REG - Mirada PLC - Final Results for the Year Ended 31 March 2019
11 July 2019
Mirada plc
("Mirada", the "Company" or the "Group")
Final Results for the Year Ended 31 March 2019
Mirada plc (AIM: MIRA), the leading audio-visual content interaction specialist, announces its final results for the year ended 31 March 2019.
Financial Highlights
· Revenue increase of 40% to $12.32 million (2018: $8.82 million)
· Substantial growth of 57% in subscriber-based licence fees to $4.05 million (2018: $2.58 million)
· Positive adjusted EBITDA (as defined in Note 7) of $0.81 million (2018: loss of $1.12 million)
· Gross profit increased to $11.47 million (2018: $7.94 million)
· Net loss reduced to $3.11 million (2018: loss of $4.87 million)
· Net debt reduced to $4.86 million (2018: $11.70 million)
Operational Highlights
· Successful mass-market deployment of Mirada's OTT product at Izzi Telecom for the 2018 FIFA World Cup.
· Deployment of Iris multiscreen licences over new segments of subscribers at Izzi Telecom to finally reach the milestone of two million STBs installed by March 2019.
· Contract win with Skytel in Mongolia in December 2018.
· First commercial deployment with ATN international, in Bermuda, in January 2019.
· Commercial deployment of Digital TV Cable Edmund in Bolivia in March 2019.
Jose Luis Vazquez, CEO of Mirada, commented:
"Mirada is increasing its market reach, with a growing healthy pipeline of opportunities as a result of the successful deployment, and a wide appraisal of, its Iris multiplatform product. We are considered to be a top-end solution for many potential customers, with a flexible model that allows audio-visual companies of any size to provide a competitive offering to their subscribers.
"Our financial position is continuously improving, reinforced by the support of our largest shareholder. Together these factors have led to an improved commercial performance with participation in multiple deals and, combined with our growing pipeline, provide confidence in our ability to secure more contract wins in the current year."
Annual Report and Accounts
The Company's Annual Report and Accounts will be available on the Company's website, www.mirada.tv.
Enquiries
Mirada plc
José Luis Vázquez, Chief Executive Officer
Gonzalo Babío, Chief Financial Officer
+44 (0) 207 868 2104
investors@mirada.tv
Newgate Communications
Bob Huxford
Tom Carnegie
Allenby Capital Limited
(AIM Nominated Adviser and Broker)
Jeremy Porter
Alex Brearley
Liz Kirchner
+44 (0) 207 680 6550
mirada@newgatecomms.com
+44 (0) 20 3328 5656
About Mirada
Mirada is a leading provider of products and services for Digital TV Operators and Broadcasters. Founded in 2000 and led by CEO José Luis Vázquez, the Company prides itself on having spent almost 20 years as a pioneer in the Digital TV market. Mirada's core focus is on the ever-growing demand for TV Everywhere for which it offers a complete suite of end-to-end modular products across multiple devices, all with innovative state-of-the-art UI designs.
Mirada's products and solutions, acclaimed for unparalleled flexibility and optimal time to market, have been deployed by some of the biggest names in digital media and broadcasting including Televisa, ATNI, Digital TV Cable Edmund, Skytel, Telefonica, Sky, Virgin Media, BBC, ITV and France Telecom. Headquartered in London, Mirada has commercial representation across Europe, Latin America and Southeast Asia and operates technology centres in the UK, Spain and Mexico. For more information, visit www.mirada.tv
Chief Executive Officer's Statement
Overview
I am pleased to present the Group's financial results for the year ended 31 March 2019. This was a transformational period for the Company, during which Mirada demonstrated its capabilities through the successful mass-market deployment of its Iris multiscreen technology in Mexico during the 2018 FIFA World Cup.
Mirada also continued its expansion with multiple new commercial deployments during the year, including two new Software as a Service (SaaS) customers, ATN international in Bermuda and Digital TV Cable Edmund in Bolivia. The Company also secured its first Iris customer in the Asian market with Skytel in Mongolia.
Mirada simultaneous coordination of multiple new deployments, while supporting a marked increase in growth within its existing customer based, demonstrated the significant advancement in the operational capabilities of the Group. Additionally, thanks to its improved sales and marketing teams, and due to the relevant references the Group has been able to secure, there has been a significant improvement in the sales pipeline anticipating a potential increase in the pace of new customer acquisition.
With the accumulation of successful deployments, the Company is also experiencing a substantial increase in both support and subscriber-based licence revenues, with a greater percentage of recurrent income providing much higher revenue visibility.
Trading Review
The Group operates two segments, being Digital TV and Broadcast ("Digital TV") and Mobile.
The Company is advancing its operational and commercial capabilities, demonstrated by Mirada's involvement in three simultaneous, significant deployments in the year. From an operational point of view, it has been the first time that Mirada has been involved in the roll-out of three simultaneous significant deployments.
Izzi Telecom in Mexico extended the Mirada Iris multiscreen technology to all its subscriber base during the 2018 World Cup, allowing them to watch the football matches over their mobile phones at times where they would not usually be at home. Mirada successfully responded to the challenge and it proved to be a great success, aided by Mexico's long run in the tournament. This has resulted in an ongoing increased usage of Mirada's OTT technology in Mexico. Additionally, Izzi Telecom chose to extend Mirada's technology to its middle tier subscribers, resulting in an increased rate of installation of Mirada licences, and therefore, improved subscriber-based licence fee revenues for Mirada during the year. In March 2019, Izzi Telecom surpassed the milestone of having 2 million set-top boxes installed with Mirada's technology. It is expected that Izzi will expand Mirada's technology to its remaining tiers in the future.
ATN International started deploying Mirada technology over its assets in the Caribbean and Bermuda during the year. The commercial phase began in January 2019, and the pace of adoption of the technology in the region is on track with Mirada's expectations. This is Mirada's first SaaS model deployment, and recurrent revenues from this customer will start to have a financial impact during the present fiscal year.
The third significant deployment during the year under review was with Digital TV Edmund in Bolivia. This is also a SaaS model deployment with the commercial phase starting in late March 2019. Long term recurring revenues from this contract are also expected to impact our financial performance in the coming year and there is potential for ongoing deployment of new features and services. A gradual roll out is planned over five years, with a target of up to nearly one million devices.
Mirada has also been able to extend its product reach to accommodate the demands of the market. The "Bring-Your-Own-Device" (BYOD) market trend is increasingly being adopted by our customers, meaning that the consumption of the audiovisual content is being extended to other devices like mobile phones, tablets, gaming consoles and smart TVs. Mirada anticipated this trend with the launch of its OTT product in 2015 and is now able to provide its services over all these devices, with the recent announcement of our software for Roku and Xbox. The set-top box market is also evolving with the extended adoption of Android TV technology over traditional pure Linux-based middleware. We are happy to announce that we are now able to provide our services over the latest version of the Android TV operator tier, with an advanced Custom Launcher that perfectly matches our Inspire user experience over these new devices.
On the commercial side, the Group has continued to improve its marketing and sales efforts, with the successful extension of our customer reach to the Asian market. The contract win in December 2018 with Skytel in Mongolia marks the first deployment of our Iris technology in the Asian market, and we expect to follow this announcement with other deals in the future. The pipeline has substantially increased, with the number of deals in which we are participating nearly doubling during the year. This increase in the pipeline can in part be attributed to the many successful deployments of our technology, which demonstrate the quality of our offering and ability to manage substantial projects. This is especially evident of our successful deployment with Televisa Group across Mexico. Our product range comprises the vast majority of the needs of our potential customers, and their feedback is that we match other top-range solutions in the market.
Regarding our non-core cashless payment parking division, Mirada Connect, we are happy to have been able to nurture a successful company, which has been able to gain a powerful presence in its market. On 31 March 2019 the audited accounts showed a turnover for the year of £0.63 million (2018: £0.66 million), net profits of £0.12 million (2018: £0.12 million) and was valued at £0.56 million on the Company's balance sheet at that date. The Connect division was clearly not related to our core activities, and we were happy to receive offers for the divestment of this unit. Post year-end, on 5th July 2019, we announced the sale of this division to PayByPhone, a competitor owned by the Volkswagen Financial Services group, for a consideration of £2.12 million in cash. This generated a profit on disposal of $1.75 million. We believe this transaction is very beneficial for all parties involved, and we wish the Connect team the best for the future.
Looking ahead to Brexit and considering mitigation plans in order to reduce the potential negative impact on the Company's operational activity and Financial Statements, the Board has decided to close its Exeter office. This closure may result in redundancies and a process is underway at the current time. The closure of the Company's Exeter office is expected to take effect in September 2019.
The growth experienced this year at all levels result from the continued deployment of a business plan based on securing profitable deals with an increased focus on recurrent revenues and a belief that a superior product and customer service is the cornerstone of every successful company. The Board believes that the Company is rapidly approaching a point of sustained profitability. We are committed to this plan, and we couldn't make it possible without the continued support of our employees, customers, suppliers, partners and investors, to whom we express our gratitude.
Financial overview
Revenue grew to $12.32 million (2018: $8.82 million), a 40% year-on-year increase. Growth in revenues on development was $2.1 million to reach $6.51 million for the year, driven by the new projects won. Subscriber-based licence fees grew by $1.5 million to reach $4.05 million for the year, mainly due to the introduction of our Iris product into new customer tiers at Izzi Telecom.
Gross profit grew to $11.46 million (2018: $7.94 million), leading to an operating loss of $2.91 million (2018: $4.62 million). Amortisation charges increased to $3.58 million from $3.35 million, in line with prior years' increase in product investment. Staff Costs increased by $1.65 million to $ 7.25 million (2018: $5.6 million). This is due to the growth of the development team during the year. As a result, the net impact was a reduction of the net loss for the year to $3.11 million (2018: loss of $4.87 million). The improvement on revenues led to an Adjusted EBITDA (as defined in Note 7) profit of $0.81 million (2018: loss of $1.12 million), mainly driven by the licence revenue increase. There is a tax credit recognised in the current period of $0.18 million (2018: $0.30) as a result of Mirada Iberia's research and innovation tax deductions.
Net Debt was reduced to $4.86 million (2018: $11.70 million). Long term interest-bearing loans and borrowings decreased by 31% to $1.72 million (2018: $2.48 million) and short term borrowings and related party loans and interest decreased to $3.26 million (2018: $11.16 million). See note 18 for further details. Trade receivables increased from $1.38 million to $1.89 million, due to increased revenues and activity at the end of the fiscal year. The Company settled a related party debt facility of £1.7 million in August 2018, and another related party facility of £3.0 million in October 2018, which were converted into capital on 29 August 2018 and 4 October 2018 respectively, alongside an additional capital injection of £3.0 million. Both the facilities and the capital injection were subject to shareholder approval in August 2018 and October 2018.
Other intangible assets have decreased by $1.22 million mainly due to the decreased valuation of the Euro against the US Dollar and due to the difference between amortisation and addition of intangible assets.
The Group used $1.24 million of cash in operating activities in the year (2018: cash used in operating activities of $1.7 million) and spent a further $3.1 million (2018: $3.9 million) in investing activities, mainly due to variations in the working capital position at the end of the period and investment in development costs.
The operating and investing cash flows were partially funded by the movement in net debt explained above. Therefore, resulting in a fall in cash and cash equivalents of $1.82 million.
The Company has adopted the new accounting standards with effect from 1 April 2018:
IFRS 9- Financial instruments
IFRS 15- Revenue from contracts with customers
IFRS 9 - Financial instruments has replaced IAS 39 Financial Instruments: Recognition and Measurement and has not had a material effect on the Company. Therefore, impairment provision on financial assets measured at amortised cost (such as trade and other receivables) has been calculated in accordance with IFRS 9's expected credit loss model. The Group did not identify significant changes in its consolidated financial statements due to applying the classification and measurement requirements of IFRS 9, because the Group only has assets that are categorised as amortised cost and the application of expected credit loss has not had a material impact to the impairment provision because all trade receivables balances have been collected before 9 July 2019. Since the impact on the Group was immaterial, the Group has chosen not to restate prior year comparatives on adoption of IFRS 9.
IFRS 15 - Revenue from customer contracts has replaced IAS 18 Revenue and IAS 11 Construction Contracts as well as various interpretations previously issued by the IFRS Interpretations Committee. The Company adopted IFRS 15 using the cumulative effect method applied to those contracts which were not completed as of 1 April 2018. The impact of the new standard was a $0.38 million positive adjustment as shown in the Consolidated Statement of Changes in Equity.
See note 3 to the financial statements for further information on the new IFRS standards.
Current Trading and Outlook
Mirada is focused on the Digital TV segment and is increasing its market reach, with a growing healthy pipeline of opportunities as a result of the successful deployment and a wide appraisal of its Iris multi-platform product. The Company is now considered to be a top-end solution for potential customers, with a flexible model that allows audiovisual companies of any size to provide a competitive offering for their subscribers.
Mirada's financial position is continuously improving, reinforced by the support of its largest shareholder. Together these factors have left to an improved commercial performance, with participation in multiple deals and, combined with the growing pipeline, provide confidences in the Company's ability to secure more contract wins in the current years.
José-Luis Vázquez
Chief Executive Officer
10th July 2019
Mirada plc
Consolidated Statement of Comprehensive Income at 31 March 2019
Note
2019
2018
$000
$000
Revenue
5
12,322
8,816
Cost of sales
(857)
(874)
Gross profit
11,465
7,942
Depreciation
(80)
(73)
Amortisation
(3,578)
(3,352)
Share-based payment charge
(70)
(72)
Staff costs
(7,249)
(5,599)
Other administrative expenses
(3,402)
(3,464)
Total administrative expenses
(14,379)
(12,560)
Operating loss
(2,914)
(4,618)
Finance income
141
84
Finance expense
(523)
(634)
Loss before taxation
(3,296)
(5,168)
Taxation
184
298
Loss for year
(3,112)
(4,870)
Other comprehensive income for the period
Amounts that will or may be reclassified to the profit or loss
Forex on translation of foreign operations
(565)
999
Total comprehensive loss for the period
(3,677)
(3,871)
Loss per share
Year ended 31 March 2019
Year ended 31 March 2018
$
$
Loss per share for the year
- basic & diluted
(0.006)
(0.035)
Mirada plc
Consolidated Statement of Financial Position as at 31 March 2019
Company number 3609752
2019
2018
$000
$000
Goodwill
5,924
6,492
Other Intangible assets
5,855
7,072
Property, plant and equipment
222
247
Other Receivables
398
308
Non-current assets
12,399
14,119
Trade & other receivables
5,421
4,484
Cash and cash equivalents
117
1,937
Current assets
5,538
6,421
Total assets
17,937
20,540
Loans and borrowings
(3,257)
(4,246)
Related parties loans and interests
-
(6,917)
Trade and other payables
(1,958)
(2,320)
Contract liabilities
(1,019)
(1,360)
Current liabilities
(6,234)
(14,843)
Net current liabilities
(696)
(8,422)
Total assets less current liabilities
11,703
5,697
Interest bearing loans and borrowings
(1,721)
(2,477)
Non-current liabilities
(1,721)
(2,477)
Total liabilities
(7,955)
(17,320)
Net assets
9,982
3,220
Issued share capital and reserves attributable to equity holders of the company
Share capital
12,015
2,261
Share premium
15,995
15,760
Other reserves
15,398
15,985
Accumulated loss
(33,426)
(30,786)
Equity
9,982
3,220
Mirada plc
Consolidated Statement of changes in equity for the year ended 31 March 2019
Share capital
Share premium
Foreign exchange reserve
Merger reserves
Accumulated
lossesTotal
$000
$000
$000
$000
$000
$000
Balance at 1 April 2018
2,261
15,760
11,122
4,863
(30,786)
3,220
Prior Year Adjustment-IFRS 15 (Note 2)
-
-
-
-
380
380
Loss for the year
-
-
-
-
(3,112)
(3,112)
Other comprehensive income
Movement in foreign exchange
-
-
(587)
-
22
(565)
Total comprehensive loss for the year
2,261
15,760
10,535
4,863
(33,496)
(77)
Transactions with owners
Share-based payment
-
-
-
-
70
70
Conversion of convertible loans into shares
5,858
235
-
-
-
6,093
Issue of shares
3,896
-
-
-
-
3,896
Balance at 31 Mar 2019
12,015
15,995
10,535
4,863
(33,426)
9,982
Share capital
Share premium
Foreign exchange reserve
Merger reserves
Accumulated
lossesTotal
$000
$000
$000
$000
$000
$000
Balance at 1 April 2017
2,261
15,760
10,134
4,863
(25,930)
7,088
Loss for the year
-
-
-
-
(4,870)
(4,870)
Other comprehensive income
Movement in foreign exchange
-
-
988
-
11
999
Total comprehensive loss for the year
2,261
15,760
11,122
4,863
(30,789)
3,217
Transactions with owners
Share-based payment
-
-
-
-
3
3
Balance at 31 March 2018
2,261
15,760
11,122
4,863
(30,786)
3,220
Mirada plc
Consolidated statement of cash flows for the year ended 31 March 2019
2019
2018
$000
$000
Cash flows from operating activities
Loss after tax
(3,112)
(4,870)
Adjustments for:
Depreciation of property, plant and equipment
80
73
Amortisation of intangible assets
3,578
3,352
Share-based payment charge
70
72
Finance income
(141)
(84)
Finance expense
523
634
Taxation
(184)
(298)
Operating cash flows before movements in working capital
814
(1,121)
Increase in trade and other receivables
(1,654)
(1,608)
(Decrease)/Increase in trade and other payables
(703)
453
Taxation received
307
540
Net cash used in operating activities
(1,236)
(1,736)
Cash flows from investing activities
Interest and similar income received
141
84
Purchases of property, plant and equipment
(80)
(161)
Purchases of other intangible assets
(3,127)
(3,780)
Net cash used in investing activities
(3,066)
(3,857)
Cash flows from financing activities
Interest and similar expenses paid
(523)
(634)
Conversion of convertible loans into shares
3,896
-
Loans received
1,201
3,020
Related parties loans received
-
6,588
Repayment of loans
(2,150)
(1,827)
Net cash from financing activities
2,424
7,147
Net increase in cash and cash equivalents
(1,878)
1,554
Cash and cash equivalents at the beginning of the period
1,937
277
Exchange losses on cash and cash equivalents
58
106
Cash and cash equivalents at the end of the year
117
1,937
Mirada plc
Notes to financial statements Year ended 31 March 2019
The following selected notes are extracted from the full Annual Report
1. General information
Mirada plc is a company incorporated in the United Kingdom. The address of the registered office is 68 Lombard Street, London, EC3V 9LJ. The nature of the Group's operations and its principal activities are the provision and support of products and services in the Digital TV and Broadcast markets.
In accordance with section 435 of the Companies Act 2006, the Directors advise that the financial information set out in this announcement does not constitute the Group's statutory financial statements for the year ended 31 March 2018 or 2019 but is derived from them. The financial statements for the year ended 31 March 2018 have been audited and filed with the Registrar of Companies. The financial statements for the year ended 31 March 2019 have been audited and will be filed with the Registrar of Companies following the Company's Annual General Meeting. The Independent Auditors Report on the Group's statutory financial statements for the years ended 31 March 2019 and 2018 were unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.
The financial information included in this announcement has been prepared in accordance with the recognition and measurement requirements of International Financial Repeating Standards as adopted for use in the EU but does not include all of the disclosures required by those standards. The accounting policies used in the preparation of the financial information are consistent with those used in the group's financial statements for the year ended 31 March 2019 and are unchanged from those set out in the financial statements for the period ended 31 March 2018, except for the implementation of the new IFRS 9 and IFRS 15 as described in Note 2.
2. Changes in accounting policies
Adoption of new and revised standards effective from 1 April 2018
IFRS 9 - Financial Instrument
IFRS 9 - Financial instruments has replaced IAS 39 Financial Instruments: Recognition and Measurement and has not had a material effect on the Company:
The impairment provision on financial assets measured at amortised cost (such as trade and other receivables) has been calculated in accordance with IFRS 9's expected credit loss model.
The Group did not identify significant changes in its consolidated financial statements due to applying the classification and measurement requirements of IFRS 9.
The Group has set up an analysis regarding expected credit losses. Since all Trade Receivables balances have been collected before 9 July 2019, it has been concluded that the impact of the new standard on the Group was immaterial.
The Group has chosen not to restate comparatives on adoption of IFRS 9.
IFRS 15 - Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. Under IFRS 15, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control - at a point in time or over time - requires judgement.
The Group has applied IFRS 15 using the cumulative effect method to those contracts which are not completed as of 1 April 2018, with the effect of initially applying this standard recognized at the date of initial application. Accordingly, the comparative information is not restated.
The impact of the new standard was $0.38 million as shown in the Consolidated Statement of Changes in Equity. The following table summarises the impact, net of tax, of transition to IFRS 15 on retained earnings at 1 April 2018:
1 April of 2018
Assets
Total Assets
-
Equity
Retained earnings
380
Total Equity
380
Liabilities
Contract liabilities
(380)
Total Liabilities
(380)
Total equity and liabilities
-
The impact of adoption on the main revenue streams is:
• Contracts with customers in respect of Development: The Group has determined the incurred works are specific to the customer and cannot be used on alternative contracts. In addition, Mirada has the right to payment for all incurred works. Accordingly, the revenue is recognised over the time of the contract.
• Contracts with customers in respect of the parking transactions: Under IFRS 15, revenue is recognised in the same month as the end user has used the cashless parking services. Since there are not differences between the revenue recognition in accordance with IFRS 15 and IAS 18, there has not been any impact of IFRS 15 application on this revenue stream.
• Contracts with customers in respect of licences are recognised as per the number of STBs or Households (depending on contracts) where the Mirada Software is installed. Licences cover the right of use of the software in the initial conditions without any right to modify it. None of the contracts have an end or termination date. Typically, once you sign a contract, you keep using the software for many years. Revenue is recognised at a point in time. The impact of the new standard was $0.38 million as shown in the Consolidated Statement of Changes in Equity.
• Contracts with customers in respect of managed services continue to be recognised monthly along the duration of the contracts. Therefore IFRS 15 has not had any impact on this revenue stream. In some cases, these outsourcing services can be carried out by a different company.
Invoices are due within 30 days, according to contractual terms. Sometimes the payments received from customers at each balance sheet date do not necessarily coincide with the amount of revenue recognised under the contracts. The assets and liabilities of the contracts are included in Accrued Income and Deferred Income, respectively (see note 5).
The Company has applied the practical expedient. Therefore, no information is provided about remaining performance obligation at 31 March 2019 as Mirada has a right to payments for all incurred works.
New Standards, interpretations and amendments not yet effective
The following standard has been issued by the IASB and has been adopted by the EU:
IFRS 16- Leases (Applicable from 1 April 2019)
The Group is required to adopt IFRS 16 Leases from 1 April 2019. IFRS 16 replaces existing leases guidance, including IAS 17 Leases. The Group has assessed the estimated impact that initial application of IFRS 16 will have on its consolidated financial statements, as described below.
IFRS 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments.
In this respect, the Group will recognise new assets and liabilities for its operating leases. The nature of expenses related to those leases will now change because the Group will recognise a depreciation charge for right-of-use assets and interest expense on lease liabilities.
Previously, the Group recognised operating lease expense on a straight-line basis over the term of the lease, and recognised assets and liabilities only to the extent that there was a timing difference between actual lease payments and the expense recognised.
The Group is applying the modified retrospective transition method under which comparative information will not be restated and has elected to use the following practical expedients permitted by the standard:
- on initial application, IFRS 16 will be only been applied to contracts that were previously classified as leases;
- lease contracts with a duration of less than 12 months, and/or leases for which the underlined asset is of low value, will continue to be expensed to the income statement on a straight-line basis over the lease term;
- the lease term has been determined with the use of hindsight where the contract contains options to extend the lease.
The adoption of the standard will result in replacing the existing operating lease expenses, within administrative expenses, with interest and depreciation expenses. Therefore, it is likely to result in an increase in EBITDA.
The Group is in the early stages of assessing the potential impact of adopting this standard. The new accounting policies are subject to change until the Group presents its first financial statements in fiscal year 2020 that include the date of initial application.
The adoption of other amendments and interpretations are likely to not have a material impact on the financial statements of the Group and Company.
3. Significant accounting policies
Basis of accounting
These Group financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations issued by the International Accounting Standards Board as adopted by European Union ("IFRSs") and with those parts of the Companies Act 2006 applicable to companies preparing their accounts under IFRSs.
Going concern
These financial statements have been prepared on the going concern basis. The Directors have reviewed the Company and Group's going concern position taking account of its current business activities, budgeted performance and the factors likely to affect its future development, which are set out in this Annual report, and include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives and its exposure to credit and liquidity risks.
As at 31 March 2019, the Group had cash and cash equivalents of $0.12m (2018: $1.94m), net cash used in operating activities of $1.24m (2018: net cash used in operating activities $1.74m), realised a loss for the year of $3.07m, (2018: a loss of $4.87m), net current liabilities of $0.66m (2018: net current liabilities of $8.42m) and had net assets of $10.02m (2018: $3.22m).
The directors have prepared cash flow forecasts covering a period of at least 12 months from the date of approval of the financial statements. If the forecast is achieved, the Group will be able to operate within its existing facilities. However, the time to close new customers and the value of each customer, which are deemed high volume and low value in nature are factors which constrain the ability to accurately predict revenue performance. Furthermore, investment in winning customers, via marketing expenditure, and servicing and delivering to new customers remains an important function of the forecasts too. As such, there is a risk that the group's working capital may prove insufficient to cover both operating activities and the repayment of its debt facilities. In such circumstances, the group would be obliged to seek additional funding though a placement of shares or source other funding. The directors have had a history of raising financing from similar transactions.
The directors have concluded that the circumstances set forth above enable the Company and Group to continue as a going concern for the foreseeable future. The financial statements do not include the adjustments that would be required if the Company and the Group were unable to continue as a going concern.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to 31 March 2019.
Where the company has control over an investee, it is classified as a subsidiary. The company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
Revenue recognition
The Group has applied IFRS 15 from 1 April 2018. For further information about the application of this standard see Note 2.
Interactive service revenues are divided into 5 types: development fees, the sale of licences, SaaS, managed services and self-billing revenues.
1. Revenues from development fees (which include set-up fees): these are recognised according to management's estimation of the stage of completion of the project. This is measured by reference to the amount of development time spent on a project compared to the most up to date calculation of the total time estimated to complete the project in full.
Since the Group has determinate the works incurred are specific to the customer and cannot be used on alternative contracts and Mirada has right to payment for all incurred works, the revenue is recognised over the time
2. Sale of licence: Revenue from licences are earned from two specific and separate streams.
i) Where the revenue relates to the sale of a one-off licence, the licence element of the sale is recognised as income when the following conditions have been satisfied:
· The software has been provided to the customer in a form that enables the customer to utilise it;
· The ongoing obligations of the Group to the customer are minimal; and
· The amount payable by the customer is determinable and there is a reasonable expectation of payment.
The performance obligation included in this type of contract is to provide initially licence and key to access.
ii) Contract licence fees payable by customers are dependent upon the number of end user subscribers signing up to the customer's digital television service, purchased Set Top Boxes or active devices. Licences cover the right of use of the software in the initial conditions without any right to modify it. None of the contracts have an end or termination date. Typically, once you sign a contract, you keep using the software for many years.
For this type of contract, revenues are recognised by multiplying the individual licence fee by the net increase in the customer's subscriber base, purchased Set Top Boxes or active devices.
The Group promises to grant a licence that provides a customer with a right to use and obtain substantially all the benefits from the licence. As a consequence of this, the recognition of the revenue is at a point in time at which the licence is granted.
3. Some of the licence software are under Software as a Service model (SaaS). Under this model, lower integration set up fees than in other agreements are offset by recurrent monthly licence fee revenues. Revenue for SaaS arrangements are recognised over the period of the arrangement to reflect the ongoing service provider.
4. Managed services - revenue is measured on a straight line basis over the length of the contract.
5. Transactions revenues: These are earned through a revenue-share agreement between Mirada and the customers which is presented in the Mobile segment. The Group are informed by the customer of the amount of revenue to invoice and the revenues are recognised at a point in time in the period these services are provided.
Where agreements involve multiple obligations, the entire fee from such arrangements is allocated to each of the individual obligations based on each obligation's fair value. The revenue in respect of each element is recognised in accordance with the above policies.
Certain revenues earned by the Group are invoiced in advance. As outlined in the revenue recognition policy above, revenues are recognised in the period in which the Group provides the services to the customer, revenues relating to services which have yet to be provided to the customer are deferred.
Business combinations
Acquisitions of businesses are accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued or to be issued, by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost and is accounted for according to the policy below.
Goodwill
Goodwill represents the excess of the cost of acquisition over the Group's interest in the fair value of the identifiable assets and liabilities of the acquired business at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
For the purpose of impairment testing, goodwill is allocated to each of the Group's cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
Other intangible assets
Intangible assets acquired as part of a business combination are initially recognised at their fair value and subsequently amortised on a straight line basis over their useful economic lives. Intangible assets that meet the recognition criteria of IAS 38, "Intangible Assets" are capitalised and carried at cost less amortisation and any impairment losses. Intangible assets comprise of completed technology, acquired software, capitalised development costs and goodwill.
Amortisation of other intangible assets is calculated over the following periods on a straight-line basis:
Completed technology - over a useful life of 4 years
Deferred development costs - over a useful life of 3 to 4 years
The amortisation is charged to administrative expenses in the consolidated income statement. Completed technology relates to software and other technology related intangible assets acquired by the Group from a third party. Deferred development costs are internally-generated intangible assets arising from work completed by the Group's product development team.
Internally-generated intangible assets - research and development expenditure
Any internally-generated intangible asset arising from the Group's development projects are recognised only if all of the following conditions are met:
· The technical feasibility of completing the intangible asset so that it will be available for use or sale.
· The intention to complete the intangible asset and use or sell it.
· The ability to use or sell the intangible asset.
· How the intangible asset will generate probable future economic benefits. Among other things, the Group can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
· The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset.
· Its ability to measure reliably the expenditure attributable to the intangible asset during its development.
If a development project has been abandoned, then any unamortised balance is immediately written off to the income statement. Where no internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred. The amortisation is charged to administrative expenses in the consolidated statement of comprehensive income.
Impairment of non-current assets excluding deferred tax assets
At each reporting date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the impairment of intangible assets line in the consolidated statement of comprehensive income as an expense immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior periods. A reversal of an impairment loss is recognised as income immediately.
Goodwill impairments are not reversed.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Depreciation is provided on all property, plant and equipment, other than freehold land, at rates calculated to write off the cost, less estimated residual value based on current prices, of each asset evenly over its expected useful life, as follows:
- Office & computer equipment 33.3% per annum
- Short-leasehold improvements 10% per annum
The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate the carrying value may not be recoverable. The asset's residual values, useful lives and methods are reviewed, and adjusted if appropriate, at each financial period end.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's statement of financial position at fair value when the Group becomes a party to the contractual provisions of the instrument.
Trade receivables
Trade receivables represent amounts due from customers in the normal course of business.
The group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables and contract assets. During this process the probability of non-payment of a trade receivable balance is assessed and multiplied by an expected amount of credit loss as a result of the likely credit default. The group has set up a matrix using the age a debtor is overdue and any likely events as a criteria to determine the default probability. This uses 5 categories ranging from 0% to 90% probability.
The Group only have assets that are categorised as amortised cost and the application of ECL has not had a material impact to the impairment provision because all trade receivables balances have been collected before the reporting date. As a conclusion, the impact of the IFRS 9 on the Group was immaterial.
Cash and cash equivalents
Cash and cash equivalents include cash at hand and deposits held at call with banks with original maturities of three months or less, net of bank overdrafts.
Financial liabilities and equity instruments
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the definition of a financial liability. The Group's ordinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price over the par value is recorded in the share premium reserve.
Incremental external costs directly attributable to the issue of new shares (other than in connection with a business combination) are recorded in equity as a deduction, net of tax, to the share premium reserve.
Bank Borrowings
Interest-bearing bank loans are initially recorded at fair value less direct issue costs. Finance charges are accounted for on an accruals basis in the income statement using the effective interest rate method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Invoice discounting
The Group has an invoice discounting facility secured on the trade debtors. Liabilities under this arrangement are shown in borrowings.
Trade payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.
Employee share incentive plans
The Group issues equity-settled share-based payments to certain employees (including directors). These payments are measured at fair value at the date of grant by use of the Black-Scholes pricing model. This fair value cost of equity-settled awards is recognised on a straight-line basis over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of any non market-based vesting conditions. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations. A corresponding credit is recorded in equity in the retained earnings.
Leases
Leases taken by the Group are assessed individually as to whether they are finance leases or operating leases. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Operating lease rental payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term. The benefit of lease incentives is spread over the term of the lease.
Taxation
The tax expense represents the sum of the current tax and deferred tax charges.
The tax currently payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Research and development tax credit
Companies within the group may be entitled to claim special tax allowances in relation to qualifying research and development expenditure (e.g. R&D tax credits). The group accounts for such allowances as tax credits and recognise them when it is probable that the benefit will flow to the group and that benefit can be reliably measured. R&D tax credits reduce current tax expense and, to the extent the amounts due in respect of them are not settled by the balance sheet date, reduce current tax payable.
Retirement benefit costs
The Group operates defined contribution pension schemes. The amount charged to the statement of comprehensive income in respect of pension costs and other post-retirement benefits is the contributions payable in the period.
Differences between contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the statement of financial position.
Foreign exchange
The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the result and the financial position of each group company are expressed in US Dollars, which is the presentational currency for the consolidated financial statements.
On translation of balances into the functional currency of the entity in which they are held, exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used.
Exchange differences arising on translating the opening statement of financial position and the current year income statements are classified as equity and transferred to the Group's foreign exchange reserve. Such translation differences are recognised as income or an expense in the period in which the operations is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. The Group has elected to treat goodwill and fair value adjustments arising on acquisitions before the date of transition to IFRS as sterling denominated assets and liabilities.
4. Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group's accounting policies
In the application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Key sources of estimation uncertainty and judgements
The following are the critical judgements and estimates that the directors have made in the process of applying the Group's accounting policies that has the most significant effect on the amounts recognised in the financial statements.
Presenting financial information in USD
The reporting currency is US Dollar due to the growing exposure to the US Dollar, as all major contracts and most of the new potential deals for the Company are denominated in this currency. The board therefore believes that USD financial reporting provides the best presentation of the group's financial position, funding and treasury functions, financial performance and its cash flows. Coupled with the evolution of the business, the group's shareholder base is now largely comprised of investors to whom financial reporting in GBP is of limited relevance. Internally, the board also bases its performance evaluation and many investment decisions on USD financial information.
Impairment of goodwill and intangibles
Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating units and the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the cash-generating unit. This includes the directors' best estimate on the likelihood of current deals in negotiation not yet concluded. Consequently, the outcome of negotiations may vary materially from management expectation.
Capitalised development costs
Any internally generated intangible asset arising from the Group's development projects are recognised only once all the conditions set out in the accounting policy Internally Generated Intangible Assets (refer to note 2) are met. The amortisation period of capitalised development costs is determined by reference to the expected flow of revenues from the product based on historical experience. Furthermore, the Group reviews, at the end of each financial year, the capitalised development costs for each product for indications of any loss of value compared to net book value at that time. This review is based on expected future contribution less the total expected costs.
The Group capitalises spend on development of new software and the delivery of innovative software. Management exercises judgement in establishing both the technical feasibility of completing an intangible asset which can be sold, and the degree of certainty that a market exists for the asset, or its output, based on feedback from existing and potential customers, for the generation of future economic benefits. In addition, amortisation rates are based on estimates of the useful economic lives and residual values of the assets involved.
5. Revenue from contracts with customers
Disaggregation of revenue
Year to 31 March 2019
Development
Transactions
Licenses
Managed services
Total
$000
$000
$000
$000
$000
Mexico
5,065
-
3,964
769
9,798
Europe
381
833
73
159
1,446
Other Americas
913
-
17
-
930
Asia
148
-
-
-
148
6,507
833
4,054
928
12,322
Revenue recognised over a period
6,182
-
-
928
7,110
Revenue recognised at a point in time
325
833
4,054
-
5,212
6,507
833
4,054
928
12,322
Year to 31 March 2018
$000
$000
$000
$000
$000
Mexico
2,131
-
2,542
793
5,466
Europe
892
878
39
201
2,010
Other Americas
1,267
-
-
-
1,267
Asia
73
-
-
-
73
4,363
878
2,581
994
8,816
Revenue recognised over a period
4,243
-
-
994
5,237
Revenue recognised at a point in time
120
878
2,581
-
3,579
4,363
878
2,581
994
8,816
Contract balances
The following table provides information about contract assets (included as accrued income) and contract liabilities (included as deferred income) from contracts with customers:
31 March 2019
31 March 2018
$000
$000
Contract assets (accrued income)
1,891
989
Contracts liabilities (deferred income)
1,019
1,360
2,910
2,349
The movement in the contract assets and liabilities during the year is set out below:
Contract assets
31 March 2019
31 March 2018
$'000
$'000
At 1 April
989
446
Transfers in the period from contract assets to trade receivables
(989)
(446)
Excess of revenue recognised over cash (or rights to cash)
1,891
989
recognised during the period
At 31 March
1,891
989
Contract liabilities
31 March 2019 31 March 2018
$'000
$'000
At 1 April
1,360
1,844
Amounts included in contract liabilities recognised
(1,360)
(1,844)
as revenue in the period
Cash received in advance of performance and not recognised
1,019
1,360
as revenue during the period
At 31 March
1,019
1,360
Contract assets ('accrued income') and contract liabilities ('deferred income') are included within 'Trade and other receivables' and 'deferred income' respectively on the face of the Statement of Financial Position. They arise from the Group's revenue contracts, where work has been performed in advance of invoicing customers, and where revenue is received in advance of work performed. Cumulatively, payments received from customers at each balance sheet date do not necessarily equate to the amount of revenue recognised on the contracts.
6. Segmental reporting
Reportable segments
The chief operating decision maker for the Group is ultimately the board of directors. For financial and operational management, the board considers the Group to be organised into two operating divisions based upon the varying products and services provided by the Group - Digital TV & Broadcast and Mobile. The products and services provided by each of these divisions are described in the Strategic Report. The segment headed other relates to corporate overheads, assets and liabilities.
Segmental results for the year ended 31 March 2019 are as follows:
Digital TV & Broadcast
Mobile
Other
Group
$000
$000
$000
$000
Revenue
11,490
832
-
12,322
Segmental profit/(loss)
1,905
171
(1,262)
814
(Adjusted EBITDA, see note 7)
Finance income
-
-
141
141
Finance expense
-
-
(523)
(523)
Depreciation
(70)
(10)
-
(80)
Amortisation
(3,578)
-
-
(3,578)
Share-based payment charge
-
-
(70)
(70)
Profit / (Loss) before taxation
(1,743)
161
(1,714)
(3,296)
$0.100 million (2018: $1.228 million) disclosed as "Other" comprises employment, legal, accounting and other central administrative costs incurred at a Mirada Plc level.
The segmental results for the year ended 31 March 2018 are as follows:
Digital TV & Broadcast
Mobile
Other
Group
$000
$000
$000
$000
Revenue -
7,938
878
-
8,816
Segmental profit/(loss)
(102)
209
(1,228)
(1,121)
(Adjusted EBITDA, see note 7)
Finance income
-
-
84
84
Finance expense
-
-
(634)
(634)
Depreciation
(63)
(10)
-
(73)
Amortisation
(3,352)
-
-
(3,352)
Share-based payment charge
-
-
(72)
(72)
Profit / (Loss) before taxation
(3,517)
199
(1,850)
(5,168)
There is no material inter-segment revenue.
The Group has a major customer in the Digital TV and Broadcast segment that generates revenues amounting to 10% or more of total revenue that account for $9.7 million of $12.4m total revenue. This is approximately 78% of all revenue (2018: $5.2 million, out of $8.8m) of the total Group revenues.
Segment assets and liabilities are reconciled to the Group's assets and liabilities as follows:
Assets 2019
Liabilities 2019
Assets 2018
Liabilities 2018
$000
$000
$000
$000
Digital TV - Broadcast & Mobile
11,360
7,675
13,807
9,664
Other:
Goodwill
5,924
-
6,492
-
Other financial assets & liabilities
653
279
241
7,656
Total other
6,577
279
6,733
7,656
Total Group assets and liabilities
17,937
7,954
20,540
17,320
Assets allocated to a segment consist primarily of operating assets such as property, plant and equipment, intangible assets, goodwill and receivables.
Liabilities allocated to a segment comprise primarily trade payables and other operating liabilities.
Geographical disclosures
External revenue by location of customer
Total assets by
location of assets
2019
2018
2019
2018
$000
$000
$000
$000
Mexico
9,799
5,466
23
6
Europe
1,445
2,010
17,914
20,534
Other Americas
930
1,267
-
-
Asia
148
73
-
-
12,322
8,816
17,937
20,540
Revenues by Products:
Digital TV & Broadcast 2019
Mobile 2019
Digital TV & Broadcast 2018
Mobile 2018
$000
$000
$000
$000
Development
6,508
-
4,363
-
Transactions
-
832
-
878
Licenses
4,054
-
2,581
-
Managed Services
928
-
994
-
11,490
832
7,938
878
7. Operating loss
This has been arrived at after charging:
2019
2018
$000
$000
Depreciation of owned assets (note 14)
80
73
Amortisation of intangible assets (note 13)
3,578
3,352
Operating lease charges
596
473
Analysis of auditors' remuneration is as follows:
2019
2018
$000
$000
Fees payable to the company's auditor for the audit of the company's annual accounts
119
87
Audit of the account of subsidiaries
36
34
Reconciliation of operating profit for continuing operations to adjusted earnings before interest, taxation, depreciation and amortisation:
2019
2018
$000
$000
Operating loss
(2,914)
(4,618)
Depreciation
80
73
Amortisation
3,578
3,352
Operating profit/loss before interest, taxation, depreciation and amortisation (EBITDA)
744
(1,193)
Share-based payment charge
70
72
Adjusted EBITDA814
(1,121)
8. Taxation
2019
2018
$'000
$'000
Analysis of tax credit for the year
Current tax
UK tax for the current financial year
(113)
(111)
Adjustments in respect of previous years
-
-
Foreign tax on income for the year
(71)
(157)
Total current tax charge/(credit)
(184)
(268)
Deferred tax
Origination and reversal of timing differences
Adjustment in respect of prior periods
-
(30)
Total deferred tax charge/(credit)
-
(30)
Total tax (credit)/charge for the year
(184)
(298)
The tax assessed on the loss on ordinary activities for the period differs from the standard rate of tax of 19% (2018-19%). The differences are reconciled below:
2019
2018
$000
$000
Loss before taxation
(3,296)
(5,168)
Loss on ordinary activities multiplied by 19% (2018:19%)
(626)
(982)
Losses carried forward
626
982
Witholding Taxes
321
125
Total current tax
321
125
Decrease of deferred tax assets
-
39
Subtotal
321
164
Tax benefit from research and development expenditure
(462)
(497)
Foreign exchange
(43)
35
Total tax credit
(184)
(298)
Deferred Taxation
Deferred tax assets related to tax losses were reduced by $30,000 during FY18 in Mirada Connect. Foreign exchange differences of $8,000 arising on consolidation of the deferred tax asset were recognised in other comprehensive income.
At the balance sheet date, the UK government has substantively enacted a 2% reduction in the main rate of UK corporation tax from 19% to 17% effective from 1 April 2020.
Reconciliation of deferred tax asset and liabilities:
2019
2018
Asset
Asset
$000
$000
Balance at 1 April
-
30
Reversal of Deferred tax asset
-
(39)
Foreign exchange
9
Balance at the end of year
-
-
Deferred taxation amounts not recognised are as follows:
Group
Group
2019
2018
$000
$000
Losses
16,880
16,272
Research & Development Tax Credits,
2,868
3,082
useable against future profits
Balance at the end of the year
19,748
19,354
The gross value of tax losses carried forward at 31 March 2019 equals $78.7 million (2018: $78.0 million).
9. Loss per share
Year ended 31 March 2019
Year ended 31 March 2018
Total
Total
Loss for year
$(3,111,688)
$(4,870,019)
Weighted average number of shares
520,652,606
139,057,695
Basic loss per share
$(0.006)
$(0.035)
Diluted loss per share
$(0.006)
$(0.035)
The Company has 4,697,166 (2018: 4,697,166) potentially dilutive ordinary shares arising from share options issued to staff. However, in 2019 and 2018 the loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for basic earnings per ordinary share. This is because the exercise of share options would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive.
10. Share capital
A breakdown of the authorised and issued share capital in place as at 31 March 2019 is as follows:
2019
2019
2018
2018
Number
$000
Number
$000
Allotted, called up and fully paid
Ordinary shares of £0.01 each
890,843,408
12,015
139,057,695
2,261
On 28 November 2017, the Company announced it had entered into agreements for the provision to the Company of unsecured one-year loan facilities of up to an aggregate amount of $2.4 million. The facility had certain conditional subscription rights in respect of new ordinary shares of 1p each in the capital of the Company. The facility was provided by Kaptungs Limited, Kronck Business S.A. and Minles Corporation Inc. This facility was converted into capital as announced on 29 August 2018.
On 7 March 2018, the Company announced it had entered into a secured one-year loan facility for up to $4.2 million. This facility was provided by Kaptungs Limited. This facility was converted into capital as announced on 4 October 2018.
On 5 October 2018, the Company announced it had raised £3 million before expenses, by way of a subscription of 300 million new Ordinary Shares at 1p per share by a substantial shareholder of the Company, Kaptungs Limited.
Kaptungs Limited is an investment company which is beneficially owned by Mr Ernesto Luis Tinajero Flores and has a total beneficial interest of 776,879,163 Ordinary Shares in Mirada, which represents 87.21 per cent of the voting rights in the Company.
11. Events after the reporting date
See note 27 of the Group financial statements.
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