TIDMMBT
RNS Number : 6851M
Mobile Tornado Group PLC
18 September 2019
18 September 2019
Mobile Tornado Group plc
("Mobile Tornado", the "Company" or the "Group")
Half Yearly Report
Mobile Tornado (AIM: MBT), the leading provider of instant
communication mobile applications to the enterprise market,
announces its unaudited results for the six-month period to 30 June
2019.
Financial Highlights
-- Total revenue increased by 21% to GBP1.49m (H1 2018: GBP1.23m)
o Recurring revenues broadly stable at GBP0.98m (H1 2018:
GBP1.02m)
o Non-recurring revenues* increased by 140% to GBP0.51m (H1
2018: GBP0.21m)
-- Operating expenses decreased by 5% to GBP1.68m (H1 2018: GBP1.78m)
-- Adjusted EBITDAE** losses reduced by 54% to GBP0.29m (H1 2018: GBP0.64m)
-- Group operating loss of GBP0.40m (H1 2018: GBP0.72m)
-- Loss after tax of GBP0.69m (H1 2018: GBP1.03m)
-- Basic loss per share of 0.20p (H1 2018: 0.34p)
-- Cash and cash equivalents of GBP0.03m (H1 2018: GBP0.33m)
o Post period end, completed a subscription to raise a total of
GBP0.75m before expenses
*Non-recurring revenues comprising installation fees, hardware,
professional services and capex license fees
**Earnings before interest, tax, depreciation, amortisation,
exceptional items and excluding exchange differences
Operating highlights
-- Several bundled solution deals completed in Israel with
public municipalities, government agencies and enterprises
-- Tender submitted and trial conducted with major government agency in South Africa
-- Sold and commissioned a server platform with an MNO partner
in Colombia for deployment with a major transportation group
-- Completed an exclusive deal with a Chinese rugged handset
manufacturer for customers in the Israel market
Post period end
-- Successfully completed a subscription to raise GBP0.75m to
provide additional working capital and conversion of GBP0.78m of
debt into equity by major shareholder InTechnology plc
Jeremy Fenn, Chairman of Mobile Tornado, said: "Our team has
delivered an excellent first half. The EBITDAE loss has more than
halved to GBP0.29m from GBP0.64m in 2018, driven by stable
recurring revenues, a solid performance with our bundled offering
in Israel and a new system deployment with our MNO partner in South
America.
"More importantly, we have competed against major players in the
PTT space in highly complex tenders, and won, securing some major
strategic customers as a result. I have no doubt that the
significantly enhanced credibility we have gained has put us in a
strong position as we engage with similar organisations across both
the public and private sectors.
"We are therefore well placed to further develop our business in
each of our target markets. I expect the recurring revenue streams
to return to growth in the second half of the current financial
year as our efforts across Africa and South America, in particular,
begin to gain traction. In Israel, we have a strong pipeline of new
deals which we are confident will be developed further as the IDEN
shutdown approaches at the end of the current calendar year."
Enquiries:
Mobile Tornado Group plc +44 (0)7734 475 888
Jeremy Fenn, Chairman www.mobiletornado.com
Allenby Capital Limited (Nominated Adviser
& Broker) +44 (0)20 3328 5656
James Reeve / Nicholas Chambers
Walbrook PR Ltd +44 (0)20 7933 8780
Paul Cornelius / Nick Rome mobiletornado@walbrookpr.com
Financial results
Total turnover in the six-month period to 30 June 2019 increased
by 21% to GBP1.49m (H1 2018: GBP1.23m). Recurring revenues remained
broadly stable in the period at GBP0.98m (H1 2018: GBP1.02m).
Non-recurring revenues, comprising installation fees, hardware,
professional services and capex license fees increased by 140% to
GBP0.51m (H1 2018: GBP0.21m). As a result, gross profit increased
by 22% to GBP1.39m (H1 2018: GBP1.14m).
Our reported operating expenses decreased by 5% to GBP1.68m (H1
2018: GBP1.78m) reflecting the positive impact our investments have
made to date and the operating efficiencies our technical platform
is now delivering.
Due to the annual revaluation of certain financial liabilities
on the balance sheet, the Group reported a translational loss of
GBP0.01m (H1 2018: GBP0.04m loss) arising from the depreciation of
Sterling comparative to the start of the period. As a result of the
above, the loss after tax for the period decreased by 33% to
GBP0.69m (H1 2018: Loss GBP1.03m).
The net cash outflow from operating activities during the period
reduced to GBP0.46m (H1 2018: GBP1.42m). At 30 June 2019, the Group
had GBP0.03m cash at bank (30 June 2018: GBP0.33m) and net debt of
GBP8.85m (30 June 2018: GBP7.81m). Of this net debt figure,
GBP5.62m is in respect of preference shares, held by InTechnology
plc, the Company's largest shareholder. These preference shares are
redeemable at par value on 31 December 2020, or, at the Company's
discretion, at any earlier date.
The Company completed a placing on 28 August 2019, raising
GBP0.75m before expenses at an issue price of 5p per share. At the
same time, InTechnology converted GBP0.78m of current debt into
equity at the 5p issue price, resulting in a total of 30,504,687
new ordinary shares being issued.
Review of Operations
The Board is delighted with the operational progress the Group
has made during the first half of the year, with positive momentum
developing in each of our target markets of Israel, Africa and the
Americas.
In Israel, our bundled solution has sold well during the first
half of the year, with notable deals concluded with public
utilities, local authorities and government agencies. The bundled
solution comprises our full end-to-end proposition including server
platform, devices, applications and dispatch console, alongside an
embedded perpetual license for use of the service. This has had a
positive effect on the Group's cashflow and profitability as we
receive margin on the license upfront, as well as separate margin
on the hardware that we procure on behalf of the customer. With the
IDEN switch-off in Israel scheduled for the end of 2019, the Board
anticipates that activity levels should accelerate in the second
half of the current financial year.
During the period, we sold and commissioned a new server
platform for a major MNO in Colombia, and this will be deployed
during the second half of the year, initially for a major
transportation group. We understand from our MNO partner that they
will use this platform to sell services to other transportation
groups, once the first customer has been fully commissioned. During
the last 18 months, we have dramatically reduced the cost of
ownership for a private system and this deal is a perfect
illustration of the types of opportunities that are now opening up
as a result.
In South Africa, we have been working with one of our MNO
customers on the submission of a tender for the deployment of
services across a major government agency. Extensive trials have
been running successfully for a number of weeks and we are hopeful
that a deal will conclude during the second half. We have a major
strategic advantage in Africa given our technical superiority.
Cellular infrastructure on this continent is still largely 2G and
3G, and we are currently the only cellular PTT carrier grade market
solution that can transition seamlessly across 2G, 3G, 4G and WiFi
networks, delivering an uninterrupted service to the end user. As a
result, we are engaged with the two leading MNOs in this territory
and are currently involved in multiple tenders across government
agencies, public authorities and enterprises.
Now that we are offering an end-to-end solution, we are able to
ensure that the handsets we offer are optimised to work seamlessly
with our applications. To this end, we are constantly reviewing the
new low cost rugged PoC handsets that are now emerging as the
market expands, to ensure we are in a position to offer our
customers the best overall value proposition. Following a recent
review, we secured an exclusive deal with a Chinese manufacturer,
requiring us to commit to purchasing 5,000 handsets over the first
12 months to maintain such exclusivity. As a result, we have had to
increase the handset stock levels and this is one of the reasons we
raised additional external funds during August.
Research and Development
As I have highlighted in the past, the barriers to entry for
cellular based PTT solution providers like Mobile Tornado into the
public safety markets are very high, largely due to the dominant
position of the established players offering radio-based solutions
that operate on their own, high cost, bespoke infrastructure and
handsets. They will not give up their control of these markets
easily, but we have demonstrated that, with our constantly
improving cellular based solution, we are able to secure public
safety contracts, evidenced by certain deals that have closed
during the first half of the year. I'm pleased to confirm that this
transformative development is being driven across all of our target
markets.
We have also been able to achieve this through our continued
investment in developing the fastest, most robust, fully
functioned, efficient PoC solution on the market. It's worth
highlighting again some of the key characteristics of our
solution:
-- Speed - 500 millisecond set up time
-- Capacity - our dual redundant servers can now be deployed to
cater for >200,000 users and our dispatch console can handle 18
independent PTT channels
-- Security - end-to-end encryption with a different key for
each transmission, and new developments to counter the increasing
cyber threat
-- Functionality/features - push to
talk/alert/location/message/video, dispatch console and recording
are all part of the solution
-- Efficiency - server/application optimised to ensure device battery consumption minimised
We believe these technical advantages are now being recognised
by large organisations within both the public and private sector
and utilising our new customers as case studies and references,
will significantly enhance our credibility as we make further
inroads into the public safety markets.
Funding
We completed a placing for GBP0.75m in August 2019, to provide
the business with additional working capital. This has enabled the
Group to build up a small increase in handset stocks and take a
more flexible approach when negotiating deals with prospective
customers. The GBP0.30m revolving loan facility with InTechnology
plc will also remain in place.
The 2018 Annual Report and Accounts highlighted a significant
outstanding receivable with one of our partners. This amount stood
at GBP0.64m as at 31 December 2018 and GBP0.80m as at 30 June 2019.
The Group was hoping to collect the outstanding debt in the short
term following an equity investment into said partner. The equity
investment was not completed as anticipated, due to the
unfavourable capital market environment, and we have been in
discussions since then to determine a mutually acceptable way
forward. Based on a growing pipeline of new business and our
partner's recent move into profitability, I'm pleased to report
that we have agreed an acceptable repayment schedule with our
partner to settle this debt over a maximum 36-month period with
certain accelerated debt repayment opportunities.
Outlook
Our team has delivered an excellent first half. The EBITDAE loss
has more than halved to GBP0.29m from GBP0.64m in 2018, driven by
stable recurring revenues, a solid performance with our bundled
offering in Israel and a new system deployment with our MNO partner
in South America.
More importantly, we have competed against major players in the
PTT space in highly complex tenders, and won, securing some major
strategic customers as a result. I have no doubt that the
significantly enhanced credibility we have gained has put us in a
strong position as we engage with similar organisations across both
the public and private sectors.
We are therefore well placed to further develop our business in
each of our target markets. I expect the recurring revenue streams
to return to growth in the second half of the current financial
year as our efforts across Africa and South America, in particular,
begin to gain traction. In Israel, we have a strong pipeline of new
deals which we are confident will be developed further as the IDEN
shutdown approaches at the end of the current calendar year.
The Board would like to thank those shareholders that supported
the recent fundraising and we look forward to the remainder of 2019
and beyond with increasing confidence.
Jeremy Fenn
Chairman
18 September 2019
Consolidated income statement
For the six months ended 30 June 2019
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Continuing Operations
Revenue 1,493 1,234 2,974
---------------------------------------- ----------------- ----------------- ---------------
Cost of sales (101) (95) (315)
---------------------------------------- ----------------- ----------------- ---------------
Gross profit 1,392 1,139 2,659
Other operating expenses (1,683) (1,775) (3,547)
Group operating loss before exchange
differences,
exceptional items, depreciation and
amortisation expense (291) (636) (888)
---------------------------------------- ----------------- ----------------- ---------------
Exchange differences (12) (44) (138)
Exceptional items - - (49)
Depreciation and amortisation expense (98) (37) (208)
Total operating expenses (1,793) (1,856) (3,942)
Group operating loss (401) (717) (1,283)
Finance costs (290) (334) (619)
Loss before tax (691) (1,051) (1,902)
Income tax credit - 17 367
Loss for the period (691) (1,034) (1,535)
---------------------------------------- ----------------- ----------------- ---------------
Loss per share (pence)
Basic and diluted (0.20) (0.34) (0.47)
---------------------------------------- ----------------- ----------------- ---------------
Consolidated statement of comprehensive income
For the six months ended 30 June 2019
Six months Six months Year ended
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Loss for the period (691) (1,034) (1,535)
Other comprehensive income
Exchange differences on translation
of foreign operations (1) (11) (28)
Total comprehensive loss for
the period (692) (1,045) (1,563)
-------------------------------------- ----------- ----------- ------------
Consolidated statement of changes in equity
For the six months ended 30 June 2019
Reverse
Share Share acquisition Merger Translation Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2018 5,427 12,672 (7,620) 10,938 (2,213) (34,220) (15,016)
Equity settled
share-based
payments - - - - - 29 29
Issue of share
capital 1,558 2,252 - - - - 3,810
Transactions
with owners 1,558 2,252 - - - 29 3,839
Loss for the
period - - - - - (1,034) (1,034)
Exchange
differences
on translation
of foreign
operations - - - - (11) - (11)
Total
comprehensive
income
for the period - - - - (11) (1,034) (1,045)
Balance at 30
June 2018 6,985 14,924 (7,620) 10,938 (2,224) (35,225) (12,222)
--------------- ------------- --------------- ----------------- --------------- ------------------ ----------------- -----------------
Reverse
Share Share acquisition Merger Translation Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2018 6,985 14,924 (7,620) 10,938 (2,224) (35,225) (12,222)
Equity settled
share-based
payments - - - - - 25 25
Transactions
with owners - - - - - 25 25
Loss for the
period - - - - - (501) (501)
Exchange
differences
on translation
of foreign
operations - - - - (17) - (17)
Total
comprehensive
income
for the period - - - - (17) (501) (518)
Balance at 31
December
2018 6,985 14,924 (7,620) 10,938 (2,241) (35,701) (12,715)
--------------- ------------- --------------- ----------------- --------------- ------------------ ----------------- -----------------
Reverse
Share Share acquisition Merger Translation Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
January
2019 6,985 14,924 (7,620) 10,938 (2,241) (35,701) (12,715)
Equity settled
share-based
payments - - - - - 27 27
Transactions
with owners - - - - - 27 27
Loss for the
period - - - - - (691) (691)
Exchange
differences
on translation
of foreign
operations - - - - (1) - (1)
Total
comprehensive
income
for the period - - - - (1) (691) (692)
Balance at 30
June 2019 6,985 14,924 (7,620) 10,938 (2,242) (36,365) (13,380)
--------------- ------------- --------------- ----------------- --------------- ------------------ ----------------- -----------------
Consolidated balance sheet
As at 30 June 2019
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant & equipment 168 308 219
Intangible assets 69 115 88
237 423 307
------------------------------ ---------- ---------- ------------
Current assets
Trade and other receivables 1,489 1,125 1,243
Inventories 69 93 151
Tax debtor 364 493 462
Cash and cash equivalents 33 328 354
------------------------------- ---------- ---------- ------------
1,955 2,039 2,210
------------------------------ ---------- ---------- ------------
Liabilities
Current liabilities
Trade and other payables (4,858) (4,364) (4,555)
Borrowings (3,262) (2,510) (2,796)
Net current liabilities (6,165) (4,835) (5,141)
------------------------------- ---------- ---------- ------------
Non-current liabilities
Trade and other payables (1,828) (2,187) (2,257)
Borrowings (5,624) (5,623) (5,624)
(7,452) (7,810) (7,881)
------------------------------ ---------- ---------- ------------
Net liabilities (13,380) (12,222) (12,715)
------------------------------- ---------- ---------- ------------
Shareholders' equity
Share capital 6,985 6,985 6,985
Share premium 14,924 14,924 14,924
Reverse acquisition reserve (7,620) (7,620) (7,620)
Merger reserve 10,938 10,938 10,938
Foreign currency translation
reserve (2,242) (2,224) (2,241)
Retained earnings (36,365) (35,225) (35,701)
Total equity (13,380) (12,222) (12,715)
------------------------------- ---------- ---------- ------------
Consolidated cash flow statement
For the six months ended 30 June 2019
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Operating activities
Cash used in operations (464) (1,421) (1,849)
Tax credit received - - 493
Net cash used in operating activities (464) (1,421) (1,356)
---------------------------------------- ---------------- ---------------- ------------------
Investing activities
Purchase of property, plant
& equipment (27) (56) (101)
Net cash used in investing activities (27) (56) (101)
---------------------------------------- ---------------- ---------------- ------------------
Financing
Issue of ordinary share capital - 1,351 1,351
Share issue costs - (81) (81)
Proceeds from borrowings 170 (200) (200)
Net cash inflow from financing 170 1,070 1,070
---------------- ---------------- ------------------
Effects of exchange rates on
cash
and cash equivalents - 3 9
---------------------------------------- ---------------- ---------------- ------------------
Net increase in cash and
cash equivalents in the period (321) (404) (378)
Cash and cash equivalents at
beginning of period 354 732 732
Cash and cash equivalents at
end of period 33 328 354
---------------------------------------- ---------------- ---------------- ------------------
Notes to the interim report
For the six months ended 30 June 2019
1 General information
The financial information in the interim report does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006 and has not been audited or reviewed. The
financial information relating to the year ended 31 December 2018
is an extract from the latest published financial statements on
which the auditor gave an unmodified report that did not contain
statements under section 498 (2) or (3) of the Companies Act 2006
and which have been filed with the Registrar of Companies.
2 Basis of preparation
These interim financial statements are for the six months ended
30 June 2019. They have been prepared using the recognition and
measurement principles of IFRS.
The interim financial statements have been prepared under the
historical cost convention.
The interim financial statements have been prepared in
accordance with the accounting policies adopted in the last annual
financial statements for the year ended 31 December 2018. The
accounting policies have been applied consistently throughout the
Group for the purpose of preparation of the interim financial
statements.
3 Loss per share
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders of GBP691,000 (30 June 2018:
GBP1,034,000, 31 December 2018: GBP1,535,000) by the weighted
average number of ordinary shares in issue during the period of
349,240,236 (30 June 2018: 303,775,500, 31 December 2018:
326,694,121).
Six months Six months
ended ended Year ended
31 December
30 June 2019 30 June 2018 2018
Unaudited Unaudited Audited
Basic and diluted Basic and diluted Basic and diluted
Loss Loss Loss Loss Loss Loss
per share per share per share
GBP'000 pence GBP'000 pence GBP'000 pence
Loss attributable to
ordinary shareholders (691) (0.20) (1,034) (0.34) (1,535) (0.47)
----------------------- ---------- ---------- --------- ------------ ----------- -----------
4 Share capital and share premium
Number
of Share Share Total
shares capital premium
'000 GBP'000 GBP'000 GBP'000
At 1 January 2018 271,353 5,427 12,672 18,099
Issue of shares 77,887 1,558 2,252 3,810
----------------------------------- ------------- ---------- ----------- -----------
At 30 June 2018, 31 December 2018
& 30 June 2019 349,240 6,985 14,924 21,909
----------------------------------- ------------- ---------- ----------- -----------
Non-voting preference shares
Number
of Nominal
shares Value
'000 GBP'000
At 30 June 2018, 31 December 2018 and 30 June
2019 71,277 5,702
------------------------------------------------ -------- ----------
Liabilities and preference shares totalling GBP5,702k were
converted into 71,277k 8p preference shares on 28 August 2013. The
preference shares are non-voting, non-convertible redeemable
preference shares redeemable at par value on 31 December 2020, or,
at the Company's discretion, at any earlier date. The preference
shares accrue interest at a fixed rate of 10% per annum.
5 Cash used in operations
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2019 2018 2018
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Loss before taxation (691) (1,051) (1,902)
Adjustments for:
Depreciation and amortisation 98 37 208
Share based payment charge 27 29 54
Interest expense 290 334 619
Changes in working capital:
Decrease/(Increase) in inventories 82 (92) (149)
(Increase)/Decrease in trade and
other receivables (148) 125 (200)
Decrease in trade and other payables (122) (803) (479)
Net cash used in operations (464) (1,421) (1,849)
-------------------------------------- ---------------- ------------------ --------------------
6 Shareholder information
The interim announcement will be published on the company's
website www.mobiletornado.com on 18 September 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR BCGDCDBBBGCR
(END) Dow Jones Newswires
September 18, 2019 02:01 ET (06:01 GMT)
Mobile Tornado (LSE:MBT)
Historical Stock Chart
From Apr 2024 to May 2024
Mobile Tornado (LSE:MBT)
Historical Stock Chart
From May 2023 to May 2024