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RNS
Mobile Streams plc   -  MOS   

Half-year Report

Released 07:00 29-Mar-2019

RNS Number : 3988U
Mobile Streams plc
29 March 2019
 

29 March 2019

Mobile Streams plc ("Mobile Streams" or the "Company") (AIM: MOS)

Interim Results


Mobile Streams announces its unaudited interim results for the six months ended 31 December 2018.

Highlights 

·      Unaudited revenues were £0.9m (31 December 2017: £1.83m). All revenue is from continuing operations.

·      £0.55m of cash and cash equivalents at 31 December 2018 (£1.46m as at 31 December 2017), with no debt.

Post-period end update 

·      £0.29m of cash and cash equivalents as at 20 March 2019, with no debt. The cash balance includes £0.13m of net funds raised via the subscription which was announced on 27 February 2019.

·      The Company is currently working with some of the largest carriers in the India market: Vodafone-Idea, Jio and BSNL.

 

Commenting, Simon Buckingham, CEO of Mobile Streams said: "Progress in India remained steady over the recent period as the market settles in response to the consolidation amongst the mobile telecom operators. Since tighter marketing regulations were imposed, revenue targets have continued to be impacted. Looking ahead to the rest of 2019, we anticipate increased performance from our relationship with the newest entrant to the Indian telecom market, however, investment is on hold with Airtel, our leading partner. In Argentina, trading has been steady in 2019, whilst operations in Indonesia have been delayed until the latter half of the calendar year."

India

The majority of revenue in India during the period, was generated from our HTML5 games service, mobilegaming.com, through our billing relationship with Airtel, one of the leading mobile operators in the country. These operations are currently on hold.

 

Airtel was recently usurped as the largest network by the Vodafone - Idea merger. Vodafone and Idea remain as individual entities with regards to our relationship with them, this development has prevented us increasing our business with these parties. 

Argentina

Trading in Argentina remained stable with a small decline during the period. We continue with Movistar subscribers acquired via Google AdWords at declining volumes.  

 

OPERATING REVIEW

 

During the period, both the Group's Mobile Internet revenues and its Mobile Operator revenues decreased. This was primarily due to increased regulation in the Indian telecom market. Devaluation of both the Argentine Peso and Indian Rupee against the British Pound was an additional factor in this decrease. On a like-for-like basis, revenues from Argentina during the period were ARS$20.8m (6 months ended 31 December 2017: ARS$38.8m) with India generating revenue of INR$38.8m (6 months ended 31 December 2017: INR$ 28.1m).

 

 

 

 

 

Mobile internet

 

Mobile Streams' performance during the six months ended 31 December 2018 was driven primarily from its Mobile Internet sales in India. During the period, Mobile Streams has continued with its strategy to develop a content offering direct to consumers across a wide range of mobile devices.

Mobile operator sales

Despite the recent signing of an agreement in India, with the third largest telecom operator Jio, this revenue stream has significantly reduced as consumer preference has moved from the operator branded stores to other third party channels such as iTunes, Google Play and our own service mobilegaming.com

FINANCIAL REVIEW

Group revenue for the six months ended 31 December 2018 was £0.92m, a decrease of 50% to the comparative period's figure of £1.83m. The gross profit was £0.41m which decreased by 39% during the period (2017: £0.67m). The gross profit margin increased from 36.7% to 44.2% as a result of decreased marketing (direct to consumer) costs related to the Mobile Internet division.

The Group recorded a loss after tax of £317k for the 6 months ended 31 December 2018 (2017: loss £587k), generating a loss per share of 0.32 pence per share (2017: 0.64 pence loss per share).

Adjusted loss per share (excluding depreciation, amortisation, impairments and share compensation expense) was 0.32 pence per share (2017: 0.63 pence adjusted loss per share).

Cash and cash equivalents

During the period, the Argentine Peso depreciated by approximately 22% against the British Pound. Current cash balances (as at 20 March 2019) are £ 0.29m.

OUTLOOK

The Directors have some reservations about the short term opportunities in India given the current developments amongst the telecom operators and increased regulations. Management's strategy is to offset revenue decline in India by expanding operations into Indonesia. It is expected that trading conditions in Argentina will remain consistent and therefore revenues in the second half of the financial year will be lower than originally expected.

 

 

 

 

 

CONSOLIDATED INCOME STATEMENT

 

 

 

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 6 months ended 31 December 

 6 months ended 31 December 

 12 months ended 30 June 

 

2018

2017

2018

 

 £000's

 £000's

 £000's

 

 

 

 

Revenue

                919

               1,833

                3,046

Cost of sales

              (513)

             (1,162)

              (1,868)

Gross profit

                406

                  671

                1,178

Selling and marketing costs

              (198)

                (440)

                 (638)

Administrative expenses **

              (570)

                (879)

              (1,724)

Operating Loss

              (362)

                (648)

              (1,184)

 

 

 

 

Finance income

                   63

                     82

                   255

Finance expense

                    -  

                     (2)

                      (2)

Loss before tax

              (299)

                (568)

                 (931)

 

 

 

 

Tax expense

                 (18)

                   (19)

                   (84)

Loss for the period

              (317)

                (587)

              (1,015)

 

 

 

 

Attributable to:

 

 

 

Attributable to equity shareholders of Mobile Streams Plc

              (317)

                (587)

              (1,015)

 

 

 

 

 

 

 

 

Earning Per Share

 

 

 

 

Pence per share

Pence per share

Pence per share

Basic loss per share

           (0.324)

             (0.641)

              (1.007)

Diluted loss per share

           (0.324)

             (0.641)

              (1.007)

 

 

 

 

* *Administrative expenses include depreciation, amortisation, impairment and share based compensation.

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF COMPRENHENSIVE LOSS

 

Unaudited

Unaudited

Audited

 

 6 months ended 31 December 

 6 months ended 31 December 

 12 months ended 30 June    

 

2018

2017

2018

 

 

 

 

 

 £000's

 £000's

 £000's

 

 

 

 

Loss for the period

                     (317)

                   (587)

                 (1,015)

 

 

 

 

Exchange differences on translating foreign operations

                     (168)

                   (145)

                    (533)

 

 

 

 

Total comprehensive loss for the period

                    (485)

                  (732)

               (1,548)

 

 

 

 

Total comprehensive loss for the period attributable to:

 

 

 

 

 

 

Equity shareholders of Mobile Streams Plc

                    (485)

                  (732)

               (1,548)

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

 

 

 

 

 

 

 

 

 

 Unaudited

 Unaudited

 Audited

 

 

 

 6 months ended 

 6 months ended

 12 months ended

 

 

 31 December 2018

  31 December 2017

  30 June

2018

 

 

 £000's

 £000's

 £000's

 

 

Assets

 

 

 

 

Non- Current

 

 

 

 

Intangible assets

-

-

-

 

Property, plant and equipment

4

12

7

 

Deferred tax asset

74

-

74

 

 

78

167

81

 

Current

 

 

 

 

Trade and other receivables

852

1,261

904

 

Cash and cash equivalents

554

1,466

1,039

 

 

1,406

2,727

1,943

 

 

 

 

 

 

Total assets

1,484

2,894

2,024

 

 

 

 

 

 

Equity

 

 

 

 

Equity attributable to equity holders of Mobile Streams Plc

 

 

 

Called up share capital

200

182

200

 

Share Premium

12,550

12,463

12,550

 

Translation reserve

(3,954)

(3,398)

(3,786)

 

Retained earnings

(8,878)

(8,136)

(8,563)

 

Total equity

(82)

1,111

401

 

 

 

 

 

 

Liabilities

 

 

 

 

Current

 

 

 

 

Trade and other payables

1,384

1,516

1,410

 

Current tax liabilities

182

267

213

 

 

1,566

1,783

1,623

 

 

 

 

 

 

Total liabilities

1,566

1,783

1,623

 

 

 

 

 

 

Total equity and liabilities

1,484

2,894

2,024

 

             

 

 

Called up share capital

Share premium

Translation reserve

Retained earnings      

Total Equity

 

 

 

 

 

 

 

£000's

£000's

£000's

£000's

£000's

 

 

 

 

 

 

Balance at 1 July 2017

           182

         12,463

           (3,253)

       (7,552)

      1,839

Credit for share based payments

               -

                  -

                    -

               4

             4

Transactions with owners

               -

                  -

                    -

               4

             4

Loss for the 6 months ended 31 December 2017

               -

                  -

                    -

          (317)

        (317)

Exchange differences on translating foreign operations

               -

                  -

              (145)

                -

        (145)

Total comprehensive income for the period

               -

                  -

              (145)

          (317)

        (462)

Balance at 31 December 2017

           182

         12,463

           (3,398)

       (7,865)

      1,381

Balance at 1 January 2018

           182

         12,463

           (3,398)

       (7,865)

      1,381

New Equity

             18

                87

                    -

                -

         105

Credit for share based payments

               -

                  -

                    -

               1

             1

Transactions with owners

             18

                87

                    -

               1

         106

Loss for the 6 months ended 30 June 2018

               -

                  -

                    -

          (429)

        (429)

Exchange differences on translating foreign operations

               -

                  -

              (388)

          (270)

        (658)

Balance at 30 June 2018

           200

         12,550

           (3,786)

       (8,563)

         401

Balance at 1 July 2018

           200

         12,550

           (3,786)

       (8,563)

         401

Credit for share based payments

               -

                  -

                    -

               3

             3

Transactions with owners

               -

                  -

                    -

               3

             3

Loss for the 6 months ended 31 December 2018

               -

                  -

                    -

          (317)

        (317)

Exchange differences on translating foreign operations

               -

                  -

              (168)

                -

        (168)

Total comprehensive income for the period

                  -

              (168)

          (317)

        (485)

Balance at 31 December 2018

           200

         12,550

           (3,954)

       (8,878)

          (82)

 

 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

The interim results of Mobile Streams PLC are prepared in accordance with the requirements of IAS 34 Interim Financial Reporting as adopted by the EU and prepared in accordance with the accounting policies set out in the last financial statements for the 12 months ended 30 June 2018.

The interim results, which are not audited, do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006.

The comparative financial information for the twelve months ended 30 June 2018 has been extracted from the statutory accounts for that period. In addition, the financial information for the 6 months ended 31 December 2018 has been extracted from the unaudited Interim results. The full audited accounts of the Group for the 12 months ended 30 June 2018 were prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and have been delivered to the Registrar of Companies.

The auditor's report on these financial statements was unqualified and did not contain statements under S498 (2) or S498 (3) of the Companies Act 2006.

 

2. SEGMENT REPORTING

As at 31 December 2018, the Group was organised into four geographical segments: Europe, North America, Latin America, and Asia Pacific. Revenues were from external customers only and generated from three principal business activities: the sale of mobile content through MNO s (Mobile Operator sales), the sale of mobile content over the internet (Mobile Internet sales) and the provision of consulting and technical services (Other Service Fees).

 

All operations are continuing and all inter-segment transfers are priced and carried out at arm's length.

 

The segmental results for the 6 months ended 31 December 2018 were as follows:

 

 

£000's

Europe

Asia Pacific

North America

Latin America

Group

Mobile operator sales

1

(1)

6

-

6

Mobile internet sales

-

422

-

491

913

Other service fees

 

-

-

-

 

Total Revenue

1

421

6

491

919

Cost of sales

-

(197)

(3)

(314)

(513)

Gross profit

1

224

2

179

406

Operating expenses

(302)

(210)

(21)

(233)

(765)

EBITDA*

(301)

13

(19)

(54)

(360)

Depreciation, amortisation

-

 

-

(1)

(1)

Share based compensation

(3)

-

-

-

(3)

Finance income

0

 

-

63

63

Profit/(Loss) before tax

(303)

13

(18)

8

(300)

Income tax expense

-

-

-

(17)

(17)

Profit/(Loss) after tax

(303)

13

(18)

(10)

(317)

 

 

 

 

 

The segmental results for the year ended 30 June 2018 were as follows:

 

 

£000's

Europe

Asia Pacific

North America

Latin America

Group

Mobile Operator Services

                2

                       1

                31

                  -

                 34

Mobile Internet Services

                 -

                   543

                  -

            2,463

             3,006

Other Service fees

                5

                       -

                  1

                  -

                   6

Total Revenue

                7

                   544

                32

            2,463

             3,046

 

0

0

0

0

 

 

 

 

 

 

 

Cost of sales

              (2)

                 (305)

              (15)

         (1,546)

          (1,868)

Gross profit

                5

                   239

                17

              917

             1,178

Selling, marketing and administration expenses

        (4,364)

                   198

              (98)

            1,913

          (2,351)

 

 

 

 

 

 

Trading EBITDA*

        (4,359)

                   437

              (81)

            2,830

          (1,173)

Depreciation, amortisation and impairment

                 -

                       -

                  -

               (6)

                 (6)

Share based compensation

              (5)

                       -

                  -

                  -

                 (5)

Finance income

                 -

                       -

                  -

              255

                255

Finance expense

            (39)

                       -

                39

               (2)

                 (2)

Loss before tax

        (4,403)

                   437

              (42)

            3,077

             (931)

Taxation

                 -

                       -

                  -

              (84)

               (84)

Loss after tax

        (4,403)

                   437

              (42)

            2,993

          (1,015)

 

 

 

 

 

 

 

 

 

 

 

The segmental results for the 6 months ended 31 December 2017 were as follows:

 

£000's

Europe

Asia Pacific

North America

Latin America

Group

Mobile operator sales

1

1

25

-

28

Mobile internet sales

-

329

-

1,471

1,800

Other service fees

4

-

2

-

5

Total Revenue

5

331

27

1,471

1,833

Cost of sales

(1)

(220)

(13)

(929)

(1,162)

Gross profit

4

111

13

543

671

Operating expenses

(540)

(251)

(38)

(484)

(1,314)

EBITDA*

(537)

(140)

(25)

58

(643)

Depreciation, amortisation

-

 

-

(3)

(3)

Share based compensation

(4)

-

-

-

(4)

Revenue/expense intercompany

0

-

-

-

0

Finance income

0

 

-

80

80

Profit/(Loss) before tax

(541)

(140)

(25)

135

(570)

Income tax expense

-

-

-

(18)

(19)

Profit/(Loss) after tax

(541)

(140)

(25)

118

(588)

 

 

 

 

 

 

 

 

 

 

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

 

3.  EARNINGS PER SHARE

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

Earnings per share is calculated by dividing the(loss)/profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.

 

 

 

 

 

 

 

 

 

 Unaudited

 Unaudited

 Audited

 

 6 months ended 31 December 2018

 6 months ended 31 December 2017

 12 months ended 30 June 2018

 

 

 

 

Loss for the period (£000's)

(317)

(587)

(1306)

 

 

 

 

Loss earnings per share (pence):

 

 

 

Basic

(0.324)

(0.641)

(3.519)

Diluted

(0.324)

(0.641)

(3.519)

 

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

 

 

Adjusted earnings per share is calculated to reflect the underlying profitability of the business by excluding non-cash charges for depreciation, amortisation, impairments and share compensation charges. 

 

 

 

 

 

 

 

 

 

 6 months ended 31 December 2018

 6 months ended 31 December 2017

 12 months ended 30 June 2018

 

£000's

£000's

£000's

 

 

 

 

Loss for the period

(317)

(587)

(1727)

Add back: share compensation expense

3

4

118

Add back: depreciation and amortisation

1

3

19

Adjusted Loss for the period

(312)

(578)

(1590)

 

 

 

 

 

 Pence per share

 Pence per share

 Pence per share

Adjusted loss per share

(0.320)

(0.633)

(2.414)

Adjusted diluted loss per share

(0.320)

(0.633)

(2.414)

 

 

 

 

 

 

 

 

Weighted average number of shares

 

 

 

                                                                 

 

 

 

 

 6 months ended 31 December 2018

 6 months ended 31 December 2017

 12 months ended 30 June 2018

 

 

 

 

Basic

        97,992,286

         91,593,533

        65,910,376

Exercisable share options

                       -  

                        -  

                       -  

Diluted

97,992,286

40,507,910

65,910,376

 

Diluted (loss)/earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has only one category of ordinary shares.

 

The adjusted EPS has been calculated to reflect the underlying profitability of the business by excluding non-cash charges for depreciation, amortisation, impairments and share compensation charges.

4. GOING CONCERN

 

The Group had cash balances of £0.55m at 31 December 2018 (30 June 2018: £1.04m) and no borrowings. Having reviewed cash flow forecasts and budgets for a year ahead the Directors have a reasonable expectation that the Group has resources to continue in operational existence for the foreseeable future. The Directors are analyzing further financing initiatives and a cost reduction program.

As at 31 December 2018, £0.45m (including short-term investments of £0.40m) of the Group's cash balance was held in Argentina. The Argentine Government has released the currency restrictions in December 2015. Since then, the Peso has remained relatively stable, although we cannot predict future movements in the currency and the impact on our financial performance.

5. FOREIGN CURRENCY TRANSLATION
(a) Presentational currency

The consolidated financial statements are presented in British Pounds: the functional currency of the parent entity is also British Pounds.


(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date the transaction occurs. Any exchange gains or losses resulting from these transactions and from the translation of monetary assets and liabilities at the balance sheet date are reported in the income statement except when these represent a net investment in a subsidiary when they are charged or credited to equity             .

Foreign currency balances are translated at the balance sheet date using exchange rates prevailing at the period end.

(c) Group companies

The financial results and position of all group entities that have a functional currency different from the presentational currency of the Group are translated into the presentational currency as follows:

i - assets and liabilities for each balance sheet are translated at the closing exchange rate at the date of the balance sheet

ii - income and expenses for each income statement are translated at average exchange rates (unless it is not a reasonable approximation to the exchange rate at the date of transaction)

iii - all resulting exchange differences are recognised as a separate component of equity (translation reserve)

The exchange rates used in respect of Argentinean Pesos are the official published exchange rates.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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Half-year Report - RNS