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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Zamano | LSE:ZMNO | London | Ordinary Share | IE00B1G17W46 | ORD EUR0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 4.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMZMNO
RNS Number : 0856B
Zamano PLC
31 March 2017
Press Release
31 March 2017
zamano PLC
('zamano', the 'Company' or the 'Group')
Final Results
zamano PLC (AIM:ZMNO, ESM:ZAZ), a provider of interactive applications and services to mobile devices, has today announced results for the 12 months ended 31 December 2016.
Highlights:
-- Revenue of EUR32.1M (up 32.2% on revenue of EUR24.3M, 2015); -- Adjusted EBITDA of EUR1.7M (down 44.2% on Adjusted EBITDA of EUR3.0M, 2015); -- Post-tax profit, excluding EUR6.4M impairment, of EUR1.0M ( 2015, EUR2.1M); -- Pre-tax loss, including EUR6.4M impairment, of EUR5.2M (pre-tax profit of EUR2.5M, 2015);
-- Post-tax loss, including EUR6.4M impairment, of EUR5.4M (post-tax profit of EUR2.1M, 2015); and
-- Significant improvement in net cash during 2016 to EUR7.2M at 31 December 2016 (EUR6.3M at 31 December 2015).
PayForIt, a UK Mobile Network Operators joint initiative to further regulate mobile payments was mandated by all UK Mobile Network Operators on 1 November 2016. Prior to this revenue growth was maintained in 2016 but since its introduction the Group has seen a significant negative impact on business performance. Furthermore, regulatory changes that have come into effect in Ireland in 2017 will also further significantly impact the Group's business.
Following the implementation of PayForIt in November 2016 the Group has taken steps to reduce the cost base of the business. This included the implementation of a redundancy programme across all divisions, reducing payroll and related costs by approximately EUR330,000 on an annualised basis. A number of other cost saving measures were also evaluated and implemented which included reducing the number of Directors and streamlining I.T. and customer service costs.
These actions achieved material cost reductions. However, it is increasingly likely that the impact of regulatory changes across zamano's business lines will prevent the Group from maintaining a cashflow positive trading position going forward. As a consequence of this outlook, goodwill and intangible assets were reduced to zero by an impairment charge of EUR6.4 million.
In light of this, the Group took the decision in early February 2017 to formally wind down the existing business lines in order to protect the cash position on the balance sheet. The wind down of the existing business lines is ongoing and the Board is currently considering alternative strategic options. In the absence of a timely strategic alternative, the Group will look to maximise its cash position and make a distribution back to shareholders.
The zamano Board is focused on conserving the Group's strong cash position by optimising our withdrawal from our existing business lines and the Group remains fully committed to supporting its clients and providing a high level of customer experience and service during the wind down process.
Further announcements will be made in due course as appropriate.
For further information, please contact:
zamano plc
Michael Connolly, Chief Financial Officer
Tel: +353 1 554 7261
Investec Corporate Finance
Shane Lawlor/Ian McGreal
Tel: + 353 1 4210000
Cenkos Securities
Derrick Lee/Neil McDonald
Tel: + 44 (0) 131 220 6939
Media Enquires:
MCOMM Communications Consultants
Richard Moore
Tel: +353 1 6713788
Mob: +353 87 2414751
Email: ir@zamano.com
Acting Chairman's statement
It was noted in zamano's outlook for 2016 that revenue growth was maintained from 2013 to 2016, despite the continuing challenging regulatory and market environment in its key markets of the UK and Ireland, but that PayForIt, a UK Mobile Network Operators joint initiative to further regulate mobile payments, would significantly impact on the Group and the industry in general once fully implemented. PayForIt was mandated by all UK Mobile Network Operators on 1 November 2016 and since its introduction the Group has seen a significant negative impact on business performance.
In this regard, since its implementation on 1 November 2016, zamano has seen a reduction in performance across all its business lines and, to date, the Group has not secured any replacement revenue through new subscriber acquisitions in the UK since PayForIt's implementation.
In Ireland, certain MNOs are also now requiring service and payment flows to use similar rules to PayForIt in the UK. The Group anticipates that these changes, once fully implemented, will also significantly impact the Group's ability to acquire new customers in Ireland.
In November 2016 the Group, as a result of the impact of PayForIt in the UK, took steps to reduce the cost base of the business. This included the implementation of a redundancy programme across all divisions, reducing payroll and related costs by approximately EUR330,000 on an annualised basis. A number of other cost saving measures were also evaluated and implemented which included reducing the number of Directors and streamlining I.T. and customer service costs.
Despite taking these actions, which achieved material cost reductions, it is increasingly likely that the impact of regulatory changes across zamano's business lines will prevent the Group from maintaining a cashflow positive trading position going forward. As a consequence of this outlook, goodwill and intangible assets were reduced to zero by an impairment charge of EUR6.4 million.
In light of this, the Group took the decision in early February 2017 to formally wind down the existing business lines in order to protect the cash position on the balance sheet. The wind down of the existing business lines is ongoing and the Board is currently considering alternative strategic options. The Group will update the market further in due course on this matter. In the absence of a timely strategic alternative, the Group will look to maximise its cash position and make a distribution back to shareholders.
2016 Financial Review
As in previous years, the UK and Irish business were the mainstay of the Group's financial performance in the year ended 31 December 2016. Group sales at EUR32.1 million were 32% ahead of the EUR24.3 million recorded in 2015. UK sales in 2016 at EUR28.2 million were 37% ahead of the 2015 outcome of EUR20.5 million. Irish sales, however, failed to match that of the UK where revenue of EUR2.8 million in 2016 was down 10% on 2015.
Gross profit for the year at EUR4.1 million was 19% behind the corresponding figure of EUR5.1 million recorded in 2015. The gross profit margin fell from 21% in 2015 to 13% in 2016 due to the continued revenue shift towards UK business-to-business (B2B) sales which carry lower margins than zamano's direct-to- consumer (D2C) services.
Taking into account the decision to wind down the existing business lines, goodwill and intangible assets have been written down by EUR6.4 million. Goodwill and intangible assets are now recorded at EURNil on the balance sheet.
Pre-tax loss for the year was EUR5.2 million (2015 profit EUR2.5 million) whilst the after tax loss outcome was EUR5.4 million (2015: profit EUR2.1 million). However, excluding the impairment of goodwill and intangibles charge of EUR6.4 million, (2015: EURnil) the Group earned an after tax profit of EUR1.0 million (2015: EUR2.1 million).
This profit after tax, excluding the impairment charge, led to a further improvement in the Group's net cash position. At 31 December 2016, net cash was EUR7.2 million, an increase of EUR0.9 million over the 31 December 2015 net cash figure of EUR6.3 million.
Market Review
Zamano's UK operation, which is largely comprised of web and mobile digital entertainment products and B2B services, performed strongly from a revenue generation perspective in 2016. Revenues in the UK at EUR28.2 million were 37% ahead of 2015 (EUR20.5 million).
The Irish business, which also focuses on web and mobile digital products and B2B services, continued to operate in an extremely challenging environment. Sales for 2016 were EUR2.8 million, down by 10% on the equivalent figure for 2015 of EUR3.1 million. This was a result of increased competition for advertising as new service providers entered the Irish market after exiting the UK.
Our sales performance in other locations during 2016 showed an increase on 2015. Sales at EUR1.1 million were 57% up on the corresponding figure of EUR0.7 million in 2015.
Outlook
The zamano Board is focused on conserving the Group's strong cash position by optimising our withdrawal from our existing business lines. The wind down of the existing business lines is ongoing. However, there is as yet no conclusion on strategic options. In the absence of concluding a transaction which shareholders approve, we will focus on how best to return the maximum amount of cash possible to shareholders.
The Group remains fully committed to supporting its clients and providing a high level of customer experience and service during the wind down process.
Further announcements will be made in due course as appropriate.
Colin Tucker
Acting Chairman
Consolidated income statement
for the year ended 31 December 2016
Hot Features
Premium
2016 2015
EUR'000 EUR'000
Revenue 32,101 24,289
Cost of sales (27,986) (19,179)
Gross profit 4,115 5,110
Other administrative expenses (2,553) (2,191)
Amortisation of intangible assets (352) (368)
Depreciation (79) (78)
Impairment of goodwill and intangible
assets (6,350) -
Total administrative expenses (9,334) (2,637)
Operating (loss)/profit (5,219) 2,473
Finance income 9 11
Finance expense (12) (27)
(Loss)/profit before income tax (5,222) 2,457
Income tax expense (131) (319)
(Loss)/profit for the year attributable
to equity holders of the parent (5,353) 2,138
(Loss)/earnings per share
basic EUR(0.054) EUR0.022
diluted EUR(0.054) EUR0.021
Consolidated statement of comprehensive income
for the year ended 31 December 2016
2016 2015
EUR'000 EUR'000
(Loss)/profit for the year (5,353) 2,138
Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Foreign currency translation adjustment (17) 4
Total comprehensive (loss)/income attributable
to equity
holders of the parent (5,370) 2,142
On behalf of the board
Colin Tucker Fergal Scully Director Director
Consolidated balance sheet
at 31 December 2016
2016 2015
EUR'000 EUR'000
Assets
Non-current assets
Property, plant and equipment 105 142
Goodwill and intangible assets - 6,428
Deferred tax asset - 107
Total non-current assets 105 6,677
Current assets
Trade and other receivables 2,936 4,407
Cash and cash equivalents 7,157 6,322
Total current assets 10,093 10,729
Total assets 10,198 17,406
Equity
Equity share capital 99 99
Share premium 13,538 13,538
Undenominated capital 1 1
Currency translation reserve (77) (60)
Share-based payment reserve 205 438
Retained loss (7,602) (2,412)
Total equity 6,164 11,604
Liabilities
Current liabilities
Trade and other payables 4,034 5,562
Loans and borrowings - 71
Current tax liabilities - 169
Total current liabilities 4,034 5,802
Total liabilities 4,034 5,802
Total equity and liabilities 10,198 17,406
On behalf of the board
Colin Tucker Fergal Scully Director Director
Consolidated statement of changes in equity
at 31 December 2016
Currency Share based
Equity share Share Undenominated Retained translation payment Total
capital premium capital earnings reserve reserve Equity
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
At 1 January 2016 99 13,538 1 (2,413) (60) 438 11,603
Loss for the year - - - (5,353) - - (5,353)
Other comprehensive
income:
Currency translation
adjustment - - - - (17) - (17)
Total comprehensive
income for the year 99 13,538 1 (7,766) (77) 438 6,233
Transactions in equity
Settlement of share
options - - - (31) - (54) (85)
Share based payment
expense - - - - - 16 16
Transfer from share
based payment reserve - - - 195 - (195) -
At 31 December 2016 99 13,538 1 (7,602) (77) 205 6,164
At 1 January 2015 99 13,538 1 (4,551) (64) 362 9,385
Profit for the year - - - 2,138 - - 2,138
Other comprehensive
income:
Currency translation
adjustment - - - - 4 - 4
Total comprehensive
income for the year - - - 2,138 4 - 2,142
Transactions in equity
Share based payment
expense - - - - - 76 76
At 31 December 2015 99 13,538 1 (2,413) (60) 438 11,603
Notes
1 Reporting entity
zamano plc ('the Company") is a company domiciled in the Republic of Ireland. The address of the Company's registered office is 3rd Floor, Hospitality House, 16-20 South Cumberland Street, Dublin 2.The consolidated financial statements of the Company as at and for the year ended 31 December 2016 comprise of the financial statements of the Company and its subsidiaries ("the Group").
The Company's shares are publicly traded on the London Alternative Investment Market ("AIM") and the Enterprise Securities Market ("ESM") in Dublin.The principal activities of the Group are the provision of mobile data services and technology.
.
2 Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU. A summary of pronouncements that came into effect after that date and the likely impact of these on the Group are set out in note 4. The consolidated financial statements were authorised for issue by the board of directors on 29 March 2017.
(b) Going concern
As explained in the Directors' Report, detrimental regulatory changes introduced during late 2016 have impacted both the Group's performance in the short term and the ability of the Group to sustain profitability going forward. In light of these changes, in February 2017, the Board took the decision to formally wind down existing business lines over the course of 2017. The Board is currently considering alternative strategic options for the Group beyond the cessation period for existing operations, one of which includes a liquidation and distribution of the Group's net assets to its shareholders. No decision has yet been made over the Group's strategic options however a decision is expected to be made during H1 2017.
The Group had net assets of EUR6.2 million at 31 December 2016 (2015: EUR11.6 million) which includes cash and cash equivalents of EUR7.2 million (2015: EUR6.3 million). In the absence of a decision on the strategic options of the Group having been fomally made by the Board, having regard to the Group's bank and cash balance at the balance sheet date and at the date of approval of the financial statements together with the projected financial performance of the Group over the next 12 months from the date of approval of these financial statements (taking into account of the impact of the wind down of the existing business of the Group), the Board considers that it is appropriate to prepare the consolidated financial statements of the Group on a going concern basis.
(c) Basis of measurement
The consolidated financial statements for the year ended 31 December 2016 have been prepared on an historical cost basis, with the exception of share-based payments, which are stated at grant date fair value.
(d) Functional and presentation currency
These consolidated financial statements are presented in euro which is the functional currency of the Company and the majority of the Group's entities. All financial information presented in euro has been rounded to the nearest thousand.
Notes to the consolidated financial statements (continued)
2 Basis of preparation (continued)
(e) Basis of consolidation
All subsidiaries have a financial year end of 31 December.
Business combinations are accounted for using the acquisition method as at the acquisition date, i.e. when control is transferred to the Group. The consolidated financial statements consolidate the financial statements of zamano plc and all its subsidiaries up to 31 December 2016.
The Group controls an entity when it is exposed to, or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through the power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.
3 Operating segments
The Group is managed based on two primary reportable segments which are defined based on geographical markets as follows: Republic of Ireland "ROI" and United Kingdom "UK". It also has sales in other jurisdictions but these are not deemed to be standalone reportable segments under the requirements of IFRS 8 and are classified as "other locations" in the table below.
The Group's sales consist of the development, promotion and distribution of mobile content and interactive services directly to consumers and also facilitating the communication and interaction between businesses and consumers on mobile phones through a range of value-added mobile applications.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment results as included in the reports that are reviewed by the Group's Chief Operating Decision Maker ("CODM") which the directors have determined to be the board of directors.
The following tables present revenue and profit and certain asset and liability information regarding the Group's reportable segments:
Year ended 31 December Other
2016
ROI UK locations Total
EUR'000 EUR'000 EUR'000 EUR'000
External revenue 2,782 28,193 1,126 32,101
Gross profit 670 3,287 158 4,115
Impairment expense 572 5,588 190 (6,350)
Unallocated expenses - - - (2,984)
Operating loss (5,219)
Net finance expense (3)
Loss before income
tax (5,222)
Income tax expense (131)
Loss for year (5,353)
Unallocated expenses include the following non-cash items;
EUR,000
Depreciation 79 Amortisation 352 Share based payment expense 16
Unallocated expenses also include central overhead and payroll costs which are not allocated to individual reporting segments.
3 Operating segments (continued)
As at 31 December Other
2016
ROI UK locations Total
EUR'000 EUR'000 EUR'000 EUR'000
Segment assets 264 2,585 87 2,936
Unallocated assets - - - 7,262
Total assets 10,198
Segment liabilities (363) (3,550) (121) (4,034)
Total liabilities (4,034)
Other information Unallocated Total
EUR'000 EUR'000
Capital expenditure
Property, plant and equipment 42 42
Unallocated assets are assets that cannot be attributed to a specific segment and comprise property, plant and equipment, software, deferred tax and cash and cash equivalents.
3 Operating segments (continued)
Year ended 31 December 2015
Other
ROI UK locations Total
EUR'000 EUR'000 EUR'000 EUR'000
External revenue 3,076 20,540 673 24,289
Gross profit 915 4,028 167 5,110
Unallocated expenses (2,637)
Operating profit 2,473
Net finance expense (16)
Profit before income
tax 2,457
Income tax expense (319)
Profit for year 2,138
Unallocated expenses include the following non-cash items;
EUR,000
Depreciation 78 Amortisation 368 Share based payment expense 76
Unallocated expenses also include central overhead and payroll costs which are not allocated to individual reporting segments.
3 Operating segments (continued)
As at 31 December Other
2015
ROI UK locations Total
EUR'000 EUR'000 EUR'000 EUR'000
Segment assets 1,369 8,844 316 10,528
Unallocated assets 6,878
Total assets 17,406
Segment liabilities (723) (4,672) (167) (5,562)
Unallocated liabilities (109)
Total liabilities (5,671)
Other information Unallocated Total
EUR'000 EUR'000
Capital expenditure
Property, plant and equipment 95 95
Intangible assets 306 306
Unallocated assets are assets that cannot be attributed to a specific segment and comprise property, plant and equipment, software, deferred tax and group cash. Unallocated liabilities relate to borrowings and corporation tax payable.
4 Income tax expense
(a) Amounts recognised in profit or 2016 2015
loss
EUR'000 EUR'000
Current tax expense:
Current year 24 319
24 319
Deferred tax expense:
Derecognition of deferred tax asset 107 -
Total tax expense 131 319
5 (Loss)/earnings per share
Basic (loss)/earnings per share amounts are calculated by dividing net (loss)/profit for the year attributable to ordinary equity holders of the parent by the weighed average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net (loss)/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 the conversion of all the dilutive potential ordinary shares into ordinary shares if the effect is not accretive.
The following reflects the income and share data used in the basic and diluted loss per share computations:
2016 2015
Basic EPS (EUR0.054) EUR0.022
Diluted EPS (EUR0.054) EUR0.021
The potential ordinary shares are antidilutive in the current year given the performance as disclosed below. Consequently Diluted EPS is equivalent to Basic EPS for the year ended 31 December 2016.
2016 2015
EUR'000 EUR'000
Net (loss)/profit attributable to equity
holders of the parent (5,353) 2,138
2016 2015
Numbers in Numbers in
Thousands Thousands
Basic weighted average number of shares 99,451 99,451
Dilutive potential ordinary shares:
Employee share options (a) - 1,187
Diluted weighted average number of
shares 99,451 100,638
(a) The impact of exercising share options had it not being antidilutive would be to increase the weighted average outstanding number of ordinary shares by approximately 805,000 shares.
6 Adjusted earnings per ordinary share
The following reflects adjusted earnings per share based on adjusted net income:
2016 2015
Adjusted basic EPS EUR0.013 EUR0.025
Adjusted diluted EPS EUR0.013 EUR0.025
Adjusted net income is calculated as: 2016 2015
EUR'000 EUR'000
(Loss)/profit after tax (5,353) 2,138
Addback:
Impairment of goodwill and intangible
assets 6,350 -
Share-based payments expense 16 76
Amortisation, net of tax 308 322
Adjusted net income 1,321 2,536
Reconciliation of reported operating profit across all segments to earnings before interest, tax, depreciation and amortisation ("EBITDA"), as adjusted for non-cash and non-recurring items ("adjusted EBITDA") is as follows:
2016 2015
EUR'000 EUR'000
Reported operating (loss)/profit (5,219) 2,473
Depreciation 79 78
Share-based payment expense 16 76
Amortisation of intangible assets 352 368
Impairment of goodwill and intangible
assets (note 16) 6,350 -
Redundancy costs 52 -
Non-recurring professional fees (note
23) 41 -
_________ _________
Adjusted EBITDA 1,671 2,995
7 Impairment of goodwill and intangible assets
Goodwill arising from business combinations in prior years and intangible assets were tested for impairment at 31 December 2016. Based on the assessment performed, the directors have determined that an impairment charge of EUR6,350,000 (2015: Nil) is required in the year. The net book value of goodwill and intangibles at 31 December 2016 is EURNil (2015: EUR6,428,000).
8 Related party disclosures
Compensation of key management
2016 2015
EUR'000 EUR'000
Short-term employee benefits 408 569
Share based payments 16 54
Pension benefits 14 18
Settlement of share options 85 -
523 641
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and includes the executive and non-executive directors and certain members of senior management. Key management personnel received total compensation of EUR523,000 (2015: EUR641,000) during the year ended 31 December 2016, including EUR85,000 in settlement of outstanding share options owned by the former Chief Executive Officer which resulted in the utilisation of EUR54,000 from the share based payment reserve. Total remuneration is included in other administrative expenses.
During the year, the Group incurred professional service fees of EUR41,000 (2015: EURNil) payable on an arms-length basis to a company which employs a former non-executive director of the Group, Edmond Murphy. Amounts payable remain outstanding as at the balance sheet date.
There were no other related party transactions in the period under review.
9 Litigation
In the normal course of business, the Group is involved in various legal proceedings with third parties, the outcome of which is uncertain. Where appropriate, provision is made in the financial statements based on the directors' best estimate of the potential outcome of such proceedings. It is the policy of the Group to rigorously defend all legal actions taken against the Group.
10 Post balance sheet events
Detrimental regulatory changes introduced during late 2016 have both impacted the Group's performance in the short term and the ability for the Group to sustain profitability going forward. In light of these changes, in February 2017, the Board took the decision to formally wind down existing business lines over the course of 2017.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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March 31, 2017 02:00 ET (06:00 GMT)
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