TIDMCDOG
RNS Number : 7145U
CDialogues PLC
11 April 2016
11 April 2016
CDialogues plc
("CDialogues", the "Company" or the "Group")
Final Results for the year ended 31 December 2015
CDialogues plc (AIM: CDOG), the provider of mobile marketing
solutions to Mobile Network Operators ("MNOs"), announces its
audited final results for the year ended 31 December 2015.
Financial highlights
-- Revenues of EUR8.71m (2014: EUR9.92m)
o Subscription revenues accounted for 82% of total revenues
(2014:76%)
-- EBITDA (adjusted*) of EUR1.55m (2014: EUR2.94m)
-- Profit before tax of EUR0.98m (2014: EUR2.61m)
-- Earnings per share of EUR0.15 (2014: EUR0.43)
-- Free Cash Flow up 22% to EUR1.49m (2014: EUR1.22m**)
-- Net cash as of 31 December 2015 up 49% to EUR3.61m (2014: EUR2.42m)
* Earnings before interest charges, taxation, depreciation,
amortisation and share-based payment charges
** After development costs and capital expenditure and excluding
one-off items relating to AIM listing
Operational highlights
-- During 2015, the Company operated a total of eight mobile
marketing projects in six countries across the Middle East and
Southeast Asia
-- Delivery of Mobile Marketing projects to a total subscriber
base of above 20 million customers (2014:35 million) which
attracted more than 1.4 million unique subscribers
-- Ongoing implementation of subscription-based recurring revenue model to existing clients
Pale Spanos, Chief Executive Officer, commented: "Whilst the
financial performance for the 12 months to 31 December 2015 was
below our expectations, as had been highlighted in previous
announcements, the Company continued to invest in our products and
further strengthened its balance sheet.
During the period we focussed on serving our existing clients
and ensuring that these projects were well executed.
Whilst our existing client base has remained unchanged during
the first quarter of 2016, and we expect revenues from these
existing projects to decline during the course of the year, the
business remains well placed and well-funded to capitalise on the
new business opportunities that may arise this year."
Enquiries:
CDialogues Plc Tel: +30 2106 300 930
George Karakovounis
Pale Spanos
Allenby Capital Tel: 0203 328 5656
Limited
David Hart
Alex Brearley
Walbrook PR Ltd Tel: 020 7933 8780
Paul Cornelius cdialogues@walbrookpr.com
Nick Rome
About CDialogues
CDialogues provides mobile marketing solutions enabling MNOs to
retain and acquire market share, increase average revenue per user
(ARPU) and reducing subscriber churn.
The Company's products and services deliver fully managed
solutions, utilizing advanced Data analytics techniques combined
with Linguistic engineering marketing, to build awareness and
multiply sales and opt-ins of promotional offerings and other
mobile content being offered by the MNOs.
The solutions designed by the Company, are tailored and served
with the appropriate Linguistic format, to each individual mobile
network subscriber typology and geography it operates in, using its
proprietary software and scalable infrastructure.
The majority of CDialogues' revenues are derived from a
recurring subscription-based revenue model, which has been
pioneered by the Company. As a result, the Company benefits from
incremental cash flow growth from each new campaign customer and
mobile network subscriber.
The Company's near-term focus is on growing both its customer
base and expanding its geographic footprint in selected markets in
the Middle East, Africa and Southeast Asia, where mobile device
penetration and mobile network usage is growing rapidly.
CHAIRMAN'S STATEMENT
The 12-month period to 31 December 2015 was clearly a
challenging one.
The period was therefore one of consolidation for the Company as
we focused on delivery of existing contracts across geographies
where MNO subscriber churn has traditionally been high, due to the
fact that mobile phone subscribers typically use pre-pay mobile
phone tariffs.
A decision was also made to focus on further product development
during the period, and whilst certain project launches were
delayed, the company remains confident that its product offerings
remain competitive in the marketplace.
Given the disappointing revenue performance, we are able to
report that the Company has continued to generate cash during the
year and maintain a strong balance sheet as of 31 December
2015.
Reassuringly, our solutions achieved direct results for our
existing clients by demonstrably reducing subscriber churn, which
helps to underpin the basis of our client relationships. We believe
that our continued product investment will result in an improved
value proposition, which should also result in further customer
loyalty and a reference point for us to generate new business and
relationships.
Our first full year on the Alternative Investment Market has
been challenging, and we must continue to improve the foundations
of the business model. The key to the future is the development of
stable new revenue opportunities. The number of MNOs and countries
in which we could operate means that there are still plenty of
opportunities ahead.
The Board remains focused on improving the business model,
whilst preserving the balance sheet and seeking to deliver
increased shareholder value, following a disappointing share price
performance over the period.
Mark Horrocks
Non-Executive Chairman
CHIEF EXECUTIVE OFFICER REVIEW
When we joined the AIM Market in 2014, the focus was on
diversifying revenue through multiple client engagements across the
Middle East and beyond. As such we invested in both products and
personnel to ensure that we are well placed to take advantage of
the growing range of global opportunities.
However, as announced during the period, the Company suffered a
number of project delays as MNOs pushed back project start dates
due to the poor economic environment during 2015. This impacted our
second half revenue performance significantly and resulted in lower
revenues and EBITDA for the year.
Notwithstanding the poor income performance, cash generation
remained strong during the year with free cash flow for the year
further enhancing the Company's net cash position to EUR3.6 million
at 31 December 2015 (2014: EUR2.4 million).
During 2015, CDialogues delivered a total of eight mobile
marketing projects in six countries to a total subscriber base of
above 20 million customers (2014: 35 million) across the Middle
East and Southeast Asia. These projects attracted more than 1.4
million unique subscribers.
Our continued investment on the evolution of our solutions and
strategic direction towards a loyalty centric offering has already
resulted in an increased interest on our value proposition from
potential customers. Further to the Company's prior announcement,
it is unfortunate to report that our initial customer in Central
America for this proposition faced different challenges on
integration that could not be resolved.
I would like to thank our staff and shareholders for their
continued support during 2015 as we consolidated our position as
one of the leading providers in the space.
Outlook
Despite the challenging environment and poor financial
performance, we continued to invest in the business whilst
maintaining our strong balance sheet and therefore remain well
positioned to capitalise on any new opportunities in the regions
where we have presence or active business development
activities.
Given that net contributions from some mature projects are
expected to decrease during 2016, the Company is now focused on
building the new business pipeline while maintaining cash
generation to preserve our balance sheet during this challenging
period for the Company.
Pale Spanos
Chief Executive Officer
CHIEF FINANCIAL OFFICER REVIEW
Revenues for the period fell 12.2% to EUR8.71m (2014: EUR9.92m)
due to weaker performance in the second half of year from the
existing projects and the lack of new project launches.
Gross profit was down by 35.6% to EUR2.27m (2014: EUR3.52m)
representing a gross margin of 26.0% (2014: 35.5%). The reduction
in gross margin came as a result of reduced revenues and increased
costs of our existing projects in the second half of 2015 as well
as investment in new project launches. Administration and selling
& distribution costs were EUR1.27m (2014: EUR0.90) representing
14.6% of revenues (2014:9.0%).
Operating Profit (after depreciation and amortisation) was down
by 62.0% to EUR1.00m (2014: EUR2.63m) representing a margin of
11.5% (2014:26.5%).
Adjusted EBITDA fell by 47.2% to EUR1.55m (2014: EUR2.94m)
representing a margin of 17.8% (2014:29.6%).
Profit before tax fell by 62.6% to EUR0.98m (2014: EUR2.61m)
with a margin of 11.2% (2014: 26.3%) while basic earnings per share
fell by 64.7% to EUR0.15 (2014: EUR0.43).
Operating cash flow remained strong with net cash flows
increasing by 47.8% to EUR2.54m (2014: EUR1.72m) as a result of
efficient working capital management. After taking into account
working capital movements and cash flows used in investing
activities, which comprise primarily capitalised investment in
software development, Free Cash Flow (after development costs and
capital expenditure) was EUR1.49m (2014: EUR1.22m).
At the year-end we had accrued income of EUR1.14m and related
accrued expenses of EUR0.63m which represents income earned during
the last months of 2015 (and its associated costs), which has
already been invoiced and collected/settled since the year end.
Net cash as of 31 December 2015 was EUR3.61m (2014: EUR2.42m)
and provides a firm foundation for further growth into new
territories.
As at 31 March 2016, net cash was above EUR3.5m as a result of
the Group's continuing focus on maintaining a strong balance sheet.
This should allow the Group to capitalise on any new business
opportunities that may arise this year.
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The Group maintains over 90% of its cash in banks in the United
Kingdom and does not generate any revenues in the Greek market.
The Directors do not propose to pay a final dividend for the
year-ended 31 December 2015.
George Karakovounis
Vice Chairman & Chief Financial Officer
STRATEGIC REPORT FOR THE YEAR ENDED 31 DECEMBER 2015
The Directors present the Strategic Report of CDialogues Plc for
the year ended 31 December 2015.
-- Review of the Business in the year
The Group provides mobile analytics solutions, being offered in
the format of marketing loyalty activities that enable brands,
mobile network operators and media companies to implement targeted,
interactive and measurable loyalty programs by engaging with and
entertaining mobile network subscribers via their mobile
devices.
The Group has developed internally a technology platform
(C/Profiler Software Platform), which is used for the provision of
mobile marketing solutions. The Group's technology platform is
offered as either a fully managed or as a Software-as-a-Service
(SAAS) product.
The core services supported by the Group's platform include the
use of any channel that is based on linguistic and text
communication such as SMS, MMS, IVR and mobile internet services.
Furthermore, the Group's platform supports recurring user
subscription and mobile billing services in cooperation with the
mobile network operators on either a pre-paid or post-paid
basis.
The Group's technical infrastructure is connected directly with
Mobile Network Operators in the territories in which it operates
and, in most cases, transacts with its business partners through
revenue sharing arrangements under which the net revenues generated
from the relevant mobile marketing initiatives are divided. In
several cases, those mobile marketing initiatives are devised in
cooperation with the operators themselves. In other instances,
campaigns are instigated by the Group and may be rolled out
concurrently across several mobile operator networks and in a
number of different countries.
More specifically, through the use of its mobile analytics and
linguistic engineering platform, the Group tries to attract as many
mobile subscribers to participate in any given service and then
seeks to engage and maintain them within the service with relevant
content offering and reward programs. To attract potential mobile
subscribers, the Group employs promotional seeding techniques which
include the use of traditional media and the use of text via mobile
or online. Once mobile subscribers are initially attracted, the
Group tries to make them engage by providing exciting mobile
utilities or providing incentives. The pool of mobile subscribers
that eventually engage is analysed and profiled into categories in
order for the Group to design the appropriate loyalty building
programs and reward schemes.
The ongoing management of mobile marketing solutions provides
the Group with a growing database of behavioral and customer
engagement analytics. The knowledge and experience on monetization
of those data, provides important feedback for the Group's future
performance and is also reflected in continuous expansion to the
Group's technology platform and evolution of product solutions
supported, progressively towards a more loyalty and analytics
centric offerings.
The Group is currently focusing its operations on emerging
markets. Countries in which it has operated since establishment are
Iraq, Vietnam, Ivory Coast, Russia, Kuwait, Lebanon, Jordan, North
Cyprus, Guatemala and Oman. It is a Group target to grow market
share in existing geographies and also expand its business in other
territories.
A summary of the key financial results for the relevant year end
are set out in the table below:
2015 (EUR) 2014 (EUR) % Change
--------------------------- ----------- ----------- ---------
Mobile marketing services
revenue 8,710,547 9,924,449 -12.2%
--------------------------- ----------- ----------- ---------
Gross profit 2,267,660 3,522,653 -35.6%
--------------------------- ----------- ----------- ---------
Gross profit margin 26.0% 35.5% -26.8%
--------------------------- ----------- ----------- ---------
Operating profit 999,250 2,628,109 -62.0%
--------------------------- ----------- ----------- ---------
Adjusted EBITDA 1,552,047 2,938,222 -47.2%
--------------------------- ----------- ----------- ---------
Profit after tax 955,317 2,552,911 -62.6%
--------------------------- ----------- ----------- ---------
Group revenue fell by 12.2% from EUR9.92m in 2014 to EUR8.71m in
2015. This was due to weaker performance in the second half of year
of the existing projects and the lack of new project launches.
Group Adjusted EBITDA for the year fell to EUR1.55m (2014:
EUR2.94), representing a fall of 47.2%. Free cash flow, after
development costs and capital expenditure grew to EUR1.49m further
enhancing the Group's cash position to EUR3.61m as of 31 December
2015.
-- Position of the Company's business at the end of the year
During the period the Group continued to diversify its revenue
base both by number of clients and geographical sources of revenue
while further strengthening its balance sheet. The Group's
statement of Financial Position at 31 December 2015 set out in the
table below:
Assets (EUR) Liabilities Net assets
(EUR) (EUR)
------------------------------ ------------- ------------ -----------
Property plant & equipment 89,835 (55,283) 34,552
------------------------------ ------------- ------------ -----------
Intangible assets 2,293,806 (988,133) 1,305,673
------------------------------ ------------- ------------ -----------
Other non-current assets
& liabilities 9,508 (24,739) (15,231)
------------------------------ ------------- ------------ -----------
Deferred tax 38,726 - 38,726
------------------------------ ------------- ------------ -----------
Current assets & liabilities 1,301,736 (726,726) 575,010
------------------------------ ------------- ------------ -----------
Total before net cash 3,733,611 (1,794,881) 1,938,730
------------------------------ ------------- ------------ -----------
Net cash 3,605,383 - 3,605,383
------------------------------ ------------- ------------ -----------
Total as at 31 December 2015 7,338,994 (1,794,881) 5,544,113
------------------------------ ------------- ------------ -----------
Subscription-based recurring revenues, which provide greater
scalability and visibility for the business, accounted for 82 per
cent of the total revenues during 2015 as a whole. Notwithstanding
the Board's expectation that revenues from existing projects will
decline during the course of 2016, the Group's subscription-based
recurring revenues are viewed as a key element of the business
model.
The Group has identified a pipeline of potential new contracts,
a number of which are being actively developed as prospects.
-- Principal risks and uncertainties facing the business
In addition to the financial risks discussed in Note 29 to the
accounts, the Directors set out below the principal risks and
uncertainties facing the Group and a summary of the key measures
taken to mitigate those risks:
Contract duration and non-renewal of contracts
The Group enters into contracts with its customers which are
typically short term in nature (three/four months) but are normally
renewed at the end of each term, though this cannot be guaranteed.
The Board seeks to ensure that the Group's relationships with its
customers and level of service minimises the risk of contracts not
being renewed.
Concentration of customer base
The Group is a relatively young business and has not yet
achieved a diverse customer base. However, CDialogues has been
continually seeking to reduce customer concentration and will
continue this aim for 2016.
Credit risk
The Group provides services and receives revenues under
agreements entered into with a local partner in the territories in
which it provides services. Whilst the Group endeavours to
diversify its sources of revenue, it is reliant on this
relationship which may result in a greater level of credit risk
than if the Group was contracted directly with the MNOs. However,
such credit risk has not affected the business adversely in the
past and the Group manages this risk by negotiating and enforcing
appropriate contract terms.
Countries in which CDialogues operates
CDialogues operates in countries where there may be risks
associated with the political or economic environment. The Group
seeks to mitigate these risks by (i) undertaking its own risk
analysis of each territory in which it operates; and (ii) operating
with local partners with detailed knowledge of the prevailing
environment.
Attracting and retaining talented staff and motivating key
people
The Group has competitive remuneration packages in place to
secure the services of talented staff and key employees.
Significant failure or interruption to the network or IT
Systems
The Group has rigorous controls to maintain and secure its
operations, including multi-site back up of key systems. In
addition, the Group implements a standardised disaster recovery
plan.
Failure to keep up to date with fast evolving technology
The Group is constantly developing its software platform
ensuring it is evolving in line with the latest technology and in
line with its clients' expectations and demands. Management
regularly communicates with the Company's clients ensuring the
mobile marketing campaigns are meeting their needs.
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Failure to comply with local laws and regulations
Management mitigate this risk by assessing the regulatory
environment and legal system before entering a new market. The
Group also implements a strong code of conduct across all of its
operations.
In addition to the principal risks and uncertainties above, the
Group faces other risks that include but are not limited to:
-- Increased competition
-- Failure to retain, or loss of, customer contracts
Corporate Responsibility
CDialogues Plc takes its responsibilities as a corporate citizen
seriously in the territories in which the company operates. The
Board's primary goal is to create shareholder value but in a
responsible way which serves all stakeholders. Furthermore,
CDialogues seeks to continually enhance and extend its contribution
to society through the work the Group undertakes with its clients
and in areas where the Group decides to operate.
Governance
The Board considers sound governance as a critical component of
the success of CDialogues and this is given the highest priority.
The Group has an effective and engaged Board, with a strong
non-executive presence from diverse backgrounds, and
well-functioning governance committees. The Audit Committee
receives and reviews reports from management and from the Company's
auditors. It is responsible for ensuring that the financial
performance of the Group is properly reported with particular
regard to legal requirements, accounting standards and the AIM
Rules. Through the Group's compensation policies and variable
components of employee remuneration, the Remuneration Committee of
the Board seeks to ensure that the Company's values are reinforced
in employee behaviour and that effective risk management is
promoted.
Going Concern
The Group meets its day to day working capital requirements
through existing cash reserves. The Directors have prepared
projected cash flow information for a period of at least twelve
months from the date of their approval of the financial statements.
On the basis of this cash flow information, the Directors consider
that the company and group will continue to operate without the
need for additional financing. Therefore, the Directors consider it
appropriate to prepare the financial statements on a going concern
basis.
Current Trading
Given that net contributions from some mature projects are
expected to decrease during 2016, the Company is now focused on
building the new business pipeline while maintaining cash
generation to preserve our balance sheet during this challenging
period for the Company.
Approved by the Board on 8 April 2016
Pale Spanos
Chief Executive Officer
Statement of comprehensive income
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Group
------------------------------------------------------------------
Note Financial year ended 31/12/2015 Financial year ended 31/12/2014
----- -------------------------------- --------------------------------
Revenue 6 8,710,547 9,924,449
Cost of sales (6,442,887) (6,401,796)
-------------------------------- --------------------------------
Gross profit 2,267,660 3,522,653
Administrative expenses (704,628) (353,167)
Selling and distribution costs (563,856) (543,135)
Other operating income 74 1,758
Operating profit 999,250 2,628,109
Finance income 27 1,660
Finance costs (20,691) (15,934)
-------------------------------- --------------------------------
Profit before tax 978,586 2,613,835
Income tax expense 7 (23,269) (60,924)
-------------------------------- --------------------------------
Profit for the year 955,317 2,552,911
================================ ================================
Other comprehensive income:
Other comprehensive income to be
reclassified to profit or loss in
subsequent periods:
Exchange differences on translation of
foreign operations 82 (1,349)
Net loss on available-for-sale financial
assets (7,068) (80,212)
-------------------------------- --------------------------------
(6,986) (81,561)
Net other comprehensive income to be
reclassified to profit or loss in
subsequent periods (6,986) (81,561)
Other comprehensive income not to be
reclassified to profit or loss in
subsequent periods:
Actuarial gain/(loss) 6,739 (1,223)
Income tax effect (1,981) 318
-------------------------------- --------------------------------
4,758 (905)
Net other comprehensive income not to be
reclassified to profit or loss in
subsequent periods 4,758 (905)
Other comprehensive loss for the year,
net of tax (2,228) (82,466)
-------------------------------- --------------------------------
Total comprehensive income for the year,
net of tax 953,089 2,470,445
================================ ================================
Profit for the year attributable to:
Equity holders of the parent 955,317 2,552,911
955,317 2,552,911
================================ ================================
Total comprehensive income for the year,
attributable to:
Equity holders of the parent 953,089 2,470,445
953,089 2,470,445
================================ ================================
Earnings per share
Basic, profit for the year attributable
to ordinary
equity holders of the parent 8 0.1531 0.4336
Diluted, profit for the year
attributable to ordinary
equity holders of the parent 8 0.1523 0.4313
Statement of financial position
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Group
----------------------
31 December
Note 2015 2014
----- ---------- ----------
Assets
Non-current Assets
Property, plant and equipment 9 34,552 37,185
Intangible Assets 10 1,305,673 749,440
Deferred tax assets 38,726 25,880
Trade and other receivables 11 9,508 9,508
---------- ----------
1,388,459 822,013
Current Assets
Trade and other receivables 11 1,286,574 3,952,938
Available for sale financial assets 15,162 22,230
Cash and cash equivalents 12 3,605,383 2,419,927
---------- ----------
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4,907,119 6,395,095
Total assets 6,295,578 7,217,108
========== ==========
Equity and liabilities
Equity attributable to equity holders of the parent
Issued share capital 13 75,213 75,213
Share premium 13 622,240 565,572
Reserves 12,117 16,745
Retained earnings 4,834,543 4,156,004
---------- ----------
Total Equity 5,544,113 4,813,534
---------- ----------
Non-current liabilities
Employee benefit liability 24,739 16,505
---------- ----------
24,739 16,505
Current liabilities
Trade and other payables 15 708,186 2,311,912
Income tax payable 18,540 75,157
---------- ----------
726,726 2,387,069
Total liabilities 751,465 2,403,574
---------- ----------
Total equity and liabilities 6,295,578 7,217,108
========== ==========
Statement of changes in equity
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Group
-------------------------------------------------------------------------------------
Ordinary Share Capital Share premium Reserves Retained Earnings Total equity
----------------------- -------------- --------- ------------------ -------------
Balance at 1 January
2014 15,000 - 93,743 1,659,561 1,768,304
======================= ============== ========= ================== =============
Profit for the period - - - 2,552,911 2,552,911
Other comprehensive
income - - (80,212) (2,254) (82,466)
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - (80,212) 2,550,657 2,470,445
Issue of share capital
net of issue cost 9,213 565,572 - - 574,785
Share capital increase
through
capitalization of
profits 51,000 - - (51,000) -
Transfers to reserves - - 3,214 (3,214) -
Balance at 31 December
2014 75,213 565,572 16,745 4,156,004 4,813,534
======================= ============== ========= ================== =============
Profit for the period - - - 955,317 955,317
Other comprehensive
income/(loss) - - (7,068) 4,840 (2,228)
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - (7,068) 960,157 953,089
Share-based payments - 56,668 - - 56,668
Transfers to reserves - - 2,440 (2,440) -
Disposal of subsidiary - - - 1,267 1,267
Cash dividends - - - (280,445) (280,445)
Balance at 31 December
2015 75,213 622,240 12,117 4,834,543 5,544,113
======================= ============== ========= ================== =============
Statement of cash flows
For the years ended 31 December 2015 and 2014
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Group
------------------------------------------------------------------
Financial year ended 31/12/2015 Financial year ended 31/12/2014
-------------------------------- --------------------------------
Cash flows from Operating Activities
Profit / (loss) before tax 978,586 2,613,835
Adjustment to reconcile profit before tax to
net cash flows
Non-cash items:
Depreciation of property, plant and equipment 15,211 16,050
Amortisation of intangible assets 480,918 294,063
Share-based payment expense 56,668 -
Interest income (27) (1,660)
Interest expense 20,691 15,934
Movements in provisions and provisions for
employee benefits 14,973 3,474
Operating cash flows before changes in working
capital 1,567,020 2,941,696
Working capital adjustments:
Decrease/(Increase) in trade and other
accounts receivable 2,666,364 (2,977,503)
(Decrease)/Increase in trade and other
accounts payable (1,603,726) 1,815,756
Income tax paid (94,633) (64,296)
Net cash flows from operating activities 2,535,025 1,715,653
-------------------------------- --------------------------------
Cash flows from investing activities
Purchase of property, plant and equipment (12,578) (3,326)
Purchase of intangible assets (1,037,151) (495,900)
Interest received 27 1,660
Net cash flows from (used in) investing
activities (1,049,702) (497,566)
-------------------------------- --------------------------------
Cash flows from financing activities
Proceeds from the issuance of share capital
net of issue costs - 574,785
Dividends paid to equity holders of the parent (280,445) -
Interest paid (19,424) (15,934)
Net cash flows from/(used in) financing
activities (299,869) 558,851
-------------------------------- --------------------------------
Net increase in cash and cash equivalents 1,185,454 1,776,938
Cash and cash equivalents at 1 January 2,419,927 643,717
Currency translation differences 2 (728)
-------------------------------- --------------------------------
Cash and cash equivalents at 31 December 3,605,383 2,419,927
================================ ================================
1. Corporate information
The consolidated financial information of Cdialogues Plc and its
subsidiaries (collectively, the "Group") for the year ended 31
December 2015 has been prepared on the basis set out below.
Cdialogues Plc (the "Company") was incorporated in England and
Wales as a limited liability company in June 2011 and during
financial year 2014 as a consequence of its listing on AIM became a
public company limited by shares.
2. Basis of preparation
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The consolidated financial information of the Group has been
prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and issued by the
International Accounting Standards Board (IASB).
The consolidated financial information has been prepared on a
historical cost basis, except for, available-for-sale (AFS)
financial assets that have been measured at fair value. The
consolidated financial information is presented in Euros, except
when otherwise indicated.
The financial information does not constitute the Company's
statutory financial statements for the year ended 31 December 2015
but is derived from those financial statements. The statutory
financial statements will be delivered following the Company's
Annual General Meeting. The Auditors have reported on those
financial statements; their reports were unqualified and did not
contain any statements under Companies Act 2006 section 498 (2) or
(3).
The directors do not recommend the payment of a final
dividend.
The financial information set out in this announcement was
approved and authorised for issue by the board of directors on 8
April 2016.
Copies of this financial information will be available on the
Company's website.
3. Basis of consolidation
The consolidated financial information comprise the financial
statements of the Group and its subsidiaries as at 31 December
2015. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the
investee. Specifically, the Group controls an investee if, and only
if, the Group has:
-- Power over the investee (i.e. existing rights that give it
the current ability to direct the relevant activities of the
investee)
-- Exposure, or rights, to variable returns from its involvement with the investee; and
-- The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting
rights result in control. To support this presumption and when the
Group has less than a majority of the voting or similar rights of
an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee,
including:
-- The contractual arrangement with the other vote holders of the investee;
-- Rights arising from other contractual arrangements; and
-- The Group's voting rights and potential voting rights
The Group re-assesses whether or not it controls an investee if
facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a
subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the
subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated financial statements from the date the Group gains
control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of Other Comprehensive Income
(OCI) are attributed to the equity holders of the parent of the
Group and to the non-controlling interests, even if this results in
the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies into line with the
Group's accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises
the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity while any
resultant gain or loss is recognised in profit or loss. Any
investment retained is recognised at fair value at the date when
control is lost.
4. Segmental reporting
Based on management information there is only one operating
segment. The Directors of the Company consider the principal
activity of the Group to be that of a provider of Mobile Marketing
services.
In this context there is no obligation to prepare and publish
financial results by segment, according to the requirements of IFRS
8 "Operating Segments". As far as geographical segment the Group
operates mainly (95%) in the area of Middle East and therefore is
considered as one geographical segment.
5. Group information
Information about subsidiaries
The Company's directly and indirectly wholly owned subsidiaries
as at 31 December 2015 and 31 December 2014 are listed below:
2015 2014
----------------------------- -----------------------------
Country of Registration Percentage of Ordinary Percentage of Ordinary
Subsidiary undertaking Shares held Shares held
------------------------ ------------------------- ----------------------------- -----------------------------
Telilea Ltd CYPRUS 100.00% 100.00%
Cdialogues S.A. GREECE 100.00% 100.00%
Cdialogues MEA DMCC U.A.E. 100.00% 100.00%
Cdialogues LLC RUSSIA 0.00% 100.00%
The Company's indirectly wholly owned investments in
subsidiaries through Telilea Ltd are Cdialogues S.A. (Greece) and
Cdialogues MEA DMCC (Dubai U.A.E).
The principal activity of each company is analysed as
follows:
Cdialogues Plc was incorporated in England and Wales as a
Limited Liability Company on June 2011 and it is the Group holding
entity.
Telilea Ltd was incorporated in Cyprus on March 2012. Its
principal activities are the provision of mobile marketing
services.
Cdialogues S.A. was established in Greece on July 2011 and
acquired by the Group on July 2012. Its principal activities
include software development services as well as support and
maintenance services related to the software.
Cdialogues MEA DMCC was established in Dubai U.A.E. on October
2013 and its principal activities are the provision of IT services
and solutions.
Cdialogues LLC was established in Russia on March 2012 as
Benastipik LLC and acquired by the Group on March 2013 (20%) and on
April 2013 (80%). Its name changed to C Dialogues LLC on June 2013.
The C Dialogues LLC activities are general trading. During the year
the procedures that started in 2014 for the closure of the Russian
subsidiary CDialogues LLC were completed. Cdialogues LLC has not
been deemed a discontinued operation because it is a trivial
element of the Group.
6. Revenue
Revenue in the accompanying financial statements of the Group is
analysed as follows:
Group
--------------------------------------------
1/1/2015- 31/12/2015 1/1/2014- 31/12/2014
--------------------- ---------------------
Mobile marketing services 8,710,547 9,924,449
Total 8,710,547 9,924,449
===================== =====================
The Company being only the holding company of the Group has no
operations in the country of domicile.
The Group operates mainly (95%) in the area of Middle East and
therefore is considered as one geographical segment.
Group
--------------------------------------------
1/1/2015- 31/12/2015 1/1/2014- 31/12/2014
--------------------- ---------------------
Middle East 8,710,547 9,924,449
Total 8,710,547 9,924,449
===================== =====================
7. Income tax
Income tax in the accompanying financial statements of the Group
is analysed as follows:
Group
----------------------------------------------
1/1/2015 - 31/12/2015 1/1/2014 - 31/12/2014
---------------------- ----------------------
Current income tax 38,016 75,443
Deferred income tax (14,747) (14,519)
Income tax in the statement of comprehensive income 23,269 60,924
====================== ======================
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The reconciliation of income taxes reflected in statements of
comprehensive income and the amount of income taxes determined by
the application of the United Kingdom statutory tax rate to pre-tax
income is summarised as follows:
Group
----------------------------------------------
1/1/2015 - 31/12/2015 1/1/2014 - 31/12/2014
---------------------- ----------------------
Profit before tax 978,586 2,613,835
At United Kingdom statutory income tax rate of 20.0% (2014: 21.5%) 195,717 561,975
Income not subject to taxation (329,056) (108,657)
Expenses not deductible for taxation purposes 40,699 21,609
Write off of deferred tax asset 1,360 -
Tax losses for which no deferred tax asset has been recognised 86,374 -
Differences in tax rates 26,183 (417,847)
10% additional charge - 2,353
Defence contribution 7 491
Business tax 1,985 1,000
Total 23,269 60,924
====================== ======================
As at 31 December 2015, the Group's tax loss which is available
for offset against future taxable profits amounts to EUR690,942 for
which no deferred tax asset is recognised in the statement of
financial position.
The "10% additional charge" was nil (2014 EUR2,353) and the
"Defence contribution" amount of EUR7 (2014 EUR491) is related to
Telilea Ltd. More specific is the 10% of the year's tax liability
as calculated in the tax computation of corporation tax. According
to the Cyprus Tax legislation companies have to pay temporary tax
on the 75% of their estimated taxable profits for the year
otherwise there is a surcharge of 10% on the final tax liability
for the year.
The Company is obliged to file its tax returns in accordance
with the applicable tax law in England and Wales. No income tax is
payable on the net income deriving from subsidiaries with foreign
operations.
The Group's subsidiaries file their tax returns in the countries
in which they are established and/or operate. The tax rates at 31
December 2015 of the countries where the operations of the Group
are located are the following:
Greece 29.0 %. (2014: 26.0 per cent)
Cyprus 12.5 %. (2014: 12.5 per cent.)
United Arab Emirates.
The income tax is not applicable. Royal Decree of 2002 of the
Emirate of Dubai states that the company should be exempt from all
taxes including income tax as they operate within the Free
Zone.
Greek subsidiary (Cdialogues S.A.)
Greek tax laws and regulations are subject to interpretations by
the tax authorities. Tax returns are filed annually but the profits
or losses declared for tax purposes remain provisional until such
time, as the tax authorities examine the returns and the records of
the taxpayer and a final assessment is issued. Tax losses, to the
extent accepted by the tax authorities, can be used to offset
profits of the five fiscal years following the fiscal year to which
they relate.
Tax Compliance certificate
From the financial year 2011 and onwards, all Greek Societe
Anonyme and Limited Liability Companies that are required to have
their statutory financial statements audited must in addition
obtain an "Annual Tax Certificate" as provided for by paragraph 5
of Article 82 of L.2238/1994. This "Annual Tax Certificate" must be
issued by the same statutory auditor or audit firm that issues the
audit opinion on the statutory financial statements.
The tax compliance certificate for the financial year 2014 was
concluded by its auditors, based on the provisions of article 65 L.
4174/2013. No significant additional tax liabilities arose, in
excess of those provided for and disclosed in the financial
statements.
The tax compliance certificate for the financial year 2015 is
still in progress based on the provisions of article 65 L.
4174/2013. No significant additional tax liabilities are expected
to arise, in excess of those provided for and disclosed in the
financial statements.
Cyprus subsidiary (Telilea Ltd)
The corporation tax rate is 12.5% (2014:12.5%).
Under certain conditions interest income may be subject to
defence contribution at the rate of 30% (2014:30%). In such cases
this interest will be exempt from corporation tax. In certain
cases, dividends received from abroad may be subject to defence
contribution at the rate of 17% for 2014 and thereafter.
The company has utilised tax relief incentives provided by the
Cyprus tax legislation. These incentives allow for special
treatment on intellectual property.
The Cyprus tax law on Intellectual Property gives rise to the
following tax treatment.
-- The cost of the acquisition or development of Intellectual
Property of a capital nature is amortised over a period of five
years, starting in the year of purchase / development.
-- A statutory reduction of 80% of the profit arising from the
use of the Intellectual Property, as well as from any gain on the
sale of the Intellectual Property.
-- The 80% deduction applies to profit after deducting any
direct expenses including amortisation and interest.
8. Earnings per share
Basic earnings per share amounts are calculated by dividing net
profit for the year attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the year plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the
basic and diluted earnings per share computations:
2015 2014
---------- ----------
Net profit attributable to ordinary equity holders of the parent 955,317 2,552,911
Weighted average number of ordinary shares for basic earnings per share 6,240,550 5,888,121
Earnings per share basic 0.1531 0.4336
========== ==========
Weighted average number of ordinary shares for basic earnings per share 6,240,550 5,888,121
Effect on dilution:
Warrants 30,617 30,617
---------- ----------
30,617 30,617
Weighted average number of ordinary shares adjusted for the effect of dilution 6,271,167 5,918,738
---------- ----------
Earnings per share diluted 0.1523 0.4313
========== ==========
9. Property plant and equipment
Property, plant and equipment in the accompanying financial
statements of the Group are analysed as follows:
Transportation assets Furniture & other office equipment Total
---------------------- ----------------------------------- -------
Cost
Balance at 1 January 2014 22,500 51,431 73,931
Additions - 3,326 3,326
Balance at 31 December 2014 22,500 54,757 77,257
---------------------- ----------------------------------- -------
Balance at 1 January 2015 22,500 54,757 77,257
Additions - 12,578 12,578
Balance at 31 December 2015 22,500 67,335 89,835
---------------------- ----------------------------------- -------
Accumulated Depreciation
Balance at 1 January 2014 1,688 22,334 24,022
Depreciation expense 3,375 12,675 16,050
Balance at 31 December 2014 5,063 35,009 40,072
---------------------- ----------------------------------- -------
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Balance at 1 January 2015 5,063 35,009 40,072
Depreciation expense 3,375 11,836 15,211
---------------------- ----------------------------------- -------
Balance at 31 December 2015 8,438 46,845 55,283
---------------------- ----------------------------------- -------
Net-book value at 31 December 2014 17,437 19,748 37,185
====================== =================================== =======
Net-book value at 31 December 2015 14,062 20,490 34,552
====================== =================================== =======
There is no property, plant and equipment that have been pledged
as security.
10. Intangible assets
Intangible assets in the accompanying financial statements of
the Group are analysed as follows:
Software development cost (internally
Purchased software generated) Total
------------------- ------------------------------------------- ----------
Cost
Balance at 1 January 2014 376,690 384,065 760,755
Additions 321,720 174,180 495,900
Balance at 31 December 2014 698,410 558,245 1,256,655
------------------- ------------------------------------------- ----------
Balance at 1 January 2015 698,410 558,245 1,256,655
Additions 697,778 339,373 1,037,151
Balance at 31 December 2015 1,396,188 897,618 2,293,806
------------------- ------------------------------------------- ----------
Accumulated amortisation
Balance at 1 January 2014 63,143 150,010 213,153
Amortisation expense 160,157 133,905 294,062
Balance at 31 December 2014 223,300 283,915 507,215
------------------- ------------------------------------------- ----------
Balance at 1 January 2015 223,300 283,915 507,215
Amortisation expense 306,635 174,283 480,918
------------------- ------------------------------------------- ----------
Balance at 31 December 2015 529,935 458,198 988,133
------------------- ------------------------------------------- ----------
Net book value at 31 December 2014 475,110 274,330 749,440
=================== =========================================== ==========
Net book value at 31 December 2015 866,253 439,420 1,305,673
=================== =========================================== ==========
11. Trade and other receivables
Trade and other receivables in the accompanying financial
statements of the Group are analysed as follows:
Group
------------------------
31/12/2015 31/12/2014
----------- -----------
Trade receivables - 47,360
Receivables from group undertakings - -
VAT receivable 41,555 39,620
Accrued income 1,136,679 3,850,737
Prepaid expenses 107,372 14,896
Other receivables 10,476 9,833
Total 1,296,082 3,962,446
=========== ===========
Non-current assets 9,508 9,508
Current assets 1,286,574 3,952,938
1,296,082 3,962,446
=========== ===========
The ageing analysis of trade receivables is as follows:
Group
----------------
2015 2014
------ -------
Neither past due nor impaired - 47,360
Total - 47,360
======= =======
12. Cash short-term deposits
Cash, short term deposits in the accompanying financial
statements of the Group are analysed as follows:
Group
------------------------
31/12/2015 31/12/2014
----------- -----------
Cash at bank and in hand 3,605,383 2,419,927
Total 3,605,383 2,419,927
=========== ===========
Cash at bank earns interest at floating rates based on monthly
bank deposit rates. Interest earned on cash at bank and time
deposits is accounted for on an accrual basis and for the year
ended December 31, 2015, amounted to EUR27 (2014 EUR1,660) and are
included in financial income in the accompanying statements of
comprehensive income.
Cash and short term deposits are analysed in the following
currencies:
Group
------------------------
31/12/2015 31/12/2014
----------- -----------
Euro 1,053,576 493,632
US Dollar 2,505,323 1.198,231
GBP 24,656 706,236
AED 21,828 21,828
3,605,383 2,419,927
=========== ===========
13. Share capital and share premium
The movement of the Company's share capital and share premium is
analysed as follows:
For the year ended 31 December 2015 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2015 6,240,550 75,213 565,572 640,785
Share-based payments 56,668 56,668
At 31 December 2015 6,240,550 75,213 622,240 697,453
============= ============== ============== ===============
For the year ended 31 December 2014 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2014 15,000 15,000 - 15,000
Bonus shares issued 11/06/2014 51,000 51,000 - 51,000
Share split on 11/06/2014 5,500,000 - - -
Issued on 11/06/2014 152,550 1,950 - 1,950
Issued on 27/06/2014 588,000 7,263 1,532,780 1,540,043
Shares issue costs - - (967,208) (967,208)
At 31 December 2014 6,240,550 75,213 565,572 640,785
============= ============== ============== ===============
On 16 April 2013, pursuant to a written resolution of the
Founders the 5,000 issued ordinary shares of EUR1.00 each were
re-designated A Ordinary Shares of EUR1.00 each.
On 16 April 2013 10,000 A ordinary shares of EUR1.00 each were
issued to the Founders.
On 11 June 2014, pursuant to written resolutions of the
Founders:
-- each of the issued existing A ordinary shares of EUR1.00 in
the capital of the Company was redesignated as an ordinary share of
EUR1.00 each;
-- the sum of EUR51,000 (being part of the Company's
distributable reserves) was capitalised and appropriated as capital
to the Founders and the Directors were to authorised to apply such
sum in paying up in full 51,000 new ordinary shares in the Company
(the "Bonus Shares") and to allot and issue such Bonus Shares,
credited as fully paid up, to the Founders at the rate of 3.4 Bonus
Shares for every 1 existing ordinary share of EUR1.00 each held by
them;
-- the entire issued share capital of the Company was
redenominated from Euros (EUR) to Pounds Sterling (GBP) at a then
prevailing exchange rate of EUR 1.2 to GBP1
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-- the issued existing ordinary shares of EUR1.00 in the capital
of the Company were consolidated on the basis of 1 new ordinary
share of GBP1.00 each in the capital of the Company for every 1.2
existing ordinary shares of EUR1.00 previously held; and each of
the issued existing ordinary shares of GBP1.00 in the capital of
the Company arising from the consolidation was subdivided into 100
new ordinary shares of GBP0.01 each in the capital of the Company
for every 1 existing ordinary share of GBP1.00 previously held.
On 11 June 2014 152,550 ordinary shares of GBP0.01 each were
allotted and fully paid in cash by certain employees and
consultants of the Group resulting in a total net increase of
EUR1,950.
On 27 June 2014, 588,000 ordinary shares of GBP0.01 each were
allotted and fully paid in cash at a price of GBP2.12 resulting in
a total net increase of EUR572,835 (after transactions costs of
EUR967,208).
The company issued a total of 182,947 warrants over ordinary
shares to advisers and non-executive directors at the date of its
admission to AIM. The warrants are exercisable at a price of
GBP2.12 per ordinary share for a period of five years. The
directors no not consider the intrinsic value of the services
provided in exchange for the issue of the warrants to be
material.
As at 31 December 2015 the Company has 6,240,550 Ordinary Shares
in issue (including 13,773 treasury shares).
14. Distributions made
Cash dividends to the equity holders of the parent:
Dividends on ordinary shares declared and paid:
31/12/2015 31/12/2014
----------- -----------
Final dividend for 2014: 2.00 pence per ordinary share 174,083 -
Interim dividend for 2015 : 1.25 pence per ordinary share 106,362 -
----------- -----------
280,445 -
=========== ===========
15. Trade & other payables
Trade and other accounts payable in the accompanying financial
statements of the Group are analysed as follows:
Group
------------------------
31/12/2015 31/12/2014
----------- -----------
Trade payables 8,294 12,242
Amounts due to group undertakings - -
Accrued expenses 634,172 2,257,540
Social security and other taxes 65,720 42,130
Total 708,186 2,311,912
=========== ===========
Short term 708,186 2,311,912
Long term - -
Total 708,186 2,311,912
=========== ===========
16. Commitments
The Greek subsidiary Cdialogues S.A. has entered into commercial
operating lease agreements for the lease of office space and car.
These lease agreements have an average life of 3 to 12 years with
renewal terms included in certain contracts. Future minimum rentals
payable under non-cancellable operating leases as at 31 December
2015 and 2014, are as follows:
Group
------------------------
31/12/2015 31/12/2014
----------- -----------
Within one year 72,299 73,534
After one year but no more than five years 291,475 294,695
Over five years 315,502 315,818
679,276 684,047
=========== ===========
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR MMGGDRLGGVZG
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April 11, 2016 02:00 ET (06:00 GMT)
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