10 December 2013
mirada plc
(AIM: MIRA)
("mirada", "the Company" or "the Group")
Interim results for the six months to 30 September 2013
New contract win
mirada plc, the AIM quoted leading audiovisual content interaction specialist,
announces its unaudited interim results for the six months to 30 September
2013. At the same time the Group is pleased to announce that it has signed an
agreement with a new customer, Millicom, a multi-national group which offers
digital lifestyle products and services in Latin America and Africa under their
Tigo brand.
Millicom will use mirada's technology to replace the software in its Arris
(formerly Motorola) High Definition DTA decoders in Honduras, Guatemala, El
Salvador and Costa Rica. The Group expects the roll-out to commence during the
first quarter of 2014 and, while mirada does not expect substantial revenues
from the contract during the first year, it is the first project in which the
Group will have the chance to replace the software in Motorola boxes in Latin
America.
Key Points
- Revenue for the period is £2.30 million, compared to £2.46 million for the
six months ended 30 September 2012
- Revenues earned from subscriber-based licence fees continued to grow
showing an increase to £0.97 million from £0.80 million in the period ended
30 September 2012
- The Group recorded EBITDA of £0.51 million in the period and an operating
profit of £61,000, compared to EBITDA of £0.61 million and an operating
profit of £0.26 million in the six months to 30 September 2012
Operational Highlights
- US$1.4 million contract secured with an established Latin American digital
television operator to deploy mirada's multi-screen product, iris, across
its network
- Digital TV activities account for over 85% of total revenues and are the
key driver for the future growth of the business
- GVT, the Brazilian telecommunications operator owned by the Vivendi group,
launched a new satellite television service using mirada's technology in
August of this year. This service is experiencing considerable growth.
Post period highlights
- The Company completed a £2.1 million fund raising via placings with both
existing shareholders and new institutional investors.
- Group's balance sheet strengthened
- Company to further grow its revenues from emerging markets
Commenting on the future outlook of the Group, José Luis Vázquez, CEO of
mirada, said:
"The Company has achieved a high level of recognition in the digital TV
industry, especially in the fast growing Latin American market. In the last two
years there have been four new digital TV services launched in the region which
utilise mirada's technology, more than any of our competitors. These are
proving to be very important references for us, notably in the region's largest
economies, Mexico and Brazil. This has positioned us to win substantial new
deals with Tier 1 operators, which should significantly increase both turnover
and margins in the coming years."
Enquiries:
mirada plc +44 (0) 207 549 5678
Jose Luis Vazquez, Chief Executive Officer
Bishopsgate Communications +44 (0) 207 562 3350
Nick Rome/Sam Allen
mirada@bishopsgatecommunications.com
Cantor Fitzgerald Europe (Nomad and Joint Broker) +44 (0) 207 894 7000
Mark Percy (Corporate Finance)
David Banks (Corporate Broking)
Peterhouse Corporate Finance (Joint Broker) +44 (0) 207 469 0937
Jon Levinson
Lucy Williams
Chief Executive Officer's Statement
Overview
I am pleased to present the Group's financial results for the six months ended
30 September 2013. During this period the Company has been working on
increasing its presence in the Latin American market, and we continue to be
involved in negotiations with a number of leading digital TV platforms in the
region.
As previously announced, the major new contract win in the first half of the
year was with an established Latin American digital television operator with
whom we have secured an agreement for the deployment of mirada's multi-screen
product, iris, across their network. The Company will receive in excess of
US$1.4 million in professional service fee income for the integration of the
product and the adaption of inspire, mirada's most advanced user interface. We
expect to complete the work on this project by the first half of 2014. As the
operator has several million existing installed customers, if the product is
rolled out across their subscriber base, we anticipate that the licence fees
earned will significantly increase the Group's revenues over the next three to
five years.
It is important to note that the split of revenues has changed during the
period, as revenues earned from professional services will be lower in the
first half of the year compared to those we expect to earn in the second half.
This is a result of the commercial and technical investment made in the first
half of the year in securing the above contract and the fact that most of the
revenues from this contract will be recognised during the final six months of
the year. Furthermore, the margins the Group will earn from the professional
service fee income on this deployment are lower than average; however, the
subscriber-based licence fees we expect to earn once the solution is
commercially deployed should far outweigh this temporary reduction in margin.
Post period end the Company completed a £2.1 million fund raising via placings
with both existing shareholders and new institutional investors. This new
funding has strengthened the Group's balance sheet and also allowed mirada to
recruit new sales and technical staff which will enable the Group to take
advantage of some significant opportunities which we currently have in the
pipeline.
I want to again recognise the outstanding support from our employees, directors
and shareholders. We are reaching the goal of becoming a leading player in the
market, and this would not have been possible without their continued
commitment and hard work.
Review of operations
The Company is fully concentrated on the growth of its digital TV activities,
which now represent more than 85% of the total revenues of the Group and is the
key driver for the future growth of the business. Following on from the
successful transition to the product-based model, the Group is now less reliant
on revenue received from professional services. This is demonstrated by the
fact that even after taking into account the reduction in professional service
fee income in the period the Group was still able to generate EBITDA of £0.51
million and an operating profit of £61,000. This was due to subscriber-based
licence fee revenue increasing to £0.97 million in the period, compared to £
0.80 million in the 6 months ended 30 September 2012.
At the period end we had four digital TV services from which licence fees are
generated, compared to three services at the end of the last financial year.
Our largest customer continues to be GVT, the Brazilian telecommunications
operator owned by the Vivendi group. GVT now has two fully operational digital
TV services utilising mirada's technology; an IPTV service, which was launched
in November 2011 (a deal which was secured through our partnership agreement
with Ericsson), and a new satellite television service which was launched in
mid August 2013. The new satellite service is experiencing considerable growth.
Although it has only just launched, we expect that, due to the nature of the
Brazilian market, the take-up of the satellite television service will be
substantial, as GVT will be able to deploy this service over large areas of
Brazil, which are currently out of the reach of their IPTV service.
I am pleased to announce that mirada signed an agreement with a new customer,
Millicom, a multi-national group, which offers digital lifestyle products and
services in Latin America and Africa under their Tigo brand. Millicom will use
mirada's technology to replace the software in their Arris (formerly Motorola)
High Definition DTA decoders. The agreement covers deployments in Honduras,
Guatemala, El Salvador and Costa Rica, and we expect the roll-out to take place
during the first quarter of 2014. Although we do not expect substantial
revenues arising from this contract during the first year, it is the first
project in which we will have the chance to replace the software in Motorola
boxes in Latin America. Motorola are the dominant suppliers in the region with
in excess of 15 million units currently deployed. We believe that this project
will be an important reference for mirada and will prove to be highly
beneficial for other operators in the region looking to replace their software.
Financial overview
Revenue for the period equalled £2.30 million compared to £2.46 million for the
six months ended 30 September 2012. As outlined above the reduction in revenue
is because of the decreased professional service fee income earned, but we
expect this income to increase in the second half of the year. The revenues
earned from subscriber-based licence fees continued to grow showing an increase
to £0.97 million from £0.80 million in the period ended 30 September 2012. The
Group recorded EBITDA of £0.51 million in the period and an operating profit of
£61,000, compared to EBITDA of £0.61 and an operating profit of £0.26 million
in the six months to 30 September 2012.
The net current liabilities at 30 September 2013 equalled £2.3 million, a
similar level to those shown at 31 March 2013. This position, however, has now
been dramatically improved following the £2.1 million placing which took place
post period end. The funds raised will enable management to harvest the
commercial opportunities available to the Group, and should be sufficient to
allow the Group to achieve the aggressive targets we have set ourselves.
Outlook
The Company has achieved a high level of recognition in the digital TV
industry, especially in the fast growing Latin American market. In the last two
years there have been four new digital TV services launched in the region which
utilise mirada's technology, more than any of our competitors. These are
proving to be important references for us, notably in the region's largest
economies, Mexico and Brazil. This has allowed us to be in a position to win
substantial new deals with Tier 1 operators, which should significantly
increase both turnover and margin in the coming years.
The most important task we have in the short term is to complete the deployment
of our iris product into the network of an existing digital TV operator. If, as
we expect, we are successful and our technology is rolled out across their
existing subscriber base, the Group will experience a substantial increase in
the annual licence fees, starting in the next financial year. In the meantime
the recent injection of new funds from shareholders has increased our
resources, improving our ability to win new contracts and take advantage of the
exciting opportunities available to the Group.
Jose Luis Vazquez
Chief Executive Officer
9 December 2013
Consolidated income statement for the six months to 30 September 2013
Note 6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Revenue 2 2,300 2,457 4,837
Cost of sales (95) (109) (207)
Gross profit 2,205 2,348 4,630
Depreciation (22) (33) (58)
Amortisation of deferred (429) (317) (683)
development costs
Other administrative expenses (1,693) (1,743) (3,649)
Total administrative costs (2,144) (2,093) (4,390)
3 61 255 240
Operating profit
Finance income - 3 137
Finance expense (234) (233) (617)
(Loss)/profit before taxation (173) 25 (240)
Taxation - - -
(Loss)/profit for period (173) 25 (240)
(Loss)/earnings per share
- basic 4 (0.3p) 0.1p (0.7p)
The above amounts are attributable to the equity holders of the parent.
Consolidated statement of comprehensive income
Six months to 30 September 2013
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
(Loss)/profit for the financial period (173) 25 (240)
Currency translation differences 4 90 (28)
Total comprehensive (expense)/income (169) 115 (268)
for the period
Consolidated statement of changes in equity
Six months to 30 September 2013
Profit
Share Foreign and
Share Share option exchange Merger loss
capital premium reserve reserve reserve account Total
£000 £000 £000 £000 £000 £000 £000
At 1 April 2013 519 3,059 140 509 2,472 (3,234) 3,465
Loss for the financial - - - - - (173) (173)
period
Conversion of 31 284 - - - (17) 298
convertible loans into
shares
Movement in foreign - - - 4 - - 4
exchange reserve
At 30 September 2013 550 3,343 140 513 2,472 (3,424) 3,594
Profit
Share Foreign and
Share Share option exchange Merger loss
capital premium reserve reserve reserve account Total
£000 £000 £000 £000 £000 £000 £000
At 1 April 2012 319 1,216 140 537 2,472 (3,026) 1,658
Profit for the financial - - - - - 25 25
period
Movement in foreign - - - 90 - - 90
exchange reserve
At 30 September 2012 319 1,216 140 627 2,472 (3,001) 1,773
Share Foreign Profit
Share Share option exchange Merger and
capital premium reserve reserve reserve loss Total
£000 £000 £000 £000 £000 account £000
£000
At 1 April 2012 319 1,216 140 537 2,472 (3,026) 1,658
Loss for the financial - - - - - (240) (240)
period
Conversion of 45 400 - - - 32 477
convertible loans into
shares
Issue of shares 155 1,457 - - - - 1,612
Share issue costs - (14) - - - - (14)
Movement in foreign - - - (28) - - (28)
exchange reserve
At 31 March 2013 519 3,059 140 509 2,472 (3,234) 3,465
Consolidated statement of financial position as at 30 September 2013
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Property, plant and equipment 48 79 61
Goodwill 6,946 6,946 6,946
Intangible assets 1,955 1,442 1,719
Non-current assets 8,949 8,467 8,726
Trade and other receivables 1,314 1,615 1,292
Cash and cash equivalents 3 3 94
Current assets 1,317 1,618 1,386
Total assets 10,266 10,085 10,112
Loans and borrowings (616) (674) (697)
Trade and other payables (2,874) (3,207) (2,725)
Provisions (121) (240) (141)
Current liabilities (3,611) (4,121) (3,563)
Net current liabilities (2,294) (2,503) (2,177)
Total assets less current 6,655 5,964 6,549
liabilities
Interest bearing loans and (2,854) (3,058) (2,767)
borrowings
Embedded conversion option (44) (292) (65)
derivative
Other non-current liabilities (163) (525) (181)
Provisions - (316) (71)
Non-current liabilities (3,061) (4,191) (3,084)
Net assets 3,594 1,773 3,465
Issued share capital and reserves
attributable to equity holders of
the company
Share capital 550 319 519
Share premium 3,343 1,216 3,059
Other reserves 3,125 3,239 3,121
Accumulated losses (3,424) (3,001) (3,234)
Equity 3,594 1,773 3,465
Consolidated statement of cash flows six months to 30 September 2013
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Cash flows from operating activities
(Loss)/profit for the period (173) 25 (240)
Adjustments for:
Depreciation of property, plant and 22 33 58
equipment
Amortisation of intangible assets 429 317 683
Finance income - (3) (137)
Finance expense 234 233 617
Operating cash flows before 512 605 981
movements in working capital
(Increase)/decrease in trade (34) (340) 44
and other receivables
Increase in trade and other 82 587 21
payables
Decrease in provisions (90) (113) (356)
Net cash generated from 470 739 690
operating activities
Cash flows from investing
activities
Interest and similar income - 3 3
received
Purchases of property, plant (11) (2) (8)
and equipment
Purchases of other intangible (683) (514) (1,116)
assets
Net cash used in investing (694) (513) (1,121)
activities
Cash flows from financing
activities
Interest and similar expense (103) (126) (341)
paid
Issue of share capital - - 1,014
Costs of share issue - - (14)
Loans received 292 604 913
Repayment of loans (196) (570) (735)
Repayment of capital element (5) (5) (10)
of finance leases
Net cash (used in)/generated (12) (97) 827
from
financing activities
Net (decrease)/increase in (236) 129 396
cash and cash equivalents
Cash and cash equivalents at 94 (299) (299)
the beginning of the period
Exchange gains on cash and (1) 13 (3)
cash equivalents
Cash and cash equivalents at (143) (157) 94
the
Cash and cash equivalents comprise cash at bank less bank overdrafts.
Notes to the Accounts
1. Basis of Preparation
These interim financial statements have been prepared using policies based on
International Financial Reporting Standards (IFRS and IFRIC Interpretations)
issued by the International Accounting Standards Board ("IASB") as adopted for
use in the EU. They do not include all disclosures that would otherwise be
required in a complete set of financial statements and should be read in
conjunction with the 31 March 2013 Annual Report. The financial information for
the half years ended 30 September 2013 and 30 September 2012 do not constitute
statutory accounts within the meaning of Section 434 (3) of the Companies Act
2006 and has neither been audited nor reviewed pursuant to guidance issued by
the Auditing Practices Board.
The annual financial statements of mirada plc are prepared in accordance with
IFRS as adopted by the European Union. The comparative financial information
for the year ended 31 March 2013 included within this report does not
constitute the full statutory Annual Report for that period. The statutory
Annual Report and Financial Statements for 31 March 2013 have been filed with
the Registrar of Companies. The Independent Auditors' Report on that Annual
Report and Financial Statement for 31 March 2013 was unqualified, but did
include a reference to the uncertainties surrounding going concern, to which
the auditors drew attention by way of emphasis, and did not contain a statement
under 498 (2) or 498 (3) of the Companies Act 2006.
After making enquiries, the directors have concluded that the Group have
adequate resources to continue operational existence for the foreseeable
future. Accordingly, they continue to adopt the going concern basis in
preparing the half-yearly consolidated financial statements.
The same accounting policies, presentation and methods of computation are
followed in these interim consolidated financial statements as were applied in
the Group's latest annual audited financial statements.
In addition, the IASB have issued a number of IFRS and IFRIC amendments or
interpretations since the last Annual Report was published. It is not expected
that any of these will have a material impact on the Group.
2. Segmental reporting
For management purposes the Group is currently organised into three operating
divisions based upon the varying products and services provided by the Group
-Digital TV, Broadcast and Mobile (which includes Interactive Marketing and
Mirada Connect). The segment headed other relates to corporate overheads.
Segmental results for the 6 months ended 30 September 2013 are as follows:
Digital TV Broadcast Mobile Other Group
£000 £000 £000 £000 £000
Revenue - external 1,971 102 227 - 2,300
Gross profit 1,955 98 152 - 2,205
Profit/(loss) before 850 73 9 (420) 512
interest, tax,
depreciation &
amortisation
Depreciation (11) - - (11) (22)
Amortisation (398) - (14) (17) (429)
Finance income - - - - -
Finance expense - - - (234) (234)
Segmental profit/(loss) 441 73 (5) (682) (173)
Segmental results for the 6 months ended 30 September 2012 are as follows:
Digital TV Broadcast Mobile Other Group
£000 £000 £000 £000 £000
Revenue - external 2,119 120 218 - 2,457
Gross profit 2,116 106 126 - 2,348
Profit/(loss) before 958 84 13 (450) 605
interest, tax,
depreciation &
amortisation
Depreciation (19) - - (14) (33)
Amortisation (282) - (19) (16) (317)
Finance income - - - 3 3
Finance expense - - - (233) (233)
Segmental profit/(loss) 657 84 (6) (710) 25
Segmental results for the year ended 31 March 2013 are as follows:
Digital TV Broadcast Mobile Other Group
£000 £000 £000 £000 £000
Revenue - external 4,094 273 470 - 4,837
Gross profit 4,074 257 299 - 4,630
Profit/(loss) before 1,761 213 57 (1,050) 981
interest, tax,
depreciation &
amortisation
Depreciation (33) - - (25) (58)
Amortisation (615) - (34) (34) (683)
Finance income - - - 137 137
Finance expense - - - (617) (617)
Segmental profit/(loss) 1,113 213 23 (1,589) (240)
Revenue by location of customer
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
UK 329 338 743
Spain 278 210 473
Continental Europe 136 288 465
Americas 1,557 1,621 3,156
Total 2,300 2,457 4,837
3. Operating profit
Reconciliation of operating profit to profit before interest, taxation,
depreciation and amortisation:
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
£000 £000 £000
Operating profit 61 255 240
Depreciation 22 33 58
Amortisation of deferred development 429 317 683
costs
Profit before interest, taxation, dep 512 605 981
reciation and amortisation
4. (Loss)/earnings per share
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
(Loss)/profit for period (£173,000) £25,000 (£240,000)
Weighted average number of shares 52,592,314 31,973,423 34,612,552
Basic earnings/(loss) per share (0.3p) 0.1p (0.7p)
Adjusted earnings per share
Adjusted earnings per share is calculated by reference to the profit from
continuing activities before interest, taxation, amortisation and depreciation
(see note 3).
6 months 6 months Year
ended ended ended
30 September 30 September 31 March
2013 2012 2013
(Unaudited) (Unaudited) (Audited)
Adjusted profit for period £512,000 £605,000 £981,000
Basic adjusted earnings per share 1.0p 1.9p 2.8p
Diluted adjusted earnings per share 0.9p 1.3p 2.2p
At each period end the Company had 301,327 potentially dilutive ordinary shares
arising from share options issued to staff. The Company also has 6,600,000 (30
September 2012: 14,200,000 and 31 March 2013: 9,750,000) potentially dilutive
ordinary shares arising from the convertible loan. These have not been included
in calculating the diluted earnings per share as the effect is anti-dilutive,
although they have been included in calculating the adjusted earnings per
share.
5. Related party transactions
Transactions between the company and its subsidiaries, which are related
parties, have been eliminated on consolidation and are not disclosed in this
note. There were no material transactions between the Group and the related
parties during the period.
6. Other
Copies of unaudited interim results have not been sent to shareholders, however
copies are available on request from the Company Secretary at the Company's
registered office, New City Cloisters, 196 Old Street, London, EC1V 9FR.