29th Sep 2006 07:03
Messaging International Plc29 September 2006 Draft 5 Messaging International Plc ("Messaging International" or "the Company") Interim Results Messaging International Plc, the AIM-listed provider of innovative messagingservices, announces its results for the six months ended 30 June 2006. Chairman's Statement The Company continued to make progress in the period, entering agreements withglobal telecom operators and developing new products, which will ensure a strongposition in the messaging sector. Our blue-chip customer base, which includesSprint-Nextel, one of the top tier mobile providers in the USA, Rogers Wireless,the largest mobile operator in Canada and several other worldwide operators, istestament to the high esteem we enjoy in the sector. Despite the lengthy sales cycles in the telecom sector and the slow build-up intraffic volumes having somewhat delayed our development, new agreements signedduring the period under review and the constantly growing number of messagesdelivered through our systems underpins our optimism for the future. We provide messaging services and products that enable service providers tosend, receive, and manage voice, text and multimedia messages from a wide rangeof communication media. Importantly for us, consumer demand continues to driveinvestment in product development in this sector. We are at the forefront oftechnological change and constantly strive to stay one step ahead of thecompetition. This position was highlighted by our recently obtained US andCanadian patent for our Mobile Station (MS) message selection identificationsystem, which enables users to seamlessly reply to messages across variousmessaging services. This patent may enable the Company to charge licensing feesto various vendors using the patent. We are waiting to receive a European patentfor this method. In tandem with developing new products, we are focused on improving our marketpenetration, which naturally requires the expansion of marketing activity. Tothis end we have stepped up activity in the USA, Asia and Europe. While there isa long lead time to completing agreements, we are beginning to see the resultsof our labour and have a pipeline of new business opportunities. New business inthe period includes agreements with Pelephone, an Israeli mobile operator, topower an email to text service, as well as two tier-one USA mobile operators andVirgin Mobile USA, to market our proprietary Text-to-Landline solution. For the period, the Company is reporting operating losses of £545,162 (yearended 31 December 2005: losses £392,919) on a turnover of £321,055 (year ended31 December 2005: £219,793). The pace of change in the sector means that wecontinue to invest heavily in research with the view to creating new products aswell as developing existing ones. These research and development costs incurredin the six month period ended 30 June 2005 were £218,435 (year ended 31 December2005: £182,655). These costs have affected our current results but the companyshould benefit financially in the longer term. Our experienced team, blue-chip clients and leading-edge technology, form asolid platform from which to develop the business. The messaging sector ischanging rapidly and in line with this your management is focused on enhancingthe Company's intellectual property base so that we are able to capitalise onthe resulting opportunities for expansion worldwide. Additionally, we continueto explore potential acquisition opportunities that will complement our alreadyextensive offering. Finally I'd like to thank all those involved with the Company for their hardwork and I look forward to the future. Horacio FurmanChairman Messaging International PlcConsolidated income statement for the six month period ended 30th June 2006 Unaudited 6months ended 30June 2006 Audited Year ended 31December 2005 Notes £ £Continuing operations Revenues 321,055 219,793Cost ofrevenue (237,186) (168,594) ---------- ---------- ---------- ----------Gross profit 83,869 51,199 ---------- ---------- Operating expensesResearch anddevelopment (218,435) (182,655)Sales andmarketing (233,874) (149,003)Administrativeand generalcosts (179,218) (131,912) ---------- ---------- ----------Totaloperatingexpenses (631,527) (463,570) ---------- ---------- ---------- Operating losson ordinaryactivitiesbeforeinterest andtaxation (547,658) (412,371) Interest andsimilar income 2,496 19,452 ---------- ---------- ---------- ----------Loss onordinaryactivitiesbeforetaxation (545,162) (392,919) Taxation onordinaryactivities 2 - - ---------- ---------- ----------Loss for thefinancialperiod (545,162) (392,919) ---------- ---------- ---------- Loss per share from continuing operations Basic anddiluted lossper share 3 (0.5) p (0.7) p ---------- ---------- All amounts relate to continued activities. There were no recognised gains or losses other than shown in the profit and loss account. Messaging International PlcConsolidated balance sheet as at 30 June 2006 Unaudited 30 June Audited 31 December 2006 2005 £ £ Non current assetsGoodwill 3,236,617 3,236,617Tangible assets 54,280 52,371Intangibleassets 1,158 1,631Restricted cash 94,288 84,338 ---------- ---------- 3,386,343 3,374,957 ---------- ---------- Current assetsCash and cashequivalents 341,264 954,888Trade and otherreceivables 266,874 181,501 ---------- ---------- 608,138 1,136,389 Current liabilitiesTrade and otherpayables (217,741) (220,549) ---------- ---------- ---------- ----------Net currentassets 390,397 915,840 ---------- ---------- Non current liabilitiesSeverence payobligations (132,681) (116,228) ---------- ---------- ---------- ----------Totalliabilities (350,422) (336,777) ---------- ---------- Net assets 3,644,059 4,174,569 ---------- ---------- Share capital 576,900 576,900 Share premiumaccount 3,999,475 3,999,475 Post acquisitionlosses (938,081) (392,919) Foreign currencytranslationreserve 5,765 (8,887) ---------- ---------- Shareholders'equity 3,644,059 4,174,569 ---------- ---------- Messaging International PlcConsolidated cash flow statement for the six months ended 30 June 2006 Unaudited 6 months ended 30 June Audited 2006 Year ended 31 December 2005 £ £ Net cashoutflow fromoperatingactivities (601,553) (344,006) ---------- ---------- ---------- ---------- Investing activitiesInterest andsimilar income 2,496 19,452Purchase oftangibleassets (14,567) (13,261)Investments - (9,193)Net overdraftsacquired withsubsidiary - (5,479) Net cash usedin investingactivities (12,071) (8,481) ---------- ---------- ---------- ---------- Financing activitiesIssue ofequity sharecapital - 1,574,998share issuecosts - (292,625) ---------- ---------- ---------- ----------Net cash fromfinancingactivities - 1,282,373 ---------- ---------- Net increasein cash andcashequivalents (613,624) 929,886 Cash and cashequivalents atthe beginningof theperiod/year 954,888 25,002 ---------- ---------- ---------- ----------Cash and cashequivalents atthe end of theperiod/year 341,264 954,888 ---------- ---------- Messaging International PlcNotes to the interim report for the six months ended 30 June 2006 1 Basis of preparation The interim results for the six months ended 30 June 2006 are unaudited and do not constitute accounts within the meaning of S240 of the Companies Act 1985.The interim results have been drawn up using accounting policies and presentation consistent with those disclosed and applied in the annual report and accounts for the year ended 31 December 2005. The Comparative information contained in this report for the year ended 31 December 2005 includes the results of its trading subsidiaries from the date of acquisition on 20 July 2005 and for that reason no comparative figures for the six months ended 30 June 2005 were considered relevant for the purposes of thisstatement. The Comparative information contained in this report does not constitute the accounts within the meaning of S240 of the Companies Act 1985. The accounting policies used in the interim statement are consistent with thoseused in the financial statements for the year ended 31 December 2005 and are in accordance with International Financial Reporting Standards. 2 Taxation No provision has been made for taxation as the group has losses available to carry forward against future trading profits. 3 Basic and diluted loss per share The calculation of the loss per ordinary share is based on the loss after taxation for the six month period to 30 June 2006 of £545,162 and 115,380,000 ordinary shares in issue throughout the period. The calculation of the loss per ordinary share the year ended 31 December 2005 is based on the loss after taxation of £392,919 and 56,171,781 ordinary sharesbeing the weighted average number of shares in issue in the period. In view of the loss, share warrants and warrants are anti-dilutive and thereforethe diluted loss per share has not been presented. 4 Reconciliation of operating loss to net cash outflow from operating activities 6 months ended Year ended 30 June 2006 31 December 2005 £ £ Operating loss for the period (547,658) (412,371) Adjustments for:- Depreciation of tangible assets 12,658 8,281 Amortisation of intangible assets 473 307 Foreign currency translation differences 14,652 (8,887) -------- -------- Operating cash flow before movements in working capital (519,875) (412,670) (Increase)/reduction in receivables (85,373) 47,308 (Reduction)/increase in payables (2,808) 7,518 Increase in provisions 6,503 13,838 -------- -------- Net cash outflow from operating activities (601,553) (344,006) -------- -------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Sigmaroc.