flow from operating activities
Cash depleted in operations								(28,695)			(281,553)
Interest paid								(150,849)			(83,643)
Interest received								18,816			10,956
Tax paid								(8,947)			(1,635)
Net cash used in operating activities								(169,675)			(355,875)
Cash flows from investing activities
Purchase of property, plant and equipment								(56,716)			(40,078)
Purchase of short term investment								-			(1,713)
Proceeds from disposal of short term investments								1,733			-
Proceeds from disposal of property, plant and equipment								5,382			454,005
Additions to development costs								(351,997)			(285,009)
Net cash (used in)/generated from investing activities								(401,598)			127,205
Cash flows from financing activities
Drawdown of  short term borrowings								372,703				864,705
Repayment of term loans								-				(184,393)
Repayment of finance lease payables								(14,948)				(12,297)
Net cash generated from financing activities								357,755				668,015
(Decrease)/increase in cash and cash equivalents								(213,518)				439,345
Effect of foreign exchange rate changes								24,373				(107,213)
Cash and cash equivalents at beginning of year								732,436				400,304
Cash and cash equivalents at end of year								543,291				732,436

Notes to the Financial Statements

For the year ended 31 December 2011

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 and presentation currency

(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 2011	4.90	4.91
Year ended 31 December 2010	4.78	4.96

4.     Segmental Analysis

The Group's activities are treated as a single class of business, all arising from goods and services provided in the Far East. Accordingly, no segmental analysis of revenues, profits, assets and liabilities is available for presentation.

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 £1,341 (2010: loss of £215,653) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year, which is 93,574,951 (2010: 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 2011, the diluted earnings per share is equivalent to the basic earnings per share.

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
	2011		2010
	£		£
Limit of guarantees
Corporate guarantees given to licensed banks by a subsidiary company for credit facilities	4,186,920		21,645,022
Amount utilised
Banker's guarantee in favour of third parties	356,552		373,455

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.

However, if the projected sales do not materialise there is a risk that the value of the intangible assets shown above would be impaired.

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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