REG - Mobile Tornado Group - Half-year Report
28/09/2023 07:00
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RNS Number : 8979N Mobile Tornado Group PLC 28 September 2023
28 September 2023
Mobile Tornado Group plc
("Mobile Tornado", the "Company" or the "Group")
Half Yearly Report
Mobile Tornado (AIM: MBT), a leading provider of resource management mobile
solutions to the enterprise market, announces its unaudited results for the
six-month period to 30 June 2023.
Financial highlights
Six months Six months
ended ended
30 June 30 June
2023 2022
Unaudited Unaudited
£'000 £'000
Recurring revenue 964 932
Non-recurring revenue* 293 172
Total revenue 1,257 1,104
Gross profit 1,129 1,066
Administrative expenses (1,284) (1,275)
Adjusted EBITDA** (155) (209)
Group operating loss (144) (454)
Loss before tax (527) (775)
· Total revenue increased by 14% to £1.26m (H1
2022: £1.10m)
o Recurring revenues increased by 3% to £0.96m (H1 2022: £0.93m)
o Non-recurring revenues* increased by 70% to £0.29m (H1 2022: £0.17m)
· Operating expenses increased by 1% to £1.28m (H1
2022: £1.28m)
· Adjusted EBITDA** loss of £0.16m (H1 2022:
£0.21m)
· Group operating loss for the period decreased to
£0.14m (H1 2022: £0.45m) - impacted by exchange differences of £0.10m gain
(H1 2022: £0.15m loss)
· Loss before tax of £0.53m (H1 2022: £0.78m)
· Basic loss per share of 0.14p (H1 2022: 0.20p)
· Net cash outflow from operating activities of
£0.28m (H1 2022: £0.02m inflow)
· Net debt at 30 June 2023 of £10.43m (H1 2022:
£10.03m)
· Cash and cash equivalents of £0.05m (30 June
2022: £0.12m)
*Non-recurring revenues comprising installation fees, hardware, professional
services and capex license fees
**Earnings before interest, tax, depreciation, amortisation, exceptional items
and excluding exchange differences
Operating Highlights
· Increased investment in business development
activities to capitalize on strength of our technical solution. Post 2022 year
end fundraise was completed to support this scale up
· Landmark push-to-talk over cellular ("PoC") deal
concluded with Leeds Bradford Airport
· Extension to agreement with our existing partner
in South Africa which will see us become an exclusive reseller of their
personnel management platform
Jeremy Fenn, Chairman and acting CEO of Mobile Tornado, said: "The Company has
for some time been a key player in the PTToC market, with a presence in
Africa, South America and Europe. Our solution meets the mission-critical
communication needs of our customers, and is characterised by a number of key
differentiators, such as seamless transition, market-leading group sizes, a
unique dispatcher console, and highly efficient data utilization. These
features continue to set us apart from our competitors and allow us to deliver
market leading performance to our partners and customers.
"The process of building a much deeper and wider business development
operation commenced during the first half of the year and has made great
progress. As a result, we have begun to open up new markets in the USA, parts
of Asia and the Middle East. Physical attendance at trade shows and a more
sophisticated PR strategy is generating significant inbound interest across
many international markets. As previously mentioned, we have strengthened our
sales teams to handle this increased activity and are now in the process of
building much deeper and better quality sales pipelines.
"Despite a challenging economic environment, the Board are confident that our
solution offers quality and good value, particularly when compared to the
traditional radio platforms. We are building a much wider partner network and
are confident that the developing sales pipeline will convert into new
customers in due course. At the same time, we are working with our partners to
develop bespoke solutions for key verticals which will provide further
opportunity as we look to push those solutions into the wider partner
network."
Enquiries:
Mobile Tornado Group plc +44 (0)7734 475 888
Jeremy Fenn, Chairman and acting CEO www.mobiletornado.com (http://www.mobiletornado.com)
Allenby Capital Limited (Nominated Adviser & Broker) +44 (0)20 3328 5656
James Reeve / Piers Shimwell (Corporate Finance)
David Johnson (Sales and Corporate Broking)
Financial results
Total turnover in the six-month period to 30 June 2023 increased by 14% to
£1.26m (H1 2022: £1.10m). Recurring revenues increased by 3% to £0.96m (H1
2022: £0.93m).
Non-recurring revenues, comprising installation fees, hardware, professional
services and capex license fees increased by 70% to £0.29m (H1 2022:
£0.17m). Gross profit increased by 6% to £1.13m (H1 2022: £1.07m).
Our underlying total operating cost-base remained largely unchanged over the
comparative period, increasing by 1% to £1.28m (H1 2022: £1.28m). Due to the
annual revaluation of certain financial liabilities on the balance sheet, the
Group reported a currency translational gain of £0.10m (H1 2022: £0.15m
loss) arising principally from the appreciation of Sterling against the US
Dollar compared to the start of the period. As a result of the above, the loss
after tax for the period decreased to £0.56m (H1 2022: Loss of £0.76m).
The Group reported a net cash outflow from operating activities during the
period of £0.28m (H1 2022: £0.02m inflow). At 30 June 2023, the Group had
£0.05m cash at bank (30 June 2022: £0.12m) and net debt of £10.43m (30 June
2022: £10.03m).
Review of operations
The Board are pleased to report a robust set of financial results for the
first six months of the year. A small increase in the recurring revenue stream
illustrates the high-quality customer base we have established, and the 70%
uplift in non-recurring revenues reflects the renewals on existing capex based
license deals. As highlighted earlier in the year, the Board is now focused on
delivering a significantly enhanced business development operation to build
out a much wider partner base, and ultimately generate a material uplift in
customers. We are confident that the investment we have made in the technical
platform over recent years has delivered superior performance against
competing solutions. It's now essential that we capitalise on this and expose
the platform to many more partners across all international markets and
industry sectors.
To facilitate this, there has been an increase in business development
activity during the period. A sophisticated outreach campaign has been
developed, supported by our attendance at the major critical communication
trade shows. We have recruited into the sales team to manage the increasing
levels of new partner and customer engagement. As a result of this activity,
new partners have been contracted in the UK, USA, Chile, Germany and UAE with
expansion into further new territories anticipated.
Our existing partners have continued to make progress during the year. In
South and Central America, we continued to focus on the deployment of the
solution to public safety organisations and progress has been made here. We
are now awaiting final confirmation around the hardware that will be utilised
alongside our platform, and this should be the catalyst for a significant roll
out. A number of other public safety organisations are now using our solution
across the Caribbean, and we are in discussions with others across multiple
territories. The quality of our solution and the relative cost compared to
traditional radio platforms is attracting a lot of interest across the public
safety sector, and we hope for a breakthrough before the end of the year.
In the UK we closed out a deal at Leeds Bradford airport ('LBA'), to provide
their ground operations staff with our full PTToC solution. We understand that
LBA is one of the first airports in Europe to upgrade its radio system to
PTToC, and the publicity that was generated from this deal has resulted in a
significant amount of interest from other airports.
A partnership agreement has also been reached with a UK security services
business to deploy our solution into water utility businesses. This represents
an interesting development, whereby our solution is adapted to meet the
specific requirement of a particular industry sector. On a similar note, we
are working with another UK partner to develop the solution specifically for
the retail supermarket sector, to address opportunities both in the UK and
Ireland. If these bespoke applications meet with success, we will look to roll
them out to our global partner network and work with them to address their own
local markets.
In Africa, we recently extended our partnership with Instacom, a leading
provider of critical communication solutions to government agencies and
private companies. As part of the agreement, we will also act as exclusive UK
reseller for Instacom's PTX personnel management platform. The platform
enables the simple and effective management of employees, helping to improve
operational efficiencies and productivity as well as reducing costs. We have
been working with Instacom since 2010 and the continued growth of mobile
network coverage across Africa is creating big opportunities for government
agencies and private enterprises to increase safety, reduce costs, boost
productivity and improve efficiency among their remote workforces. Completing
this deal, and integrating the PTX platform into our own, will allow the
Company to reduce R&D operating costs, as we can reduce the resources
currently allocated to the development of our own workforce management
platform.
In the Caribbean, our partner has built up strong sales momentum with Digicel,
one of the main mobile network operators in the region. Deals have been closed
within multiple sectors including public safety, security, hotels and
logistics.
Funding
As announced on 22 September 2023, we agreed a 12-month extension of our
revolving loan facility with our principal shareholder, InTechnology plc. This
facility has a term ending on 26 September 2024 with a maximum principal
amount of £500,000. The balance drawn down at 30 June 2023 was £150,000 and
as at today's date, the balance drawn down is £190,000.
In March 2023, we concluded a subscription for 25.0m new ordinary shares of 2
pence each representing approximately 6.6 per cent. of the existing issued
ordinary share capital of the Company at a price of 2 pence per share to raise
£500,000. The Company also announced the capitalisation of £259,490 of
indebtedness owed by the Company to InTechnology plc into 12,974,492 new
Ordinary Shares, also at 2 pence per share.
We remain confident that our available cash resources together with our
long-established recurring revenue customer base and anticipated future
contracts will provide us with adequate financial resources for the
foreseeable future.
Outlook
The Company has for some time been a key player in the PTToC market, with a
presence in Africa, South America and Europe. Our solution meets the
mission-critical communication needs of our customers, and is characterised by
a number of key differentiators, such as seamless transition, market-leading
group sizes, a unique dispatcher console, and highly efficient data
utilization. These features continue to set us apart from our competitors and
allow us to deliver market leading performance to our partners and customers.
The process of building a much deeper and wider business development operation
commenced during the first half of the year and has made great progress. As a
result, we have begun to open up new markets in the USA, parts of Asia and the
Middle East. Physical attendance at trade shows and a more sophisticated PR
strategy is generating significant inbound interest across many international
markets. As previously mentioned, we have strengthened our sales teams to
handle this increased activity and are now in the process of building much
deeper and better quality sales pipelines.
Despite a challenging economic environment, the Board are confident that our
solution offers quality and good value, particularly when compared to the
traditional radio platforms. We are building a much wider partner network and
are confident that the developing sales pipeline will convert into new
customers in due course. At the same time, we are working with our partners to
develop bespoke solutions for key verticals which will provide further
opportunity as we look to push those solutions into the wider partner network.
Jeremy Fenn
Chairman
28 September 2023
Consolidated income statement
For the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Continuing operations
Revenue 1,257 1,104 2,279
Cost of sales (128) (38) (56)
Gross profit 1,129 1,066 2,223
Operating expenses
Administrative expenses (1,284) (1,275) (2,507)
Exchange differences 101 (148) (227)
Depreciation and amortisation expense (90) (97) (212)
Total operating expenses (1,273) (1,520) (2,946)
Group operating loss before exchange differences,
depreciation and amortisation expense (155) (209) (284)
Group operating loss (144) (454) (723)
Finance costs (383) (321) (696)
Loss before tax (527) (775) (1,419)
Income tax (expense)/credit (29) 12 37
Loss for the period (556) (763) (1,382)
Loss per share (pence)
Basic and diluted 3 (0.14) (0.20) (0.36)
Consolidated statement of comprehensive income
For the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss for the period (556) (763) (1,382)
Other comprehensive income
Exchange differences on translation
of foreign operations 23 (58) (61)
Total comprehensive loss for the period (533) (821) (1,443)
Consolidated statement of financial position
As at 30 June 2023
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 130 139 155
Right-of-use assets 300 - 350
430 139 505
Current assets
Trade and other receivables 1,472 1,701 1,414
Inventories 35 34 25
Cash and cash equivalents 45 122 145
1,552 1,857 1,584
Liabilities
Current liabilities
Trade and other payables (5,244) (5,139) (5,191)
Borrowings (4,748) (4,414) (10,558)
Lease liabilities (105) - (105)
Net current liabilities (8,545) (7,696) (14,270)
Non-current liabilities
Trade and other payables (861) (1,219) (1,076)
Borrowings (5,723) (5,734) (27)
Lease liabilities (209) - (258)
(6,793) (6,953) (1,361)
Net liabilities (14,908) (14,510) (15,126)
Equity attributable to the owners of the parent
Share capital 4 8,354 7,595 7,595
Share premium 4 15,787 15,797 15,797
Reverse acquisition reserve (7,620) (7,620) (7,620)
Merger reserve 10,938 10,938 10,938
Foreign currency translation reserve (2,247) (2,267) (2,270)
Accumulated losses (40,120) (38,953) (39,566)
Total equity (14,908) (14,510) (15,126)
Consolidated statement of changes in equity
For the six months ended 30 June 2023
Share Share Reverse acquisition Merger Foreign currency translation Accumulated Total
capital premium reserve reserve reserve Losses equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2022 7,595 15,797 (7,620) 10,938 (2,209) (38,196) (13,695)
Loss for the period - - - - - (763) (763)
Exchange differences on translation
of foreign operations - - - - (58) - (58)
Total comprehensive loss for the year - - - - (58) (763) (821)
Equity settled share-based payments - - - - - 6 6
Balance at 30 June 2022 7,595 15,797 (7,620) 10,938 (2,267) (38,953) (14,510)
Share Share Reverse acquisition Merger Foreign currency translation Accumulated Total
capital premium reserve reserve reserve Losses equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2022 7,595 15,797 (7,620) 10,938 (2,267) (38,953) (14,510)
Loss for the period - - - - - (619) (619)
Exchange differences on translation
of foreign operations - - - - (3) - (3)
Total comprehensive loss for the year - - - - (3) (619) (622)
Equity settled share-based payments - - - - - 6 6
Balance at 31 December 2022 7,595 15,797 (7,620) 10,938 (2,270) (39,566) (15,126)
Share Share Reverse acquisition Merger Foreign currency translation Accumulated Total
capital premium reserve reserve reserve Losses equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 7,595 15,797 (7,620) 10,938 (2,270) (39,566) (15,126)
Issue of share capital 759 (11) - - - - 749
Transactions with owners 759 (11) - - - - 749
Loss for the period - - - - - (556) (556)
Exchange differences on translation
of foreign operations - - - - 23 - 23
Total comprehensive loss for the year - - - - 23 (556) (532)
Equity settled share-based payments - - - - - 2 2
Balance at 30 June 2023 8,354 15,786 (7,620) 10,938 (2,247) (40,120) (14,908)
Consolidated statement of cash flows
For the six months ended 30 June 2023
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Operating activities
Cash used in operations 5 (247) (265) (173)
Tax (paid)/received (29) 281 238
Interest paid - - 9
Net cash (outflow)/inflow from operating activities (276) 16 74
Investing activities
Purchase of property, plant & equipment (1) (20) (60)
Net cash used in investing activities (1) (20) (60)
Financing
Issue of ordinary share capital 759 - -
Share issue costs (11) - -
(Repayment of)/Increase in borrowings (514) 145 240
IFRS 16 leases (55) (89) (180)
Net cash (outflow)/inflow from financing 179 56 60
Effects of exchange rates on cash
and cash equivalents (2) 5 6
Net (decrease)/increase in cash and
cash equivalents in the period (100) 57 80
Cash and cash equivalents at beginning of period 145 65 65
Cash and cash equivalents at end of period 45 122 145
Notes to the interim report
For the six months ended 30 June 2023
1 General information
The financial information in the interim report does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006 and has
not been audited or reviewed. The financial information relating to the year
ended 31 December 2022 is an extract from the latest published financial
statements on which the auditor gave an unmodified report that did not contain
statements under section 498 (2) or (3) of the Companies Act 2006 and which
have been filed with the Registrar of Companies.
2 Basis of preparation
These interim financial statements are for the six months ended 30 June 2023.
They have been prepared using the recognition and measurement principles of
IFRS.
The interim financial statements have been prepared under the historical cost
convention.
The interim financial statements have been prepared in accordance with the
accounting policies adopted in the last annual financial statements for the
year ended 31 December 2022. The accounting policies have been applied
consistently throughout the Group for the purpose of preparation of the
interim financial statements.
3 Loss per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders of £556,000 (30 June 2022: £763,000, 31 December 2022:
£1,382,000) by the weighted average number of ordinary shares in issue during
the period of 406,390,009 (30 June 2022: 379,744,923, 31 December 2022:
379,744,923).
Six months ended Six months ended Year ended
30 June 2023 30 June 2022 31 December 2022
Unaudited Unaudited Audited
Basic and diluted Basic and diluted Basic and diluted
Loss Loss Loss Loss Loss Loss
per share per share per share
£'000 pence £'000 pence £'000 pence
Loss attributable to
ordinary shareholders (556) (0.14) (763) (0.20) (1,382) (0.36)
4 Share capital and share premium
Number of
issued and fully paid Share Share
shares capital premium Total
'000 £'000 £'000 £'000
At 1 January 2022, 30 June 2022 & 31 December 2022 379,745 7,595 15,797 23,392
Issue of shares 37,974 759 (11) 749
As at 30 June 2023 417,719 8,354 15,786 24,141
Non-voting preference shares
Number of Nominal
shares Value
'000 £'000
As at 30 June 2022, 31 December 2022 and 30 June 2023 71,277 5,702
Liabilities and preference shares totalling £5,702k were converted into
71,277k 8p preference shares on 28 August 2013. The preference shares are
non-voting, non-convertible redeemable preference shares currently redeemable
at par value on 31 December 2023, or, at the Company's discretion, at any
earlier date. The Preference Shares accrue interest at a fixed rate of 10% per
annum.
5 Cash used in operations
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
Loss before taxation (527) (775) (1,419)
Adjustments for:
Depreciation and amortisation 90 97 212
Share based payment charge 2 6 12
Interest expense 383 321 696
Changes in working capital:
(Increase)/decrease in inventories (17) 41 49
(Increase)/decrease in trade and other receivables (59) (264) 41
(Decrease)/increase in trade and other payables (119) 309 236
Net cash used in operations (247) (265) (173)
6 Shareholder information
The interim announcement will be published on the company's website
www.mobiletornado.com (http://www.mobiletornado.com) on 28 September 2023.
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