TIDMMACC
RNS Number : 2763Y
Macromac PLC
07 September 2015
7 September 2015
Macromac PLC
("Macromac", "the Company" or "the Group")
Interim Results
For the six months ended 30 June 2015
The Board of Macromac (AIM: MACC), the AIM quoted company
principally engaged in the business of mobile messaging services
and software solutions, is pleased to today announce its unaudited
interim results for the six month period ended 30 June 2015.
HIGHLIGHTS:
-- Revenue increased by 41% to RM18.2m (H1 2014: RM12.9m)
-- Thailand's contribution to revenue is 189% higher at RM15.6m (H1 2014: RM5.4m)
-- Gross profit decreased by 77% to RM1.7m (H1 2014: RM7.4m)
-- Loss before tax of RM1.8m (H1 2014: profit before tax of RM4.3m)
-- Gross profit margin decreased by 48% to 9% (H1 2014: 57%)
-- Basic loss per share of 2.03 sen per share (H1 2014: basic
earnings per share of 4.23 sen per share)
For further information please visit www.macromacgroup.com or
contact:
Macromac PLC +603 7784 9488
Michael Lew, Chief Executive Officer
Andrew Khoo, Chief Operating Officer
Allenby Capital Limited (Nominated Adviser and Broker) +44 (0)20
3328 5656
Nick Athanas / James Reeve
Leander (Financial PR) +44 (0)7795 168 157
Christian Taylor-Wilkinson
About Macromac
Macromac is a group of companies headquartered in Malaysia
comprising two divisions. The Company aims to deliver mobile
content and web-based marketing solutions to its customers across
South East Asia. Through its proprietary MMP, the Company provides
Premium and Bulk Mobile Messaging solutions for corporate and
advertising campaigns, allowing its clients to better reach their
customers by delivering targeted mobile messaging. The Company also
develops project-based customised software solutions for its
SME.
Chief Executive's Statement
For the six months ended 30 June 2015
Financial and Operational Review
Revenue for the first half of the financial year increased by
41% to RM18.2m (H1 2014: RM12.9m), gross profit decreased by 77% to
RM1.7m (H1 2014: RM7.4m) with loss before tax of RM1.8m (H1 2014:
profit before tax: RM4.3m). Basic loss per share for the period was
2.03 sen per share (H1 2014 basic earnings per share: 4.23 sen per
share). Gross margin for the period was 9% (H1 2014: 57%). At 30
June 2015 cash and cash equivalents was RM6.2m (31 December 2014:
RM8.4m, 30 June 2014: RM3.6m).
Following the successful acquisition of Smile Interactive Co.,
Ltd ("Smile") in 2014, 99% (H1 2014: 65%) of the Group's revenue
was generated through the provision of mobile messaging related
services, while the remaining 1% (H1 2014: 35%) was through the
software development and system solutions. The enterprise web
development and optimisation segment was disposed of during the
course of 2014 as the Group decided to focus on the larger revenue
contributing business segment of the Group.
In the first half of the year, revenue of RM15.6m (H1 2014:
RM5.4m) was generated through mobile messaging related services
provided in Thailand, indicating the growth of the Thailand market.
86% (H1 2014: 42%) of the revenue generated by the Group was
generated in Thailand as compared to the Group's home country of
Malaysia. The significant increase in the revenue contributed by
Thailand was largely contributed by the consolidation of Smile into
the Group from end of August 2014 onwards.
The Group is reporting a loss for the period ended 30 June 2015
due primarily to the increase in cost of sales. This is attributed
to the increased advertising and promotion expenses incurred by the
Group, in particular in Thailand, as well as an increased number of
content providers whom are utilizing the Group's services in
Malaysia and Thailand. The Board believes that the increase in
advertising and promotion spend is a key driver for the Group to
increase revenue in the future. However, in the first half of the
year the increase in revenue has been insufficient to recover most
of the cost of sales incurred, resulting in the Group reporting a
net loss for the period. The Board is hopeful that the benefits of
the increased marketing spend will lead to an improved performance
in the second half of the year.
In early 2015, one of the Group's operating subsidiaries in
Malaysia, Macromac Technology Sdn Bhd, managed to obtain a license
from the authorities which will allow the Group to connect directly
to the telephone operators in Malaysia. Connections have been
established with two of the four telephone operators in Malaysia,
with established connections expected to be in place by the end of
2015 for all four telephone operators.
Outlook
We continue to make progress with the strategy which we
currently have in place and we will continue to seek to deliver
top-line growth as we expand and deliver new services and products
to our customers in all our markets. We are continuously seeking
growth opportunities with a clear focus on continuing to expand
beyond our Malaysia home base.
Our continued investment in human resources, technological
advancement and geographical expansion are all designed to
successfully grow the Company for the benefit of all
stakeholders.
Michael Lew
Chief Executive Officer
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2015
Period Year ended Period
ended 30 31 December ended 30
June 2015 2014 June 2014
RM'000 RM'000 RM'000
(Unaudited) (Audited) (Unaudited)
Revenue 18,239 29,805 12,948
Cost of sales (16,585) (15,663) (5,522)
------------- -------------- --------------
Gross profit 1,654 14,142 7,426
------------- -------------- --------------
Other operating income 546 537 162
Administrative expenses (3,898) (7,099) (3,130)
------------- -------------- --------------
Operating (loss) /
profit (1,698) 7,580 4,458
Finance costs (117) (290) (129)
------------- -------------- --------------
(Loss) / Profit before
taxation (1,815) 7,290 4,329
Taxation (226) (327) (68)
------------- -------------- --------------
(Loss) / Profit for
the period (2,041) 6,963 4,261
------------- -------------- --------------
Other comprehensive
income
Items that may be reclassified
subsequently to profit
and loss
Exchange differences
on translating foreign
operation 88 276 -
------------- -------------- --------------
Other comprehensive
income for the year 88 276 -
------------- -------------- --------------
Total comprehensive
income for the year (1,953) 7,239 4,261
(Loss) / Profit for
the year attributable
to:
Equity holders of
the company (2,041) 6,963 4,261
------------- -------------- --------------
Total comprehensive
income for the year
attributable to:
Equity holders of
the company (1,953) 7,239 4,261
------------- -------------- --------------
(Loss) / Earnings per
share (Sen)
Basic (2.03) 6.91 ------4.23
------------- -------------- --------------
Diluted (2.03) 6.91 4.23
------------- -------------- --------------
(Loss) / Earnings per
share (Pence)
Basic (0.34) 1.27 -----0.78
------------- -------------- --------------
Diluted (0.34) 1.27 0.78
------------- -------------- --------------
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
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AS AT 30 JUNE 2015
As at 30 As at 31 As at 30
June 2015 December June 2014
2014
RM'000 RM'000 RM'000
ASSETS (Unaudited) (Audited) (Unaudited)
Non-current assets
Property, plant and
equipment 262 296 227
Intangible assets 8,888 9,436 4,658
Investment in associate
company 675 - -
9,825 9,732 4,885
------------- ----------- -------------
Current assets
Trade and other receivables 21,043 21,322 18,083
Assets held for sale 3,842 6,982 6,982
Tax recoverable 610 439 -
Cash and cash equivalents 6,234 8,410 3,645
------------- ----------- -------------
31,729 37,153 28,710
------------- ----------- -------------
Total assets 41,554 46,885 33,595
------------- ----------- -------------
EQUITY AND LIABILITIES
Capital and reserves
Stated capital account 13,350 13,350 13,350
Other reserves (10,452) (10,540) (10,816)
Share to be issued 6,187 6,187 -
Retained earnings 23,396 25,437 22,737
------------- ----------- -------------
Total equity 32,481 34,434 25,271
------------- ----------- -------------
Non-current liabilities
Borrowings 2,897 5,338 5,481
Deferred tax liabilities 3 3 3
------------- ----------- -------------
Total non-current liabilities 2,900 5,341 5,484
------------- ----------- -------------
Current liabilities
Trade and other payables 5,944 6,722 2,006
Amount owing to directors 33 33 33
Borrowings 195 353 358
Tax payables 1 2 443
------------- ----------- -------------
Total current liabilities 6,173 7,110 2,840
------------- ----------- -------------
Total Liabilities 9,073 12,451 8,324
------------- ----------- -------------
Total equity and liabilities 41,554 46,885 33,595
------------- ----------- -------------
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2015
GROUP
Stated Other Translation Share Retained
capital reserves reserves to be earnings Total
account issued
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Balance at
1 January 2014 13,350 (10,816) - - 18,474 21,008
Profit for
the year - - - - 6,963 6,963
Other comprehensive
income for
the year - - 276 - - 276
Shares to be
issued - - - 6,187 - 6,187
Balance at
31 December
2014 13,350 (10,816) 276 6,187 25,437 34,434
--------- ---------- ------------ -------- ---------- --------
Balance at
1 January 2015 13,350 (10,816) 276 6,187 25,437 34,434
Loss for the
year - - - - (2,041) (2,041)
Other comprehensive
income for
the year - - 88 - - 88
--------- ---------- ------------ -------- ---------- --------
Balance at
30 June 2015 13,350 (10,816) 364 6,187 23,396 32,481
--------- ---------- ------------ -------- ---------- --------
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2015
Period Year Period
ended ended 31 ended
30 June December 30 June
2015 2014 2014
RM'000 RM'000 RM'000
(Unaudited) (Audited) (Unaudited)
Cash flows from operating
activities
(Loss) / Profit before
taxation (1,815) 7,290 4,329
Adjustments for:
Amortisation of intangible
assets 548 1,096 548
Depreciation of property,
plant and equipment 81 162 82
Gain disposal of property,
plant and equipment (138) (102) -
Foreign exchange (209) (189) (36)
Interest expenses 117 290 138
Interest income (16) (24) (11)
------------ ---------- ------------
Operating (loss) / profit
before working capital
changes (1,432) 8,523 5,050
(Increase)/decrease in
working capital
------------ ---------- ------------
Trade and other receivables 279 346 (2,992)
Trade and other payables (779) (2,943) (1,933)
(500) (2,597) (4,925)
------------ ---------- ------------
Cash (used in) / generated
from operations (1,932) 5,926 125
------------ ---------- ------------
Interest paid (117) (290) (138)
Interest received 16 24 11
Tax paid (403) (1,202) (66)
Tax refund 5 - -
------------ ---------- ------------
(499) (1,468) (193)
------------ ---------- ------------
Net cash (used in) / from
operating activities (2,431) 4,458 (68)
------------ ---------- ------------
Cash flows from investing
activities
Proceeds from disposal
of property, plant and
equipment 3,277 102 -
Acquisition of associate (675) - -
company
Purchase of property,
plant and equipment (47) (177) (5)
Acquisition of subsidiary, - 78 -
net of cash acquired
Net cash from investing
activities 2,555 3 (5)
------------ ---------- ------------
Cash flows from financing
activities
Repayment of term loans (2,592) (320) (177)
Repayment of hire purchase
liabilities (8) (123) (32)
------------ ---------- ------------
Net cash used in financing
activities (2,600) (443) (209)
------------ ---------- ------------
(Decrease)/Increase in
cash and cash equivalents (2,476) 4,018 (282)
Effect of exchange rate
fluctuations on cash held 300 465 -
Cash and cash equivalents
at beginning of period 8,410 3,927 3,927
------------ ---------- ------------
Cash and cash equivalents
at end of period 6,234 8,410 3,645
------------ ---------- ------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2014
1. General information
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MACROMAC PLC was incorporated in Jersey on 28 February 2013 with
registration number 112499. The company is domiciled in Jersey and
has its registered office at 11 Bath Street, St Helier, Jersey JE2
4ST, Channel Islands. The principal place of the group's operation
is at 43-45, Jalan PJS 1/48, Taman Petaling Utama, Jalan Klang
Lama, 46150, Petaling Jaya, Selangor Darul Ehsan, Malaysia.
The principal activities of the group is that of the business of
mobile content aggregation and messaging services and software
development and system solutions.
The interim report was approved by the Board of Directors on 7
September 2015.
2. Accounting policies
This financial information has been prepared using accounting
policies consistent with those used in the preparation of the
audited accounts of the Group for the year ended 31 December 2014.
The interim financial information has been drawn up using
accounting policies and presentation expected to be adopted in the
Group's full financial statements for the year ended 31 December
2015.
3. Earnings per share
Earnings per share are calculated by dividing the profit for
each period attributable to owners of the company by the weighted
average number of ordinary shares in issue during each period.
There are no dilutive ordinary shares in the company.
For comparative, earnings per share are calculated by dividing
the profit attributable to owners of the company by the weighted
average ordinary shares assuming the shares were issued at the
beginning of the comparative period.
Period Year ended Period
ended 31 December ended
30 June 30
2015
(Unaudited) 2014 June 2014
(Audited) (Unaudited
& restated)
Net (loss) / profit
for the period attributable
to the owners of 6,963
the company (RM'000) (2,041) 4,261
------ --------------- -------------------------------
Weighted number
of ordinary share 100,750,000
issue 100,750,000 100,750,000
------ --------------- -------------------------------
Basic earnings per 6.91
share (Sen) (2.03) 4.23
------ --------------- -------------------------------
Diluted earnings 6.91
per share (Sen) (2.03) 4.23
------ --------------- -------------------------------
4. Intangible assets
Licensing
rights Goodwill Total
RM'000 RM'000 RM'000
Year ended 30 June
2015
Cost
At 1 January 2015 5,480 5,326 10,806
Additions - - -
---------- ----------- ----------
At 30 June 2015 5,480 5,326 10,806
---------- ----------- ----------
Accumulated depreciation
At 1 January 2015 1,370 - 1,370
Charge for the year 548 - 548
---------- ----------- ----------
At 30 June 2015 1,918 - 1,918
---------- ----------- ----------
Carrying amount
At 30 June 2015 3,562 5,326 8,888
---------- ----------- ----------
Year ended 31 December
2014
Cost
At 1 January 2014 5,480 - 5,480
Additions - 5,326 5,326
---------- ----------- ----------
At 31 December 2014 5,480 5,326 10,806
---------- ----------- ----------
Accumulated depreciation
At 1 January 2014 274 - 274
Charge for the year 1,096 - 1,096
---------- ----------- ----------
At 31 December 2014 1,370 - 1,370
---------- ----------- ----------
Carrying amount
At 31 December 2014 4,110 5,326 9,436
---------- ----------- ----------
Year ended 30 June
2014
Cost
At 1 January 2014 5,480 - 5,480
Additions - - -
---------- ----------- ----------
At 30 June 2014 5,480 - 5,480
---------- ----------- ----------
Accumulated depreciation
At 1 January 2014 274 - 274
Charge for the year 548 - 548
---------- ----------- ----------
At 30 June 2014 822 - 822
---------- ----------- ----------
Carrying amount
At 30 June 2014 4,658 - 4,658
---------- ----------- ----------
The above represents licensing rights for "Macromac Suite"
acquired by the group for sale. The remaining period of the
amortisation is 39 months (H1 2014: 51 months)
Goodwill arose in the acquisition of SMILE because the cost of
the combination included a control premium. In addition, the
consideration paid for the combination effectively included amounts
in relation to the benefit of expected synergies, revenue growth,
future market development and the fact that SMILE is well
established Thailand. These benefits are not recognised separately
from goodwill because they do not meet the recognition criteria for
identifiable intangibles assets. The goodwill arising from this
acquisition is not expected to be deductible for tax purposes.
5. Segment analysis
The group has three reporting segments, as described below,
which are the group's strategic business units.
Mobile content Operates as a mobile content
aggregation aggregator, mediating SMS and
and messaging MMS-based transactions.
Software development Development of Electronic Industry
and system solutions Court ("eIC") that helps Industrial
Court staff to manage court case,
designed the management system
iTrack for the photocopy machine,
development of social networking
solution Volkout and Geolocation
and also the design and development
of software for digital signage.
Software development Provision of web development
and system solutions and optimisation services.
The accounting policies of the segments are consistent with the
accounting policies of the group.
Information about major customers
Performance is measured based on segment profit before tax,
interest, depreciation and amortisation. Segment profit is used to
measure performance as management believes that such information is
the most relevant in evaluating the results of certain segments
relative to other entities that operate within these
industries.
Segment assets
The total of segment asset is measured based on all assets
(including goodwill) of a segment. Segment total asset is used to
measure the return of assets of each segment.
Segment liabilities
The total of segment liability is measured based on all
liabilities (including loans and borrowings and deferred tax
liabilities) of a segment.
Mobile Enterprise
content Software web development Per
aggregation development and Adjustment consolidated
and messaging and system optimisation Sales and financial
solutions - Others elimination statement
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Year ended
30 June 2015
Revenue
External
customer 18,076 137 - 42 (16) 18,239
Inter-segment 3,862 - - - (3,862) -
--------------- -------------- ---------------- ----------- ---------------- ------------------
Total revenue 21,938 137 - 42 (3,878) 18,239
--------------- -------------- ---------------- ----------- ---------------- ------------------
Results
Segment results (4,378) (1,229) - 42 3,851 (1,714)
Interest
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income 10 6 - - - 16
Interest
expenses (117) - - - - (117)
--------------- -------------- ---------------- ----------- ---------------- ------------------
(Loss) /
Profit before
taxation (4,485) (1,223) - 42 3,851 (1,815)
Taxation (226) - - - - (226)
--------------- -------------- ---------------- ----------- ---------------- ------------------
(Loss) /
Profit for
the year (4,711) (1,223) - 42 3,851 (2,041)
--------------- -------------- ---------------- ----------- ---------------- ------------------
Assets
Addition
to non
current assets 37 10 - - - 47
Segment assets 39,846 32,886 - - (31,178) 41,554
--------------- -------------- ---------------- ----------- ---------------- ------------------
Mobile Enterprise
content Software web development Per
aggregation development and Adjustment consolidated
and messaging and system optimisation Sales and financial
solutions - Others elimination statement
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Liabilities
Segment
liabilities 37,258 3,000 - - (31,186) 9,072
--------------- -------------- ---------------- ----------- ---------------- ------------------
Other
information
Depreciation
of property,
plant and
equipment 21 60 - - - 81
Amortisation
of intangible
assets - 548 - - - 548
Gain on
disposal
of property,
plant &
equipment (138) - - - - (138)
--------------- -------------- ---------------- ----------- ---------------- ------------------
Year ended
31 December
2014
Revenue
External
customer 24,615 4,839 351 - - 29,805
Inter-segment 7,418 - - - (7,418) -
--------------- -------------- ---------------- ----------- ---------------- ------------------
Total revenue 32,033 4,839 351 - (7,418) 29,805
--------------- -------------- ---------------- ----------- ---------------- ------------------
Results
Segment results (1,065) 940 263 - 7,418 7,556
Interest
income 9 8 7 - - 24
Interest
expenses (290) - - - - (290)
--------------- -------------- ---------------- ----------- ---------------- ------------------
(Loss) /
Profit before
taxation (1,346) 948 270 - 7,418 7,290
Taxation (324) (3) - - - (327)
--------------- -------------- ---------------- ----------- ---------------- ------------------
(Loss) /
Profit for
the year (1,670) 945 270 - 7,418 6,963
--------------- -------------- ---------------- ----------- ---------------- ------------------
Assets
Addition
to non-current
assets 123 54 - - - 177
Segment assets 42,760 24,435 6,308 - (26,618) 46,885
--------------- -------------- ---------------- ----------- ---------------- ------------------
Liabilities
Segment
liabilities 35,531 158 3,380 - (26,618) 12,451
--------------- -------------- ---------------- ----------- ---------------- ------------------
Mobile Enterprise
content Software web development Per
aggregation development and Adjustment consolidated
and messaging and system optimisation Sales and financial
solutions - Others elimination statement
RM'000 RM'000 RM'000 RM'000 RM'000 RM'000
Other
information
Depreciation
of property,
plant and
equipment 28 134 - - - 162
Amortisation
of intangible
assets - 1,096 - - - 1,096
Gain on
disposal
of property,
plant and
equipment (100) (2) - - - (102)
--------------- -------------- ---------------- ----------- ---------------- ------------------
Year ended
30 June 2014
Revenue
External
customer 8,362 4,394 192 - - 12,948
Inter-segment 3,648 - - - (3,648) -
--------------- -------------- ---------------- ----------- ---------------- ------------------
Total revenue 12,010 4,394 192 - (3,648) 12,948
--------------- -------------- ---------------- ----------- ---------------- ------------------
Results
Segment results 4,857 3,117 121 - (3,648) 4,447
Interest
income 2 5 4 - - 11
Interest
expenses (129) - - - - (129)
--------------- -------------- ---------------- ----------- ---------------- ------------------
Profit before
taxation 4,730 3,122 125 - (3,648) 4,329
Taxation (64) (4) - - - (68)
--------------- -------------- ---------------- ----------- ---------------- ------------------
Profit for
the year 4,666 3,118 125 - (3,648) 4,261
--------------- -------------- ---------------- ----------- ---------------- ------------------
Assets
Addition
to non-current
assets 5 50 - - - 55
Segment assets 22,021 23,012 1,683 - (18,006) 28,710
--------------- -------------- ---------------- ----------- ---------------- ------------------
Liabilities
Segment
liabilities 19,814 3,075 3,441 - (18,006) 8,324
--------------- -------------- ---------------- ----------- ---------------- ------------------
Other
information
Depreciation
of property,
plant and
equipment 4 75 3 - - 82
Amortisation
of intangible
assets - 548 - - - 548
--------------- -------------- ---------------- ----------- ---------------- ------------------
Geographical segments
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