TIDMMES
RNS Number : 3823N
Messaging International Plc
28 September 2012
Messaging International Plc / Market: AIM / Epic: MES / Sector:
Technology
Messaging International Plc
('Messaging International' or 'the Company')
Interim Results
Messaging International Plc, the AIM traded company and provider
of converged messaging products and services, announces its results
for the six months ended 30 June 2012.
Highlights
-- Continued Revenue Growth - increased by 3% to GBP1,732,041 (6M 2011: GBP1,684,354)
-- Gross margins improved to 65.6% (6M 2011: 58.5%)
-- Pre-tax profit for the first six months - GBP79,160 (6M 2011
profit: GBP170,401) with positive cash flow generated
-- Strengthening offering and investing in new products to offer
ever more useful messaging products and services to existing and
new clients
-- Investment made to increase R&D and Sales teams to
support new products and expand sales efforts
-- Healthy new business pipeline including initial efforts in India
Chairman's Statement
Trading has been solid for Messaging during the first six months
of 2012, as we continue to focus on developing converged messaging
solutions, through our subsidiary TeleMessage, to improve the way
users manage messages across various communication mediums. We
maintain close relationships with our blue-chip client base, have a
highly creative R&D team and innovative messaging solutions
which ensure that the company retains its place as a leading
provider in this sector.
As expressed in our new Vision and Mission statements:
'Our Vision is to become a leading provider of converged
messaging where people are free to use messaging services in the
way that is most appropriate, effective and convenient.'
'Our Mission isto provide Telecom Operators with solutions that
enhance the messaging experience, which are flexible, reliable,
easy to implement and meet their current & future needs.'
To be more specific, our converged messaging products and
services are provided to carriers and enterprises to deliver text,
voice, video and multimedia messages to and from any communication
device. Users can send, receive, and manage SMS, MMS, IP, Voice,
Fax and E-mail messages from the Internet, E-Mail clients,
iOS/Android Smartphones and Tablets, Fixed or Mobile phones and
APIs.
Our clients include, among others, companies such as Sprint in
the USA; Rogers Wireless, Bell Mobility and Telus in Canada; USI in
Russia and T-Mobile in Macedonia. We ensure stable revenues by
either hosting messaging services for a per-message fee or by
selling software licences, which are usually linked to the number
of messages that can be sent through the system or to the number of
active users.
As the messaging world is changing, from SMS/MMS to IP
messaging, we have increased our R&D capacity to stay ahead in
the market and to continue to seize opportunities in the messaging
space. Specifically, we are investing in the new emerging devices
(e.g. smartphones, tablets etc) and interfaces used by consumers
and enterprises to send and receive messages. We have already soft
launched our new Android Messenger on Google Play and our new iPad
Messenger on the Apple Store to be able to demonstrate these new
capabilities to our customers.
Sales of our 'Messaging Gateway' product to Mobile operators and
directly to enterprises, offering a range of interfaces for content
providers, enterprises and Facebook developers, continue to
increase. The product, which enables enterprises to manage messages
(mainly SMS/MMS, but also voice, fax and email) for customers and
employees on a wide scale, is enjoying growing uptake and gaining
momentum particularly as more clients understand its convenience
and cost-saving benefits.
In July 2012, we completed the delivery of a fairly large
installation of the Messaging Gateway to Dhiraagu, a mobile carrier
in The Maldives.
During the year, the company has been developing partnerships
and a pipeline of opportunities with a few leading players in India
for its "Voice as SMS" solution, which enables subscribers to
receive text messages as voice
and reply with voice messages.
As stated in the 2011 Annual Report, in February 2012, the
Company completed the buyback of 80,007,853 ordinary shares in the
company from Pacific Continental Securities UK Limited for
GBP127,500. The acquired shares were cancelled leaving the Company
with 155,872,147 ordinary shares of 0.5 pence each in issue.
As part of the agreement and following completion of the
buyback, Pacific were granted options to subscribe for up to
10,000,000 new ordinary shares at 0.5 pence per share exercisable
in whole or in part, which will lapse on the earlier of three years
from the date of grant or the date on which Pacific is dissolved.
Details of the capital cancellation can be found in the circular to
shareholders dated 23 November 2011.
In June 2012, the Company's subsidiary, TeleMessage Ltd, signed
an agreement for a venture loan of US$1,000,000 from Mizrahi
Tefahot Bank Ltd. This loan will be used for the development of
innovative products and services as well as assisting the group's
working capital requirements.
Under the terms of the agreement, repayments will be over 36
equal monthly instalments with an interest rate based on the London
Interbank Offered Rate plus 5.5%.
In addition, as part of the agreement, the Company will grant to
Mizrahi Tefahot Bank Ltd 3,896,804 warrants exercisable at any time
from grant until 17 June 2017. The warrants are exercisable at a
price of 0.63p per share, although in certain circumstances the
exercise price might be subject to adjustment.
Financial Results
As demonstrated by our financials, Messaging continues to
demonstrate growth and maintain profitability. For the period ended
30 June 2012, we are reporting a profit before tax of GBP79,160 on
the back of revenues of GBP1,732,041 (2011: GBP1,684,354). The fall
in the level of operating profit is attributable to the increased
costs of research and development.
The Group's cash position at 30 June 2012 was GBP1,423,623
(December 2011: GBP393,311). The cash position includes the loan
from Mizrahi Tefahot Bank referred to above.
Outlook
Our focus remains on increasing our presence within the telecom
sector both geographically and technologically. We are a profitable
company with an expert technical team that has again proven its
ability to provide innovative messaging services that add value to
our blue chip customers, thus positioning the Company for continued
growth.
I would like to thank our team for their hard work and
dedication, and our shareholders for their continued support. I
look forward to reporting another successful period of trading for
the year in our next annual report.
H Furman
Chairman
27 September 2012
For more information visit www.telemessage.com or contact:
Guy Levit Messaging International Tel: + 972 3 9225252
Plc
Horacio Furman Messaging International Tel: + 972 3 6964420
Plc
Mark Percy/ Seymour Pierce Limited Tel: +44 (0) 20 7107
Catherine Leftley 8000
Consolidated statement of comprehensive income for the six
months ended 30 June 2012
Unaudited Unaudited Audited
Notes six months six months year ended
ended ended 31 December
30 June 2012 30 June 2011 2011
GBP GBP GBP
Revenues 2 1,732,041 1.684,354 3,673,747
Cost of revenue (596,008) (699,148) (1,507,492)
Gross profit 1,136,033 985,206 2,166,255
-------------- -------------- -------------
Operating expenses
Research and development (456,524) (297,583) (676,923)
Sales and marketing (328,320) (287,316) (606,382)
Administrative costs (236,874) (218,403) (480,264)
Total operating expenses (1,021,718) (803,302) (1,763,569)
-------------- -------------- -------------
Operating profit 114,315 181,904 402,686
Finance costs (35,155) (11,503) (41,460)
Profit before taxation 79,160 170,401 361,226
Taxation 3 (7,682) - (36,850)
Profit for the financial
period 71,478 170,401 324,376
============== ============== =============
Other comprehensive loss
Foreign exchange difference
on translation of foreign
operations (18,577) (27,761) 3,009
Foreign exchange difference
arising from restating
the carrying value of
goodwill associated with
foreign operations - 4,538
(18,577) (27,761) 7,547
============== ============== =============
Total comprehensive profit 52,900 142,640 331,923
============== ============== =============
Earnings per share
Basic earnings per share 4 0.04p 0.07p 0.14p
============== ============== =============
Diluted earnings per
share 4 0.03p 0.06p 0.12p
============== ============== =============
Consolidated statement of changes in equity for the six months
ended 30 June 2012
Share Share Translation Revenue
capital premium reserve reserves Total
GBP GBP GBP GBP GBP
As at 1 January
2012 1,179,400 4,298,727 398,108 (1,194,726) 4,681,509
Capital reorganisation (400,039) (4,298,727) - 4,698,766 -
Re purchase of
shares (127,500) (127,500)
Profit for the
period 71,478 71,478
Share based payments 25,431 25,431
Foreign currency
translation changes (18,577) (18,577)
As at 30 June
2012 779,361 - 379,531 3,473,449 4,632,341
============ ============== ============ ============== ============
As at 1 January
2011 1,179,400 4,298,727 390,561 (1,520,598) 4,348,090
Profit for the
period 170,401 170,401
Share based payments 4,563 4,563
Foreign currency
translation changes (27,761) (27,761)
As at 30 June
2011 1,179,400 4,298,727 362,800 (1,345,634) 4,495,293
============ ============== ============ ============== ============
As at 1 January
2011 1,179,400 4,298,727 390,561 (1,520,598) 4,348,090
Profit for the
year 324,376 324,376
Share based payments 1,496 1,496
Foreign currency
translation changes
for goodwill 4,538 4,538
Other foreign
currency translation
changes 3,009 3,009
As at 31 December
2011 1,179,400 4,298,727 398,108 (1,194,726) 4,681,509
============ ============== ============ ============== ============
Consolidated Statement of financial position as at 30 June
2012
Unaudited Unaudited Audited
as at as at as at
30 June 30 June 31 December
2012 2011 2011
GBP GBP GBP
Non current assets
Goodwill 3,673,203 3,668,665 3,673,203
Property, plant and equipment 147,402 59,267 118,807
Other investments 249,100 199,126 238,230
4,069,705 3,927,058 4,030,240
------------ ------------ -------------
Current assets
Trade and other receivables 797,283 1,030,883 1,144,714
Cash and cash equivalents 1,423,623 393,311 543,684
2,220,906 1,424,194 1,688,398
------------ ------------ -------------
Total assets 6,290,611 5,351,252 5,718,638
Current liabilities
Trade and other payables (719,044) (586,745) (706,348)
(719,044) (586,745) (706,348)
------------ ------------ -------------
Non current liabilities
Borrowings (641,026) - -
Other payables (34,110) (39,693) (58,100)
Employee provisions (264,090) (229,521) (272,681)
------------ ------------ -------------
(939,226) (269,214) (330,781)
------------ ------------ -------------
Total liabilities (1,658,270) (855,959) (1,037,129)
Net assets 4,632,341 4,495,293 4,681,509
============ ============ =============
Equity
Share capital 779,361 1,179,400 1,179,400
Share premium account - 4,298,727 4,298,727
Foreign currency translation
reserve 379,531 362,800 398,108
Revenue reserves 3,473,449 (1,345,634) (1,194,726)
Shareholders' equity 4,632,341 4,495,293 4,681,509
============ ============ =============
Consolidated cash flow statement for the six months ended 30
June 2012
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2012 30 June 2011 2011
GBP GBP GBP
Cash flow from operating
activities
profit before taxation 114,315 181,904 402,686
-------------- -------------- -------------
Adjustments for:
Share based payments 25,431 4,563 12,056
Depreciation and amortisation 31,899 13,484 36,803
Foreign currency translation
adjustments (17,816) (26,862) (29,152)
-------------- -------------- -------------
39,514 (8,815) 19,707
-------------- -------------- -------------
Operating cash flow before
working capital movements 153,829 173,089 422,393
Decrease/(increase) in receivables 347,431 (185,658) (299,489)
(Decrease)/increase in payables (11,295) 122,407 235,679
(Decrease)/Increase in provisions (8,591) - 34,820
327,545 (63,251) (28,990)
-------------- -------------- -------------
Cash inflow from operating
activities 481,374 109,838 393,403
Investing activities
Net finance costs (35,155) (11,503) (9,075)
Investments (10,870) - (31,868)
Purchase of property, plant
and equipment (61,255) (17,606) (98,686)
Net cash used in investing
activities (107,280) (29,109) (139,629)
-------------- -------------- -------------
Taxation (7,681) - (12,112)
-------------- -------------- -------------
Financing activities
Borrowings/(repayments) 641,026 - -
Bank loan repayments - (44,737) (55,297)
Re-purchase of ordinary shares (127,500) - -
-------------- -------------- -------------
Net cash used from financing
activities 513,526 (44,737) (55,297)
-------------- -------------- -------------
Net increase in cash and
cash equivalents 879,939 35,992 186,365
Cash and cash equivalents
at the beginning of the period/year 543,684 357,319 357,319
Cash and cash equivalents
at the end of the period/year 1,423,623 393,311 543,684
============== ============== =============
Notes to the interim report
For the six months ended 30 June 2012
1. Basis of preparation and consolidation
The financial information contained in the interim results has
been prepared in accordance with International Financial Reporting
Standards ('IFRS') as adopted by the European Union. It has been
prepared in accordance with IAS 34 - Interim Financial Reporting
and does not include all of the information required for full
annual financial statements.
The financial information contained in these interim results for
the six months ended 30th June 2012 and 30th June 2011 are
un-audited. The comparative figures for the year ended 31st
December 2011 do not constitute statutory financial statements of
the group within the definition of S434 of the Companies Act 2006.
Full audited accounts of the group in respect of that financial
period prepared in accordance with IFRS, which we received an
unqualified audit opinion have been delivered to Registrar of
Companies.
The accounting policies and methods of computation used in the
interim statement are consistent with those used in the financial
statements for the year ended 31 December 2011 and are in
accordance with International Financial Reporting Standards.
The statement of comprehensive income, statement of changes in
equity and financial position include the financial statements of
the company and its subsidiary undertakings up to 30 June 2012.
The consolidated interim financial statements do not include all
the information required for full annual financial statements and
therefore cannot be construed to be in full compliance with
IFRS.
The consolidated interim financial statements were approved by
the board and authorised for issue on 27 September 2012.
2. Turnover
Unaudited Unaudited Audited
six months six months year ended
ended ended 31 December
30 June 2011 30 June 2012 2011
GBP GBP GBP
North America 1,519,731 1,370,917 2,988,368
Europe and Middle
East 205,727 287,815 639,183
Rest of the World 6,583 25,622 46,196
-------------- -------------- ----------------
1,732,041 1,684,354 3,673,747
-------------- -------------- ----------------
3. Taxation
The tax charge for the year represents amounts due for US State
tax in relation to the profits of Telemessage Inc. based in the
USA. U.S. operating losses from previous years are subject to
annual limitations due to the "change in ownership" provisions of
the Internal Revenue Code of 1986 and similar state provisions.
No further provision has been made for taxation as the group has
losses available to carry forward against future trading profits.
No deferred tax asset has been recognised in accordance with
International Accounting Standard 12.
Notes to the interim report
For the six months ended 30 June 2012 (continued)
4. Basic and diluted loss per share
For the six months ended 30 June 2012, basic earnings per share
has been calculated on the group's profit attributable to owners
the company of GBP71,478 and on the weighted average number of
shares in issue during the year, which was 175,200,000.
Diluted earnings per share has been calculated on the group's
profit of GBP71,478 which in addition to 156 million ordinary
shares in issue, takes into account 52 million warrants and options
to subscribe for ordinary shares.
For the six months ended 30 June 2011, basic earnings per share
has been calculated on the group's profit attributable to owners
the company of GBP170,401 and on the weighted average number of
shares in issue during the year, which was 235,880,000.
Diluted earnings per share has been calculated on the group's
profit of GBP170,401 which in addition to 235 million ordinary
shares in issue, takes into account GBP100,000 worth of warrants
and 23 million options to subscribe for ordinary shares.
For the year ended 31 December 2011, basic earnings per share
has been calculated on the group's profit attributable to equity
holders of the parent company of GBP324,376 and on the weighted
average number of shares in issue during the year, which was
235,880,000.
Diluted earnings per share has been calculated on the group's
profit of GBP324,376 (2010: GBP357,245) which in addition to 235
million ordinary shares in issue, takes into account 52 million
warrants and options to subscribe for ordinary shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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