TIDMIMO
RNS Number : 9184Q
IMImobile PLC
23 June 2015
IMIMOBILE PLC
("IMI" or "the Company" or "the Group")
Audited Preliminary Results for the year ended 31 March 2015
IMImobile PLC, a London based global technology company which
provides software and services for mobile engagement today
announces its Audited Preliminary Results for the year ended 31
March 2015.
Financial highlights:
-- Revenue up 13% to GBP48.9m (2014: GBP43.4m)
-- Gross profit up 8% to GBP30.0m (2014: GBP27.9m)
-- EBITDA(1) up 27% to GBP9.2m (2014: GBP7.2m)
-- Adjusted profit after tax(2) up 48% to GBP5.6m (2014: GBP3.8m)
-- Loss after tax on a statutory basis of GBP3.4m (2014: GBP3.9m
profit) reflecting share based payments and costs in relation to
IPO and acquisition activities
-- Good contribution from Europe with organic(3) annual gross profit growth of 26%
-- Managed solution growth in MEA of 16%
-- Net cash generated from operating activities of GBP8.2m,
representing operating cash conversion(4) of 90% (2014: 121%)
-- Free cash flow(5) of GBP6.6m (2014: GBP6.9m)
-- Cash and cash equivalents at 31 March 2015 of GBP14.6m (2014: GBP9.3m)
Operational highlights:
-- New major client wins in all regions
-- Key new contracts signed in India with revenue benefit expected in FY16
-- Renewal of several major contracts including the BBC, a
multi-national North African telecoms operator and a major motoring
organisation
-- Listed on AIM in June 2014 raising net proceeds of
approximately GBP7m for the Company (after considering fees and the
acquisition of the Group) to support significant growth
opportunities
-- Acquisition and successful integration of TxtLocal Limited
(TextLocal), trading well since acquisition in October 2014
Outlook
The 2016 financial year has started well, building on the
successes of 2015. Trading is in line with Directors'
expectations.
The contracts won last year will help to enhance revenues and
profitability in 2016 and beyond. Deployments and new product
developments are progressing as planned and the high mix of repeat
and recurring revenues gives us confidence and good visibility. We
continue to invest in sales and marketing activities which we
anticipate will underpin our organic growth forecasts for the
coming years.
We also continue to innovate and are excited about the changes
in our marketplace and we expect to use our financial and cash
strength to further our ambitions to consolidate a fragmented
market and accelerate our reach into enterprise customers.
IMImobile remains well placed to take advantage of the macro
trends affecting the markets in which we operate and we remain
confident about our prospects for the year ahead.
Jay Patel, Chief Executive Officer of IMImobile PLC,
commented:
"2015 was a transformational year for IMImobile, listing on the
AIM market in June 2014 and also making the acquisition of
TextLocal which has been successfully integrated into the business
and is generating profit for the Group.
We continue to deliver good performance across the key financial
metrics whilst continuing to invest in our technology roadmaps and
geographic expansion. We expect organic growth in all our key
markets and will use our financial and cash strength to further our
ambitions to consolidate a fragmented market.
We are well positioned to exploit the macro trends around
increasing mobile usage and digitisation of business operations and
we remain confident about our prospects for the future."
An analyst meeting will be held at 09.30am today at the offices
of Buchanan, 107 Cheapside, London, EC2V 6DN. To attend please
contact Buchanan.
Cautionary statement
This announcement contains forward-looking statements that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as anticipate, target, expect, estimate, intend, plan, goal,
believe, will, may, should, would, could, is confident, or other
words of similar meaning. Undue reliance should not be placed on
any such statements because they speak only as at the date of this
document and, by their very nature, they are subject to known and
unknown risks and uncertainties and can be affected by other
factors that could cause actual results, and IMImobile's plans and
objectives, to differ materially from those expressed or implied in
the forward-looking statements.
There are a number of factors which could cause actual results
to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are; increased competition, the loss of
or damage to one or more key customer relationships, the outcome of
business or industry restructuring, changes in economic conditions,
currency fluctuations, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines,
technological developments, the failure to retain key management,
or the key timing and success of future acquisition opportunities
or major investment projects.
IMImobile undertakes no obligation to revise or update any
forward-looking statement contained within this announcement,
regardless of whether those statements are affected as a result of
new information, future events or otherwise, save as required by
law and regulations.
For further information please contact:
IMImobile PLC c/o Buchanan
Jay Patel, Chief Executive Officer Tel: +44 (0)20
Mike Jefferies, Group Finance Director 7466 5000
Buchanan - Financial PR adviser Tel: +44 (0)20
Mark Edwards / Gabriella Clinkard 7466 5000
/ Stephanie Watson imimobile@buchanan.uk.com
SPARK Advisory Partners - Nominated Tel: +44 (0)203
adviser 368 3550
Matt Davis / Sean Wyndham-Quin
Whitman Howard - Joint Broker Tel: +44 (0)207
Ranald McGregor-Smith 659 1234
WH Ireland - Joint Broker Tel: +44 (0)207
Adrian Hadden 220 1666
About IMImobile PLC
IMImobile is a leading provider of software and services for
mobile engagement. Its services, delivered in over 60 countries in
Europe, the Americas, MEA and India, help its clients to
communicate and transact with their customers more effectively on
mobile devices. The Company's solutions allow customers to use
mobile as a channel to create new revenue streams, as a CRM and
customer engagement channel, and as a channel to improve business
operations.
IMImobile's DaVinci suite of products is modular, scalable and
delivered through cloud infrastructure which is integrated into
mobile operator networks, internet services and social media
platforms. The products and solutions have helped IMImobile
establish a blue-chip client base of leading mobile operators and
global enterprises. Key customers include Vodafone, O2, Telefonica,
Aircel, Airtel, BSNL, AT&T, MTN, France Telecom, Centrica,
Coca-Cola, Universal Music, Tata, the AA, the BBC and major
financial institutions.
The Company is headquartered in London with regional head
offices in Hyderabad, Atlanta and Dubai and has approximately 680
employees worldwide.
Chairman's Statement
Following another year of strong growth for the Group I am
delighted to introduce this year's preliminary results
announcement. The year to 31 March 2015 was one which saw the
Company list on AIM, make and successfully integrate a significant
acquisition and continue to grow and generate cash. Our product and
solution offering has never been stronger and we are helping more
clients than ever with engaging their customers on mobile
devices.
Since founding the Group we have been focused on the
opportunities created by the expansion of mobile operator networks
and their capacity to carry data services. The continued evolution
and growth of these networks and smartphones provides the
foundations for new business opportunities. Since we started the
business we have remained entrepreneurial in our approach to
product and market development and we shall remain so in what has
become a complex and competitive eco-system.
We maintain our focus on profitable and cash generative growth
and continue to expand the international footprint of our business
to fully leverage the intellectual property created by the Group. I
am very happy to have further consolidated our position in Europe,
welcoming TextLocal to the IMImobile family this year. TextLocal's
market leading platform for small and medium sized businesses
complements the existing IMImobile offering and presents another
exciting opportunity to leverage our international footprint.
In the year to 31 March 2015 revenues grew by 13% to GBP48.9m
(2014: GBP43.4m) with significant growth coming from Europe and
managed solutions contracts across the Middle East and African
region. Although the growth has been tempered by continuing
declines from our Indian and South East Asia region, the year ended
positively with contract wins and new deployments which will
contribute to the region in the coming year. On a statutory basis
the Group made a loss after tax of GBP3.4m in the year to 31 March
2015 (2014: GBP3.9m profit), after charging GBP7.3m of share based
payment expense and GBP1.6m of non-recurring IPO and acquisition
related costs. On an adjusted basis the profit after tax of the
Group was GBP5.6m(6) (2014: GBP3.8m).
We operate in competitive and fast moving markets and I would
like to thank the wider IMImobile team whose commitment and drive
have made our successes possible. We continue to invest in,
incentivise and reward our stable and growing team. This enables us
to attract and retain the best talent who can drive technological
innovation and sales growth and help us to deliver on our other
strategic objectives.
Our strategy from foundation has been to create intellectual
property that can be deployed in global markets through a business
model of recurring revenues. We believe that our DaVinci platform,
our core product offering and professional services position us
well to take advantage of the structural trends surrounding
mobility, social networking and cloud computing.
Chief Executive's Report
The year to 31 March 2015 has been another good year of
profitable growth for the Group on an adjusted basis(7) across all
of the key financial metrics. We continue to strengthen our balance
sheet, with strong cash conversion from operations and have made
investments in the sales and marketing areas of our business,
particularly in Europe and the Americas. We have enjoyed very
strong growth in Europe during the year to 31 March 2015 and have
also grown our recurring revenue base in the Middle East and
Africa. Conditions remained challenging in India throughout the
year; however, the year ended strongly in this region with several
key new contract wins which will deliver revenues during the new
financial year.
Market overview
We are living in a period of great change driven by technology,
the ubiquity of mobile networks, increasing processing power of
mobile devices and the falling costs of cloud computing are
disrupting many industries and providing tremendous opportunities
for value creation. The impact of these changes to consumer
behaviour is compelling all consumer-facing businesses to
fundamentally assess how they engage with their customers. At the
core of IMImobile we are a technology company providing a
combination of software and services to enable our clients to fully
embrace the changes taking place whether they create additional
revenue opportunities or help reduce operating costs.
Our strategy has been to ensure that our platforms and services
are network, channel and device agnostic. The guiding principle
being to ensure our clients have a partner that is able to deliver
the right experience for their customers across a customer base
that maybe highly fragmented in its use and adoption of
technologies.
Though we operate in a highly competitive, complex and
fast-changing environment we continue to be excited about
technological change. Over the last year we have seen the
successful launch of 4G networks in the UK and expect 4G to be
launched in India later this year, growth of 22% in global
smartphone ownership to over 2 billion devices(8) and the
phenomenal rise of IP messaging. We believe that better networks,
more devices and more complexity provide great opportunities to
leverage our existing software and are confident that we have the
product roadmaps and resources in place for a promising future.
Products and platform
DaVinci ESP
Since foundation we have created and owned all our intellectual
property and at the core is the DaVinci Evolved Service Platform
which has been developed with hundreds of person-years of
engineering effort. It provides a unified, fully integrated and
standards-based environment to create, deliver and manage a wide
range of cross-channel enterprise and consumer services. The
platform utilises a broad spectrum of enablers including mobile
operator connectivity (for messaging, charging, identity and
location), device repositories, over-the-top (OTT) messaging,
payment mechanisms and integrations with OEM environments and
social media platforms.
The platform comprises several distinct yet fully interoperable
modules which are designed to function in a standalone mode or as
part of a fully integrated suite. Each module delivers
enterprise-grade performance, availability and scalability and
exposes open industry-standards based APIs.
The platform includes a flexible metadata driven service
creation layer, which provides an environment for configuring new
services. The 'configure, not code' approach means new services can
be launched cost-effectively, reliably and quickly and
customisations can be delivered rapidly.
Our Software Applications
DaVinci CMS
The DaVinci Content Management System has been architected and
developed to support the delivery of a wide array of content types
to the universe of connected devices - from basic feature phones
and PCs to smartphones, tablets and in-car infotainment systems.
The product acts as a digital exchange managing multiple content
owners, content aggregators, developers and service providers
through a single unified environment. Key features include
end-to-end content lifecycle management, partner management and an
in-built portal engine allows user interfaces to be configured and
rendered across thousands of device types.
DaVinci CMS has been widely deployed around the world and
currently powers content storefronts for a range of mobile
operators, digital distribution for major music labels and
m-Governance citizen services for Government bodies.
Campaign Manager
Campaign Manager enables omni-channel marketing campaigns.
Supported channels include SMS, MMS, Email, USSD, In-app push
notifications and Voice. The product supports different types of
campaigns such as promotional, event-triggered, interactive,
progressive and multi-wave campaigns. Integration with DaVinci
Profile Manager enables fine-grained target group definition and
the application of analytical models such as propensity modelling
and clustering. Configurable A/B testing and control groups allow
campaigns to be optimized for maximizing campaign
effectiveness.
Campaign Manager today is used for cross-sell, up-sell,
information, engagement and customer delight campaigns for mobile
operators, retailers, financial institutions and gaming companies
delivering over a billion customer interactions annually.
OpenHouse
OpenHouse exposes service enablers (messaging, voice, location,
presence etc.), federated within the underlying DaVinci platform,
as a set of APIs which are augmented with tools such as a workflow
designer, call flow builder and a high-performance rules engine to
enable rapid service creation. The multi-tenanted architecture
allows the software to be delivered as a service. OpenHouse allows
customer identities to be linked to individual channel identities
enabling the messaging APIs to be used in a channel-agnostic way.
It provides intelligent message routing based on customer
preferences, channel cost, presence, priority and other factors.
OpenHouse also provides software development kits or SDKs which not
only enable in-app messaging and push notifications but also
facilitate data collection from devices to provide customer context
to enrich communications and trigger operational workflows.
Transaction alerts, fraud prevention, account notifications,
two-factor authentication and service messages are some examples of
applications built on top of OpenHouse and currently live for
leading enterprises in multiple markets.
TextLocal
TextLocal is a SaaS business messaging tool and has been widely
adopted by SMEs and large brands alike. The product today delivers
nearly 250 million customer interactions annually in the UK. In
addition to basic SMS messaging, TextLocal supports file
attachments, surveys, landing pages, data capture forms, ticketing,
coupons, vouchers, loyalty cards and other value-added features. It
provides sophisticated data import, target group definition, audit
logs and role-based access control which make the product ideally
suited for enterprise usage whilst providing an extremely intuitive
and easy-to-use interface for simpler use cases.
DaVinci Social
DaVinci Social aggregates high volumes of inbound customer /
audience messages from multiple channels such as Facebook, Twitter
and SMS. It allows configuration of rules and workflows to process
the inbound messages and includes a curation console which can be
used to identify messages which require further manual processing
such as referring the message to a customer care agent or a
presenter (in a broadcasting scenario).
DaVinci Social has been deployed for leading broadcasters such
as the BBC and other major media houses powering their audience
engagement programmes.
Direct Carrier Billing (DCB)
DCB allows consumers to pay for digital content, in-app
purchases, contests, donations and other such services through
their mobile phone bill. The product includes a merchant portal
where merchants may register themselves, request for specific price
points, get access to a common charging API and view transaction
reports. One single API provides access to multiple mobile
operators thereby insulating merchants from the complexities of
integrating with each mobile operator separately.
Each of the products above has a continual roadmap of
development, which has been developed in discussions with clients,
and analysis of technology and market trends. Over the next year we
expect to continue developing technologies that help clients use
video, IP messaging and the plethora of new devices.
Regional performance
The Group is managed commercially and strategically on a
regional basis with centralised resources for software development,
finance and general management in the UK. A key operating metric
for each region is gross profit as there are considerable
differences in gross margins across regions, product lines and
revenue models. Gross profit also measures most directly the value
of the software and solutions delivered by the Group which excludes
the impact of network infrastructure, third party hardware and
content costs.
Europe and the Americas
Europe gross profit GBP15.7m (2014: GBP11.0m)
Europe makes up over 52% of Group gross profit. Including the
contribution made by TextLocal, gross profit in Europe grew by over
43%. Organic(9) annual gross profit growth in the same period was
strong at just over 26%. Gross margins also increased in the region
thanks to favourable mix of delivery models and the falling costs
of third party network infrastructure, a trend we expect will
continue.
The growth in the region comes from a combination of new client
wins across mobile operator, retail and gambling and gaming sectors
and upsell and cross sell to existing customers. No major clients
were lost during the period and we have maintained investment in
our sales and marketing teams during the year to position ourselves
well for future growth. We are very pleased with the acquisition
and integration of TextLocal, it has met expectations on financial
targets and synergies and we shall be leveraging our global
footprint and resources to launch the product in our existing and
new geographies.
All our products and platforms are live in this region and we
continue to be well positioned to exploit the macro trends around
increasing mobile usage and digitisation of business operations.
Our largest clients are mobile operators and with consolidation
taking place in that sector it has provided us with opportunities
to position ourselves as a trusted reliable vendor with deep
integrations. We see significant opportunities in the financial
services sector as digitisation and mobilisation of existing
processes becomes a necessity. We also see opportunities with large
consumer brands that look to engage with their customers via
digital marketing programmes and I am pleased that we have won
several industry accolades, including "Best Relationship Building /
CRM" for a programme run with O2 in the UK and "Best Mobile
CRM/Enterprise Messaging Campaign" for the work we have done with
Ikea.
We continue to invest in establishing our operations in the US
market and are pleased with progress to date. We have started
working with leading operators and developed a good experienced
team on the ground.
Middle East and Africa
Gross profit GBP8.6m (2014: GBP10.7m)
Our business in the MEA region performed well in the year, with
gross profit growth of 16% in recurring managed solutions
contracts. The business in MEA is largely based on group
relationships with the leading mobile operators in the region and
our growth is based on new territory and service deployments for
existing customers. In the year to 31 March 2015 we saw new
services going live in Senegal, Ghana, Nigeria, Guinea Conakry and
Niger.
There was an expected decline in year-on-year gross profit from
licence revenues following an exceptional year to 31 March 2014.
Gross profit from licence revenue of GBP2.9m in the year to 31
March 2015 represents a decline of roughly 50% compared to the
prior period, and includes revenue from deployments for a global
Systems Integrator and multiple mobile operators across Africa.
These multi-million US Dollar licence deals are typically for an
installation of the entire DaVinci ESP or multiple modules in the
platform and demonstrate the value inherent in the intellectual
property.
Though deployments can be lengthy and local network
infrastructure and connectivity unstable, the Group has
demonstrated an ability to deliver revenue generating services
successfully in challenging circumstances and as a result is well
placed to benefit from the predicted growth of mobile usage across
MEA. Currently the DaVinci ESP and CMS are the main offerings in
the region sold to mobile operators however over the coming year we
expect to establish our broader product set in the region catering
not only to telecom operators but enterprise and government as
well.
India and SE Asia
Gross Profit GBP5.0m (2014: GBP5.9m)
The performance in India has been disappointing with a gross
profit decline of 15% compared with the year to 31 March 2014. In
local currency the reduction was 13%. The continued decline is a
direct consequence of the implementation of new consumer protection
regulation that has impacted our customers, chiefly the mobile
network operators. In India our main activity is managing certain
content and value added telecom services for mobile operators and
tighter regulation requiring operators to seek additional consents
to sign customers up to these services led to a period of
transition as new third party consent gateways have been
implemented.
As a Group we have welcomed the changes as overly aggressive
marketing and over-charging had damaged consumer perception of
mobile services and we believe that in the long term the changes
will benefit the overall market and are confident of our return to
growth for mobile services in this region.
During the period we have successfully won multiple managed
solution contracts with additional operators in India, Myanmar and
Nepal which are currently under deployment and which we expect to
contribute to revenue in the coming year. We also expect additional
revenue growth to come from our efforts in broadening our offering
in the region. Over the last year we have invested in sales and
marketing into new sectors and are pleased with progress having
signed new customers in the public sector and with leading consumer
brands. We will continue to invest in targeting new sectors and
expect to launch additional SaaS products over the coming year.
Outlook
The 2016 financial year has started well, building on the
successes of 2015. Trading is in line with Directors'
expectations.
The contracts won last year will help to enhance revenues and
profitability in 2016 and beyond. Deployments and new product
developments are progressing as planned and the high mix of repeat
and recurring revenues gives us confidence and good visibility. We
continue to invest in sales and marketing activities which we
anticipate will underpin our organic growth forecasts for the
coming years.
We also continue to innovate and are excited about the changes
in our marketplace and we expect to use our financial and cash
strength to further our ambitions to consolidate a fragmented
market and accelerate our reach into enterprise customers.
I believe IMImobile remains well placed to take advantage of the
macro trends affecting the markets in which we operate and we
remain confident about our prospects for the year ahead.
Financial Review
The Company was incorporated on the 4 December 2013 and did not
trade prior to listing on 27 June 2014.
On 27 June 2014 the Company was successfully admitted to trading
on AIM, a market operated by the London Stock Exchange. The initial
placing, which comprised of 25,000,000 Ordinary shares at GBP1.20
per Ordinary Share, raised gross proceeds of GBP30,000,000.
GBP19,868,014 of the proceeds raised was used by the Company to
satisfy its obligations to pay the cash consideration for the
acquisition of IMI Mobile Private Limited, and its subsidiaries.
The financial information included in this preliminary announcement
and in the Group's audited financial statements for the year ended
31 March 2015 reflect the acquisition of IMI Mobile Private Limited
by IMImobile PLC. This has been accounted for as a capital
reorganisation with the results and financial position shown on an
ongoing basis to reflect the substance of the transaction, with the
24% interest in IMI Mobile Private Limited owned by the two
founding shareholders accounted for as a non-controlling
interest.
Group performance at a glance
Year ended 31 March 2015 2014 Growth
GBPm GBPm / (decline)
Revenue 48.9 43.4 13%
------------------------------------- ------- ------ -------------
Gross Profit 30.0 27.9 8%
Gross Margin 61.4% 64.3%
------------------------------------- ------- ------ -------------
EBITDA 9.2 7.2 27%
EBITDA Margin 18.7% 16.6%
------------------------------------- ------- ------ -------------
Operating profit before share-based
payments and exceptional items 6.7 5.1 31%
------------------------------------- ------- ------ -------------
(Loss) / profit before tax (2.3) 5.3 (143%)
------------------------------------- ------- ------ -------------
Adjusted profit before tax(10) 6.7 5.1 31%
------------------------------------- ------- ------ -------------
(Loss) / profit after tax (3.4) 3.9 (186%)
------------------------------------- ------- ------ -------------
Adjusted profit after tax(11) 5.6 3.8 48%
------------------------------------- ------- ------ -------------
Diluted EPS (5.3p)
------------------------------------- ------- ------ -------------
Diluted adjusted EPS(12) 8.9p
------------------------------------- ------- ------ -------------
Cash at period end 14.6 9.3 57%
------------------------------------- ------- ------ -------------
Key performance indicators (KPIs)
This section sets out the KPIs for the Group during the year
ended 31 March 2015.
Group revenue and gross profit
For the year to 31 March 2015 total revenue increased by 13% to
GBP48.9m (2014: GBP43.4m) and gross profit increased by 8% to
GBP30.0m (2014: GBP27.9m). The Board considers that gross profit is
the key operational measure of performance in the business.
Group geographical split of revenues and gross profit is as
follows:
Revenue
Year ended 31 March 2015 2014 Growth
GBPm GBPm / (decline)
Europe 27.2 21.2
---------------------------- ------ ------ -------------
Less: Greek subsidiary(13) - (0.1)
---------------------------- ------ ------ -------------
Europe excluding
Greek subsidiary 27.2 21.1 28%
---------------------------- ------ ------ -------------
Middle East & Africa 11.3 13.3 (15%)
---------------------------- ------ ------ -------------
India & South East
Asia 9.6 8.5 13%
---------------------------- ------ ------ -------------
Rest of World 0.8 0.4 76%
---------------------------- ------ ------ -------------
Total (including
Greek subsidiary) 48.9 43.4 13%
---------------------------- ------ ------ -------------
Gross profit
Year ended 31 March 2015 2014 Growth
GBPm GBPm / (decline)
Europe 15.7 11.0
---------------------------- ------ ------ -------------
Less: Greek subsidiary(14) - (0.1)
---------------------------- ------ ------ -------------
Europe excluding
Greek subsidiary 15.7 10.9 43%
---------------------------- ------ ------ -------------
Middle East & Africa 8.6 10.7 (19%)
---------------------------- ------ ------ -------------
India & South East
Asia 5.0 5.9 (15%)
---------------------------- ------ ------ -------------
Rest of World 0.7 0.3 93%
---------------------------- ------ ------ -------------
Total (including
Greek subsidiary) 30.0 27.9 8%
---------------------------- ------ ------ -------------
The Europe region gross profit grew by 43% in the year after
removing the impact of the non-core Greek subsidiary from the prior
year results which was sold in May 2013. The post-acquisition
result of TextLocal represents 17% of the increase in gross profit
for the region. Gross margin in Europe in the year was 57.8% up
from 51.8% in 2014 in part as a consequence of the declining cost
of third party network infrastructure.
Gross profit from managed solution contracts increased by 16% in
the year, however, licence fee income recognised in the prior year
in the Middle East & Africa (MEA) region were not repeated to
the same extent this year, resulting in regional gross profit
decreasing by 19% to GBP8.6m (2014: GBP10.7m). Gross margin in MEA
reduced to 76.2% from 80.6%, again reflecting the decreased
proportion of licence fees recognised during the period.
In GBP the Indian and SEA region gross profit declined in the
year by 15% to GBP5.0m (2014: GBP5.9m). A proportion of the year on
year decline was attributable to the weakening of the Indian Rupee
against the Pound, and in local currency gross profit fell by 13%.
The major reason for decline in gross profit in local currency was
the implementation of regulations in the Indian market imposed by
the Telecom Regulatory Authority of India ("TRAI Regulations")
which affected the managed solutions provided to the mobile
operators in India. The TRAI Regulations include limitations on the
volume of promotions that can be sent to consumers and the
requirement for additional third-party consent to be obtained prior
to the billing of any consumers for services consumed via the
mobile device.
Operating costs before amortisation, depreciation, impairment
costs, share-based payments and exceptional items
Operating costs before amortisation, depreciation, impairment
costs, share-based payments and exceptional items in the year were
GBP20.9m (2014: GBP20.7m).
EBITDA(15) and operating profit before share-based payments and
exceptional items
EBITDA for the year to 31 March 2015 was GBP9.2m (2014: GBP7.2m)
and operating profit before share-based payments and exceptional
items was GBP6.7m (2014: GBP5.1m) representing an increase of 31%
against the prior year.
Group cash flow and working capital
Year end cash and cash equivalents were GBP14.6m (2014:
GBP9.3m). There were no bank borrowings at 31 March 2015 (2014:
GBPnil). Cash generated from operations was GBP8.2m (2014: GBP8.7m)
and represents an operating cash flow conversion of 90% of EBITDA
(2014: 121%). The Company listed on AIM on 27 June 2014 raising
GBP6.5m cash for the Company after deducting one-off IPO related
expenditure. On the 13 October 2014 the Group acquired the entire
share capital of TextLocal comprising an initial cash consideration
of GBP10.0m, the value of cash included in the acquired net assets
of TextLocal was GBP2.0m.
Group working capital is made up as follows:
As at 31 March 2015 2014
GBPm GBPm
----------------------------- ------- -------
Cash and cash equivalents 14.6 9.3
Trade and other receivables 19.8 21.4
Trade and other payables (20.1) (20.4)
----------------------------- ------- -------
Net working capital 14.3 10.3
----------------------------- ------- -------
Trade receivables and payables include "pass through" amounts
generated from mobile payment transactions. The receivables are
from mobile operators and payables to customers who use IMImobile's
payment APIs. These amounts are excluded from revenues and cost of
sales, as the Group accounts only for the commission earned on such
transactions within revenue as it is not the principal obligor in
the arrangement. The value of pass through revenues included in
trade and other receivables at 31 March 2015 is GBP3.2m (2014:
GBP4.8m) and the value of pass through revenues included in trade
and other payables at 31 March 2015 is GBP5.2m (2014: GBP6.0m).
Group loss / profit after tax
Loss after tax was GBP3.4m (2014: profit of GBP3.9m) after the
impact of IPO and other exceptional costs of GBP1.6m (2014:
GBP0.1m), share based payment charges net of deferred tax of
GBP6.7m (2014: GBP0.1m), impairment of available-for-sale financial
assets of GBP0.1m (2014: GBPnil), de-recognition of deferred tax
assets of GBP0.5m (2014: GBPnil) and a one-off gain from the
disposal of a subsidiary of GBPnil (2014: GBP0.3m). Adjusted profit
after tax was GBP5.6m (2014: GBP3.8m) representing an increase of
48% against the prior year.
Earnings per share
Diluted loss per share was 5.3p. Diluted adjusted EPS was
8.9p.
Other financial information
Group taxation
The tax charge for the year was GBP1.1m (2014: GBP1.3m). The
effective rate of tax(16) for the year was 16.7% (2014: 26.1%).
Group Capital expenditure
Capital expenditure during the year was GBP1.5m (2014: GBP1.9m)
split between plant, property and equipment of GBP1.0m (2014:
GBP1.7m) and third party software GBP0.5m (2014: GBP0.2m).
Goodwill
Goodwill held at 31 March 2015 was GBP17.9m (2014: GBP7.9m)
following the acquisition of TextLocal. There were no other changes
to the carrying amount of goodwill in the year.
Redeemable Preference Shares
There were no redeemable preference shares in issue at 31 March
2015 (2014: GBP10.9m). The optionally convertible preference shares
that were in issue on 31 March 2014 were converted to equity on 20
June 2014, prior to the listing of the Company.
IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Income Statement For the year ended
31 March 2015
Year Year
ended ended
31 March 31 March
Notes 2015 2014
GBP000 GBP000
Revenue 2,4 48,876 43,404
Cost of sales (18,848) (15,505)
Gross profit 4 30,028 27,899
Operating costs:
Other operating costs (20,872) (20,681)
Depreciation and amortisation (2,442) (2,106)
Share based payment charge 11 (7,294) (150)
IPO and acquisition related
costs (1,575) (67)
Impairment of available-for-sale
financial assets (145) -
Operating (loss) / profit (2,300) 4,895
Investment income 13 31
Finance costs - (5)
Gain on sale of subsidiary - 340
(Loss) / profit before tax (2,287) 5,261
Tax 5 (1,076) (1,342)
(Loss) / profit for the year (3,363) 3,919
(Loss) / profit for the year
attributable to:
Equity holders of the company (5,975) 3,919
Non-controlling interest 2,612 -
(Loss) / profit for the year (3,363) 3,919
EBITDA(17) 9,156 7,218
Basic (loss) / earnings per
share 6 (7.6p)
Adjusted basic earnings per
share 6 12.6p
Diluted (loss) / earnings
per share 6 (5.3p)
Adjusted diluted earnings
per share 6 8.9p
IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2015
Year Year
ended ended
31 March 31 March
2015 2014
GBP000 GBP000
(Loss) / profit
for the year (3,363) 3,919
Items that may be reclassified
subsequently to profit
or loss:
Exchange differences on
translation of foreign
operations
Equity holders of the parent 1,066 (330)
Non-controlling interest 352 -
Other comprehensive income
/ (expense) for the year 1,418 (330)
Total comprehensive (expense)
/ income for the year (1,945) 3,589
Total comprehensive (expense)
/ income for the year attributable
to:
Equity holders of the parent (4,909) 3,589
Non-controlling interest 2,964 -
Total comprehensive (expense)
/ income for the year (1,945) 3,589
IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS
Statement of Changes in Equity
For the year ended 31 March 2015
Capital Total Non-controlling
restructuring equity interest
Share reserve Retained attributable
based Earnings to
Share Share Translation payment / shareholders Total
capital premium reserve reserve (Deficit) of parent equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31
March 2013 4,287 6,801 2,508 1,122 (7,392) 2,672 9,998 - 9,998
Profit for the
year - - - - - 3,919 3,919 - 3,919
Foreign
exchange
differences - - (330) 19 - - (311) - (311)
Share based
payment
charge - - - 131 - - 131 - 131
Proceeds from
share issue 237 1,482 - - (1,146) - 573 - 573
Dividends - - - - - (415) (415) - (415)
Balance at 31
March 2014 4,524 8,283 2,178 1,272 (8,538) 6,176 13,895 - 13,895
Capital
restructuring (2,295) 16,230 - - (20,502) (6,546) (13,113) 6,546 (6,567)
Loss for the
year - - - - - (5,975) (5,975) 2,612 (3,363)
Foreign
exchange
differences - - 1,066 - - - 1,066 352 1,418
Share based
payment
charge - - - 7,294 - - 7,294 - 7,294
Proceeds from
share issue 2,505 27,509 - - - - 30,014 - 30,014
Issue of
shares
as part of
acquisition 71 929 - - - - 1,000 - 1,000
Cost of share
issue - (2,055) - - - - (2,055) - (2,055)
Cancellation
of
share options - - - (2,697) - - (2,697) - (2,697)
Balance at 31
March 2015 4,805 50,896 3,244 5,869 (29,040) (6,345) 29,429 9,510 38,939
IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statement of Financial Position
As at 31 March 2015
As at As at
31 March 31 March
Notes 2015 2014
GBP000 GBP000
Non-current assets
Goodwill 7 17,934 7,861
Other intangible assets 1,678 475
Available-for-sale financial
assets 279 424
Property, plant and equipment 4,285 5,134
Deferred tax assets 911 871
Total non-current assets 25,087 14,765
Current assets
Cash and cash equivalents 8 14,617 9,305
Trade and other receivables 9 19,745 21,367
Total current assets 34,362 30,672
Current liabilities
Trade and other payables (20,104) (20,402)
Total current liabilities (20,104) (20,402)
Net current assets 14,258 10,270
Non-current liabilities
Redeemable preference shares - (10,895)
Provision for defined benefit
gratuity (406) (245)
Total non-current liabilities (406) (11,140)
Net assets 38,939 13,895
Equity attributable to the
owners of the parent
Share capital 10 4,805 4,524
Share premium 10 50,896 8,283
Translation reserve 3,244 2,178
Share based payment reserve 5,869 1,272
Capital restructuring reserve (29,040) (8,538)
Retained earnings (6,345) 6,176
Equity attributable to shareholders
of the parent 29,429 13,895
Non-controlling interest 9,510 -
Total equity 38,939 13,895
IMIMOBILE PLC CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Cash Flow Statement
For the year ended 31 March 2015
Year Year
ended ended
31 March 31 March
Notes 2015 2014
GBP000 GBP000
Net cash from operating
activities 12 8,234 8,748
Investing activities
Interest received 13 31
Purchases of intangibles (672) (186)
Purchases of property,
plant & equipment (967) (1,683)
Disposal of property,
plant & equipment 15 -
Available for sale
investment - (50)
Acquisition of subsidiary
as part of capital restructuring (23,464) (113)
Acquisition of subsidiary
net of cash acquired 13 (7,970) -
Disposal of subsidiary - (566)
Net cash used in investing
activities (33,045) (2,567)
Financing activities
Repayment of borrowings
- Bank loans - (1,220)
Issue of borrowings
- Related party Director
loans - (301)
Proceeds from issuance
of Ordinary shares 30,000 572
Dividends paid to owners
of the parent - (415)
Net cash generated
by / (used in) financing
activities 30,000 (1,364)
Net increase in cash
and cash equivalents 5,189 4,817
Cash and cash equivalents
at beginning of the
year 9,305 4,643
Effect of foreign exchange
rate changes 123 (155)
Cash and cash equivalents
at end of the year 8 14,617 9,305
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of preparation
While the financial information included in this preliminary
announcement has been computed in accordance with International
Financial Reporting Standards as adopted for use by the EU (IFRS),
this announcement does not itself contain sufficient information to
comply with IFRS. The Company expects to publish full financial
statements that comply with IFRS in due course.
The financial information set out above does not constitute the
Company's statutory accounts for the period ended 31 March 2015,
but is derived from those accounts. Statutory accounts for 2014
have been delivered to the Registrar of Companies and those for
2015 will be delivered following the company's annual general
meeting.
The auditor has reported on those accounts; the auditor's report
was unqualified, did not draw attention to any matters by way of
emphasis without qualifying its report and did not contain
statements under s498(2) or (3) of the Companies Act 2006.
2. Basis of consolidation and accounting policies
The principal accounting policies set out below have been
applied consistently by the Group entities in preparing the
financial statements of the Group from which the information
contained in this preliminary announcement has been extracted:
Basis of consolidation
The Group financial statements incorporate the financial
statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 March each year. Control is
achieved when the Company:
-- has the power over the investee;
-- is exposed, or has rights, to variable return from its involvement with the investee; and
-- has the ability to use its power to affect its returns.
The results of subsidiaries acquired or disposed of in any year
are included in the consolidated Income Statement from the date of
acquisition or up to the date of disposal.
Goodwill is measured as the excess of the sum of consideration
transferred. Goodwill is stated at cost less any accumulated
impairment losses. Goodwill is allocated to cash-generating units
and is not amortised but is tested annually for impairment.
Where necessary, adjustments are made to the financial
information of subsidiaries to bring the accounting policies into
line with those used by the Group. Inter-company balances and
transactions, including inter-company profits and unrealised
profits and losses are eliminated on consolidation.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the acquisition of
a subsidiary is the fair values of the assets transferred, the
liabilities incurred to the former owners of the acquiree and the
equity interests issued by the Group.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at their fair values at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis. When the Group ceases to have
control, any retained interest in the entity is remeasured to its
fair value at the date when control is lost, with the change in
carrying amount recognised in the Income Statement.
The acquisition of IMI Mobile Private Limited by IMImobile PLC
has been accounted for as a capital reorganisation, presenting the
continuation of the Group's results and financial position to
reflect the substance of the transaction, with the 24% interest in
IMI Mobile Private Limited owned by the two founding shareholders
accounted for as a non-controlling interest.
Cash and cash equivalents
Cash and short-term deposits in the balance sheet comprise cash
at bank and in hand and short-term deposits with an original
maturity of three months or less, highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value. For the purpose
of the consolidated Cash Flow Statement, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of
outstanding bank overdrafts.
Trade receivables
Trade receivables are amounts due from customers for merchandise
sold or services performed in the ordinary course of business. If
collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as
current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment.
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Trade payables are classified as current liabilities if
payment is due within one year or less (or in the normal operating
cycle of the business if longer). If not, they are presented as
non-current liabilities. Trade payables are recognised initially at
fair value and subsequently measured at amortised cost using the
effective interest method.
Goodwill
Goodwill arises on the acquisition of subsidiaries and
represents the excess of the consideration transferred over the
Group's interest in the net fair value of the net identifiable
assets, liabilities and contingent liabilities of the acquiree and
the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a
business combination is allocated to each cash generating unit
("CGU" or "unit"), or groups of CGUs, that is expected to benefit
from the synergies of the combination. Each unit or group of units
to which the goodwill is allocated represents the lowest level
within the entity at which the goodwill is monitored for internal
management purposes. Goodwill is monitored at the CGU level.
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a
potential impairment. The carrying value of goodwill is compared to
the recoverable amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is recognised
immediately as an expense and is not subsequently reversed.
Employee benefits
Employee share-based payments
The Group operates a number of equity-settled, share-based
compensation plans, under which the entity receives services from
employees as consideration for equity instruments (options) of the
Group. The fair value of the employee services received in exchange
for the grant of the options is recognised as an expense. The total
amount to be expensed is determined by reference to the fair value
of the options granted:
-- including any market performance conditions (for example, an entity's share price);
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
Non-market performance and service conditions are included in
assumptions about the number of options that are expected to vest.
The total expense is recognised over the vesting period, which is
the period over which all of the specified vesting conditions are
to be satisfied. Where options are cancelled by the Group and
settled in cash the expense is accelerated in the period in which
the options are settled, with the cash payment recognised in the
share based payment reserve.
At the end of each reporting period, the Group revises its
estimates of the number of options that are expected to vest based
on the non-market vesting conditions. It recognises the impact of
the revision to original estimates, if any, in the consolidated
Income Statement, with a corresponding adjustment to equity.
When the options are exercised, the Group issues new shares. The
proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share
premium.
The social security contributions payable in connection with the
grant of the share options are payable by the employee.
Fair value is measured by use of the Black-Scholes model. The
expected life used in the model has been adjusted, based on
management's best estimate, for the effects of non-transferability,
performance conditions, exercise restrictions and behavioural
considerations.
Company Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Revenue recognition
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group's activities. Revenue is shown net of returns,
rebates and discounts and after eliminating sales within the
Group.
The Group recognises revenue when the amount of revenue can be
reliably measured, it is probable that future economic benefits
will flow to the entity and specific criteria have been met for
each of the Group's activities as described below. The amount of
revenue is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved. The Group
bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the
specifics of each arrangement.
Where the Group enters into arrangements to deliver multiple
elements (licensing, servicing and maintenance), such elements are
separated for recognition based on stand-alone value where sold and
delivered separately. If such elements cannot be separated they are
treated as a single deliverable and recognised over the period of
delivery when the criteria for recognition have been met and
customer acceptance received. Amounts incurred but not yet billed
are classified as unbilled amounts in work in progress. Where the
Group acts as principal in the sale of goods and content, revenue
is recognised on a gross basis.
Managed solutions and SaaS contracts
Revenues from managed solutions contracts are recognised
proportionally over the period during which the services are
rendered. Revenue from content related sales is recognised on
delivery of the content, when all significant contractual
obligations have been satisfied, the significant risks and rewards
of ownership have been transferred and no effective ownership
control is retained. Revenues are billed up to 60 days after month
end and classified as amounts billable not yet invoiced until this
point.
Billing revenues, within SaaS contracts, recognised within
turnover relate only to the commission earned on hosting each
service and are recognised at the point of delivery to the
customer. Pass through revenues collected on behalf of the
customers are not recognised within turnover.
Licence fees
Revenue from sale of end user licences is recognised at fair
value on customer acceptance following installation at the
customer's locations as per the terms of the contract.
Operating segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes
strategic decisions.
Exceptional items
These are items which, in management's judgement, are
significant non-recurring items or items that do not reflect
underlying profits of the Group and need to be disclosed in order
for the user to obtain a proper understanding of the financial
information.
3. Critical accounting judgements, estimates and assumptions
The Group makes judgements, estimates and assumptions. The
preparation of the consolidated Financial Statements in conformity
with International Financial Reporting Standards requires
management to make judgements, estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
consolidated Financial Statements and the reported amounts of
revenue and expenses during the year. Actual results could differ
from the estimates.
The preparation of financial statements in conformity with IFRS
requires the use of estimates and assumptions that affects the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reported period. Although these estimates are
based on management's best knowledge of the amount, event or
actions, actual results may ultimately differ from those estimates.
The key sources of estimation uncertainty at the reporting date
derive from management assumptions in respect of:
Revenue recognition
Revenue is recognised to the extent it is probable that the
economic benefits will flow to the Group and the revenue can be
reliably measured. The determination of whether the revenue
recognition criteria as specified under IAS 18 are met requires
judgement. Where revenues are verified by third parties, revenues
are accrued based on platform data. Differences are adjusted for
upon receipt of third party reports.
Where contracts include more than one deliverable element, each
element and deliverables are assigned to one, or more, separate
units of accounting based on their fair value. Revenue is
recognised on a milestone basis, based on the judgement of
management, as each deliverable is met.
Goodwill and impairment reviews
The recognition of business combinations requires the excess of
the purchase price of acquisitions over the net book value of
assets acquired to be allocated to the assets and liabilities of
the acquired entity. The Group makes judgements and estimates in
relation to the fair value allocation of the purchase price. If any
unallocated portion is positive it is recognised as Goodwill and if
negative, it is recognised in the consolidated Income
Statement.
Judgement is required in determining the fair value of
identifiable assets, liabilities and contingent assets and
liabilities assumed in a business combination and the fair value of
the consideration payable. Calculating the fair values involves the
use of significant estimates and assumptions, including
expectations about future cash flows, discount rates and the lives
of assets following purchase.
Judgement is also required in identifying the cash generating
units to which goodwill is associated for the purpose of goodwill
impairment testing. Identification of cash generating units
involves an assessment of whether assets or groups of assets
generate cash flows that are largely independent. Goodwill is then
allocated to each identified cash generating unit that is expected
to benefit from the synergies of the business combinations from
which goodwill has arisen.
The Group tests annually whether goodwill has suffered any
impairment, in accordance with the accounting policy above. The
recoverable amounts of cash-generating units have been determined
based on value-in-use calculations. These calculations require the
use of estimates which have been detailed within the notes to the
consolidated Financial Statements.
Debtor recoverability
The Group's trade receivables are stated after allowances for
bad and doubtful debts based on management's judgement of
recoverability on an individual customer basis. The credit
worthiness of individual customers is assessed based on their
financial strength using available information, communication with
the customer and the historic trading relationship.
Share based payments
The fair value is determined at grant date and expensed over the
vesting period based on the estimate of the proportion of the
shares which will vest. The new schemes include performance
conditions, including achieving targets for the Group's EPS. The
probability of whether these performance targets will be met based
on the latest Group forecasts is re-assessed on a six monthly
basis.
The accounting policies in relation to these items are disclosed
in note 2.
4. Business and geographical segments
The Group's operating segments are established on the basis of
those components of the Group that are evaluated regularly by the
Chief Operating Decision Maker in deciding how to allocate
resources and in assessing performance.
The Chief Operating Decision Maker considers results principally
by geographical region, which forms the Group's operating and
reporting segments. Geographically, in the operating segments are
defined as Europe (substantially all to the UK), India and South
East Asia (SEA), Middle East and Africa (MEA) and the rest of the
world, which also represent the Group's reportable segments.
The performance of the operating segments is assessed based on a
measure of revenue and gross profit (the result for the segment).
Any sales between segments are carried out at arm's length. As
costs are shared across geographies, results from gross profit to
profit after tax are assessed on a consolidated basis only. The
Group does not regularly provide information in relation to the
assets or liabilities of operating segments to management.
Geographical revenue and results
The following is an analysis of the Group's revenue and results
by geographical segment:
Rest
India of
Europe and SEA MEA the world Total
GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31 March
2015
Revenue from external
companies 27,237 9,610 11,288 741 48,876
Intersegment revenues - 578 - - 578
Gross profit 15,742 5,048 8,599 639 30,028
Other operating
costs (20,872)
Depreciation and
amortisation (2,442)
Share based payment
charge (7,294)
IPO and acquisition
related costs (1,575)
Impairment of AFS
financial assets (145)
Operating profit (2,300)
Investment income 13
Loss before tax (2,287)
Tax (1,076)
Loss after tax (3,363)
Non-current assets 20,501 3,565 926 95 25,087
Year ended 31 March
2014
Revenue from external
companies 21,198 8,541 13,243 422 43,404
Intersegment revenues - 503 - - 503
Gross profit 10,985 5,911 10,672 331 27,899
Operating costs (20,681)
Depreciation and
amortisation (2,106)
Share based payment
charge (150)
IPO and acquisition
related costs (67)
Operating profit 4,895
Investment income 31
Finance costs (5)
Gain on sale of
subsidiary 340
Loss before tax 5,261
Tax (1,342)
Profit after tax 3,919
Non-current assets 9,932 3,739 1,090 4 14,765
During the year revenues from Customer A and Customer B
accounted for 14% (2014: 12%) and 15% (2014: 15%) of the Group's
revenue.
The accounting policies of the reportable segments are the same
as the Group's accounting policies described in note 2 for each
period. The revenue from external parties reported is measured in a
manner consistent with that in the consolidated Income Statement.
Revenues are attributed to countries on the basis of the customer's
location.
The Group measures segment profit and loss as gross profit as
reported. The Group does not allocate general administration,
marketing and sales expenses to its segments.
Additional voluntary disclosures
Delivery model revenue and results
The following disclosures are provided for additional purposes
only and does not form part of the Group's segmental reporting
under IFRS 8.
In addition to geographical performance, the Chief Operating
Decision Maker also considers the performance of the Group in line
with its delivery model, which has also been disclosed below. The
Group's delivery models are defined as Managed solutions, Software
as a service (SaaS) and Licence Fees which arise in all
geographical segments.
The following is an analysis of the Group's revenue and result
by delivery model:
Software
Managed as a Service Licence
solutions (SaaS) fees Total
GBP000 GBP000 GBP000 GBP000
Year ended 31 March
2015
Revenue from external
companies 19,800 23,801 5,275 48,876
Intersegment revenues - - 578 578
Gross profit 14,506 10,562 4,960 30,028
Year ended 31 March
2014
Revenue from external
companies 20,336 15,691 7,377 43,404
Intersegment revenues - - 503 503
Gross profit 14,466 6,507 6,926 27,899
5. Tax
Year Year
ended ended
31 March 31 March
2015 2014
GBP000 GBP000
Current tax
India tax expense (6) 835
UK tax expense 522 -
Other foreign tax
expense 80 3
Withholding tax
expense 592 547
Adjustments in respect
of prior periods 13 (346)
1,201 1,039
Deferred tax
Current year (125) 12
Adjustments in respect
of prior periods - 291
(125) 303
1,076 1,342
The total tax charge for the year can be reconciled to the
result per consolidated Income Statement as follows:
Year ended Year
31 March ended
2015 31 March
2014
GBP000 GBP000
(Loss) / profit before
tax (2,287) 5,261
Tax at the UK corporation
tax rate of 21% (2014:
23%) (480) 1,210
Effect of overseas tax
rates (367) 24
Non-taxable disposal of
subsidiary - (81)
Expenses not deductible
for tax purposes 57 120
Tax losses on which deferred
tax not recognised 1,323 45
Effect of change in UK
tax rate 2 79
Tax adjustments in respect
of previous years 13 (55)
De-recognition of deferred tax asset 578 -
Enhanced tax relief on research and
development expenditure (50) -
Total tax charged in the
Income Statement 1,076 1,342
Taxation for each region is calculated at the rates prevailing
in the respective jurisdictions. Prior year adjustments relate to
the routine confirmation and agreement of the final tax position in
local jurisdictions.
One of the regions the Group operates in is the Dubai Airport
Free Zone (IMI Mobile Vas Ltd FZE). The Dubai Airport Free Zone
(FZE) operates under the laws, politics and direction of the
Chairman H. H. Sheikh Ahmed Bin Saeed Al Maktoum. The operations in
the FZE are not subject to income tax and as such no provision has
been made for deferred taxes related to operations or assets and
liabilities of these operations.
Deferred tax in respect to temporary differences arising from
long-term employee benefits including retirement benefits,
provisions for doubtful debts, of carried forward trading losses
available to offset profits in future periods and the difference
between tax and accounting depreciation have been recognised in the
Income Statement.
The Finance Act 2013 reduced the UK standard rate of corporation
tax from 23% to 21% from 1 April 2014 and 21% to 20% from 1 April
2015. All UK deferred tax assets and liabilities have been
recognised at 20% (2014: 20%).
6. Earnings per share ('EPS')
Year ended
31 March 2015
pence
Basic EPS (7.6)
Adjusted basic EPS 12.6
Diluted EPS (5.3)
Adjusted diluted EPS 8.9
Year ended
31 March
2015
Million
Weighted average number of ordinary shares
for the purpose of basic EPS 44.3
Effect of dilutive potential ordinary shares:
share options 19.0
Weighted average number of ordinary shares
for the purpose of diluted EPS 63.3
To provide more meaningful comparative information on the
Group's profitability, a number of non-GAAP adjusted profit
measures are used in this preliminary announcement. Summarised
below is a reconciliation between statutory results to adjusted
results. The adjusted profit after tax earnings measure is also
used for the purpose of calculating adjusted earnings per
share.
Statutory Share IPO and Impairment De-recognition Adjusted
results based acquisition of AFS of deferred results
payment related financial tax asset
charge costs asset
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31
March 2015
Revenue 48,876 - - - - 48,876
Gross profit 30,028 - - - - 30,028
Operating (loss)
/ profit (2,300) 7,294 1,575 145 - 6,714
(Loss) / profit
before tax (2,287) 7,294 1,575 145 - 6,727
(Loss) / profit
after tax (3,363) 6,706 1,575 145 537 5,600
Basic EPS (pence) (7.6) 15.1 3.6 0.3 1.2 12.6
Diluted EPS (5.3) 10.3 2.4 0.2 0.9 8.9
Statutory Share IPO and Impairment Gain on Adjusted
results based acquisition of AFS sale of results
payment related financial subsidiary
charge costs asset
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31
March 2014
Revenue 43,404 - - - - 43,404
Gross profit 27,899 - - - - 27,899
Operating (loss)
/ profit 4,895 150 67 - - 5,112
Profit before
tax 5,261 150 67 - (340) 5,138
Profit after tax 3,919 150 67 - (340) 3,796
7. Goodwill
Goodwill is monitored by management at the CGU level by delivery
model. The following is a summary of goodwill allocation for each
CGU:
Impairment Foreign Closing
Exchange
Opening Additions Disposals Movement
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
31 March 2014
Managed solutions 4,725 - - - (9) 4,716
Cloud based services
/ SaaS 3,153 - - - (8) 3,145
Total 7,878 - - - (17) 7,861
31 March 2015
Managed solutions 4,716 - - - - 4,716
Cloud based services
/ SaaS 3,145 - - - - 3,145
TextLocal - 10,073 - - - 10,073
Total 7,861 10,073 - - - 17,934
The recoverable amount of all CGUs has been determined based on
value-in-use calculations. These calculations use pre-tax cash flow
projections based on financial budgets approved by management
covering a five-year period. Cash flows beyond the five-year period
are extrapolated using the estimated growth rates stated below. The
long-term growth rates are management's estimates. The discount
rates used are pre-tax and reflect specific risks relating to the
relevant CGU.
CGUs serve a common group of customers such that the key
assumptions used for value-in-use calculations for both CGUs are as
follows:
31 March
2015
Long-term growth
rate: 3%
Discount rate: 15%
Value in use is calculated for the various CGUs based on
approved business plans and forecasts taking into account certain
variables for each CGU. Below is a description of the principal
variables that have been considered for each CGU with significant
goodwill.
Long-term growth rate
In all cases, impairment tests are performed using the projected
cash flows based on Board approved forecasts and strategic plans
over a five year period. Cash flow projections from the sixth year
are calculated using an expected constant growth rate.
Discount rate
The pre-tax discount rates used are disclosed above and take
into account the market risk rate associated with the company. A
discount factor is calculated using the discount rate and applied
to future projected cash flows.
The Group has conducted a sensitivity analysis on the impairment
test of each CGUs carrying value. A reasonable possible change of
3% percentage points would not cause the carrying value of goodwill
to be less than its recoverable amount.
8. Cash and cash equivalents
As at As at
31 March 31 March
2015 2014
GBP000 GBP000
Unrestricted
Cash on hand and at bank 14,570 9,265
Restricted
Short-term bank deposits 47 40
Cash and cash equivalents 14,617 9,305
Restricted short-term bank deposits represent cash balances
deposited in bank accounts attracting a preferential interest rate
and are typically deposited for a period of 90 to 180 days.
Preferential interest rates are agreed in advance of the deposit
being transferred and depend on the prevailing local rates and
market conditions at the time.
9. Trade and other receivables
As at As at
31 March 31 March
2015 2014
GBP000 GBP000
Trade receivables
- revenue to be collected on behalf
of the Group 7,817 8,752
- pass through revenues to be collected
on behalf of premium rate customers 848 1,710
Other receivables 21 138
Refundable deposits 185 162
Work in progress 1,746 2,143
Amounts billable not yet invoiced
- revenue to be collected on behalf
of the Group 4,561 3,340
- pass through revenues collected
on behalf of premium rate customers 2,327 3,089
Withholding tax debtor 2,187 1,553
Due from related parties 53 480
19,745 21,367
10. Share Capital and Share Premium
Allotted, called up and fully Share Share Total
paid Capital Premium
GBP000 GBP000 GBP000
At 1 April 2014 4,524 8,283 12,807
Capital restructuring (2,295) 16,230 13,935
Proceeds from IPO 2,500 27,500 30,000
Cost of share issue - (2,055) (2,055)
Issue of ordinary B shares - - -
Shares issued as part of consideration
for TextLocal (note 31) 71 929 1,000
Share options exercised 5 9 14
At 31 March 2015 4,805 50,896 55,701
As at
31 March
2015
Number
Ordinary shares as at 1 April
2014 11,256,358
Ordinary shares converted on 3:1
basis 22,512,716
Preference shares converted to
equity 14,135,304
New shares created prior to admission 10,679,519
Less: non-controlling interest (11,299,599)
Shares issued as part of consideration
for TextLocal 707,564
Share options exercised 47,000
Ordinary shares as at 31 March
2015 48,038,862
Ordinary B shares 2
48,038,864
On 16 June 2014 two ordinary B shares, with an aggregate nominal
value of GBP0.20, were issued at GBP50.00 each.
On 20 June 2014 the optionally convertible preference shares
were converted to equity prior to the listing of the Company and
the ordinary shares, including the converted preference shares,
were converted to three times as many ordinary shares and revalued
to the issue price at admission of GBP1.20.
As part of this capital restructuring the opening share capital
and share premium have been restated using the 3:1 conversion of
ordinary shares, with a corresponding entry in the capital
restructuring reserve. The capital restructuring movement in the
current year represents the conversion of the preference shares to
increase the number of shares by 14,135,304 less the
non-controlling interest holding of 11,299,599 ordinary shares.
On 27 June 2014 the Company was successful admitted to the
London Stock Exchange Alternative Investment Market and 25,000,000
ordinary shares, including 10,679,519 newly created ordinary
shares, with an aggregate nominal value of GBP2,500,000, were
issued at GBP1.20 each as part of the initial placing.
Costs of GBP2,055,000 relating to the admission have been
recognised directly in equity through the share premium
reserve.
The Group's capital consists of two classes of equity share.
Ordinary shares
The amount classified as equity share capital represents the
nominal value of allotted, called up and fully paid ordinary shares
at a par value of GBP0.10. Each holder of ordinary shares is
entitled to one vote per share.
Ordinary B shares
The amount classified as equity share capital represents the
nominal value of allotted, called up and fully paid ordinary shares
at a par value of GBP0.10. Each holder of ordinary B shares is able
to exercise voting rights in respect of such shares equal to the
number of Ordinary Shares each of its nominees would receive if
they exchanged their holding in IMI Mobile Private Limited, a
subsidiary of the Company, for three ordinary shares in the
Company.
In addition, each holder of ordinary B shares has the right (but
not the obligation) to swap all of their shares in IMI Mobile
Private Limited for ordinary shares in the Company on the basis of
one IMI Mobile Private Limited share for three ordinary shares in
the Company (subject to adjustment for any consolidation, sub
division or any other alteration of the share capital of either the
Company or IMI Mobile Private Limited). Such share swap is subject
to all legal and regulatory consents and approvals being obtained.
If such share swap occurred in full the holders of ordinary B
shares would be entitled to acquire 11,299,599 ordinary shares. The
holders of the ordinary B shares form the non-controlling interest
in the Group.
11. Share-based payments
The fair value of options granted is recognised as an employee
expense in the income statement with a corresponding increase in
equity. The fair value is measured at the grant date and spread
over the period during which the employees become unconditionally
entitled to the options. The fair value of the options is measured
using the Black-Scholes option valuation model, taking into account
the terms and conditions upon which the options were granted. The
amount recognised in the Income Statement is adjusted at each
balance sheet date to reflect the number of share options that are
expected to vest revised for expected leavers and estimated
achievement for non-market based vesting conditions.
Prior to admission, options were issued to the Directors and key
employees. The Group operated the following schemes during the
year.
Plan A
Under Plan A, options were granted for employees of the Group
who are resident within India. The exercise price of the options
was 10 Indian Rupees (GBP0.13 as at the grant date). The options
granted vested over a period of 0-4 years from the date of grant
depending on the share option agreement given to each employee. The
contractual life of each option was 10 years after the grant date,
except for former employees where options may be convertible to
equity shares within one year from the date of grant.
The fair value at grant date had been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 15%, exercise price shown
above, an expected option life of between four and 10 years,
volatility of 30% and a dividend yield of nil.
On Admission part of the proceeds of placing was used by the
Company as consideration for the surrender of options under Plan A.
Compensation payments were paid to participants within the option
scheme in lieu of options already vested totalling GBP2,697,000
(2014: GBPnil). In accordance with IFRS 2 the Group has accelerated
the charge relating to the cancelled schemes through the Income
Statement in the period.
Details of the share options movements during the year are as
follows:
As at 31 March As at 31 March
2015 2014
Weighted
average
Weighted Number exercise Number
average exercise of share price of share
price (GBP) options (GBP) options
At 1 April 1,051,952 1,051,952
Surrendered
or forfeited 0.13 (1,051,952) - -
At 31 March - 1,051,952
Plan B
Under Plan B, options were granted for employees of the Group
who are not resident within India. The exercise price of the
options range between 91 Indian Rupees (GBP1.05 as at the grant
date) and 101 Indian Rupees (GBP1.03 as at the grant date). The
options granted vest over a period of 0-4 years from the date of
grant. The contractual life of each option is 10 years after the
grant date.
The fair value at grant date has been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 6.9%, exercise price shown
above, an expected option life of seven years, volatility of 30%
and a dividend yield of nil.
Prior to admission these options were released in exchange for
options under the Unapproved Plan.
As at 31 March As at 31 March
2015 2014
Weighted Weighted
average average
exercise Number exercise Number
price of share price of share
(GBP) options (GBP) options
At 1
April 317,000 239,000
Granted - - 1.03 96,000
Forfeited - - 1.05 (18,000)
Converted 1.05 (317,000) - -
At 31
March - 317,000
Flowering Share Plan
The plan was established on 16 May 2014. The options granted
vest over a period of 0-4 years and are dependent upon continued
employment, and meeting an objective Company hurdle and performance
targets for the Group's EPS. The options may be forfeited if the
employee leaves the Group and the rights of the participants lapse
if the award has not been exercised after a period of 10 years from
the grant date.
Details of the share awards outstanding during the year are as
follows:
As at 31 March As at 31 March
2015 2014
Weighted Weighted
average average
exercise Number exercise Number
price of share price of share
(GBP) options (GBP) options
At 1 - -
April
Granted 0.03 3,000,000 - -
At 31 3,000,000 -
March
The fair value at grant date has been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 0.31% to 1.55%, exercise
price shown above, an expected option life of five years,
volatility of 22% to 70% depending on the vesting date of the
options and a dividend yield of nil.
2014 Unapproved Option Plan
The plan was established on 26 June 2014. The options granted
vest over a period of 0-4 years and are dependent upon continued
employment and meeting performance targets for the Group's EPS. The
options may be forfeited if the employee leaves the Group and the
rights of the participants lapse if the award has not been
exercised after a period of 10 years from the grant date.
Details of the share awards outstanding during the year are as
follows:
As at 31 March As at 31 March
2015 2014
Weighted Weighted
average average
exercise Number exercise Number
price of share price of share
(GBP) options (GBP) options
At 1 - -
April
Granted 0.33 6,387,373 - -
Forfeited 1.20 (17,355) - -
At 31 6,370,018 -
March
The fair value at grant date has been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 0.42% to 1.72%, exercise
price shown above, an expected option life of five years,
volatility of 7% to 70% depending on the vesting date of the
options and a dividend yield of nil.
CSOP
The plan was established on 26 June 2014. The options granted
vest over a period of 0-4 years and are dependent upon continued
employment. The options may be forfeited if the employee leaves the
Group and the rights of the participants lapse if the award has not
been exercised after a period of 10 years from the grant date.
Details of the share awards outstanding during the year are as
follows:
As at 31 March As at 31 March
2015 2014
Weighted Weighted
average average
exercise Number exercise Number
price of share price of share
(GBP) options (GBP) options
At 1 - -
April
Granted 1.24 1,051,580 - -
Forfeited 1.20 (57,642) - -
At 31 993,938 -
March
The fair value at grant date has been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 0.42% to 1.72%, exercise
price shown above, an expected option life of five years,
volatility of 7% to 70% depending on the vesting date of the
options and a dividend yield of nil.
Rollover scheme
The plan was established on 27 June 2014 for the exchange of one
option under Plan B for the option of three shares in the Company.
The options granted vest over a period of 0-4 years and are
dependent upon continued employment. The options may be forfeited
if the employee leaves the Group and the rights of the participants
lapse if the award has not been exercised after a period of 10
years from the grant date.
Details of the share awards outstanding during the year are as
follows:
As at 31 March As at 31 March
2015 2014
Weighted Weighted
average average
exercise Number exercise Number
price of share price of share
(GBP) options (GBP) options
At 1 - -
April
Converted 0.30 951,000 - -
Exercised 0.29 (47,000) - -
Forfeited 0.31 (84,000) - -
At 31 820,000 -
March
The fair value at grant date has been determined using the
Black-Scholes valuation model. The significant inputs into the
model were a risk free interest rate of 0.44% to 1.34%, exercise
price shown above, an expected option life of five years,
volatility of 9% to 41% depending on the vesting date of the
options and a dividend yield of nil.
TextLocal deferred consideration
The deferred consideration arising from the acquisition of
TextLocal is treated at remuneration rather than consideration as
one of the conditions of payment is continued employment of the
shareholders of the company post acquisition. As the Group has the
option to settle the deferred consideration in shares in the
Company or cash, it is included as a share based payment. The
charge is taken to the consolidated Income Statement evenly over
the period from acquisition to the settlement date.
Share based payment charge
The Group recognised the following expense related to
share-based payments:
31 March 31 March
2015 2014
GBP000 GBP000
Accelerated charge in lieu of 35 -
cancelled scheme
Equity settled share based payment
plans 7,259 150
At 31 March 7,294 150
12. Notes to the consolidated Cash Flow Statement
Year Year
ended ended
31 March 31 March
2015 2014
GBP000 GBP000
Cash flows from operating
activities:
(Loss) / profit before
taxation (2,287) 5,261
Adjustments:
Finance cost expense - 5
Interest income (13) (31)
Depreciation of property,
plant and equipment 2,219 1,951
Share-based payments 7,294 150
Exceptional costs - IPO
preparation costs 1,575 113
Exceptional costs - gain
on sale of subsidiary - (340)
Amortisation of intangible
assets 223 155
Impairment of available-for-sale
financial assets 145 -
Operating cash flow before
movements in working capital: 9,156 7,264
Decrease / (increase)
in receivables 2,461 (4,915)
(Decrease) / increase
in payables (3,460) 6,694
Increase/(decrease) in provision
for defined benefit gratuity plan 161 (7)
Foreign exchange loss/(gain)
on working capital 498 (283)
Cash generated from operations 8,816 8,753
Finance costs paid - (5)
Tax paid (582) -
Net cash generated from
operating activities 8,234 8,748
13. Acquisition of TxtLocal Limited
On 13 October 2014 the Group acquired the entire share capital
of TxtLocal Limited ("TextLocal") for the maximum total
consideration of GBP13.2 million, comprising an initial
consideration of GBP10.0 million payable in cash, and GBP1.0
million satisfied by the issue of 707,564 ordinary shares at a
price of 141.33p per share with additional deferred payments, split
over two years, of up to a maximum of GBP2.2 million dependent upon
continued employment and accounted for as remuneration. The primary
reasons for acquiring the business were the significant cross-sell
and lead generation opportunities and to leverage the Group's
global footprint by introducing TextLocal's offering into new
international markets.
The results of the acquired entity which have been consolidated
in the Income Statement from 13 October 2014 contributed GBP3.8
million of revenues and a profit of GBP0.5 million to the profit
attributable to equity shareholders of the Group during the period,
before share based payment charges. Had TextLocal been acquired at
the start of the year the contribution would have been GBP7.5m of
revenue and a profit of GBP1.2m before share based payment
charges.
The provisional purchase price allocation is set out in the
table below:
Fair value
GBP000
Net assets acquired:
Identifiable intangible
assets(18) 700
Deferred tax recognised
on identifiable intangible
assets (140)
Property, plant and equipment 27
Trade and other receivables 425
Cash and cash equivalents 2,030
Current and deferred taxation
liabilities (4)
Trade and other payables (2,111)
Net identifiable assets
acquired 927
Goodwill(19) 10,073
Total consideration 11,000
Cash consideration 10,000
Cash acquired (2,030)
Consideration net of cash
acquired 7,970
(1) EBITDA is defined as operating loss / profit before
depreciation, amortisation, fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation and excluding the impact of the disposal of
subsidiaries.
(2) Adjusted profit after tax is defined by the Group as
loss/profit after tax before fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation, de-recognition of deferred tax assets and excluding
the impact of the disposal of subsidiaries. See note 6 for a
reconciliation.
(3) Excluding the impact of the TextLocal acquisition.
(4) Calculated as net cash from operating activities as a
proportion of EBITDA.
(5) Free cash flow defined as net cash from operating activities
less purchases of intangibles, property, plant & equipment.
(6) See note 6 for a reconciliation of statutory loss / profit
after tax to adjusted profit after tax.
(7) See note 6 for a reconciliation of statutory loss / profit
after tax to adjusted profit after tax.
(8) Source:
http://www.prnewswire.com/news-releases/strategy-analytics-global-smartphone-users-reach-2-billion-in-2014-300041752.html
(9) Excluding the impact of the TextLocal acquisition.
(10) Adjusted profit before tax is defined by the Group as
loss/profit before tax before fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation and excluding the impact of the disposal of
subsidiaries. See note 6 for a reconciliation.
(11) Adjusted profit after tax is defined by the Group as
loss/profit after tax before fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation, de-recognition of deferred tax assets and excluding
the impact of the disposal of subsidiaries. See note 6 for a
reconciliation.
(12) Adjusted EPS uses adjusted profit after tax as defined
above.
(13) Non-core Greek subsidiary disposed of in May 2013.
(14) Non-core Greek subsidiary disposed of in May 2013.
(15) EBITDA is defined as operating loss / profit before
depreciation, amortisation, fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation and excluding the impact of the disposal of
subsidiaries.
(16) Tax as a proportion of adjusted profit before tax, as
reconciled in note 6.
(17) EBITDA is defined as operating loss / profit before
depreciation, amortisation, fees incurred in relation to IPO and
acquisition activities, impairment charges, share based
compensation and excluding the impact of the disposal of
subsidiaries.
(18) Identifiable intangible assets consist of GBP0.7 million of
messaging solution software and is amortised in line with Group
accounting policies.
(19) The goodwill is attributable to the expected profitability
from cross-selling the acquired messaging platform and extending it
into the Group's international markets.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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