2 February 2018
Mobile Streams plc ("Mobile Streams" or the "Company") (AIM: MOS)
Mobile Streams is updating its shareholders on its progress for the six months ended 31 December 2017.
· Customer renewal base* in India exceeded 750,000 subscribers. This has grown to over 1 million since the period end
· Growth driven by growth enabled by our billing connection for the largest local mobile phone operator (four contracts entered into with a fifth in advanced discussions)
· 180,000 active paying subscribers** in India currently with an addressable audience of c.750 million mobile users
· Trading in Argentina was stabile throughout the period
· Unaudited revenues were approximately £1.85m (31 December 2016: £3.6m). All revenue is from continuing operations
· £1.4mm of cash and cash equivalents at 31 December 2017 (£2.8m as at 31 December 2016), with no debt
* Customer renewal base is the active paying subscriber base plus the renewal base of zero-rate customers, whereby customers who have zero balances in their pre-pay mobile account who want to use MobileGaming.com are subscribed to the service with billing attempts then subsequently made to turn them into active paying subscribers.
**Active paying subscribers are measured as consumers who have made a purchase from the Company in the country in the past 60 days. For like-for-like comparability, this is the same methodology the Company uses to measure subscribers in its other markets such as Argentina.
Commenting, Simon Buckingham, CEO of Mobile Streams said: "We are pleased that the team has grown the mobilegaming.com customer renewal base above 1 million subscribers. Our primary focus during the period was to reduce losses with our key accounts in India through a process of marketing and customer churn optimisation as well as working to convert zero rated mobileGaming.com customers into active paying subscribers. With the Argentina business stabilised, we intend to continue to focus on achieving active paying subscriber growth in India which in turn drives our revenues."
By the end of the calendar year, the Company's local subsidiary, Mobile Streams India Private Limited, exceeded the important milestone of reaching a customer renewal base of 750,000 on its Android and HTML5 MobileGaming.com games subscription services. Subsequently, the customer renewal base has climbed to more than 1,000,000. The number of active paying subscribers is currently 180,000.
Most of the growth in customer renewal base to date has been driven by growth enabled by the Company's billing connection for the largest local mobile phone operator. The Company has faced certain challenges with its other billing partners which have hindered growth over the past six months, but the Directors believe these issues have now been addressed. The Company is working on launch of services with a fifth telecom operator and anticipates that this will take place over in the next few months.
During the first half of the financial year, the Indian mobile industry saw a number of changes which impacted the Company. Reliance Jio's continued growth throughout the year, based largely on their free voice, low cost data packages, has proven to be very challenging to other telecom operators negatively impacting their own revenues. This has led to consolidation in the market (Airtel takeover of Telenor and Tata and the Vodafone-Idea merger), and increased regulation for value added services. Conversely, consuming mobile content has never been easier for customers with enhanced networks, cheap smartphones and data making the opportunity in India, particularly for games content, a huge one.
As a consequences of these challenges, the Company has sought to refocus and reduce its marketing spend to approximately 20% of the levels in June 2017 with a view to protecting EBITDA and cash. This has resulted in reduced revenues with the result that the Directors expect unaudited revenues for the six months ended 31 December 2017 to be approximately £1.85m (31 December 2016: £3.6m) with cash and cash equivalents at 31 December 2017 being £1.4m (£2.8m as at 31 December 2016). Trading conditions in the Company's core markets of India and Argentina are unlikely to change materially in the second half of the current financial year meaning that the Company expects that second half revenues will be slightly below those recorded in the first half of the year. The EBITDA loss for the 6 months ended 31 December 2017 is expected to be in the region of £700,000. The Company expects that the EBITDA loss for the second half of the year will be lower than that experienced in the first half of the financial year.
Simon Buckingham, Chief Executive Officer +1 347 669 9068
Enrique Benasso, Chief Financial Officer
N+1 Singer (Nominated Adviser and Broker)
Alex Price +44 20 7496 3000
Alex Laughton Scott
This information is provided by RNS