30th Sep 2022 07:00
30 September 2022
MobilityOne Limited
("MobilityOne", the "Company" or the "Group")
Unaudited interim results for the six months ended 30 June 2022
MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and platform provider, announces its unaudited interim results for the six months ended 30 June 2022.
Highlights:
· Revenue decreased by 13.2% to £113.4 million (H1 2021: £130.7 million) due to lower sales for the Group's mobile phone prepaid airtime reload and bill payment business in Malaysia;
· Profit after tax of £0.34 million (H1 2021: profit after tax of £1.01 million);
· Cash and cash equivalents (including fixed deposits) at 30 June 2022 of £4.72 million (30 June 2021: £4.52 million); and
· The Group is cautious on the outlook for the remainder of 2022, taking into consideration the current business and operational landscape of rising inflation and interest rates as well as higher administrative expenses notwithstanding that the e-payments industry is expected to continue to grow in Malaysia.
For further information, contact:
MobilityOne Limited +6 03 89963600
Dato' Hussian A. Rahman, CEO www.mobilityone.com.my
Allenby Capital Limited
(Nominated Adviser and Broker) +44 20 3328 5656
Nick Athanas / Vivek Bhardwaj
About the Group:
MobilityOne provides e-commerce infrastructure payment solutions and platforms through its proprietary technology solutions. The Group has developed an end-to-end e-commerce solution which connects various service providers across several industries such as banking, telecommunication and transportation through multiple distribution devices including EDC terminals, mobile devices, automated teller machines ("ATM") and internet banking. The Group's technology platform is flexible, scalable and designed to facilitate cash, debit card and credit card transactions from multiple devices while controlling and monitoring the distribution of different products and services.
For more information, refer to our website at www.mobilityone.com.my
Chairman's statement
The Group's revenue decreased by 13.2% to £113.4 million (H1 2021: revenue of £130.7 million) in the first six months of 2022. This was as a result of lower sales from the Group's products and services, namely the mobile phone prepaid airtime reload and bill payment business through the Group's banking channels (i.e. mobile banking and internet banking) with 10 banks and third parties' e-wallet applications. The Malaysian market accounted for almost the Group's entire revenue for the first six months of 2022. As a consequence of the reduction of revenue, coupled with higher administrative expenses, the Group registered a lower profit after tax of £0.34 million in the first six months of 2022 (H1 2021: profit after tax of £1.01 million).
The Group's other businesses (i.e., the international remittance services and e-money in Malaysia and e-payment solutions activities in the Philippines and Brunei) continued to remain small in the first six months of 2022.
As at 30 June 2022, the Group had cash and cash equivalents (including fixed deposits) of £4.72 million (30 June 2021: cash and cash equivalents of £4.52 million) while the secured loans and borrowings from financial institutions increased to £2.89 million (30 June 2021: £2.06 million).
Current trading and outlook
The Group's business activities are predominately concentrated in Malaysia. Other than the Group's core mobile phone prepaid airtime reload and bill payment business, the Group's international remittance and e-money businesses are expected to remain insignificant in 2022. This is also expected to be the case for the e-payment solutions activities in the Philippines and Brunei.
On 1 June 2022 the Company announced that its wholly-owned subsidiary in Malaysia, MobilityOne Sdn Bhd, had received a license from MasterCard Asia/Pacific Pte Ltd ("MasterCard") and approval from the Central Bank of Malaysia to issue MasterCard prepaid cards. In line with announced expectations, the Group has commenced the issuance of MasterCard prepaid cards in Malaysia on a small scale to complement the Group's existing e-wallet and is part of the Group's end-to-end payment ecosystem.
However, the Central Bank of Malaysia has not yet given its decision, the timings of which continue to remain uncertain, for the Group to expand its money transfer business via the Society for Worldwide Interbank Financial Telecommunication ("SWIFT") network. Nevertheless, the Group is currently working closely with a bank in Malaysia on the integration process while waiting for the Central Bank of Malaysia's approval.
On 11 October 2021, the Group entered into a joint venture cum shareholders agreement with One M Tech Pty Ltd to explore e-commerce and e-payment business opportunities in Australia. As there have been no developments or progress made by the joint venture partner, the Group has today given a notice to the joint venture partner to terminate the agreement. While this joint venture cum shareholders agreement was previously envisaged to not contribute any material revenue or earnings to the Group, should a viable new opportunity arise, the Group will reassess exploring potential business expansion in Australia again in the future.
In order for the Group to expand its business in the UK, M-One Tech Limited, the Company's wholly-owned subsidiary in the UK, continues to progress its work in respect of re-submit an application to the Financial Conduct Authority (the "FCA"), the financial regulatory body in the UK, for authorisation as an electronic money institution to provide e-money services in the UK (together the "FCA Application"). While it was originally the Group's intention to re-submit the FCA Application by September 2022, as most recently announced by the Group on 29 June 2022, the Group now intends to re-submit the revised FCA Application reflecting the FCA's feedback in the fourth quarter of 2022.
Notwithstanding that the e-payments industry is expected to continue to grow in Malaysia in the long-term and that the Group will continue to invest and enhance its research and development as the backbone to support the business expansion and technology advancement, the Group is cautious on the outlook for the remainder of 2022. This cautious view takes into consideration the current business and operational landscape which comprises rising inflation and interest rates as well as higher administrative expenses. Rising administrative expenses include higher staff costs, higher infrastructure and marketing costs as well as other related expenses. As a result, in order to maintain or grow the Group's business, it is the Board's view that the Group's gross profit margin for its products and services are likely to also be impacted. For future growth, the Group will also consider partnerships with parties in complementary businesses to explore new business opportunities.
Abu Bakar bin Mohd Taib (Chairman)
30 September 2022
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2022
Six months |
| Six months |
| Financial year | |
Ended |
| Ended |
| Ended | |
30 June 2022 |
| 30 June 2021 |
| 31 Dec 2021 | |
Unaudited |
| Unaudited |
| Audited | |
CONTINUING OPERATIONS | £ |
| £ |
| £ |
| |||||
Revenue | 113,355,113 | 130,710,091 | 255,707,270 | ||
Cost of sales | (107,103,390) | (123,637,568) | (242,050,541) | ||
GROSS PROFIT | 6,251,723 | 7,072,523 | 13,656,729 | ||
Other operating income | 92,839 | 91,793 | 155,832 | ||
Administration expenses | (5,549,417) | (5,403,641) | (11,256,000) | ||
Other operating expenses | (209,083) | (314,042) | (411,740) | ||
Net loss on financial instruments | - | - | (13,366) | ||
OPERATING PROFIT | 586,062 | 1,446,633 | 2,131,455 | ||
Finance costs | (63,501) | (58,603) | (115,620) | ||
PROFIT BEFORE TAX | 522,561 | 1,388,030 | 2,015,835 | ||
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Tax | (184,356) | (374,862) | (507,582) | ||
PROFIT FROM CONTINUING OPERATIONS |
338,205 |
1,013,168 |
1,508,253 | ||
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Attributable to: | |||||
Owners of the parent | 338,842 | 1,013,868 | 1,524,429 | ||
Non-controlling interest | (637) | (700) | (16,176) | ||
338,205 | 1,013,168 | 1,508,253 | |||
EARNINGS PER SHARE | |||||
Basic earnings per share (pence) | 0.319 | 0.954 | 1.434 | ||
Diluted earnings per share (pence) | 0.301 | 0.882 | 1.341 | ||
PROFIT FOR THE PERIOD/YEAR | 338,205 | 1,013,168 | 1,508,253 | ||
OTHER COMPREHENSIVE PROFIT/(LOSS) | |||||
Foreign currency translation | 296,985 | (30,164) | (44,254) | ||
TOTAL COMPREHENSIVE PROFIT FOR THE PERIOD/YEAR |
635,190 |
983,004 |
1,463,999 | ||
Total comprehensive profit attributable to: | |||||
Owners of the parent | 636,224 | 962,256 | 1,458,754 | ||
Non-controlling interest | (1,034) | 20,748 | 5,245 | ||
635,190 | 983,004 | 1,463,999 | |||
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
|
| At |
| At |
| At |
|
|
| 30 June 2022 |
| 30 June 2021 |
| 31 Dec 2021 |
|
|
| Unaudited |
| Unaudited |
| Audited |
|
£ |
| £ |
| £ |
| ||
Assets |
| ||||||
Non-current assets |
| ||||||
Intangible assets | 421,863 | 598,367 | 433,844 |
| |||
Property, plant and equipment | 1,180,684 | 991,405 | 950,664 |
| |||
Right-of-use assets | 191,759 | 218,708 | 155,660 |
| |||
Other investment | 12,144 | - | - |
| |||
1,806,450 | 1,808,480 | 1,540,168 |
| ||||
Current assets |
| ||||||
Inventories | 3,162,123 | 2,485,534 | 3,118,571 |
| |||
Trade receivables | 2,087,657 | 1,651,637 | 2,299,267 |
| |||
Other receivables | 927,759 | 837,538 | 878,431 |
| |||
Tax recoverable | 169,179 | - | 53,010 |
| |||
Fixed deposits | 1,603,471 | 1,471,568 | 1,508,388 |
| |||
Cash and cash equivalents | 3,114,703 | 3,050,103 | 3,157,136 |
| |||
11,064,892 | 9,496,380 | 11,014,803 |
| ||||
|
| ||||||
Total Assets | 12,871,342 |
| 11,304,860 |
| 12,554,971 |
| |
|
| ||||||
Shareholders' equity |
| ||||||
|
| ||||||
Equity attributable to equity holders of the Company |
| ||||||
| Called up share capital | 2,657,470 | 2,657,470 | 2,657,470 |
| ||
| Share premium | 909,472 | 909,472 | 909,472 |
| ||
| Reverse acquisition reserve | 708,951 | 708,951 | 708,951 |
| ||
| Foreign currency translation reserve | 990,089 | 706,770 | 692,707 |
| ||
| Accumulated profit/ (losses) | 221,219 | (628,184) | (117,623) |
| ||
Shareholders' equity | 5,487,201 | 4,354,479 | 4,850,977 |
| |||
Non-controlling interest | (8,263) | 8,274 | (7,229) |
| |||
Total Equity | 5,478,938 | 4,362,753 | 4,843,748 |
| |||
|
| ||||||
Liabilities |
| ||||||
Non-current liabilities |
| ||||||
| Loans and borrowings - secured | 225,171 | 226,161 | 217,881 |
| ||
| Lease liabilities | 74,047 | 76,386 | 83,501 |
| ||
| Deferred tax liabilities | 44,782 | 55,204 | 42,570 |
| ||
| 344,000 | 357,751 | 343,952 | ||||
Current liabilities |
| ||||||
Trade payables | 947,062 | 1,030,890 | 1,195,283 |
| |||
Other payables | 3,116,652 | 3,195,262 | 4,008,268 |
| |||
Amount due to directors | 176,457 | 140,878 | 124,426 |
| |||
Loans and borrowings - secured | 2,668,243 | 1,830,684 | 1,958,841 |
| |||
Lease liabilities | 108,810 | 124,358 | 71,988 |
| |||
Tax payables | 31,180 | 262,284 | 8,465 |
| |||
7,048,404 | 6,584,356 | 7,367,271 |
| ||||
Total Liabilities | 7,392,404 | 6,942,107 | 7,711,223 |
| |||
|
| ||||||
Total Equity and Liabilities | 12,871,342 |
| 11,304,860 |
| 12,554,971 |
| |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2022
Non-Distributable | Distributable | ||||||||
|
| Foreign |
|
|
|
| |||
| Reverse | Currency |
|
| Non- |
| |||
Share | Share | Acquisition | Translation | Accumulated |
| Controlling | Total | ||
Capital | Premium | Reserve | Reserve | Losses | Total | Interest | Equity | ||
£ | £ | £ | £ | £ | £ | £ | £ | ||
As at 1 January 2021 | 2,657,470 | 909,472 | 708,951 | 758,382 | (1,642,052) | 3,392,223 | (12,474) | 3,379,749 | |
Foreign currency translation | - | - | - | (51,612) | - | (51,612) | 21,448 | (30,164) | |
Profit for the period | - | - | - | - | 1,013,868 | 1,013,868 | (700) | 1,013,168 | |
As at 30 June 2021 | 2,657,470 | 909,472 | 708,951 | 706,770 | (628,184) | 4,354,479 | 8,274 | 4,362,753 | |
As at 1 July 2021 | 2,657,470 | 909,472 | 708,951 | 706,770 | (628,184) | 4,354,479 | 8,274 | 4,362,753 | |
Foreign currency translation | - | - | - | (14,063) | - | (14,063) | (27) | (14,090) | |
Profit/(Loss) for the period | - | - | - | - | 510,561 | 510,561 | (15,476) | 495,085 | |
As at 31 Dec 2021 | 2,657,470 | 909,472 | 708,951 | 692,707 | (117,623) | 4,850,977 | (7,229) | 4,843,748 | |
|
|
|
|
|
|
|
| ||
As at 1 January 2022 | 2,657,470 | 909,472 | 708,951 | 692,707 | (117,623) | 4,850,977 | (7,229) | 4,843,748 | |
Foreign currency translation | - | - | - | 297,382 | - | 297,382 | (397) | 296,985 | |
Profit for the period | - | - | - | - | 338,842 | 338,842 | (637) | 338,205 | |
As at 30 June 2022 | 2,657,470 | 909,472 | 708,951 | 990,089 | 221,219 | 5,487,201 | (8,263) | 5,478,938 | |
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital over the nominal value of the respective shares net of share issue expenses.
The reverse acquisition reserve relates to the adjustment required by accounting for the reverse acquisition in accordance with IFRS 3.
The Company's assets and liabilities stated in the Statement of Financial Position were translated into Pound Sterling (£) using the closing rate as at the Statement of Financial Position date and the income statements were translated into £ using the average rate for that period. All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Retained earnings represent the cumulative earnings of the Group attributable to equity shareholders.
Non-controlling interests represent the share of ownership of subsidiary companies outside the Group.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2022
| Six months |
| Six months |
| Financial year |
| Ended |
| Ended |
| ended |
| 30 June 2022 |
| 30 June 2021 |
| 31 Dec 2021 |
| Unaudited |
| Unaudited |
| Audited |
| £ |
| £ |
| £ |
Cash flows (used in)/from operating activities |
|
|
|
| |
Cash (used in)/generated from operations | (205,386) | 2,011,004 | 2,409,305 | ||
Interest paid | (63,501) | (58,630) | (115,620) | ||
Interest received | 11,221 | 12,568 | 12,867 | ||
Tax paid | (287,340) |
| (242,859) | (723,469) | |
Tax refund | 5,470 |
| - | - | |
Net cash (used in)/generated from operating activities | (539,536) | 1,722,083 | 1,583,083 | ||
| |||||
Cash flows (used in) investing activities | |||||
Purchase of property, plant and equipment | (306,614) | (1,692) | (34,866) | ||
Addition in right-of-use assets | - | - | (5,690) | ||
Net cash outflow for acquisition of subsidiary company | - | (408,722) | (376,517) | ||
Repayment from associate company | - | - | 221,583 | ||
Addition in non-controlling interests | - | - | 21,310 | ||
Proceeds from disposal of property, plant & equipment | 8,370 | - | - | ||
Net cash (used in) investing activities | (298,244) | (410,414) | (174,180) | ||
Cash flows from/(used in) financing activities | |||||
Net change of banker acceptance | 607,556 | (1,136,798) | (1,202,597) | ||
Repayment of lease liabilities | (53,825) | (71,214) | (122,576) | ||
Repayment of term loan | (4,038) | (6,685) | (8,734) | ||
Net cash from/(used in) financing activities | 549,693 | (1,214,697) | (1,333,907) | ||
| |||||
(Decrease)/Increase in cash and cash equivalents | (288,087) |
| 96,972 |
| 74,996 |
|
|
|
|
| |
Effect of foreign exchange rate changes | 340,737 |
| 6,823 |
| 172,652 |
|
|
|
|
| |
Cash and cash equivalents at beginning of period/year | 4,665,524 |
| 4,417,876 |
|
4,417,876 |
|
|
|
|
| |
Cash and cash equivalents at end of period/year | 4,718,174 |
| 4,521,671 |
| 4,665,524 |
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. | Basis of preparation | |||||||||||||||
The Group's interim financial statements for the six months ended 30 June 2022 were authorised for issue by the Board of Directors on 30 September 2022.
The interim financial statements are unaudited and have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), as adopted by the European Union, and with those parts of the Companies (Jersey) Law 1991 applicable to companies preparing their financial statements under IFRS. It has been prepared in accordance with IAS 34 "Interim Financial Reporting" and does not include all of the information required for full annual financial statements. The financial statements have been prepared under the historical cost convention.
Full details of the accounting policies adopted, which are consistent with those disclosed in the Company's 2021 Annual Report, will be included in the audited financial statements for the year ending 31 December 2022.
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2. | Basis of consolidation | |||||||||||||||
The consolidated statement of comprehensive income and statement of financial position include financial statements of the Company and its subsidiaries made up to 30 June 2022.
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3. | Nature of financial information
The unaudited interim financial information for the six months ended 30 June 2022 does not constitute statutory accounts under the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 December 2021 are extracted from the audited statutory financial statements. Full audited financial statements of the Group in respect of that financial year prepared in accordance with IFRS, which we received an unqualified audit opinion, have been delivered to the Registrar of Companies.
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4. | Functional and presentation currency
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The functional currency of the Group is Ringgit Malaysia (RM). The consolidated financial statements are presented in Pound Sterling (£), which is the Company's presentational currency as this is the currency used in the country in which the entity is listed.
Assets and liabilities are translated into Pound Sterling (£) at foreign exchange rates ruling at the Statement of Financial Position date. Results and cash flows are translated into Pound Sterling (£) using average rates of exchange for the period.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year/period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.
The financial information set out below has been translated at the following rates:
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5. | Segmental analysis
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7. | Earnings per share
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The basic earnings per share is calculated by dividing the profit in the six month period ended 30 June 2022 of £338,842 (30 June 2021: profit of £1,013,868 and year ended 31 December 2021: profit of £1,524,429) attributable to owners of the parent by the number of ordinary shares outstanding at 30 June 2022 of 106,298,780 (30 June 2021: 106,298,780 and 31 December 2021: 106,298,780).
The diluted earnings per share for the six month period ended 30 June 2022 is calculated using the number of shares adjusted to assume the exercise of all dilutive potential ordinary shares of 112,567,904 (ie, on 5 December 2014, the Company granted share options of 10,600,000 shares at 2.5p to directors and certain employees of the Group. Share options of 2,000,000 shares had lapsed due to resignation of employees and no option has been exercised).
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8. | Reconciliation of profit before tax to cash generated from operations
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9. | Contingent liabilities
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In the period under review, corporate guarantees of RM27.0 million (£5.04 million) (H1 2021: RM21.1 million (£3.68 million) were given to a licensed bank by the Company for credit facilities granted to a subsidiary company.
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10. | Significant accounting policies |
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The interim consolidated financial statements have been prepared applying the same accounting policies that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2021 except for the adoption of new and amended reporting standards, which are effective for periods commencing on or after 1 January 2022. Various amendments to standards and interpretations of standards are effective for periods commencing on or after 1 January 2022 as detailed in the 2021 Annual Report, none of which have any impact on reported results. |
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Amortisation of intangible assets
Software is amortised over its estimated useful life. Management estimated the useful life of this asset to be within 10 years. Changes in the expected level of usage and technological development could impact the economic useful life therefore future amortisation could be revised.
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value-in-use of the cash generating units ("CGU") to which goodwill is allocated. Estimating a value-in-use amount requires management to make an estimation of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
The research and development costs are amortised on a straight-line basis over the life span of the developed assets. Management estimated the useful life of these assets to be within 5 years. Changes in the technological developments could impact the economic useful life and the residual values of these assets, therefore future amortisation charges could be revised.
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Impairment of goodwill on consolidation
The Group's cash flow projections include estimates of sales. However, if the projected sales do not materialise there is a risk that the value of goodwill would be impaired.
The Directors have carried out a detailed impairment review in respect of goodwill. The Group assesses at each reporting date whether there is an indication that an asset may be impaired, by considering cash flows forecasts. The cash flow projections are based on the assumption that the Group can realise projected sales. A prudent approach has been applied with no residual value being factored. At the period end, based on these assumptions there was no indication of impairment of the value of goodwill or of development costs.
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Research and development costs
All research costs are recognised in the income statement as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the project and the ability to measure reliably the expenditure during the development. Product development expenditures which do not meet these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost less any impairment losses and are amortised through other operating expenses in the income statement using the straight-line basis over the commercial lives of the underlying products not exceeding 5 years. Impairment is assessed whenever there is an indication of impairment and the amortisation period and method are also reviewed at least at each Statement of Financial Position date. |
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11. | Dividends |
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The Company has not proposed or declared an interim dividend. |
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12. | Interim report |
This interim financial statement will, in accordance with Rule 26 of the AIM Rules for Companies, be available shortly on the Company's website at www.mobilityone.com.my. | |
-Ends- |
Related Shares:
Mobilityone