TIDMCDOG
RNS Number : 7836K
CDialogues PLC
21 April 2015
21 April 2015
CDialogues plc
("CDialogues" or the "Company")
Final Results for the year ended 31 December 2014
- Announcement of maiden dividend
CDialogues plc (AIM: CDOG), the provider of mobile marketing
solutions to Mobile Network Operators ("MNOs"), is pleased to
announce its audited final results for the year ended 31 December
2014. This was a pivotal year for the Company, which successfully
built on its Admission to AIM by diversifying its geographical
footprint as well as growing revenues, pre-tax profits and cash
balances.
Financial highlights
-- Revenues up 117% to EUR9.92m (2013: EUR4.58m)
o Subscription revenues accounted for 76% of total revenues
(2013:79%)
-- EBITDA up 87% to EUR2.94m (2013: EUR1.57m)
-- Profit before tax up 89% to EUR2.61m (2013: EUR1.38m)
-- Earnings per share up 77% to EUR0.43 (2013: EUR0.24)
-- Free Cash Flow* up 108% to EUR1.22m (2013: EUR0.59m)
-- Net cash as of 31 December 2014 of EUR2.42m (2013: EUR0.64m)
-- Maiden dividend of 2p subject to AGM approval
* After development costs and capital expenditure and excluding
one-off items relating to AIM listing
Operational highlights
-- Successful admission to trading on AIM on 27 June 2014
-- Significant diversification of revenue base both by number of
clients and geographical sources
-- During 2014, the Company operated a total of eight mobile
marketing projects in five countries across the Middle East
-- Delivery of Mobile Marketing projects to a total subscriber
base of 35 million customers (2013:15 million) which attracted more
than 5.5 million unique subscribers and gross billings in excess of
EUR50m
-- Continuous and successful implementation of subscription-based recurring revenue model
The Board is proposing a final dividend for the year ended 31
December 2014 of 2 pence per share. Subject to shareholder approval
at the Company's AGM to be held in June 2015 (separate notice of
which will be published in due course), this dividend will be paid
on 1 July 2015 to shareholders on the register on 5 June 2015. The
shares will go ex-dividend on 4 June 2015.
Pale Spanos, Chief Executive Officer, commented: "This was an
extremely important year for the Company. We joined AIM in June
2014 and since then we have seen our Company further diversify its
geographical footprint and sources of revenue, while it continued
to deliver strong financial results.
"We started this year well and have good revenue visibility
based on our current contracts. Our pipeline remains strong and by
adding new geographies and customers we continue to further
diversify our client base. We remain committed to continuing the
expansion trend seen during 2014 by further expanding our
geographical footprint and investing in our core technology.
We continue to generate strong levels of free cash flow
increasing considerably our capacity for further growth. We are
confident that we will maintain the momentum and further strengthen
our balance sheet. As such, the Board is delighted to have
announced today the Company's first dividend."
Enquiries:
CDialogues Plc
---------------------- ----------------------------------------------
George Karakovounis Tel: +30 (210) 630 0930
---------------------- ----------------------------------------------
Pale Spanos Tel: +30 (210) 630 0930
---------------------- ----------------------------------------------
Strand Hanson Limited
---------------------- ----------------------------------------------
Andrew Emmott Tel: 020 7409 3494
---------------------- ----------------------------------------------
Rory Murphy
---------------------- ----------------------------------------------
Mirabaud LLP
---------------------- ----------------------------------------------
Peter Krens Tel: 020 7321 2508
---------------------- ----------------------------------------------
Walbrook PR Ltd Tel: 020 7933 8780/ cdialogues@walbrookpr.com
---------------------- ----------------------------------------------
Paul Cornelius Mob: 07866 384 707
---------------------- ----------------------------------------------
Nick Rome Mob: 07748 325 236
---------------------- ----------------------------------------------
CHAIRMAN'S STATEMENT
This has been a transformational year for the Company. With a
proven, profitable business model and proprietary technology
platform already in place, we spent considerable time during the
first half of the year preparing for our Initial Public Offering
("IPO") on AIM in London, which completed successfully in June 2014
raising GBP1.25m gross proceeds.
Our subscription-based recurring revenue model, which has
underpinned growth to date, differentiates us notably from the
competition, and we believe our strategic focus across the emerging
markets of the Middle East, Africa and Asia provides an attractive
investment proposition to both existing and potential shareholders
of the Company.
Following our successful IPO, we turned our focus towards
generating new project opportunities with existing and new clients
across our target territories. We are pleased to report that during
2014 we have successfully increased the number of our Mobile
Network Operators ("MNOs") clients and diversified our revenue
streams by geography.
Prior to our IPO, we were principally active across the Middle
East. Today, with additional territories in the Middle East, we are
also active across Southeast Asia with further scope to grow our
subscriber base as we focus on larger markets with a wider number
of MNOs.
During the year, we continued to expand our client base and
sources of revenue thereby reducing the level of customer
concentration from that at the beginning of the year.
We are pleased with the advancement of the data analytics and
language engineering engines that drive our mobile offering. This
allows us to enter new overseas markets with confidence, and by
targeting regions where pre-pay mobile device penetration and usage
are growing rapidly, we believe that the Company can maintain its
strong margins and profitability.
This year was also about enhancing our investment profile within
the London capital markets and demonstrating that there is
significant demand for our services. The full year results show how
far we have come with strong growth in subscriber and client
numbers, revenues, profits and cash generation.
Furthermore, with our strong and growing cash balance, the Board
is proposing to pay a final dividend, subject to approval at the
Company's AGM to be held in June 2015.
Looking ahead, the pipeline of opportunities for our services
should deliver further financial growth for the Company and we will
remain focussed on enhancing shareholder value during the coming
financial year.
Mark Horrocks
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER REVIEW
We are pleased to report our financial results for the 12 months
ended 31 December 2014. The Company successfully completed its
listing on AIM and raised gross funds of GBP1.25m on 27 June
2014.
We took the decision to join AIM in order to accelerate our
growth strategy and build on our strong performance since founding
the Company in 2011. Since IPO, we have further improved our
performance based on the benefits derived from the Company's strong
relationships across a growing number of key geographical regions.
We have kept delivering increasingly profitable and cash generative
turn-key solutions with low fixed overheads and high operating
margins.
Revenues for the period increased 117% to EUR9.92m
(2013:EUR4.58m).This revenue growth was achieved despite the
cessation of operations in Iraq in early December 2014, and
demonstrates the successful outcome of the Company's drive to grow
and diversify revenues which continues in 2015. More than 75% of
revenues in 2014 were derived from subscription-based charging.
During 2014, CDialogues delivered a total of eight mobile
marketing projects in five countries to a total subscriber base of
35 million customers (2013: 15 million) in the Middle East. These
projects attracted more than 5.5 million unique subscribers and
generated total gross billings in excess of $50 million.
We also utilised a growing number of regional representatives to
establish relationships with new MNOs, enabling us to increase
subscriber numbers at a low marginal cost and increase average
revenue per user ("ARPU").
The potential target market remains strong with the number of
global mobile connections forecast to grow from 6.9 billion in 2014
to 8.1 billion in 2018 and annual mobile service revenue forecast
to grow from US$968 billion in 2014 to US$1.1 trillion in 2018. Our
growth strategy is therefore focused on expanding our contract
base, extending our regional clients relationships and investing in
our technology platform.
I would like to thank our staff and shareholders for their
support during 2014 which was a transformational year for the
Company.
Outlook
The Company's business model is highly scalable given that our
proprietary technology can be readily deployed. We have started the
current year well and the nature of our model means that we already
have good visibility on revenues based on current contracts. We are
well placed to continue to grow customer numbers under existing
contracts and also to add new customers in new geographies.
We are increasingly investing on our core Platform capacity on
mobile data analytics and marketing language engineering, with the
strategy of further expanding our Services Portfolio. We continue
to generate strong levels of free cash flow to support profitable
growth and, are confident that we will further strengthen our
balance sheet.
Given the results for 2014, good revenue visibility and high
levels of cash conversion, the Board proposes to commence the
payment of dividends by the Company, subject to shareholder
approval at the forthcoming AGM.
Pale Spanos
Chief Executive Officer
CHIEF FINANCIAL OFFICER REVIEW
During the 12 month period ending 31 December 2014, the Company
consolidated its market position by growing its customer base and
diversifying its revenue by both client numbers and geography. The
Company's high margin, low fixed-cost model resulted in both
significant profit before tax and earnings per share growth during
the period while the high level of cash conversion and free cash
flow ensured the Company finished the period with a significantly
strengthened balance sheet.
Revenues for the period increased 117% to EUR9.92m
(2013:EUR4.58m) as a result of our focus on building relationships
with an increasing number of MNOs in a number of regions, and
further diversify our revenue sources.
Gross profit was up by 90% to EUR3.52m (2013: EUR2.05m)
representing a gross margin of 35.5% (2013: 44.6%). The reduction
in gross margin resulted from increased cost of sales as new
projects came on stream. Administration and selling &
distribution costs were EUR0.93m (2013:EUR0.64) representing 9.3%
of revenues (2013:14%).
Operating Profit (after depreciation and amortisation) was up by
87% to EUR2.63m (2013: EUR1.40m) representing a margin of 26.5%
(2013:30.6%). While variable costs increase with each new project,
due to marketing and associated incentive costs, our subscription
revenue model and 'opt-in' nature of our service ensures we have
high revenue visibility as the number of participants in each
project increases.
EBITDA increased by 87% to EUR2.94m (2013:EUR1.57m) representing
a margin of 29.6% (2013:34.3%).
Profit before tax increased by 90% to EUR2.61m (2013: EUR1.38m)
with a margin of 26.3% (2013: 30.2%) while basic earnings per share
grew by 76% to EUR0.43 (2013: EUR0.24) despite the dilutive effects
of the new shares issued at IPO.
Operating cash flow remained strong with net cash flows, before
changes in working capital, increasing by 87% to EUR2.94m (2013:
EUR1.57m) representing approximately 100% of EBITDA. After taking
into account working capital movements and cash flows used in
investing activities, which comprise primarily of capitalised
investment in software development, Free Cash Flow was EUR1.22m
(2013:EUR0.59m).
At the year-end we had accrued income of EUR3.85m and related
accrued expenses of EUR2.26m which represents income earned during
the last months of 2014 (and its associated costs), the vast
majority of which has already been invoiced and collected/settled
since the year end.
Having raised net proceeds of EUR0.57m via the IPO in June 2014,
we have consistently delivered strong levels of cash conversion.
Net cash as of 31 December 2014 was EUR2.42m (2013: EUR0.64m) and
provides a firm foundation for further growth into new territories.
The Company (and its subsidiaries) maintain over 90% of its cash in
banks in the United Kingdom. The Group does not generate any
revenues in the Greek market.
Finally, the current financial year has started well with strong
levels of free cash flow and we have a strong pipeline in place for
us to build on the momentum achieved to date.
George Karakovounis
Vice Chairman & Chief Financial Officer
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2014
The Directors present the Strategic Report of CDialogues Plc for
the year ended 31 December 2014.
-- Review of the Business in the year
The Group provides mobile analytics solutions, being offered in
the format of marketing loyalty activities that enable brands,
mobile network operators and media companies to implement targeted,
interactive and measurable loyalty programs by engaging with and
entertaining mobile network subscribers via their mobile
devices.
The Group has developed internally a technology platform
(C/Profiler Software Platform), which is used for the provision of
mobile marketing solutions. The Group's Technology platform is
offered as either a fully managed or as Software-as-a-Service
(SAAS) product.
The core services supported by the Group's platform include the
use of any channel that is based on linguistic and text
communication such as SMS, MMS, IVR and mobile internet services.
Furthermore, the Group's platform supports recurring user
subscription and mobile billing services in cooperation with the
mobile network operators on either a pre-paid or post-paid
basis.
The Group's technical infrastructure is connected directly with
Mobile Network Operators in the territories in which it operates
and, in most cases, transacts with its business partners through
revenue sharing arrangements under which the net revenues generated
from the relevant mobile marketing initiatives are divided. In
several cases, those mobile marketing initiatives are devised in
cooperation with the operators themselves. In other instances,
campaigns are instigated by the Group and may be rolled out
concurrently across several mobile operator networks and in a
number of different countries.
More specifically, through the use of its mobile analytics and
linguistic engineering platform, the Group tries to attract as many
mobile subscribers to participate in any given service and then
seeks to engage and maintain them within the service with relevant
content offering and reward programs. To attract potential mobile
subscribers, the Group employs promotional seeding techniques which
include the use of traditional media and the use of text via mobile
or online. Once mobile subscribers are initially attracted, the
Group tries to make them engage by providing exciting mobile
utilities or providing incentives. The pool of mobile subscribers
that eventually engage is analysed and profiled into categories in
order for the Group to design the appropriate loyalty building
programs and reward schemes.
The ongoing management of mobile marketing solutions provides
the Group with a growing database of behavioral and customer
engagement analytics. The knowledge and experience of these Service
iterations provides important feedback for the Group's future
performance and is also reflected in improvements to the Group's
technology platform in order to maximise its efficiency.
The Group is currently focusing its operations on emerging
markets. Countries in which it has operated since establishment are
Iraq, Vietnam, Ivory Coast, Russia, Kuwait, Lebanon, Jordan and
Oman. It is a Group target to grow market share in existing
geographies and also expand its business in other territories.
A summary of the key financial results for the relevant year end
are set out in the table below:
2014 (EUR) 2013 (EUR) % Change
--------------------------- ----------- ----------- ---------
Mobile marketing services
revenue 9,924,449 4,584,375 117%
--------------------------- ----------- ----------- ---------
Gross profit 3,522,653 2,046,734 72%
--------------------------- ----------- ----------- ---------
Gross profit margin 35.5% 44.6% (21)%
--------------------------- ----------- ----------- ---------
Operating profit 2,628,109 1,404,830 87%
--------------------------- ----------- ----------- ---------
EBITDA 2,938,222 1,570,926 87%
--------------------------- ----------- ----------- ---------
Profit after tax 2,552,911 1,346,194 90%
--------------------------- ----------- ----------- ---------
Group revenue grew by 117% from EUR4.6m in 2013 to EUR9.9m in
2014. This result, which is ahead of budget, was achieved despite
reduced revenues from Iraq in fourth quarter of 2014 as a result of
the cessation of these operations in early December 2014. The loss
of revenues from of operations in Iraq (which accounted for
approximately 15% of Group revenues in November 2014) is being more
than compensated by growth in other countries and demonstrates the
success of the Group in growing and diversifying revenue streams.
This substantial growth was aided by a number of new campaigns that
were launched in the year.
Group EBITDA for the year shows strong growth to EUR2.94m
(2013:EUR1.57), representing a growth of 87 per cent. Free cash
flow, after development costs and capital expenditure and excluding
one-off items relating to the AIM listing, reached EUR1.22m further
enhancing the Group's cash position to EUR2.4m as of 31 December
2014.
-- Position of the Company's business at the end of the year
In addition to the strong financial performance during the 12
months to 31 December 2014, the Group also successfully completed a
number of strategic milestones. In particular, the Group managed to
significantly diversify its revenue base both by number of clients
and geographical sources of revenue.
CDialogues also completed its AIM listing in June 2014 raising
GBP1.25m and further strengthening its balance sheet. The Group's
statement of Financial Position at 31 December 2014 set out in the
table below:
Assets (EUR) Liabilities Net assets
(EUR) (EUR)
------------------------------ ------------- ------------ -----------
Property plant & equipment 37,185 - 37,185
------------------------------ ------------- ------------ -----------
Intangible assets 749,440 - 749,440
------------------------------ ------------- ------------ -----------
Other non-current assets
& liabilities 9,508 (16,505) (6,997)
------------------------------ ------------- ------------ -----------
Deferred tax 26,573 (693) 25,880
------------------------------ ------------- ------------ -----------
Current assets & liabilities 3,975,168 (2,387,069) 1,588,099
------------------------------ ------------- ------------ -----------
Total before net cash 4,797,874 (2,404,267) 2,393,607
------------------------------ ------------- ------------ -----------
Net cash 2,419,927 - 2,419,927
------------------------------ ------------- ------------ -----------
Total as at 31 December 2014 7,217,801 (2,404,267) 4,813,534
------------------------------ ------------- ------------ -----------
Subscription-based recurring revenues, which provide greater
scalability and visibility for the business, accounted for more
than 75 per cent of the total revenues during 2014 as a whole and
therefore provide the Group with a strong basis for the year ending
31 December 2015.
The Group has identified a pipeline of potential new contracts,
a number of which are currently undergoing preparations for launch
in the coming months and the Board remains confident that these
will result in further growth opportunities during 2015.
-- Principal risks and uncertainties facing the business
In addition to the financial risks discussed in Note 29 to the
accounts, the Directors set out below the principal risks and
uncertainties facing the Group and a summary of the key measures
taken to mitigate those risks:
Contract duration and non-renewal of contracts
The Group enters into contracts with its customers which are
typically short term in nature (three/four months) but are normally
renewed at the end of each term, though this cannot be guaranteed.
The Board seeks to ensure that the Group's relationships with its
customers and level of service minimises the risk of contracts not
being renewed.
Concentration of customer base
The Group is a young business and has not yet achieved a diverse
customer base. However, CDialogues has been successful in reducing
customer concentration during 2014 and the current business
pipeline for 2015, if delivered, will reduce this customer
concentration further.
Credit risk
The Group provides services and receives revenues under
agreements entered into with a local partner in the territories in
which it provides services. Whilst the Group endeavours to
diversify its sources of revenue, it is reliant on this
relationship which may result in a greater level of credit risk
than if the Group was contracted directly with the MNOs. However,
such credit risk has not affected the business adversely in the
past and the Group manages this risk by negotiating and enforcing
appropriate contract terms.
Countries in which CDialogues operates
CDialogues operates in countries where there may be risks
associated with the political or economic environment. The Group
seeks to mitigate these risks by (i) undertaking its own risk
analysis of each territory in which it operates; and (ii) operating
with local partners with detailed knowledge of the prevailing
environment.
Attracting and retaining talented staff and motivating key
people
The Group has competitive remuneration packages in place to
secure the services of talented staff and key employees.
Significant failure or interruption to the network or IT
Systems
The Group has rigorous controls to maintain and secure its
operations, including multi-site back up of key systems. In
addition, the Group implements a standardised disaster recovery
plan.
Failure to keep up to date with fast evolving technology
The Group is constantly developing its software platform
ensuring it is evolving in line with the latest technology and in
line with its clients' expectations and demands. Management
regularly communicates with the Company's clients ensuring the
mobile marketing campaigns are meeting their needs.
Failure to comply with local laws and regulations
Management mitigate this risk by assessing the regulatory
environment and legal system before entering a new market. The
Group also implements a strong code of conduct across all of its
operations.
In addition to the principal risks and uncertainties above, the
Group faces other risks that include but are not limited to:
-- Increased competition
-- Failure to retain, or loss of, customer contracts
Corporate Responsibility
CDialogues Plc takes its responsibilities as a corporate citizen
seriously in the territories in which the company operates. The
Board's primary goal is to create shareholder value but in a
responsible way which serves all stakeholders. Furthermore,
Cdialogues seeks to continually enhance and extend its contribution
to society through the work the Group undertakes with its clients
and in areas where the Group decides to operate.
Governance
The Board considers sound governance as a critical component of
the success of CDialogues and this is given the highest priority.
The Group has an effective and engaged Board, with a strong
non-executive presence from diverse backgrounds, and
well-functioning governance committees. The Audit Committee
receives and reviews reports from management and from the Company's
auditors. It is responsible for ensuring that the financial
performance of the Group is properly reported with particular
regard to legal requirements, accounting standards and the AIM
Rules. Through the Group's compensation policies and variable
components of employee remuneration, the Remuneration Committee of
the Board seeks to ensure that the Company's values are reinforced
in employee behaviour and that effective risk management is
promoted.
Going Concern
The Board considers that the Group has sufficient financial and
other resources to manage its business risks successfully and it
has a diverse range of businesses across different geographical
areas to maintain its strong financial position. Furthermore, the
Board consider that there are no material uncertainties that may
cast significant doubt about the Group's ability to continue as a
going concern.
Current Trading
The current year has started well and is in line with the
Board's expectations.
Approved by the Board on 20 April 2015
Pale Spanos
Chief Executive Officer
Statement of comprehensive income
For the years ended 31 December 2014 and 2013
Group
------------------------------------------------------------------
Note Financial year ended 31/12/2014 Financial year ended 31/12/2013
----- -------------------------------- --------------------------------
Revenue 6 9,924,449 4,584,375
Cost of sales (6,401,796) (2,537,641)
-------------------------------- --------------------------------
Gross profit 3,522,653 2,046,734
Administrative expenses (353,167) (232,211)
Selling and distribution costs (543,135) (409,693)
Other operating income 1,758 -
Operating profit / (loss) 2,628,109 1,404,830
Finance income 1,660 1,110
Finance costs (15,934) (21,718)
-------------------------------- --------------------------------
Profit / (loss) before tax 2,613,835 1,384,222
Income tax expense 7 (60,924) (38,028)
-------------------------------- --------------------------------
PROFIT / (LOSS) FOR THE YEAR 2,552,911 1,346,194
================================ ================================
Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of
foreign operations (1,349) (34,183)
Net loss on available-for-sale financial
assets (80,212) -
-------------------------------- --------------------------------
(81,561) (34,183)
Net other comprehensive income to be
reclassified to profit or loss in
subsequent periods (81,561) (34,183)
Other comprehensive income not to be
reclassified to profit or loss in
subsequent periods:
Actuarial gain/(loss) (1,223) 2,177
Income tax effect 318 (562)
-------------------------------- --------------------------------
(905) 1,615
Net other comprehensive income not to be
reclassified to profit or loss in
subsequent periods (905) 1,615
Other comprehensive loss for the year,
net of tax (82,466) (32,568)
-------------------------------- --------------------------------
Total comprehensive income/(loss) for
the year, net of tax 2,470,445 1,313,626
================================ ================================
Profit/(loss) for the year attributable
to:
Equity holders of the parent 2,552,911 1,346,194
2,552,911 1,346,194
================================ ================================
Total comprehensive income/ (loss) for
the year, attributable to:
Equity holders of the parent 2,470,445 1,313,626
2,470,445 1,313,626
================================ ================================
Earnings per share 8
Basic, profit for the year attributable
to ordinary
equity holders of the parent 0.4336 0.2448
Diluted, profit for the year
attributable to ordinary
equity holders of the parent 0.4313 0.2448
Statement of financial position
For the years ended 31 December 2014 and 2013
Group
----------------------
31 December
Note 2014 2013
----- ---------- ----------
ASSETS
Non-current Assets
Property, plant and equipment 9 37,185 49,909
Intangible Assets 10 749,440 547,602
Investments in subsidiaries - -
Deferred tax assets 25,880 11,664
Trade and other receivables 11 9,508 9,508
---------- ----------
822,013 618,683
Current Assets
Trade and other receivables 11 3,952,938 975,435
Available for sale financial assets 22,230 102,443
Cash and cash equivalents 12 2,419,927 643,717
---------- ----------
6,395,095 1,721,595
TOTAL ASSETS 7,217,108 2,340,278
========== ==========
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Issued share capital 13 75,213 15,000
Share premium 13 565,572 -
Reserves 16,745 93,743
Retained earnings 4,156,004 1,659,561
---------- ----------
Total Equity 4,813,534 1,768,304
---------- ----------
Non-current liabilities
Employee benefit liability 16,505 11,808
---------- ----------
16,505 11,808
Current liabilities
Trade and other payables 14 2,311,912 496,156
Income tax payable 75,157 64,010
---------- ----------
2,387,069 560,166
Total liabilities 2,403,574 571,974
---------- ----------
TOTAL EQUITY AND LIABILITIES 7,217,108 2,340,278
========== ==========
Statement of changes in equity
For the years ended 31 December 2014 and 2013
Group
-------------------------------------------------------------------------------------
Ordinary Share Capital Share premium Reserves Retained Earnings Total equity
----------------------- -------------- --------- ------------------ -------------
Balance at 1 January
2013 5,000 - 90,230 349,448 444,678
======================= ============== ========= ================== =============
Profit for the period - - - 1,346,194 1,346,194
Other comprehensive
income - - - (32,568) (32,568)
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - - 1,313,626 1,313,626
Issue of share capital 10,000 - - - 10,000
Transfers to reserves - - 3,513 (3,513) -
Balance at 31 December
2013 15,000 - 93,743 1,659,561 1,768,304
======================= ============== ========= ================== =============
Profit for the period - - - 2,552,911 2,552,911
Other comprehensive
income/(loss) - - (80,212) (2,254) (82,466)
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - (80,212) 2,550,657 2,470,445
Issue of share capital
net of issue cost 9,213 565,572 - - 574,785
Share capital increase
through
capitalisation of
profits 51,000 - - (51,000) -
Transfers to reserves - - 3,214 (3,214) -
Balance at 31 December
2014 75,213 565,572 16,745 4,156,004 4,813,534
======================= ============== ========= ================== =============
Statement of cash flows
For the years ended 31 December 2014 and 2013
Group
------------------------------------------------------------------
Note Financial year ended 31/12/2014 Financial year ended 31/12/2013
----- -------------------------------- --------------------------------
Cash flows from Operating Activities
Profit / (loss) before tax 2,613,835 1,384,222
Adjustment to reconcile profit before
tax to net cash flows:
Non-cash items:
Depreciation of property, plant and
equipment 9 16,050 13,216
Amortisation of intangible assets 10 294,063 152,880
Interest income (1,660) (1,110)
Interest expense 15,934 21,718
Movements in provisions and
provisions for employee benefits 3,474 2,509
Operating cash flows before changes in
working capital 2,941,696 1,573,435
Working capital adjustments:
Increase in trade and other accounts
receivable (2,977,503) (349,224)
Increase/(Decrease) in trade and
other accounts payable 1,815,756 (43,028)
Income tax paid (64,296) (9,081)
Net cash flows from operating
activities 1,715,653 1,172,102
-------------------------------- --------------------------------
Cash flows from investing activities
Purchase of property, plant and
equipment (3,326) (36,043)
Purchase of intangible assets (495,900) (448,454)
Interest received 1,660 1,110
Purchase of financial instruments - (102,443)
Net cash flows used in investing
activities (497,566) (585,830)
-------------------------------- --------------------------------
Cash flows from financing activities
Proceeds from the issuance of share
capital net of issue costs 13 574,785 10,000
Proceeds from borrowings - 60,000
Repayment of borrowings - (60,000)
Interest paid (15,934) (21,718)
Net cash flows from/(used in)
financing activities 558,851 (11,718)
-------------------------------- --------------------------------
Net increase in cash and cash
equivalents 1,776,938 574,554
Cash and cash equivalents at 1
January 643,717 103,293
Currency translation differences (728) (34,130)
-------------------------------- --------------------------------
Cash and cash equivalents at 31
December 12 2,419,927 643,717
================================ ================================
1. Corporate information
The consolidated financial information of Cdialogues Plc and its
subsidiaries (collectively, the "Group") for the year ended 31
December 2014 has been prepared on the basis set out below.
Cdialogues Plc (the "Company") was incorporated in England and
Wales as a Limited Liability Company in June 2011 and during this
financial year as a consequence of its listing on AIM became a
public company limited by shares.
2. Basis of preparation
The consolidated financial information of the Group has been
prepared using accounting policies which are consistent with those
adopted in Part 3 of the AIM Admission Document of the Company
dated 24 June 2014, as well as applying the following accounting
policy in respect of the basis of consolidation as extracted from
the financial statements.
The consolidated financial information has been prepared on a
historical cost basis, except for, available-for-sale (AFS)
financial assets that have been measured at fair value. The
consolidated financial information is presented in Euros, except
when otherwise indicated.
The financial information does not constitute the Company's
statutory financial statements for the year ended 31 December 2014
but is derived from those financial statements. The statutory
financial statements will be delivered following the Company's
Annual General Meeting. The Auditors have reported on those
financial statements; their reports were unqualified and did not
contain any statements under Companies Act 2006 section 498 (2) or
(3).
The directors recommend the payment of a dividend of 2 pence per
ordinary share.
The financial information set out in this announcement was
approved and authorised for issue by the board of directors on 20
April 2015.
Copies of this financial information will be available on the
Company's website.
3. Basis of consolidation
The consolidated financial information comprises the financial
statements of the Group and its subsidiaries as at 31 December
2014. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
Ø Power over the investee (i.e. existing rights that give it the
current ability to direct the relevant activities of the
investee)
Ø Exposure, or rights, to variable returns from its involvement
with the investee; and
Ø The ability to use its power over the investee to affect its
returns
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
Ø The contractual arrangement with the other vote holders of the
investee;
Ø Rights arising from other contractual arrangements; and
Ø The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the
Group's accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises
the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any
resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value at the date when
control is lost.
4. Segmental reporting
Based on management information there is only one operating
segment. The Directors of the Company consider the principal
activity of the Group to be that of a provider of Mobile Marketing
services.
In this context there is no obligation to prepare and publish
financial results by segment, according to the requirements of IFRS
8 "Operating Segments". As far as geographical segment the Group
operates mainly (95%) in the area of Middle East and therefore is
considered as one geographical segment.
5. Group information
Information about subsidiaries
The consolidated financial statements of the Group include:
2014 2013
----------------------------- -----------------------------
Country of Registration Percentage of Ordinary Percentage of Ordinary
Subsidiary undertaking Shares held Shares held
------------------------ ------------------------- ----------------------------- -----------------------------
Telilea Ltd CYPRUS 100.00% 100.00%
CDialogues S.A. GREECE 100.00% 100.00%
CDialogues MEA JLT U.A.E. 100.00% 100.00%
CDialogues LLC RUSSIA 100.00% 100.00%
The principal activity of each company is analysed as
follows:
Cdialogues Plc was incorporated in England and Wales as a
Limited Liability Company on June 2011 and it is the Group holding
entity.
Telilea Ltd was incorporated in Cyprus on March 2012. Its
principal activities are the provision of mobile marketing
services.
CDIALOGUES S.A. was established in Greece on July 2011 and
acquired by the Group on July 2012. Its principal activities
include software development services as well as support and
maintenance services related to the software.
Cdialogues LLC was established in Russia on March 2012 as
Benastipik LLC and acquired by the Group on March 2013 (20%) and on
April 2013 (80%). Its name changed to C Dialogues LLC on June 2013.
The C Dialogues LLC activities are general trading.
CDIALOGUES MEA JLT was established in Dubai U.A.E. on October
2013 and its principal activities are the provision of IT services
and solutions.
6. Revenue
Revenue in the accompanying income statements of the Group and
the Companyare analysed as follows:
Group
--------------------------------------------
1/1/2014- 31/12/2014 1/1/2013- 31/12/2013
--------------------- ---------------------
Mobile marketing services 9,924,449 4,584,375
Support fees - -
Total 9,924,449 4,584,375
===================== =====================
7. Income tax
The amounts of income taxes which are reflected in the
accompanying income statements are analysed as follows:
Group
----------------------------------------------
1/1/2014 - 31/12/2014 1/1/2013 - 31/12/2013
---------------------- ----------------------
Current income tax 75,443 47,512
Deferred income tax (14,519) (9,484)
Income tax in the income statement 60,924 38,028
====================== ======================
The reconciliation of income taxes reflected in statements of
comprehensive income and the amount of income taxes determined by
the application of the United Kingdom statutory tax rate to pre-tax
income is summarised as follows:
Group
----------------------------------------------
1/1/2014 - 31/12/2014 1/1/2013 - 31/12/2013
---------------------- ----------------------
Profit / (loss) before tax 2,613,835 1,384,222
At United Kingdom statutory income tax rate of 21.5% (2013: 20%) 561,975 276,844
Income not subject to taxation (108,657) (48,933)
Expenses not deductible for taxation purposes 21,609 20,013
Tax losses for which no deferred tax asset has been recognised - 283
Differences in tax rates (417,847) (211,408)
10% additional charge 2,353 895
Defence contribution 491 334
Business tax 1,000 -
Total 60,924 38,028
====================== ======================
The "10% additional charge" amount of EUR2,353 (2013 EUR895) and
the "Defence contribution" amount of EUR491 (2013 EUR334) is
related to Telilea Ltd. More specific is the 10% of the year's tax
liability as calculated in the tax computation of corporation tax.
According to the Cyprus Tax legislation companies have to pay
temporary tax on the 75% of their estimated taxable profits for the
year otherwise there is a surcharge of 10% on the final tax
liability for the year.
The Company is obliged to file its tax returns in accordance
with the applicable tax law in England and Wales. No income tax is
payable on the net income deriving from subsidiaries with foreign
operations.
The Group's subsidiaries file their tax returns in the countries
in which they are established and/or operate. The tax rates at 31
December 2014 of the countries where the operations of the Group
are located are the following:
Greece 26.0 %. (2013: 26.0 per cent)
Cyprus 12.5 %. (2013: 12.5 per cent.)
Russia 20.0 %. (2013: 20.0 per cent.)
United Arab Emirates. The income tax is not applicable.
Greek subsidiary (CDIALOGUES S.A.)
Greek tax laws and regulations are subject to interpretations by
the tax authorities. Tax returns are filed annually but the profits
or losses declared for tax purposes remain provisional until such
time, as the tax authorities examine the returns and the records of
the taxpayer and a final assessment is issued. Tax losses, to the
extent accepted by the tax authorities, can be used to offset
profits of the five fiscal years following the fiscal year to which
they relate.
Tax Compliance certificate
From the financial year 2011 and onwards, all Greek Societe
Anonyme and Limited Liability Companies that are required to have
their statutory financial statements audited must in addition
obtain an "Annual Tax Certificate" as provided for by paragraph 5
of Article 82 of L.2238/1994. This "Annual Tax Certificate" must be
issued by the same statutory auditor or audit firm that issues the
audit opinion on the statutory financial statements.
The tax compliance certificate for the financial year 2013 was
concluded by its auditors, based on the provisions of --5, article
82 of L.2238/1994. No significant additional tax liabilities arose,
in excess of those provided for and disclosed in the financial
statements.
The tax compliance certificate for the financial year 2014 is
still in progress based on the provisions of --5, article 82 of
L.2238/1994. No significant additional tax liabilities are expected
to arose, in excess of those provided for and disclosed in the
financial statements.
Cyprus subsidiary (Telilea Ltd)
The corporation tax rate is 12.5% (2013:12.5%).
Under certain conditions interest income may be subject to
defence contribution at the rate of 30% (2013:30%). In such cases
this interest will be exempt from corporation tax. In certain
cases, dividends received from abroad may be subject to defence
contribution at the rate of 20% for the tax year 2013 and 17% for
2014 and thereafter.
The company has utilised tax relief incentives provided by the
Cyprus tax legislation. These incentives allow for special
treatment on intellectual property.
The Cyprus tax law on Intellectual Property gives rise to the
following tax treatment.
Ø The cost of the acquisition or development of Intellectual
Property of a capital nature is amortised over a period of five
years, starting in the year of purchase / development.
Ø A statutory reduction of 80% of the profit arising from the
use of the Intellectual Property, as well as from any gain on the
sale of the Intellectual Property.
Ø The 80% deduction applies to profit after deducting any direct
expenses including amortisation and interest.
8. Earnings per share
Basic earnings per share amounts are calculated by dividing net
profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
Group
2014 2013
---------- ----------
Net profit attributable to ordinary equity holders of the parent 2,552,911 1,346,194
Weighted average number of ordinary shares for basic earnings per share 5,888,121 5,500,000
Earnings per share basic 0.4336 0.2448
========== ==========
Weighted average number of ordinary shares for basic earnings per share 5,888,121 5,500,000
Effect on dilution:
Warrants 30,617 -
---------- ----------
30,617 -
Weighted average number of ordinary shares adjusted for the effect of dilution 5,918,738 5,500,000
---------- ----------
Earnings per share diluted 0.4313 0.2448
========== ==========
9. Property plant and equipment
Property, plant and equipment of the Group are analysed as
follows:
Transportation assets Furniture & other office equipment Total
---------------------- ----------------------------------- -------
Cost
Balance at 1 January 2013 - 37,888 37,888
Additions 22,500 13,543 36,043
Balance at 31 December 2013 22,500 51,431 73,931
---------------------- ----------------------------------- -------
Balance at 1 January 2014 22,500 51,431 73,931
Additions - 3,326 3,326
Balance at 31 December 2014 22,500 54,757 77,257
---------------------- ----------------------------------- -------
Accumulated Depreciation
Balance at 1 January 2013 - 10,806 10,806
Depreciation expense 1,688 11,528 13,216
Balance at 31 December 2013 1,688 22,334 24,022
---------------------- ----------------------------------- -------
Balance at 1 January 2014 1,688 22,334 24,022
Depreciation expense 3,375 12,675 16,050
Balance at 31 December 2014 5,063 35,009 40,072
Net-book value at 31 December 2013 20,812 29,097 49,909
====================== =================================== =======
Net-book value at 31 December 2014 17,437 19,748 37,185
====================== =================================== =======
There is no property, plant and equipment that have been pledged
as security.
10. Intangible assets
Intangible assets of the Group are analysed as follows:
Software development cost (internally
Purchased software generated) Total
------------------- ------------------------------------------- ----------
Cost
Balance at 1 January 2013 62,950 249,351 312,301
Additions 313,740 134,714 448,454
Balance at 31 December 2013 376,690 384,065 760,755
------------------- ------------------------------------------- ----------
Balance at 1 January 2014 376,690 384,065 760,755
Additions 321,720 174,180 495,900
Balance at 31 December 2014 698,410 558,245 1,256,655
------------------- ------------------------------------------- ----------
Accumulated amortization
Balance at 1 January 2013 6,505 53,768 60,273
Amortisation expense 56,638 96,242 152,880
Balance at 31 December 2013 63,143 150,010 213,153
------------------- ------------------------------------------- ----------
Balance at 1 January 2014 63,143 150,010 213,153
Amortisation expense 160,157 133,905 294,062
Balance at 31 December 2014 223,300 283,915 507,215
Net book value at 31 December 2013 313,547 234,055 547,602
=================== =========================================== ==========
Net book value at 31 December 2014 475,110 274,330 749,440
=================== =========================================== ==========
11. Trade and other receivables
Trade receivables in the accompanying financial statements are
analysed as follows:
Group
------------------------
31/12/2014 31/12/2013
----------- -----------
Trade receivables 47,360 17,486
VAT receivable 39,620 54,613
Accrued Income 3,850,737 893,420
Prepaid expenses 14,896 5,470
Other receivables 9,833 13,954
Total 3,962,446 984,943
=========== ===========
Non-current assets 9,508 9,508
Current assets 3,952,938 975,435
3,962,446 984,943
=========== ===========
The ageing analysis of trade receivables is as follows:
Group
----------------
2014 2013
------- -------
Neither past due nor impaired 47,360 17,486
Total 47,360 17,486
======= =======
12. Cash and cash equivalents and restricted cash
Cash and cash equivalents and restricted cash in the
accompanying financial statements are analysed as follows:
Group
------------------------
31/12/2014 31/12/2013
----------- -----------
Cash at bank and in hand 2,419,927 589,930
Total excluding restricted cash 2,419,927 589,930
=========== ===========
Restricted cash - 53,787
Total including restricted cash 2,419,927 643,717
=========== ===========
Cash at bank earns interest at floating rates based on monthly
bank deposit rates. Interest earned on cash at bank and time
deposits is accounted for on an accrual basis and for the year
ended December 31, 2014, amounted to EUR1,660 (2013 EUR1,100) and
are included in financial income in the accompanying statements of
comprehensive income.
The restricted cash represents time deposits of nine and twelve
months with Bank of Cyprus created as a result of the
recapitalisation of Bank of Cyprus. The nine month time deposit of
an amount of EUR 26,893 expired on 30 April 2014 and the twelve
month time deposit of an amount of EUR 26,894 expired on 30 July
2014. Bank of Cyprus has the option to renew both deposits once
with the same duration of nine and twelve months respectively.
Cash and cash equivalents are analysed in the following
currencies:
Group
-----------
31/12/2014 31/12/2013
----------- -----------
Euro 493,632 205,164
US Dollar 1,198,231 390,911
GBP 706,236 47,642
AED 21,828 -
2,419,927 643,717
=========== ===========
13. Share capital and share premium
The movement of the Company's share capital and share premium is
analysed as follows:
For the year ended 31 December 2014 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2014 15,000 15,000 - 15,000
Bonus shares issued 11/06/2014 51,000 51,000 - 51,000
Share split on 11/06/2014 5,500,000 - - -
Issued on 11/06/2014 152,550 1,950 - 1,950
Issued on 27/06/2014 588,000 7,263 1,532,780 1,540,043
Shares issue costs - - (967,208) (967,208)
At 31 December 2014 6,240,550 75,213 565,572 640,785
============= ============== ============== ===============
For the year ended 31 December 2013 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2013 5,000 5,000 - 5,000
Issued on 16/04/2013 10,000 10,000 - 10,000
At 31 December 2013 15,000 15,000 - 15,000
============= ============== ============== ===============
On 16 April 2013, pursuant to a written resolution of the
Founders the 5,000 issued ordinary shares of EUR1.00 each were
re-designated A Ordinary Shares of EUR1.00 each.
On 16 April 2013 10,000 A ordinary shares of EUR1.00 each were
issued to the Founders.
On 11 June 2014, pursuant to written resolutions of the
Founders:
Ø each of the issued existing A ordinary shares of EUR1.00 in
the capital of the Company was redesignated as an ordinary share of
EUR1.00 each;
Ø the sum of EUR51,000 (being part of the Company's
distributable reserves) was capitalised and appropriated as capital
to the Founders and the Directors were to authorised to apply such
sum in paying up in full 51,000 new ordinary shares in the Company
(the "Bonus Shares") and to allot and issue such Bonus Shares,
credited as fully paid up, to the Founders at the rate of 3.4 Bonus
Shares for every 1 existing ordinary share of EUR1.00 each held by
them;
Ø the entire issued share capital of the Company was
redenominated from Euros (EUR) to Pounds Sterling (GBP) at a then
prevailing exchange rate of EUR 1.2 to GBP1
Ø the issued existing ordinary shares of EUR1.00 in the capital
of the Company were consolidated on the basis of 1 new ordinary
share of GBP1.00 each in the capital of the Company for every 1.2
existing ordinary shares of EUR1.00 previously held; and each of
the issued existing ordinary shares of GBP1.00 in the capital of
the Company arising from the consolidation was subdivided into 100
new ordinary shares of GBP0.01 each in the capital of the Company
for every 1 existing ordinary share of GBP1.00 previously held.
On 11 June 2014 152,550 ordinary shares of GBP0.01 each were
allotted and fully paid in cash by certain employees and
consultants of the Group resulting in a total net increase of
EUR1,950.
On 27 June 2014, 588,000 ordinary shares of GBP0.01 each were
allotted and fully paid in cash at a price of GBP2.12 resulting in
a total net increase of EUR572,835 (after transactions costs of
EUR967,208).
The company issued a total of 182,947 warrants over ordinary
shares to advisers and non-executive directors at the date of its
admission to AIM. The warrants are exercisable at a price of
GBP2.12 per ordinary share for a period of five years. The
directors no not consider the intrinsic value of the services
provided in exchange for the issue of the warrants to be
material.
14. Trade & other payables
Trade and other accounts payable in the accompanying financial
statements are analysed as follows:
Group
------------------------
31/12/2014 31/12/2013
----------- -----------
Trade payables 12,242 172,045
Accrued expenses 2,257,540 294,829
Social security and other taxes 42,130 22,777
Other liabilities - 6,505
Total 2,311,912 496,156
=========== ===========
Short term 2,311,912 496,156
Long term - -
Total 2,311,912 496,156
=========== ===========
15. Commitments
The Greek subsidiary CDIALOGUES S.A. has entered into commercial
operating lease agreements for the lease of office space and car.
These lease agreements have an average life of 3 to 12 years with
renewal terms included in certain contracts. Future minimum rentals
payable under non-cancellable operating leases as at 31 December
2014 and 2013, are as follows:
Group
------------------------
31/12/2014 31/12/2013
----------- -----------
Within one year 73,534 86,350
After one year but no more than five years 294,695 348,607
Over five years 315,818 476,441
684,047 911,398
=========== ===========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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