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MBT Mobile Tornado Group Plc

0.75
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Mobile Tornado Group Plc LSE:MBT London Ordinary Share GB00B01RQV23 ORD 2P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.75 0.70 0.80 0.75 0.75 0.75 0.00 07:36:30
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Investors, Nec 2.28M -1.38M -0.0033 -2.27 3.13M

Mobile Tornado Group PLC Final Results (9967X)

12/05/2016 7:00am

UK Regulatory


Mobile Tornado (LSE:MBT)
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RNS Number : 9967X

Mobile Tornado Group PLC

12 May 2016

Mobile Tornado Group plc

("Mobile Tornado", the "Company" or the "Group")

Final results

Mobile Tornado Group plc, the leading provider of instant communication mobile applications to the enterprise market, announces its results for the year ended 31 December 2015.

Financial Highlights

   --     Total revenue up by 29% to GBP2.26m (2014: GBP1.75m) 

o Recurring revenues up by 33% to GBP1.68m (2014: GBP1.26m)

o Professional service sales up by 74% to GBP0.5m (2014: GBP0.29m)

o Hardware and 3(rd) party software sales reduced to GBP0.08m (2014: GBP0.20m)

   --     Group operating loss of GBP1.45m (2014: GBP2.66m) 
   --     Adjusted EBITDA* loss of GBP1.26m (2014: GBP2.50m) 
   --     Adjusted operating loss* of GBP1.38m (2014: GBP2.65m) 
   --     Loss after tax of GBP1.66m (2014: GBP2.95m) 
   --     Basic loss per share of 0.69p (2014: 1.31p) 
   --     Cash at bank of GBP0.11m (2014: GBP0.04m) with net debt of GBP6.81m (2014: GBP6.56m) 

*Earnings before interest, tax, depreciation, amortization and excluding exchange differences

Operating highlights

-- Strong recurring revenue growth of 33% reflecting increased momentum within Mobile Network Operator customers across the Americas

-- Restructure of business to focus on key markets and customers resulted in operating expenses savings of GBP0.59m compared to 2014

-- New commercial contract agreed with an independent communications service provider in Israel for commercial launch of services

-- Commercial partnership agreed with independent communications service provider within the global oil and gas sector

   --     Push to Talk ('PTT') deployment completed with a transportation customer in Brazil 
   --     3GPP committee engagement 

-- R&D tax credit of GBP0.37m in 2015 (2014:GBP0.22m) reduced operating expenses further to GBP3.01m (2014:GBP3.75m)

Jeremy Fenn, Chief Executive Officer of Mobile Tornado, said: "We were satisfied with the performance of the business in 2015 with the financial results showing a marked improvement over the prior year. At the adjusted EBITDA level, losses were halved from GBP2.50m in 2014 to GBP1.26m in 2015, the improvement being delivered through a combination of reduced cost-base and increased recurring license revenues.

The business has made good progress and whilst we are frustrated that the momentum is not quite at the levels we would have liked, there are grounds for optimism given the customers we are working with and the opportunities currently presented. We look forward to the rest of the year with cautious optimism."

Enquiries:

 
 Mobile Tornado Group plc                                       www.mobiletornado.com 
 Jeremy Fenn, Chief Executive                                     +44 (0)7734 475 888 
 
 Investec Bank plc (Nominated 
  Adviser & Broker)                                               +44 (0)20 7597 4000 
 Dominic Emery / Carlton 
  Nelson 
 
 Walbrook PR Ltd                 +44 (0)20 7933 8780 or mobiletornado@walbrookpr.com 
 Paul Cornelius 
 Helen Cresswell 
 
 

Financial results and key performance indicators

Total revenue for the year ended 31 December 2015 increased by 29% to GBP2.26m (2014: GBP1.75m). Encouragingly, recurring revenue, a key performance indicator for the business, was up by 33% to GBP1.68m (2014: GBP1.27m). Non-recurring revenue, comprising installation fees, hardware and professional services, increased slightly to GBP0.58m (2014: GBP0.48m).

Gross profit increased to GBP2.12m (2014: GBP1.47m) as a result of the growth in higher margin recurring revenue. Operating expenses declined by 15% to GBP3.38m (2014: GBP3.97m) during the year, primarily due to the lower staffing levels following the restructure during 2014. The Group received an income tax credit in respect of our qualifying investment in R&D activities of GBP0.37m (2014: GBP0.22m) further reducing our net operating expenses. As a result, the loss after tax for the year reduced significantly to GBP1.66m (2014: Loss GBP2.95m). This resulted in a reduced basic loss per share of 0.69p (2014: 1.31p).

The net cash outflow from operating activities was GBP1.23m (2014: GBP2.75m). At 31 December 2015, the Group had GBP0.11m cash at bank (31 December 2014: GBP0.04m) and net debt of GBP6.81m (2014: GBP6.56m).

Results and dividends

The Directors are unable to recommend the payment of a dividend in respect of the year ended 31 December 2015 (year ended 31 December 2014: nil). The Company currently intends to reinvest future earnings to finance the growth of the business over the near term.

Review of operations

Mobile network operators ('MNOs')

Our engagement with Tier 1 MNOs across the world continues, with commercial contracts now in place with ten customers. The growth in recurring revenues was driven principally by the commercial roll out of services by our customers in the Americas. This territory, particularly South America, represents the principal target for growth in the business over the coming years. As the iDEN technology platform reaches the end of its life, we expect many of these customers will look to switch their instant communication requirements to PTT. Our business development team has worked hard during the period to engage with new partners in these territories as we look to widen our commercial reach in these markets.

During the period, our Tier 1 customer in mainland Europe extended its contract for a further three years. Our technical team continues to work to optimise the platform prior to full commercial launch.

As previously reported, our partner in South Africa has secured agreement to provide PTT services to the three domestic Tier 1 MNOs. Commercial deployment by the operators has been delayed as a result of technical integration issues, principally around location of server hosting, although it appears that these are now close to being resolved. We anticipate resolution and launch of services in the second half of this financial year.

During 2015, we reviewed the various options open to us for launching services in Israel, an established PTT market. We concluded an agreement with a company focused on the deployment of value added services to the corporate market. Our exclusive agreement was successfully launched in January 2016 and we are pleased to report it has already secured some important customers in the commercial market: leading enterprises in the Israeli banking, logistics and security sectors have already committed to the service and we anticipate increasing sales momentum through the rest of this financial year.

Independent Solution Vendors ('ISVs')

Whilst MNOs represent a valuable channel to market given their ability to forward sell our services to a wide customer base, the inherent uncertainty arising from our inability to exert full control over the sales and marketing strategies make it very difficult to predict with any certainty how our customer base will grow and with it, expand our recurring revenue base.

We have continued to seek out partners keen to integrate our communication solution to an existing software application. Our partner in the transportation sector successfully concluded the installation of its solution, incorporating our communication platform, with a transportation company in Brazil. As a result we are now engaged in a number of other tenders with this partner.

We have also established a partnership with an ISV serving the global oil and gas sector and are currently participating in a number of tenders. We are also seeking a similar engagement in the mining sector.

The workforce management sector offers numerous opportunities to deploy our service across applications that have already been sold into significant customer bases. Our technical team is working towards delivering a more sophisticated and usable interface to allow wider adoption of our technology by other software application providers.

Hardware manufacturers

We have worked extensively with all of the major rugged handset and accessory manufacturers during the period. As a result, we are cooperating with these partners on tenders to both mobile operators and enterprises.

Public sector

Whilst our focus across 2015 has been to develop our recurring revenue streams with our Tier 1 MNOs, we continue to be invited to tender for significant projects within the public sector. We are currently engaged on trials with potential customers in India, Africa and Asia. The nature of the deals is such that we give the customer the right to use our platform for a fixed period of time in return for an upfront capital sum. Whilst the profitability and cash-flow impact of these deals can be significant, the trials and negotiations can take place over an extended period of time, and predicting with any certainty when they might close if extremely difficult. Nevertheless, we continue to develop these opportunities since successful closure of any of them would bring material financial upside.

Management

As announced separately, we are delighted to confirm the appointment of Avi Tooba as Chief Operating Officer with immediate effect.

Avi will lead our technical and operations teams and bring huge experience to our business as we continue to engage Tier 1 MNOs, major global enterprises and public sector bodies. Having worked across all major radio platforms, his inputs as we develop our strategy for next generation critical communication platforms will be invaluable.

Technical development

We continue to invest in our technical platform to ensure services can be deployed more effectively to customers across the world. At the same time we are monitoring closely the development of Mission Critical PTT, where the industry is seeking to leverage the strengths of LTE through the addition of a comprehensive set of features needed for public safety communications. We are participating members of the 3GPP committee tasked with setting these standards and will ensure that our future strategy is developed in line with the market. We believe the recruitment of Avi Tooba to our team will be invaluable in this respect.

Principal risks and uncertainties

The management of the business and the nature of the Group's strategy are subject to a number of risks.

The Directors have set out below the principal risks facing the business. The Directors are of the opinion that a thorough risk management process is adopted, which involves the formal review of all the risks identified below. Where possible, processes are in place to monitor and mitigate such risks.

Product obsolescence

Due to the nature of the market in which the Group operates, products are subject to technological advances and as a result, obsolescence. The Directors are committed to the research and development strategy in place, and are confident that the Group is able to react effectively to the developments within the market.

Indirect route to market

As described above, one of the Group's primary channels to market are MNOs reselling our services to their enterprise customers. Whilst MNOs are ideally positioned to forward sell our services and are likely to possess material resources for doing so, there remains an inherent uncertainty arising from the Group's inability to exert full control over the sales and marketing strategies of these customers.

Going concern and funding

On 15 April 2015, the Company completed a placing of 22.5m million shares at 6p to raise a total of GBP1.35m. InTechnology Plc and the Directors subscribed for 18,581,907 shares comprising 82.6% of the issue. The placing was used to fund the working capital requirements of the Company.

The Directors believe the Group has sufficient working capital for the foreseeable future given its contracted revenues, anticipated contracts and continuing support from its principal shareholder, InTechnology Plc. They have therefore concluded that the financial statements are appropriately prepared on a going concern basis.

Outlook

We were satisfied with the performance of the business in 2015 with the financial results showing a marked improvement over the prior year. At the adjusted EBITDA level, losses were halved from GBP2.50m in 2014 to GBP1.26m in 2015, the improvement being delivered through a combination of reduced cost-base and increased recurring license revenues.

However, as we have moved into 2016, recurring revenues from our Tier 1 MNO customers continue to grow more slowly, as highlighted in the half-year statement. Given the relative sizes of these businesses, it is a more difficult area for us to control and influence. The continued flat performance of this part of our business remains below market expectations although we anticipate that the strengthening of our management team will help to improve this in the coming months.

The Group continues to see a range of opportunities in the homeland security markets. However, contracts in these markets are typically capital expenditure in nature for our clients and their impact is difficult to predict with any certainty.

The Board therefore currently anticipates that the Company's revenue performance will be at least in line with 2015, with the opportunity to surpass this dependent on securing homeland security opportunities.

We would like to record our appreciation for the exceptional contribution made by our team during 2015. The business has made good progress and whilst we are frustrated that the momentum is not quite at the levels we would have liked, there are grounds for optimism given the customers we are working with and the opportunities currently presented. We look forward to the rest of the year with cautious optimism.

Peter Wilkinson

Chairman

12 May 2016

Consolidated income statement

For the year ended 31 December 2015

 
                                             2015             2014 
 
                                          GBP'000          GBP'000 
 Continuing operations 
 Revenue                                    2,259            1,746 
------------------------------  -----------------  --------------- 
 
 
 Cost of sales                              (137)            (280) 
------------------------------  -----------------  --------------- 
 Gross profit                               2,122            1,466 
 
 Operating expenses 
 Administrative expenses                  (3,384)          (3,969) 
 Group operating loss before 
  exchange 
 differences & depreciation 
  expense                                 (1,262)          (2,503) 
------------------------------  -----------------  --------------- 
 Exchange differences                        (68)             (13) 
 Depreciation expense                       (115)            (146) 
------------------------------  -----------------  --------------- 
 Total operating expenses                 (3,567)          (4,128) 
 
 Group operating loss                     (1,445)          (2,662) 
 
 Finance costs                              (586)            (513) 
 Finance income                                 -                7 
------------------------------  -----------------  --------------- 
 
 Loss before tax                          (2,031)          (3,168) 
 
 Income tax credit                            371              220 
 Loss for the year                        (1,660)          (2,948) 
------------------------------  -----------------  --------------- 
 
 
 Loss per share (pence) 
 Basic and diluted                         (0.69)           (1.31) 
------------------------------  -----------------  --------------- 
 

Consolidated statement of comprehensive income

For the year ended 31 December 2015

 
 
                                     2015      2014 
                                  GBP'000   GBP'000 
 
 Loss for the year                (1,660)   (2,948) 
 
 Other comprehensive loss 
 
 Item that will subsequently 
  be reclassified 
 to profit or loss: 
 Exchange differences on 
  translation 
 of foreign operations               (19)      (18) 
 
 Total comprehensive loss 
  for the period                  (1,679)   (2,966) 
-------------------------------  --------  -------- 
 
 Attributable to: 
 Equity holders of the parent     (1,679)   (2,966) 
-------------------------------  --------  -------- 
 

Consolidated statement of changes in equity

For the year ended 31 December 2015

 
                                                                                                Foreign 
                                                           Reverse                             currency 
                         Share            Share        acquisition           Merger         translation           Accumulated             Total 
                       capital          premium            reserve          reserve             reserve                  Loss            equity 
                       GBP'000          GBP'000            GBP'000          GBP'000             GBP'000               GBP'000           GBP'000 
 
 
 Balance at 1 
  January 
  2014                   4,499           11,225            (7,620)           10,938             (2,146)              (24,634)           (7,738) 
 
 Equity settled 
  share-based 
  payments                   -                -                  -                -                   -                  (10)              (10) 
 
 Issue of share 
  capital 
  on exercise 
  of options                 2                -                  -                -                   -                     -                 2 
 
 Transactions 
  with owners                2                -                  -                -                   -                  (10)               (8) 
 
 Loss for the 
  year                       -                -                  -                -                   -               (2,948)           (2,948) 
 
 Exchange 
 differences 
 on translation 
 of foreign 
  operations                 -                -                  -                -                (18)                     -              (18) 
 
 Total 
  comprehensive 
  loss for the 
  year                       -                -                  -                -                (18)               (2,948)           (2,966) 
 
 Balance at 31 
  December 
  2014                   4,501           11,225            (7,620)           10,938             (2,164)              (27,592)          (10,712) 
---------------  -------------  ---------------  -----------------  ---------------  ------------------  --------------------  ---------------- 
 
                                                                                                Foreign 
                                                           Reverse                             currency 
                         Share            Share        acquisition           Merger         translation           Accumulated             Total 
                       capital          premium            reserve          reserve             reserve                  Loss            equity 
                       GBP'000          GBP'000            GBP'000          GBP'000             GBP'000               GBP'000           GBP'000 
 
 
 Balance at 1 
  January 
  2015                   4,501           11,225            (7,620)           10,938             (2,164)              (27,592)          (10,712) 
 
 Equity settled 
  share-based 
  payments                   -                -                  -                -                   -                    13                13 
 
 Issue of share 
  capital                  450              787                  -                -                   -                     -             1,237 
 
 Transactions 
  with owners              450              787                  -                -                   -                    13             1,250 
 
 Loss for the 
  year                       -                -                  -                -                   -               (1,660)           (1,660) 
 
 Exchange 
 differences 
 on translation 
 of foreign 
  operations                 -                -                  -                -                (19)                     -              (19) 
 
 Total 
  comprehensive 
  loss for the 
  year                       -                -                  -                -                (19)               (1,660)           (1,679) 
 
 Balance at 31 
  December 
  2015                   4,951           12,012            (7,620)           10,938             (2,183)              (29,239)          (11,141) 
---------------  -------------  ---------------  -----------------  ---------------  ------------------  --------------------  ---------------- 
 

Consolidated statement of financial position

As at 31 December 2015

 
                                       2015                 2014 
                                    GBP'000              GBP'000 
 Assets 
 Non-current assets 
 Property, plant and equipment          315                  213 
 Intangible assets                      107                    - 
                                        422                  213 
 -------------------------------  ---------  ------------------- 
 
 Current assets 
 Trade and other receivables          1,268                1,472 
 Inventories                             28                  109 
 Cash and cash equivalents              107                   41 
--------------------------------  ---------  ------------------- 
                                      1,403                1,622 
 -------------------------------  ---------  ------------------- 
 
 Liabilities 
 Current liabilities 
 Trade and other payables           (3,535)              (3,303) 
 Borrowings                         (1,380)              (1,047) 
 
 Net current liabilities            (3,512)              (2,728) 
--------------------------------  ---------  ------------------- 
 
 
 Non-current liabilities 
 Trade and other payables           (2,514)              (2,643) 
 Borrowings                         (5,537)              (5,554) 
                                    (8,051)              (8,197) 
 -------------------------------  ---------  ------------------- 
 
 Net liabilities                   (11,141)             (10,712) 
--------------------------------  ---------  ------------------- 
 
 
 Equity attributable to 
  the owners of the parent 
 Share capital                        4,951                4,501 
 Share premium                       12,012               11,225 
 Reverse acquisition reserve        (7,620)              (7,620) 
 Merger reserve                      10,938               10,938 
 Foreign currency translation 
  reserve                           (2,183)              (2,164) 
 Accumulated loss                  (29,239)             (27,592) 
 Total equity                      (11,141)             (10,712) 
--------------------------------  ---------  ------------------- 
 

Consolidated statement of cash flows

For the year ended 31 December 2015

 
                                                 2015                 2014 
                                              GBP'000              GBP'000 
 
 Operating activities 
 Cash used in operations                      (1,233)              (2,751) 
 Tax received                                     371                  220 
 Interest received                                  -                    7 
---------------------------------                      ------------------- 
 Net cash used in operating 
  activities                                    (862)              (2,524) 
---------------------------------  ------------------  ------------------- 
 
 Investing activities 
 Purchase of property, plant 
  & equipment                                   (206)                (148) 
 Purchase of intangible 
  assets                                        (107)                    - 
 Net cash used in investing 
  activities                                    (313)                (148) 
---------------------------------  ------------------  ------------------- 
 
 
 Financing 
 Issue of ordinary share 
  capital                                       1,350                    2 
 Share issue costs                              (113)                    - 
 Proceeds from borrowings                           -                  270 
 Net cash inflow from financing                 1,237                  272 
                                   ------------------  ------------------- 
 
 Effects of exchange rates 
  on cash 
 and cash equivalents                               4                    4 
---------------------------------  ------------------  ------------------- 
 
 Net increase/(decrease) 
  in cash and 
 cash equivalents in the 
  period                                           66              (2,396) 
 Cash and cash equivalents 
  at beginning of period                           41                2,437 
 Cash and cash equivalents 
  at end of period                                107                   41 
---------------------------------  ------------------  ------------------- 
 
   1          Financial information 

The financial information set out in this final results announcement does not constitute statutory accounts within the meaning of s495(2) or s495(3) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2015 will be dispatched to shareholders for approval at the Annual General Meeting to be held on 6 July 2016. The statutory accounts contain an unqualified audit report, which did not include a statement under s498(2) or s498(3) of the Companies Act 2006, and will be delivered to the Registrar of Companies.

The statutory accounts for the year ended 31 December 2014 which have been delivered to the Registrar of Companies, contained an unqualified audit report and did not include a statement under s498(2) or s498(3) of the Companies Act 2006.

   2          Segmental analysis 

The Group presents its results in accordance with internal management reporting information to the chief operating decision maker (Board of Directors). At 31 December 2015 the Board continued to monitor operating results by category of revenue within a single operating segment, the provision of instant communication solutions. Under IFRS 8 the Group has only one operating segment. Therefore the results presented in the income statement are the same as those required under IFRS 8, save for the year end entry of IFRS 2 share option charge of GBP13,000 (year ended 31 December 2014: GBP10,000 credit).

Revenue by category

 
 
                                 2015                 2014 
                              GBP'000              GBP'000 
 
 Licences                       1,279                  981 
 Hardware & 
  software                         81                  196 
 Professional 
  services                        499                  287 
 Other                            400                  282 
 Total                          2,259                1,746 
-----------------  ------------------  ------------------- 
 

Revenue is reported by geographical location of customers. Non-current assets are reported by geographical location of assets.

 
                     2015                   2015      2014                    2014 
                                     Non-current                       Non-current 
                  Revenue                 assets   Revenue                  assets 
                  GBP'000                GBP'000   GBP'000                 GBP'000 
 
 UK                   125                     11       169                      19 
 Europe               476                      -       546                       - 
 North America        764                     15       440                      46 
 South America        271                      -       112                       - 
 Israel               105                    396        48                     148 
 Africa               483                      -       379                       - 
 Asia/Pacific          35                      -        52                       - 
--------------- 
 Total              2,259                    422     1,746                     213 
---------------  --------  ---------------------  --------  ---------------------- 
 

Our mobile network operator customer in Canada represents GBP729,000 (2014: GBP418,000) of the total revenue of the Group.

   3          Loss per share 

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of GBP1,660,000 (2014: GBP2,948,000) by the weighted average number of ordinary shares in issue during the year of 240,710,723 (2014: 224,990,775).

 
                                   2015                       2014 
                                Basic and                  Basic and 
                                  diluted                    diluted 
                               Loss         Loss         Loss            Loss 
                                             per                          per 
                                           share                        share 
                            GBP'000        pence      GBP'000           pence 
 Loss attributable 
  to 
 ordinary shareholders      (1,660)       (0.69)      (2,948)          (1.31) 
 Adjusted basic loss 
  per share                 (1,660)       (0.69)      (2,948)          (1.31) 
-----------------------  ----------  -----------  -----------  -------------- 
 

The loss attributable to ordinary shareholders and the weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share. This is because the exercise of share options are anti-dilutive under the terms of IAS 33.

   4          Annual General Meeting 

The Annual General Meeting of the Company will be held at Cardale House, Cardale Court, Beckwith Head Road, Harrogate, HG3 1RY on 6 July 2016 at 9.00 a.m. The audited results for the year ended 31 December 2015 will be posted to shareholders shortly and will be available on the Company's website at www.mobiletornado.com at the same time.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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May 12, 2016 02:00 ET (06:00 GMT)

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