TIDMMPM
RNS Number : 4639A
mporium Group PLC
29 September 2015
29 September 2015
mporium Group PLC
Financial Statements for the 6 months ended 30(th) June 2015
mporium Group PLC (AIM :MPM) ("mporium" or the "Company"), the
mobile commerce specialist, today announces its results for the six
months ended 30 June 2015.
Results Overview
These half year results reflect the original MoPowered Group plc
("MoPowered") business which the directors of the Company believe
to have been uncommercial and largely inoperable and have therefore
resulted in the poor financial performance of the Company during
the half year under review.
Overall revenue during the period under review was GBP559,065
(2014: GBP753,204) and the loss from ordinary activities before
taxation was GBP3,895,937 (2014: loss of GBP2,375,612). The loss
per share was 0.03 (2014: loss of 0.15). The Group had cash
reserves at the end of the half year of GBP2,604,750, following the
successful placing in June 2015 which raised approximately GBP2.9m
net of expenses (the "Placing").
Business Review
On 8 June a new management team led by Barry Moat as Chief
Executive was appointed to the Company, three weeks before the end
of the period under review. Following their appointment, Barry and
his new team initiated a complete business review of the Company
which identified that the old MoPowered business model was, in
their belief, not viable and that significant changes were required
throughout. To support the new management team and the development
of a new product suite, the Company successfully completed the
Placing in June 2015. So far, the Company's new management team
have rebranded MoPowered to 'mporium', implemented a new
organisational structure comprising the appointment of certain
highly experienced senior managers and the appointment of a number
of new directors to the Board, which has been further strengthened
today.
On 8 June the Company acquired the entire issued share capital
of Fast Web Media Limited (FWM) with a 50.001 per cent. holding of
FWM's subsidiary InTELEgentsia Limited for a total consideration of
GBP1.56 million. The consideration was satisfied by the issue of
89,046,800 new ordinary shares at 1.75 pence per ordinary share.
Furthermore, on the same date, the Company entered into a share
swap agreement and services agreement with Cxense to licence
Cxense's technology. The Company allotted and issued 25,000,000 new
ordinary shares to Cxense at 2 pence per ordinary share in return
for the allotment and issue by Cxense to the Company of 51,177 new
shares at an issue price of NOK 113.45 per share. The total
consideration for the services agreement of GBP1 million was
satisfied through the issue of 50,000,000 new ordinary shares at 2
pence per ordinary share to Cxense. In addition to the acquisition,
share swap and services agreements, the Company raised GBP3.3
million (before expenses) through a placing and subscription of
165,000,000 new ordinary shares. The Issue Price of 2 pence per new
ordinary share represented a 14 per cent. premium to the closing
middle market price of 1.75 pence per ordinary share on 14 May
2015, being the last business day prior to the announcement of the
Placing.
Directorate changes
As part of the transformation of mporium, further Board changes
have been made with effect from today. As announced separately,
Nigel Walder has been appointed, as non-Executive Chairman of the
Company, replacing Mike Hughes who retires today. Nigel has over 25
years' experience of working with technology within the Financial
Services sector including Chief Information Officer positions at
Barclays Bank plc, NatWest Markets, Royal Bank of Scotland and
Deutsche Bank.
Dominic Keen, non-Executive Director, has also left the Board
today in order to be able to focus on his other business
interests.
Outlook
mporium, under the leadership of Barry Moat and the new Board,
is in the process of implementing its new strategy. This includes
the development of new products and shareholders will be further
updated in due course. As announced separately, mporium has today
completed the purchase of the remaining 49.999% interest in
InTELEgentsia Ltd. which it does not already own. The consideration
of approximately GBP250,000 is to be satisfied through the issue of
5,555,555 new ordinary shares of 0.5p in the Company at an issue
price of 4.5p each which represents a 5.26% discount to the closing
middle market price of 4.75p per ordinary share on 28 September
2015.
mporium: 020 3242 0515
Barry Moat
N+1 Singer: 020 7496 3000
Ben Wright
Alex Wright
Buchanan: 020 7466 5000
Charles Ryland
Vicky Watkins
Independent review report to MoPowered Group PLC
Introduction
We have been engaged by the company to review the financial
information in the half-yearly financial report for the six months
ended 30 June 2015 which comprises the Consolidated interim
statement of total comprehensive income, the Consolidated interim
statement of financial position, the Consolidated interim statement
of changes in equity, the Consolidated interim statement of cash
flows and the related explanatory notes that have been reviewed. We
have read the other information contained in the half yearly
financial report which comprises only the Results Overview,
Business Review, Directorate Changes and Outlook and considered
whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of
financial statements.
This report is made solely to the company in accordance with
guidance contained in ISRE (UK and Ireland) 2410, 'Review of
Interim Financial Information performed by the Independent Auditor
of the Entity'. Our review work has been undertaken so that we
might state to the company those matters we are required to state
to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The AIM rules of the London
Stock Exchange require that the accounting policies and
presentation applied to the financial information in the
half-yearly financial report are consistent with those which will
be adopted in the annual accounts having regard to the accounting
standards applicable for such accounts.
As disclosed in Note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the
European Union. The financial information in the half-yearly
financial report has been prepared in accordance with the basis of
preparation in Note 1.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the financial information in the half-yearly financial report based
on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the financial information in the
half-yearly financial report for the six months ended 30 June 2015
is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 1.
GRANT THORNTON UK LLP
AUDITOR
London
28 September 2015
Consolidated interim statement of total comprehensive income for
the period ended 30 June 2015
6 months
6 months to 30 Year ended
to 30 June 31 December
June 2015 2014 2014
Note unaudited unaudited audited
GBP GBP GBP
Continuing operations
Revenue 4 553,623 753,204 1,098,954
Cost of sales (378,821) (296,566) (815,669)
------------ ------------ -------------
Gross profit 174,802 456,638 283,285
Administrative expenses (4,065,057) (2,832,250) (5,820,299)
------------ ------------ -------------
Operating loss (3,890,255) (2,375,612) (5,537,014)
Financial income 131 150 254
Financial expense (5,813) - (1,906)
Loss on ordinary activities
before taxation (3,895,937) (2,375,462) (5,538,666)
Taxation - 74,441 377,013
------------ ------------ -------------
Loss for the period (3,895,937) (2,301,021) (5,161,653)
Other comprehensive
loss for the period
Revaluation of investment (55,000) - -
which will subsequently
be reclassified to
profit and loss
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------------ ------------ -------------
Total comprehensive
losses attributable
to equity holders
of the parent company (3,950,937) (2,301,021) (5,161,653)
------------ ------------ -------------
Basic and diluted
loss per share for
losses attributable
to the owners of the
parent during the
period 8 (0.03) (0.15) (0.16)
Consolidated interim statement of financial position as at 30
June 2015
As at As at As at
30 June 30 June 31 December
2015 2014 2014
Note unaudited unaudited audited
GBP GBP GBP
Non-current assets
Property, plant and
equipment 43,023 9,548 11,423
Intangible assets 6 2,057,251 466,803 16,917
Investments 7 445,000 - -
------------- ------------- -------------
Total Non-current assets 2,545,274 476,351 28,340
Current assets
Trade and other receivables 1,670,435 935,699 793,177
Cash and cash equivalents 2,604,750 647,797 1,321,437
------------- ------------- -------------
Total Current assets 4,275,185 1,583,496 2,114,614
Total assets 6,820,459 2,059,847 2,142,954
------------- ------------- -------------
Current liabilities
Trade and other payables (3,087,613) (1,675,047) (1,527,340)
Current proportion - (9,831) -
of loans and borrowings
------------- ------------- -------------
Total Current liabilities (3,087,613) (1,684,878) (1,527,340)
Total liabilities (3,087,613) (1,684,878) (1,527,340)
------------- ------------- -------------
Net assets 3,732,846 374,969 615,614
============= ============= =============
Shareholders' Equity
Share capital 2,128,598 79,564 445,264
Share premium 10,446,625 3,748,000 6,978,853
Share option reserve 1,731,296 1,766,474 1,518,590
Non-controlling interest 6,969 - -
Merger reserve 8,754,683 7,888,990 7,641,598
Retained earnings (19,335,325) (13,108,059) (15,968,691)
Equity shareholders'
funds 3,732,846 374,969 615,614
============= ============= =============
Consolidated interim statement of changes in equity for the
period ended 30 June 2015
Retained Share Share Share Merger Minority Total
Earnings capital premium option Reserve Interests
reserve reserve
GBP GBP GBP GBP GBP GBP GBP
31 December 2012
- unaudited (7,166,108) 39,708 5,317,141 543,418 - (1,265,841)
Reclassification
arising on group
reorganisation
to equal deemed
share capital - 17,761 (5,317,141) - 5,299,380 - -
Comprehensive
loss for the
period (3,640,930) - - - - - (3,640,930)
Transactions -
with owners:
Share-based payments - - - 607,222 - - 607,222
Share issue costs - - (326,976) - - - (326,976)
Share issues
during the period 21,595 4,322,368 - - - 4,343,963
Limited company
Share issue - 17,761 2,324,457 - - - 2,342,218
Reclassification
to equal deemed
share capital - (17,761) (2,324,457) - 2,342,218 - -
------------- ---------- ------------ ---------- ---------- ---------- ------------
31 December 2013
- unaudited (10,807,038) 79,064 3,995,392 1,150,640 7,641,598 - (2,059,656)
Comprehensive
loss for the
period (5,161,653) - - - - - (5,161,653)
Transactions
with owners:
Share-based payments - - - 367,950 - - 367,950
Share issue costs - - (307,839) - - - (307,839)
Share issues
during the period - 366,200 3,291,300 - - - 3,657,500
31 December 2014
- unaudited (15,968,691) 445,264 6.978,853 1,518,590 7,641,598 - 615,614
Comprehensive
loss for the
period (3,895,937) - - - - - (3,895,937)
Transactions
with owners:
Share-based payments - - - 797,009 - - 797,009
Transfer 584,303 - - (584,303) - - -
Minority interests 6,969 6,969
Share issue costs - - (246,528) - - - (246,528)
Share issues
during the period - 1,683,334 3,714,300 - 1,113,085 - 6,510,719
------------- ---------- ------------ ---------- ---------- ---------- ------------
30 June 2015
- unaudited (19,280,325) 2,128,598 10,446,625 1,731,296 8,754,683 6,969 3,787,846
============= ========== ============ ========== ========== ========== ============
Consolidated interim statement of cash flows for the period
ended 30 June 2015
6 months 6 months Year ended
to 30 to 30 31 December
June 2015 June 2014 2014
unaudited unaudited audited
GBP GBP GBP
Cash flows used in operating
activities
Loss before taxation (3,895,937) (2,375,462) (5,538,666)
Adjustments for:
Depreciation of property,
plant and equipment 1,748 1,280 3,308
Amortisation of intangible
assets 16,917 232,399 482,278
Impairment of intangible
assets - - 612,143
Share based payment expense 797,009 615,834 367,950
Bad debt expense 72,084 92,120 154,193
Financial income (131) (150) (254)
Financial expense 5,813 - 1,906
Cash flows from operating
activities before changes
in working capital (3,002,497) (1,433,979) (3,917,142)
------------ ------------ -------------
Decrease/(increase) in
trade and other receivables 343,485 (205,115) 247,768
Increase /(decrease) in
trade and other payables 747,754 (160,545) (387,947)
Cash used in operations (1,911,258) (1,799,639) (4,057,321)
------------ ------------ -------------
Income taxes received - - -
Net cash used in operating
activities (1,911,258) (1,799,639) (4,057,321)
------------ ------------ -------------
Cash flows used in investing
activities
Interest received 131 150 254
Purchase of intangible
assets - (328,773) (740,908)
Purchase of property, plant
and equipment - (8,459) (12,361)
Cash acquired with subsidiary (5,619) - -
------------ ------------ -------------
Net cash used in investing
activities (5,488) (337,082) (753,015)
------------ ------------ -------------
Cash flows from financing
activities
Interest paid (5,813) - (1,906)
Issue of share capital 3,300,000 500 3,657,500
Issue cost of share (94,128) - (307,839)
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Increase in borrowings 250,000 - 250,000
Repayment of borrowings (250,000) - (250,000)
Net cash generated from
financing activities 3,200,059 500 3,347,755
------------ ------------ -------------
Net increase/(decrease)
in cash and cash equivalents 1,283,313 (2,136,221) (1,462,581)
Cash and cash equivalents
at start of period 1,321,437 2,784,018 2,784,018
Cash and cash equivalents
at end of period 2,604,750 647,797 1,321,437
============ ============ =============
Notes to the consolidated interim financial statements
1 Basis of preparation
The interim condensed consolidated financial statements are the
unaudited Consolidated Financial Statements of mporium Group plc,
for the six months ended 30 June 2015.This non-statutory interim
statement has been prepared on a basis consistent with that used in
the preparation of the annual accounts, which are prepared under
International Financial Reporting Standards as adopted by the EU
("IFRS"). They do not include all of the information required in
annual financial statements in accordance with IFRS.
The interim financial statements were approved by the Board on
28 September 2015. The financial information set out in this
interim report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006.
The financial statements have been prepared under the historical
cost convention and the consolidated financial statements
incorporate the financial statements of the Company and its
subsidiary companies.
The comparative figures for the year ended 31 December 2014 were
derived from the statutory accounts for that year which have been
delivered to the Registrar of Companies. Those accounts received an
unqualified audit report which did not contain statements under
sections 498(2) or (3) (accounting record or returns inadequate,
accounts not agreeing with records and returns or failure to obtain
necessary information and explanations) of the Companies Act
2006.
Going Concern
The interim financial statements have been prepared assuming the
Group will continue as a going concern. Under the going concern
assumption, an entity is ordinarily viewed as continuing in
business for the foreseeable future with neither the intention nor
the necessity of liquidation, ceasing trading or seeking protection
from creditors pursuant to laws or regulations. In assessing
whether the going concern assumption is appropriate, management has
considered the Group's existing working capital position.
Management are of the opinion that the Group has adequate resources
to continue as a going concern.
2 Significant accounting policies
The principal accounting policies and presentation followed in
the preparation of this interim report have been consistently
applied to all periods in these financial statements and are the
same as those applied in the Group's annual accounts for the year
ended 31 December 2014. The accounts for the Group can be obtained
from the company's website.
3 Critical accounting judgements and key estimation of uncertainty
The preparation of financial statements in conforming with
adopted IFRS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets, liabilities, income and expenses. The estimates
and assumptions are based on historical experience and other
factors considered reasonable at the time, but actual results may
differ from those estimates. Revisions to these estimates are made
in the period in which they are recognised. The critical accounting
judgements made in preparing this interim report are the same as
those in preparing the annual accounts for the Group for the year
ended 31 December 2014 which can be obtained from the company's
website.
4 Business segments
The MoPowered Group plc's operations are centred on providing a
software as service and supporting services. Management therefore
considers there to be one reporting segment covering the entire
Group.
A supplementary analysis of revenue is as follows:
6 months Year ended
to 30 June 6 months 31 December
2015 to 30 June 2014
unaudited 2014 unaudited audited
GBP GBP GBP
Product Revenue 377,458 753,204 1,098,954
Agency and Project Fees 176,165 - -
553,623 753,204 1,098,954
============ ================ =============
Business segments have been updated to reflect the acquisition
of Fast Web Media. Product Revenue relates to the mporium business
and Agency and Project Fees to the Fast Web Media business.
5 Staff numbers
The average number of persons employed by the mporium Group
during the period including executive directors is analysed
below:
6 months to 30 June 2015 6 months to 30 June 2014 Year ended 31 December 2014
unaudited unaudited audited
Directors 4 2 4
Administration 2 4 3
Research and development 7 12 9
Operations 13 14 16
Customer services 14 12 13
Sales 5 12 12
------------------------- ----------------------------- ----------------------------
45 56 57
------------------------- ----------------------------- ----------------------------
6 Intangible assets
On 8 June the Company acquired the entire issued share capital
of Fast Web Media Limited (FWM) with a 50.001 per cent. holding of
FWM's subsidiary InTELEgentsia Limited for a total consideration of
GBP1,558,319. Goodwill arising on this transaction totalled
GBP1,279,751. An intangible asset of GBP27,500 acquired as part of
the transaction and relating to FWM's development costs has also
been recognised.
On the same day the Company entered into a services agreement
with Cxense to licence Cxense's technology and for the provision of
hosting services. Consideration of GBP750,000 was paid for the
licencing element of the services agreement this has been
recognised as an intangible asset.
7 Investments
On 8 June as part of the arrangements with Cxense the Company
entered into a share swap agreement. The Company allotted and
issued 25,000,000 new ordinary shares to Cxense at 2 pence per
ordinary share in return for the allotment and issue by Cxense to
the Company of 51,177 new shares at an issue price of NOK 113.45
per share with an initial valuation of GBP500,000.
The shares have been accounted for as an available for sale
financial asset and are recorded at their fair value. On 30 June
the share Cxense's share price had fallen to NOK 108.00 per share
resulting in a fair value of GBP445,000 and a charge of GBP55,000
being recognised in other comprehensive income.
8 Loss per share
6 months to 30 June
6 months to 30 June 2015 2014 Year ended 31 December 2014
unaudited unaudited audited
GBP GBP GBP
Loss for the period (3,895,937) (2,301,021) (5,161,653)
Deemed average ordinary
shares
in issue during the period 129,973,630 15,850,640 31,723,378
Loss per share (0.03) (0.15) (0.16)
Deemed average ordinary shares are used due to the application
of merger accounting.
9 Adjusted EBITDA loss
6 months to 30 June 6 months to 30 June Year ended 31 December 2014
2015 unaudited 2014 unaudited audited
GBP GBP GBP
Revenue 553,623 753,204 1,098,954
Cost of sales (378,821) (296,566) (815,669)
---------------------------- ---------------------------- ----------------------------
Gross profit 174,802 456,638 283,285
Administrative expenses (4,065,057) (2,832,250) (5,820,299)
---------------------------- ---------------------------- ----------------------------
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