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Share Name | Share Symbol | Market | Type |
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Monster Beverage Corp | TG:MOB | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.55 | 1.09% | 51.08 | 51.16 | 51.22 | 51.19 | 50.33 | 50.67 | 152 | 14:56:47 |
RNS Number:3809S MonsterMob Group PLC 24 November 2003 MONSTERMOB GROUP PLC ADMISSION TO THE ALTERNATIVE INVESTMENT MARKET Key Highlights *Monstermob Group plc ("Monstermob" or the "Company"), a UK mobile phone entertainment content provider, announces its Ordinary shares have been admitted to trading on the Alternative Investment Market (AIM) of the London Stock Exchange with effect from 8am this morning. Placing Price 135p Number of Placing Shares being issued or sold pursuant to the Placing 5,970,368 Number of Placing Shares being sold by the Sellers 2,044,442 Number of Ordinary Shares in issue on Admission 23,762,416 Market capitalisation of Company following the Placing #32.1 million at Placing Price Percentage of enlarged issued Ordinary Share capital being placed 25.1% Estimated net proceeds of the Placing receivable by the #4.8 million Company *Teather & Greenwood on behalf of the Company and certain of its shareholders has successfully placed 5,970,368 million new and existing Ordinary shares with a range of institutional investors at 135p per share, raising #5.3 million for the Company and #2.76 million for such shareholders (gross of expenses). The fund-raising values Monstermob at #32 million. *Since incorporation in 2000, the Company's subsidiary, Monstermob Limited, has built a profitable business and is building recurring revenue streams. It generated revenue of #6.6 million and operating profit of #910,000 in H1 2003 (FY2002 revenue #7.9 million, operating profit #310,000). *Monstermob has a strong management team led by founder Martin Higginson. Martin has successfully founded and sold two businesses and recently floated Cityblock plc where he remains Non-executive Chairman. Martin was also a member of the management team instrumental in the flotation of Thus plc where he was Director of Internet and Interactive Services with responsibility for the company's Internet offerings, which included Demon Internet. *Monstermob markets differentiated and easily accessed mobile phone content, such as ringtones, competitions, wallpapers, voicemails, logos, alerts and games. The Company focuses on entertainment and personalisation products that appeal to the most prolific adopters of mobile content - the 14-30 age group. *Monstermob uses a proprietary content management and delivery platform which is at the hub of the business. This helps to build recurring (including subscription) revenues with a view to delivering a high quality revenue stream and the ability to market new products and services quickly to likely consumers as well as its database of 3 million mobile telephone numbers of customers. *Monstermob has developed a promotional pack called "Monstermob NOW!" that provides free trial content to customers of partners. Partners include The Link and Dialaphone as well as certain mass-circulation magazines and web partners. This introductory offer converts into a subscription service after the first month provided the user does not unsubscribe. *The net proceeds of the placing of new shares in the Company will initially be used to facilitate Monstermob's expansion overseas, principally in Continental Europe. The Placing will also provide funds for Monstermob to invest in new marketing initiatives and the development of its existing business. The Company aims to generate additional revenues not only through launching services overseas but the creation of affinity group services such as chat and dating services (both via WAP and SMS) using subscription based mobile billing with a view to providing recurring revenue streams. *Monstermob is in an immature and rapidly growing market in which it is an early entrant. The Directors expect that the portion of total youth spending on leisure products through mobile phones will continue to increase substantially in the medium term. For example, the global market for ringtones alone is projected to grow from Euro1.3 billion in 2003 to Euro2.3 billion in 2006. (Source: Mobile Youth Report 2003 (c) W2F Limited.) *Teather & Greenwood Limited is appointed Nominated Adviser and Broker. Martin Higginson, Managing Director, Monstermob, said: "We believe that the mobile content market is set for rapid growth and this flotation will cement our position in the vanguard of this new industry. We will use the funds to further develop and expand our offering in the UK and to initiate activity overseas, capitalising where we see substantial opportunities for growth." - ENDS - For further information contact: Charles Reynolds / Charlotte Lambkin Bell Pottinger Financial 020 7861 3232 Christopher Hardie / Stephen Austin Teather & Greenwood Limited 020 7426 9000 High resolution images are available for the media to view and download free of charge from http://www.vismedia.co.uk Words and expressions defined in the prospectus of Monstermob dated 21 November 2003 shall have the same meanings in this announcement unless the context otherwise requires. FURTHER INFORMATION: Introduction Monstermob was formed in 2000 to take advantage of the growing demand for mobile phone content. Monstermob primarily markets to 14 to 30 year olds mobile phone content such as ringtones, competitions, wallpapers, voicemails, logos, alerts and games, under the "Monstermob" brand. Income is derived from the sale of content which is ordered by customers sending an SMS (text message) or ringing a PRS (premium rate service). The customer is charged for the cost of the premium rate SMS or PRS call by their network operator. Monstermob receives a majority of these revenues. Monstermob has built a profitable business with growing recurring revenues and has generated a database of over 3 million customers. The Directors believe that the market in which the Company operates is poised for significant growth in the next few years from which the Company is well positioned to benefit. Mobile Content Mobile content refers to the various types of data and services that a consumer may receive onto their mobile phone including: *ringtones - initially monophonic and now more sophisticated polyphonic ringtones; *logos - displayed on the mobile phone screen in a prominent position; *picture messages - picture and symbol based products that can be sent and received as an SMS; *voicemails - personalised greeting messages often performed by celebrity impersonators; *competitions - users can enter through text messaging or a premium rate service; *wallpapers - provide a background pattern or image to mobile phone screens; *multimedia messaging - audio clips and photographs; *JAVA based games; and *video clips - short clips of motion pictures which may be animated or live action. Mobile Content Market The development of the mobile content market originated from the growth of person to person text messaging. The identification that mobile phones could be used for more than voice communication stimulated the sale by independent service providers of basic ringtones and logos to 2G phone users in 2000. Initially the services were sold through fixed line premium rate numbers as there was no mechanism to order products directly through text messages. More recently, the market for mobile content has been stimulated by the following factors: *the rapid adoption of technologically sophisticated mobile handsets which can receive greater quantities of data, run JAVA based applications, have colour screens and integrated devices such as cameras; *the introduction of SMS billing whereby the user's MNO account is charged for a premium SMS; and *agreements between the MNOs permitting data to be transmitted across the various mobile networks ("interoperability") which it is expected will be extended to MMS. The Directors believe that the portion of total youth spending on leisure through mobile phones will continue to increase substantially throughout the next three years. It is estimated that the global market for mobile content amongst young people consists of the following elements: *ringtones - estimated to be worth Euro 1.3 billion in 2003 increasing to Euro 2.3 billion in 2006; *multimedia messaging (including picture messaging) - estimated to be worth Euro 65.7 million in 2003 increasing to Euro 427 million in 2006; and *JAVA games - estimated to be worth Euro 101.6 million in 2003 increasing to Euro 321.6 million in 2006. (Source: Mobile Youth Report 2003 (c) W2F Limited.) These estimates are supported by data from the MNOs that indicate that mobile data (being SMS text messages and mobile data) comprises an increasing proportion of consumer spending. The Directors believe that the Company is well placed to capitalise on the strong growth in spending on mobile content in the coming years. Monstermob's Content The Directors believe an important element of Monstermob's strategy is its ability to generate content and applications and take them to market rapidly. Monstermob offers a range of content from ringtones, celebrity photos and voicemails to JAVA games and competitions. Monstermob's database offers approximately 36,000 products which can be obtained by customers. Content is developed in-house and by purchase from third parties, who together produce on average 230 new products every month for Monstermob. Monstermob also licences a number of products, most notably JAVA games. Normally the licences are taken on a non-exclusive basis but Monstermob will look to negotiate exclusivity if justified by sales volumes. Monstermob makes royalty payments to certain bodies (including the Performing Rights Society and Mechanical Copyright Protection Society) for intellectual property used in products it develops and markets (such as the original music score in the case of ringtones). Marketing Strategy The majority of revenue is generated from advertisements and inserts in mass circulation newspapers and a range of youth-orientated magazines. As well as offering specific content, the advertising carries details of the Monstermob web and WAP sites, encouraging potential visitors to these sites. Each customer order provides Monstermob with details of the customer's mobile telephone number and the promotional medium that stimulated the order. Monstermob has built up a database, for its exclusive use, of over 3 million mobile telephone numbers of customers together with the products and services purchased by each customer. For the first nine months of 2003, new customers have been added at an average rate in excess of 120,000 per month. Additional details, such as name and/or address and/or date of birth and/or sex and/or handset type are known of approximately 250,000 of these customers. These additional details are gathered by Monstermob through subsequent interactions with the customer. Monstermob seeks to ensure that the database is comprised only of active mobile numbers. The Directors consider the database to be a valuable marketing tool that provides Monstermob with an in-depth understanding of the purchasing patterns of its customers. Through its database Monstermob is able to market specific products directly to those customers whom it believes are most likely to be receptive to those products. The effectiveness of this marketing is measured accurately by Monstermob resulting in highly profitable direct marketing campaigns. These direct marketing campaigns include the use of the following channels: *direct mail - approximately every two months Monstermob mails a catalogue containing details of some 1,800 products to its customers (the last catalogue having been sent to 245,000 customers). The circulation figure of the catalogue has increased from 144,000 in June 2002 as Monstermob has acquired details of the names and addresses of more of its customers; and *text messaging - Monstermob sends text messages to customers on a regular basis promoting products which the Directors believe will be attractive to those customers. Most recently Monstermob has pursued partnerships with businesses in complementary markets. Monstermob has developed a promotional pack called "Monstermob NOW!" that provides free trial content to customers of partners. Partners include The Link and Dialaphone as well as certain mass-circulation magazines and web partners. This introductory offer converts into a subscription service after the first month provided the user does not unsubscribe. The Monstermob brand is further promoted through the sponsorship of the Monstermob Ducati team, winner of the British Superbike Championship in 2002 and 2003. The Championship attracted over 125 hours of BBC and Sky television coverage. Insert Competitions Monstermob regularly places inserts in newspapers and magazines offering competitions that may be entered by sending a premium rate SMS or dialling a PRS. This activity has been successful in encouraging competition entrants to use their mobile phones which helps Monstermob build data on these entrants. Inserts offering competitions provide a cost effective form of advertising and secure increased income from mobile and fixed line network operators through greater traffic volumes. At present, approximately 43 per cent. of the revenues of Monstermob are generated from competitions. The Directors believe that this percentage is likely to decline as the revenues from other areas grow at a faster rate. H.M. Government has announced that it intends to propose new legislation relating to prize competitions. It has indicated that whilst lotteries will be prohibited (unless exclusively for good causes) promotional prize draws will be permitted which are entirely by chance and which genuinely do not require payment for entry. A scheme will not be regarded as requiring payment for entry if, amongst other things, the means for doing so are displayed equally as prominently as other means of entry and if the costs to be incurred are ordinary costs (such as a standard rate telephone call or first class postage). Monstermob now gives equal prominence to free entry mechanisms on its insert competitions and if H.M. Government's proposals are implemented, Monstermob would be required to give equal prominence to free entry mechanisms and promotions for competitions on SMS, WAP and on the internet. Monstermob considers that it will be able to comply with such requirements notwithstanding difficulties that may arise in relation to SMS and WAP given the restrictive format. Monstermob's insert competitions currently give equal prominence to a free entry mechanism which generate responses of approximately 5 per cent. of total responses. The Directors consider that these proposed changes to the law are unlikely to have a significant effect on Monstermob. The Transaction Process Monstermob's customers purchase mobile phone content via a text message or a phone call. Most products are priced between #3.00 and #4.50 - the cost of which will appear on the customer's telephone bill (either fixed line or mobile). Monstermob in turn receives a majority share of these revenues from the relevant network operator. Monstermob has secured contracts for the direct payment by the MNOs, resulting in reduced credit risk. Monstermob's Competitive Advantages The Directors believe that there are two broad categories of competitors, namely the MNOs and third party service providers, such as Monstermob. As the market is relatively new and growing rapidly there are no reliable statistics available as to the market positions of the participants. The Directors believe that Monstermob has a number of advantages over the MNOs, despite their large databases of consumer information. The Directors believe that the quality of Monstermob's database along with its marketing-led approach give it an advantage in bringing the most attractive content to market rapidly. In addition, the Monstermob brand is considered by the Directors to have greater appeal to the target market of 14 to 30 year olds than the brands of the MNOs. The Directors believe that Monstermob possesses the following competitive advantages over other third party service providers: *Monstermob achieves industry-leading times to market for topical and trend-setting content; *Monstermob preserves the exclusivity of its own content by not offering it on a white label basis; *the Monstermob customer database enables targeted advertising and real-time campaign response analysis; *the Monstermob technology platform allows Monstermob to monitor and ensure a high quality of service as well as protect its margins by enabling in-house delivery; *Monstermob has built subscription-based premium rate SMS services giving itself a first-mover advantage over its competitors; *and Monstermob is well placed to exploit new handset technology. Directors The board currently consists of seven Directors whose brief biographies are set out below. The Right Honourable Lord Baker of Dorking CH, Non-executive Chairman, age 69 Lord Baker has served as Non-executive Chairman of Monstermob since 3 July 2001. Lord Baker has been a Member of the House of Lords since 1997. He served as a member of Parliament between 1968 and 1997, as Secretary of State for the Environment from 1985 to 1986, as Secretary of State for Education and Science from 1986 to 1989, as Chairman of the Conservative Party from 1989 to 1990 and as Secretary of State for the Home Office from 1990 to 1992. He is Chairman of Northern Edge Limited, Business Serve PLC and Belmont Press (London) Limited. He is a Non-executive Director of Hanson PLC, Millennium Chemicals Inc., Stanley Leisure PLC and Teather & Greenwood Holdings PLC. He also serves as President of the Royal London Society for the Blind. Martin J Higginson, Managing Director, age 40 Martin is the founder and principal shareholder in Monstermob. Martin sold his first business to IPC Magazines Limited in 1984. In 1987 he founded Megafone Limited, a company specialising in the delivery of premium rate competition services. Martin grew the company's turnover to in excess of #6 million before selling the business to Scottish Power PLC in 1997. Within Scottish Power PLC, Martin initially oversaw the integration of six newly acquired businesses into the interactive content business. Prior to the company's flotation under the new name of Thus PLC, he was responsible for the company's internet and interactive businesses (including Demon Internet) with a turnover of #87 million and over 321 staff. He left Thus PLC in July 2000 when he was Business Development Director responsible for mergers, acquisitions and business development across the Thus PLC portfolio. He is Non-executive Chairman of Cityblock PLC, a company providing student accommodation and a Non-executive Director of Hay Carr Estates Limited, Northern Edge Limited and Business Serve PLC. Martin was voted North West Entrepreneur of the Year 2002. Lee J Dudack ACA, Finance Director, age 39 Prior to Monstermob, Lee was Finance Director of M-Quest Limited, a start up business specialising in the delivery of services to the mobile content sector. M-Quest Limited was acquired by Monstermob in July 2001. Lee joined M-Quest Limited from Interoute Telecommunications PLC ("Interoute") where he was Group Finance Director. Interoute operated in 11 countries across Europe with a staff of over 1,000. Before joining Interoute, Lee was a partner in Clark Whitehill, Chartered Accountants, from 1995 to 1997. Gavin R Whyte, Operations Director, age 34 Gavin joined Monstermob following the acquisition of M-Quest Limited. Prior to this Gavin was employed by 3 Net Communications Limited, a subsidiary of Megatel International Management B.V. Megatel was a provider of international and domestic premium rate services. Gavin was responsible for establishing operations in Sweden, the Philippines, Hawaii, Russia and Bulgaria. In his current role Gavin is responsible for technical operations of Monstermob, including the supervision and continued development of Mobserv. Gavin is also responsible for the adoption and exploitation of new technologies. Michael J Watt, Marketing Director, age 37 Michael joined Monstermob in May 2001. He is responsible for all creative and marketing activities including consumer advertising, insert competitions, direct marketing and sponsorship. In addition he has responsibility for Monstermob's brand and creative direction across all activities. Michael joined Monstermob from Thus PLC where he was Director of Interactive Media and Content with responsibility for all premium rate services In addition he had responsibility for the New Media Division and a division supplying specialised marketing services to external brands. He was responsible for a turnover of #35 million with 130 staff across three offices. Prior to joining Thus PLC, Michael was Creative Director of Megafone Limited, a business sold to Scottish Power PLC in 1997. Alan W Denyer, Sales Director, age 39 Alan is one of the founder members of Monstermob with over 10 years' experience in the telecoms industry. Prior to joining Monstermob Alan worked at Thus PLC as a Business Development Manager. He was responsible for the launch and management of Demon Internet's free ISP service In2Home. He was also responsible for conception and launch of several other web-based entertainment content initiatives. Alan joined Thus PLC from Cable & Wireless PLC. John Boyle, Non-executive Director, age 50 John Boyle invested in Monstermob in January 2001 together with Northern Edge Limited, an investment company of which he is a Director and one of the founder shareholders. He was appointed a Non-executive Director of Monstermob at this time. John was the majority shareholder of Direct Holidays Limited which was sold in July 1998 to Airtours PLC (now known as MyTravel Group PLC). John is currently Chairman of The Hamilton Portfolio Limited and has invested, via a number of investment vehicles, in several private companies in Scotland and England. It is intended that a further Non-executive Director with a strong financial management and public company background will be appointed following flotation. Current Trading and Prospects Monstermob's business has grown strongly in the six months to 30 June 2003, with turnover at over 80 per cent of the previous year's turnover. As a result the profits before tax have almost trebled to #926,000. The Directors ascribe this to the effectiveness of Monstermob's marketing as well as the development and adoption of new technically more advanced handsets. Since 30 June 2003, activity levels have continued in line with those expressed in the first six months of 2003. Monstermob aims to achieve additional revenues through the increased distribution of the "Monstermob NOW!" product and the introduction of affinity group services. Monstermob intends to offer these services through all channels to market including WAP and traditional SMS services. Monstermob has agreed terms in principle to form a joint venture with Coral to market betting and gambling products for the mobile phone user. Monstermob is currently marketing a fixed odds subscription betting service based upon the New York lottery, playable directly from mobile phones. In addition to the new initiatives outlined above, the Directors are convinced of the strong growth prospects of the market in which Monstermob operates. Moreover, Monstermob is focussed on converting a greater proportion of its revenue to a subscription basis and the early results from "Monstermob NOW!" are encouraging. For these reasons the Directors look forward to the future with confidence. The Placing The Placing of 5,970,368 Ordinary Shares at 135p per share comprises the issue of 3,925,926 new Ordinary Shares by the Company (representing 16.5 per cent. of the enlarged issued ordinary share capital) and the sale of 2,044,442 Sale Shares by the Sellers (representing 8.6 per cent. of the enlarged issued ordinary share capital). The Placing will raise #5,300,000 for the Company before expenses. At the Placing Price, the Company will have a market capitalisation of #32.1 million. Following the Placing, Martin Higginson's holding will represent approximately 49.81 per cent. of the enlarged issued share capital. The other Executive Directors' holdings will in total represent approximately 10.35 per cent. of the enlarged issued share capital. Reasons for the Placing The net proceeds of the Placing will initially be used to facilitate Monstermob's expansion overseas, principally in Continental Europe. The Placing will also provide funds for Monstermob to invest in new marketing initiatives and the development of its existing business. The proceeds of the Placing and the Admission will allow Monstermob to make acquisitions as part of its overall expansion strategy. The Directors believe that the profile of the Group will be significantly enhanced by its position as a quoted company. Quoted shares will allow the Company to incentivise management and employees through share option schemes and provide a market for the Company's existing shareholders. This information is provided by RNS The company news service from the London Stock Exchange END MSCBBBFTMMTTBMJ
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