Mobestar Holdings Plc (the "Mobestar" or the "Group")
Final results for the year ended 31 December 2007
CHAIRMAN'S STATEMENT
`The board is confident that the Group's investment in technological innovation
and development will lead to attractive returns to shareholders'.
Results
2006 was a landmark year for the Group and we have made significant progress
towards the achievement of our long term goals. Not only did our business
successfully join AIM in April but our flagship mDate product development was
completed and successfully launched at the 3GSM World Congress (the major trade
event in the Group's market sector) and we signed a major international dating
brand (Gaydar) as our first customer. Gaydar has in excess of 1 million
subscribers in the UK alone. Client customisation, installation and testing are
underway with live services which commenced on May 1 2007.
The conclusion of 2006 has marked a sea change in our operations as we evolve
from a development organisation to one that has a growing customer base of
satisfied customers. Our first products are now completed and mature and 2007
will see the results of these significant developments.
At the commencement of 2006 one of our major goals for 2007 was to reach
10,000,000 addressable customers with our products and solutions. This is now
in sight and the largest question is not, if our products are taken up by
global communities, but how quickly this can happen.
Financial
Turnover of �18,446 (2005: �26,487) represented sales of video based content
under the mGlamour brand. This was a tactical activity designed to raise the
profile of Mobestar amongst our target market audience. We do not plan to
actively promote this activity in the future.
Administrative expenses (including the costs associated with the AIM admission
- �244,517) amounted to �2,027,500 (2005: �1,166,016). The loss for the year
amounted to �1,936,966 (2005: �1,088,933).
The Company raised approximately �1,300,000 by way of a private placing prior
to its admission on AIM.
Consistent with previous years the Group has continued its prudent management
of resources and has maintained a strong balance sheet with �0.85million of net
current assets at the year end including cash balances of �1.24million.
Marketplace
Mobestar offers a complete technology solution for mobile communities. Our
first application, mDate, is a full feature dating platform for mobile devices
including a live, anonymous, video calling facility. Our immediate market
comprises pre-existing on-line dating and browser based social networking
businesses. Such organisations are well aware of the latent revenue potential
that may be realised by offering mobile video-based services to their existing
subscribers. It is reasonable to assume that they will wish to access this
inherently more profitable business model.
Additionally, Mobestar's product combination makes it possible for any
business, not just licensed dating and social-networking organisations, to
offer mobile video-dating and community services. This extended mobile
community market offers huge growth potential.
The Group regularly attends, and presents at industry trade events and we have
found the level of market interest shown in our products extremely encouraging.
The company's standing in the mobile applications market place is rapidly
gaining recognition and our goal of attaining a leadership position is within
reach.
This augurs well for the future.
Strategy
Following an in depth business review the board is convinced that a large-scale
opportunity exists for its mDate, mSpace and FACE solutions together with the
company's associated point products and services. The limiting factor is our
capacity to meet the growing demand which we believe will be on a global scale.
As a consequence the focus in the coming months will be on expanding our
delivery and sales capability so as to accelerate the rate at which we can
acquire customers, install our products and provide first rate customer
support. Recent milestones in this process have been the completion of our
sales and marketing plan which will be executed by the recently appointed Sales
and Marketing director and the appointment of Head of Software Development to
ramp up the delivery capabilities to new customers.
Board and Staff
I would like to pay tribute to our employees who are the true drivers behind
our business. To date all of the success the company has achieved has been
delivered by a small, highly skilled team under the leadership of Peter
Richards. It is recognised that the business has now reached a stage in its
development where further operational, technical and sales management and staff
are required to enable the business to achieve its ambitious growth targets and
properly address this worldwide market opportunity. Michael Wilkinson, who led
the process to secure our successful flotation on the AIM market last April,
has resigned from the company.
Prospects
As outlined above the Group has generated a wide level of serious interest in
our target market sectors with the current and proposed product set. Our
targeted prospective customer list comprise the top global community owners and
brands and we are already engaged with a growing number of these potential
customers to emulate the success that we have experienced in the UK
Now as a public Group we believe that the business is in a unique position to
take advantage of the commercial opportunities that have presented themselves.
Our challenge in 2007 is to capitalise on and maximise the returns on the
opportunities that become available to us.
Paul Robinson
Executive Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 DECEMBER 2006
2006 2005
� �
Turnover 18,446 26,487
Administrative expenses (1,832,085) (1,166,016)
Administrative expenses - exceptional items (195,415) -
Total administrative expenses (2,027,500) (1,166,016)
Operating loss (2,009,054) (1,139,529)
Interest receivable 72,088 50,596
Loss on ordinary activities before taxation (1,936,966) (1,088,933)
Tax on loss on ordinary activities - -
Loss for the financial year (1,936,966) (1,088,933)
Basic and diluted loss per share (5.21p) (3.71p)
All of the Group's operations are classed as continuing. There were no gains or
losses other than those included in the above profit and loss account.
CONSOLIDATED BALANCE SHEET as at 31 DECEMBER 2006
2006 2005
� �
Fixed assets
Intangible assets 594,622 101,139
Tangible fixed assets 40,297 28,185
634,919 129,324
Current assets
Debtors 64,725 269,424
Cash at bank 1,239,323 1,791,458
1,304,048 2,060,882
Creditors: amounts falling due within (457,753) (365,141)
one year
Net current assets 846,295 1,695,741
Net assets 1,481,214 1,825,065
Capital and reserves
Called up share capital 379,515 342,616
Share premium account 451,472 -
Merger reserve 3,853,163 2,943,834
Share based payment reserve 195,415 -
Profit and loss account (3,398,351) (1,461,385)
Equity shareholders' funds 1,481,214 1,825,065
The accounts were approved by the Board of Directors on 16 May 2007
CONSOLIDATED CASHFLOW STATEMENT for the year ended 31 DECEMBER 2006
Notes 2006 2005
� �
Net cash outflow from operating 17 (1,734,856) (1,888,381)
activities
Returns on investments
Interest received 72,088 50,596
Capital expenditure
Purchase of intangible fixed assets (320,622) (106,000)
Purchase of tangible fixed assets (36,827) (24,292)
(357,449) (130,292)
Cash outflow before financing (2,020,217) (1,968,077)
Financing
Issue of ordinary share capital 1,574,315 2,837,252
Expenses paid in respect of share (90,664) -
issues
1,483,651 2,837,252
Decrease in cash in the year 18 (536,566) 869,175
Reconciliation of movements in equity 2006 2005
shareholders' funds - Group
� �
Loss for the financial year (1,936,966) (1,088,933)
Issue of ordinary share capital 1,397,700 173,186
Shares to be issued 1,813,260
Credit to equity for share based payments 195,415 -
Net (reduction)/addition to shareholders' funds (343,851) 897,513
Opening equity shareholders' funds 1,825,065 927,552
Closing equity shareholders' funds 1,481,214 1,825,065
Reconciliation of movements in equity 2006
shareholders' funds - Company
�
Loss for the financial year (899,380)
Issue of ordinary share capital 830,987
Credit to equity for share based 195,415
payments
Net (reduction)/addition to 127,022
shareholders' funds
Opening equity shareholders' funds -
Closing equity shareholders' funds 127,022
Reconciliation of operating loss to net 2006 2005
cash outflow from operating activities
� �
Operating loss (2,009,054) (1,139,529)
Depreciation 24,715 7,779
Amortisation charge 20,139 4,861
Share based payment 195,415 -
Disposal of intangible fixed assets - 48,894
Decrease/(increase) in debtors 6,748 (1,083,636)
Increase in creditors 27,181 273,250
Net cash outflow from operating (1,734,856) (1,888,381)
activities
Reconciliation of net cash flow to � �
movement in net funds
(Decrease)/increase in cash in the year (536,566) 869,175
Net funds at 1 January 1,773,746 904,571
Net funds at 31 December 1,237,180 1,773,746
Analysis of net funds At 1 January Cash At 31
December
2006 flow 2006
� � �
Cash in hand, at bank 1,791,458 (552,135) 1,239,323
Overdrafts (17,712) 15,569 (2,143)
1,773,746 (536,566) 1,237,180
Basis of preparation and consolidation
The financial statements have been prepared under the historical cost basis of
accounting and in accordance with applicable Accounting Standards in the United
Kingdom.
Under section 230(4) of the Companies Act 1985, the Company is exempt from the
requirement to present its own profit and loss account.
Basic and diluted loss per share
The basic loss per share is based upon a loss of �1,936,966 (2005: �1,088,933)
and the weighted average number of shares of 37,197,307 (2005: 29,335,475) in
issue during the year. The share options (see note 13) have not been included
as they are anti-dilutive.
Annual general meeting
The Annual General Meeting of Mobestar is to be held on 11 June 2007 at 11 am
at Hotel Vier Jahreszeiten Kempinski, Maximilianstrasse 17, 80539 Munich,
Germany.
Contact:-
Peter Richards, Chief Executive Officer
Mobestar Holdings Plc (tel:- 08454 900 565)
Liam Murray, Nominated Adviser
City Financial Associates Limited (tel:- 020 7090 7800)
END
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