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28 October 2017
Mobile Streams plc
("Mobile Streams" or the "Company")
Mobile Streams PLC (AIM: MOS), the emerging markets focused mobile media company, is today issuing an update on its current trading ahead of the publication of its audited results. As announced on 26 July 2017 trading for the 12 months to 30 June 2017 was in line with expectations.
On the 15 March 2017 the Company announced that it was experiencing difficult trading in Argentina as a result of general market conditions and regulation in the local market for mobile content subscriptions. These conditions have continued into the current financial year and whilst the Company expects that revenues from the region will continue their reduction, this is seen as being gradual and manageable over time on account of the Company's continuing strong relationship with its carrier billing partner in Argentina and that partner's commitment to the business.
Whilst the Company is still anticipating revenue growth from its Indian operations in the current financial year, consolidation activity has taken place amongst the local mobile carriers in India with new market entrants disrupting the previous status quo and attracting customers through aggressive promotion of reduced cost data plans. The Company is of course working to secure agreement with these new market entrants but to do so takes time. This, coupled with certain revenue policy changes made by one of the Company's key regional partners, has resulted in trading in India being more challenging than the Company had previously anticipated. At the same time the Company has also experienced issues with lower than expected returns from monetising some subscribers to its MobileGaming.com service on account of those subscribers being unable to pay for the Company's services because of low or zero balances in their pre-pay mobile account.
As a result of these market trends, the Company expects both revenue and EBITDA for the current financial year to be materially lower than current market expectations. However, in both Argentina and India, the Company routinely renegotiates and redirects its marketing acquisition costs when revenues deviate from prior expectations in order to optimise the overall business margins.
The Company remains committed to both India and Argentina and will issue a more detailed update at the same time as announcing its final results in the coming weeks.
Simon Buckingham, Chief Executive Officer
Enrique Benasso, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)
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