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RNS Number : 0071T
Mobilewave Group PLC
30 November 2011
MobileWave Group Plc
UNAUDITED INTERIM RESULTS
for the period ended 31 August 2011
Chairman's Statement
I am pleased to present the interim results for MobileWave Group
plc for the period ended 31 August 2011. The Board is encouraged by
the progress made during the period. Our CEO, Kurt Pakendorf, who
commenced his role on 1 June 2011, has made a strong start. As set
out in the preliminary results, a detailed strategic plan was
prepared by Kurt and accepted by your board. An extensive
recruitment process resulted in the appointment of an outstanding
Group Chief Revenue Officer, Arthur Holcombe, who commences his
role on 1 December 2011. He joins Rory Stear, Kurt Pakendorf and
Steve Herne in the core leadership team, tasked with executing the
strategy. Significant work has been undertaken during the period on
continuing the development of our proprietary operating platform as
well as the evaluating of potential acquisition targets. Your board
will of course make announcements in this regard as soon as any
material event occurs.
Sourcing capital has been a major focus of the period under
review. In May, shareholders approved the raising of up to GBP2M of
convertible preference shares. To date over $700K has been raised
and discussions continue with investors to fully utilise this
facility in the short term. In October shareholders authorised a
GBP4M equity facility with Duchess Capital.
Review of Operations
MobileWave is a broad based global mobile technology solution
partner to companies and brands that enables them to have a
meaningful and real relationship with end users. MobileWave's long
term ambition is to become an integrator of business functions into
a mobile platform, thereby enhancing commercial effectiveness and
efficiency in order to generate maximum returns. MobileWave
increases brand awareness by building highly relevant customer
databases that enables a context relevant, location aware dialogue.
The Company aims to partner with enterprises to assist them develop
their businesses in dealing with what the Board perceives to be an
increasing use and reliance by consumers on mobile phones and
social media. MobileWave's goal is to be a leading B2B mobile
relationship management platform for maximizing enterprise
effectiveness and efficiency.
Since acquiring the MobileWave business, the Directors have
carried out a full business review and have broadened the focus of
the development of the MobileWave business, with an emphasis on
organic growth of the Company's technology and on strategic
acquisitions. MobileWave intends to be a global organization, with
a focus on developing markets, where we aim to gain clear market
leadership. Our key initiatives include:
-- Partnerships
MobileWave intends to develop partnerships with leading
advertising agencies, telecom operators and customer relationship
management platforms to accelerate the integration of its own
platform with brands and retailers' existing loyalty systems.
-- Strategic Acquisitions
The Company will seek to acquire appropriate mobile platform,
services and technology companies complimentary to its existing
business and adding to its revenue. Discussions are in progress
with several companies in this regard.
-- White Labelling
MobileWave's offering will have a highly scalable interface and
can be 'skinned' with a brand or retailers look-and-feel and
rapidly rolled out as a customized solution to complement their
existing marketing, mobile and loyalty initiatives and/or to
mobilize their enterprise software.
As a consequence of the previously reported relationship with
Palo Alto based marketing advisor, Global Fluency, MobileWave has
forged a strategic alliance with the Chief Marketing Officer
Council, a non-profit network of approximately 6,000 marketing
professionals engaged in developing best practice in customer
relationship management, marketing automation and loyalty.
MobileWave has benefitted from this collaboration from
introductions to CMO councils member organisations as well as from
the credibility of being associated with this influential
network.
As part of the process of expanding its reach, MobileWave has
now moved its product development away from South Africa and has in
place a development agreement with Ariose Software in Delhi, India.
The Company's immediate focus is around the marketing function and
capability. The initial goal is and remains to gain critical mass
as MobileWave focuses on becoming a global provider of mobile
marketing and advertising solutions that enable brands, advertising
agencies, retailers and large enterprises to implement highly
targeted, interactive and measurable campaigns by communicating
with and engaging consumers via their mobile devices. The Company
believes that the integrated, user friendly platform, currently
being developed will be a leading solution for customers looking to
build deeper relationships with their consumers and/or end users.
It is expected that this platform will enable the Company's
customers to plan via insight-based profiling and segmentation,
execute, target, monitor and measure mobile marketing and
advertising campaigns in real time throughout the campaign
lifecycle to drive better results from customers, including
enhanced return on investment.
High profile tier 1 customers will be targeted within sectors
which will act as reputation builders critical to establish the
Company's credentials as a serious, trusted player in the mobile
marketing and relationship management space. Current industry focus
areas are pharma/health, financial services, retail, FMCG, sport
and entertainment and mass transit. The Company has also commenced
with an aggressive first phase acquisition strategy and has
identified five potential target companies operating in the mobile
sector.
People
At the beginning of June 2011, the Company recruited Kurt
Pakendorf as Group CEO and a board member of MobileWave Group Plc.
Kurt is a highly experienced technology executive who has held
significant leadership positions in technology companies based in
Europe and the USA. Prior to this Kurt was an attorney practising
corporate law in South Africa, the United Kingdom, and Belgium and
with the United Nations in Kosovo. The Company has recruited Arthur
Holcombe as Chief Revenue Officer of the Group. His start date is 1
December 2011. Arthur has an accomplished track record building and
scaling businesses in the Internet, CRM and mobile wireless sector.
Prior to joining the Company, Arthur was Co-Founder and CFO of
Coordinate Technologies, a China based Telecom VAS Company
servicing China Mobile and China Unicom and providing wireless data
connectivity services to over 20 global leading Telecom Operators,
and before that he was a Co-Founder and Sales Director for
Coremetrics, a Web marketing optimization and customer analytics
platform that was subsequently acquired by IBM. Additionally,
Arthur has worked in China where he helped Dow Jones launch their
Online Interactive Services division. Arthur is tri-lingual,
speaking English, Spanish and Chinese and is an MBA graduate from
Thunderbird. He is based in London, England, and will report to the
Group CEO. A Group Chief Technology Officer is expected to be
appointed shortly.
Litigation update
As shareholders are aware, the Company has been pursuing Mr
Devinder Raj Narang (Devin Narang) in respect of the deferred cash
payment of US $1.5 million which was due on 31 December 2009,
together with accrued interest following the disposal of the
Freeplay business on 4 August 2008.
The Company obtained judgment against Mr Narang in the UK which
it is seeking to enforce in India. The next hearing date for the
matter in India is scheduled for March 2012. The company has also
commenced proceedings to enforce its judgement in the UK courts, in
parallel to the Indian proceedings, and has obtained permission
from the UK court to serve Devin Narang with the relevant court
papers in India. While formal mediation by the company was halted
at the end of August, we remain available to settle this matter
outside of the courts if possible.
Financial Review
MobileWave Group PLC has not traded during the period to 31
August 2011, other than to make investments in exploring various
investment opportunities and in maintaining the administrative
functions of the company. As a result of negotiations into
potential acquisitions taking longer than expected and therefore
delaying the development of the product it is now expected that
revenue will not commence until early 2012. MobileWave Ltd, the
Group's 100% owned operating subsidiary, continued to invest in
ongoing Research & Development, Market Research, Corporate
Restructuring and the recruitment of Personnel to fulfill its
future objectives.
Outlook
In May 2011 Shareholders approved a proposal to raise up to
GBP2.0 million in aggregate by way of an issue of Convertible
Preference Shares in order to finance the ongoing development of
the MobileWave business. To date the Company has raised $400,000
from investors in the Convertible Preference Shares and continues
to seek further investors for the Convertible Preference
Shares.
In addition to the initiative to raise funds from the issue of
the Convertible Preference Shares, the Company has, with
Shareholders' approval, entered into an Investment Agreement with
Duchess Opportunity Cayman Fund, Ltd (the "Investor"), whereby the
Investor has committed to subscribe for up to GBP4.0 million of New
Ordinary Shares over a period of thirty six (36) months. Under the
material terms of the agreement the Company is entitled to serve
notice on the Investor (the "Put Notice") requiring it to subscribe
for New Ordinary Shares equal in value to the greater of (i)
GBP25,000 and (ii) 400% of the average daily volume ("ADV") of New
Ordinary Shares multiplied by the average of the three (3) daily
closing bid prices for the New Ordinary Shares immediately
preceding the Put Notice; on one occasion only to serve notice
requiring the Investor to subscribe for New Ordinary Shares up to a
value of GBP250,000; the subscription price at which the Investor
will subscribe for New Ordinary Shares will be 92% of the lowest
daily volume weighted average price of the New Ordinary Shares
during the ten (10) consecutive trading days immediately after
service of the Put Notice; and the Company is entitled to withdraw
from a transaction if the subscription price of the New Ordinary
Shares falls below a price to be set by the Company when it serves
the Put Notice.
As the business continues to evolve, this additional investment
will provide assurances that the Company will have sufficient
working capital until such time as further Convertible Preference
Shares can be issued.
With the above funds in place, MobileWave Group PLC is well
placed to take advantage of the numerous client leads it is now
developing for its products, and expects to be generating revenues
from March 2012 onwards.
Yours faithfully
Rory Stear
Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 31 August 2011
14 months
6 months ended 28
ended 31 February
August 2011 2011
(Unaudited) (Audited)
Notes US$000 US$000
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses
(before
separately identifiable
costs) (953) (2,313)
Separately identifiable
costs - (1,242)
Loss from operations (953) (3,555)
Finance expenses (31) (11)
Finance income - 10
--------------------------------------- ---------------------------------------
Loss before taxation (984) (3,556)
--------------------------------------- ---------------------------------------
Taxation - -
--------------------------------------- ---------------------------------------
Loss for the period (984) (3,556)
=========================== ===========================
Other comprehensive
income,
net of tax
Currency translation
difference (11) (3)
--------------------------------------- ---------------------------------------
Other comprehensive
income (11) (3)
--------------------------------------- ---------------------------------------
Total comprehensive
expense
for the period (995) (3,559)
=========================== ===========================
$ $
Basic and fully diluted
loss
per share 1 (0.01) (0.05)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 August 2011
As at 28
As at 31 February
August 2011 2011
(Unaudited) (Audited)
US$000 US$000
Assets
Non-current assets
Intangible assets 1,647 1,648
Property, plant and equipment 16 20
1,663 1,668
Current assets
Inventories - 2
Trade and other receivables 96 64
Cash and cash equivalents 30 5
Total current assets 126 71
Total assets 1,789 1,739
Equity
Share capital 15,426 15,051
Share premium 28,761 28,761
Merger reserve (1,047) (1,047)
Other reserves 60 60
Foreign currency translation
reserve (14) (3)
Share based payment reserve 1,278 1,278
Retained losses (44,568) (43,584)
Total equity (104) 516
Current liabilities
Trade and other payables 1,893 1,223
1,893 1,223
TOTAL EQUITY AND LIABILITIES 1,789 1,739
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 August 2011
CONSOLIDATED
Foreign Share
Share currency based
Share Premium Merger Other translation payment Retained
Capital Account Reserve Reserve reserve reserve Deficit Total
$000 $000 $000 $000 $000 US$000 $000 $000
At 31 December
2009 13,373 28,761 - 60 - 1,479 (40,234) 3,439
Loss for the
period - - - - - - (3,556) (3,556)
Other
comprehensive
income:
Currency
translation
difference - - - - (3) - - (3)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------- ----------------- -----------------
Total
comprehensive
expense for
the period - - - - (3) - (3,556) (3,559)
Issue of
shares 1,678 - (1,047) - - - - 631
Share based
compensation - - - - - 5 - 5
Transfer due
to lapsed
options - - - - - (206) 206 -
---------------- ----------------- ---------------- ---------------- ----------------- ------------------ ------------------ ------------------
At 28 February
2011 15,051 28,761 (1,047) 60 (3) 1,278 (43,584) 516
Loss for the
period - - - - - - (984) (984)
Other
comprehensive
income:
Currency
translation
difference - - - - (11) - - (11)
---------------- ---------------- ---------------- ---------------- ---------------- ----------------- ----------------- -----------------
Total
comprehensive
expense for
the period (11) (984) (995)
Issue of
shares 375 375
---------------- ----------------- ---------------- ---------------- ----------------- ------------------ ------------------ ------------------
At 31 August
2011 15,426 28,761 (1,047) 60 (14) 1,278 (44,568) (104)
============ ============ ============ ============ ============ ============ ============ ============
CONSOLIDATED CASH FLOW STATEMENT
For the period ended 31 August 2011
14 months
6 months ended 28
ended 31 February
August 2011 2011
(Unaudited) (Audited)
US$000 US$000
Cash flow from operating activities
Loss for period before tax (984) (3,556)
Adjustments for:
Finance cost 31 11
Finance income - (10)
Gain on bargain purchase - (776)
Share based payment expense - 5
Depreciation 5 11
Changes in working capital
Decrease in inventories 2 -
(Increase)/Decrease in trade and other
receivables (32) 1,519
Increase in trade and other payables 338 800
------------------------ ------------------------
Cash used in operating activities (640) (1,994)
Income taxes credit received - -
------------------------ ------------------------
Net cash used in operating activities (640) (1,994)
------------------------ ------------------------
Cash flows from investing activities
Acquisition of subsidiary undertaking - (66)
Net cash acquired on acquisition of
subsidiary undertaking - 2
Payments to acquire intangible asset - (12)
Interest received - 10
------------------------ ------------------------
Net cash used in investing activities - (66)
------------------------ ------------------------
Cash flows from financing activities
Issue of preference share capital 375 -
Increase in shareholder loans 332 -
Interest on loans (31) (11)
------------------------ ------------------------
Net cash outflow from financing activities 676 (11)
------------------------ ------------------------
Net decrease in cash and cash equivalents 36 (2,071)
Cash & cash equivalents at the beginning
of the financial period 5 2,079
Effect of foreign exchange rate changes (11) (3)
------------------------ ------------------------
Cash & cash equivalents at the end
of the financial period 30 5
================ ================
NOTES TO THE FINANCIAL STATEMENTS
For the period ended 31 August 2011
GENERAL INFORMATION
The Group's results are made up to 31 August 2011.
The interim financial information for MobileWave Group plc is
presented in US Dollars and all values are rounded to the nearest
thousands of dollars ($000) except when otherwise indicated.
The company is a limited liability company incorporated in
England & Wales whose shares are listed on the London AIM Stock
Exchange.
The interim report was approved for issue by the Board of
Directors on 29 November 2011.
BASIS OF PREPARATION
The financial information contained in this interim report does
not constitute statutory accounts as defined in section 434 of the
Companies Act 2006. It does not therefore include all the
information and disclosures required in the annual financial
statements and should be read in conjunction with the Group's
financial statements for the period ended 28 February 2011.
The financial information for the 6 months ended 31 August 2011
is also unaudited.
The Group's statutory accounts for the period ended 28 February
2011 have been delivered to the Registrar of Companies. The report
of the auditors on these accounts was unqualified and did not
contain a statement under Section 498 (2) or (3) of the Companies
Act 2006.
SIGNIFICANT ACCOUNTING POLICIES
In accordance with AIM Rules, the interim report has been
prepared using accounting policies consistent with those followed
in the preparation of the Group's financial statements for the
period ended 28 February 2011.
1 LOSS PER SHARE
6 months ended 31 August 2011 14 months ended 28 February 2011
(Unaudited) (Audited)
US$000 US$000
Loss for period (984) (3,556)
Average number of ordinary shares in
issue 79,113 66,613
Dilutive potential of share options - -
Current tax credit/(expense) for year 79,113 66,613
US$ US$
Loss Per Share:
Basic loss per 5p ordinary share (in US$) (0.01) (0.05)
Diluted loss per 5p ordinary share (in
US$) (0.01) (0.05)
The calculation of the basic and diluted loss per ordinary share
of 5p (period ended 28 February 2011: 5p) each has been based on
the loss for the relevant period and on 79,112,769 shares (period
ended 28 February 2011: 66,612,769). This represents the weighted
average number of ordinary shares in issue. The loss for the year
from continuing operations and the weighted average number of
ordinary shares for the purposes of calculating the diluted loss
per share from continuing operations are the same as for the basic
loss per share calculation. This is because the outstanding share
options would have the effect of reducing the loss per ordinary
share and therefore not dilute under the terms of IAS 33.
2 Related party transactions
The Group has a trading relationship with Flambard Holdings
Limited, a company of which R M Stear is a Director and
shareholder. Flambard Holdings Limited has a service agreement with
the Group for the provision, on an arm's length basis, of
consultancy and administrative services in the UK and South Africa.
The Group purchased $120,000 of consultancy services (period ended
28 February 2011: $285,781) and $156,202 of administrative services
(period ended 28 February 2011: $113,013) from Flambard Holdings
Limited during the period. The balance due by the group to Flambard
Holdings Limited at 31 August 2011 was $445,120 (28 February 2011:
$144,963).
Included in trade and other payables is a shareholder loan of
$326,150 (period ended 28 February 2011: $250,262) due to Flambard
Holdings Limited.
R M Stear is also a director and shareholder of Flambard Data
Services Limited. At 31 August 2011, the group owed $45,797 (28
February 2011: $43,599) to Flambard Data Services Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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