Half-year Report

RNS Number : 0735L

MobilityOne Limited

28 September 2016

 

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).

28 September 2016

MobilityOne Limited

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

Unaudited interim results for the six months ended 30 June 2016

MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and platform provider with its main operations in Malaysia, announces its unaudited interim results for the six months ended 30 June 2016.

Highlights:

·          Revenue grew by 7.26% to £33.59 million (H1 2015: £31.32 million) mainly contributed by growth in the Group's mobile phone prepaid airtime reload and bill payment business in Malaysia;

·          Operating profit of £0.29 million (H1 2015: operating profit of £0.22 million);

·          Profit after tax of £0.14 million (H1 2015:  profit after tax of £0.11 million);

·          The Group is acquiring 50% equity interest in Unique Change Sdn Bhd, which provides international remittance services from Malaysia, mainly to Nepal, Bangladesh and Indonesia; and

·          The Board of MobilityOne expects the trading performance in the second half of 2016 to remain positive as the Group continues to explore new opportunities and to expand its e-payment solutions and services in Malaysia.

For further information, 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                                                                                                          [phone]                                         Robyn McConnachie                                                                                                                                  

About the Group:

MobilityOne provides e-commerce infrastructure payment solutions and platforms through its proprietary technology solutions, marketed under the brands MoCS and ABOSSE.

The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices including EDC terminals, mobile devices, automated teller machines ("ATM") and internet banking.

The Group's technology platform is flexible, scalable and designed to facilitate cash, debit card and credit card transactions from multiple devices while controlling and monitoring the distribution of different products and services.

For more information, refer to our website at www.mobilityone.com.my

Chairman's statement

The revenue of the Group grew by 7.26% to £33.59 million in the first six months of 2016, which was mainly contributed by growth in the mobile phone prepaid airtime reload and bill payment business via the Group's existing banking channels (such as mobile banking, internet banking and ATMs) and payment terminal base in Malaysia.  As a result of the increased revenue, the Group recorded an operating profit of £0.29 million (H1 2015: operating profit of £0.22 million) and the Group's profit after tax increased to £0.14 million in the first six months of 2016, as compared to a profit after tax of £0.11 million in the first six months of 2015.

The contribution from the Group's operations in the Philippines remained insignificant with a small revenue generated through the provision of an e-payment solution.

As at 30 June 2016, the Group had cash and cash equivalents of £2.57 million (30 June 2015: cash and cash equivalents of £1.71 million) and the secured loans and borrowings from financial institutions were £3.05 million (30 June 2015: £2.43 million).  

Current trading and outlook

The Board of MobilityOne expects the trading performance in the second half of 2016 to remain positive notwithstanding the current economic situation in Malaysia which may present challenging business conditions.

Besides the Group's mobile phone prepaid airtime reload and bill payment business via its existing business channels, the Group will continue to explore new opportunities to expand its e-payment solutions and services in Malaysia to capitalise on the efforts of the Malaysian central bank to encourage switching from paper-based payments to e-payments. 

In view of the Group's past experience in the international remittance business, the Group is acquiring 50% of the issued and paid-up share capital of Unique Change Sdn Bhd ("Unique Change") for a nominal purchase consideration of RM10.00 (c. £1.87).  Unique Change is incorporated in Malaysia and provides international remittance services from Malaysia, mainly to Bangladesh, Nepal and Indonesia. It currently holds a remittance business license issued by the Central Bank of Malaysia and has 6 outlets in Malaysia.  The acquisition provides a good opportunity for the Group to partner with the existing shareholders of Unique Change to grow the business.  In 2015, there were more than 2.1 million foreign workers in Malaysia, mainly from Indonesia (39.2%), Nepal (23.5%) and Bangladesh (13.2%) who have the need to send money back to their home countries. Full details on the acquisition have been announced today.

Abu Bakar bin Mohd Taib

Chairman

28 September 2016

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2016

	Six months		Six months		Financial year
	Ended		Ended		Ended
	30 June 2016		30 June 2015		31 Dec 2015
	Unaudited		Unaudited		Audited
CONTINUING OPERATIONS	£		£		£
Revenue	33,591,365		31,317,005		65,161,080
Cost of sales	(31,291,165)		(29,424,516)		(61,008,206)
GROSS PROFIT	2,300,200		1,892,489		4,152,874
Other operating income	21,695		63,354		71,408
Administration expenses	(1,778,599)		(1,500,002)		(3,228,126)
Other operating expenses	(249,684)		(237,177)		(650,550)
OPERATING PROFIT	293,612		218,664		345,606
Finance costs	(86,066)		(88,479)		(153,286)
PROFIT BEFORE TAX	207,546		130,185		192,320
Tax	(63,528)		(18,651)		(29,100)
PROFIT FOR THE PERIOD/YEAR	144,018		111,534		163,220
Attributable to:
Owners of the parent	144,761		113,165		165,678
Non-controlling interest	(743)		(1,631)		(2,458)
	144,018		111,534		163,220
EARNINGS PER SHARE
Basic earnings per share (pence)	0.136		0.106		0.156
Diluted earnings per share (pence)	0.124		0.097		0.142
PROFIT FOR THE PERIOD	144,018		111,534		163,220
OTHER COMPREHENSIVE PROFIT/(LOSS)
Foreign currency translation	158,894		(144,135)		(104,617)
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR THE PERIOD	302,912		(32,601)		58,603
Total comprehensive profit/(loss) attributable to:
Owners of the parent	301,259		(31,324)		61,061
Non-controlling interest	1,653		(1,277)		(2,458)
	302,912		(32,601)		58,603

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2016

		At		At				At
		30 June 2016		30 June 2015				31 Dec 2015
		Unaudited		Unaudited				Audited
		£		£				£
Assets
Non-current assets
	Intangible assets	31,733		473,489				54,291
	Property, plant and equipment	545,204		542,999				497,567
		576,937		1,016,488				551,858
Current assets
	Inventories	1,055,079		337,181				1,063,008
	Trade receivables	602,820		1,558,053				2,697,809
	Other receivables	858,235		399,375				649,979
	Tax recoverable	1,029		-				3,016
	Cash and cash equivalents	2,571,104		1,705,062				2,216,715
		5,088,267		3,999,671				6,630,527
Total Assets		5,665,204		5,016,159				7,182,385
Shareholders' equity
Equity attributable to equity holders of the Company
	Called up share capital	2,657,470		2,657,470				2,657,470
	Share premium	909,472		909,472				909,472
	Reverse acquisition reserve	708,951		708,951				708,951
	Foreign currency translation reserve	845,744		649,374				689,246
	Retained earnings	(3,557,036)		(3,754,310)				(3,701,797)
Shareholders' equity		1,564,601		1,170,957				1,263,342
Non-controlling interest		(3,970)		(4,442)				(5,623)
Total Equity		1,560,631		1,166,515				1,257,719
Liabilities
Non-current liabilities
	Loans and borrowings - secured	347,597		328,833				296,692
Current liabilities
	Trade payables	475,334		851,129				157,856
	Other payables	552,741		546,447				3,769,912
	Amount due to Directors	6,439		6,146				118,603
	Loans and borrowings - secured	2,702,848		2,104,211				1,581,603
	Tax Payable	19,614		12,878				-
		3,756,976		3,520,811				5,627,974
Total Liabilities		4,104,573		3,849,644				5,924,666
Total Equity and Liabilities		5,665,204		5,016,159				7,182,385

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2016

		Non-Distributable			Distributable
				Foreign
			Reverse	Currency			Non-
	Share	Share	Acquisition	Translation	Retained		Controlling
	Capital	Premium	Reserve	Reserve	Earnings	Total	Interest	Total
	£	£	£	£	£	£	£	£
As at 1 January 2016	2,657,470	909,472	708,951	689,246	(3,701,797)	1,263,342	(5,623)	1,257,719
Foreign currency translation	-	-	-	156,498	-	156,498	2,396	158,894
Profit for the period	-	-	-	-	144,761	144,761	(743)	144,018
As at 30 June 2016	2,657,470	909,472	708,951	845,744	(3,557,036)	1,564,601	(3,970)	1,560,631
As at 1 January 2015	2,657,470	909,472	708,951	793,863	(3,867,475)	1,202,281	(3,165)	1,199,116
Foreign currency translation	-	-	-	(144,489)	-	(144,489)	354	(144,135)
Profit for the period	-	-	-	-	113,165	113,165	(1,631)	111,534
As at 30 June 2015	2,657,470	909,472	708,951	649,374	(3,754,310)	1,170,957	(4,442)	1,166,515

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.

Non-controlling interests represent the share of ownership of subsidiary companies outside the Group.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2016

	Six months		Six months		Financial year
	Ended		Ended		ended
	30 June 2016		30 June 2015		31 Dec 2015
	Unaudited		Unaudited		Audited
	£		£		£
Cash flows from operating activities
Cash (used in)/generated from operations	(768,380)		779,714		1,972,724
Interest paid	(86,066)		(88,479)		(153,286)
Interest received	21,668		22,600		51,395
Tax paid	(52,012)		(1,522)		(44,948)
Tax refund	-		-		434
Net cash (used in)/generated from operating activities	(884,790)		712,313		1,826,319
Cash flows from investing activities
Purchase of property, plant and equipment	(18,042)		(74,656)		(111,191)
Net cash used in investing activities	(18,042)		(74,656)		(111,191)
Cash flows from financing activities
Drawdown /(Repayment) of  term loan	40,011		(1,861)		(46,355)
Drawdown /(Repayment) of  short term borrowings	1,161,488		(249,098)		(938,577)
Repayment from finance lease payables	(29,348)		(49,984)		(114,717)
Net cash generated/(used in) from financing activities	1,172,151		(300,943)		(1,099,649)
Increase in cash and cash equivalents	269,319		336,714		615,479
Effect of foreign exchange rate changes	85,070		(239,907)		(7,019)
Cash and cash equivalents at beginning of period/year	2,216,715		1,608,255		1,608,255
Cash and cash equivalents at end of period/year	2,571,104		1,705,062		2,216,715

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1.	Basis of preparation
	The Group's interim financial statements for the six months ended 30 June 2016 were authorised for issue by the Board of Directors on 28 September 2016. The interim financial statements are unaudited and 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. It has been prepared in accordance with IAS 34 "Interim Financial Reporting" and does not include all of the information required for full annual financial statements. The financial statements have been prepared under the historical cost convention. Full details of the accounting policies adopted, which are consistent with those disclosed in the Company's 2015 Annual Report, will be included in the audited financial statements for the year ending 31 December 2016.
2.	Basis of consolidation
	The consolidated statement of comprehensive income and statement of financial position include financial statements of the Company and its subsidiaries made up to 30 June 2016.
3.	Nature of financial information The unaudited interim financial information for the six months ended 30 June 2016 does not constitute statutory accounts under the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 December 2015 are extracted from the audited statutory financial statements. Full audited financial statements of the Group in respect of that financial year prepared in accordance with IFRS, which we received an unqualified audit opinion, have been delivered to the Registrar of Companies.
4.	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/period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.               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/ Period Period ended 30 June 2016 5.44 5.88 Period ended 30 June 2015 5.93 5.59 Year ended 31 December 2015 6.36 5.97
5.	Segmental analysis
	No segmental analysis of revenues, profits, assets and liabilities are presented and no geographical segment information is presented as the Group mainly trades and provides services in only one region - the Far East.
6.	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.
7.	Earnings per share
	The basic earnings per share is calculated by dividing the profit in the six month period ended 30 June 2016 of £144,761 (30 June 2015: profit of £113,165 and year ended 31 December 2015: profit of £165,678) attributable to ordinary shareholders by the number of ordinary shares outstanding at 30 June 2016 of 106,298,780 (30 June 2015: 106,298,780 and 31 December 2015: 106,298,780). The diluted earnings per share for the six month period ended 30 June 2016 is calculated using the number of shares adjusted to assume the conversion of all dilutive potential ordinary shares of 116,898,780 (on 5 December 2014, the Company granted share options of 10,600,000 shares at 2.5p to directors and certain employees of the Group).

8.	Reconciliation of profit before tax to cash generated from operations
	Six months ended 30 June 2016 Unaudited Six months ended 30 June 2015 Unaudited Financial year ended 31 Dec 2015 Audited £ £ £ Cash flow from operating activities Profit before tax 207,546 130,185 192,320 Adjustments for: Depreciation 47,489 52,640 104,749 Amortisation of development costs 29,382 48,829 115,449 Property, plant and equipment written off - - 3,716 Impairment loss on goodwill - - 366,591 Interest expenses 86,066 88,479 153,286 Interest income (21,668) (22,600) (51,395) Operating profit before working capital changes 348,815 297,533 884,716 Decrease/(Increase) in inventories 7,929 163,904 (517,210)  Decrease/(Increase) in receivables 1,886,733 237,519 (1,024,537) Decrease/(Increase) in amount due to Directors (112,164) (66,729) 45,180 (Decrease)/Increase in payables (2,899,693) 147,487 2,584,575 Cash (used in)/generated from operations (768,380) 779,714 1,972,724
9.	Contingent liabilities
	In the period under review, corporate guarantees of RM20.0 million (£3.68 million) were given to a licensed bank by the Company for credit facilities granted to a subsidiary company.

10.

Significant accounting policies

The interim consolidated financial statements have been prepared applying the same accounting policies that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2015 except for the adoption of new and amended reporting standards, which are effective for periods commencing on or after 1 January 2016. Various amendments to standards and interpretations of standards are effective for periods commencing on or after 1 January 2016 as detailed in the 2015 Annual Report, none of which have any impact on reported results.

	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 cash flows forecasts. 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 5 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.
11.	Dividends
	The Company has not proposed or declared an interim dividend.

12.	Interim report
	This interim financial statement will, in accordance with Rule 20 of the AIM Rules for Companies, be available shortly on the Company's website at www.mobilityone.com.my.
	-Ends-

 

END

 

 

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