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Zamano PLC (ZMNO)

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Thursday 19 March, 2015

Zamano PLC

Final Results

RNS Number : 8392H
Zamano PLC
19 March 2015
 



Press Release

19 March 2014

 

zamano PLC

 

('zamano', the 'Company' or the 'Group')

 

Final Results

 

zamano PLC (AIM:ZMNO, ESM:ZAZ), a leading European provider of interactive applications and services to mobile devices, has today announced results for the 12 months ended 31 December 2014. 

 

Highlights:

·    Revenue of €19.863M (up 23.9% on revenue of €16.034M, 2013);

·    EBITDA* of €2.735M (up 4.9% on EBITDA of €2.608M, 2013);

·    Operating profit of €2.232M (up 0.4% on operating profit of €2.224M, 2013);

·    Pre-tax profit €2.177M (up 13.5% on pre-tax profit of €1.918M, 2013);

·    Post-tax profit €1.892M (up 10.6% on post-tax profit of €1.711M, 2013);

·    Significant improvement in net cash during 2014 (net cash of €4.603M at 31 December

2014 versus net cash of €2.139M at 31 December 2013);

 

John Rockett, Chairman zamano, commented: " The Group recorded very pleasing  increases in EBITDA, Pre-Tax and Post-Tax profits during the year under review, and, the strong operating performance of the Group during 2014 translated into a consistent improvement in zamano's net cash position"

 

"After another highly satisfactory outcome in 2014, the Group intends to remain focussed on maintaining its core business, while at the same time, looking for acquisition opportunities to enable it to strategically re-align the Group".

 

Ross Conlon, CEO zamano, commented: "In the year ended 31 December 2014, zamano maintained its upward curve across virtually all of its financial performance metrics. The Group achieved considerable increases in sales, EBITDA, pre-tax and post-tax profits. It also significantly improved its balance sheet position".

"In 2015, the Group will continue to strive to address the wide array of opportunities available in the web and mobile marketing space. zamano's significant expertise in data analytics, mobile media and mobile billing/payments makes it an attractive partner for a growth orientated technology driven business operating in those areas".

*EBITDA is calculated as earnings before interest, tax, depreciation, amortisation and share based payment amounts.

- Ends -

 

For further information, please contact:

 

zamano plc

Ross Conlon, Chief Executive Officer

Tel: + 353 1 554 7313

Michael Connolly, Chief Financial Officer

Tel: +353 1 554 7261

 

Investec Corporate Finance

Shane Lawlor/Conor Murtagh

Tel: + 353 1 4210000

 

Cenkos Securities

Derrick Lee/Neil McDonald

Tel: + 44 (0) 131 220 6939

 

 

 

Media Enquires:

 

MCOMM Communications Consultants

Richard Moore

Tel:   +353 1 661 9428

Mob: +353 87 241 4751

Email: [email protected]

zamano plc & subsidiaries

 

Chairman's Statement

 

I am pleased to report a highly satisfactory performance for zamano at both an operational and financial level for the year ended 31 December 2014.

 

zamano has achieved a significant increase in revenues during 2014, with sales of €19.863 million being 23.9% ahead of last year (2013: €16.034 million). The increase in sales recorded in 2014 was primarily attributable to a concentrated effort to develop our business-to-business (B2B) activity in the UK together with strong growth  in our Australian business.

 

Gross profit recorded for the year at €4.778 million was down 4% on the previous year's figure of €4.976 million as gross profit margins decreased from 31% in 2013 to 24% in 2014.  This margin decline was largely attributable to a significant increase in lower margin third party activity in the UK B2B market during the second half of 2014.

 

The Group recorded very pleasing increases in EBITDA, Pre-Tax and Post-Tax profits during the year under review with EBITDA at €2.735 million 4.9% ahead of the 2013 EBITDA outturn of €2.608 million. Pre-Tax profit for the year at €2.177 million was 13.5% ahead of 2013 (€1.918 million), while the Post-Tax outturn at €1.892 million was 10.5% ahead of the corresponding figure for 2013 of €1.711 million.

 

As in the previous year, the strong operating performance of the Group during 2014 translated into a consistent improvement in zamano's net cash position. Net cash at 31 December 2014 was €4.603 million, an increase of €2.464 million over the equivalent figure (€2.139 million) at 31 December 2013. The strengthening of the Group's balance sheet position during 2014 is underpinned by the capacity of the business to generate healthy positive cash flow from its operations, and, demonstrates the Group's ability to adapt quickly to changing market circumstances and leverage its relatively low cost base.

 

In my statement with last year's results, I informed shareholders that zamano wished to expand its geographic footprint and broaden its product market base. In that regard, I informed shareholders of our entry into new territories in Eastern Europe.  During the course of 2014 we continued to test new markets. However, the economic returns that were generated in territories like Czech Republic and Slovakia were not significantly attractive. Consequently, we have, for the time being, discontinued customer acquisition in those markets and refocused our marketing spend on English speaking territories like the UK and Australia where we enjoyed considerable success.

 

In the new product area, Messagehero, a messaging product for the SME and Enterprise market in Ireland was launched in late 2013. During the year, zamano carried out a number of refinements to the product to meet the ever changing needs of its target customers. In addition, during 2014 the Group explored a number of acquisitions, primarily in the UK and Ireland, to complement the Messagehero offering and accelerate its entry to the market.

 

 

 

*EBITDA is calculated as earnings before interest, tax, depreciation, amortisation and share based payment amounts.

 

 

 

 

zamano plc & subsidiaries

 

Chairman's Statement (continued)

 

zamano has also opened discussions with mobile network operators and an anchor client to develop a single-click micro-payment solution for mobile devices. We hope to report further progress with these initiatives during 2015.

 

The Board and management remain committed to diversifing both the product range and geographical spread of its existing business and will continue to pursue opportunities as they present themselves or as they are targeted. Undoubtedly, there is a buoyant market environment for web and mobile commerce products and services at present. zamano has considerable capability in data analytics, mobile billing/payments and mobile marketing where it can add value to a joint venture, licensing or acquisition situation and we hope to capitalise on these core strengths in the coming year.

 

During the period under review, zamano and its advisors put considerable resources into identifying acquisitions, investments and joint venture opportunities, primarily in the UK and Ireland. In this regard, strict acquisition criteria have been formulated and agreed  by the Board.  The Group and its advisors identified and examined a number of opportunities in mobile media, billing and messaging, but unfortunately to date none of these potential investments adequately met the criteria set. We do, however, continue to actively pursue a number of targets with a view to diversifying our business operations.

 

Regulation, particularly in our principal geographic territories of the UK and Ireland, remains an ongoing feature of our business.  zamano is committed to maintaining and delivering the highest levels of customer experience and service in a compliant manner.  During the year, the Group worked diligently with a number of the key stakeholders in the industry to help ensure a high level of compliance with the relevant codes of practice in both markets.

 

After another highly satisfactory outcome in 2014, the Group intends to remain focussed on maintaining its core business, notwithstanding the many challenges it faces, while at the same time, looking for acquisition opportunities to enable it to strategically re-align the Group.

 

Finally, I would like to thank all of the Groups' employees for their considerable commitment and dedication to the business during the year just ended. The extremely positive financial results for 2014 which are contained in the Annual Report and Accounts are attributable to you all.

 

John Rockett

Chairman

 

 

 

 

 

zamano plc & subsidiaries

 

Chief Executive Officer's Statement

 

Introduction

 

In the year ended 31 December 2014, zamano maintained its upward curve across virtually all of its financial performance metrics. The Group achieved considerable increases in sales, EBITDA, pre-tax and post-tax profits. It also significantly improved its balance sheet position during the year increasing its net cash balances by €2.464 million. Gross contribution margin was the only financial metric that fell, as some new business wins in the UK carried a lower margin than our conventional mobile marketing products. Nevertheless, the overall performance of the Group in 2014 was highly satisfactory, which demonstrates the resilience and efficiency of our operations.

 

Activity in UK and Ireland continued to dominate our sales, with business in the UK increasing significantly during the second half of the year. During the year, we discontinued customer acquisition in Eastern Europe, but we can still reactivate our interest there when market conditions improve. This fall-off in activity was compensated for by a successful strategic marketing campaign in Australia which drove sales well ahead of 2013.

 

The market for mobile products continues to expand, with smartphones driving this growth. Global smartphone penetration is forecast to reach 5.4 billion units in 2015, a penetration level of approximately 60%. Global revenue from mobile content is expected to reach US$13 billion in 2017. The number of global mobile payment users is expected to top the 1 billion mark by the end of the current year which equates to US$1 trillion worth of global mobile payments.

 

The growth in mobile users and the changing face of mobile payments driven by the depth of smartphone penetration is underpinning the mobile entertainment and mobile commerce markets in which zamano operates. In conjunction with its mobile network operator and global aggregator partners, the Group intends to actively pursue mobile content and payment opportunities in its key territories during the course of 2015.

 

Market Review

 

The UK business, which is comprised of web and mobile entertainment products and business-to-business services, performed exceptionally well during the year ended 31 December 2014. Revenues for the year were €15.175 million representing an increase of 56.5% over 2013 (€9.698 million). The principal driver of this surge in revenue was the opening up of a number of new business relationships and by leveraging our direct binds to the Mobile Network Operators, a key asset for the company.

 

The Irish business unit, which is also comprised of web and mobile products and business-to-business services, performed in accordance with budget during the year under review. Sales at €3.586 million fell short of the 2013 outturn of €4.133 million by 13.2%. Given that the sales decline amounted to 42.6% in the previous year the extent of the sales decline was arrested somewhat in 2014. However, the contribution margin % increased to 30.2% from 28.5% in the previous year as a result of changes in our product mix. Messagehero, our new messaging product for SME's launched in late 2013, continues to be refined to meet the ever changing requirements of the market. Modest sales levels were achieved in trial market environments during H2 2014.

 

 

 

 

zamano plc & subsidiaries

 

Chief Executive Officer's Statement (continued)

 

Market review (continued)

 

As announced with our first half results, zamano discontinued customer acquisition in the Czech Republic and Slovakia due to a changing regulatory environment which impacted on the economics of the business in those territories. As a result, sales in the "other territories" category fell from €1.4million in 2013 to €1.1 million during 2014. Of these sales, €0.982 million was recorded in Australia with the balance coming from other European markets. Other territories contributed €0.143 million in gross profit, which represented a gross margin contribution of 13%, during the financial year ended 31 December 2014.

 

Financial Review

 

The Chairman commented in his statement on the significant overall improvement in Group financial performance in 2014 when compared to the previous year. In particular, growth in sales, EBITDA, operating profit, pre and post-tax profit was achieved relative to 2013. A significant uplift in sales, albeit with lower gross margins than 2013, supported by tight operational controls were the main drivers of the uplift in earnings achieved during the year just ended.

 

The UK and Irish businesses effectively underwrote the improved financial performance of the Group during 2014. Group revenues were ahead of 2013 by a significant 23.9% (€19.863 million 2014; €16.034 million 2013), with UK revenues of €15.175 million 56.5% ahead of the equivalent figure for 2013 of €9.698 million. Irish revenues at €3.568 million were not unexpectedly down by 13.2% on the 2013 outturn of €4.133 million; however, the rate of sales decline in the Irish business was significantly reduced in 2014.

 

Group gross profit for 2014 at €4.778 million was just short of the €4.976 million achieved in 2013, but the gross margin percentage at 24% was down significantly on the 31% achieved in 2013. This was largely due to the changing mix of our business in the UK. EBITDA for 2014 at €2.735 million was 4.9% ahead of the 2013 figure of €2.608 million.

 

The Group recorded an operating profit for 2014 of €2.232 million, marginally ahead of the €2.224 million achieved in the previous year. Profit before tax at €2.177 million was 13.5% ahead of the corresponding figure for 2013 of €1.918 million, while profit after tax at €1.891 million was 10.5% ahead of the 2013 outturn of €1.771 million. Basic earnings per share for 2014 at €0.019 were 11.8% ahead of the equivalent figure for 2013 of €0.017.

 

The strong earnings performance of the Group referred to above was reflected in a significant strengthening of the Group's balance sheet position. In particular, cash net of loan balances outstanding at 31 December 2014 was €4.603 million, more than double the net cash position of €2.139 million at the end of the previous year. The availability of such significant cash balances provides the Group with a degree of flexibility in funding its product development and acquisition initiatives.

 

 

 

 

 

zamano plc & subsidiaries

 

Chief Executive Officer's Statement (continued)

 

Outlook

 

zamano continued to improve its operating performance during 2014, despite a challenging market and regulatory environment in its core product areas. The growth recorded in sales, EBITDA, pre and post-tax profits and the effective translation of this into cash is a testament to the operating efficiency and flexible nature of the business.

 

During 2014, the Group has sought to capitalise on the buoyant market which currently exists for web and mobile commerce products and services. zamano continues to invest in product development in the messaging and micro payments/billing areas, in particular. This programme is complemented by the Group's focus on identifying acquisition, investment and joint venture opportunities in its principal geographic markets of the UK and Ireland. zamano continues to examine a number of opportunities in mobile media, payments/billing and messaging with a view to both growing the business and diversifying its product base by providing attractive offerings to web, mobile and smartphones users.

 

In 2015, the Group will continue to strive to address the wide array of opportunities available in the web and mobile marketing space. zamano's significant expertise in data analytics, mobile media and mobile billing/payments makes it an attractive partner for a growth orientated technology driven business operating in those areas.

 

The Board and management intend to continue to operate its core web and mobile marketing and business-to-business services activities in an effective and efficient manner for the benefit of shareholders during the rest of 2015 and beyond. In conjunction with this focus on our core activities and markets, we will actively pursue our strategy of diversifying the business via the development of new products and the continuation of our acquisition programme.

 

 

Ross Conlon

Chief Executive Officer

 

 

 

 

 

 

zamano plc & subsidiaries

 

Consolidated income statement

for the year ended 31 December 2014




2014


2013


Notes


€'000


€'000

Revenue - from continuing operations

6


19,863


16,034

Cost of sales



(15,085)


(11,058)







Gross profit



4,778


4,976







Other administrative expenses



(2,120)


(2,432)

Amortisation of intangible assets



(366)


(276)

Depreciation



(60)


(44)

 

Total administrative expenses



 

(2,546)


 

(2,752)







Operating profit

7


2,232


2,224

Finance income

9


6


1

Finance expense

9


(61)


(307)







Profit before income tax



2,177


1,918







Income tax expense

10


(285)


(207)







Profit for the year attributable






to equity holders of the parent



1,892


1,711







Earnings per share






       basic

12


€0.019


€0.017

       diluted

12


€0.019


€0.017

 

Consolidated statement of comprehensive income

for the year ended 31 December 2014



2014


2013



€'000


€'000

Profit for the year


1,892


1,711

Other comprehensive income:

Items that may be reclassified subsequently to profit or loss:





Foreign currency translation adjustment


2


(2)






Total comprehensive income, all attributable to equity holders of the parent         


 

1,894


 

1,709



             


             

On behalf of the board

                                                                    

Ross Conlon                                                        Pat Landy                                       

Director                                                             Director

zamano plc & subsidiaries

 

Consolidated balance sheet

at 31 December 2014



2014


2013

 

Assets

Notes

€'000


€'000

 

Non-current assets





 

Property, plant and equipment

14

125


100

 

Intangible assets

15, 16

6,491


6,409

 

Deferred tax asset

10

107


117

 






 






 

Total non-current assets


6,723


6,626

 






 

Current assets





 

Trade and other receivables

17

3,064


2,224

 

Cash and cash equivalents

18

4,950


2,747

 






 






 

Total current assets


8,014


4,971

 






 






 

Total assets


14,737


11,597

 






 

Equity





 

Equity share capital

19

99


98

 

Share premium


13,538


13,494

 

Capital conversion reserve


1


1

 

Foreign currency translation reserve


(64)


(66)

 

Share-based payment and warrant reserve


362


300

 

Retained loss


(4,551)


(6,458)

 






 






 

Total equity


9,385


7,369

 






 

Liabilities





 

Non-current liabilities





 

Loans and borrowings

21

76


352







 






 

Total non-current liabilities


76


352







 

Current liabilities





 

Trade and other payables

20

4,761


3,429

 

Loans and borrowings

21

271


256

 

Current tax liabilities


244


191

 






 






 

Total current liabilities


5,276


3,876

 






 






 

Total liabilities


5,352


4,228

 






 






 






 

Total equity and liabilities


14,737


11,597

 






 

 

On behalf of the board

                                                                    

Ross Conlon                                                      Pat Landy                                            

Director                                                           Director

zamano plc & subsidiaries

 

Consolidated statement of changes in equity

for the year ended 31 December 2014





Foreign

Share-based





Capital


currency

payment and



Equity share

Share

conversion

Retained

translation

warrant

Total


capital

premium

reserve

earnings

reserve

reserve

Equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000









At 1 January 2014

98

13,494

1

(6,458)

(66)

300

7,369

Total comprehensive profit for the year








Profit for the year

-

-

-

1,892

-

-

1,892

Other comprehensive income








Currency translation adjustment

-

-

-

-

2

-

2


______

_______

______

_______

______ 

_______

______ 

Total comprehensive income for the year

-

-

-

1,892

2

-

1,894


           

              

               

                

              

_______

______ 

Other transactions








Issue of equity share capital

1

44

-

-

-

-

45

Transfer of share option reserve

-

-

-

15

-

(15)

-

Share based payment expense

-

-

-

-

-

77

77


           

              

               

                

              

_______

______ 

At 31 December 2014

99

13,538

1

(4,551)

(64)

362

9,385


=======

=======

=======

=======

=======

=======

=== ====









At 1 January 2013

98

13,494

1

(8,169)

(64)

236

5,596

Total comprehensive profit for the year








Profit for the year

-

-

-

1,711

-

-

1,711

Other comprehensive income








Currency translation adjustment

-

-

-

-

(2)

-

(2)


______

_______

______

_______

______ 

_______

______ 

Total comprehensive income for the year

-

-

-

1,711

(2)

-

1,709


           

              

               

                

              

_______

______ 

Other transactions








Share based payment expense

-

-

-

-

-

64

64


______

_______

______

_______

______ 

_______

______ 

At 31 December 2013

98

13,494

1

(6,458)

(66)

300

7,369


=======

=======

=======

=======

=======

=======

=======

















 









 









 

zamano plc & subsidiaries

 

Consolidated cash flow statement

for the year ended 31 December 2014



2014


2013

 



€'000


€'000

 

Cash flows from operating activities





 

Profit after tax


1,892


1,711

 






 

Adjustments to reconcile profit for the year to





 

net cash inflow from operating activities

Income tax expense


286


207

 

Depreciation


60


44

 

Amortisation of intangible assets


366


276

 

Share-based payments expense


77


64

 

(Increase)/Decrease in trade and other receivables


(840)


903

 

Increase/(Decrease) in trade and other payables


1,332


(751)

 

Finance income


(6)


(1)

 

Finance expense


61


307

 






 






 

Cash generated from operations


3,228


2,760

 

Interest paid


(61)


(41)

 

Income tax paid


(223)


(7)

 






 






 

Net cash inflow from operating activities


2,944


2,712







 

Cash flows from investing activities





 

Purchase of property, plant and equipment


(85)


(94)

 

Purchase of intangible assets


-


(51)

 

Capitalisation of internally generated intangible assets


(447)


(300)

 

Interest received


6


1

 






 






 

Net cash outflow from investing activities


(526)


(444)






            

 

Cash flows from financing activities





 

Proceeds from issue of share capital


46


-

 

Repayment of debt


(261)


(1,543)

 

Cash inflow from loan financing


-


800

 






 

Net cash outflow from financing activities


(215)


(743)

 





            

 






 

Net increase in cash and cash equivalents


2,203


1,525

 

Cash and cash equivalents at 1 January


2,747


1,222

 





            

 






 

Cash and cash equivalents at 31 December


4,950


2,747

 





            

 

 

 

 

 

zamano plc & subsidiaries

 

Notes to the consolidated financial statements

for the year ended 31 December 2014

 

1     Reporting entity

 

zamano plc ('the company") is a company domiciled in the Republic of Ireland.  The address of the company's registered office is 3rd Floor, Hospitality House,16-20 South Cumberland Street, Dublin 2.  

 

The consolidated financial statements of the company as at and for the year ended 31 December 2014 comprise the company and its subsidiaries ("the Group").

 

The company's shares are publicly traded on the London Alternative Investment Market ("AIM") and the Enterprise Securities Market ("ESM") in Dublin.

 

The principal activities of the Group are the provision of mobile data services and technology.

 

2     Basis of preparation

 

(a) Statement of compliance

      

       The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU.  A summary of pronouncements that came into effect after that date and the likely impact of these on the Group are set out in note 5.   The consolidated financial statements were authorised for issue by the board of directors on 18 March 2015.

 

  (b) Going concern  

 

       Having regard to the Group's projected earnings over the next 12 months from the date on which these financial statements were approved, the directors consider that it continues to be appropriate to prepare the financial statements on a going concern basis.

 

  (c) Basis of measurement

 

The consolidated financial statements for the year ended 31 December 2014 have been prepared on an historical cost basis, with the exception of share-based payments, which are stated at grant date fair value.

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

2     Basis of preparation (continued)

 

(d) Functional and presentation currency

 

These consolidated financial statements are presented in Euro ("€") which is the functional currency of the company and the majority of the Group's entities.  All financial information presented in Euro has been rounded to the nearest thousand.

 

(e) Basis of consolidation

 

The consolidated financial statements consolidate the financial statements of zamano plc and all its subsidiaries up to 31 December 2014. The Group controls an entity when it is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through the power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

 

All subsidiaries have a financial year end of 31 December.

 

Business combinations are accounted for using the acquisition method as at the acquisition date, i.e. when control is transferred to the Group.  Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

 

 

 

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

3     Operating segments

 

The Group is managed based on three reportable segments which are defined based on geographical markets as follows:  Republic of Ireland (ROI) and United Kingdom (UK). The Group previously reported the United States of America (USA) as a reporting segment, however activity in this market has decreased and is therefore no longer considered a significant reporting segment in the current financial year. It also has sales in other jurisdictions but these are not deemed to be standalone reportable segments under the requirements of IFRS 8 and are classified as "other locations" in the table below. The Group has restated prior year comparable information in oder to conform with those segments reported in the current year. 

 

The Group's sales consist of the development, promotion and distribution of mobile content and interactive services directly to consumer and also facilitating the communication and interaction between businesses and consumers on mobile phone through a range of value-added mobile applications.

 

Information regarding the results of each reportable segment is included below.  Performance is measured based on segment results as included in the reports that are reviewed by the Group's Chief Operating Decision Maker ("CODM") which is determined to be the board of directors.

                                                                                                            

The following tables present revenue and profit and certain assets and liability information regarding the Group's reportable segments:

 

Year ended 31 December 2014








Other





ROI


UK


  locations


Total

 



€'000


€'000


€'000


€'000

 

 

External revenue


 

3,586


 

15,175


1102


19,863

 










 










 

Gross profit


1,084


3,551


143


4,778

 










 










 

Unallocated expenses *








(2,546)

 










 










 

Operating profit








2,232

 

Net finance expense








(55)

 










 










 

Profit before income tax








2,177

 

Income tax expense








(285)

 










 










 

Profit for year








1,892

 










 

 

*Unallocated expenses comprise payroll costs, amortisation of intangibles and central overheads such as rent, administration, overhead costs which are not allocated to individual reportable segments.

zamano plc & subsidiaries

 

Notes (continued)

 

3     Operating segments (continued)

 

As at 31 December 2014






Other




ROI



locations


Total

 


€'000



  €'000


€'000

 









 

Segment assets

       2,371


6,573


185


9,129

 

Unallocated assets*







5,608

 









 









 

Total assets







14,737

 









 









 

Segment liabilities

    857


3,618


286


4,761

 

Unallocated liabilities*

 







591

 

 

Total liabilities








 








5,352

 

 

 

Other segment information

Unallocated

Total


€'000

€'000

Capital expenditure



Property, plant and equipment

85

85

Intangible assets

447

447

Other



Depreciation

60

60

Amortisation  

366

366

Share-based payment expense

77

77

 

        * The unallocated assets principally comprise of software, group cash and deferred tax.  The unallocated liabilities principally relate to loan liabilities.

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

3     Operating segments (continued)

      

       (As restated)

 

Year ended 31 December 2013







Other




 


ROI


UK


locations



Total

 


€'000


€'000


€'000



€'000

 










 

External revenue

4,133


9,698


2203



16,034

 










 










 

Gross profit

1,179


3,394


403



4,976

 










 












Unallocated expenses *








(2,752)

 










 










 

Operating profit








2,224

 

Net finance expense








(306)

 










 










 

Profit before income tax








1,918

 

Income tax expense








(207)

 










 










 

Profit for year








1,711

 










 

 

 

*Unallocated expenses comprise payroll costs, amortisation of intangibles and central overheads such as rent, administration, overhead costs which are not allocated to individual reportable segments.

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

 

 

3     Operating segments (continued)

      

       (As restated)

 

As at 31 December 2013





Other




ROI


UK


locations


Total

 


€'000


€'000


€'000


€'000

 









 

Segment assets

2,392


5,591


306


8,289

 

Unallocated assets*







3,308

 









 









 

Total assets







11,597

 









 









 

Segment liabilities

884


2,074


        470


3,428

 

Unallocated liabilities*







800

 









 

Total liabilities







4,228

 









 









 

 

 

Other segment information

Unallocated

Total


€'000

€'000

Capital expenditure



Property, plant and equipment

94

94

Intangible assets

351

351

Other



Depreciation

44

44

Amortisation  

276

276

Share-based payment credit

64

64

 

        * The unallocated assets principally comprise intangibles and Group cash and deferred tax.  The unallocated liabilities principally relate to loan liabilities.

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

 

4     Income tax expense

 

 (a)   Analysis of charge for the year:

 


2014

2013


€'000

€'000

Current tax:



Irish corporation tax

Adjustment for prior year

257

19

187

-


_________

_________





275

187

Deferred tax:



Movement in deferred tax amounts for the year

(Note 10(c))

10

20


_________

_________




Income tax expense (Note 10 (b))

285

207


_________

_________

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

5          Earnings per share

           

            Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.  Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

 

            The following reflects the income and share data used in the basic and diluted loss per share computations:



2014

2013








Basic EPS

€0.019

€0.017


Diluted EPS

€0.019

€0.017







2014

2013



€'000

€'000






Net profit attributable to equity holders

 of the parent

1,892

_________

1,711 _________







2014

2013



Numbers in

Numbers in



thousands

thousands






Basic weighted average number of shares

98,712

97,918


Dilutive potential ordinary shares:




Employee share options

874

1,701



_________

_________






Diluted weighted average number of shares

99,586

99,619



_________

_________

 

 

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

6          Adjusted earnings per ordinary share

           

            The following reflects adjusted earnings per share based on adjusted net income:

 


2014

2013





Adjusted basic EPS

€0.024

       €0.021

Adjusted diluted EPS

€0.023

       €0.020


_________

_________




Adjusted net income is calculated as:

2013

2013


€'000

€'000




Profit after tax

1,892

 

1,711

 

Share-based payments expense

67

64

Amortisation, net of tax

320

241


_________

_________





2,279

2,016


_________

_________

 

 



Reconciliation of reported operating profit across segments to earnings before interest, tax, depreciation and amortisation ("EBITDA").

 

                                                                                                                      


2014

2013


€'000

€'000




Reported operating profit

2,232

2,224

Depreciation

60

44

Share-based payment expense

77

64

Amortisation of intangible assets

366

276


_________

_________




 EBITDA

2,735

2,608


_________

_________

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

7          Impairment of goodwill

 

            Goodwill arising from business combinations in prior years was tested for impairment at 31 December 2014.  Based on this test, the directors have determined that no impairment charge is required (2013: €Nil) in the year.

 

For the purposes of the impairment testing, goodwill has been allocated to Cash Generating Units

("CGUs") which correspond to significant operating segments of the Group as follows:

 

                                                                                                            2014                2013

                                                                                                            €'000               €'000

Ireland                                                                                                 1,820               1,820

UK                                                                                                      4,245               4,245

                                                                                                                         _____              _____

 

   6,065               6,065

   _____           ____     _

 

The recoverable amount of the goodwill for each CGU has been determined based on a value-in-use calculation using cash flow projections based on EBITDA less capitalised research and development costs from financial budgets approved by senior management covering a one year period which have been rolled on for a further 4 year period.

 

Key assumptions used in value-in-use calculations

 

The calculation of value-in-use for each CGU is most sensitive to the following assumptions:

 

·     the discount rate; and

·     budgeted EBITDA growth rate

 

The discount rate reflects management's estimate of the risks specific to the CGU. In determining the appropriate discount rate, management has considered factors such as the average cost of capital and expected rate of return and has applied a pre-tax discount rate of 12.6% for both CGUs.

 

Another key assumption used within the cash flow projections is that EBITDA will grow at 3% per annum for both CGUs from FY2015 to forecast levels.

 

No reasonable charge in the assumptions would result in an impairment to the carrying value of goodwill.

 

 

 

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

8          Related party disclosures

           

            Compensation of key management


2014

2013


€'000

€'000




Short-term employee benefits

493

673

Share-based payments

54

64

Pension benefits

18

10


_________

_________





565

747

 

 

_________

_________

 

            Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and includes the executive and non-executive directors and certain members of senior management.

           

Related party transactions

 

On 26 June 2014, Pageant Holdings Limited ("Pageant") acquired 1,533,333 ordinary shares in the company at a price of €0.03 per ordinary share pursuant to warrants issued to Pageant on 21 December 2012.  Pageant now holds 26,938,510 ordinary shares in the company representing approximately 27.09% of the entire enlarged issued ordinary share capital of the company. Peter Furlong, a director of the company, is also a director of Pageant. 

 

In addition during the year the company paid an arrangement fee of €46,000 to Pageant which arose on a loan liability settled in the prior year.

 

 

 

 

 

 

zamano plc & subsidiaries

 

Notes (continued)

 

 

9          Litigation

 

In the normal course of business, the Group is involved in various legal proceedings with third parties, the outcome of which is uncertain.  Where appropriate, provision is made in the financial statements based on the directors' best estimate of the potential outcome of such proceedings. It is the policy of the Group to rigorously defend all legal actions taken against the Group.

 

10        Subsequent events

 

There have been no significant post balance sheet events.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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