TIDMMOS
RNS Number : 4571T
Mobile Streams plc
30 March 2016
Mobile Streams plc
("Mobile Streams", the "Company" or the "Group")
(AIM: MOS)
Interim results - in line with management's revised
expectations
Mobile Streams plc ("Mobile Streams" or the "Company") (AIM:
MOS) updates its shareholders on its unaudited interim results for
the six months ended 31 December 2015. These were in line with
management's expectations as set out in the Company's trading
update on 22 January:
-- Revenues of GBP8.0m (GBP18.5m for the 6 months ended 31
December 2014). All revenue is from continuing operations;
-- Mobile Internet revenues were GBP7.9m (6 months ended 31 December 2014: GBP18.1m);
-- EBITDA* loss of GBP104k (6 months ended 31 December 2014: GBP313k profit);
-- Post-tax loss of GBP321k (6 months to 31 December 2014: GBP302k loss); and
-- GBP1.5m of cash and cash equivalents at 31 December 2015 (31
December 2014: GBP3.2m), with no debt. The company's current cash
balance is GBP 1.4m.
* Earnings before interest, tax, depreciation, amortisation and
share compensation ("EBITDA") is a non IFRS measure which the Group
uses to assess its performance. It is defined as earnings before
interest, tax, depreciation, amortisation and share
compensation.
Commenting, Simon Buckingham, CEO of Mobile Streams said: "The
Company has been focused on stabilising its Latin American
operations in Argentina, Mexico, Colombia and Brazil. Additionally,
Mobile Streams has been working to launch and grow its operations
in India. Whilst still at an early stage, operations in India are
proceeding along the expected lines, and the Company remains
excited about the potential for this market as well as its ad
funded services."
During the period under review, and subsequently, the Company
has continued to deliver its strategy of launching subscription
based and ad-funded Mobile Internet services in emerging
markets.
In India, the Company's local subsidiary, Mobile Streams India
Private Limited, has launched subscription services with billing
connectivity for the three largest local mobile phone operators,
reaching a potential billable audience of approximately 600 million
local mobile phone users. Discussions are under way to add
additional mobile billing connections in India in order to maximize
the potential number of subscribers accessible through the service.
The Company has been implementing its usual launch related testing
and optimisation processes to establish key metrics such as the
marketing acquisition costs and lifetime subscriber values
associated with the market. The Company offers daily, weekly and
monthly subscriptions at various price points and has been learning
which business models appeal most to local consumers.
The Company's ad-funded MobileGaming.com service has been
expanded into several new markets beyond the initial launches in
India, Argentina and the U.S. Following the Company's trading
update on 22 January 2016, this service has since launched in the
Company's second largest market, Mexico, and is scheduled to launch
in Colombia and Brazil shortly.
As announced on 22 January 2016, the Company has continued to
develop proprietary technology to power its ad-funded games store
MobileGaming.com. This includes developing a Download Manager to
help consumers complete their downloads in places where the
cellular coverage is variable, building a low end version of the
service for older Android devices, building an installable app
version of the service to supplement the mobile internet service,
and further enhancing our wrapper technology. The Company has
localised the service into multiple languages. We have also added
several new advertisement types and mobile advertising networks and
continue to work to optimize the service and customer
experience.
Enquires:
Mobile Streams
Simon Buckingham, Chief Executive Officer +1 646 812 4749
Enrique Benasso, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)
Nic Hellyer +44 20 7496 3000
Alex Price
OPERATING REVIEW
Mobile internet
During the period, we continued to invest in our mobile internet
subscription services, in particular in our core Latin American
markets of Argentina, Mexico, Colombia and Brazil. Additionally, we
started operating services in India. The internet business has been
affected mainly by such economic factors as the devaluation and
consumer spending in Argentina.
Mobile operators
The mobile operator segment continued its gradual decline in
revenues over the period as the Company continued to execute its
strategy of building services on the open mobile internet.
Consumers tend to buy less content from operator managed content
services as they upgrade from traditional mobile devices to
smartphones and tablets.
FINANCIAL REVIEW
For the 6 months ended 31 December 2015.
Gross profit for the six month period ended 31 December 2015 was
GBP2.1m (2014: GBP5.0m). Gross margin was 25.9%, down from 26.8% in
2014.
Mobile Internet revenue has decreased by 56.2% to GBP7.9m (2014:
GBP18.1m). The cost of sales on mobile internet revenue is much
higher than on operator revenue because of marketing costs
resulting in a lower overall gross profit margin.
The Group recorded a loss after tax of GBP321k for the 6 months
ended 31 December 2015 (2014: loss GBP302k), generating a loss per
share of 0.865 pence per share (2014: 0.814 pence loss per
share).
Adjusted loss per share (excluding depreciation, amortisation,
impairments and share compensation expense) was 0.674 pence per
share (2014: 0.461 pence adjusted loss per share).
Cash and cash equivalents
The Argentine peso devalued by around 20% during December 2015,
caused by the release of currency restrictions, meaning that
currency can now flow freely in and out of Argentina. This policy
was adopted by the country's new elected president in November
2015. Current cash balances are GBP 1.4m.
The impact of the devaluation in the income statement was GBP
0.1m reduction in revenue. The effect of on the balance sheet was
GBP0.8m loss recognized in the currency translation reserve
account. For the remainder of the year, the revenues in GBP will be
reduced by about 20% due to the peso devaluation effect.
CONSOLIDATED INCOME STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12
ended ended months
31 December 31 December ended
2015 2014 30 June
2015
GBP000's GBP000's GBP000's
Revenue 8,033 18,488 29,063
Cost of sales (5,948) (13,519) (21,390)
-------------------- -------------------- ---------------------- -------------------------- ---------------------
Gross profit 2,085 4,969 7,673
Selling and
marketing
costs (771) (2,884) (3,405)
Administrative
expenses
** (1,489) (1,903) (3,493)
Operating (Loss)/
profit (175) 182 775
Finance income 47 26 65
Finance expense (13) - (8)
-------------------- ---------------------- -------------------------- ---------------------
(Loss)/Profit
before tax (141) 208 832
Tax expense (180) (510) (495)
(Loss)/Profit for
the period (321) (302) 337
=================== ===================== ====================== ========================== =====================
Attributable
to:
Attributable to equity shareholders
of Mobile Streams Plc (321) (302) 337
========================================== ====================== ========================== =====================
Earning Per Share
Pence Pence Pence
per share per share per
share
Basic
(loss)/earnings
per share (0.865) (0.814) 0.908
Diluted
(loss)/earnings
per share (0.865) (0.814) 0.855
* *Administrative expenses include depreciation,
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amortisation, impairment and share based compensation
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Unaudited Unaudited Audited
6 months 6 months 12
ended ended months
31 December 31 December ended
2015 2014 30 June
2015
GBP000's GBP000's GBP000's
(Loss)/profit for the period (321) (302) 337
Exchange differences on translating
foreign operations (822) 70 (92)
Total comprehensive (loss)/income
for the period (1,143) (232) 245
======================================= =================== =============== ==================
Total comprehensive (loss)/income
for the period attributable
to:
Equity shareholders of Mobile
Streams plc (1,143) (232) 245
--------------------------------------- ------------------- --------------- ------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Unaudited Audited
6 months ended 6 months ended 12 months
31 December 31 December ended 30
2015 2014 June 2015
GBP000's GBP000's GBP000's
Assets
Non- Current
Intangible
assets 1 1 -
Property, plant
and equipment 52 127 94
Deferred tax
asset - - 285
---------------- ---------------- ------------
53 128 379
Current
Trade and other
receivables 3,307 5,188 4,016
Cash and cash
equivalents 1,512 3,238 2,098
4,819 8,426 6,114
Total assets 4,872 8,554 6,493
======================= ================ ================ ============
Equity
Equity attributable
to equity holders
of Mobile Streams
Plc
Called up share
capital 74 74 74
Share Premium 10,579 10,579 10,579
Translation
reserve (2,955) (1,971) (2,133)
Retained earnings (5,059) (6,334) (4,782)
---------------------- ---------------- ----------------
Total equity 2,639 2,348 3,738
----------------------- ---------------- ---------------- ------------
Liabilities
Current
Trade and other
payables 1,607 4,299 2,090
Current tax
liabilities 626 1,907 665
---------------------- ---------------- ---------------- ------------
2,233 6,206 2,755
Total liabilities 2,233 6,206 2,755
---------------------- ---------------- ---------------- ------------
Total equity
and liabilities 4,872 8,554 6,493
======================= ================ ================ ============
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12
ended ended months
31 December 31 December ended
2015 2014 30 June
2015
GBP000's GBP000's GBP000's
Operating activities
Profit before taxation (141) 208 832
Adjustments:
Shared based payments 44 103 219
Depreciation 27 28 59
Interest received (47) - (65)
Changes in Trade and
other receivables 709 1,305 1,983
Changes in Trade and
other payables (483) (1,381) (3,250)
Movement in provisions - - (340)
Tax Paid (219) (271) -
Interest paid (13) - -
Total cash utilised in
operating activities (123) (8) (562)
------------------------------- -------------------- ---------------------- -------------------
Investing Activities
Additions to property,
plant and equipment (1) - (49)
Interest received 47 26 65
Net Cash generated from
investing activities 46 26 16
------------------------------- -------------------- ---------------------- -------------------
Issue of share capital
(net of expenses paid) - - 39
Net Cash generated from
financing activities - - 39
------------------------------- -------------------- ---------------------- -------------------
Net change in cash and
cash equivalents (77) 18 (507)
Cash and cash equivalents
at beginning of period 2,098 2,964 2,964
Exchange (loss)/ gain
on cash and cash equivalents (509) 256 (359)
Cash and cash equivalents,
end of period 1,512 3,238 2,098
------------------------------- -------------------- ---------------------- -------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called Share Translation Retained Total
up share premium reserve earnings Equity
capital
GBP000's GBP000's GBP000's GBP000's GBP000's
Balance at 1
July 2014 74 10,579 (2,041) (5,338) 3,274
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Credit for
share based
payments - - - 130 130
Transactions
with owners - - - 130 130
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Profit/(loss)
for the
6 months
ended 31
December
2014 - - - (302) (302)
Exchange
differences
on
translating
foreign
operations - - 70 (824) (754)
Total
comprehensive
income for
the period - - 70 (1,126) (1,056)
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Balance at 31
December
2014 74 10,579 (1,971) (6,334) 2,348
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Balance at 1
January
2015 74 10,579 (1,971) (6,334) 2,348
Credit for
share based
payments - - - 115 115
Transactions
with owners - - - 115 115
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
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Profit for the
6 months
ended 30 June
2015 - - - 1,437 1,437
Exchange
differences
on
translating
foreign
operations - - (162) - (162)
Total
comprehensive
income for
the period - - (162) - (162)
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Balance at 30
June
2015 74 10,579 (2,133) (4,782) 3,738
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Balance at 1
July 2015 74 10,579 (2,133) (4,782) 3,738
Credit for
share based
payments - - - 44 44
Transactions
with owners - - - 44 44
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Loss for the 6
months
ended 31
December 2015 - - - (321) (321)
Exchange
differences
on
translating
foreign
operations - - (822) - (822)
Total
comprehensive
income for
the period - - (822) (321) (1,143)
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
Balance at 31
December
2015 74 10,579 (2,955) (5,059) 2,639
--------------- ------------------ --------------------- ----------------------- ------------------- ---------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
The interim results of Mobile Streams PLC are prepared in
accordance with the requirements of IAS 34 Interim Financial
Reporting as adopted by the EU and prepared in accordance with the
accounting policies set out in the last financial statements for
the 12 months ended 30 June 2015.
The interim results, which are not audited, do not comprise
statutory accounts within the meaning of section 434 of the
Companies Act 2006.
The comparative financial information for the 12 months ended 30
June 2015 has been extracted from the statutory accounts for that
period. In addition, the financial information for the 6 months
ended 31 December 2015 has been extracted from the unaudited
Interim results. The full audited accounts of the Group for the 12
months ended 30 June 2015 were prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the European Union and have been delivered to the Registrar of
Companies.
The auditor's report on these financial statements was
unqualified and did not contain statements under S498(2) or S498(3)
of the Companies Act 2006.
2. SEGMENT REPORTING
As at 31 December 2015, the Group was organised into 4
geographical segments: Europe, North America, Latin America, and
Asia Pacific. Revenues were from external customers only and
generated from three principal business activities: the sale of
mobile content through MNO s (Mobile Operator sales), the sale of
mobile content over the internet (Mobile Internet sales) and the
provision of consulting and technical services (Other Service
Fees).
All operations are continuing and all inter-segment transfers
are priced and carried out at arm's length.
The segmental results for the 6 months ended
31 December 2015 were as follows:
North Latin
GBP000's Europe Asia America America Group
Mobile operator
sales 8 5 19 80 112
Mobile internet
sales - - 4 7,901 7,905
Other service fees 15 - - 1 16
---------------------------- ------- ----- --------- --------- ---------------------
Total Revenue 23 5 23 7,982 8,033
Cost of sales (40) (14) (10) (5,884) (5,948)
---------------------------- ------- ----- --------- --------- ---------------------
Gross profit (17) (9) 13 2,098 2,085
Operating expenses (291) (86) (70) (1,742) (2,189)
---------------------------- ------- ----- --------- --------- ---------------------
EBITDA* (308) (95) (57) 356 (104)
---------------------------- ------- ----- --------- --------- ---------------------
Depreciation, amortisation - - - (27) (27)
Share based compensation (44) - - - (44)
Revenue/expense
intercompany 238 - - (238) -
Finance income - - 1 33 34
---------------------------- ------- ----- --------- --------- ---------------------
Profit/(Loss) before
tax (114) (95) (56) 124 (141)
Income tax expense - - - (180) (180)
---------------------------- ------- ----- --------- --------- ---------------------
Loss after tax (114) (95) (56) (56) (321)
*Calculated as profit before tax, interest,
amortization, depreciation, share compensation
expense and impairment of assets.
The segmental results for the 6 months ended 31
December 2014 were as follows:
North Latin
GBP000's Europe Asia America America Group
Mobile operator
sales 9 92 18 284 403
Mobile internet
sales - - 26 18,035 18,061
Other service fees 15 - 1 8 24
---------------------------- ------- ------ --------- --------- ---------
Total Revenue 24 92 45 18,327 18,488
Cost of sales (11) (65) (26) (13,417) (13,519)
---------------------------- ------- ------ --------- --------- ---------
Gross profit 13 27 19 4,910 4,969
Operating expenses (277) (130) (90) (4,159) (4,656)
---------------------------- ------- ------ --------- --------- ---------
EBITDA* (264) (103) (71) 751 313
---------------------------- ------- ------ --------- --------- ---------
Depreciation, amortisation - - (1) (27) (28)
Share based compensation (103) - - - (103)
Revenue/expense
intercompany 619 - - (619) -
Finance income 2 - 1 23 26
---------------------------- ------- ------ --------- --------- ---------
Profit/(Loss) before
tax 254 (103) (71) 128 209
Income tax expense - - (7) (503) (510)
---------------------------- ------- ------ --------- --------- ---------
Profit/(Loss) after
tax 254 (103) (78) (375) (302)
============================ ======= ====== ========= ========= =========
*Calculated as profit before tax, interest, amortization,
depreciation, share compensation expense and impairment
of assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The segmental results for the year ended 30 June
2015 were as follows:
North Latin
GBP000's Europe Asia Pacific America America Group
Mobile operator
sales 10 151 29 440 630
Mobile internet
sales - - 28 28,379 28,407
Other service fees 10 - 2 14 26
---------------------------- ------- ------------- --------- --------- ---------
Total revenue 20 151 59 28,833 29,063
Cost of sales (27) 95 (11) (21,447) (21,390)
---------------------------- ------- ------------- --------- --------- ---------
Gross profit (7) 246 48 7,386 7,673
Operating expenses 397 (249) 42 (6,810) (6,620)
------- ------------- --------- --------- ---------
EBITDA* 390 (3) 90 576 1,053
---------------------------- ------- ------------- --------- --------- ---------
Depreciation, amortisation - (1) (1) (57) (59)
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Share compensation
expense (219) - - - (219)
Finance income 3 - 1 53 57
---------------------------- ------- ------------- --------- --------- ---------
Profit/(loss) before
tax 174 (4) 90 572 832
Taxation - - (7) (488) (495)
---------------------------- ------- ------------- --------- --------- ---------
Profit/(Loss) after
tax 174 (4) 83 84 337
============================ ======= ============= ========= ========= =========
*Calculated as profit before tax, interest, amortization,
depreciation, share compensation expense and impairment
of assets.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The segmental assets at 31 December 2015
were as follows:
North Latin
GBP000's Europe Asia America America Consol Group
Non current fixed
assets
Property, plant
& equipment - - - 52 - 52
--------------------- ------- ----- --------- --------- ------- --------
Intangible assets - - 1 - - 1
--------------------- ------- ----- --------- --------- ------- --------
Current assets 183 218 347 4,071 - 4,819
--------------------- ------- ----- --------- --------- ------- --------
Cash and cash
equivalents 108 35 254 1,115 - 1,512
Accounts receivable 14 54 13 590 - 671
Accrued receivables 8 104 40 471 - 623
Prepayments 25 10 10 1,678 - 1,723
Minimum guarantees
and advances - - - 13 - 13
Other assets 28 15 30 204 - 277
TOTAL ASSETS 183 218 348 4,123 - 4,872
===================== ======= ===== ========= ========= ======= ========
Current liabilities (167) (68) (275) (1,723) - (2,233)
--------------------- ------- ----- --------- --------- ------- --------
Trade Payables (72) (37) (30) (168) - (307)
Accrued content
costs (30) (17) (230) (447) - (724)
Other accrued
liabilities (43) (1) (15) (302) - (361)
Other payables (22) (13) - (180) - (215)
Corporate income
tax payable - - - (626) - (626)
TOTAL LIABILITIES (167) (68) (275) (1,723) - (2,233)
===================== ======= ===== ========= ========= ======= ========
The segmental assets at 31 December
2014 were as follows:
North Latin
GBP000's Europe Asia America America Consol Group
Non current fixed
assets
Property, plant
& equipment - - 1 126 - 127
--------------------- ------- ------ --------- --------- ------- --------
Intangible assets - - 1 - - 1
--------------------- ------- ------ --------- --------- ------- --------
Current assets 1,397 98 638 6,293 - 8,426
--------------------- ------- ------ --------- --------- ------- --------
Cash and cash
equivalents 1,317 12 560 1,349 - 3,238
Accounts receivable 18 49 8 988 - 1,063
Accrued receivables 17 4 43 1,391 - 1,455
Prepayments 4 11 10 1,636 - 1,661
Minimum guarantees
and advances - - - 14 - 14
Other assets 41 22 17 915 - 995
TOTAL ASSETS 1,397 98 640 6,419 - 8,554
===================== ======= ====== ========= ========= ======= ========
Current liabilities (437) (193) (296) (5,280) - (6,206)
--------------------- ------- ------ --------- --------- ------- --------
Trade Payables (36) (59) (46) (1,428) - (1,569)
Accrued content
costs (30) (222) (245) (690) - (1,187)
Other accrued
liabilities (378) 105 (15) (1,016) - (1,304)
Other payables 7 (17) 10 (239) - (239)
Corporate income
tax payable - - - (1,907) - (1,907)
TOTAL LIABILITIES (437) (193) (296) (5,280) - (6,206)
===================== ======= ====== ========= ========= ======= ========
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The segmental assets at 30 June 2015
were as follows:
North Latin
GBP000's Europe Asia America America Consol Total
Non current fixed
assets
Property, plant
& equipment - 1 - 93 - 94
--------------------- ------- ----- --------- --------- ------- --------
Deferred tax - - - 285 - 285
--------------------- ------- ----- --------- --------- ------- --------
Current assets 846 101 452 4,715 - 6,114
--------------------- ------- ----- --------- --------- ------- --------
Cash and cash
equivalents 795 13 380 910 - 2,098
Accounts receivable 6 50 11 943 - 1,010
Accrued receivables 9 5 32 711 - 757
Prepayments 30 9 10 2,011 - 2,060
Minimum guarantees
and advances - - - 13 - 13
Other assets 6 24 19 127 - 176
TOTAL ASSETS 846 102 452 5,093 - 6,493
===================== ======= ===== ========= ========= ======= ========
Current liabilities (162) 20 (249) (2,364) - (2,755)
--------------------- ------- ----- --------- --------- ------- --------
Trade Payables (60) (46) (29) (865) - (1,000)
Accrued content
costs (31) (20) (215) (411) - (677)
Other accrued
liabilities (64) 95 (14) (354) - (337)
Other payables (7) (9) 9 (69) - (76)
Corporate income
tax payable - - - (665) - (665)
TOTAL LIABILITIES (162) 20 (249) (2,364) - (2,755)
===================== ======= ===== ========= ========= ======= ========
3. EARNINGS PER SHARE
Earnings per share
Earnings per share is calculated by dividing
the(loss)/profit attributable to equity holders
of the Company by the weighted average number
of ordinary shares in issue during the period.
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2015 2014 2015
(Loss)/profit for the
period (GBP000's) (321) (302) 337
-------------- -------------- ------------------------
Loss earnings per share
(pence):
Basic (0.865) (0.814) 0.908
Diluted (0.865) (0.814) 0.855
Adjusted earnings per
share
Adjusted earnings per share is calculated to
reflect the underlying profitability of the
business by excluding non-cash charges for
depreciation, amortisation, impairments and
share compensation charges.
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2015 2014 2015
GBP000's GBP000's GBP000's
(Loss)/profit for the
period (321) (302) 337
Add back: share compensation
expense 44 103 219
Add back: depreciation
and amortisation 27 28 59
Adjusted (Loss)/profit
for the period (250) (171) 615
Pence Pence Pence
per share per share per share
Adjusted (loss)/earnings
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per share (0.674) (0.461) 1.659
Adjusted diluted (loss)/earnings
per share (0.674) (0.461) 1.596
Weighted average number
of shares
6 months 6 months 12 months
ended ended ended
31 December 31 December 30 June
2015 2014 2015
Basic 37,100,536 37,075,083 37,100,536
Exercisable share options 2,330,960 1,463,763 2,330,960
-------------- -------------- ------------------------
Diluted 39,431,496 38,538,846 39,431,497
-------------- -------------- ------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Diluted (loss)/earnings per share is calculated adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential ordinary shares. The Company
has only one category of ordinary shares.
The adjusted EPS has been calculated to reflect the underlying
profitability of the business by excluding non-cash charges for
depreciation, amortisation, impairments and share compensation
charges.
4. GOING CONCERN
The Group had cash balances of GBP1.5m at 31 December 2015 (30
June 2015: GBP2.1m) and no borrowings. Having reviewed cash flow
forecasts and budgets for a year ahead the Directors have a
reasonable expectation that the Group has sufficient resources to
continue in operational existence for the foreseeable future.
As at 31 December 2015, GBP0.8m (including short-term
investments of GBP0.1m) of the Group's cash balance was held in
Argentina. The Argentine Peso devalued by 20% during December 2015,
after the new Government was elected in Argentina. Since then, the
Peso has remained relatively stable, although we cannot predict
future movements in the currency and the impact on our financial
performance.
5. FOREIGN CURRENCY TRANSLATION
(a) Presentational currency
The consolidated financial statements are presented in British
pounds: the functional currency of the parent entity is also
British pounds.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date the
transaction occurs. Any exchange gains or losses resulting from
these transactions and from the translation of monetary assets and
liabilities at the balance sheet date are reported in the income
statement except when these represent a net investment in a
subsidiary when they are charged or credited to equity
.
Foreign currency balances are translated at the balance sheet
date using exchange rates prevailing at the period end.
(c) Group companies
The financial results and position of all group entities that
have a functional currency different from the presentational
currency of the Group are translated into the presentational
currency as follows:
i- assets and liabilities for each balance sheet are translated
at the closing exchange rate at the date of the balance sheet
ii - income and expenses for each income statement are
translated at average exchange rates (unless it is not a reasonable
approximation to the exchange rate at the date of transaction)
iii- all resulting exchange differences are recognised as a
separate component of equity (translation reserve)
The exchange rates used in respect of Argentinean pesos are the
official published exchange rates.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BLGDXRDDBGLC
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