REG - MobilityOne Limited - Half-year Report
29/09/2023 09:45
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RNS Number : 1728O MobilityOne Limited 29 September 2023
29 September 2023
MobilityOne Limited
("MobilityOne", the "Company" or the "Group")
Unaudited interim results for the six months ended 30 June 2023
MobilityOne (AIM: MBO), the e-commerce infrastructure payment solutions and
platform provider, announces its unaudited interim results for the six months
ended 30 June 2023.
Highlights:
· Revenue increased by 7.2% to £121.5 million (H1 2022:
£113.4 million) due to higher sales for the Group's mobile phone prepaid
airtime reload and bill payment business in Malaysia;
· Profit after tax of £5,117 (H1 2022: profit after tax
of £0.34 million);
· Cash and cash equivalents (including fixed deposits) at
30 June 2023 of £3.42 million (30 June 2022: £4.72 million);
· The Group is cautious on the outlook for the remainder
of 2023, taking into consideration rising interest rates and expenses
including, but not limited to, higher administrative expenses, higher
infrastructure and marketing costs as well as lower gross profit margins for
the Group's products and services; and
· For future growth, the Group will continue to invest
and enhance its research and development capabilities as well as form
partnerships or to undertake acquisitions in complementary businesses, as
applicable.
For further information, contact:
MobilityOne
Limited +6
03 89963600
Dato' Hussian A. Rahman,
CEO
www.mobilityone.com.my
har@mobilityone.com.my
Allenby Capital Limited
(Nominated Adviser and
Broker)
+44 20 3328 5656
Nick Athanas / Vivek Bhardwaj
About the Group:
MobilityOne is one of the leading virtual distributors of mobile prepaid
reload and bill payment services in Malaysia. With connections to various
service providers across industries such as banking, telecommunications,
utilities, government agencies, and transportation, the Group operates through
multiple distribution channels including mobile wallets, e-commerce sites, EDC
terminals, automated teller machines, kiosks, and internet & mobile
banking. Holding licenses in regulated spaces including acquiring, e-money,
remittance and lending, the Group offers a range of services to the market,
including wallet, internet, and terminal-based payment services, white label
e-money, remittance, lending, and custom fintech ecosystems for communities.
The Group's flexible, scalable technology platform enables cash, debit card,
and credit card transactions from multiple devices while providing robust
control and monitoring of product and service distribution.
For more information, refer to our website at www.mobilityone.com.my
(http://www.mobilityone.com.my)
Chairman's statement
The Group's revenue increased by 7.2% to £121.5 million (H1 2022: revenue of
£113.4 million) in the first six months of 2023 as a result of higher sales
from the Group's main products and services in Malaysia, namely the mobile
phone prepaid airtime reload and bill payment business through the Group's
banking channels (i.e. mobile banking and internet banking), electronic data
capture ("EDC") terminals and third parties' e-wallet applications.
Notwithstanding the higher sales, the Group registered a lower profit after
tax of £5,117 in the first six months of 2023 (H1 2022: profit after tax of
£0.34 million) mainly due to a reduction in gross profit margin in the period
under review to 5.08% (H1 2022: gross profit margin of 5.52%), higher
administrative expenses and higher finance costs.
The Group's other businesses such as its international remittance services,
EDC terminals sales and services, e-money and lending in Malaysia as well as
the e-payment solutions activities in Brunei continued to remain small. The
Group did not record any sales in the Philippines in the first six months of
2023.
As at 30 June 2023, the Group had cash and cash equivalents (including fixed
deposits) of £3.42 million (30 June 2022: cash and cash equivalents of £4.72
million) while the secured loans and borrowings from financial institutions
increased to £4.14 million (30 June 2022: £2.89 million).
Current trading and outlook
The Group's business activities are still predominately concentrated in
Malaysia. Other than the Group's main business activities of mobile phone
prepaid airtime reload and bill payment in Malaysia, the Group's other
businesses are expected to remain insignificant in 2023. As reported by the
Central Bank of Malaysia in August 2023, the Malaysian economy grew by 2.9% in
the second quarter of 2023 weighed mainly by slower external demand. Domestic
demand remained the key driver of growth, supported by private consumption and
investment. With the challenging global environment, the Malaysian economy is
projected to expand close to the lower end of the 4.0% to 5.0% range in 2023.
Growth will continue to be supported by domestic demand amid improving
employment and income as well as implementation of multi-year projects.
As part of the Group's business plans for long-term growth, the Group has the
following initiatives:
(1) Proposed disposal of OneShop Retail Sdn Bhd ("1Shop") and
proposed joint venture with Super Apps Holdings Sdn Bhd ("Super Apps")
On 19 October 2022, MobilityOne Sdn Bhd ("M1 Malaysia"), the Group's
wholly-owned subsidiary in Malaysia, entered into a Share Sale Agreement with
Super Apps for the proposed disposal by M1 Malaysia of a 60% shareholding in
the Group's wholly-owned non-core subsidiary 1Shop to Super Apps (together the
"Proposed Disposal"). Concurrently, M1 Malaysia entered into a Joint-Venture
cum Shareholders Agreement with Super Apps and 1Shop (together the "Proposed
Joint Venture"). The Proposed Disposal and Proposed Joint Venture are
inter-conditional in order to establish a new joint venture to expand the
Group's e-products and services business initially in Malaysia.
The Proposed Disposal is subject to the completion of a merger exercise
between Technology & Telecommunication Acquisition Corporation ("TETE")
and Super Apps (together the "Merger Exercise").
Pursuant to the terms of the Proposed Disposal and subject to the completion
of the Merger Exercise, the Group is expected to receive cash proceeds of
RM40.0 million (c. £7.53 million) and RM20.0 million (c. £3.76 million)
within 14 days and 180 days respectively of completion of the Merger Exercise.
A draft proxy statement has been filed by Tete Technologies Inc, a
wholly-owned subsidiary of TETE, on 2 August 2023 ("TETE Proxy Filing") with
the United States Securities and Exchange Commission ("SEC"). An extraordinary
general meeting will be convened in due course by TETE once the TETE Proxy
Filing is in complete form and approved by the SEC. The Company will release
further announcements as and when appropriate.
There can be no guarantee that the Proposed Disposal and Proposed Joint
Venture can be completed as they are conditional on the completion of the
Merger Exercise, which is out of the Group's control. The completion of the
Proposed Disposal and Proposed Joint Venture are expected to positively
contribute to the future growth of the Group.
(2) Money transfer business via SWIFT network
To expand the Group's money transfer business via the Society for Worldwide
Interbank Financial Telecommunication ("SWIFT") network, the Group continues
to work with a bank in Malaysia on the integration process due to the
migration of messaging standards within the SWIFT network while waiting for
the Central Bank of Malaysia's approval, the timings of which continue to
remain uncertain. The Company will make the relevant announcement on the
arrangement with SWIFT as and when is appropriate.
(3) UK electronic money institution application
On 11 May 2023, the Company announced that M1 Tech Limited ("M1 Tech"), the
Group's wholly-owned subsidiary in the UK, had withdrawn its application to
the Financial Conduct Authority (the "FCA"), the financial regulatory body in
the UK, for authorisation as an electronic money institution to provide
e-money services in the UK (the "FCA Application"). This follows receipt of
further feedback from the FCA requesting further information in relation to
certain disclosures relating to M1 Tech's proposed business plan. The Group is
reviewing its proposed business plan to expand its business in the UK and its
options in relation to submitting a further revised FCA application in due
course which addresses the FCA's latest feedback. The Company will release
further announcements as and when appropriate.
(4) New joint venture to explore business opportunities from the
Kingdom of Saudi Arabia
On 26 June 2023, M1 Malaysia entered into a joint venture cum shareholders
agreement with Syed Faisal Algadrie Bin Syed Hassan to incorporate Qube Nexus
Sdn Bhd, Malaysia to explore any suitable business opportunities from the
Kingdom of Saudi Arabia. Any material developments in relation to new business
opportunities will be announced in due course.
(5) Proposed acquisition of Hati International Sdn Bhd ("Hati")
via Sincere Acres Sdn Bhd ("Sincere")
On 29 September 2023, M1 Malaysia entered into a share sale agreement with
United Flagship Development Sdn Bhd ("Vendor") to acquire a 49% equity
interest in Sincere for a total cash consideration of RM30.0 million (c.
£5.217 million) to be paid to the Vendor in two tranches (the "Proposed
Acquisition"). The first tranche, representing RM2.0 million (c. £0.348
million), has been paid to the Vendor using M1 Malaysia's existing cash
resources. The second tranche, representing the balance of RM28.0 million (c.
£4.869 million) (the "Second Tranche"), is required to be paid by M1 Malaysia
by 8 March 2024 (the "Second Tranche Payment Date"). It is envisaged that the
Second Tranche will be paid by the Group using M1 Malaysia's existing cash
resources.
While the Second Tranche Payment Date can be extended for up to a further 6
months ("Extended Second Tranche Payment Date"), any payment in relation to
the Second Tranche made after the Second Tranche Payment Date will be subject
to an interest charge of 10% per annum. The balance amount payable for the
Second Tranche (including any interest charge if the payment is made after the
Second Tranche Payment Date) shall be reduced by RM1.0 million (c. £0.174
million) when the payment is made by the Extended Second Tranche Payment Date.
While the Proposed Acquisition is not subject to any conditions precedent,
both parties have agreed to complete the Proposed Acquisition by 4 October
2023.
Sincere is an investment holding company with its sole business activity
comprising of owning a 100% equity interest in Hati, an operating company in
Malaysia. Hati is a healthcare information systems provider in Malaysia
focused on healthcare software development and information technology. Through
the use of cloud service platforms and software system solutions, Hati has
developed a product suite comprising of hospital information systems, clinical
information systems, business intelligence platforms and Internet of Things
(IoT)/Artificial Intelligence (AI) enabled platforms.
The Proposed Acquisition will result in a number of synergistic benefits for
both the Group and Hati. The Proposed Acquisition is anticipated to enable the
Group to vertically integrate its existing electronic payment systems and
services with Hati's suite of existing products to support payment methods
such as credit cards, debit cards and eWallets via online payments and over
the counter payments. In addition, the Proposed Acquisition will result in
Hati being able to utilise the Group's infrastructure and engineering know-how
to automate electronic billing and invoicing.
Following completion of the Proposed Acquisition, and as part of the Group's
long-term growth strategy, the Group intends to develop a payment system that
integrates the Group's e-claims and e-payments services with insurance
companies thereby resolving cash flow issues typically faced by hospitals and
clinics. The Group also intends to explore potential collaborations with the
Group's telecommunication partners in order to enable Hati's real-time IoT/AI
enabled healthcare devices to operate over 5G cellular networks. The above
proposed developments will also contribute to the Group expanding its
customers base for its existing electronic payment systems and services.
In addition, the Proposed Acquisition will enable the Group to amongst other
benefits, diversify its existing business activities into the growing
healthcare information systems industry.
Further details on the Proposed Acquisition can be found in the announcement
released by the Group on 29 September 2023.
Notwithstanding that the Malaysia economy is expected to grow in 2023 as well
as the demand for the Group's mobile phone prepaid products, the Group is
cautious on the outlook for the remainder of 2023, taking into consideration
rising interest rates and expenses including, but not limited to, higher
administrative expenses, higher infrastructure and marketing costs as well as
other related expenses. In addition, in order to maintain or grow the Group's
businesses, the Group's gross profit margins for its products and services
have been impacted. For future growth, the Group will continue to invest and
enhance its research and development as the backbone to support the business
and technology advancement as well as to form partnerships or to undertake
acquisitions in complementary businesses, as applicable.
Abu Bakar bin Mohd Taib (Chairman)
29 September 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS PERIOD ENDED 30 JUNE 2023
Six months Six months Financial year
Ended Ended Ended
30 June 2023 30 June 2022 31 Dec 2022
Unaudited Unaudited Audited
CONTINUING OPERATIONS £ £ £
Revenue 121,529,982 113,355,113 233,761,671
Cost of sales (115,358,166) (107,103,390) (221,010,827)
GROSS PROFIT 6,171,816 6,251,723 12,750,844
Other operating income 40,165 92,839 183,426
Administration expenses (5,914,978) (5,549,417) (11,940,311)
Other operating expenses (174,821) (209,083) (304,196)
Net loss on financial instruments - - (273,642)
OPERATING PROFIT 122,182 586,062 416,121
Finance costs (116,268) (63,501) (137,143)
PROFIT BEFORE TAX 5,914 522,561 278,978
Tax (797) (184,356) (262,350)
PROFIT FROM CONTINUING OPERATIONS
5,117 338,205 16,628
Attributable to:
Owners of the parent 1,056 338,842 23,857
Non-controlling interest 4,061 (637) (7,229)
5,117 338,205 16,628
EARNINGS PER SHARE
Basic earnings per share (pence) 0.001 0.319 0.022
Diluted earnings per share (pence) 0.001 0.301 0.021
PROFIT FOR THE PERIOD/YEAR 5,117 338,205 16,628
OTHER COMPREHENSIVE PROFIT/(LOSS)
Foreign currency translation (624,236) 296,985 354,322
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR THE PERIOD/YEAR
(619,119) 635,190 370,950
Total comprehensive profit/loss attributable to:
Owners of the parent (624,438) 636,224 378,832
Non-controlling interest 5,319 (1,034) (7,882)
(619,119) 635,190 370,950
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
At At At
30 June 2023 30 June 2022 31 Dec 2022
Unaudited Unaudited Audited
£ £ £
Assets
Non-current assets
Intangible assets 192,622 421,863 214,180
Property, plant and equipment 900,093 1,180,684 1,122,194
Right-of-use assets 144,414 191,759 182,935
Development cost 280,379 - -
Trade and other receivables 905,758 - 228,050
Other investment 11,045 12,144 12,281
2,434,311 1,806,450 1,759,640
Current assets
Inventories 2,280,346 3,162,123 3,189,901
Trade and other receivables 3,277,551 3,015,416 2,179,785
Tax recoverable 254,391 169,179 183,321
Fixed deposits 1,604,051 1,603,471 1,768,584
Cash and cash equivalents 1,813,504 3,114,703 3,246,588
9,229,843 11,064,892 10,568,179
Total Assets 11,664,154 12,871,342 12,327,819
Shareholders' equity
Equity attributable to equity holders of the Company
Called up share capital 2,657,470 2,657,470 2,657,470
Share premium 909,472 909,472 909,472
Reverse acquisition reserve 708,951 708,951 708,951
Foreign currency translation reserve 422,188 990,089 1,047,682
Accumulated profit/ (losses) (92,710) 221,219 (93,766)
Shareholders' equity 4,605,371 5,487,201 5,229,809
Non-controlling interest (9,792) (8,263) (15,111)
Total Equity 4,595,579 5,478,938 5,214,698
Liabilities
Non-current liabilities
Loans and borrowings - secured 195,166 225,171 221,697
Lease liabilities 15,007 74,047 98,450
Deferred tax liabilities 13,926 44,782 15,484
224,099 344,000 335,631
Current liabilities
Trade and other payables 2,775,077 4,063.714 2,947,056
Amount due to directors 2,403 176,457 66,855
Loans and borrowings - secured 3,943,085 2,668,243 3,647,482
Lease liabilities 123,063 108,810 105,316
Tax payables 848 31,180 10,781
6,844,476 7,048,404 6,777,490
Total Liabilities 7,068,575 7,392,404 7,113,121
Total Equity and Liabilities 11,664,154 12,871,342 12,327,819
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2023
Non-Distributable Distributable
Foreign
Reverse Currency Non-
Share Share Acquisition Translation Accumulated Controlling Total
Capital Premium Reserve Reserve Profit/(Losses) Total Interest Equity
£ £ £ £ £ £ £ £
As at 1 January 2022 2,657,470 909,472 708,951 692,707 (117,623) 4,850,977 (7,229) 4,843,748
Foreign currency translation - - - 297,382 - 297,382 (397) 296,985
Profit for the period - - - - 338,842 338,842 (637) 338,205
As at 30 June 2022 2,657,470 909,472 708,951 990,089 221,219 5,487,201 (8,263) 5,478,938
As at 1 July 2022 2,657,470 909,472 708,951 990,089 221,219 5,487,201 (8,263) 5,478,938
Foreign currency translation - - - 57,593 - 57,593 (256) 57,337
Profit/(Loss) for the period - - - - (314,985) (314,985) (6,592) (321,577)
As at 31 Dec 2022 2,657,470 909,472 708,951 1,047,682 (93,766) 5,229,809 (15,111) 5,214,698
As at 1 January 2023 2,657,470 909,472 708,951 1,047,682 (93,766) 5,229,809 (15,111) 5,214,698
Foreign currency translation - - - (625,494) - (625,494) 1,258 (624,236)
Profit for the period - - - - 1,056 1,056 4,061 5,117
As at 30 June 2023 2,657,470 909,472 708,951 422,188 (92,710) 4,605,371 (9,792) 4,595,579
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of the respective shares net of share issue expenses.
The reverse acquisition reserve relates to the adjustment required by
accounting for the reverse acquisition in accordance with IFRS 3.
The Company's assets and liabilities stated in the Statement of Financial
Position were translated into Pound Sterling (£) using the closing rate as at
the Statement of Financial Position date and the income statements were
translated into £ using the average rate for that period. All resulting
exchange differences are taken to the foreign currency translation reserve
within equity.
Retained earnings represent the cumulative earnings of the Group attributable
to equity shareholders.
Non-controlling interests represent the share of ownership of subsidiary
companies outside the Group.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED 30 JUNE 2023
Six months Six months Financial year
Ended Ended ended
30 June 2023 30 June 2022 31 Dec 2022
Unaudited Unaudited Audited
£ £ £
Cash flows used in operating activities
Cash used in operations (816,961) (205,386) (614,763)
Interest paid (116,414) (63,501) (137,143)
Interest received 14,580 11,221 35,933
Tax paid (99,165) (287,340) (421,991)
Tax refund - 5,470 5,532
Net cash used in operating activities (1,017,960) (539,536) (1,132,432)
Cash flows used in investing activities
Purchase of property, plant and equipment (9,876) (306,614) (390,056)
Addition in right-of-use assets (23,641) - -
Addition in other investment - - (12,281)
Increase in development cost (280,379) - -
Proceeds from disposal of property, plant & equipment 163 8,370 8,465
Net cash used in investing activities (313,733) (298,244) (393,872)
Cash flows from financing activities
Net change of banker acceptance 662,713 607,556 1,562,937
Repayment of lease liabilities (45,186) (53,825) (111,144)
Repayment of term loan (4,218) (4,038) (9,615)
Net cash from financing activities 613,309 549,693 1,442,178
Decrease in cash and cash equivalents (718,384) (288,087) (84,126)
Effect of foreign exchange rate changes (879,233) 340,737 433,774
Cash and cash equivalents at beginning of period/year 5,015,172 4,665,524
4,665,524
Cash and cash equivalents at end of period/year 3,417,555 4,718,174 5,015,172
NOTES TO THE INTERIM FINANCIAL STATEMENTS
1. Basis of preparation
The Group's interim financial statements for the six months ended 30 June 2023
were authorised for issue by the Board of Directors on 29 September 2023.
The interim financial statements are unaudited and have been prepared in
accordance with International Financial Reporting Standards (IFRSs and IFRIC
interpretations) issued by the International Accounting Standards Board
(IASB), as adopted by the European Union, and with those parts of the
Companies (Jersey) Law 1991 applicable to companies preparing their financial
statements under IFRS. 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 statements have been prepared
under the historical cost convention.
Full details of the accounting policies adopted, which are consistent with
those disclosed in the Company's 2022 Annual Report, will be included in the
audited financial statements for the year ending 31 December 2023.
2. Basis of consolidation
The consolidated statement of comprehensive income and statement of financial
position include financial statements of the Company and its subsidiaries made
up to 30 June 2023.
3. Nature of financial information
The unaudited interim financial information for the six months ended 30 June
2023 does not constitute statutory accounts under the meaning of Section 435
of the Companies Act 2006. The comparative figures for the year ended 31
December 2022 are extracted from the audited statutory financial statements.
Full audited financial statements of the Group in respect of that financial
year prepared in accordance with IFRS, which we received an unqualified audit
opinion, have been delivered to the Registrar of Companies.
4. Functional and presentation currency
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The functional currency of the
Group is Ringgit Malaysia (RM). The consolidated financial statements are
presented in Pound Sterling (£), which is the Company's presentational
currency as this is the currency used in the country in which the entity is
listed.
Assets and liabilities are translated into Pound Sterling (£) at foreign
exchange rates ruling at the Statement of Financial Position date. Results and
cash flows are translated into Pound Sterling (£) using average rates of
exchange for the period.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year/period-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the
statement of comprehensive income.
The financial information set out below has been
translated at the following rates:
Exchange rate (RM: £)
At Statement of Financial Position date Average for year/
Period
Period ended 30 June 2023 5.88 5.50
Period ended 30 June 2022 5.35 5.54
Year ended 31 December 2022 5.29 5.43
5. Segmental analysis
The Group has three operating segments as follows:
(a) Telecommunication services and electronic commerce solutions;
(b) Hardware and services; and
(c) Remittance services and others.
No segmental analysis of assets and capital expenditure are presented as they
are mostly unallocated items which comprise corporate assets and liabilities.
No geographical segment information is presented as more than 95% of the
Group's revenue was generated in Malaysia.
Telecommunication services and electronic commerce solutions
Hardware and services Remittance Elimination Total
Group services
and others
6months ended 30 June 2023 £ £ £ £ £
Segment revenue:
Sales to external customers 121,242,999 279,339 92,511 (84,867) 121,529,982
121,242,999 279,339 92,511 (84,867) 121,529,982
Profit before tax 5,914 - - - 5,914
Tax (797) - - - (797)
Profit for the period 5,117 - - - 5,117
Non-cash expenses/(income)*
Depreciation of property, plant and equipment 127,350 - - - 127,350
Amortisation of intangible assets - - - - -
Amortisation of right-of-use assets 47,471 - - - 47,471
Unrealised loss on forex 2,707 - - - 2,707
177,528 - - - 177,528
Group
6months ended 30 June 2022
Segment revenue:
Sales to external customers 112,494,543 959,051 56,692 (155,173) 113,355,113
112,494,543 959,051 56,692 (155,173) 113,355,113
Profit before tax 522,561 - - - 522,561
Tax (184,356) - - (184,356)
Profit for the period 338,205 - - - 338,205
Non-cash expenses/(income)*
Depreciation of property, plant and equipment 132,115 - - - 132,115
Amortisation of intangible assets 33,384 - - - 33,384
Amortisation of right-of-use assets 43,584 - - - 43,584
209,083 - - - 209,083
Group
Financial year ended 31 Dec 2022
Segment revenue:
Sales to external customers 230,754,843 3,296,531 - (289,703) 233,761,671
230,754,843 3,296,531 - (289,703) 233,761,671
Profit before tax 278,978 - - - 278,978
Tax (262,350) - - - (262,350)
Profit for the period 16,628 - - - 16,628
Non-cash expenses/(income)*
Depreciation of property, plant and equipment 282,260 - - - 282,260
Amortisation of intangible assets 68,051 - - - 68,051
Amortisation of right-of-use assets 132,580 - - - 132,580
Bad debt written off 5,622 - - - 5,622
488,513 - - - 488,513
*The disclosure for non-cash expenses has not been split according to the
different segments as the cost to obtain such information is excessive and
provides very little by way of information.
*The disclosure for non-cash expenses has not been split according to the
different segments as the cost to obtain such information is excessive and
provides very little by way of information.
6. Taxation
Taxation on the income statement for the financial period comprises current
and deferred tax. Current tax is the expected amount of taxes payable in
respect of the taxable profit for the financial period and is measured using
the tax rates that have been enacted at the Statement of Financial Position
date.
Deferred tax is recognised on the liability method for all temporary
differences between the carrying amount of an asset or liability in the
Statement of Financial Position and its tax base at the Statement of Financial
Position date. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for all
deductible temporary differences, unused tax losses and unused tax credits to
the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised. Deferred tax is not recognised if the
temporary difference arises from goodwill or negative goodwill or from the
initial recognition of an asset or liability in a transaction which is not a
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled, based on the tax rates that have been enacted or substantively
enacted by the Statement of Financial Position date. The carrying amount of a
deferred tax asset is reviewed at each Statement of Financial Position date
and is reduced to the extent that it becomes probable that sufficient future
taxable profit will be available.
Deferred tax is recognised in the income statement, except when it arises from
atransaction which is recognised directly in equity, in which case the
deferred tax is also charged or credited directly in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred
tax is included in the resulting goodwill or negative goodwill.
7 Earnings per share
The basic earnings per share is calculated by dividing the profit in the six
month period ended 30 June 2023 of £1,056 (30 June 2022: profit of £338,842
and year ended 31 December 2022: profit of £23,857) attributable to owners of
the parent by the number of ordinary shares outstanding at 30 June 2023 of
106,298,780 (30 June 2022: 106,298,780 and 31 December 2022: 106,298,780).
The diluted earnings per share for the six month period ended 30 June 2023 is
calculated using the number of shares adjusted to assume the exercise of all
dilutive potential ordinary shares of 112,623,648- on 5 December 2014, the
Company granted share options of 10,600,000 shares at 2.5p to directors and
certain employees of the Group. Share options of 2,000,000 shares have lapsed
due to resignation of employees and no options have been exercised.
8. Reconciliation of profit before tax to cash generated from operations
Six months Six months Financial year
ended Ended ended
30 June 2023 30 June 2022 31 Dec 2022
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Profit before tax 5,914 522,561 278,978
Adjustments for:
Amortisation of intangible assets - 33,384 68,051
Amortisation of right-of-use assets 47,471 43,584 132,580
Bad debt written off - - 5,622
Depreciation of property, plant and equipment 127,350 132,115 282,260
Gain on disposal of property, plant & equipment (156) (8,090) (8,464)
Impairment loss on trade receivables - - 282,535
Impairment loss on others receivables - - 3,403
Impairment loss on goodwill - - 177,546
Interest expenses 116,414 63,501 137,143
Interest income (14,580) (11,221) (35,933)
Reversal on impairment loss on trade receivable - - (5,061)
Unrealised loss/(gain) on forex 2,707 - (22,279)
Operating profit before 285,120 775,834 1,296,381
working capital changes
(Increase)/Decrease in inventories 909,555 (43,552) (71,330)
(Increase)/Decrease in receivables (1,775,475) 150,139 474,252
Increase in amount due to Directors & - - (121,754)
Shareholder
Amount due to/by related company - 52,030 -
Decrease in payables (236,161) (1,139,837) (2,192,312)
Cash used in operations (816,961) (205,386) (614,763)
9. Contingent liabilities
In the period under review, corporate guarantees of RM27.0 million (£4.59
million) (H1 2022: RM27.0 million (£5.04 million) were given to a licensed
bank by the Company for credit facilities granted to a subsidiary company.
10. Significant accounting policies
The interim consolidated financial statements have been prepared applying the
same accounting policies that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 31 December
2022 except for the adoption of new and amended reporting standards, which are
effective for periods commencing on or after 1 January 2023. Various
amendments to standards and interpretations of standards are effective for
periods commencing on or after 1 January 2023 as detailed in the 2022 Annual
Report, none of which have any impact on reported results.
Amortisation of intangible assets
Software is amortised over its estimated useful life. Management estimated the
useful life of this asset to be within 10 years. Changes in the expected level
of usage and technological development could impact the economic useful life
therefore future amortisation could be revised.
The Group determines whether goodwill is impaired at least on an annual basis.
This requires an estimation of the value-in-use of the cash generating units
("CGU") to which goodwill is allocated. Estimating a value-in-use amount
requires management to make an estimation of the expected future cash flows
from the CGU and also to choose a suitable discount rate in order to calculate
the present value of those cash flows.
The research and development costs are amortised on a straight-line basis over
the life span of the developed assets. Management estimated the useful life of
these assets to be within 5 years. Changes in the technological developments
could impact the economic useful life and the residual values of these assets,
therefore future amortisation charges could be revised.
Impairment of goodwill on consolidation
The Group's cash flow projections include estimates of sales. However, if the
projected sales do not materialise there is a risk that the value of goodwill
would be impaired.
The Directors have carried out a detailed impairment review in respect of
goodwill. The Group assesses at each reporting date whether there is an
indication that an asset may be impaired, by considering cash flows forecasts.
The cash flow projections are based on the assumption that the Group can
realise projected sales. A prudent approach has been applied with no residual
value being factored. At the period end, based on these assumptions there was
no indication of impairment of the value of goodwill or of development costs.
Research and development costs
All research costs are recognised in the income statement as incurred.
Expenditure incurred on projects to develop new products is capitalised and
deferred only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale,
its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefits, the availability of resources to
complete the project and the ability to measure reliably the expenditure
during the development. Product development expenditures which do not meet
these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost
less any impairment losses and are amortised through other operating expenses
in the income statement using the straight-line basis over the commercial
lives of the underlying products not exceeding 5 years. Impairment is assessed
whenever there is an indication of impairment and the amortisation period and
method are also reviewed at least at each Statement of Financial Position
date.
11. Dividends
The Company has not proposed or declared an interim dividend.
*The disclosure for non-cash expenses has not been split according to the
different segments as the cost to obtain such information is excessive and
provides very little by way of information.
6. Taxation
Taxation on the income statement for the financial period comprises current
and deferred tax. Current tax is the expected amount of taxes payable in
respect of the taxable profit for the financial period and is measured using
the tax rates that have been enacted at the Statement of Financial Position
date.
Deferred tax is recognised on the liability method for all temporary
differences between the carrying amount of an asset or liability in the
Statement of Financial Position and its tax base at the Statement of Financial
Position date. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised for all
deductible temporary differences, unused tax losses and unused tax credits to
the extent that it is probable that future taxable profit will be available
against which the deductible temporary differences, unused tax losses and
unused tax credits can be utilised. Deferred tax is not recognised if the
temporary difference arises from goodwill or negative goodwill or from the
initial recognition of an asset or liability in a transaction which is not a
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the period when the asset is realised or the liability is
settled, based on the tax rates that have been enacted or substantively
enacted by the Statement of Financial Position date. The carrying amount of a
deferred tax asset is reviewed at each Statement of Financial Position date
and is reduced to the extent that it becomes probable that sufficient future
taxable profit will be available.
Deferred tax is recognised in the income statement, except when it arises from
a transaction which is recognised directly in equity, in which case the
deferred tax is also charged or credited directly in equity, or when it arises
from a business combination that is an acquisition, in which case the deferred
tax is included in the resulting goodwill or negative goodwill.
7
Earnings per share
The basic earnings per share is calculated by dividing the profit in the six
month period ended 30 June 2023 of £1,056 (30 June 2022: profit of £338,842
and year ended 31 December 2022: profit of £23,857) attributable to owners of
the parent by the number of ordinary shares outstanding at 30 June 2023 of
106,298,780 (30 June 2022: 106,298,780 and 31 December 2022: 106,298,780).
The diluted earnings per share for the six month period ended 30 June 2023 is
calculated using the number of shares adjusted to assume the exercise of all
dilutive potential ordinary shares of 112,623,648- on 5 December 2014, the
Company granted share options of 10,600,000 shares at 2.5p to directors and
certain employees of the Group. Share options of 2,000,000 shares have lapsed
due to resignation of employees and no options have been exercised.
8.
Reconciliation of profit before tax to cash generated from operations
Six months Six months Financial year
ended Ended ended
30 June 2023 30 June 2022 31 Dec 2022
Unaudited Unaudited Audited
£ £ £
Cash flow from operating activities
Profit before tax 5,914 522,561 278,978
Adjustments for:
Amortisation of intangible assets - 33,384 68,051
Amortisation of right-of-use assets 47,471 43,584 132,580
Bad debt written off - - 5,622
Depreciation of property, plant and equipment 127,350 132,115 282,260
Gain on disposal of property, plant & equipment (156) (8,090) (8,464)
Impairment loss on trade receivables - - 282,535
Impairment loss on others receivables - - 3,403
Impairment loss on goodwill - - 177,546
Interest expenses 116,414 63,501 137,143
Interest income (14,580) (11,221) (35,933)
Reversal on impairment loss on trade receivable - - (5,061)
Unrealised loss/(gain) on forex 2,707 - (22,279)
Operating profit before 285,120 775,834 1,296,381
working capital changes
(Increase)/Decrease in inventories 909,555 (43,552) (71,330)
(Increase)/Decrease in receivables (1,775,475) 150,139 474,252
Increase in amount due to Directors & - - (121,754)
Shareholder
Amount due to/by related company - 52,030 -
Decrease in payables (236,161) (1,139,837) (2,192,312)
Cash used in operations (816,961) (205,386) (614,763)
9.
Contingent liabilities
In the period under review, corporate guarantees of RM27.0 million (£4.59
million) (H1 2022: RM27.0 million (£5.04 million) were given to a licensed
bank by the Company for credit facilities granted to a subsidiary company.
10.
Significant accounting policies
The interim consolidated financial statements have been prepared applying the
same accounting policies that were applied in the preparation of the Company's
published consolidated financial statements for the year ended 31 December
2022 except for the adoption of new and amended reporting standards, which are
effective for periods commencing on or after 1 January 2023. Various
amendments to standards and interpretations of standards are effective for
periods commencing on or after 1 January 2023 as detailed in the 2022 Annual
Report, none of which have any impact on reported results.
Amortisation of intangible assets
Software is amortised over its estimated useful life. Management estimated the
useful life of this asset to be within 10 years. Changes in the expected level
of usage and technological development could impact the economic useful life
therefore future amortisation could be revised.
The Group determines whether goodwill is impaired at least on an annual basis.
This requires an estimation of the value-in-use of the cash generating units
("CGU") to which goodwill is allocated. Estimating a value-in-use amount
requires management to make an estimation of the expected future cash flows
from the CGU and also to choose a suitable discount rate in order to calculate
the present value of those cash flows.
The research and development costs are amortised on a straight-line basis over
the life span of the developed assets. Management estimated the useful life of
these assets to be within 5 years. Changes in the technological developments
could impact the economic useful life and the residual values of these assets,
therefore future amortisation charges could be revised.
Impairment of goodwill on consolidation
The Group's cash flow projections include estimates of sales. However, if the
projected sales do not materialise there is a risk that the value of goodwill
would be impaired.
The Directors have carried out a detailed impairment review in respect of
goodwill. The Group assesses at each reporting date whether there is an
indication that an asset may be impaired, by considering cash flows forecasts.
The cash flow projections are based on the assumption that the Group can
realise projected sales. A prudent approach has been applied with no residual
value being factored. At the period end, based on these assumptions there was
no indication of impairment of the value of goodwill or of development costs.
Research and development costs
All research costs are recognised in the income statement as incurred.
Expenditure incurred on projects to develop new products is capitalised and
deferred only when the Group can demonstrate the technical feasibility of
completing the intangible asset so that it will be available for use or sale,
its intention to complete and its ability to use or sell the asset, how the
asset will generate future economic benefits, the availability of resources to
complete the project and the ability to measure reliably the expenditure
during the development. Product development expenditures which do not meet
these criteria are expensed when incurred.
Development costs, considered to have finite useful lives, are stated at cost
less any impairment losses and are amortised through other operating expenses
in the income statement using the straight-line basis over the commercial
lives of the underlying products not exceeding 5 years. Impairment is assessed
whenever there is an indication of impairment and the amortisation period and
method are also reviewed at least at each Statement of Financial Position
date.
11.
Dividends
The Company has not proposed or declared an interim dividend.
12. Interim report
This interim financial statement will, in accordance with Rule 26 of the AIM
Rules for Companies, be available shortly on the Company's website at
www.mobilityone.com.my (http://www.mobilityone.com.my) .
-Ends-
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