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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Cdialogues | LSE:CDOG | London | Ordinary Share | GB00BN40HL64 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 65.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMCDOG
RNS Number : 7145U
CDialogues PLC
11 April 2016
11 April 2016
CDialogues plc
("CDialogues", the "Company" or the "Group")
Final Results for the year ended 31 December 2015
CDialogues plc (AIM: CDOG), the provider of mobile marketing solutions to Mobile Network Operators ("MNOs"), announces its audited final results for the year ended 31 December 2015.
Financial highlights
-- Revenues of EUR8.71m (2014: EUR9.92m)
o Subscription revenues accounted for 82% of total revenues (2014:76%)
-- EBITDA (adjusted*) of EUR1.55m (2014: EUR2.94m) -- Profit before tax of EUR0.98m (2014: EUR2.61m) -- Earnings per share of EUR0.15 (2014: EUR0.43) -- Free Cash Flow up 22% to EUR1.49m (2014: EUR1.22m**) -- Net cash as of 31 December 2015 up 49% to EUR3.61m (2014: EUR2.42m)
* Earnings before interest charges, taxation, depreciation, amortisation and share-based payment charges
** After development costs and capital expenditure and excluding one-off items relating to AIM listing
Operational highlights
-- During 2015, the Company operated a total of eight mobile marketing projects in six countries across the Middle East and Southeast Asia
-- Delivery of Mobile Marketing projects to a total subscriber base of above 20 million customers (2014:35 million) which attracted more than 1.4 million unique subscribers
-- Ongoing implementation of subscription-based recurring revenue model to existing clients
Pale Spanos, Chief Executive Officer, commented: "Whilst the financial performance for the 12 months to 31 December 2015 was below our expectations, as had been highlighted in previous announcements, the Company continued to invest in our products and further strengthened its balance sheet.
During the period we focussed on serving our existing clients and ensuring that these projects were well executed.
Whilst our existing client base has remained unchanged during the first quarter of 2016, and we expect revenues from these existing projects to decline during the course of the year, the business remains well placed and well-funded to capitalise on the new business opportunities that may arise this year."
Enquiries:
CDialogues Plc Tel: +30 2106 300 930 George Karakovounis Pale Spanos Allenby Capital Tel: 0203 328 5656 Limited David Hart Alex Brearley Walbrook PR Ltd Tel: 020 7933 8780 Paul Cornelius cdialogues@walbrookpr.com Nick Rome
About CDialogues
CDialogues provides mobile marketing solutions enabling MNOs to retain and acquire market share, increase average revenue per user (ARPU) and reducing subscriber churn.
The Company's products and services deliver fully managed solutions, utilizing advanced Data analytics techniques combined with Linguistic engineering marketing, to build awareness and multiply sales and opt-ins of promotional offerings and other mobile content being offered by the MNOs.
The solutions designed by the Company, are tailored and served with the appropriate Linguistic format, to each individual mobile network subscriber typology and geography it operates in, using its proprietary software and scalable infrastructure.
The majority of CDialogues' revenues are derived from a recurring subscription-based revenue model, which has been pioneered by the Company. As a result, the Company benefits from incremental cash flow growth from each new campaign customer and mobile network subscriber.
The Company's near-term focus is on growing both its customer base and expanding its geographic footprint in selected markets in the Middle East, Africa and Southeast Asia, where mobile device penetration and mobile network usage is growing rapidly.
CHAIRMAN'S STATEMENT
The 12-month period to 31 December 2015 was clearly a challenging one.
The period was therefore one of consolidation for the Company as we focused on delivery of existing contracts across geographies where MNO subscriber churn has traditionally been high, due to the fact that mobile phone subscribers typically use pre-pay mobile phone tariffs.
A decision was also made to focus on further product development during the period, and whilst certain project launches were delayed, the company remains confident that its product offerings remain competitive in the marketplace.
Given the disappointing revenue performance, we are able to report that the Company has continued to generate cash during the year and maintain a strong balance sheet as of 31 December 2015.
Reassuringly, our solutions achieved direct results for our existing clients by demonstrably reducing subscriber churn, which helps to underpin the basis of our client relationships. We believe that our continued product investment will result in an improved value proposition, which should also result in further customer loyalty and a reference point for us to generate new business and relationships.
Our first full year on the Alternative Investment Market has been challenging, and we must continue to improve the foundations of the business model. The key to the future is the development of stable new revenue opportunities. The number of MNOs and countries in which we could operate means that there are still plenty of opportunities ahead.
The Board remains focused on improving the business model, whilst preserving the balance sheet and seeking to deliver increased shareholder value, following a disappointing share price performance over the period.
Mark Horrocks
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER REVIEW
When we joined the AIM Market in 2014, the focus was on diversifying revenue through multiple client engagements across the Middle East and beyond. As such we invested in both products and personnel to ensure that we are well placed to take advantage of the growing range of global opportunities.
However, as announced during the period, the Company suffered a number of project delays as MNOs pushed back project start dates due to the poor economic environment during 2015. This impacted our second half revenue performance significantly and resulted in lower revenues and EBITDA for the year.
Notwithstanding the poor income performance, cash generation remained strong during the year with free cash flow for the year further enhancing the Company's net cash position to EUR3.6 million at 31 December 2015 (2014: EUR2.4 million).
During 2015, CDialogues delivered a total of eight mobile marketing projects in six countries to a total subscriber base of above 20 million customers (2014: 35 million) across the Middle East and Southeast Asia. These projects attracted more than 1.4 million unique subscribers.
Our continued investment on the evolution of our solutions and strategic direction towards a loyalty centric offering has already resulted in an increased interest on our value proposition from potential customers. Further to the Company's prior announcement, it is unfortunate to report that our initial customer in Central America for this proposition faced different challenges on integration that could not be resolved.
I would like to thank our staff and shareholders for their continued support during 2015 as we consolidated our position as one of the leading providers in the space.
Outlook
Despite the challenging environment and poor financial performance, we continued to invest in the business whilst maintaining our strong balance sheet and therefore remain well positioned to capitalise on any new opportunities in the regions where we have presence or active business development activities.
Given that net contributions from some mature projects are expected to decrease during 2016, the Company is now focused on building the new business pipeline while maintaining cash generation to preserve our balance sheet during this challenging period for the Company.
Pale Spanos
Chief Executive Officer
CHIEF FINANCIAL OFFICER REVIEW
Revenues for the period fell 12.2% to EUR8.71m (2014: EUR9.92m) due to weaker performance in the second half of year from the existing projects and the lack of new project launches.
Gross profit was down by 35.6% to EUR2.27m (2014: EUR3.52m) representing a gross margin of 26.0% (2014: 35.5%). The reduction in gross margin came as a result of reduced revenues and increased costs of our existing projects in the second half of 2015 as well as investment in new project launches. Administration and selling & distribution costs were EUR1.27m (2014: EUR0.90) representing 14.6% of revenues (2014:9.0%).
Operating Profit (after depreciation and amortisation) was down by 62.0% to EUR1.00m (2014: EUR2.63m) representing a margin of 11.5% (2014:26.5%).
Adjusted EBITDA fell by 47.2% to EUR1.55m (2014: EUR2.94m) representing a margin of 17.8% (2014:29.6%).
Profit before tax fell by 62.6% to EUR0.98m (2014: EUR2.61m) with a margin of 11.2% (2014: 26.3%) while basic earnings per share fell by 64.7% to EUR0.15 (2014: EUR0.43).
Operating cash flow remained strong with net cash flows increasing by 47.8% to EUR2.54m (2014: EUR1.72m) as a result of efficient working capital management. After taking into account working capital movements and cash flows used in investing activities, which comprise primarily capitalised investment in software development, Free Cash Flow (after development costs and capital expenditure) was EUR1.49m (2014: EUR1.22m).
At the year-end we had accrued income of EUR1.14m and related accrued expenses of EUR0.63m which represents income earned during the last months of 2015 (and its associated costs), which has already been invoiced and collected/settled since the year end.
Net cash as of 31 December 2015 was EUR3.61m (2014: EUR2.42m) and provides a firm foundation for further growth into new territories.
As at 31 March 2016, net cash was above EUR3.5m as a result of the Group's continuing focus on maintaining a strong balance sheet. This should allow the Group to capitalise on any new business opportunities that may arise this year.
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The Group maintains over 90% of its cash in banks in the United Kingdom and does not generate any revenues in the Greek market.
The Directors do not propose to pay a final dividend for the year-ended 31 December 2015.
George Karakovounis
Vice Chairman & Chief Financial Officer
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2015
The Directors present the Strategic Report of CDialogues Plc for the year ended 31 December 2015.
-- Review of the Business in the year
The Group provides mobile analytics solutions, being offered in the format of marketing loyalty activities that enable brands, mobile network operators and media companies to implement targeted, interactive and measurable loyalty programs by engaging with and entertaining mobile network subscribers via their mobile devices.
The Group has developed internally a technology platform (C/Profiler Software Platform), which is used for the provision of mobile marketing solutions. The Group's technology platform is offered as either a fully managed or as a Software-as-a-Service (SAAS) product.
The core services supported by the Group's platform include the use of any channel that is based on linguistic and text communication such as SMS, MMS, IVR and mobile internet services. Furthermore, the Group's platform supports recurring user subscription and mobile billing services in cooperation with the mobile network operators on either a pre-paid or post-paid basis.
The Group's technical infrastructure is connected directly with Mobile Network Operators in the territories in which it operates and, in most cases, transacts with its business partners through revenue sharing arrangements under which the net revenues generated from the relevant mobile marketing initiatives are divided. In several cases, those mobile marketing initiatives are devised in cooperation with the operators themselves. In other instances, campaigns are instigated by the Group and may be rolled out concurrently across several mobile operator networks and in a number of different countries.
More specifically, through the use of its mobile analytics and linguistic engineering platform, the Group tries to attract as many mobile subscribers to participate in any given service and then seeks to engage and maintain them within the service with relevant content offering and reward programs. To attract potential mobile subscribers, the Group employs promotional seeding techniques which include the use of traditional media and the use of text via mobile or online. Once mobile subscribers are initially attracted, the Group tries to make them engage by providing exciting mobile utilities or providing incentives. The pool of mobile subscribers that eventually engage is analysed and profiled into categories in order for the Group to design the appropriate loyalty building programs and reward schemes.
The ongoing management of mobile marketing solutions provides the Group with a growing database of behavioral and customer engagement analytics. The knowledge and experience on monetization of those data, provides important feedback for the Group's future performance and is also reflected in continuous expansion to the Group's technology platform and evolution of product solutions supported, progressively towards a more loyalty and analytics centric offerings.
The Group is currently focusing its operations on emerging markets. Countries in which it has operated since establishment are Iraq, Vietnam, Ivory Coast, Russia, Kuwait, Lebanon, Jordan, North Cyprus, Guatemala and Oman. It is a Group target to grow market share in existing geographies and also expand its business in other territories.
A summary of the key financial results for the relevant year end are set out in the table below:
2015 (EUR) 2014 (EUR) % Change --------------------------- ----------- ----------- --------- Mobile marketing services revenue 8,710,547 9,924,449 -12.2% --------------------------- ----------- ----------- --------- Gross profit 2,267,660 3,522,653 -35.6% --------------------------- ----------- ----------- --------- Gross profit margin 26.0% 35.5% -26.8% --------------------------- ----------- ----------- --------- Operating profit 999,250 2,628,109 -62.0% --------------------------- ----------- ----------- --------- Adjusted EBITDA 1,552,047 2,938,222 -47.2% --------------------------- ----------- ----------- --------- Profit after tax 955,317 2,552,911 -62.6% --------------------------- ----------- ----------- ---------
Group revenue fell by 12.2% from EUR9.92m in 2014 to EUR8.71m in 2015. This was due to weaker performance in the second half of year of the existing projects and the lack of new project launches.
Group Adjusted EBITDA for the year fell to EUR1.55m (2014: EUR2.94), representing a fall of 47.2%. Free cash flow, after development costs and capital expenditure grew to EUR1.49m further enhancing the Group's cash position to EUR3.61m as of 31 December 2015.
-- Position of the Company's business at the end of the year
During the period the Group continued to diversify its revenue base both by number of clients and geographical sources of revenue while further strengthening its balance sheet. The Group's statement of Financial Position at 31 December 2015 set out in the table below:
Assets (EUR) Liabilities Net assets (EUR) (EUR) ------------------------------ ------------- ------------ ----------- Property plant & equipment 89,835 (55,283) 34,552 ------------------------------ ------------- ------------ ----------- Intangible assets 2,293,806 (988,133) 1,305,673 ------------------------------ ------------- ------------ ----------- Other non-current assets & liabilities 9,508 (24,739) (15,231) ------------------------------ ------------- ------------ ----------- Deferred tax 38,726 - 38,726 ------------------------------ ------------- ------------ ----------- Current assets & liabilities 1,301,736 (726,726) 575,010 ------------------------------ ------------- ------------ ----------- Total before net cash 3,733,611 (1,794,881) 1,938,730 ------------------------------ ------------- ------------ ----------- Net cash 3,605,383 - 3,605,383 ------------------------------ ------------- ------------ ----------- Total as at 31 December 2015 7,338,994 (1,794,881) 5,544,113 ------------------------------ ------------- ------------ -----------
Subscription-based recurring revenues, which provide greater scalability and visibility for the business, accounted for 82 per cent of the total revenues during 2015 as a whole. Notwithstanding the Board's expectation that revenues from existing projects will decline during the course of 2016, the Group's subscription-based recurring revenues are viewed as a key element of the business model.
The Group has identified a pipeline of potential new contracts, a number of which are being actively developed as prospects.
-- Principal risks and uncertainties facing the business
In addition to the financial risks discussed in Note 29 to the accounts, the Directors set out below the principal risks and uncertainties facing the Group and a summary of the key measures taken to mitigate those risks:
Contract duration and non-renewal of contracts
The Group enters into contracts with its customers which are typically short term in nature (three/four months) but are normally renewed at the end of each term, though this cannot be guaranteed. The Board seeks to ensure that the Group's relationships with its customers and level of service minimises the risk of contracts not being renewed.
Concentration of customer base
The Group is a relatively young business and has not yet achieved a diverse customer base. However, CDialogues has been continually seeking to reduce customer concentration and will continue this aim for 2016.
Credit risk
The Group provides services and receives revenues under agreements entered into with a local partner in the territories in which it provides services. Whilst the Group endeavours to diversify its sources of revenue, it is reliant on this relationship which may result in a greater level of credit risk than if the Group was contracted directly with the MNOs. However, such credit risk has not affected the business adversely in the past and the Group manages this risk by negotiating and enforcing appropriate contract terms.
Countries in which CDialogues operates
CDialogues operates in countries where there may be risks associated with the political or economic environment. The Group seeks to mitigate these risks by (i) undertaking its own risk analysis of each territory in which it operates; and (ii) operating with local partners with detailed knowledge of the prevailing environment.
Attracting and retaining talented staff and motivating key people
The Group has competitive remuneration packages in place to secure the services of talented staff and key employees.
Significant failure or interruption to the network or IT Systems
The Group has rigorous controls to maintain and secure its operations, including multi-site back up of key systems. In addition, the Group implements a standardised disaster recovery plan.
Failure to keep up to date with fast evolving technology
The Group is constantly developing its software platform ensuring it is evolving in line with the latest technology and in line with its clients' expectations and demands. Management regularly communicates with the Company's clients ensuring the mobile marketing campaigns are meeting their needs.
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Failure to comply with local laws and regulations
Management mitigate this risk by assessing the regulatory environment and legal system before entering a new market. The Group also implements a strong code of conduct across all of its operations.
In addition to the principal risks and uncertainties above, the Group faces other risks that include but are not limited to:
-- Increased competition -- Failure to retain, or loss of, customer contracts
Corporate Responsibility
CDialogues Plc takes its responsibilities as a corporate citizen seriously in the territories in which the company operates. The Board's primary goal is to create shareholder value but in a responsible way which serves all stakeholders. Furthermore, CDialogues seeks to continually enhance and extend its contribution to society through the work the Group undertakes with its clients and in areas where the Group decides to operate.
Governance
The Board considers sound governance as a critical component of the success of CDialogues and this is given the highest priority. The Group has an effective and engaged Board, with a strong non-executive presence from diverse backgrounds, and well-functioning governance committees. The Audit Committee receives and reviews reports from management and from the Company's auditors. It is responsible for ensuring that the financial performance of the Group is properly reported with particular regard to legal requirements, accounting standards and the AIM Rules. Through the Group's compensation policies and variable components of employee remuneration, the Remuneration Committee of the Board seeks to ensure that the Company's values are reinforced in employee behaviour and that effective risk management is promoted.
Going Concern
The Group meets its day to day working capital requirements through existing cash reserves. The Directors have prepared projected cash flow information for a period of at least twelve months from the date of their approval of the financial statements. On the basis of this cash flow information, the Directors consider that the company and group will continue to operate without the need for additional financing. Therefore, the Directors consider it appropriate to prepare the financial statements on a going concern basis.
Current Trading
Given that net contributions from some mature projects are expected to decrease during 2016, the Company is now focused on building the new business pipeline while maintaining cash generation to preserve our balance sheet during this challenging period for the Company.
Approved by the Board on 8 April 2016
Pale Spanos
Chief Executive Officer
Statement of comprehensive income
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and unless otherwise stated)
Group ------------------------------------------------------------------ Note Financial year ended 31/12/2015 Financial year ended 31/12/2014 ----- -------------------------------- -------------------------------- Revenue 6 8,710,547 9,924,449 Cost of sales (6,442,887) (6,401,796) -------------------------------- -------------------------------- Gross profit 2,267,660 3,522,653 Administrative expenses (704,628) (353,167) Selling and distribution costs (563,856) (543,135) Other operating income 74 1,758 Operating profit 999,250 2,628,109 Finance income 27 1,660 Finance costs (20,691) (15,934) -------------------------------- -------------------------------- Profit before tax 978,586 2,613,835 Income tax expense 7 (23,269) (60,924) -------------------------------- -------------------------------- Profit for the year 955,317 2,552,911 ================================ ================================ Other comprehensive income: Other comprehensive income to be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations 82 (1,349) Net loss on available-for-sale financial assets (7,068) (80,212) -------------------------------- -------------------------------- (6,986) (81,561) Net other comprehensive income to be reclassified to profit or loss in subsequent periods (6,986) (81,561) Other comprehensive income not to be reclassified to profit or loss in subsequent periods: Actuarial gain/(loss) 6,739 (1,223) Income tax effect (1,981) 318 -------------------------------- -------------------------------- 4,758 (905) Net other comprehensive income not to be reclassified to profit or loss in subsequent periods 4,758 (905) Other comprehensive loss for the year, net of tax (2,228) (82,466) -------------------------------- -------------------------------- Total comprehensive income for the year, net of tax 953,089 2,470,445 ================================ ================================ Profit for the year attributable to: Equity holders of the parent 955,317 2,552,911 955,317 2,552,911 ================================ ================================ Total comprehensive income for the year, attributable to: Equity holders of the parent 953,089 2,470,445 953,089 2,470,445 ================================ ================================ Earnings per share Basic, profit for the year attributable to ordinary equity holders of the parent 8 0.1531 0.4336 Diluted, profit for the year attributable to ordinary equity holders of the parent 8 0.1523 0.4313
Statement of financial position
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and unless otherwise stated)
Group ---------------------- 31 December Note 2015 2014 ----- ---------- ---------- Assets Non-current Assets Property, plant and equipment 9 34,552 37,185 Intangible Assets 10 1,305,673 749,440 Deferred tax assets 38,726 25,880 Trade and other receivables 11 9,508 9,508 ---------- ---------- 1,388,459 822,013 Current Assets Trade and other receivables 11 1,286,574 3,952,938 Available for sale financial assets 15,162 22,230 Cash and cash equivalents 12 3,605,383 2,419,927 ---------- ----------
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4,907,119 6,395,095 Total assets 6,295,578 7,217,108 ========== ========== Equity and liabilities Equity attributable to equity holders of the parent Issued share capital 13 75,213 75,213 Share premium 13 622,240 565,572 Reserves 12,117 16,745 Retained earnings 4,834,543 4,156,004 ---------- ---------- Total Equity 5,544,113 4,813,534 ---------- ---------- Non-current liabilities Employee benefit liability 24,739 16,505 ---------- ---------- 24,739 16,505 Current liabilities Trade and other payables 15 708,186 2,311,912 Income tax payable 18,540 75,157 ---------- ---------- 726,726 2,387,069 Total liabilities 751,465 2,403,574 ---------- ---------- Total equity and liabilities 6,295,578 7,217,108 ========== ==========
Statement of changes in equity
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and unless otherwise stated)
Group ------------------------------------------------------------------------------------- Ordinary Share Capital Share premium Reserves Retained Earnings Total equity ----------------------- -------------- --------- ------------------ ------------- Balance at 1 January 2014 15,000 - 93,743 1,659,561 1,768,304 ======================= ============== ========= ================== ============= Profit for the period - - - 2,552,911 2,552,911 Other comprehensive income - - (80,212) (2,254) (82,466) ----------------------- -------------- --------- ------------------ ------------- Total comprehensive income - - (80,212) 2,550,657 2,470,445 Issue of share capital net of issue cost 9,213 565,572 - - 574,785 Share capital increase through capitalization of profits 51,000 - - (51,000) - Transfers to reserves - - 3,214 (3,214) - Balance at 31 December 2014 75,213 565,572 16,745 4,156,004 4,813,534 ======================= ============== ========= ================== ============= Profit for the period - - - 955,317 955,317 Other comprehensive income/(loss) - - (7,068) 4,840 (2,228) ----------------------- -------------- --------- ------------------ ------------- Total comprehensive income - - (7,068) 960,157 953,089 Share-based payments - 56,668 - - 56,668 Transfers to reserves - - 2,440 (2,440) - Disposal of subsidiary - - - 1,267 1,267 Cash dividends - - - (280,445) (280,445) Balance at 31 December 2015 75,213 622,240 12,117 4,834,543 5,544,113 ======================= ============== ========= ================== =============
Statement of cash flows
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and unless otherwise stated)
Group ------------------------------------------------------------------ Financial year ended 31/12/2015 Financial year ended 31/12/2014 -------------------------------- -------------------------------- Cash flows from Operating Activities Profit / (loss) before tax 978,586 2,613,835 Adjustment to reconcile profit before tax to net cash flows Non-cash items: Depreciation of property, plant and equipment 15,211 16,050 Amortisation of intangible assets 480,918 294,063 Share-based payment expense 56,668 - Interest income (27) (1,660) Interest expense 20,691 15,934 Movements in provisions and provisions for employee benefits 14,973 3,474 Operating cash flows before changes in working capital 1,567,020 2,941,696 Working capital adjustments: Decrease/(Increase) in trade and other accounts receivable 2,666,364 (2,977,503) (Decrease)/Increase in trade and other accounts payable (1,603,726) 1,815,756 Income tax paid (94,633) (64,296) Net cash flows from operating activities 2,535,025 1,715,653 -------------------------------- -------------------------------- Cash flows from investing activities Purchase of property, plant and equipment (12,578) (3,326) Purchase of intangible assets (1,037,151) (495,900) Interest received 27 1,660 Net cash flows from (used in) investing activities (1,049,702) (497,566) -------------------------------- -------------------------------- Cash flows from financing activities Proceeds from the issuance of share capital net of issue costs - 574,785 Dividends paid to equity holders of the parent (280,445) - Interest paid (19,424) (15,934) Net cash flows from/(used in) financing activities (299,869) 558,851 -------------------------------- -------------------------------- Net increase in cash and cash equivalents 1,185,454 1,776,938 Cash and cash equivalents at 1 January 2,419,927 643,717 Currency translation differences 2 (728) -------------------------------- -------------------------------- Cash and cash equivalents at 31 December 3,605,383 2,419,927 ================================ ================================ 1. Corporate information
The consolidated financial information of Cdialogues Plc and its subsidiaries (collectively, the "Group") for the year ended 31 December 2015 has been prepared on the basis set out below.
Cdialogues Plc (the "Company") was incorporated in England and Wales as a limited liability company in June 2011 and during financial year 2014 as a consequence of its listing on AIM became a public company limited by shares.
2. Basis of preparation
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The consolidated financial information of the Group has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and issued by the International Accounting Standards Board (IASB).
The consolidated financial information has been prepared on a historical cost basis, except for, available-for-sale (AFS) financial assets that have been measured at fair value. The consolidated financial information is presented in Euros, except when otherwise indicated.
The financial information does not constitute the Company's statutory financial statements for the year ended 31 December 2015 but is derived from those financial statements. The statutory financial statements will be delivered following the Company's Annual General Meeting. The Auditors have reported on those financial statements; their reports were unqualified and did not contain any statements under Companies Act 2006 section 498 (2) or (3).
The directors do not recommend the payment of a final dividend.
The financial information set out in this announcement was approved and authorised for issue by the board of directors on 8 April 2016.
Copies of this financial information will be available on the Company's website.
3. Basis of consolidation
The consolidated financial information comprise the financial statements of the Group and its subsidiaries as at 31 December 2015. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:
-- Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
-- Exposure, or rights, to variable returns from its involvement with the investee; and -- The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:
-- The contractual arrangement with the other vote holders of the investee; -- Rights arising from other contractual arrangements; and -- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of Other Comprehensive Income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value at the date when control is lost.
4. Segmental reporting
Based on management information there is only one operating segment. The Directors of the Company consider the principal activity of the Group to be that of a provider of Mobile Marketing services.
In this context there is no obligation to prepare and publish financial results by segment, according to the requirements of IFRS 8 "Operating Segments". As far as geographical segment the Group operates mainly (95%) in the area of Middle East and therefore is considered as one geographical segment.
5. Group information
Information about subsidiaries
The Company's directly and indirectly wholly owned subsidiaries as at 31 December 2015 and 31 December 2014 are listed below:
2015 2014 ----------------------------- ----------------------------- Country of Registration Percentage of Ordinary Percentage of Ordinary Subsidiary undertaking Shares held Shares held ------------------------ ------------------------- ----------------------------- ----------------------------- Telilea Ltd CYPRUS 100.00% 100.00% Cdialogues S.A. GREECE 100.00% 100.00% Cdialogues MEA DMCC U.A.E. 100.00% 100.00% Cdialogues LLC RUSSIA 0.00% 100.00%
The Company's indirectly wholly owned investments in subsidiaries through Telilea Ltd are Cdialogues S.A. (Greece) and Cdialogues MEA DMCC (Dubai U.A.E).
The principal activity of each company is analysed as follows:
Cdialogues Plc was incorporated in England and Wales as a Limited Liability Company on June 2011 and it is the Group holding entity.
Telilea Ltd was incorporated in Cyprus on March 2012. Its principal activities are the provision of mobile marketing services.
Cdialogues S.A. was established in Greece on July 2011 and acquired by the Group on July 2012. Its principal activities include software development services as well as support and maintenance services related to the software.
Cdialogues MEA DMCC was established in Dubai U.A.E. on October 2013 and its principal activities are the provision of IT services and solutions.
Cdialogues LLC was established in Russia on March 2012 as Benastipik LLC and acquired by the Group on March 2013 (20%) and on April 2013 (80%). Its name changed to C Dialogues LLC on June 2013. The C Dialogues LLC activities are general trading. During the year the procedures that started in 2014 for the closure of the Russian subsidiary CDialogues LLC were completed. Cdialogues LLC has not been deemed a discontinued operation because it is a trivial element of the Group.
6. Revenue
Revenue in the accompanying financial statements of the Group is analysed as follows:
Group -------------------------------------------- 1/1/2015- 31/12/2015 1/1/2014- 31/12/2014 --------------------- --------------------- Mobile marketing services 8,710,547 9,924,449 Total 8,710,547 9,924,449 ===================== =====================
The Company being only the holding company of the Group has no operations in the country of domicile.
The Group operates mainly (95%) in the area of Middle East and therefore is considered as one geographical segment.
Group -------------------------------------------- 1/1/2015- 31/12/2015 1/1/2014- 31/12/2014 --------------------- --------------------- Middle East 8,710,547 9,924,449 Total 8,710,547 9,924,449 ===================== ===================== 7. Income tax
Income tax in the accompanying financial statements of the Group is analysed as follows:
Group ---------------------------------------------- 1/1/2015 - 31/12/2015 1/1/2014 - 31/12/2014 ---------------------- ---------------------- Current income tax 38,016 75,443 Deferred income tax (14,747) (14,519) Income tax in the statement of comprehensive income 23,269 60,924 ====================== ======================
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The reconciliation of income taxes reflected in statements of comprehensive income and the amount of income taxes determined by the application of the United Kingdom statutory tax rate to pre-tax income is summarised as follows:
Group ---------------------------------------------- 1/1/2015 - 31/12/2015 1/1/2014 - 31/12/2014 ---------------------- ---------------------- Profit before tax 978,586 2,613,835 At United Kingdom statutory income tax rate of 20.0% (2014: 21.5%) 195,717 561,975 Income not subject to taxation (329,056) (108,657) Expenses not deductible for taxation purposes 40,699 21,609 Write off of deferred tax asset 1,360 - Tax losses for which no deferred tax asset has been recognised 86,374 - Differences in tax rates 26,183 (417,847) 10% additional charge - 2,353 Defence contribution 7 491 Business tax 1,985 1,000 Total 23,269 60,924 ====================== ======================
As at 31 December 2015, the Group's tax loss which is available for offset against future taxable profits amounts to EUR690,942 for which no deferred tax asset is recognised in the statement of financial position.
The "10% additional charge" was nil (2014 EUR2,353) and the "Defence contribution" amount of EUR7 (2014 EUR491) is related to Telilea Ltd. More specific is the 10% of the year's tax liability as calculated in the tax computation of corporation tax. According to the Cyprus Tax legislation companies have to pay temporary tax on the 75% of their estimated taxable profits for the year otherwise there is a surcharge of 10% on the final tax liability for the year.
The Company is obliged to file its tax returns in accordance with the applicable tax law in England and Wales. No income tax is payable on the net income deriving from subsidiaries with foreign operations.
The Group's subsidiaries file their tax returns in the countries in which they are established and/or operate. The tax rates at 31 December 2015 of the countries where the operations of the Group are located are the following:
Greece 29.0 %. (2014: 26.0 per cent)
Cyprus 12.5 %. (2014: 12.5 per cent.)
United Arab Emirates.
The income tax is not applicable. Royal Decree of 2002 of the Emirate of Dubai states that the company should be exempt from all taxes including income tax as they operate within the Free Zone.
Greek subsidiary (Cdialogues S.A.)
Greek tax laws and regulations are subject to interpretations by the tax authorities. Tax returns are filed annually but the profits or losses declared for tax purposes remain provisional until such time, as the tax authorities examine the returns and the records of the taxpayer and a final assessment is issued. Tax losses, to the extent accepted by the tax authorities, can be used to offset profits of the five fiscal years following the fiscal year to which they relate.
Tax Compliance certificate
From the financial year 2011 and onwards, all Greek Societe Anonyme and Limited Liability Companies that are required to have their statutory financial statements audited must in addition obtain an "Annual Tax Certificate" as provided for by paragraph 5 of Article 82 of L.2238/1994. This "Annual Tax Certificate" must be issued by the same statutory auditor or audit firm that issues the audit opinion on the statutory financial statements.
The tax compliance certificate for the financial year 2014 was concluded by its auditors, based on the provisions of article 65 L. 4174/2013. No significant additional tax liabilities arose, in excess of those provided for and disclosed in the financial statements.
The tax compliance certificate for the financial year 2015 is still in progress based on the provisions of article 65 L. 4174/2013. No significant additional tax liabilities are expected to arise, in excess of those provided for and disclosed in the financial statements.
Cyprus subsidiary (Telilea Ltd)
The corporation tax rate is 12.5% (2014:12.5%).
Under certain conditions interest income may be subject to defence contribution at the rate of 30% (2014:30%). In such cases this interest will be exempt from corporation tax. In certain cases, dividends received from abroad may be subject to defence contribution at the rate of 17% for 2014 and thereafter.
The company has utilised tax relief incentives provided by the Cyprus tax legislation. These incentives allow for special treatment on intellectual property.
The Cyprus tax law on Intellectual Property gives rise to the following tax treatment.
-- The cost of the acquisition or development of Intellectual Property of a capital nature is amortised over a period of five years, starting in the year of purchase / development.
-- A statutory reduction of 80% of the profit arising from the use of the Intellectual Property, as well as from any gain on the sale of the Intellectual Property.
-- The 80% deduction applies to profit after deducting any direct expenses including amortisation and interest.
8. Earnings per share
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
2015 2014 ---------- ---------- Net profit attributable to ordinary equity holders of the parent 955,317 2,552,911 Weighted average number of ordinary shares for basic earnings per share 6,240,550 5,888,121 Earnings per share basic 0.1531 0.4336 ========== ========== Weighted average number of ordinary shares for basic earnings per share 6,240,550 5,888,121 Effect on dilution: Warrants 30,617 30,617 ---------- ---------- 30,617 30,617 Weighted average number of ordinary shares adjusted for the effect of dilution 6,271,167 5,918,738 ---------- ---------- Earnings per share diluted 0.1523 0.4313 ========== ========== 9. Property plant and equipment
Property, plant and equipment in the accompanying financial statements of the Group are analysed as follows:
Transportation assets Furniture & other office equipment Total ---------------------- ----------------------------------- ------- Cost Balance at 1 January 2014 22,500 51,431 73,931 Additions - 3,326 3,326 Balance at 31 December 2014 22,500 54,757 77,257 ---------------------- ----------------------------------- ------- Balance at 1 January 2015 22,500 54,757 77,257 Additions - 12,578 12,578 Balance at 31 December 2015 22,500 67,335 89,835 ---------------------- ----------------------------------- ------- Accumulated Depreciation Balance at 1 January 2014 1,688 22,334 24,022 Depreciation expense 3,375 12,675 16,050 Balance at 31 December 2014 5,063 35,009 40,072 ---------------------- ----------------------------------- -------
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Balance at 1 January 2015 5,063 35,009 40,072 Depreciation expense 3,375 11,836 15,211 ---------------------- ----------------------------------- ------- Balance at 31 December 2015 8,438 46,845 55,283 ---------------------- ----------------------------------- ------- Net-book value at 31 December 2014 17,437 19,748 37,185 ====================== =================================== ======= Net-book value at 31 December 2015 14,062 20,490 34,552 ====================== =================================== =======
There is no property, plant and equipment that have been pledged as security.
10. Intangible assets
Intangible assets in the accompanying financial statements of the Group are analysed as follows:
Software development cost (internally Purchased software generated) Total ------------------- ------------------------------------------- ---------- Cost Balance at 1 January 2014 376,690 384,065 760,755 Additions 321,720 174,180 495,900 Balance at 31 December 2014 698,410 558,245 1,256,655 ------------------- ------------------------------------------- ---------- Balance at 1 January 2015 698,410 558,245 1,256,655 Additions 697,778 339,373 1,037,151 Balance at 31 December 2015 1,396,188 897,618 2,293,806 ------------------- ------------------------------------------- ---------- Accumulated amortisation Balance at 1 January 2014 63,143 150,010 213,153 Amortisation expense 160,157 133,905 294,062 Balance at 31 December 2014 223,300 283,915 507,215 ------------------- ------------------------------------------- ---------- Balance at 1 January 2015 223,300 283,915 507,215 Amortisation expense 306,635 174,283 480,918 ------------------- ------------------------------------------- ---------- Balance at 31 December 2015 529,935 458,198 988,133 ------------------- ------------------------------------------- ---------- Net book value at 31 December 2014 475,110 274,330 749,440 =================== =========================================== ========== Net book value at 31 December 2015 866,253 439,420 1,305,673 =================== =========================================== ==========
11. Trade and other receivables
Trade and other receivables in the accompanying financial statements of the Group are analysed as follows:
Group ------------------------ 31/12/2015 31/12/2014 ----------- ----------- Trade receivables - 47,360 Receivables from group undertakings - - VAT receivable 41,555 39,620 Accrued income 1,136,679 3,850,737 Prepaid expenses 107,372 14,896 Other receivables 10,476 9,833 Total 1,296,082 3,962,446 =========== =========== Non-current assets 9,508 9,508 Current assets 1,286,574 3,952,938 1,296,082 3,962,446 =========== ===========
The ageing analysis of trade receivables is as follows:
Group ---------------- 2015 2014 ------ ------- Neither past due nor impaired - 47,360 Total - 47,360 ======= =======
12. Cash short-term deposits
Cash, short term deposits in the accompanying financial statements of the Group are analysed as follows:
Group ------------------------ 31/12/2015 31/12/2014 ----------- ----------- Cash at bank and in hand 3,605,383 2,419,927 Total 3,605,383 2,419,927 =========== ===========
Cash at bank earns interest at floating rates based on monthly bank deposit rates. Interest earned on cash at bank and time deposits is accounted for on an accrual basis and for the year ended December 31, 2015, amounted to EUR27 (2014 EUR1,660) and are included in financial income in the accompanying statements of comprehensive income.
Cash and short term deposits are analysed in the following currencies:
Group ------------------------ 31/12/2015 31/12/2014 ----------- ----------- Euro 1,053,576 493,632 US Dollar 2,505,323 1.198,231 GBP 24,656 706,236 AED 21,828 21,828 3,605,383 2,419,927 =========== ===========
13. Share capital and share premium
The movement of the Company's share capital and share premium is analysed as follows:
For the year ended 31 December 2015 No of shares Share capital Share premium Total increase ------------- -------------- -------------- --------------- At 1 January 2015 6,240,550 75,213 565,572 640,785 Share-based payments 56,668 56,668 At 31 December 2015 6,240,550 75,213 622,240 697,453 ============= ============== ============== =============== For the year ended 31 December 2014 No of shares Share capital Share premium Total increase ------------- -------------- -------------- --------------- At 1 January 2014 15,000 15,000 - 15,000 Bonus shares issued 11/06/2014 51,000 51,000 - 51,000 Share split on 11/06/2014 5,500,000 - - - Issued on 11/06/2014 152,550 1,950 - 1,950 Issued on 27/06/2014 588,000 7,263 1,532,780 1,540,043 Shares issue costs - - (967,208) (967,208) At 31 December 2014 6,240,550 75,213 565,572 640,785 ============= ============== ============== ===============
On 16 April 2013, pursuant to a written resolution of the Founders the 5,000 issued ordinary shares of EUR1.00 each were re-designated A Ordinary Shares of EUR1.00 each.
On 16 April 2013 10,000 A ordinary shares of EUR1.00 each were issued to the Founders.
On 11 June 2014, pursuant to written resolutions of the Founders:
-- each of the issued existing A ordinary shares of EUR1.00 in the capital of the Company was redesignated as an ordinary share of EUR1.00 each;
-- the sum of EUR51,000 (being part of the Company's distributable reserves) was capitalised and appropriated as capital to the Founders and the Directors were to authorised to apply such sum in paying up in full 51,000 new ordinary shares in the Company (the "Bonus Shares") and to allot and issue such Bonus Shares, credited as fully paid up, to the Founders at the rate of 3.4 Bonus Shares for every 1 existing ordinary share of EUR1.00 each held by them;
-- the entire issued share capital of the Company was redenominated from Euros (EUR) to Pounds Sterling (GBP) at a then prevailing exchange rate of EUR 1.2 to GBP1
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-- the issued existing ordinary shares of EUR1.00 in the capital of the Company were consolidated on the basis of 1 new ordinary share of GBP1.00 each in the capital of the Company for every 1.2 existing ordinary shares of EUR1.00 previously held; and each of the issued existing ordinary shares of GBP1.00 in the capital of the Company arising from the consolidation was subdivided into 100 new ordinary shares of GBP0.01 each in the capital of the Company for every 1 existing ordinary share of GBP1.00 previously held.
On 11 June 2014 152,550 ordinary shares of GBP0.01 each were allotted and fully paid in cash by certain employees and consultants of the Group resulting in a total net increase of EUR1,950.
On 27 June 2014, 588,000 ordinary shares of GBP0.01 each were allotted and fully paid in cash at a price of GBP2.12 resulting in a total net increase of EUR572,835 (after transactions costs of EUR967,208).
The company issued a total of 182,947 warrants over ordinary shares to advisers and non-executive directors at the date of its admission to AIM. The warrants are exercisable at a price of GBP2.12 per ordinary share for a period of five years. The directors no not consider the intrinsic value of the services provided in exchange for the issue of the warrants to be material.
As at 31 December 2015 the Company has 6,240,550 Ordinary Shares in issue (including 13,773 treasury shares).
14. Distributions made
Cash dividends to the equity holders of the parent:
Dividends on ordinary shares declared and paid:
31/12/2015 31/12/2014 ----------- ----------- Final dividend for 2014: 2.00 pence per ordinary share 174,083 - Interim dividend for 2015 : 1.25 pence per ordinary share 106,362 - ----------- ----------- 280,445 - =========== ===========
15. Trade & other payables
Trade and other accounts payable in the accompanying financial statements of the Group are analysed as follows:
Group ------------------------ 31/12/2015 31/12/2014 ----------- ----------- Trade payables 8,294 12,242 Amounts due to group undertakings - - Accrued expenses 634,172 2,257,540 Social security and other taxes 65,720 42,130 Total 708,186 2,311,912 =========== =========== Short term 708,186 2,311,912 Long term - - Total 708,186 2,311,912 =========== ===========
16. Commitments
The Greek subsidiary Cdialogues S.A. has entered into commercial operating lease agreements for the lease of office space and car. These lease agreements have an average life of 3 to 12 years with renewal terms included in certain contracts. Future minimum rentals payable under non-cancellable operating leases as at 31 December 2015 and 2014, are as follows:
Group ------------------------ 31/12/2015 31/12/2014 ----------- ----------- Within one year 72,299 73,534 After one year but no more than five years 291,475 294,695 Over five years 315,502 315,818 679,276 684,047 =========== ===========
This information is provided by RNS
The company news service from the London Stock Exchange
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