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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Mobile Streams Plc | LSE:MOS | London | Ordinary Share | GB00B0WJ3L68 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0375 | 0.035 | 0.04 | 0.0375 | 0.0375 | 0.0375 | 38,723,275 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Communications Services, Nec | 1.82M | -3.79M | -0.0007 | -0.57 | 2.13M |
From Apr 2019 to Apr 2024
TIDMMOS
RNS Number : 2945X
Mobile Streams plc
23 November 2017
23 November 2017
Mobile Streams plc
("Mobile Streams", the "Company" or the "Group")
Final results for the year ended 30 June 2017
Mobile Streams (AIM: MOS), the emerging markets focused mobile media company, announces its final audited results for the year ended 30 June 2017.
Financial highlights:
-- Decrease in revenues to GBP5.7m (2016: GBP12.8m) caused primarily by challenges in the Company's core market of Argentina.
-- EBITDA* loss of GBP1.48m (2016 loss: GBP0.65m) attributable to expansion in India. -- Loss before tax GBP1.5m (2016 loss: GBP0.74m) -- Loss after tax of GBP1.7m (2016 loss of GBP1.3m) -- Basic loss per share of 2.62p per share (2016: loss of 3.52p per share) -- GBP2.3m in cash (2016: GBP1.4m), with no debt. Current cash is GBP1.7m
*EBITDA is a non-IFRS measure and is calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.
Operational highlights:
-- More than 230,000 active paying subscribers* in India currently with an addressable audience of c.750 million mobile users
-- Agreements signed with 4 of the largest 6 mobile carriers that provide direct carrier billing
-- Online (HTML5) games service launched in January as a complimentary offering to the mobilegaming.com download service
The full report and accounts for the year ended 30 June 2017 will be sent to shareholders shortly and will be uploaded to the Company's website, www.mobilestreams.com, in accordance with AIM Rule 20.
Simon Buckingham, CEO, said: "We announced on 15 March 2017 that trading conditions in Argentina were challenging in the year under review as a result of general market conditions and regulation in the local market for mobile content subscriptions. These conditions are continuing but we are confident that our strong relationship with our carrier billing partner, which remains very supportive of our business, will enable us to manage this.
"In India, we announced on 28 October 2017 that factors affecting the business have been more complex than originally expected because of policy changes at one of our key partners and 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. In addition, 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. Despite these challenges, revenues have been steadily growing quarter after quarter and we are continuously looking to improve our gross margins by reducing our subscriber acquisition costs and increasing our average revenue per subscriber.
"The current situation presents us with an opportunity as we look to refocus our business and continue to develop our ad-funded games service and subscription services, with an increasing emphasis likely to be placed on India. The opportunity in that region is potentially transformational for our business. We look forward to updating shareholders with our progress in the coming months."
* Active paying subscribers are measured as consumers who have made a purchase from the Company in the country in the past 60 days. For like-for-like comparability, this is the same methodology the Company uses to measure subscribers in its other markets such as Argentina.
**Zero rate subscribers are consumers who are allowed to subscribe to our service even though they do not have sufficient balance in their pre-pay account to pay for the subscription at that time. Revenue may or may not then be received from the subscriber (this can occur at any time the customer's prepaid balance is topped up in a 90 day period). Active paying subscriber numbers do not include zero rate subscribers in their total.
Outlook
Mobile Streams has focused on three main objectives in its recent business trading: further expansion into India; stabilisation of our Argentina business; and seeking to minimise net cash outflow. The Company has sought to invest the capital raised in December 2016 primarily in the Indian market which the Directors believe presents the greatest opportunity to grow the business.
In the past financial year in India, the focus has been very much on growing the active paying weekly subscriber base on our download and online games services. The marketing team responsible for the success the Company has had in Latin America have had to be very flexible with their investment strategy over the period as the mobile market in India is ever evolving. The demonetisation in India in November 2016, policy changes from selected carriers and zero rate prepaid balances have been challenging but, on a positive note, the Company has direct carrier billing agreements with two new mobile networks and launched its online HTML5 games service.
Looking ahead to the remainder of the current financial year and beyond, the Company's primary objective is improving our gross margins in India by optimising the marketing mix to increase its active subscribers at a reasonable cost.
The Indian mobile market is developing quickly, the entrance of Reliance Jio 4G network (breaking world records in subscriber growth) into the market has improved network connections throughout the country, lowered prices for data and had a substantial impact on the financial results of other carriers. A GSMA Intelligence consumer survey report in October 2016 forecast that over the next 5 years India will be responsible for over a quarter of all new mobile subscribers and that smartphone adoption increase from under 30% to nearly 50%.
The Board believes that India remains the largest opportunity for the Company to deliver growth in shareholder returns with established and newly developed products using its strong trading relationships in developing markets.
Enquires:
Mobile Streams
+1 347 669 9068
Simon Buckingham, Chief Executive Officer
Enrique Benasso, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)
+44 (0)20 7496 3000
Alex Price
Alex Laughton-Scott
About Mobile Streams:
Mobile Streams licenses and distributes a wide range of mobile content including games and apps that are retailed around the world, primarily in emerging markets. The Company's main operations are in Latin America and in particular Argentina, with recent expansion into India. Its shares are traded on the AIM market of the London Stock Exchange under the symbol MOS LN.
Chairman's Statement:
The Board of Mobile Streams is pleased to present its audited accounts for the financial year ended 30 June 2017.
The past twelve months has seen Mobile Streams continue with its strategy to develop a content offering direct to consumers across a wide range of mobile devices in a number of large emerging markets. This is in addition to our original business of providing content to mobile network operators and other business partners.
Group revenue for the year ended 30 June 2017 was GBP5.7m (2016: GBP12.8m). Trading EBITDA (calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets) was, as anticipated, negative GBP1.5m for year (2016: negative GBP0.6m). Loss before tax was GBP1.5m (2016: GBP0.7m loss). Much of the reduction in revenues is attributable to Argentina. Revenue in Argentina (which equated to 83.7% of our revenue) on a constant currency basis decreased by 51% from AR$188m to AR$92m.
During the second half of the financial year the Company continued to invest in India to build a strong position in the country and grow the number of our active subscribers. The second half of the financial year was particularly busy in India, with several launches, including the three largest telecom operators covering over 700m mobile customers. In the new financial year, the team will focus on growing the Group's subscriber base and access to mobile customers further, as well as exploring other strategic business alliances with key Indian mobile companies.
The Directors do not propose a payment of a dividend (2016: GBPNil). In the new financial year, the majority of revenues are once again expected to be generated in Latin America and the majority of the investment will be in India. The Group ended the year with a net cash balance of GBP2.3m, with no debt, at 30 June 2017 (2016: GBP1.4m).
The Board believes that India remains the largest opportunity for the Company to deliver growth in shareholder returns with established and newly developed products using its strong trading relationships in developing markets.
R Parry
Chairman
STRATEGIC REPORT
Operating review
Mobile Streams' performance during the financial year ended 30 June 2017 was driven primarily from its Mobile Internet sales in Latin America. The past twelve months has seen Mobile Streams continue with its strategy to develop a content offering direct to consumers across a wide range of mobile devices in a number of large emerging markets. This is in addition to the Company's business of providing content to mobile network operators and other business partners.
Group revenue for the year ended 30 June 2017 was GBP5.7m. The gross profit was GBP1.8m and decreased by 50% during the year (year ended 30 June 2016: GBP3.5m). The gross profit margin increased from 27.6% to 30.8% as a result of decreased marketing (direct to consumer) costs related to its Mobile Internet division.
Selling and marketing expenses were GBP0.8m, a 42.3% decrease on the year ended 30 June 2016. Revenues are generated from two principal business activities: the sale of mobile content through mobile operators (Mobile Operator Sales); and the sale of mobile content over the internet (Mobile Internet Sales). Additionally, the Group is engaged in the provision of consulting and technical services (Other Service Fees).
During the period, both the Group's Mobile Internet revenues and its Mobile Operator revenues decreased. As consumers steadily update their phones from legacy feature and flip phone models to smartphones, they have generally used the operator content portals less. Consumers generally use independent portals, as well as the open mobile internet, more actively.
Mobile Internet sales
The Group experienced growth and then stabilisation in 2013 to 2014 in Mobile Internet sales as consumers used their mobile devices to purchase mobile content subscriptions. After that, the business model (based on Mobile Internet) shifted to a model based on the operator platforms and the revenue based on internet decreased. This was mostly the result of the devaluation of the Argentine peso during the 2014 to 2017 financial years, resulting in a fall in sales.
Latin America, primarily Argentina, accounted for the majority of revenues.
Mobile Operator sales
The Group has several contracts with mobile operators that allow the distribution of content through their mobile portals, although the revenue has been reduced by more than 55% year on year partially because of consumer preferences.
There was a reduction in the number of consumer visitors to these portals, which has been a continuing trend for several years. The Group's teams share and implement the best retailing practices in order to increase the conversion of visitors into customers to mitigate the natural decline in this revenue stream as the market changes.
Sales by Territory
Operations in Argentina were extremely challenging in the year under review as a result of general market conditions and regulation in the local market for mobile content subscriptions. Further reduction in revenues in this region are seen as manageable on account of the Company's strong relationship with its carrier billing partner and their commitment to the business. However, this also presents the Group with an opportunity as it looks to refocus its business and continue to develop its ad-funded games service and subscription services in India. These opportunities are potentially transformational for the Group's business.
In India, revenues have been steadily growing quarter after quarter. The Directors are continuously looking to improve the Group's gross margins by reducing its subscriber acquisition costs and increasing average revenue per subscriber. However, trading has been more challenging than anticipated because of policy changes at one of the Group's key partners and lower revenue from another.
In the past financial year in India, the focus has been very much on growing the active paying weekly subscriber base on our download and online games services. The marketing team responsible for the success The Group has had in Latin America have had to be very flexible with their investment strategy over the period as the mobile market in India is ever evolving. The demonetisation in India in November 2016, policy changes from selected carriers and zero rate
prepaid balances have been challenging but, on a positive note, the Group has direct carrier billing agreements with two new mobile networks and launched its online HTML5 games service.
The Indian mobile market is developing quickly, the entrance of Reliance Jio 4G network (breaking world records in subscriber growth) into the market has improved network connections throughout the country, lowered prices for data and had a substantial impact on the financial results of other carriers. A GSMA Intelligence consumer survey report in October 2016 forecast that over the next 5 years India will be responsible for over a quarter of all new mobile subscribers and that smartphone adoption increase from under 30% to nearly 50%.
During the second half of the financial year the Company continued to invest in India to build a strong position in the country and grow the number of our active subscribers. Active subscribers had quadrupled year on year to over 200,000 members at the end of the financial year. The second half of the financial year was particularly busy in India, with several launches, including the 3 largest telecom operators covering over 700m mobile customers. In the new financial year, the team will focus on growing the Group's subscriber base and access to mobile customers further, as well as exploring other strategic business alliances with key Indian mobile companies.
The Group has several contracts with mobile operators that allow the distribution of content through their mobile portals, although the revenue has been reduced by more than 55% year on year partially because of consumer preferences on products of other portals and a higher competition. There was a reduction in the number of consumer visitors to these portals, which has been a continuing trend for several years. Our teams share and implement the best retailing practices in order to increase the conversion of visitors into customers to mitigate the natural decline in this revenue stream as the market changes.
Financial review
Group revenue for the year ended 30 June 2017 was GBP5.7m, a 55.5% decrease on the previous year (2016: GBP12.8m).
Gross profit was GBP1.8m, a decrease of 50.3% during the year (2016: GBP3.5m). The gross profit margin increased from 27.6% to 30.8% on account of decreased marketing (Direct to Consumer) costs related to Mobile Internet.
Selling, marketing and administrative expenses were GBP3.4m, a 23.1% decrease on the year ended 30 June 2017 (2016: GBP4.4m).
The Group recorded a loss after tax of GBP1.7m. for the year ended 30 June 2017 (2016 loss: GBP1.3m). Basic earnings per share increased to a loss of 2.62 pence per share (2016: loss of 3.52 pence per share). Adjusted earnings per share (excluding interest, depreciation, amortisation, impairments and share compensation expense) increased to a loss of 2.41 pence per share (2016: loss of 2.97 pence per share).
The Group had cash of GBP2.3m at 30 June 2017, with no debt (GBP1.4m of cash with no debt as at 30 June 2016). Argentina office cash was GBP0.8m at 30 June 2017 (2016: GBP1.2m).
Headcount reduction
During the first half of the fiscal year, a significant cost savings initiative was implemented. The Global headcount was reduced by a 53% (from 47 to 22 people). The Hong Kong office was shut down in December 2016 (5 people). 22 people were dismissed in Argentina and 1 person in United Kingdom. After 30 June 2017 another 3 people were dismissed from the Argentina office. The operations and marketing activities were re-organized in order to continue with normal activities.
Financial performance
Hot Features
Premium
Year Year
to 30 to 30
June June
2017 2016
GBP000's GBP000's
Revenue 5.695 12.786
Gross profit 1.753 3.530
Selling and Marketing
Costs (769) (1.333)
Administrative
Expenses* (2.461) (2.843)
Trading EBITDA** (1.477) (646)
Depreciation
and Amortisation (19) (59)
Impairments - -
Share Based Compensation (118) (146)
Operating loss (1.614) (851)
Finance Income 98 118
Finance Expense (2) (4)
Loss before tax (1.518) (737)
* Administrative expenses don't include amortisation,
depreciation and share compensation expense.
** Calculated as profit before tax, interest,
amortisation, depreciation, share compensation
expense and impairment of assets.
Key performance indicators ("KPI's")
Gross profit as a percentage of revenue is a measure of our profitability. Gross profit was GBP1.8m. for the year ended on 30 June 2017. The KPIs used by the Group are Trading EBITDA, variance in revenue and gross profit. Management review these on a regular basis, largely by reference to budgets and reforecasts. Trading EBITDA was a loss of GBP1.5m for the year ended on June 2017, and it was a loss of GBP0.6m for the year ended in June 2016.
Earnings before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets (Trading EBITDA) measured exactly as stated. All tax, interest, amortisation, depreciation, share compensation expense and impairment of assets entries in the income statement are added back to profit after tax in calculating this measure.
Growth in revenue is a measure of how the Group is building its business. The Company's goal is to achieve year-on-year growth. Although revenue decreased 55% during the year, like-for-like revenue on a constant currency basis actually decreased by 51%.
Gross profit as a percentage of revenue is a measure of our profitability. Gross profit margin was 30.8% for the year ended in June 2017, an increase of 3.1% (2016: 27.6%).
Strategy
The Group's business model is generating revenues though relationships with mobile operators and content aggregators and retailing directly to the consumer. Mobile Streams has developed expertise in selling content to consumers in developing markets.
Mobile Streams has focused on three main objectives in its recent business trading: expansion into India; stabilisation of our Latin American business primarily in Argentina; and seeking to minimise net cash outflow. Generally, we have sought to invest the gross profits from our Argentine operations into developing the India business whilst seeking to
maintain cash balances around the current levels. Argentina revenues in the last financial year were impacted by the slowdown in the mobile subscription business in the local market.
In India, we formed Mobile Streams India Private Limited in October 2015 to enable Mobile Streams to sign agreements with Indian mobile network operators (MNOs), device manufacturers (OEM) and other third parties. As per the strategy in Latin America, the focus is very much on the recurrent revenue generating subscription service in India, with daily and weekly packages both being trialled. Our Mobilegaming.com service was launched in February 2016 with the top three Indian mobile operators with marketing campaigns coordinated by the same team responsible for the success we have had in the Latin America region over the past several years. Active subscribers are measured as consumers who have made a purchase from the Company in the country in the past 60 days. For like-for-like comparability, this is the same methodology the Group uses to measure subscribers in its other markets such as Argentina.
Share Issue
In December 2016 the Group issued 54,479,250 shares at a par value of GBP0.002 per share. The Group's source of capital is the parent company's equity shares. The funds obtained are dedicated to fund the expansion of the India subsidiary through the increase of the marketing initiatives. The Group has not raised debt financing in the past and expects not to do so in the future.
The Company only has one class of share. The total number of shares in issue as at 30 June 2017 is 91,593,533 (30 June 2016: 37,114,283) with a par value of GBP0.002 per share. All issued shares are fully paid.
Principal risks and uncertainties
The nature of the Group's business and strategy makes it subject to a number of risks.
The Directors have set out below the principal risks facing the business.
Contracts with Mobile Network Operators (MNOs)
While Mobile Streams maintains relationships with numerous MNOs in the various territories, a small number of operators account for a high portion of the Group's business.
Contracts with rights holders
The majority of content provided by Mobile Streams is licensed from rights holders. While Mobile Streams is not dependent on any single rights holder for its entertainment content, termination, non-renewal or significant renegotiation of a contract could result in lower revenue.
The Group continues to enter into new content licensing arrangements to mitigate these risks.
Competition
Competition from alternative providers could adversely affect operating results through either price pressures, or lost custom. Products and pricing of competitors are continuously monitored to ensure the Group is able to react quickly to changes in the market.
Fluctuations in currency exchange rates
Approximately 99% of the Group's revenue relates to operations outside the UK. The Group is therefore exposed to foreign currency fluctuations and the financial condition of the Group may be adversely impacted by foreign currency fluctuations. See note 24 on page 47 "Foreign currency risk".
The Group has operations in Europe, Asia Pacific, North America and Latin America and recently in India. As a result, it faces both translation and transaction currency risks.
Currency exposure is not currently hedged, though the Board continuously reviews its foreign currency risk exposure and potential means of combating this risk.
Dependencies on key executives and personnel
The success of the business is substantially dependent on the Executive Directors and senior management team.
The Group has incentivised all key and senior personnel with share options and has taken out a Key Man insurance policy on its Chief Executive Officer, Simon Buckingham.
Intellectual property rights
The protracted and costly nature of litigation may make it difficult to take a swift or decisive action to prevent infringement of the Group's intellectual property rights.
Although the Directors believe that the Group's content and technology platform and other intellectual property rights do not infringe the IP rights of others, third-parties may assert claims of infringement which could be expensive to defend or settle. The Group holds suitable insurance to reduce the risk and extent of financial loss.
Technology risk
A significant portion of the future revenues are dependent on the Group's technology platforms. Instability or interruption of availability for an extended period could have an adverse impact on the Group's financial position.
Mobile Streams has invested in resilient hardware architecture and continues to maintain software control processes to minimise this risk.
Management controls and reporting procedures and execution
The ability of the Group to implement its strategy in a competitive market requires effective planning and management control systems. The Group's future growth will depend upon its ability to expand whilst improving exposure to operational, financial and management risk.
Going concern risk
The current uncertain economic climate and changing market place may impact the Group's cash flows and thereby its ability to pay its creditors as they fall due.
In the past financial year in India, the focus has been very much on growing the active paying weekly subscriber base on our download and online games services. The marketing team responsible for the success we have had in Latin America have had to be very flexible with their investment strategy over the period as the mobile market in India is ever evolving.
The Group had cash balances of GBP2.3m at the year-end (2015: GBP1.4m) and no borrowings. Marketing spend in India can be managed with flexibility depending on the cash balances. Management can also implement cost savings initiatives in order to reduce the cash burn.
A principal responsibility of management is to manage liquidity risk, as detailed in note 24 to the financial statements. The Group uses annual budgeting, forecasting and regular performance reviews to assess the longer term profitability of the Group and make strategic and commercial changes as required ensuring cash resources are maintained. Although there was a significant fall in revenues and a loss for the year ending 30 June 2017, the Group actively manages its use of cash, particularly marketing and other expenditure, and having reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. The Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.
Financial risk management objectives and policies
The Group uses various financial instruments. These include cash and various items, such as trade receivables and trade payables that arise directly from its operations. The numerical disclosures relating to these policies are set out in notes to the financial statements.
The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below. The Group does not currently use derivative products to manage foreign currency or interest rate risks.
The main risks arising from the Group's financial instruments are market risk, currency risk, liquidity risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous periods.
Market risk
Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. In this review interest rate and price risk have been ignored as they are not considered material risks to the business.
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.
The Group currently has no borrowing arrangements in place and prepares cash flow forecasts which are reviewed at Board meetings to monitor liquidity.
Credit risk
The Group's principal financial assets are bank deposits, cash and trade receivables. The credit risk associated with the bank deposits and cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from the Group's trade receivables. Most of the Group's trade receivables are large mobile network operators or media groups. Whilst historically credit risk has been low management continuously monitors its financial assets and performs credit checks on prospective partners.
Argentina
12 months 2017 2016 2017 2016
to June
30
AR$'000 AR$'000 GBP'000 GBP'000
Revenue 91.648 187.634 4.681 11.198
----------- -------- -------- -------- --------
The Argentina Division delivered a decreased revenue performance according to the projections. The division represented 83.7% of the revenues of the Group.
Argentina revenue decreased 51.1% in Argentine Pesos terms; from AR$188 Million to AR$92 Million; but the reported British Pound figures shows a 58.1% decrease in revenue; from GBP11.2m to GBP4.6m.
Future developments
Looking ahead to the remainder of 2017 and beyond, our primary objectives are to secure mobile billing with the leading seven or eight mobile operators in India, progressively increase marketing spend to grow the subscriber base, enhance our content and service offer by partnering with local Indian companies and launching our browser based (utilising HTML5) games service to become the leading destination for games in India. Mobile Streams has recently gone live with a fourth carrier billing connection in India, extending our addressable audience to around 700 million potential mobile users. The Indian mobile market is growing rapidly, the entrance of Reliance Jio 4G network into the market this year and the upcoming spectrum auction means the primary obstacle of poor data connectivity is being addressed.
The Company sees potential for browser based gaming in both Latin America and India. This HTML5 content works well across all devices including Android, Apple, Tizen and Windows Phone. Devices in emerging markets often have limited memory capable to store downloadable applications so browser based gaming is attractive in the region. Browser based content is not available from Google Play and the App Store, providing differentiation from these competing offerings.
Potential impact of Brexit
The outcome of the UK's vote to leave the European Union and trigger article 50 is unlikely to materially impact the Group at an operational level with almost all of the Group's revenues derived from customers based outside of the EU.
The Strategic Report, encompassing pages 4 to 10, was approved by the Board and signed on its behalf by:
E Benasso
Chief Financial Officer
Items dealt with in the Strategic report
-- Business review
-- Principal risks and uncertainties
-- Future developments
The principal activity of the Group is the sale of content for distribution on mobile devices. The Company is registered in England and Wales under company number 03696108.
Results and dividends
The trading results and the Group's financial position for the year ended 30 June 2017 are shown in the attached financial statements, and are discussed further in the Strategic Report.
The Directors have not proposed a dividend for this year (2016: GBPnil).
Directors and their interests
The present membership of the Directors of the Company (the "Board" or the "Directors"), together with their beneficial interests in the ordinary shares of the Group, is set out below. All Directors served on the Board throughout the year, except for M Carleton who resigned on 20 January 2017.
Shares held or controlled
by Directors
Ordinary Ordinary
shares shares
of of
GBP0.002 GBP0.002
each each
30 June 30 June
2017 2016
S Buckingham 12.385.500 10,382,500
M Carleton (resigned 20 - -
January 2017).
P Tomlinson 40.000 40.000
R Parry 181.183 181.183
T Maunder 5.000 5.000
E Benasso - -
Options
The table below summarises the exercise terms of the various options over ordinary shares of GBP0.002 (year ended 30 June 2016: GBP0.002) which have been granted and were still outstanding at 30 June 2017.
The remuneration of the Directors for the year amounted to GBP 329,000 (2016: GBP 328,000). The remuneration of the highest paid Director was GBP 242,000 (2016: GBP 202,000).
The remuneration of each of the Directors for the period ended 30 June 2017 is set out below:
Year Year
to 30 to 30
June June
2017 2016
Salary Fees Benefits Total Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
S D Buckingham 236 - 6 242 202
T Maunder 20 - - 20 20
R G Parry 16 14 - 30 30
P Tomlinson - 20 - 20 20
E Benasso 51 - - 51 56
Total 323 34 6 363 328
======== ======== ========= ======== ========
Benefits comprise medical health insurance.
Going Concern
The current uncertain economic climate and changing market place may impact the Group's cash flows and thereby its ability to pay its creditors as they fall due.
In the past financial year in India, the focus has been very much on growing the active paying weekly subscriber base on our download and online games services. The marketing team responsible for the success we have had in Latin America have had to be very flexible with their investment strategy over the period as the mobile market in India is ever evolving.
The Group had cash balances of GBP2.3m at the year-end (2015: GBP1.4m) and no borrowings. Marketing spend in India can be managed with flexibility depending on the cash balances. Management can also implement cost savings initiatives in order to reduce the cash burn.
A principal responsibility of management is to manage liquidity risk, as detailed in note 24 to the financial statements. The Group uses annual budgeting, forecasting and regular performance reviews to assess the longer term profitability of the Group and make strategic and commercial changes as required ensuring cash resources are maintained. Although there was a significant fall in revenues and a loss for the year ending 30 June 2017, the Group actively manages its use of cash, particularly marketing and other expenditure, and having reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. The Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.
Directors' responsibilities statement
The Directors are responsible for preparing the Strategic Report, the Director's Report and the Financial Statements in accordance with applicable laws and regulations.
Company law requires the Directors to prepare financial statements for each nancial year. Under that law the Directors have elected to prepare the parent company nancial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) including FRS 101 Reduced disclosure Framework, and the consolidated accounts in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period. In preparing these financial Statements, the Directors are required to:
-- Select suitable accounting policies and then apply them consistently. -- Make judgements and estimates that are reasonable and prudent.
-- State whether applicable UK Accounting Standards and lFRSs have been followed. subject to any
material departures disclosed and explained in the nancial statements, and
-- Prepare the nancial statements on the going concern basis unless it is inappropriate to presume that
the Group and the parent Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent Company's transactions and disclose with reasonable accuracy at any time the nancial position of the Group and the parent Company and enable them to ensure that the nancial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of both the Group and the parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors con rm that
-- So far as each Director is aware, there is no relevant audit information of which the Company's auditor
is unaware, and
-- The Directors have taken all steps that they ought to have taken to make themselves aware of any
relevant audit information and to establish that the auditor is aware of that information.
This confirmation is given pursuant to section 418 of the Companies Act 2006 and should be interpreted in accordance with and subject to those provisions.
The Directors are responsible for the maintenance and integrity of the corporate and nancial information included on the Group's website Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Auditor
Grant Thornton UK LLP has indicated their willingness to continue in office.
On behalf of the Board
E Benasso
Chief Financial Officer
Summary of significant accounting policies
Basis of preparation
The Group financial statements consolidate those of the parent company and all of its subsidiary undertakings drawn up to 30 June 2017. They have been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. All references to IFRS in these statements refer to IFRS as adopted by the EU.
The historical cost convention has been applied as set out in the accounting policies.
Consolidation
Subsidiaries are all entities over which the Group has the power to govern the operating and financial policies generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control is lost.
Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated in full. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries' accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.
The separate financial statements and related notes of the Company are presented on pages 54-61, which are prepared in accordance with FRS 101.
Foreign currency translation
(a) Presentational currency
The consolidated and parent company 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 the translation of monetary assets and liabilities at the consolidated statement of financial position date are recognised in the income statement, except to the extent that a monetary asset or liability represents a net investment in a subsidiary when exchange differences arising on translation are recognised in equity within the translation reserve. Amount due from or to subsidiaries are treated as part of net investment in the subsidiary when settlement is neither planned nor likely to occur in the foreseeable future.
Foreign currency balances are translated at the year-end using exchange rate prevailing at the year-end.
(c) Group companies
The financial results and position of all group entities that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:
i assets and liabilities for each consolidated statement of financial position are translated at the closing exchange rate at the date of the consolidated statement of financial position.
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 (cumulative translation reserve)
Property, plant and equipment
All property, plant and equipment (PPE) is stated at cost, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the purchase of the items.
Depreciation is calculated to write off the cost of property, plant and equipment less estimated residual value on a straight line basis over its estimated useful life. The following rates and methods have been applied:
Plant and
equipment 33% straight line
Between 10% and
Office furniture 33% straight line
Each asset's residual value and useful life is reviewed, and adjusted if required, at each consolidated statement of financial position date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.
Gains/losses on disposal of assets are determined by comparing proceeds received to the carrying amount. Any gain/loss is recognised in the income statement.
Going Concern
The current uncertain economic climate and changing market place may impact the Group's cash flows and thereby its ability to pay its creditors as they fall due.
In the past financial year in India, the focus has been very much on growing the active paying weekly subscriber base on our download and online games services. The marketing team responsible for the success we have had in Latin America have had to be very flexible with their investment strategy over the period as the mobile market in India is ever evolving.
The Group had cash balances of GBP2.3m at the year-end (2015: GBP1.4m) and no borrowings. Marketing spend in India can be managed with flexibility depending on the cash balances. Management can also implement cost savings initiatives in order to reduce the cash burn.
A principal responsibility of management is to manage liquidity risk, as detailed in note 24 to the financial statements. The Group uses annual budgeting, forecasting and regular performance reviews to assess the longer term profitability of the Group and make strategic and commercial changes as required ensuring cash resources are maintained. Although there was a significant fall in revenues and a loss for the year ending 30 June 2017, the Group actively manages its use of cash, particularly marketing and other expenditure, and having reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. The Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.
Standards and Amendments to existing standards effective 1 January 2016
New standards effective for accounting periods commencing on 1 January 2016 are:
Applicable for financial years beginning on/after
Amendments to IFRS 11: Accounting for Acquisitions of Interests in 1 January 2016
Joint Operations
Annual Improvements to IFRSs 2012-2014 Cycle 1 January 2016
Amendments to IAS 16 and IAS 41: Bearer Plants 1 January 2016
Amendments to IAS 27: Equity Method in Separate Financial 1 January 2016
Statements
Disclosure Initiative: Amendments to IAS 1 Presentation of 1 January 2016
Financial Statements
Amendments to IFRS 10, IFRS 12 and IAS 28: Applying the 1 January 2016
consolidation exception for investing
entities.
Standards, interpretations and amendments to published standards that are not yet effective and have not been adopted early by the Group
A number of the new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2017, and have not been applied in preparing these consolidated financial statements. Those which are/may be relevant to the Group and expected to have significant effect on the consolidated financial statements of the Group are set out below The Group is yet to assess the full impact of these changes.
-- IFRS 9 Financial Instruments addresses the classification, measurement and recognition of financial assets and financial liabilities. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments The standard is effective for accounting periods beginning on or after 1 January 2018 Early adoption is permitted subject to EU endorsement.
-- IFRS 15 Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements. The standard replaces IAS 18 Revenue and 1AS 11 Construction contracts and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted subject to EU endorsement.
-- IAS12 Income Taxes - amendments regarding the recognition of deferred tax assets for unrealised losses. The standard is effective for annual periods beginning on or after 1 January 2017.
-- IFRS 2 Share-based payments ("SBP") provides clarification concerning the treatment of vesting and non-vesting conditions. It also clarifies the treatment when tax laws oblige an entity to withhold an amount for an employee's tax obligation associated with a SBP and to transfer that amount to the tax authority on the employee's behalf. Finally the amendment provides further guidance on accounting for modifications of options. The standard is effective for accounting periods beginning on or after 1 January 2018.
With the exception of IFRS 15, the Directors do not expect that the adoption of the Standards and amendments listed above will have a material impact on the financial statements of the Group in the future periods
The impact that IFRS 15 will have on the financial statements is yet to be quantified. The Group has different contractual arrangements with each of its clients which will require detailed review in order to assess the changes the Group will need to make to its revenue recognition policies once the standard is implemented. The Management will review and analyse the impact before the next fiscal year close (30 June 2018). The impact will be disclosed in the next financial statements.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the cost of a business combination over the fair value of net identifiable assets of the acquired entity at the date of acquisition. This goodwill for subsidiaries is included in intangible assets. Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for impairment testing.
(b) Assets acquired through business combinations
These consist of customer relationships, technology based assets and non-compete agreements acquired through business combinations. To meet this definition, the intangibles must be identifiable either by being separable, or by arising from contractual or other legal rights. Intangibles acquired through business combinations are recognised at fair value. Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangibles, the intangible will be tested for impairment. The estimated useful lives of these assets are:
Customer relationships 3 years Technology based assets 3 years Non-compete agreements 3.5 years
(c) Media content and Media platform development
Media content and Media platform development represent intangible assets that have been acquired from third parties and also that are internally generated, including capitalised direct staff costs. Content and platform expenditure is charged against income in the year in which it is incurred unless it meets the recognition criteria of IAS 38 Intangible Assets. To meet the criteria of an intangible asset the Group must demonstrate the following criteria:
- the technical feasibility of completing the asset so that it will be available for use, - its intention to complete the intangible (or sell it), - its ability to use or sell the intangible, - that the intangible will generate future economic benefit, - that adequate resources are available to complete the intangible, and - the expenditure can be reliably measured.
Intangible assets, if capitalised, are amortised on a straight-line basis over the period of the expected benefit. Amortisation commences when the asset is ready for use.
(d) Appitalism
Appitalism development represents intangible assets that have been internally generated, including capitalised direct staff costs. To meet the intangible asset criteria the group must demonstrate the technical feasibility of completing the asset so that it will be available for use, its intention to complete the intangible (or sell it), its ability to use or sell the intangible, that the intangible will generate future economic benefit, adequate resources to complete the intangible and the expenditure can be reliably measured. Intangible assets, if capitalised, are amortised on a straight line basis, and reviewed annually for indicators of impairment.
(e) Software
Software represents assets that have been acquired from third parties. To meet the criteria for recognition the intangible asset must be both identifiable and either separable, or arise from contractual or other legal rights. Intangible assets acquired from third parties are stated at cost less accumulated amortisation and impairment losses. Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangible assets with a definite life, the intangible will be tested for impairment. The estimated useful life of acquired software is 2 years.
Amortisation is included in "Administrative expenses" in the income statement.
Impairment of assets
Assets that have an indefinite useful life, such as goodwill, are not subject to amortisation, but are instead tested annually for impairment and also tested whenever an event or change in situation indicates that the carrying amount may not be recoverable. Assets that are subject to amortisation are also tested for impairment whenever an event or change in situation indicates that the carrying amount may not be recoverable. An impairment loss is recognised in the income statement as the amount by which the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined by the higher of the fair value of an asset less costs to sell and the value in use. In order to assess impairment, assets are grouped at the lowest levels for which separate cash flows can be identified (cash generating units).
Impairment charges are included in the "Administrative expenses" in the income statement.
Taxation
Current tax is the tax currently payable based on taxable profit for the year.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.
Deferred income tax is determined using tax rates known by the consolidated statement of financial position date and that are expected to apply when the deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax liabilities are provided in full. There is no discounting of assets or liabilities.
Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the income statements, except where they relate to items that are charged or credited directly to equity or other comprehensive income, in which case the related deferred tax is also charged or credited directly to equity or other comprehensive income.
Provisions
Provisions, including those for legal claims, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be reliably estimated.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the consolidated statement of financial position date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.
Financial Assets
a) Cash and cash equivalents
Cash and cash equivalents include cash on hand, demand deposits held with financial institutions and other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
b) Trade and other receivables
Trade receivables are included in trade and other receivables in the consolidated statement of financial position. Trade receivables are recognised initially at fair value and later measured at amortised cost using the effective interest method, less any provision for impairment. An impairment provision for trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the terms of the receivables. The provision is calculated as the difference between the receivable's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Subsequent recoveries of amounts previously written off are credited in the income statement
Financial Liabilities
Financial liabilities are obligations to pay cash or deliver other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument. All financial liabilities are recorded initially at fair value, net of direct issue costs.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.
The Group's financial liabilities consist of trade and other payables, which are measured subsequent to initial recognition at amortised cost using the effective interest rate method.
All interest-related charges are reported in the income statement as finance costs.
Revenue recognition
As at 30 June 2017, the Group was organised into four geographical segments: Europe, North America, Latin America, and Asia Pacific. Revenues are from external customers only and are generated from three principal business activities: the sale of mobile content through Mobile Operator Services (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).
Revenue includes the fair value of sale of goods and services, net of value added tax, rebates and discounts and after eliminating intercompany sales within the Group. Revenue is recognised as follows:
a) Mobile Operator Sales & Mobile Internet Sales
Revenue from the sale of goods is recognised when a Group entity has delivered media content to the end consumer, who has accepted the product and collectability of the related receivable is reasonably assured from the customer.
b) Other Service Fees
Revenue is recognised in the accounting period in which the services are rendered, by reference to the stage of completion of the specific transaction, on the basis of the actual service provided as a proportion of the total services to be provided.
c) Interest Income
Interest receivable is recognised in the income statement using the effective interest method. If the collection of interest is considered doubtful, it is deferred and excluded from interest income in the income statement.
d) Deferred Income
Revenue that has been collected from customers but where the above conditions are not met is recorded in the Statement of Financial Position under accruals and deferred income and released to the income statement when the conditions are met.
Share based payments
Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').
The Group has applied the requirements of IFRS 2 Share-based Payments to all grants of equity instruments.
The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instruments granted. The fair value is determined by using the Black-Scholes model.
The cost of equity-settled transactions is recognised in the income statement, together with a corresponding increase in retained earnings, over the periods in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date'). At each consolidated statement of financial position date before vesting the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest. Market conditions are taken into account in determining the fair value of the options granted, at grant date, and are subsequently not adjusted for. The movement in cumulative expense since the previous consolidated statement of financial position date is recognised in the income statement, with a corresponding entry in equity.
No expense or increase in equity is recognised for awards that do not ultimately vest. Awards where vesting is conditional upon a market condition are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are charged to the share premium account.
Leased assets
In accordance with IAS 17, all the Group's leases are determined to be operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.
Operating leases are leases in which the risks and rewards of ownership are not transferred to the lessee.
Equity balances
a) Called up share capital
Called up share capital represents the aggregate nominal value of ordinary shares in issue.
b) Share premium
The share premium account represents the incremental paid up capital above the nominal value of ordinary shares issued.
c) Translation Reserve
The translation reserve represents the cumulative translation adjustments on translation of foreign operations.
CONSOLIDATED INCOME STATEMENT
Year ended Year ended
30 June 30 June
2017 2016
GBP000's GBP000's
Revenue 21 5.695 12.786
Cost of sales 21 (3.942) (9.256)
------------------------------------ --- -------------------- --------------------------
Gross profit 21 1.753 3.530
Selling and marketing
costs 21 (769) (1.333)
Administrative expenses
* 21 (2.598) (3.048)
----------------------------------- --- -------------------- --------------------------
Operating Loss (1.614) (851)
Finance income 5 98 118
Finance expense 6 (2) (4)
------------------------------------ --- -------------------- --------------------------
Loss before
tax (1.518) (737)
Tax expense 10 (209) (569)
-------------------- --------------------------
Loss for the
year (1.727) (1.306)
==================================== === ==================== ==========================
Attributable
to:
Attributable to equity shareholders
of Mobile Streams plc (1.727) (1.306)
========================================= ==================== ==========================
Loss per share
Pence Pence
per share per share
Basic loss
per share 9 (2,620) (3,519)
Diluted loss
per share 9 (2,620) (3,519)
* Administrative expenses include Depreciation,
Amortisation and Impairment GBP19k (ended 30 June
2016: GBP59k); Share Based Compensation GBP118k
(ended 30 June 2016: GBP146k). Other administrative
expenses GBP2.4m (ended 30 June 2016: GBP2.9m).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended Year
30 June ended
2017 30 June
2016
GBP000's GBP000's
Loss for
the year (1.728) (1.306)
Amounts which may be
reclassified to profit
& loss
Exchange differences on translating
foreign operations (103) (1.017)
Total comprehensive loss
for the year (1.831) (2.323)
======================================= =================== ==================
Total comprehensive loss for
the year attributable to:
Equity shareholders of
Mobile Streams plc (1.831) (2.323)
======================================= =================== ==================
CONSOLIDATED
STATEMENT OF
FINANCIAL POSITION
2017 2016
GBP000's GBP000's
Assets
Non- Current
Property, plant and
equipment 12 16 20
Deferred tax
asset 17 155 189
----------------------------------------- ----- ----------------------- -----------------------
171 209
Current
Trade and other receivables 14 1.571 2.576
Cash and cash equivalents 15 2.260 1.367
--------------------------------- ------ ----- ----------------------- -----------------------
3.831 3.943
Total assets 4.002 4.152
========================================= ===== ======================= =======================
Equity
Equity attributable to equity holders
of Mobile Streams plc
Called up share capital 18 182 74
Share premium 12.463 10.579
Translation
reserve (3.253) (3.150)
Retained earnings (7.553) (5.943)
Total equity 1.839 1.560
========================================= ===== ======================= =======================
Current
Trade and other payables 16 1.649 1.595
Current tax
liabilities 514 997
----------------------------------------- ----- ----------------------- -----------------------
2.163 2.592
Total liabilities 2.163 2.592
========================================= ===== ======================= =======================
Total equity and liabilities 4.002 4.152
================================= ====== ===== ======================= =======================
The financial statements were approved by the Board of Directors on 22 November 2017 and are signed on its behalf by:
E Benasso
Chief Financial Officer
Company registration
number: 03696108
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
Called Share Translation Retained Total
up share premium reserve earnings Equity
capital
GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 30 June
2015 74 10.579 (2.133) (4.782) 3.738
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Balance at 1 July
2015 74 10.579 (2.133) (4.782) 3.738
Credit for share
based payments - - - 145 145
Transactions with
owners - - - 145 145
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Loss for the 12
months ended 30
June 2016 - - - (1.306) (1.306)
Exchange differences
on translating foreign
operations - - (1.017) - (1.017)
------------------------- ------------------ -----------------
Total comprehensive
loss for the year - - (1.017) (1.306) (2.323)
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Balance at 30 June
2016 74 10.579 (3.150) (5.943) 1.560
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Balance at 1 July
2016 74 10.579 (3.150) (5.943) 1.560
Credit for share
based payments - - - 118 118
New Capitalization 108 1.884 - - 1.992
Transactions with
owners 108 1.884 - 118 2.110
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Loss for the 12
months ended 30
June 2017 - - - (1.728) (1.728)
Exchange differences
on translating foreign
operations - - (103) - (103)
------------------------- ------------------ -----------------
Total comprehensive
loss for the year - - (103) (1.728) (1.831)
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
Balance at 30 June
2017 182 12.463 (3.253) (7.553) 1.839
------------------------- ---------------- ---------------- ------------------ ----------------- --------------
CONSOLIDATED CASH FLOW STATEMENT
Year ended Year ended
30 June 30 June
2017 2016
GBP000's GBP000's
Operating activities
Loss before taxation (1.518) (737)
Adjustments:
Share based payments 118 146
Depreciation 4 19 59
Impairments 4 - -
Interest received 5 (98) (118)
Interest paid 6 2
Changes in trade and
other receivables 1.005 304
Changes in trade and
other payables 54 13
Tax paid (692) (237)
Total cash generated
in operating activities (1.110) (570)
---------------------------- --- ------------------------ ------------------------
Investing activities
Additions to property,
plant and equipment 12 (15) (8)
Interest received 5 98 118
Interest paid 6 (2)
Net Cash generated from
investing activities 81 110
---------------------------- --- ------------------------ ------------------------
Financing activities
Issue of share capital (net 1.969 -
of expenses paid)
Net Cash generated from 1.969 -
financing activities
---------------------------- --- ------------------------ ------------------------
Net change in cash and
cash equivalents 940 (460)
Cash and cash equivalents
at beginning of year 1.367 2.098
Exchange (losses) on cash
and cash equivalents (47) (271)
Cash and cash equivalents,
end of year 15 2.260 1.367
---------------------------- --- ------------------------ ------------------------
NOTES TO COMPANY FINANCIAL STATEMENTS
1. General information
Mobile Streams Plc (the Company) and its subsidiaries (together 'the Group') sell digital content, primarily for distribution on wireless devices. The Group has subsidiaries in Europe, Asia, North America and Latin America. The Group has made various strategic acquisitions to build its market share in these regions.
The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is 14 Cleveland Grove, Newbury, Berkshire, RG14 1XF
The Company is listed on the London Stock Exchange's Alternative Investment Market.
These consolidated financial statements have been approved for issue by the Board of Directors on 22 November 2017.
2. Critical accounting estimates and judgements
Estimates and judgements are evaluated on a regular basis and are based on historical experience and other factors, such as expectations of future events that are believed to be reasonable under the circumstances.
2.1 Critical accounting estimates, judgements and assumptions
The Group makes estimates and assumptions concerning the future. These estimates, by definition, will rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Estimates
(a) Accrued revenue and accrued content costs
Estimation is required by management to determine the value of accrued revenue and accrued content cost liability which is based on the content delivery to its customers. Due to the timing of confirmation of delivery of content to its customers from the service providers, management estimation is applied to determine the level of accrued revenue and accrued content liability to be recognised within the financial statements until confirmation is received.
Judgement
(b) Income taxes
The Group is subject to income taxes in various jurisdictions. Judgement is required in determining the worldwide provision for income taxes. There are many transactions/calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different to what is initially recorded, such differences will impact the income tax and deferred tax provisions.
(c) Deferred taxation
Judgement is required by management in determining whether the Group should recognise a deferred tax asset. Management consider whether there is sufficient certainty its tax losses available to carry forward will ultimately be offset against future earnings, this judgement impacts on the degree to which deferred tax assets are recognised. The deferred tax credit is produced by the Argentina subsidiary, which has been profitable and paid income tax return along the years.
3. Services provided by the group's auditor and network firms
Year Year
ended ended
2017 2016
GBP000's GBP000's
Fees payable to the Company's auditor
and its associates for the audit
of the parent company and consolidated
accounts 51 69
Non-Audit services:
Fees payable to the Company's auditor and its
associates for other services:
Interim statement review 9 11
Tax compliance and advisory services 6 12
66 92
===================== =====================
4. Operating loss/ (profit)
Operating (loss)/profit is stated Year ended Year
after charging the following items: 2017 ended
2016
Notes GBP000's GBP000's
Depreciation 12 19 59
Loss on foreign currency 3 (402)
22 (343)
===================== =========
5. Finance income
2017 2016
GBP000's GBP000's
Interest receivable 98 118
========= =========
6. Finance EXPENSE
2017 2016
GBP000's GBP000's
Interest expense (2) (4)
========= =========
7. Directors' and Officers' remuneration
The Directors are regarded as the key management personnel of Mobile Streams Plc.
Charges in relation to remuneration received by key management personnel for services in all capacities during the year ended 30 June 2017 are as follows:
KEY MANAGEMENT REMUNERATION
2017 2016
GBP000's GBP000's
Short- term employee benefits
- benefits 6 -
- salaries/remuneration 357 328
363 328
========= =========
8. Directors and employees
Staff costs during the year were as follows:
2017 2016
GBP000's GBP000's
Wages and salaries 1.520 2.012
Social security costs 137 225
1.657 2.237
================ ================
BENEFITS
Europe Asia North Latin Group
Pacific America America
Benefits (5) (5) (4) (53) (67)
(5) (5) (4) (53) (67)
----------------- ------------------ --------------------- ------------------- ----------------
PRIOR YEAR
BENEFITS
Europe Asia North Latin Group
Pacific America America
Benefits (2) (4) (17) (67) (90)
(2) (4) (17) (67) (90)
----------------- ------------------ -------------------- ------------------- ----------------
The average number of employees during the year to 30 June 2017 was as follows:
Year ended Year
2017 ended
2016
Number Number
Management 6 7
Administration 16 40
22 47
================== ==================
9. LOSS PER SHARE
Basic loss per share is calculated by dividing the loss or profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period. The options this year are not-dilutive as loss-making.
Year Year
ended ended
2017 2016
Pence Pence
per share per share
Basic loss per share (2,620) (3,519)
Diluted loss per share (2,620) (3,519)
Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.
2017 2016
GBP000's GBP000's
Loss for the year (1.727) (1.306)
=============================== ===============================
For adjusted earnings per share GBP000's GBP000's
Loss for the year (1.727) (1.306)
Add back: share compensation
expense 118 146
Add back: depreciation and amortisation 19 59
Adjusted loss for the year (1.590) (1.101)
=============================== ===============================
Weighted average number of shares
Number Number
of shares of shares
For basic earnings per share 65.910.376 37.114.283
Exercisable share options - -
For diluted earnings per share 65.910.376 37.114.283
------------------------------- -------------------------------
Pence per Pence per
share share
Adjusted Loss per share (2,414) (2,967)
Adjusted diluted Loss per share (2,414) (2,967)
For year ended 30 June 2017, 4m (2016: 3.17m) potential ordinary shares has been excluded from the calculations of earnings per share as they are anti-dilutive.
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.
10. income tax expense
The tax charge is based on the profit before tax for the year and represents:
2017 2016
GBP'000 GBP'000
Foreign tax on profits of the period 176 473
------------------- ------------------
Total current tax 176 473
Deferred tax:
Origination & reversal of timing differences:
(Deferred tax charge/(credit) (Note
17) 33 96
Tax on (loss)/profit on ordinary activities 209 569
------------------- ------------------
Factors affecting the tax charge for
the period
Loss on ordinary activities before
tax (1.518) (737)
Loss multiplied by standard rate
------------------- ------------------
of corporation tax in the United Kingdom
of 20.75%/24% (315) (153)
Effects
of:
Adjustment for tax-rate differences (39) 177
Expenses not deductible for tax purposes (33) (96)
Expenses not deductible others subsidiaries 402 217
Other (120) 271
Current tax charge for the period 209 569
------------------- ------------------
Comprising
Current tax expense 176 473
Deferred tax (expense), income, resulting
from the origination and reversal of
temporary differences 33 96
209 569
------------------- ------------------
Provision for deferred tax (Deferred
tax asset)
Provision brought forward 189 285
Current Year (33) (96)
Traslation adjustment (1) -
Deferred tax provision/(asset) carried
forward 155 189
------------------- ------------------
Relating to
Expenses deducted in Argentina on a
paid basis 155 189
Provision for deferred tax 155 189
=================== ==================
11. DIVIDS
No dividends were paid or proposed during the current year or prior year.
12. PROPERTY, PLANT AND EQUIPMENT
Office
furniture,
plant
and equipment
GBP000's
Cost
At 1 July 2016 556
Additions 15
Translation adjustments (0)
At 30 June 2017 571
----------------------
Depreciation
At 1 July 2016 536
Provided in the year 19
Translation adjustments -
At 30 June 2017 555
----------------------
Net book value at 30 June
2017 16
======================
Office
furniture,
plant
and equipment
GBP000's
Cost
At 1 July 2015 568
Additions 8
Translation adjustments (20)
At 30 June 2016 556
----------------------
Depreciation
At 1 July 2015 474
Provided in the year 59
Translation adjustments 3
At 30 June 2016 536
----------------------
Net book value at 30 June
2016 20
======================
13. Goodwill AND INTANGIBLE ASSETS
The Group impaired in full the remaining value of goodwill attributable to Mobile Streams (Hong Kong) Limited and its subsidiaries in Singapore and Australia which make up the Asia Pacific operating segment at June 2014.
Media Media Appitalism Other Subtotal Goodwill Total
platform content intangibles
development
and software
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 1
July
2016 2.348 332 337 2.364 5.381 2.670 8.051
At 30
June
2017 2.348 332 337 2.364 5.381 2.670 8.051
----------------------- ------------------ ------------------ ------------------- ------------------ ------------------ ------------------
Accumulated amortisation
and impairment
At 1
July
2016 2.348 332 337 2.364 5.381 2.670 8.051
At 30
June
2017 2.348 332 337 2.364 5.381 2.670 8.051
----------------------- ------------------ ------------------ ------------------- ------------------ ------------------ ------------------
Net - - - - - - -
book
value
at 30
June
2017
======================= ================== ================== =================== ================== ================== ==================
Media Media Appitalism Other Subtotal Goodwill Total
platform content intangibles
development
and software
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Cost
At 1 July
2015 2.348 332 337 2.364 5.381 2.670 8.051
At 30 June
2016 2.348 332 337 2.364 5.381 2.670 8.051
----------------------- ------------------ ------------------ ------------------- ------------------ ------------------ ------------------
Accumulated amortisation
and impairment
At 1 July
2015 2.348 332 337 2.364 5.381 2.290 7.671
Impairment - - - - - 380 380
At 30 June
2016 2.348 332 337 2.364 5.381 2.670 8.051
----------------------- ------------------ ------------------ ------------------- ------------------ ------------------ ------------------
Net book - - - - - - -
value
at 30 June
2016
======================= ================== ================== =================== ================== ================== ==================
Other intangible assets
Mobile Streams' other intangible assets comprised acquired customer relationships, technology based assets and non-compete agreements. These assets are fully amortised.
14. Trade and other receivables
2017 2016
GBP000's GBP000's
Trade receivables 297 555
Accrued receivables 146 434
Other debtors 1.128 1.587
1.571 2.576
================ ================
The carrying value of receivables is considered a reasonable approximation of fair value.
In addition, some of the unimpaired trade receivables are past due as at the reporting date. The age profile of trade receivables is as follows:
2017 2016
GBP000's GBP000's
Within terms
Not more than 30 days 212 238
Overdue
Not more than 3 months 6 97
More than 3 months but not
more than 6 months 6 2
More than 6 months but not
more than 1 year 24 154
More than 1 year 200 256
Provision for doubtful debts (151) (192)
297 555
================== ==================
Provision for doubtful debts reconciliation
2017 2016
GBP000's GBP000's
Opening provision for doubtful
debts 192 173
Change in provision during
the year (41) 19
Closing provision for doubtful
debts 151 192
================ =================
Trade and other receivables that are not past due or impaired are considered to be collectible within the Group's normal payment terms.
15. Cash and cash equivalents
Cash and cash equivalents include the following components:
2017 2016
GBP000's GBP000's
Argentina's cash at bank and
in hand 654 1178
Other companies 1.606 189
Cash at bank and in hand 2.260 1.367
=============== ===============
16. Trade and other payables
2017 2016
GBP000's GBP000's
Trade payables 368 349
Other payables 150 161
Accruals and deferred income 1.131 1.085
1.649 1.595
================ ================
All amounts are current. The carrying values are considered to be a reasonable approximation of fair value.
17. Deferred TAX ASSETS AND liabilities
Balance Recognised Balance Recognised Traslation Balance
30 June in income 30 June in income Adjustment 30 June
2015 statement 2016 statement 2017
GBP000's GBP000's GBP000's GBP000's GBP000's GBP000's
Deferred tax
asset:
- Expenses
accrued 58 (35) 23 (9) - 14
- Royalties 89 (36) 53 (5) - 48
- Bonus - - - - - -
provisions
- Others 138 (26) 112 (19) - 93
-------------------- -------------------- -------------------- -------------------- --------------------
Deferred tax
asset 285 (96) 189 (33) - 155
==================== ==================== ==================== ==================== ==================== ===================
Deferred tax
liability:
- On - - - - - -
intangible
assets
==================== ==================== ==================== ==================== ==================== ===================
The majority of the deferred tax asset credit was produced from unpaid intercompany balances in Argentina. This temporary difference is expected to be reversed once the balances are repaid. No deferred tax asset has been recognised in respect of surplus tax losses available for carry forward due to uncertainty over the timing of future taxable profits. There are gross losses available within the Group for carry forward of GBP2.3m.
18. SHARE CAPITAL
The Company only has one class of share. The total number of shares in issue as at 30 June 2017 is 91,593,533 (30 June 2016: 37,114,283) with a par value of GBP0.002 per share. All issued shares are fully paid.
The Group's main source of capital is the parent company's equity shares. The policy which is met by the Group is to retain sufficient authorised share capital so as to be able to issue further shares to fund acquisitions, settle share based transactions and raise new funds. Share based payments relate to employee share options schemes. The schemes have restrictions on headroom so as not to dilute the value of issued shares of the Company. The Group has not raised debt financing in the past and expects not to do so in the future.
2017 2016
GBP000's GBP000's
Authorised
149,082,791 ordinary shares of GBP0.002
each (30 June 2016: 69,150,000) 298 138
========= =========
Allotted, called up and fully
paid: 183 74
91,593,533 ordinary shares of GBP0.002
each (30 June 2016: 37,114,283)
========= =========
Allotted, called up and fully paid
Year ended Year ended
2017 2016
In issue at 1 July 2016 37.114.283 37.114.283
Issued 54.479.250 -
In issue at 30 June 2017 91.593.533 37.114.283
Other Reserves
Share Premium Account
The balance in the share premium account represents the proceeds received above the nominal value on the issue of the Company's equity share capital.
Translation Reserve
The Translation reserve contains the exchange differences arising on translating foreign operations.
19. Share based payments
The Group operates three share option incentive plans - an Enterprise Management Incentive Scheme, a Global Share Option Plan and an ISO Sub Plan - in order to attract and retain key staff. The remuneration committee can grant options over shares in the Company to employees of the Group. Options are granted with a fixed exercise price equal to the market price of the shares under option at the date of grant and are equity settled, the contractual life of an option is 10 years. Exercise of an option is subject to continued employment. Options are valued at date of grant using the Black-Scholes option pricing model.
On 31 December 2016, 500,000 options were granted to Company personnel. Strike value was GBP0.05 per option.
The volatility of the Company's share price on the date of grant was calculated as the average of volatilities of share prices of companies in the Peer Group on the corresponding date. The volatility of share price of each company in the Peer Group was calculated as the average of annualised standard deviations of daily continuously compounded returns on the Company's stock, calculated over 1, 2, 3, 4 and 5 years back from the date of grant, where applicable. The risk-free rate is the yield to maturity on the date of grant of a UK Gilt Strip, with term to maturity equal to the life of the option. The expected life of an employee share option is 5 years.
The calculation model includes these variables:
Expected volatility: 86.7%
Expected dividends: 0 (Nil)
Risk free interest rate: 1.99%
Share options in issue at the year-end under the various schemes are:
1. Personal to the Option Holder and are not transferable, or assignable. 2. Shall not be exercisable on or after the tenth anniversary of the grant date.
3. Subject to the rules of the Plans, the Options shall Vest as follows - Options vest at 33.3% per year:
l 33.3% vest on the First Anniversary of the grant of option;
l A second 33.3% vest on the Second Anniversary of the grant of option; and
l The last 33.33% vest on the Third Anniversary of the grant of option.
2017 2016
Range Weighted Number Weighted Weighted Number Weighted
of exercise average of Shares average average of Shares average
prices exercise (000's) remaining exercise (000's) remaining
price life price life (years):
(GBP) (years): (GBP)
------------ -------------------------
Contractual Contractual
GBP0
- GBP0.50 0,282 1014 4,3 0,28 1.014 5,30
GBP0.51
- GBP1.00 0,640 3487 3,1 0,740 2.987 4,00
No share options were exercised during the year ended on 30 June 2017. (2016: Nil).
The total charge for the year relating to employee share based payment plans was GBP118k (2016: GBP147k), all of which related to equity-settled share based payment transactions.
20. OPERATING LEASES
The Group operating leases for land and buildings were cancelled before the end of the year.year.
Land and Buildings
2017 2016
GBP000's GBP000's
Future minumum lease payments under
non-cancelabble operating leases
Within one year - 11
In two-five years - -
In more than five years - -
- 11
====================== ====================
The Hong Kong office was closed in December 2016 and the lease agreement was terminated. The Argentina office lease contract expired on May 31 2016 and it was replaced by a shared office space with monthly fee, with a contract cancelabble with a 30 days notice, so no future minimum lease payments are applicable.
Lease payments recognised as an expense during the period amount to GBP108k (2016: GBP222k).
21. Segment reporting
As at 30 June 2017, the Group was organised into 4 geographical segments: Europe, North America, Latin American, and Asia Pacific. The operating segments are organised, managed and reported to the Chief Operating Decision Maker based on their geographical location. Revenues are from external customers only and generated from three principal business activities: the sale of mobile content through Multi-National Organisation's (Mobile Operator Services), the sale of mobile content over the internet (Mobile Internet Services) and the provision of consulting and technical services (Other Service Fees).
All operations are continuing and all inter-segment transactions are priced and carried out at arm's length.
The segmental results for the year ended 30 June 2017 are as follows:
GBP000's Europe Asia North Latin Group
Pacific America America
Mobile Operator
Services 34 2 48 - 84
Mobile Internet
Services - 398 4 5.195 5.597
Other Service
fees 10 - 3 1 14
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Total Revenue 44 400 55 5.196 5.695
Cost of sales (8) (260) (12) (3.662) (3.942)
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Gross profit 36 140 43 1.534 1.753
Selling,
marketing
and
administration
expenses (596) (442) (120) (2.072) (3.230)
Trading EBITDA* (560) (302) (77) (538) (1.477)
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Depreciation,
amortisation
and impairment - - (19) - (19)
Share based
compensation (118) - - - (118)
Finance income - - - 98 98
Finance expense (2) - 1 (1) (2)
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Loss before tax (680) (302) (95) (441) (1.518)
Taxation (84) - - (125) (209)
Loss after tax (764) (302) (95) (566) (1.727)
================ ================== =================== ====================== ====================== =================
Segmental
assets 1.370 314 175 2.143 4.002
The segmental results for the year ended 30 June 2016 are as follows:
GBP000's Europe Asia North Latin Group
Pacific America America
Mobile Operator
Services 31 6 58 80 175
Mobile Internet
Services - 21 11 12.552 12.583
Other Service
fees 23 - - 5 28
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Total Revenue 54 27 69 12.637 12.786
Cost of sales (33) (29) (30) (9.165) (9.256)
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Gross profit 21 (2) 39 3.472 3.530
Selling,
marketing
and
administration
expenses (557) (317) (113) (3.189) (4.176)
Trading EBITDA* (536) (318) (74) 283 (646)
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Depreciation,
amortisation
and impairment - (1) (0) (57) (58)
Share based
compensation (146) - - - (146)
Finance
income/expense - - - 113 113
---------------- ------------------ ------------------- ---------------------- ---------------------- -----------------
Loss before tax (682) (319) (74) 338 (737)
Taxation - - - (569) (569)
------------------ ------------------- ----------------------
Loss after tax (682) (319) (74) (231) (1.306)
================ ================== =================== ====================== ====================== =================
Segmental
assets 84 117 179 3.772 4.152
Segmental
liabilities 161 (34) 296 2.168 2.592
* Earnings before interest, tax, depreciation, amortization, impairments of assets and share compensation
The totals presented in the Group's operating region segments reconcile to the Group's key financial figures as presented in its financial statements as follows:
2017 2016
GBP000's GBP000's
Segment revenues
Total segment revenues 5.695 12.786
Group's revenues 5.695 12.786
--------------------- ---------------------
Segment results
Total segment Loss after tax (1.727) (1.306)
Group's Loss after tax (1.727) (1.306)
--------------------- ---------------------
Segment assets
Total segment assets 4.002 4.152
Consolidation eliminations - -
Group's assets 4.002 4.152
--------------------- ---------------------
Segment liabilities
Total segment liabilities 2.163 2.592
Consolidation eliminations - -
Groups's liabilities 2.163 2.592
--------------------- ---------------------
Revenue in Argentina represents 83.7% of the total revenue of the Group; then Mexico 8.6%, India 7.1% and the rest of the companies 0.5%. One main customer in Argentina comprises the 56.9% of the total Group revenue.
INTEREST REVENUE
Interest Revenue for the year ended 30 June 2017 was GBP98k (2016: GBP118k)
DEFERRED TAX
Year ended
30 June
2017
DEFERRED Europe Asia North Latin Group
TAX Pacific America America
Deferred
Tax - - - 155 155
- - - 155 155
------------------- -------------------- ----------------------------------- ------------------- ----------------
Year ended
30 June
2016
DEFERRED Europe Asia North Latin Group
TAX Pacific America America
Deferred
Tax - - - 189 189
189 189
---------------------------------------------------------------------------- ------------------- ----------------
The deferred tax credit was produced by the Argentina subsidiary, which was profitable along the years.
22. Capital commitments
The Group has no capital commitments as at 30 June 2017 (30 June 2016: GBPNil).
23. Related party transactions
Key Management
The only related party transactions that occurred during the year were the remuneration of senior management disclosed in note 7.
24. RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group is exposed to currency and liquidity risk, which result from both its operating and investing activities. The Group's risk management is coordinated in close co-operation with the Board and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets. The most significant financial risks to which the Group is exposed are described below. Also refer to the accounting policies.
Foreign currency risk
The Group is exposed to transaction foreign exchange risk. The currencies where the Group is most exposed to volatility are US Dollars, Australian Dollars, Argentine Peso, Mexican Peso and Colombian Peso.
Currently, there is generally an alignment of assets and liabilities in a particular market and no hedging instruments are used. In Latin American markets cash in excess of working capital is converted into a hard currency such as US Dollars, except in Argentina, where domestic regulations prevented companies from acquiring US Dollars until December 2015. Given this situation, the Argentine subsidiary is considering other alternatives to hedge a possible devaluation of local currency. The Company will continue to review its currency risk position as the overall business profile changes.
Foreign currency denominated financial assets and liabilities, which are all short-term in nature and translated into local currency at the closing rate, are as follows.
2017 2016
000's 000's
USD AUS ARS Other USD AUS ARS Other
Nominal GBP GBP GBP GBP GBP GBP GBP GBP
amounts
Financial
assets 129 60 1.437 389 126 59 2.672 336
Financial
liabilities (297) (50) (943) (606) (295) (46) (1.477) (612)
Short-term
exposure (168) 10 494 (217) (169) 13 1.195 (276)
----------- ------------ ---------------- ---------- ------- ------------ ---------- -----------
Percentage movements for the period in regards to the British Pound to US Dollar, Australian Dollar and Argentine Peso exchange rates are as follows. These percentages have been determined based on the average market volatility in exchange rates during the period.
2017 2016
US Dollar 3% 17%
Australian Dollar 6% 14%
Argentine Peso -6% -28%
Effect of possible changes
in currency rates
GBP'000 GBP'000
Currency: GBP Effect on Effect on
Profit Equity
Effect of a 10% US Dollar devaluation
(against the GBP) (128) (128)
Effect of a 10% US Dollar Appreciation
(against the GBP) 128 128
Effect of a 10% Australian Dollar
devaluation (against the GBP) 75 75
Effect of a 10% Australian Dollar
appreciation (against the GBP) (75) (75)
Effect of a 20% Peso devaluation
(against the GBP) (179) (179)
Year ended Year
2017 ended
2016
GBP000's GBP000's
Foreign currency (3) 402
================== ================
Liquidity risk
The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs. Management prepares cash flow forecasts which are reviewed at Board meetings to ensure liquidity. The Group has no borrowing arrangements.
As at 30 June 2017, the Group's financial liabilities were all current and have contractual maturities as follows:
30 June 2017 Within 6 6 to 12
months months
GBP000's GBP000's
Trade and other 518 -
payables
The maturity of the Group's financial liabilities, which were all current at the previous year end, was as follows:
30 June 2016 Within 6 6 to
months 12 months
GBP000's GBP000's
Trade and other 510 -
payables
Capital Management Disclosures
Management assesses the Group's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group could return capital to shareholders or issue new shares.
The Group considers its capital to comprise the following:
2017 2016
GBP000's GBP000's
Ordiary Share
capital 183 74
Share premium 12.463 10.579
translation reserve (3.253) (3.150)
Retained earnings (7.553) (5.943)
1.840 1.560
=============================== ======================
25. FINANCIAL RISK MANAGEMENT
The Group's financial assets and financial liabilities, as defined by IAS 32, are categorised as follows:
2017 2016
GBP000's GBP000's
Financial Assets
Accrued Receivables 146 434
Trade receivables 297 554
Cash and Cash
equivalents 2.260 1.367
Group's revenues 2.703 2.355
--------------------- ---------------------
Financial Liabilities
Trade Creditors (368) (349)
Accrued content
costs (630) (676)
Other Accrued
liabilities (501) (409)
Group's assets (1.499) (1.434)
--------------------- ---------------------
Management have assessed that the fair value of cash and short term deposits, trade receivables, accrued receivables, trade payables and accrued payables approximate to their carrying amounts as those items have short term maturities.
26. EVENTS AFTER THE REPORTING PERIOD
Directors resignation
Tim Maunder presented his resignation to the Board of Directors, to be effective after the Annual General Meeting. Roger Parry communicated he would be leaving the board after the AGM as well. Mark Carleton resigned from the Board of Directors on 20 January 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UOORRBKAAURA
(END) Dow Jones Newswires
November 23, 2017 02:01 ET (07:01 GMT)
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