TIDMCDOG
RNS Number : 6903K
CDialogues PLC
27 June 2014
27 June 2014
CDialogues plc
("CDialogues" or the "Company")
Admission to AIM
&
First Day of Dealings
CDialogues, the provider of specialised mobile marketing
services to Mobile Network Operators ("MNOs"), announces the
admission of its ordinary shares of 1 penny each ("Ordinary
Shares") to trading on AIM and the commencement of dealings in its
Ordinary Shares under the ticker CDOG.
HIGHLIGHTS
-- CDialogues is a growing, profitable and cash generative
provider of mobile marketing services to Mobile Network Operators
("MNOs") in emerging markets, principally in the Middle East. The
Group has successfully monetized proprietary algorithms to provide
value added services to MNOs with the aim of maintaining and
increasing subscriber numbers and increasing Average Revenue Per
User ("ARPU").
-- It has successfully implemented a subscription-based
recurring revenue model. As such it generates recurring revenue
streams, which it shares with its customers and local operating
partners.
-- The current financial year has shown significant growth over
the same period last year. Turnover for the three months ended 31
March 2014 was EUR1.92m which is 152 per cent ahead of the same
period last year (Q1 2013: EUR0.76m, FY 2013: EUR4.6m). Similarly,
EBITDA for the first quarter was EUR0.69m which represents a 208
per cent increase over the prior year (Q1 2013: EUR0.22m, FY 2013:
EUR1.6m). Operating cash flow remained positive with net cash
inflows from operating activities of EUR0.38m (FY 2013:
EUR0.37m).
-- The Company has successfully raised GBP1.25m via the placing
of 588,000 new ordinary shares at a price of GBP2.12. Funds raised
will be used:
o To fund business development and support the acquisition of
new contracts in the current and targeted markets
o To set up offices and recruit regional sales teams in current
and targeted markets
o To invest in expanding network technology equipment and
further enhance its technology platform's data mining and profiling
capacity
-- On admission, the Company has 6,240,550 ordinary shares in issue
-- The market Capitalisation of the Company on Admission at the placing price is GBP13.23m
The Company's admission document dated 24 June 2014 is available
for download from the Company's website: www.cdialogues.com
Pale Spanos, Chief Executive Officer of CDialogues, and George
Karakovounis, CFO and Vice Chairman, commented:
"We look forward to using our listing to accelerate growth and
develop our business in new markets. This year has started well
with sales and profits growing significantly and we anticipate
building on this as mobile penetration continues to grow rapidly in
emerging markets."
Enquiries:
CDialogues plc Tel: +30 (210) 630 0930
George Karakovounis
Pale Spanos
Strand Hanson Limited Tel: 020 7409 3494
Andrew Emmott
Mirabaud LLP Tel: 020 7321 2508
Peter Krens
Walbrook PR Ltd Tel: 020 7933 8780/
cdialogues@walbrookpr.com
Paul Cornelius Mob: 07866 384 707
Nick Rome Mob: 07748 325 236
BACKGROUND
The Group's business was founded in 2011 in Athens by Pale
Spanos and George Karakovounis, the Group's CEO and Vice
Chairman/CFO respectively.
Pale Spanos and George Karakovounis have considerable experience
in the telecoms and technology industries internationally, and in
direct sales and marketing; they formed CDialogues to exploit that
experience and their industry networks. Prior to founding
CDialogues, Pale and George held the positions of Chief Operations
Officer and Chief Financial Officer respectively at InternetQ
leaving prior to its flotation on AIM in December 2010.
CDialogues's proprietary algorithms enable MNOs to provide
targeted value added services to existing and new subscribers with
the aim of maintaining and increasing subscriber numbers and
increasing ARPU.
CDialogues is principally active in the Middle East and North
Africa. In most of these emerging market economies, mobile phone
usage and penetration is growing rapidly. MNOs need to market
continually their services to take advantage of this growth and add
to their subscriber bases. In addition, in these markets, the
majority of MNO customers access mobile phone services through
pre-pay rather than contractual arrangements. As a result, such
pre-pay subscribers are able to switch between MNOs according to
their general preferences or to take advantage of varying
promotions offered by the MNOs.
In this environment, CDialogues' services are in demand as they
enable MNOs to market directly to such subscribers. The Group's
algorithmic software enables it to provide bespoke and dynamic
campaigns which create loyalty to a particular MNO through
establishing a dialogue between the MNO and the subscriber.
CDialogues provides a proven and profitable method of
maintaining and increasing subscriber numbers for its clients. MNOs
working with CDialogues receive a share of the income generated by
marketing campaigns, typically with CDialogues and its local
partners bearing the costs of initiating and operating each
marketing campaign.
The dialogue with subscribers can take the form of access to
mobile content, information services, competitions or offers.
CDialogues is typically given access to certain data relating to
the registered subscriber base of a MNO and has developed
technologies and specialised marketing techniques which use this
data to profile and segment subscribers throughout a campaign
according to their preferences, and then accordingly tailors the
marketing approach for each subscriber.
STRATEGY
The Group intends to become a leading mobile data analytics and
marketing language engineering provider in emerging markets. The
Group's strategy is to develop and expand the existing business,
moving into new regions and markets in order to increase revenue
and generate higher profit margins through scale.
An overview of the Group's strategy and key objectives is as
follows:
-- Focus primarily in emerging markets where mobile penetration
is growing fast, competition between MNOs for market share is
intense and there is a strong potential for greater ARPUs, in
particular Africa, the Middle East and the Commonwealth of
Independent States;
-- Diversify the Group's customer base, both internationally and in terms of its MNO partners;
-- Maintain relatively low overheads (compared with
competitors), so as to retain price advantage. Staff growth will be
gradual depending on the requirements of new projects acquired and
launched; and
-- Use additional funds to accelerate growth - the funds from
the Placing will also strengthen the Group's balance sheet.
In the future, the Board may consider it appropriate to make
acquisitions. However no such corporate activity is currently
envisaged in the near future.
The Group's primary aspiration in the mobile marketing and
mobile data analytics industry is to provide best-in-class
technology and customer service in an increasingly complex and
demanding global market.
CUSTOMER CONCENTRATION AND EXPOSURE TO IRAQ
CDialogues is a young business and has not yet achieved a
diverse customer base. In 2013, approximately 95 per cent. of
revenues came from Zain Iraq and Zain Kuwait, MNOs within the Zain
Group which is a leading mobile telecommunications provider in the
Middle East and North Africa. The Directors and the Proposed
Directors recognise that CDialogues is currently reliant on these
customers and relationships, but are confident that the sources of
the Group's revenues in 2014 and 2015 will be materially more
diversified. The majority of new projects which are currently being
developed are with new MNOs in new territories, albeit many of
these will continue to be in co-operation with local partners.
Currently, approximately half of the Group's revenues are
generated from its campaigns in Iraq. The pipeline of opportunities
which the Company is developing is expected to diversify its
sources of revenue, but at the present time the Company is
significantly exposed to the Iraqi economy. Iraqi armed forces are
currently engaged in heavy clashes with Sunni Islamist militants
led by the Islamic State of Iraq and the Levant ("ISIS") across the
central and northern parts of Iraq. However, despite this
deterioration in the political situation in Iraq, revenues have not
suffered a material change. If the political or economic situation
in Iraq deteriorates further, this could significantly and
adversely affect the business and operating revenue of the
Group.
CURRENT TRADING AND PROSPECTS
In the financial year ending 31 December 2013, the Group managed
to deliver strong financial results with revenues reaching almost
EUR4.6 million, EBITDA EUR1.6million, Profit After Tax EUR1.3
million and Free Cash Flow EUR0.6 million.
The Group has continued to trade in line with the Board's
expectations during the current financial year and has shown
significant growth over the same period last year. Turnover for the
three months ended 31 March 2014 was EUR1.92m which is 152 per cent
ahead of the same period last year (Q1 2013: EUR0.76m). Similarly,
EBITDA for the first quarter was EUR0.69m which represents a 208
per cent increase over the prior year (Q1 2013: EUR0.22m).
Operating cash flow remained positive with net cash inflows from
operating activities of EUR0.38m (FY 2013: EUR0.37m).
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