26th Mar 2007 07:01
Zamano PLC26 March 2007 ZAMANO PLC ("zamano" or the "company") FINAL RESULTS - YEAR ENDED 31st DECEMBER 2006 zamano announces maiden full year results ahead of market expectations. 2006 2005 % change •'000 •'000 Turnover 13,357 9,694 +38%EBITDA * 2,498 1,631 +53%Profit before tax 2,241 1,307 +71%Profit after tax 1,997 1,276 +57% Earning per share- Basic 3.8c 2.6c +46%- diluted 3.5c 2.4c +46% * Before charge of €55,747 (2005: €26,686) relating to options costs Highlights - zamano performed strongly in 2006 to deliver its 4th successive year of significant growth- Profit after tax increased by 57% to €1,997m reflecting efficiency improvements and traffic growth following investment in zamano's platform and application suite- Revenues increased by 38% with EBITDA up by 53% while EPS of 3.8c was up 46%- Industry leading profit margins Chairman's Statement I am delighted to report on a very exciting year for zamano. The company hasdelivered revenue and profit growth ahead of market expectations and took asignificant step by successfully raising money and listing on the London AIMmarket and on IEX in Dublin. When we listed, we sought new finance to support our strategy in three keyareas: •Support for merger and acquisition activity as the consolidation in the market continues •Identification of appropriate new geographic markets and controlled entry •Development of our technology platform to support new technologies and services Progress continues on all these fronts. During the listing process, we also reported on the strengthening of our Boardthrough the appointment of Colin Tucker and Mike Watson who are recognisedheavyweights in the sector and I am pleased to report that they are alreadycontributing significantly to the Board and the company. We also recentlyannounced that we have started the process to recruit a new Finance Director. Trading in 2007 has been good in the first two months, with a strong pipeline ofgrowth in our B2B businesses in the UK and Ireland, and we look to the remainderof the year with confidence. Management Review John O'Shea, zamano's Managing Director, commented "I'm pleased that our firstset of results delivered after our successful AIM and IEX flotations are aheadof market expectations. Our continued investment in our platform and applicationsuite has led to significant efficiency improvements and facilitated furthertraffic growth, thereby delivering the 53% EBITDA increment on 2005." Financial Performance zamano operates a hybrid business model within the Mobile Data Services marketspace. The B2B business units serve business customers and brands wishing tointeract and sell mobile services to mobile phone users. The B2C business unitoperates a brand, Mobile X, and sells directly to phone owners. Different marginstructures apply to each business unit. The strategy of the company is to maintain the hybrid nature of the business byinvesting in organic and inorganic growth opportunities in both the B2B and B2Careas. This enables zamano to maximise the benefits from economies of scale andto spread investment costs over a wider revenue base. The Board was particularly pleased with the resulting profit margins, settingzamano amongst the market leaders in terms of the ratio of profit to revenues.The EBITDA/Revenue ratio increased from 16.8% in 2005 to 18.7% in 2006. Having raised €4.9M after costs in the AIM flotation in October 2006, zamano'scash balance was strengthened considerably to €7.5M at year end. Net cash inflowfrom operating activities amounted to €2.3M, and after completing payments forthe purchase of a subsidiary, Enabletel, the overall increase in cash amountedto over €6.8M. Operational Performance During 2006, the company continued to invest in platform and applicationdevelopment, and increased the number of people employed in development,platform, application and technical customer support. Significant improvements in traffic throughput were achieved, and the platformwas successfully moved to a new managed hosting centre with increased bandwidthand redundancy. The company has migrated many services from SMS to WAP, thereby offeringend-users more choice in content purchasing and a richer multi-media experience. A video platform was acquired and successfully integrated with the existingbilling and content delivery platforms, positioning zamano to benefit fromincreasing 3G-based interactive video services. Successful growth in B2B sales in the UK resulted from an increase in theLondon-based sales team. UK sales made up 40% of the company's revenues. TheBoard expects this percentage to increase in 2007.A trial launch of the Mobile X brand in Australia proved successful, and thecompany now has a franchise operation operating in Melbourne and deliveringmonthly profits. zamano has invested significant efforts into the regulation of its customer baseto ensure compliance with industry standards. Strict guidelines have been put inplace for new customers connecting to the platform, and the customer servicesteam invests considerable time in overseeing service providers' applications tothe UK and Irish regulators of the industry for service approvals. The management team was expanded in 2006 with the recruitment of a new managerto the B2C business unit, while the appointment of a new Finance Director isexpected to be completed in Q2 2007. Outlook 2007 has started well for the company, with the business performing in line withexpectations. The company has not been impacted by the review of Premium Rateservices undertaken by ITV. Technology investment is focused on improving the user experience of buyers ofmobile content and interactive services, in line with improved devicefunctionality and greater bandwidth. zamano's WAP offering will soon extend topayment processing, and will aid further confluence between fixed line andmobile internet offerings. The Board is confident that zamano will continue to make progress in deliveringon our strategic intentions in 2007. CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 December 2006 2006 2005 Note • • Restated Turnover - continuing operations 13,357,291 9,693,971 Cost of Sales (8,134,828) (6,246,125) _________ _________ Gross Profit 5,222,463 3,447,846 Administrative expenses (3,040,485) (2,145,876) _________ _________ Operating profit - continuing operations 2,181,978 1,301,970 Interest payable and similar charges (26,108) (3,388) Interest receivable and similar income 84,765 8,246 _________ _________ Profit on ordinary activities before 2,240,635 1,306,828taxation Tax on profit on ordinary activities (243,561) (30,977) _________ _________Profit for the financial yearattributable tomembers of the parent company 1,997,074 1,275,851 ========= ======== Earnings per share 3 - basic 3.8c 2.6c- diluted 3.5c 2.4c CONSOLIDATED BALANCE SHEETat 31 December 2006 2006 2005ASSETS EMPLOYED Note • • FIXED ASSETS Intangible assets 903,599 1,112,122Tangible assets 164,917 51,811 _________ ________ 1,068,516 1,163,933 _________ ________ CURRENT ASSETS Debtors 4 2,773,515 1,924,208Cash at bank 7,491,045 683,119 _________ ________ 10,264,560 2,607,327 _________ ________ CREDITORS (amounts falling duewithin one year) 5 (2,785,040) (2,155,424) _________ ________ NET CURRENT ASSETS 7,479,520 451,903 ________ ________ TOTAL ASSETS LESS CURRENT LIABILITIES 8,548,036 1,615,836 ________ ________ CREDITORS (amounts falling dueafter more than one year) 6 - (906,956) ________ ________ 8,548,036 708,880 ======== ======= CAPITAL AND RESERVES Called up share capital 67,838 26,302Share premium 6,368,030 623,231Capital conversion reserve 300 300Profit and loss account 2,111,868 59,047 ________ ________Shareholders' funds 8,548,036 708,880 ======== ======== CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 2006 2006 2005 Note • •Net cash inflow from operating activities 7 2,313,229 1,202,489 RETURNS ON INVESTMENTSAND SERVICING OF FINANCEInterest received 84,765 8,246Interest paid (5,553) (3,172)Interest element of finance -lease rental payments (216) ________ ________Net cash inflow from returnson investments and servicingof finance 79,212 4,858TAXATION Corporation tax paid (67,312) (32,617) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENTPurchase of subsidiary undertaking (251,808) (1,095,447)Payments to acquire tangible fixed assets (164,774) (37,848) ________ ________ (416,582) (1,133,295) ________ ________Net cash inflow before financing 1,908,547 41,435 Financing:Net proceeds from issue of additional share 4,899,379 65,462capitalCapital element of finance leaserental payments - (7,815) ________ _______ 4,899,379 57,647 ________ _______Increase in cash 6,807,926 99,082 ======== ======= RECONCILIATION OF NET CASH FLOWS TO MOVEMENTS IN NET CASH/(DEBT) Increase in cash for the period 6,807,926 99,082Cash outflow from movement in - 7,815debt and lease financing Share conversion 8 906,956 - ________ _______Movement in net cash/(debt) for the 106,897 7,714,882period Net debt at 1 January 8 (223,837) (330,734) ________ _______Net cash/(debt) at 31 December 8 7,491,045 (223,837) ======== ======= GROUP STATEMENTS OF TOTAL RECOGNISED GAINS AND LOSSESfor the year ended 31 December 2006 2006 2005 • • Restated Profit for the financial year attributableto members of the parent company andtotal recognised gains and losses relatingto the year 1,997,074 1,275,851 ======= Prior year adjustment (as explained in Note 2) - Share based payment costs (43,367)- Reserve adjustment from share based 43,367payments ________ Total gains and losses recognised sincelast annual report 1,997,074 ======== RECONCILIATION OF SHAREHOLDERS' FUNDSfor the year ended 31 December 2006 2006 2005 • • Restated Total recognised gains and losses 1,997,074 1,275,851 Share issues net of issue costs 4,879,379 65,462 Reclassification from liability to 906,956 -equity Reserve credit for share based payment 55,747 26,686 ________ ________ Total movements during the year 7,839,156 1,367,999 Shareholders' funds at 1 January 708,880 (659,119) ________ ________ Shareholders' funds at 31 December 8,548,036 708,880 ======== ======== NOTES TO THE FINANCIAL INFORMATION FOR THE YEAR ENDING 31 DECEMBER 2006 1. The financial information set out in this preliminary announcement, which wasapproved by the board of directors on 23 March 2007, has been prepared basedon the accounting policies set out in the financial statements for the yearended 31 December 2006. This financial information does not constitute thegroup's statutory financial statements but is derived from the financialstatements for the year ended 31 December 2006, which will be delivered tothe Company's Annual General Meeting. Following the Annual General Meeting, the financial statements will be filed with the Companies' Office in Dublin. The auditors have reported on the financial statements for the year ended 31 December 2006; their report was unqualified. 2.In preparing the financial statements for the current year, the grouphas adopted FRS 20 'Share-based Payment'. The adoption of FRS 20 has resulted ina change in the accounting policy for share-based payment transactions. FRS 20requires the fair value of options and share awards which ultimately vest to becharged to the profit and loss account over the vesting or performance period.For equity-settled transactions fair value is determined at the date of thegrant using an appropriate pricing model. If an award fails to vest as theresult of certain types of performance condition not being satisfied, the chargeto the income statement will be adjusted to reflect this.Arising from the adoption of FRS 20 additional staff costs of €55,747 (2005 -€26,686) have been recognised in the profit and loss account. 3.EARNINGS PER ORDINARY SHARE Basic earnings per share amounts are calculated by dividing net profit for theyear attributable to ordinary equity holders of the parent by the weighedaverage number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net profitattributable to ordinary equity holders of the parent by the weighted averagenumber of ordinary shares outstanding during the year plus the weighted averagenumber of ordinary shares that would be issued on the conversion of all thedilutive potential ordinary shares into ordinary shares. The following reflects the income and share data used in the basic and dilutedearnings per share computations: 2006 2005 • • RestatedNet profit attributable to equityholders of the parent 1,997,074 1,275,851 ======== ======== 3. EARNINGS PER ORDINARY SHARE (continued) 2006 2005 thousands thousands Basic weighted average number of shares 52,933 49,134Dilutive potential ordinary shares:Employee share options 4,829 3,755 _______ _______Diluted weighted average number of shares 57,762 52,889 ======= ======= 4. DEBTORS (amounts falling due within one year) 2006 2005 • • Trade debtors and prepayments 2,773,515 1,924,208 ======== ======== CREDITORS(amounts falling due within one year) 2006 2005 • • Trade creditors and accruals 1,927,534 1,658,875Deferred consideration - 251,808PAYE/PRSI 136,476 63,225VAT 531,972 168,713Corporation tax 189,058 12,803 ________ ________ 2,785,040 2,155,424 ======== ======== 5. CREDITORS (amounts falling due after more than one year) 2006 2005 • •Series 'A' Convertible RedeemablePreferred Shares - 906,956 ====== ====== On 27 September 2006 the company converted 925,962 Series 'A' ConvertibleRedeemable Preferred Shares of €0.01 each, which had been issued at a premium of€897,696, to 925,962 Ordinary Shares of €0.01.each. 6. RECONCILIATION OF OPERATINGPROFIT TO NET CASH INFLOWFROM OPERATING ACTIVITIES 2006 2005 • •Operating profit 2,181,978 1,301,970Depreciation of tangible fixed assets 51,668 82,864Amortisation of goodwill 208,523 219,858Share based payments cost 55,747 26,686Increase in debtors (849,307) (929,776)Increase in creditors 664,620 500,887 _______ ________Net cash inflow from operating activities 2,313,229 1,202,489 ======== ======== 7. ANALYSIS OF NET CASH/(DEBT) At At 1 Jan Cash Share 31 Dec 2006 Flow Conversion 2006 • • • • Cash at bank and in hand 683,119 6,807,926 - 7,491,045 Series 'A' ConvertibleRedeemable PreferredShares (906,956) - 906,956 - _______ ________ _______ ________ Net (debt)/cash (223,837) 6,807,926 906,956 7,491,045 ======= ======= ====== ======= The company's 925,962 Series 'A' Convertible Redeemable Preferred Shares whichwere included in Creditors (amounts falling due after more than one year) at 31December 2005 in accordance with FRS 25, were converted to Ordinary Sharesduring the year and consequently are included in equity at 31 December 2006. 8. The report and accounts for the year ended 31 December 2006 will be posted to shareholders in due course and further copies will be available from Seymour Pierce Ltd., Bucklersbury House, 3 Queen Victoria Street, LondonEC4N 8EL. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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