TIDMIMO
RNS Number : 0398X
IMImobile PLC
21 November 2017
IMIMOBILE PLC
("IMImobile", "the Group" or "the Company")
Unaudited interim results for the
six months ended 30 September 2017
"Continued growth and strategic progress."
IMImobile PLC, a cloud communications software and solutions
provider, today announces its consolidated interim results for the
six months ended 30 September 2017.
The Company is pleased to report it has continued to maintain
its upward momentum since IPO in 2014. IMImobile has now achieved a
three-year gross profit CAGR of 22%, and 10% organic(1) gross
profit growth during the period.
Key financial highlights
Six months ended 30 September 2017 2016 Growth/
GBPm GBPm decline
------------------------------- ------ ------ ---------
Revenue 53.1 36.0 48%
------------------------------- ------ ------ ---------
Gross profit 24.7 20.2 22%
Gross margin 46.4% 56.1%
------------------------------- ------ ------ ---------
Gross profit contribution for
Europe and Americas 13.8 10.6 30%
Gross profit contribution for
Middle East and Africa 5.6 6.7 (17%)
Gross profit contribution for
India and South East Asia 5.3 2.9 84%
------------------------------- ------ ------ ---------
EBITDA(2) 5.7 5.3 8%
EBITDA margin (EBITDA / gross
profit) 23.1% 26.0%
------------------------------- ------ ------ ---------
Profit after tax 1.0 1.0 3%
------------------------------- ------ ------ ---------
Adjusted profit after tax(2) 3.3 3.3 3%
------------------------------- ------ ------ ---------
Diluted EPS 1.6p 2.1p (27%)
------------------------------- ------ ------ ---------
Diluted adjusted EPS(2) 4.8p 4.8p 1%
------------------------------- ------ ------ ---------
Cash at period end 15.4 17.9
------------------------------- ------ ------ ---------
-- Revenue up 48% to GBP53.1m (2016: GBP36.0m) (12% organic(1) )
-- Gross profit up 22% to GBP24.7m (2016: GBP20.2m) (10% organic(1) )
-- EBITDA up 8% to GBP5.7m (2016: GBP5.3m)
-- Adjusted profit after tax up 3% to GBP3.3m (2016: GBP3.3m)
-- Profit after tax on a statutory basis up 3% to GBP1.0m (2016: GBP1.0m)
-- Diluted adjusted EPS up 1% to 4.8p (2016: 4.8p)
-- Cash generated from operating activities of GBP5.7m
representing operating cash conversion(3) of 100% (2016: 122%)
-- Cash and cash equivalents at 30 September 2017 of GBP15.4m (31 March 2017: GBP14.7m)
(1) Excluding the impact of the Infracast acquisition in March
2017
(2) See note 5 for details of adjusted performance measures,
adjusting items and a reconciliation of statutory results to
adjusted results.
(3) Cash conversion is defined as cash generated from operations
(see note 6) as a percentage of adjusted EBITDA.
Operational highlights
-- Continued organic growth: 10% organic gross profit growth;
the Group has reported organic growth in every reporting period
since IPO in 2014
-- Acceleration of partnership activities: new commercial and
technical partnerships being established to broaden distribution of
our intellectual property
-- Consolidated position in the UK market: established market
leader in digital and mobile notifications in key consumer
verticals - financial services, utilities, logistics and
telecoms
-- Strong growth in South East Asia: deployments under new
relationship with Telenor group progressing well
-- Synergies from acquisitions starting to progress:
cross-selling of core IMImobile products to clients of Textlocal,
Archer and Infracast
-- US investment: first enterprise contract with one of the
largest US distribution and logistics services companies and, post
period end, acquired Sumotext Corporation to target the US
enterprise market
Jay Patel, Chief Executive Officer of IMImobile PLC,
commented:
"The Group has continued to perform well, both financially and
operationally, and delivered another period of profitable, cash
generative growth. We have consolidated our leading position in the
UK, achieved very strong organic gross profit growth in India and
South East Asia, and despite known headwinds in Middle East and
Africa, achieved 12% organic revenue growth across all regions.
Post period, IMImobile also completed the acquisition of Sumotext,
providing a platform to launch IMImobile's product offering to the
enterprise market in the US.
"This growth has been driven by the continued global demand for
cloud-based solutions that can help deliver digital transformation,
automation and cost-cutting. IMImobile has created a market leading
product suite that focuses on real time, interactive customer
communications and service automation and we are excited about the
benefits that new emerging technologies can deliver.
"We remain confident about the Group's prospects for the
remainder of the year. We expect revenue and gross profit to be in
line with market expectations that were recently upgraded following
the trading update given on 1 November and underlying EBITDA to be
in line with expectations."
An analyst meeting will be held at 9.30am today at the offices
of Redleaf Communications, 1st Floor, 4 London Wall Buildings,
Blomfield Street, EC2M 5NT. To attend please contact Redleaf
Communications.
For further information please contact:
IMImobile PLC c/o Redleaf Communications
Jay Patel, Chief Executive Officer Tel: +44 (0)20 7382 4769
Mike Jefferies, Chief Financial Officer
Redleaf Communications - PR Adviser Tel: +44 (0)20 7382 4769
Charlie Geller imimobile@redleafpr.com
Alina Haritonova
Investec Bank - Nominated Adviser and Broker Tel: +44 (0)207 597 5970
Andrew Pinder
Henry Reast
Robert Baker
Whitman Howard - Broker Tel: +44 (0) 207 659 1234
Ranald McGregor-Smith
Francis North
About IMImobile PLC
IMImobile is a cloud communications software and solutions
provider that enables companies to use mobile and digital
technologies to communicate and engage with their customers.
Organisations that trust us to deliver smarter digital customer
engagement solutions include Vodafone, Telefonica, Aircel, Capita,
BT, BSNL, Ooredoo, MTN, France Telecom, Centrica, Pizza Hut, Tata,
the AA, the BBC, EE, Multichoice, Betfair and several major
financial institutions.
IMImobile is headquartered in London with offices in Hyderabad,
Atlanta, Dubai and Johannesburg, and has over 950 employees
worldwide. IMImobile PLC is quoted on the London Stock Exchange's
AIM market with the TIDM code IMO.
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.
Chief Executive's Report
We have consolidated our position in the UK market, experienced
strong growth in India and South East Asia, made strategic progress
in the US and established new partnerships. We had another
excellent period of cash generation, funded another acquisition
from our operating cash flow, and invested in new product
development and geographic expansion.
As previously outlined, although the technology trends impacting
the business are global, the market opportunities and business
models reflect local environments and, as a result, the commercial
activities of the business are managed and best reviewed on a
regional basis.
Regional Review
Europe and Americas
Europe and Americas contributed 56% of Group gross profit in the
six months to 30 September 2017, representing year on year gross
profit growth of 30%.
The year on year growth in the region reflects the acquisition
of Infracast in March 2017 and a further 7% organic growth. The
acquisition of Infracast consolidated the position of the Group
within the UK financial services sector and we now process the
majority of digital notifications for three of the top four UK
retail banking groups. At the time of acquisition, we identified
many revenue synergies and have initiated projects to combine
technologies and deliver additional capabilities to our banking
clients. We expect these projects to crystallise over the coming
year.
We have deepened our relationships with our mobile operator
clients which now include more real-time customer marketing, as
well as providing capabilities around managing customer service and
fulfilment journeys, such as ordering of SIMs and new handsets. The
additional services provide further penetration of existing
accounts across both client systems and activities.
We have had a good period of winning new clients, particularly
in the utilities, logistics and retail sectors. We signed several
deals for a combination of our cloud products (IMIconnect, IMIchat
and IMIcampaign) with additional capabilities for automation of
customer interactions being delivered through our recently
introduced IMIbot.ai product. The deployments of these projects
will begin in the second half.
Textlocal has grown strongly year on year and continues to
attract significant new clients in the leisure, gaming, insurance
and public sectors. The unit has experienced a number of record
months for messages sent, individual users on the platform and new
sales. Progress has also been made with partners including
dotdigital and BT to launch combined offerings. Further technical
investment in the core platform has maintained Textlocal's position
as the leading product of its type with rich, market-leading
functionality in the UK SMB sector and a Trustpilot rating of 9.5
from over 1,500 reviews.
The consistent organic growth in the UK over the last eight
years and two selective acquisitions have made the Group the
leading provider of communications software and services for
digital interactions in the UK. We have significant market share in
the key vertical markets where mobile interactions are increasingly
important including financial services, mobile operators, utilities
and logistics.
In the US, despite the loss of one material client due to
consolidation of systems within their broader group, the Group made
good progress with another client by signing a two-year agreement
for specific marketing activities. We also started targeting the
enterprise segment and signed our first enterprise client in
partnership with one of the largest US carriers, for the use of
IMIchat and IMIconnect products. We have several ongoing
discussions with operator and contact centre partners to bring the
broader IMImobile product suite to market in the US and the initial
market reaction has been positive.
The acquisition of Sumotext in November 2017 reflects our
confidence that our product suite is highly competitive in the US
market. Sumotext is an established and leading provider of
messaging solutions in the US, based in Little Rock, Arkansas. The
experienced team at Sumotext will provide valuable expertise as
well as an established customer base made up of a government
agency, travel companies, retailers, healthcare companies and other
leading brands, agencies and non-profit organisations.
Following this acquisition, we are accelerating investment in
the US market with new sales and marketing employees and additional
marketing expenditure. Overall, we expect the acquisition to be
earnings enhancing during the year to 31 March 2019.
Middle East and Africa ("MEA")
MEA contributes 23% of Group gross profit. The 17% decline in
gross profit in the region compared with the same period last year
was largely expected due to the revised commercial terms of the MTN
contract, currency devaluations and the market conditions in both
Nigeria and South Africa.
The relationship with MTN group stretches back to 2009 and over
that period we have successfully helped MTN create and manage
content and data services with our IMIdigital platform across 20
countries. The commercial terms are reviewed periodically, and the
contract was last renewed in 2016, resulting in a significant
reduction in transaction-based fees. Over the last six months we
have successfully introduced new innovative services including a
short format video streaming service which has had very good
traction.
We also signed a long term, multi-territory agreement for the
IMIdigital platform with another major operator group in the
region, under which we will deploy content services. The first
deployments will take place in the second half of the year.
The market conditions in Nigeria were also a large factor in the
year-on-year decline in gross profits in the region following a
significant devaluation of the Nigerian Naira by 18% and new
regulatory requirements for mobile operators. Despite these
circumstances, we remain positive about our operations and economic
prospects in the medium term. The risks from further volatility
impacting on Group results have been reduced as ongoing Nigerian
trading activities now represent approximately 2% of Group gross
profit compared with 6% in the previous year.
The enterprise business in the region is Archer Digital, and
integration of this acquisition is progressing well. As more
momentum has been generated for cross selling IMImobile's core
products, we have re-branded the business as IMImobile South Africa
and we expect good progress in the second half by deploying
IMIconnect and IMIcampaign into a new banking client. The business
is trading satisfactorily in a difficult economic and political
environment in South Africa, and we secured a new three-year
contract for data management with the leading PayTV operator in the
country. We also signed a partnership agreement with Blue Label
Mobile, part of Blue Label Telecom, South Africa's leading telecom
distributor to bring IMImobile's products and solutions to
market.
India and South East Asia
The India and SEA region, which accounts for 21% of the Group
gross profit, grew by 84% in the six months to 30 September 2017
compared with the same period in the prior year.
The very strong performance in the region was driven by
deployments under the contract signed with the Telenor Group
earlier this year to provide a series of cloud-based modules from
IMIdigital to replace legacy on-premise solutions for value added
telecom services.
In addition, we have experienced growth from further deployments
in the public sector, notably for the Government of Telangana. We
have also continued to grow our India business by working with
brands and agencies as they utilise mobile channels for customer
communications and brand building. Our telecom clients in India
continue to be under pressure due to intense market competition
and, subsequently we have seen consolidation and restructuring
within the industry as well as limited investment in new
initiatives. Our business in Myanmar is progressing, and we see
further opportunities for growth both in the telecom and enterprise
market.
Textlocal India has grown significantly and now has over 13,500
paying customers, and we continue to invest in customer acquisition
through digital marketing. The payback for this investment will be
seen in future periods.
Market, Technology and Products
As we have outlined before, the markets we operate in are
characterised by rapid change and driven by fundamental advances in
network and hardware technologies, as well as the strategies of the
infrastructure vendors and the global internet companies. Over the
last year, there has been an acceleration of the digital
transformation and automation agenda and as a Group we are well
positioned to take advantage of this movement.
In our core platform, IMIconnect, we have introduced the ability
to quickly set up integrations with enterprise systems which can be
used to automate multiple customer journeys, allowing us to deploy
new clients faster. We have also developed additional channel
capabilities and are a launch partner for Google's RCS (Rich
Communication Services) Business Messaging programme which will
bring rich media messaging to Android devices.
We introduced a Consent Management solution, powered by
IMIconnect, to help clients comply with the new General Data
Protection Regulation (GDPR), particularly for obtaining, managing
and renewing customer consent for storing and processing their
data. The first implementation of this solution is already
underway.
The investment we started last year in building AI and
automation capability is also beginning to gain market traction
with several implementations in progress for the IMIbot.ai product.
These will automate customer service interactions for furniture
retailers, utilities, parcel delivery and transport clients. The
capabilities of the product were recently shortlisted for the
Virtual Customer Assistant category of the UK National Innovation
Awards 2017.
We continue to invest in our cloud delivery infrastructure and
over the last six months have started delivering more of the
products through Amazon Web Services which provides a globally
scalable and high availability system. The initial set up in the UK
was implemented last year, and we now have a similar set up in the
US for the IMIconnect and IMIchat products.
Growth Initiatives
We are delivering on our objective of being the trusted
technology vendor of customer communication software for our
clients. Our strategy has been to invest ahead of market demand in
new technologies and intellectual property that leverages new
emerging communication channels, and this is what has helped us win
new clients and broaden our relationship within existing ones.
Our plans to extend distribution of our intellectual property
through partners began last year, and we now have active commercial
agreements with BT for enterprise interactive digital messaging,
contact centre vendors such as NICE InContact and KCOM, air
transport industry leaders, like SITA, and operator groups, such as
Telefonica. We are also technically integrating into solutions by
Netcracker, Cisco and Genesys amongst others. First projects under
some of these partnerships have been completed, and we are actively
working on educating the go-to-market teams in these organisations.
We would expect to see revenue progress accelerating in the coming
year.
We see significant opportunities for growth in the US market.
The Group's intellectual property is both competitive and relevant
to US corporates, and during the six months to 30 September 2017 we
won our first significant enterprise contract in the region in
partnership with a large US carrier. During the period we have also
continued to make progress with other partnership opportunities in
the territory. Post period end we completed the acquisition of
Sumotext. This strategic acquisition provides a platform to launch
our product offering to the enterprise market in the US. As a
result we expect to invest a further GBP0.5m during the second half
of the current financial year to fund team and marketing expenses,
from which we expect to see a return in the year to 31 March
2019.
Acquisition opportunities to accelerate our sales into major
blue-chip clients are regularly reviewed, and the Group has
maintained a strong balance sheet to pursue these. We remain
confident in the Group's ability to identify and complete
successful earnings enhancing acquisitions, should the right
opportunities become available.
The Board remains fully focused on delivering shareholder value
and will continue to review the use of cash to ensure there is an
appropriate balance between retaining flexibility to grow,
investing in the business and enhancing shareholder returns through
capital returns.
Outlook
We remain confident about the Group's prospects for the
remainder of the year. We expect revenue and gross profit to be in
line with market expectations that were recently upgraded following
the trading update given on 1 November and underlying EBITDA to be
in line with expectations.
Jay Patel
CEO
IMIMOBILE PLC CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Income Statement for the
six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
Notes 2017 2016
GBP000 GBP000
Revenue 4 53,149 36,024
Cost of sales (28,490) (15,797)
Gross profit 4 24,659 20,227
Operating costs:
Other operating costs (18,957) (14,963)
Depreciation and amortisation (2,113) (1,480)
Share-based payment expense (1,416) (1,748)
Acquisition and restructuring
related costs (39) (190)
Exchange losses on the Nigerian
Naira(1) (357) (166)
Operating profit 1,777 1,680
Finance income - 3
Finance cost (63) -
Profit before tax 1,714 1,683
Tax (681) (676)
Profit for the period 1,033 1,007
Profit for the period attributable
to:
Equity holders of the company 1,073 1,443
Non-controlling interest (40) (436)
Profit for the period 1,033 1,007
EBITDA(1) 5,702 5,264
Basic earnings per share 5 1.8p 2.9p
Adjusted basic earnings per share 5 5.5p 6.6p
Diluted earnings per share 5 1.6p 2.1p
Adjusted diluted earnings per
share 5 4.8p 4.8p
The accompanying notes are an integral part of the consolidated
interim Financial Statements and are all attributable to continuing
operations.
[1] See note 5 for details of adjusted performance measures,
adjusting items and a reconciliation of statutory results to
adjusted results.
IMIMOBILE PLC CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Statement of Comprehensive
Income
for the six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Profit for the period 1,033 1,007
Items that may be reclassified
subsequently to profit or loss:
Exchange differences on translation
of foreign operations
Equity holders of the parent (2,240) 283
Non-controlling interest (8) 67
Other comprehensive income / (expense)
for the period (2,248) 350
Total comprehensive income for
the period (1,215) 1,357
Total comprehensive income / (expense)
for the period attributable to:
Equity holders of the parent (1,167) 1,726
Non-controlling interest (48) (369)
Other comprehensive income for
the period (1,215) 1,357
The accompanying notes are an integral part of the consolidated
interim Financial Statements.
IMIMOBILE PLC CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Statement of Changes in Equity
for the six months ended 30 September 2017
Total
equity
Capital attributable Non-controlling
Share-based restructuring Retained to interest
Share Share Translation payment reserve earnings/ shareholders Total
capital premium reserve reserve (deficit) of parent equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31
March
2016 4,918 52,384 3,165 6,661 (29,040) (2,913) 35,175 8,374 43,549
Profit /
(loss) for
the period - - - - - 1,443 1,443 (436) 1,007
Foreign
exchange
differences - - 283 - - - 283 67 350
Credit to
equity for
share-based
payments - - - 1,748 - - 1,748 - 1,748
Deferred tax
on
share-based
payments - - - - - 100 100 - 100
Proceeds from
share
issue 14 72 - - - - 86 - 86
Balance at 30
September
2016 4,932 52,456 3,448 8,409 (29,040) (1,370) 38,835 8,005 46,840
Share swap 791 11,785 - - - (4,239) 8,337 (8,337) -
Profit /
(loss) for
the period - - - - - 3,122 3,122 (52) 3,070
Foreign
exchange
differences - - 926 - - - 926 376 1,302
Credit to
equity for
share-based
payments - - - 454 - - 454 - 454
Share-based
payments
reclassified
to Other
creditors - - - (208) - - (208) - (208)
Proceeds from
share
issue 352 5,061 - - - (5,390) 23 - 23
Deferred
consideration
as part of
acquisition - - - (1,150) - - (1,150) - (1,150)
Deferred tax
on
share-based
payments - - - - - (37) (37) - (37)
Tax relief on
exercised
share-based
payments - - - - - 13 13 - 13
Issue of
shares as
part of
acquisition 27 452 - - - - 479 - 479
Balance at 31
March
2017 6,102 69,754 4,374 7,505 (29,040) (7,901) 50,794 (8) 50,786
Profit /
(loss) for
the period - - - - - 1,073 1,073 (40) 1,033
Foreign
exchange
differences - - (2,240) - - - (2,240) (8) (2,248)
Credit to
equity for
share-based
payments - - - 1,262 - - 1,262 - 1,262
Deferred tax
on
share-based
payments - - - - - 80 80 - 80
Proceeds from
share
issue 29 80 - (14) - - 95 - 95
Balance at 30
September
2017 6,131 69,834 2,134 8,753 (29,040) (6,748) 51,064 (56) 51,008
The accompanying notes are an integral part of the consolidated
interim Financial Statements.
IMIMOBILE PLC CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Statement of Financial Position
as at 30 September 2017
As at As at
30 September 31 March
Notes 2017 2017
GBP000 GBP000
Non-current assets
Goodwill 25,133 25,314
Other intangible assets 11,027 9,933
Property, plant and equipment 5,449 6,005
Deferred tax assets 279 301
Total non-current assets 41,888 41,553
Current assets
Cash and cash equivalents 15,395 14,662
Trade and other receivables 35,073 30,554
Available-for-sale financial assets - 28
Total current assets 50,468 45,244
Current liabilities
Trade and other payables (39,542) (33,906)
Bank borrowings (191) (196)
Total current liabilities (39,733) (34,102)
Net current assets 10,735 11,142
Non-current liabilities
Bank borrowings (496) (644)
Provision for defined benefit
gratuity (631) (634)
Deferred tax liabilities (488) (631)
Total non-current liabilities (1,615) (1,909)
Net assets 51,008 50,786
Equity attributable to the owners
of the parent
Share capital 6,131 6,102
Share premium 69,834 69,754
Translation reserve 2,134 4,374
Share-based payment reserve 8,753 7,505
Capital restructuring reserve (29,040) (29,040)
Retained earnings / (deficit) (6,748) (7,901)
Equity attributable to shareholders
of the parent 51,064 50,794
Non-controlling interest (56) (8)
Total equity 51,008 50,786
The accompanying notes are an integral part of the consolidated
interim Financial Statements.
IMIMOBILE PLC CONSOLIDATED INTERIM FINANCIAL STATEMENTS
Unaudited Consolidated Cash Flow Statement
for the six months ended 30 September 2017
Six months Six months
ended ended
30 September 30 September
Notes 2017 2016
GBP000 GBP000
Operating activities
Cash from operating activities 6 5,714 6,404
Tax paid (237) (588)
Net cash from operating activities 5,477 5,816
Investing activities
Interest (paid) / received (63) 3
Purchases of intangible assets (2,195) (904)
Purchases of property, plant
& equipment (773) (1,086)
Sale / (acquisition) of available-for-sale
financial assets 28 (65)
Acquisition and restructuring
related costs (39) (190)
Net cash used in investing activities (3,042) (2,242)
Financing activities
Bank loan repayments (153) -
Proceeds from issuance of Ordinary
shares 95 86
Net cash used in financing activities (58) 86
Net increase in cash and cash
equivalents 2,377 3,660
Cash and cash equivalents at
beginning of the period 14,662 15,039
Effect of foreign exchange rate
changes (1,644) (766)
Cash and cash equivalents at
end of the period 15,395 17,933
The accompanying notes are an integral part of the consolidated
interim Financial Statements.
1. Basis of preparation
The condensed consolidated interim Financial Statements for the
six month period ended 30 September 2017 have been prepared under
the measurement principles of IFRS, using accounting policies and
methods of computation consistent with those set out in the
Company's 31 March 2017 Financial Statements. As permitted by AIM
rules the Group has not applied IAS 34 'Interim reporting' in
preparing interim reports.
IMImobile PLC (the "Company") is a company domiciled in the UK.
The consolidated interim Financial Statements of the Company for
the six month period ended 30 September 2017 comprise of the
Company and its subsidiaries (together referred to as "the
Group").
The consolidated interim Financial Statements are prepared under
the historical cost convention. A presentational currency of UK
Pound Sterling has been used and accounts have been translated from
other functional currencies into UK Pound Sterling.
The preparation of the consolidated interim Financial Statements
in conformity with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group's accounting
policies.
The preparation of the consolidated interim 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 interim Financial Statements and the reported amounts
of revenue and expenses during the year. Actual results could
differ from the estimates.
2. Basis of consolidation
The Group interim financial statements incorporate the interim
financial statements of the Company and entities controlled by the
Company (its subsidiaries) made up to 30 September 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
period are included in the consolidated interim 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 re-measured to its
fair value at the date when control is lost, with the change in
carrying amount recognised in the Income Statement.
3. Accounting policies
The principal accounting policies adopted are consistent with
those of the consolidated financial statements of IMImobile PLC for
the year ended 31 March 2017.
The accounting policies have been applied consistently
throughout the Group for the purposes of preparation of these
consolidated interim Financial Statements.
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, the operating segments are
defined as Europe and Americas, India and South East Asia (SEA) and
Middle East and Africa (MEA), 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:
Europe India
and Americas and SEA MEA Total
GBP000 GBP000 GBP000 GBP000
Six months ended 30 September
2017
Revenue 35,185 8,819 9,145 53,149
Gross profit 13,740 5,304 5,615 24,659
Other operating costs (18,957)
Depreciation and amortisation (2,113)
Share-based payment charge (1,416)
Acquisition and restructuring
related costs (39)
Exchange losses on the
Nigerian Naira (357)
Operating profit 1,777
Finance cost (63)
Profit before tax 1,714
Tax (681)
Profit after tax 1,033
Non-current assets 26,813 6,330 8,745 41,888
Six months ended 30 September
2016
Revenue 19,224 5,213 11,587 36,024
Gross profit 10,604 2,881 6,742 20,227
Other operating costs (14,963)
Depreciation and amortisation (1,480)
Share-based payment expense (1,748)
Acquisition and restructuring
related costs (190)
Exchange losses on the
Nigerian Naira (166)
Operating profit 1,680
Investment income 3
Profit before tax 1,683
Tax (676)
Profit after tax 1,007
Non-current assets 22,543 3,177 5,401 31,121
During the period revenues from Customer "A", Customer "B" and
Customer "C" accounted for 11% (2016: 13%), 7% (2016: 16%) and 5%
(2016: nil) of the Group's revenue.
The accounting policies of the reportable segments are the same
as the Group's accounting policies described in note 3 for each
period. The revenue from external parties reported is measured in a
manner consistent with that in the consolidated interim 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 segments.
Additional voluntary disclosures
Alternative revenue model 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 revenue model, which has also been disclosed
below. The Group's revenue models are defined as:
1. Monthly recurring revenue ("MRR") which is made up of a mix
of contracted, usage-based and transactional revenues.
2. Licence, one-off and professional service revenues.
These alternative revenue models arise in all geographical
segments. The following is an analysis of the Group's revenue and
result by delivery model:
Licence,
Monthly one-off
recurring and professional
revenue services Total
GBP000 GBP000 GBP000
Six months ended 30 September
2017
Revenue 47,718 5,431 53,149
Gross profit 20,171 4,488 24,659
Six months ended 30 September
2016
Revenue 34,769 1,255 36,024
Gross profit 19,065 1,162 20,227
5. Earnings per share ('EPS')
Six months Six months
ended ended
30 September 30 September
2017 2016
pence pence
Basic EPS 1.8 2.9
Adjusted basic EPS 5.5 6.6
Diluted EPS 1.6 2.1
Adjusted diluted EPS 4.8 4.8
Six months Six months
ended ended
30 September 30 September
2017 2016
million million
Weighted average number of ordinary
shares for the purpose of basic
EPS 61.1 49.2
Effect of exchange of Ordinary B
Shares - 11.3
Effect of dilutive potential ordinary
shares: share options 7.8 7.1
Weighted average number of ordinary
shares for the purpose of diluted
EPS 68.9 67.6
A number of non-GAAP adjusted profit measures are used in these
consolidated interim Financial Statements. Adjusting items are
excluded from our headline performance measures by virtue of their
size and nature, in order to reflect management's view of the
performance of the Group. 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 Adjusted
results A B C D E results
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Six months ended
30 September
2017
Revenue 53,149 - - - - - 53,149
Gross profit 24,659 - - - - - 24,659
Operating costs (22,882) 1,416 39 357 561 - (20,509)
Operating profit 1,777 1,416 39 357 561 - 4,150
Profit before
tax 1,714 1,416 39 357 561 - 4,087
Tax (681) 80 (5) - (143) - (749)
Profit after
tax 1,033 1,496 34 357 418 - 3,338
EBITDA 3,890 1,416 39 357 - - 5,702
Basic EPS (pence) 1.8 2.4 0.1 0.6 0.7 (0.1) 5.5
Diluted EPS (pence) 1.6 2.2 0.1 0.5 0.5 (0.1) 4.8
Statutory Adjusted
results A B C D E results
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Six months ended
30 September
2016
Revenue 36,024 - - - - - 36,024
Gross profit 20,227 - - - - - 20,227
Operating costs (18,547) 1,748 190 166 276 - (16,167)
Operating profit 1,680 1,748 190 166 276 - 4,060
Profit before
tax 1,683 1,748 190 166 276 - 4,063
Tax (676) (61) (20) - (55) - (812)
Profit after
tax 1,007 1,687 170 166 221 - 3,251
EBITDA 3,160 1,748 190 166 - - 5,264
Basic EPS (pence) 2.9 3.4 0.4 0.3 0.5 (0.9) 6.6
Diluted EPS (pence) 2.1 2.5 0.3 0.2 0.3 (0.6) 4.8
Adjustment A Share-based payment charge.
Adjustment B Acquisition related costs, including restructuring
costs following acquisitions.
Adjustment C Exchange losses incurred on the Nigerian Naira
following its unpegging against the US Dollar on 20 June 2016 and
until such time as the currency can be freely traded on the
exchange market due to the lifting of restrictions imposed by the
Central Bank of Nigeria.
Adjustment D Amortisation of acquired intangibles.
Adjustment E Basic adjusted EPS and diluted adjusted EPS
includes profit attributable to non-controlling interests not
included in the calculation of statutory basic and diluted EPS.
6. Notes to the Consolidated Cash Flow Statement
Six months Six months
ended ended
30 September 30 September
2017 2016
GBP000 GBP000
Cash flows from operating activities:
Profit before taxation 1,714 1,683
Adjustments:
Interest (cost) / income 63 (3)
Share-based payments 1,416 1,748
Depreciation of property, plant
and equipment 1,080 900
Amortisation of intangible assets 1,033 580
Acquisition and restructuring
related costs 39 190
Exchange losses on the Nigerian
Naira 357 166
Operating cash flows before movements
in working capital: 5,702 5,264
(Increase) / decrease in receivables (6,097) (4,063)
Increase / (decrease) in payables 6,159 5,839
Increase / (decrease) in provision
for defined benefit gratuity plan 44 32
Foreign exchange loss / (gain)
on working capital (94) (668)
Cash generated from operations 5,714 6,404
7. Post balance sheet events
Cancellation of share premium account
In January 2017 the founding shareholders of the Company
exercised their right to exchange their shareholding in IMI Mobile
Private Limited for ordinary shares in the Company. This exchange
resulted in the impairment of the investment in IMI Mobile Private
Limited held by Company. As a consequence the Company did not have
distributable reserves.
For most purposes under the Companies Act 2006, a share premium
account is undistributable. However, with the approval of
shareholders by special resolution and with the subsequent
confirmation of the High Court, it is possible to reduce or cancel
a share premium account. It was proposed that the entire reserve at
the date of the hearing of the High Court be cancelled, being
GBP69,759,230.
Following approval of the cancellation of the Company's share
premium account by special resolution at the general meeting of the
Company held on 16 August 2017 the High Court of Justice Chancery
Division confirmed the cancellation effective on 5 October 2017. As
a result of the High Court approval the Company now has
distributable reserves.
Acquisition of the trade and assets of Sumotext Corporation
On 1 November 2017 the Company announced it had acquired the
trade and assets of Sumotext Corporation, an established US-based
communications platform provider. The total consideration will be
between $4,500,000 and $6,000,000 depending on EBITDA performance
of the acquired business during the first 12 months following the
acquisition.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGGWCGUPMPPU
(END) Dow Jones Newswires
November 21, 2017 02:01 ET (07:01 GMT)
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