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Mobile Streams Plc RNS Release

Final Results

RNS Number : 7976O
Mobile Streams plc
10 November 2016
 

                                This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014 (MAR)

 

10 November 2016

 

Mobile Streams plc

 

("Mobile Streams", the "Company" or the "Group")

 

Final results for the year ended 30 June 2016 - in line with management's revised expectations

 

Mobile Streams (AIM:MOS), the emerging markets focused mobile media company, is pleased to announce its final results for the year ended 30 June 2016 which are in line with management's revised expectations.

 

Financial highlights:

·      Decrease in revenues to £12.8m (2015: £29.1m) caused by ongoing challenges in the Company's core market of Argentina

·      EBITDA* loss of £0.65m (2015 profit: 1.1m) attributable to investment in new products such as ad-funded services and in scaling new geographies, particularly India

·      Loss before tax £0.74m (2015 profit: £0.83m)

·      Loss after tax of £1.3m (2015 profit of £0.3m)

·      Basic loss per share of 3.52p per share (2015: earnings of 0.908p per share)

·      £1.4m in cash (2015: £2.1m), with no debt. Current cash is £1m.

 

*EBITDA is a non-IFRS measure and is calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.

Operational highlights:

·      Focused on expansion into India

·      Mobile Streams India Private Limited formed in October 2015

·      Advertised Funded Mobilegaming.com service was launched in India during February 2016 with the top three Indian mobile operators

·      More than 75,000 active subscribers in India currently with an addressable audience from the of c.700 million mobile users - expected to increase to c.900 million such users by the end of 2016

 

The full report and accounts for the year ended 30 June 2016 will be sent to shareholders today and will be uploaded to the Company's website, www.mobilestreams.com, in accordance with AIM Rule 20.

 

Simon Buckingham, CEO, said: "Operations in Argentina were extremely challenging in the year under review. However, this also presents us with an opportunity as we look to refocus our business and continue to develop our ad-funded games service and subscription services in India. These opportunities are potentially transformational and I am extremely pleased that our active subscriber numbers in India are growing steadily. We look forward to updating shareholders with our progress as and when we achieve incremental subscriber milestones and billing launches in the coming months."

 

Outlook

 

Mobile Streams has focused on three main objectives in its recent business trading: expansion into India; stabilisation of its Latin American business primarily in Argentina; and seeking to minimise net cash outflow. Generally, we have sought to invest the profits from our relatively mature Argentine operations into developing the fast growing India business. As previously announced, in Argentina revenues in the last financial year were in part adversely impacted by the devaluation of the Argentine peso in December 2015 as well as a wider slowdown in the mobile subscription business in the local market.

 

We formed Mobile Streams India Private Limited in October 2015 to enable Mobile Streams to sign agreements with Indian mobile network operators (MNOs), device manufacturers (OEM) and other third parties and this is already proving to be successful.

 

As per the strategy in Latin America, the focus in India is very much on the recurrent revenue generating subscription service in India, with daily and weekly packages both being trialled. Our ad-funded Mobilegaming.com service was launched in February 2016 with the top three Indian mobile operators with marketing campaigns coordinated by the same team responsible for the success we have had in the Latin American region over the past several years. Active subscriber numbers are steadily growing and now exceed 75,000 in India. Active 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 active subscribers in its other markets such as Argentina.

 

Looking ahead to the remainder of 2016 and beyond, our primary objectives are to secure mobile billing with the leading seven or eight mobile operators in India, progressively increase marketing spend to grow the active subscriber base, enhance our content and service offer by partnering with local Indian companies and the launch of our browser based games service (utilising HTML5) to become the leading destination for games in India. Mobile Streams has recently launched with a fourth carrier billing connection in India, extending our addressable audience to around 700 million potential mobile users.

 

The Company sees potential for browser based gaming in both Latin America and India. Our newly developed HTML5 content works well across all devices including Android, Apple, Tizen and Windows Phone. Devices in emerging markets often have limited memory capable to store downloadable applications so browser based gaming is attractive. In addition, as browser based content is not available from Google Play and the App Store, this provides us with an important differentiation from these offerings.

 

The Indian mobile market is growing rapidly, the entrance of Reliance Jio 4G network into the market this year and the upcoming spectrum auction means the primary obstacle of poor data connectivity is being addressed. A report by Business Insider UK (The Smartphone Mark, by Country: Adoption, Platform and vendor trends in the US, China and India (1 April 2016)) found that, India has yet to fulfill its promise as the future engine of smartphone sales growth, but that could change soon. The report showed that Smartphones accounted for c.44% of mobile shipments in India in Q2 2016. We are therefore confident in the prospects that the opportunity in India affords us.

 

Enquires:

 

Mobile Streams

+1 347 669 9068

Simon Buckingham, Chief Executive Officer

Enrique Benasso, Chief Financial Officer

 

N+1 Singer (Nominated Adviser and Broker)

+44 (0)20 7496 3000

Alex Laughton-Scott

Alex Price

 

About Mobile Streams:

 

Mobile Streams licenses and distributes a wide range of mobile content including games and apps that are retailed around the world, primarily in emerging markets. The Company's main operations are in Latin America and in particular Argentina, with recent expansion into India and Nigeria. Its shares are traded on the AIM market of the London Stock Exchange under the symbol MOS LN.

               

 

Chairman's Statement:

 

The Board of Mobile Streams plc ("Mobile streams" or "the company" or "the group")  is pleased to present its audited accounts for the financial year ended 30 June 2016.

The past twelve months has seen Mobile Streams continue with its strategy to develop a content offering direct to consumers across a wide range of mobile devices in a number of large emerging markets. This is in addition to our original business of providing content to mobile network operators and other business partners. The operating performance of the business reflects our substantial position in Argentina which has been a challenging market and the cost of working with Argentinian currency control rules combined with a significant devaluation in the Argentinian peso.

Group revenue for the year ended 30 June 2016 was £12.8m (2015: £29.1m). Trading EBITDA (calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets) was negative £0.6m for year (2015: positive £1.1m). Loss before tax was £0.7m (2014: £0.8m profit). Much of the reduction in revenues is attributable to Argentina. Revenue in Argentina (which equates to 88% of our revenue) on a constant currency basis decreased by 45% from AR$343m to AR$188m. The challenges in Argentina spurred the Company to develop new premium content products, advertising funded products, and to seek to diversify into new emerging markets, specifically India. Mexico is our second largest market and accounted for around 10.3% of our revenues during the period.

The Directors do not propose a payment of a dividend (2015: £Nil). In the new financial year, the majority of revenues are once again expected to be generated in Latin America and the majority of the investment will be in India. The Group ended the year with a net cash balance of £1.4m at 30 June 2016 (2015: £2.1m).

The team at Mobile Streams are long established experts in mobile content and have good contacts with the leading mobile operators around the world. Despite the challenges in Argentina, the Board believes that the Group has the potential  to deliver growth in shareholder returns with established and newly developed advertising funded and premium products using our strong trading relationships in developing markets. If we feel we need to accelerate our growth in India this is likely to require additional investment from a joint venture partner or from shareholders.

 

Roger Parry
Chairman

 

 



 

STRATEGIC REPORT

Mobile Streams PLC (AIM: MOS), the global mobile media company, is pleased to provide an update to its shareholders on its performance for the 12 months ended 30 June 2016.

BUSINESS REVIEW

Operating review

Mobile Streams' performance during the financial year ended 30 June 2016 was driven primarily from its Mobile Internet sales in Latin America.

Group revenue for the year ended 30 June 2016 was £12.8m. The gross profit was £3.5m and decreased by 54% during the year (year ended 30 June 2015: £7.7m). The gross profit margin increased from 26.4% to 27.6% as a result of decreased marketing (direct to consumer) costs related to its Mobile Internet division.

Selling and marketing expenses were £1.3m, a 61% decrease on the year ended 30 June 2015. Revenues are generated from two principal business activities: the sale of mobile content through mobile operators (Mobile Operator Sales); and the sale of mobile content over the internet (Mobile Internet Sales). Additionally, the Group is engaged in the provision of consulting and technical services (Other Service Fees).

During the period, both the Group's Mobile Internet revenues and its Mobile Operator revenues decreased. As consumers steadily update their phones from legacy feature and flip phone models to smartphones, they have generally used the operator content portals less. Consumers generally use independent portals, as well as the open mobile internet, more actively.

The Argentine peso suffered a devaluation against the British Pound during the year (28% for the 12 months ended on 30 June 2016).  The financial results and balances of all group entities that have a functional currency different from the presentation currency are translated into the presentation currency, and these exchange differences are recognised as a separate component of equity (cumulative translation reserve). The devaluation of the Argentine Peso has a direct impact in the revenue and the gross profit of the subsidiary, either through the translation to British pounds and by the impact that the currency level has on local inflation and consumers spending level.

Mobile Internet sales

The Group anticipated the shift to the open Mobile Internet business model several years ago and added new products at new price points in new markets.

The Group experienced growth and then stabilisation in 2013 to 2014 in Mobile Internet sales as consumers used their mobile devices to purchase mobile content subscriptions. After that, the business model (based on Mobile Internet) shifted to a model based on the operator platforms and the revenue based on internet decreased. This was mostly the result of the devaluation of the Argentine peso during the 2014 to 2016 financial years, resulting in a fall in sales.

 Latin America, primarily Argentina, accounted for the majority of revenues.

 

 

 

STRATEGIC REPORT

Mobile Operator sales

The Group has several contracts with mobile operators that allow the distribution of content through their mobile portals, although the revenue has been reduced by more than 56% year on year partially because of the fact that consumers prefer to use the open mobile internet services on their smartphones and partly because of our own increased focus on Mobile Internet services.

There was a reduction in the number of consumer visitors to these portals, which has been a continuing trend for several years. Our teams share and implement the best retailing practices in order to increase the conversion of visitors into customers to mitigate the natural decline in this revenue stream as the market changes.

Financial review

 

Group revenue for the year ended 30 June 2016 was £12.8m, a 56% decrease on the previous year (2015: £29.1m).

Gross profit was £3.5m, a decrease of 54% during the year (2015: £7.7m). The gross profit margin increased from 26.4% to 27.6% due to decreased marketing (Direct to Consumer) costs related to Mobile Internet.

Selling, marketing and administrative expenses were £4.2m, a 37% decrease on the year ended 30 June 2015 (2015: £6.6m).

The Group recorded a loss after tax of £1.3m. for the year ended 30 June 2016 (2015 profit: £337k). Basic earnings per share decreased to a loss of 3.52 pence per share (2015: earnings of 0.908 pence per share). Adjusted earnings per share (excluding interest, depreciation, amortisation, impairments and share compensation expense) decreased to a loss of 2.97 pence per share (2015: earnings of 1.56 pence per share).

The Group had cash of £1.4m at 30 June 2016, with no debt (£2.1m of cash with no debt as at 30 June 2015). Argentina cash was £1.2m at 30 June 2016 (2015: £80k).

Financial performance

 

Year to 30 June 2016

Year to 30 June 2015                





£000's

£000's




Revenue

           12,786

             29,063




Gross profit

             3,530

               7,673




Selling and Marketing Costs

           (1,333)

            (3,405)




Administrative Expenses

           (2,843)

            (3,215)




Trading EBITDA*

              (646)

               1,053




Depreciation and Amortisation

                (59)

                 (59)




Impairments

                      -

                      -




Share Based Compensation

              (146)

               (219)




Operating (loss)/ profit

              (851)

                  775










Finance Income

                 118

                    65




Finance Expense

                   (4)

                   (8)




(Loss)/Profit before tax

              (737)

                  832










* Calculated as profit before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets.



STRATEGIC REPORT

Key performance indicators ("KPI's")

Gross profit as a percentage of revenue is a measure of our profitability. Gross profit was £3.5m. for the year ended on 30 June  2016. The KPIs used by the Group are Trading EBITDA, variance in revenue and gross profit. Management review these on a regular basis, largely by reference to budgets and reforecasts. Trading EBITDA was  a loss of £0.6m for the year ended on June 2016, and it was a profit of £1.1m for the year ended in June 2015.  

Earnings before tax, interest, amortisation, depreciation, share compensation expense and impairment of assets (Trading EBITDA) measured exactly as stated. All tax, interest, amortisation, depreciation, share compensation expense and impairment of assets entries in the income statement are added back to profit after tax in calculating this measure.

Growth in revenue is a measure of how we are building our business. Our goal is to achieve year-on-year growth. Although revenue decreased 56% during the year, like-for-like revenue on a constant currency basis actually decreased by 45%.

Gross profit as a percentage of revenue is a measure of our profitability. Gross profit was 27.6% for the year ended in June 2016, an increase of 1.2% (2015: 26.4%).

Strategy

Our business model is generating revenues though relationships with mobile operators and content aggregators and retailing directly to the consumer. Mobile Streams have developed expertise in selling content to consumers in developing markets. Our results have suffered from the currency issues described.

Mobile Streams has focused on three main objectives in its recent business trading: expansion into India; stabilisation of its Latin American business primarily in Argentina; and seeking to minimise net cash outflow. Generally, we have sought to invest the gross profits from our Argentine operations into developing the India business whilst seeking to maintain cash balances around the current levels. As previously announced, in Argentina revenues in the last financial year were in part adversely impacted by the devaluation of the Argentine peso in December 2015 as well as a wider slowdown in the mobile subscription business in the local market.

 

In India, we formed Mobile Streams India Private Limited in October 2015 to enable Mobile Streams to sign agreements with Indian mobile network operators (MNOs), device manufacturers (OEM) and other third parties. As per the strategy in Latin America, the focus is very much on the recurrent revenue generating subscription service in India, with daily and weekly packages both being trialed. Our Mobilegaming.com service was launched in February 2016 with the top three Indian mobile operators with marketing campaigns coordinated by the same team responsible for the success we have had in the Latin America region over the past several years. Active subscriber numbers are steadily growing and now exceed 75,000 in India. Active 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 Group uses to measure subscribers in its other markets such as Argentina.

 

Principal risks and uncertainties

The nature of the Group's business and strategy makes it subject to a number of risks.

The Directors have set out below the principal risks facing the business.

STRATEGIC REPORT

Contracts with Mobile Network Operators (MNOs)

While Mobile Streams maintains relationships with numerous MNOs in the various territories, a small number of operators account for a high portion of the Group's business.

Contracts with rights holders

The majority of content provided by Mobile Streams is licensed from rights holders. While Mobile Streams is not dependent on any single rights holder for its entertainment content, termination, non-renewal or significant renegotiation of a contract could result in lower revenue.

The Group continues to enter into new content licensing arrangements to mitigate these risks.

Competition

Competition from alternative providers could adversely affect operating results through either price pressures, or lost custom. Products and pricing of competitors are continuously monitored to ensure the Group is able to react quickly to changes in the market.

Fluctuations in currency exchange rates

Approximately 99% of the Group's revenue relates to operations outside the UK. The Group is therefore exposed to foreign currency fluctuations and the financial condition of the Group may be adversely impacted by foreign currency fluctuations. See note on page 9 "Financial risk management objectives and policies".

The Group has operations in Europe, Asia Pacific, North America and Latin America and recently in India. As a result, it faces both translation and transaction currency risks. 

Currency exposure is not currently hedged, though the Board continuously reviews its foreign currency risk exposure and potential means of combating this risk.

Dependencies on key executives and personnel

The success of the business is substantially dependent on the Executive Directors and senior management team.

The Group has incentivised all key and senior personnel with share options and has taken out a Key Man insurance policy on its Chief Executive Officer, Simon Buckingham.

Intellectual property rights

The protracted and costly nature of litigation may make it difficult to take a swift or decisive action to prevent infringement of the Group's intellectual property rights.

Although the Directors believe that the Group's content and technology platform and other intellectual property rights do not infringe the IP rights of others, third-parties may assert claims of infringement which could be expensive to defend or settle.  The Group holds suitable insurance to reduce the risk and extent of financial loss.

Technology risk

A significant portion of the future revenues are dependent on the Group's technology platforms.  Instability or interruption of availability for an extended period could have an adverse impact on the Group's financial position.

Mobile Streams has invested in resilient hardware architecture and continues to maintain software control processes to minimise this risk.

STRATEGIC REPORT

Management controls and reporting procedures and execution

The ability of the Group to implement its strategy in a competitive market requires effective planning and management control systems.  The Group's future growth will depend upon its ability to expand whilst improving exposure to operational, financial and management risk.

Going concern risk

The current uncertain economic climate and changing market place may impact the Group's cash flows and thereby its ability to pay its creditors as they fall due.

A principal responsibility of management is to manage liquidity risk, as detailed in note 24 to the financial statements.  The Group uses annual budgeting, forecasting and regular performance reviews to assess the longer term profitability of the Group and make strategic and commercial changes as required ensuring cash resources are maintained. Although there was a significant fall in revenues and a loss for the year ending 30 June 2016, having initiated significant cost saving actions after the end of the reporting period (see note 25) and reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future.

Financial risk management objectives and policies

The Group uses various financial instruments.  These include cash and various items, such as trade receivables and trade payables that arise directly from its operations.  The numerical disclosures relating to these policies are set out in notes to the financial statements.

The existence of these financial instruments exposes the Group to a number of financial risks, which are described in more detail below.  The Group does not currently use derivative products to manage foreign currency or interest rate risks.

The main risks arising from the Group's financial instruments are market risk, currency risk, liquidity risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised below.  These policies have remained unchanged from previous periods.

Market risk

Market risk encompasses three types of risk, being currency risk, fair value interest rate risk and price risk. In this review interest rate and price risk have been ignored as they are not considered material risks to the business. 

 

Liquidity risk

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash assets safely and profitably.

The Group currently has no borrowing arrangements in place and prepares cash flow forecasts which are reviewed at Board meetings to monitor liquidity.

 

STRATEGIC REPORT

 

Credit risk

The Group's principal financial assets are bank deposits, cash and trade receivables.  The credit risk associated with the bank deposits and cash is limited as the counterparties have high credit ratings assigned by international credit-rating agencies. The principal credit risk arises therefore from the Group's trade receivables.  Most of the Group's trade receivables are large mobile network operators or media groups.  Whilst historically credit risk has been low management continuously monitors its financial assets and performs credit checks on prospective partners. 

Argentina















12 months to June 30

2016

2015

2016

2015


AR$'000

AR$'000

£'000

£'000

Revenue

187,634

342,846

11,198

25,293






 

 

The Argentina Division delivered a decreased revenue performance according to the projections. The division represented 88% of the revenues of the Group.

  

Argentina revenue decreased 45% in Argentine Pesos terms; from AR$343 Million to AR$188 Million; but the reported British Pound figures shows a 56% decrease in revenue; from £25.3m to £11.2m.

 

 

Future developments

 

Looking ahead to the remainder of 2016 and beyond, our primary objectives are to secure mobile billing with the leading seven or eight mobile operators in India, progressively increase marketing spend to grow the subscriber base, enhance our content and service offer by partnering with local Indian companies and launching our browser based (utilising HTML5) games service to become the leading destination for games in India. Mobile Streams has recently gone live with a fourth carrier billing connection in India, extending our addressable audience to around 700 million potential mobile users. The Indian mobile market is growing rapidly, the entrance of Reliance Jio 4G network into the market this year and the upcoming spectrum auction means the primary obstacle of poor data connectivity is being addressed.

The Company sees potential for browser based gaming in both Latin America and India. This HTML5 content works well across all devices including Android, Apple, Tizen and Windows Phone. Devices in emerging markets often have limited memory capable to store downloadable applications so browser based gaming is attractive in the region. Browser based content is not available from Google Play and the App Store, providing differentiation from these competing offerings.

 

The Strategic Report, encompassing pages 4 to 10, was approved by the Board and signed on its behalf by:

 

 

 

 

 

STRATEGIC REPORT

 

 

Enrique Benasso

Chief Financial Officer

 

 

 

DIRECTORS' REPORT

The principal activity of the Group is the sale of content for distribution on mobile devices.  The Company is registered in England and Wales under company number 03696108.

Results and dividends

The trading results and the Group's financial position for the year ended 30 June 2016 are shown in the attached financial statements, and are discussed further in the Strategic Report.

The Directors have not proposed a dividend for this year (2015: £nil).

Directors and their interests

The present membership of the Directors of the Company (the "Board" or the "Directors"), together with their beneficial interests in the ordinary shares of the Group, is set out below. All Directors served on the Board throughout the year.




 

Shares held or controlled by Directors



 

 


Ordinary

Ordinary

 

 

shares of

shares of

 

 

£0.002 each

£0.002 each

 

 

30 June 2016

30 June 2015

 

 




 

 

S Buckingham

10,382,500

10,382,500

 

 

M Carleton

-

-

 

 

P Tomlinson

           40,000

             40,000

 

 

R Parry

         181,183

           181,183

 

 

T Maunder

             5,000

               5,000

 

 

E Benasso

-

-

 

 

 



DIRECTORS' REPORT

Options

The table below summarises the exercise terms of the various options over ordinary shares of £0.002 (year ended 30 June 2015: £0.002) which have been granted and were still outstanding at 30 June 2016.

 


Options Held at

Options Granted During the period

Options exercised During the period

Options Held at

Exercise price

Earliest date from which exercisable

Latest expiry


01 July 2015

30 June 2016

date






Number

Number

Number

Number

£



R G Parry

              250,000

 -

 -

              250,000

                  0.343

23 March 2012

22 March 2021

E Benasso

              250,000

 -

                          -

              250,000

                  0.198

13 June 2015

12 June 2024









 

 

The remuneration of each of the Directors for the period ended 30 June 2015 is set out below:

 





Year to 30 June 2016


Year to 30 June 2015


Salary

Fees

Benefits

Total


Total


£'000

£'000

£'000

£'000


£'000

S  D Buckingham

                    202

 -

                       -  

                    202


                    192

T Maunder

                      20

 -

 -

                      20


                      20

R G Parry

                      16

                      14

 -

                      30


                      30

P Tomlinson

 -

                      20

 -

                      20


                      20

E Benasso

                      56

 -

 -

                      56


                      67

Total

                   294

                     34

                       -  

                   328


                   329

 

 

 

Benefits comprise medical health insurance.

 

Events after the reporting period

Subsequent to the end of the reporting period, in response to the fall in revenues and the loss incurred for the year ending 30 June 2016, the group initiated a significant restructuring and cost cutting exercise to bring running costs in line with current levels of revenue. These actions include bringing staff numbers down to 14 from 23 in Argentina, closing the Hong Kong office and reducing office space, server and fees for professional services. The cost of implementing these changes is expected to be approximately £0.27m.

 

 

 

 

 

DIRECTORS' REPORT

 

Going Concern

The Group had cash balances of £1.4m at the year-end (2015: £2.1m) and no borrowings. Although there was a significant fall in revenues and a loss for the year ending 30 June 2016, having initiated significant cost saving actions after the end of the reporting period (see note 25) and reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. The Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.

 

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Director's Report and the Financial Statements in accordance with applicable laws and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws) including FRS 101 Reduced disclosure Framework, and the consolidated accounts in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs and profit or loss of the Company and Group for that period. In preparing these financial Statements, the Directors are required to:

 

·      Select suitable accounting policies and then apply them consistently.

·      Make judgments and estimates that are reasonable and prudent.

·      State whether applicable UK Accounting Standards and lFRSs have been followed. subject to any

material departures disclosed and explained in the financial statements, and

·      Prepare the financial statements on the going concern basis unless it is inappropriate to presume that

the Group and the parent Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group and parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and the parent Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of both the Group and the parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors confirm that

 

·      So far as each Director is aware, there is no relevant audit information of which the Company's auditor

is unaware, and

 

·      The Directors have taken all steps that they ought to have taken to make themselves aware of any

relevant audit information and to establish that the auditor is aware of that information.

 

This confirmation is given pursuant to section 418 of the Companies Act 2006 and should be interpreted in accordance with and subject to those provisions.

 

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Group's website Legislation in the United Kingdom governing the preparation and Dissemination of financial statements may differ from legislation in other jurisdictions.



Auditor

Grant Thornton UK LLP has indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed at the annual general meeting.

On behalf of the Board

 

 

Enrique Benasso

Chief Financial Officer


We have audited the consolidated financial statements of Mobile Streams Plc for the year ended 30 June 2016 which comprise the accounting policies, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of financial position, the consolidated statement of changes in equity, the consolidated cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

 

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of Directors and auditor

 

As explained more fully in the Directors' Responsibilities Statement, the Directors are responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the consolidated financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

 

A description of the scope of an audit of financial statements is provided on the FRC's website at https://www.frc.org.uk/auditscopeukprivate

Opinion on financial statements

In our opinion the consolidated financial statements:

give a true and fair view of the state of the group's affairs as at 30 June 2016 and of its loss for the year then ended;

have been properly prepared in accordance with IFRSs as adopted by the European Union; and

have been prepared in accordance with the requirements of the Companies Act 2006.

 

Opinion on other matter prescribed by the Companies Act 2006

 

In our opinion the information given in the Strategic Report and the Directors' Report for the financial period for which the group financial statements are prepared is consistent with the group financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

certain disclosures of Directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

 



Other matters

 

We have reported separately on the parent company financial statements of Mobile Streams Plc for the year ended 30 June 2016

.

               

 

                                         0;                                          &# 160;                           

Christopher Smith

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

 

 

 


ACCOUNTING POLICIES

Summary of significant accounting policies

Basis of preparation

The Group financial statements consolidate those of the parent company and all of its subsidiary undertakings drawn up to 30 June 2016. They have been prepared in accordance with applicable International Financial Reporting Standards as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. All references to IFRS in these statements refer to IFRS as adopted by the EU.

The historical cost convention has been applied as set out in the accounting policies.

Consolidation

Subsidiaries are all entities over which the Group has the power to govern the operating and financial policies generally accompanying a shareholding of more than half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control is lost.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated in full. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries' accounting policies have been changed where necessary to ensure consistency with the policies adopted by the Group.

The separate financial statements and related notes of the Company are presented on pages 50-56, which are prepared in accordance with FRS 101.

Foreign currency translation

(a) Presentational currency

The consolidated and parent company financial statements are presented in British pounds. The functional currency of the parent entity is also British pounds.

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date the transaction occurs. Any exchange gains or losses resulting from these transactions and the translation of monetary assets and liabilities at the balance sheet date are recognised in the income statement, except to the extent that a monetary asset or liability represents a net investment in a subsidiary when exchange differences arising on translation are recognised in equity within the translation reserve. Amount due from or to subsidiaries are treated as part of net investment in the subsidiary when settlement is neither planned nor likely to occur in the foreseeable future.

Foreign currency balances are translated at the year-end using exchange rate prevailing at the year-end.



ACCOUNTING POLICIES

 

(c) Group companies

The financial results and position of all group entities that have a functional currency different from the presentation currency of the Group are translated into the presentation currency as follows:

i                    assets and liabilities for each balance sheet are translated at the closing exchange rate at the date of the balance sheet

ii                   income and expenses for each income statement are translated at average exchange rates (unless it is not a reasonable approximation to the exchange rate at the date of transaction)

iii                  all resulting exchange differences are recognised as a separate component of equity (cumulative translation reserve)

Property, plant and equipment

All property, plant and equipment (PPE) is stated at cost, less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the purchase of the items.

Depreciation is calculated to write off the cost of property, plant and equipment less estimated residual value on a straight line basis over its estimated useful life. The following rates and methods have been applied:

Plant and equipment



33% straight line

Office furniture



Between 10% and 33% straight line

 

Each asset's residual value and useful life is reviewed, and adjusted if required, at each balance sheet date. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount is greater than its estimated recoverable amount.

Gains/losses on disposal of assets are determined by comparing proceeds received to the carrying amount. Any gain/loss is recognised in the income statement.



ACCOUNTING POLICIES

 

Going Concern

The Group had cash balances of £1.4m at the year-end (2015: £2.1m) and no borrowings. Although there was a significant fall in revenues and a loss for the year ending 30 June 2016, having initiated significant cost saving actions after the end of the reporting period (see note 25) and reviewed the resulting cash flow forecasts for the 12-month period from date of approval of these Financial Statements, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. The Board consider Mobile Streams to be a going concern. No material uncertainties or events that may cast significant doubt about the ability of the Group to continue as a going concern have been identified by the Directors.

 

Standards and Amendments to existing standards effective 1 July 2015

In issue but not effective for periods commencing on 1 July 2015

New standards and interpretations currently in issue (as at 11 August 2016) but not effective, based on EU mandatory effective dates, for accounting periods commencing on 1 July 2015 are:

Applicable for financial years beginning on/after ​

​Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations

​1 January 2016

​Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38

​1 January 2016

Annual Improvements to IFRSs 2011-2013 Cycle

​1 January 2015

​Amendments to IAS 16 and IAS 41: Bearer Plants

​​1 January 2016

​Amendments to IAS 27: Equity Method in Separate Financial Statements

​​​1 January 2016

​Disclosure Initiative: Amendments to IAS 1 Presentation of Financial Statements

​1 January 2016

 

New standards and interpretations currently in issue (as at 11 Aug 2016) but not effective, based on EU mandatory effective dates, for accounting periods commencing on 1 July 2015 are: 

 

Applicable for financial years beginning on/after

Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations

​1 January 2016

​Clarification of Acceptable Methods of Depreciation and Amortisation - Amendments to IAS 16 and IAS 38

​1 January 2016

Annual Improvements to IFRSs 2012-2014 Cycle

​1 January 2016

​Amendments to IAS 16 and IAS 41: Bearer Plants

​​1 January 2016

​Amendments to IAS 27: Equity Method in Separate Financial Statements

​​​1 January 2016

​Disclosure Initiative: Amendments to IAS 1 Presentation of Financial Statements

​1 January 2016

 

 

Intangible assets

(a)  Goodwill

Goodwill represents the excess of the cost of a business combination over the fair value of net identifiable assets of the acquired entity at the date of acquisition. This goodwill for subsidiaries is included in intangible assets.  Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for impairment testing. 

(b)  Assets acquired through business combinations

These consist of customer relationships, technology based assets and non-compete agreements acquired through business combinations. To meet this definition, the intangibles must be identifiable either by being separable, or by arising from contractual or other legal rights.  Intangibles acquired through business combinations are recognised at fair value.  Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangibles, the intangible will be tested for impairment.  The estimated useful lives of these assets are:

Customer relationships

3 years

Technology based assets

3 years

Non-compete agreements

3.5 years

 

 (c)  Media content and Media platform development

Media content and Media platform development represent intangible assets that have been acquired from third parties and also that are internally generated, including capitalised direct staff costs. Content and platform expenditure is charged against income in the year in which it is incurred unless it meets the recognition criteria of IAS 38 Intangible Assets. To meet the criteria of an intangible asset the Group must demonstrate the following criteria: 

-       the technical feasibility of completing the asset so that it will be available for use,

-       its intention to complete the intangible (or sell it),

-       its ability to use or sell the intangible,

-       that the intangible will generate future economic benefit,

-       that adequate resources are available to complete the intangible, and

-       the expenditure can be reliably measured.

 

Intangible assets, if capitalised, are amortised on a straight-line basis over the period of the expected benefit. Amortisation commences when the asset is ready for use.



ACCOUNTING POLICIES

 

(d) Appitalism

Appitalism development represents intangible assets that have been internally generated, including capitalised direct staff costs. To meet the intangible asset criteria the group must demonstrate the technical feasibility of completing the asset so that it will be available for use, its intention to complete the intangible (or sell it), its ability to use or sell the intangible, that the intangible will generate future economic benefit, adequate resources to complete the intangible and the expenditure can be reliably measured. Intangible assets, if capitalised, are amortised on a straight line basis, and reviewed annually for indicators of impairment. 

 (e)  Software                                         &# 160;       

Software represents assets that have been acquired from third parties. To meet the criteria for recognition the intangible asset must be both identifiable and either separable, or arise from contractual or other legal rights. Intangible assets acquired from third parties are stated at cost less accumulated amortisation and impairment losses. Where a reliable estimate of useful life of the intangible can be obtained, the intangible asset is to be amortised using the straight line basis, over the useful life. Where there is an indication of impairment of intangible assets with a definite life, the intangible will be tested for impairment.  The estimated useful life of acquired software is 2 years.

Amortisation is included in "Administrative expenses" in the income statement.

Impairment of assets

Assets that have an indefinite useful life, such as goodwill, are not subject to amortisation, but are instead tested annually for impairment and also tested whenever an event or change in situation indicates that the carrying amount may not be recoverable. Assets that are subject to amortisation are also tested for impairment whenever an event or change in situation indicates that the carrying amount may not be recoverable. An impairment loss is recognised in the income statement as the amount by which the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is determined by the higher of the fair value of an asset less costs to sell and the value in use. In order to assess impairment, assets are grouped at the lowest levels for which separate cash flows can be identified (cash generating units).

Impairment charges are included in the "Administrative expenses" in the income statement.

Taxation

Current tax is the tax currently payable based on taxable profit for the year.

Deferred income tax is provided, using the liability method, on temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences associated with shares in subsidiaries is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future.

Deferred income tax is determined using tax rates known by the balance sheet date and that are expected to apply when the deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred tax liabilities are provided in full. There is no discounting of assets or liabilities.

Changes in deferred tax assets or liabilities are recognised as a component of the tax expense in the income statements, except where they relate to items that are charged or credited directly to equity or other comprehensive income, in which case the related deferred tax is also charged or credited directly to equity or other comprehensive income.



ACCOUNTING POLICIES

Provisions

Provisions, including those for legal claims, are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic benefits will be required to settle the obligation and the amount can be reliably estimated.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

Financial Assets

a)   Cash and cash equivalents

Cash and cash equivalents include cash on hand, demand deposits held with financial institutions and other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

b)  Trade and other receivables

Trade receivables are included in trade and other receivables in the balance sheet.  Trade receivables are recognised initially at fair value and later measured at amortised cost using the effective interest method, less any provision for impairment. An impairment provision for trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the terms of the receivables. The provision is calculated as the difference between the receivable's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the income statement. Subsequent recoveries of amounts previously written off are credited in the income statement

Financial Liabilities

Financial liabilities are obligations to pay cash or deliver other financial assets and are recognised when the Group becomes a party to the contractual provisions of the instrument.  All financial liabilities are recorded initially at fair value, net of direct issue costs.

A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged or cancelled or expires.

The Group's financial liabilities consist of trade and other payables, which are measured subsequent to initial recognition at amortised cost using the effective interest rate method. 

 

All interest-related charges are reported in the income statement as finance costs.

 

Revenue recognition

As at 30 June 2016, the Group was organised into four geographical segments: Europe, North America, Latin America, and Asia Pacific. Revenues are from external customers only and are generated from three principal business activities: the sale of mobile content through Mobile Operator Services (Mobile Operator Sales), the sale of mobile content over the internet (Mobile Internet Sales) and the provision of consulting and technical services (Other Service Fees).



ACCOUNTING POLICIES

Revenue includes the fair value of sale of goods and services, net of value added tax, rebates and discounts and after eliminating intercompany sales within the Group. Revenue is recognised as follows:

 

a) Mobile Operator Sales & Mobile Internet Sales

Revenue from the sale of goods is recognised when a Group entity has delivered media content to the end consumer, who has accepted the product and collectability of the related receivable is reasonably assured from the customer.

b) Other Service Fees

Revenue is recognised in the accounting period in which the services are rendered, by reference to the stage of completion of the specific transaction, on the basis of the actual service provided as a proportion of the total services to be provided.

c) Interest Income

Interest receivable is recognised in the income statement using the effective interest method. If the collection of interest is considered doubtful, it is deferred and excluded from interest income in the income statement.

d)  Deferred Income

Revenue that has been collected from customers but where the above conditions are not met is recorded in the Statement of Financial Position under accruals and deferred income and released to the income statement when the conditions are met.

Share based payments

Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

The Group has applied the requirements of IFRS 2 Share-based Payments to all grants of equity instruments.

The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instruments granted. The fair value is determined by using the Black-Scholes model.

The cost of equity-settled transactions is recognised in the income statement, together with a corresponding increase in retained earnings, over the periods in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date'). At each balance sheet date before vesting the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest.  Market conditions are taken into account in determining the fair value of the options granted, at grant date, and are subsequently not adjusted for.  The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.

No expense or increase in equity is recognised for awards that do not ultimately vest. Awards where vesting is conditional upon a market condition are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

Share capital

Ordinary shares are classified as equity.  Incremental costs directly attributable to the issue of new shares or options are charged to the share premium account.



ACCOUNTING POLICIES

Leased assets

In accordance with IAS 17, all the Group's leases are determined to be operating leases and the payments made under them are charged to the income statement on a straight line basis over the lease term.  Lease incentives are spread over the term of the lease.

Operating leases are leases in which the risks and rewards of ownership are not transferred to the lessee.

Equity balances

a) Called up share capital

Called up share capital represents the aggregate nominal value of ordinary shares in issue.

b) Share premium

The share premium account represents the incremental paid up capital above the nominal value of ordinary shares issued.

c) Translation Reserve

The translation reserve represents the cumulative translation adjustments on translation of foreign operations. Please refer to the page 30 for the judgment and estimates disclosure.

 

 

 

CONSOLIDATED INCOME STATEMENT















Year ended
30 June 2016                                                                       


Year ended
30 June 2015                        





£000's


£000's








Revenue



21

           12,786


                   29,063

Cost of sales


21

           (9,256)


                 (21,390)

Gross profit


21

             3,530


                     7,673

Selling and marketing costs

21

           (1,333)


                   (3,405)

Administrative expenses *

21

           (3,048)


                   (3,493)

Operating (Loss)/Profit


              (851)


                        775








Finance income


5

                 118


                          65

Finance expense


6

                   (4)


                          (8)

(Loss)/Profit before tax


              (737)


                        832








Tax expense


10

              (569)


                      (495)

(Loss)/Profit for the year


           (1,306)


                        337








Attributable to:






Attributable to equity shareholders of Mobile Streams plc


           (1,306)


                       337















(Loss)/earnings per share











 Pence per share


 Pence per share

Basic (loss)/earnings per share


9

           (3.519)


                     0.908

Diluted (loss)/earnings per share


9

           (3.519)


                     0.855






















* Administrative expenses include Depreciation, Amortisation and Impairment £59k (ended 30 June 2015:£59k); Share Based Compensation  £146k (ended 30 June 2015: £219k). Other administrative expenses £2.9m (ended 30 June 2015: £3.2m).

 

   

 

 






Year ended
30 June 2016


Year ended
30 June 2015






£000's


£000's









(Loss)/Profit  for the year



           (1,306)


                  337

Amounts which may be reclassified to profit & loss






Exchange differences on translating foreign operations


           (1,017)


                 (92)









Total comprehensive (loss)/income for the year


           (2,323)


                 245









Total comprehensive (loss)/income for the year attributable to:













Equity shareholders of Mobile Streams plc


           (2,323)


                 245






2016


2015






£000's


£000's










Assets








Non- Current







Property, plant and equipment

12

                      20


                       94


Deferred tax asset



17

                     189


                     285






                    209


                    379


Current








Trade and other receivables

14

                2,576


                  4,016


Cash and cash equivalents

15

                1,367


                  2,098






                3,943


                6,114










Total assets



                4,152


                6,493










Equity








Equity attributable to equity holders of Mobile Streams plc






Called up share capital


18

                      74


                       74


Share premium



              10,579


                10,579


Translation reserve



              (3,150)


               (2,133)


Retained earnings



              (5,943)


               (4,782)


Total equity



                1,560


                3,738










Current








Trade and other payables

16

                1,595


                  2,090


Current  tax liabilities



                    997


                     665






                2,592


                2,755










Total liabilities



                2,592


                2,755










Total equity and liabilities




                4,152


                6,493


 

The financial statements were approved by the Board of Directors on 9 November 2016 and are signed on its behalf by:

 

 

Enrique Benasso

Chief Financial Officer

Company registration number: 03696108

 

 



Equity attributable to equity holders of Mobile Streams Plc


Called up share capital

Share premium

Translation reserve

Retained earnings

Total Equity














£000's

£000's

£000's

£000's

£000's







Balance at 30 June 2014

            74

     10,579

          (2,041)

        (5,338)

          3,274

Balance at 1 July 2014

            74

       10,579

           (2,041)

         (5,338)

           3,274

Credit for share based payments

               -

                 -

                     -

               219

              219

Transactions with owners

               -

                 -

                     -

               219

             219

Profit for the 12 months ended 30 June 2015

               -

                 -

                     -

               337

              337

Exchange differences on translating foreign operations

               -

                 -

                (92)

                    -

              (92)

Total comprehensive loss for the year

               -

                 -

                (92)

               337

              245

Balance at 30 June 2015

            74

     10,579

          (2,133)

        (4,782)

          3,738

Balance at 1 July 2015

            74

       10,579

           (2,133)

         (4,782)

           3,738

Credit for share based payments

               -

                 -

                     -

               145

              145

Transactions with owners

               -

                 -

                     -

               145

             145

(Loss)/Profit for the 12 months ended 30 June 2016

               -

                 -

                     -

         (1,306)

         (1,306)

Exchange differences on translating foreign operations

               -

                 -

           (1,017)

                    -

         (1,017)

Total comprehensive loss for the year

               -

                 -

           (1,017)

         (1,306)

         (2,322)

Balance at 30 June 2016

            74

     10,579

          (3,150)

        (5,943)

          1,560







 

 

 

                       


 



Year ended
30 June
2016


Year ended
30 June
2015                     



£000's


£000's

Operating activities





(Loss)/Profit before taxation


                 (737)


                     832

Adjustments:





Share based payments


                    146


                     219

Depreciation

4

                      59


                       59

Interest received

5

                 (118)


                    (65)

Changes in trade and other receivables


                    304


                  1,983

Changes in trade and other payables


                      13


               (3,250)

Provision


                         -


                  (340)

Tax paid


                 (237)


                         -

Total cash generated in operating activities


                 (570)


                 (562)






Investing activities





Additions to property, plant and equipment

12

                      (8)


                    (49)

Interest received

5

                    118


                       65

Net Cash generated from investing activities


                    110


                      16






Financing activities





Issue of share capital (net of expenses paid)


                         -


                       39

Net Cash generated from financing activities


                         -


                       39






Net change in cash and cash equivalents


                 (461)


                  (507)

Cash and cash equivalents at beginning of year


                2,098


                  2,964

Exchange (losses) on cash and cash equivalents


                 (270)


                  (359)

Cash and cash equivalents, end of year

15

                1,367


                2,098


1. General information

Mobile Streams Plc (the Company) and its subsidiaries (together 'the Group') sell digital content, primarily for distribution on wireless devices. The Group has subsidiaries in Europe, Asia, North America and Latin America. The Group has made various strategic acquisitions to build its market share in these regions.

The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is 125 Wood Street, London, EC2V 7AW.

The Company is listed on the London Stock Exchange's Alternative Investment Market.

These consolidated financial statements have been approved for issue by the Board of Directors on 9 November 2016.

2. Critical accounting estimates and judgements

Estimates and judgements are evaluated on a regular basis and are based on historical experience and other factors, such as expectations of future events that are believed to be reasonable under the circumstances.

2.1 Critical accounting estimates, judgements and assumptions

The Group makes estimates and assumptions concerning the future. These estimates, by definition, will rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Estimates

 (a) Accrued revenue and accrued content costs

Estimation is required by management to determine the value of accrued revenue and accrued content cost liability which is based on the content delivery to its customers. Due to the timing of confirmation of delivery of content to its customers from the service providers, management estimation is applied to determine the level of accrued revenue and accrued content liability to be recognised within the financial statements until confirmation is received.

Judgement

(b)  Income taxes

The Group is subject to income taxes in various jurisdictions. Judgement is required in determining the worldwide provision for income taxes. There are many transactions/calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Where the final tax outcome is different to what is initially recorded, such differences will impact the income tax and deferred tax provisions. 

(c) Deferred taxation

Judgement is required by management in determining whether the Group should recognise a deferred tax asset.  Management consider whether there is sufficient certainty its tax losses available to carry forward will ultimately be offset against future earnings, this judgement impacts on the degree to which deferred tax assets are recognised (see note 17).

 

 

 

 

 

 

 

 

 

 

 

 

3.  Services provided by the group's auditor and network firms

 

During the year ended 30 June 2016 the Group (including its overseas subsidiaries) obtained the following services from the Group's auditor and network firms:

 



Year ended 
2016


Year ended 
2015



£000's


£000's

Fees payable to the Company's auditor and its associates for the audit of the parent company and consolidated accounts

                  69


                   56






Non-Audit services:





Fees payable to the Company's auditor and its associates for other services:




     Interim statement review


                  11


                   10

     Tax compliance and advisory services


                  12


                   18



                  92


                   84

 

4.  Operating (loss)/profit

 

 

Operating (loss)/profit is stated after charging the following items:






Year ended 
2016


Year ended 
2015


Notes

£000's


£000's






Depreciation

12

                  59


                   59

Reversal of provision

23

                     -


              (340)

Loss on foreign currency


             (402)


                   38



             (343)


             (243)

 



5Finance income




2016


 
2015



£000's


£000's






Interest receivable


                118


                  65

 

6.  Finance EXPENSE




2016



2015



£000's


£000's






Interest expense


                  (4)


                  (8)

 

7.  Directors' and Officers' remuneration

The Directors are regarded as the key management personnel of Mobile Streams Plc.

Charges in relation to remuneration received by key management personnel for services in all capacities during the Year ended 30 June 2016 are as follows:

 

KEY MANAGEMENT REMUNERATION







2016


2015



£000's


£000's

Short- term employee benefits





 -       benefits


-


1

 -       salaries/remuneration


328


328



328


329

 

 

8. Directors and employees

Staff costs during the year were as follows:




2016


 
2015



£000's


£000's






Wages and salaries


            2,012


              2,107

Social security costs


                225


                 260



            2,237


            2,367

 

CURRENT YEAR












BENEFITS







Europe

Asia Pacific

North America

Latin America

Group







Benefits

                (2)

                 (4)

                  (17)

                  (67)

             (90)


                (2)

                 (4)

                 (17)

                 (67)

             (90)

 

PRIOR YEAR












BENEFITS







Europe

Asia Pacific

North America

Latin America

Group







Benefits

                (3)

               (23)

                    (1)

                  (42)

             (69)


                (3)

              (22)

                    (1)

                 (42)

             (69)

 

 

The average number of employees during the year to June 2016 was as follows:



Year ended 
2016


Year ended 
2015



Number


Number






Management


                    7


                     7

Administration


                  40


                   48



                  47


                  55

 

 

9.  (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share is calculated by dividing the (loss) or profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period. The options this year are not-dilutive as loss-making.

 

 


Year ended 
2016


Year ended 
2015


Pence per share


Pence per share





Basic (loss)/earnings per share

                      (3.519)


                          0.908

Diluted (loss)/earnings per share                                           ;                                          

                      (3.519)


                          0.855





 

Reconciliations of the earnings and weighted average number of shares used in the calculations are set out below.

 

 

 


2016


2015


£000's


£000's









(Loss)/profit for the year

                      (1,306)


                            337





For adjusted earnings per share

£000's


£000's





(Loss)/profit for the year

                      (1,306)


                             337





Add back: share compensation expense

                            146


                             219

Add back: depreciation and amortisation      

                              59


                               59

Adjusted (loss)/profit for the year

                      (1,101)


                            615









Weighted average number of shares








                                         0;                        

Number of shares


Number of shares





For basic earnings per share

              37,114,283


                 37,100,536

Exercisable share options

                                 -


                   2,330,961

For diluted earnings per share

              37,114,283


              39,431,497






Pence per share


Pence per share





Adjusted (Loss)/earnings per share

                      (2.967)


                          1.658

Adjusted diluted (Loss)/earnings per share

                      (2.967)


                          1.560

 

For year ended 30 June 2016, 3.17m (2015: 2.33m) potential ordinary shares has been excluded from the calculations of earnings per share as they are anti-dilutive.

The adjusted EPS has been calculated to reflect the underlying profitability of the business by excluding non-cash charges for depreciation, amortisation, impairments and share compensation charges.

 



10. income tax expense

 

The tax charge is based on the profit before tax for the year and represents:

 



2016


2015








£'000


£'000

Foreign tax on profits of the period

473


521

Total current tax

473


521






Deferred tax:









Origination & reversal of timing differences:  (Deferred tax charge/(credit) (Note 17)

                  96


                (26)






Tax on (loss)/profit on ordinary activities

569


495






Factors affecting the tax charge for the period




(Loss)/Profit on ordinary activities before tax

              (737)


495

(Loss)/Profit multiplied by standard rate




of corporation tax in the United Kingdom of 20.75%/24%

              (153)


                103






Effects of:





Adjustment for tax-rate differences

                177


207

Expenses not deductible for tax purposes

                (96)


350

Expenses not deductible others subsidiaries

                217


                  19

Other


                271


              (158)

Current tax charge for the period

569


521






Comprising





Current tax expense

473


521

Deferred tax (expense), income, resulting from the origination and reversal of temporary differences

                  96


                (26)



569


495






Provision for deferred tax (Deferred tax asset)









Provision brought forward

285


260

Current Year


                (96)


                  26

Traslation adjustment

                   -  


                  (1)

Deferred tax provision/(asset) carried forward

189


285






Relating to





Expenses deducted in Argentina on a paid basis

189


285

Provision for deferred tax

189


285
















 

 

 



11. DIVIDENDS

No dividends were paid or proposed during the current year or prior year.

 

12. PROPERTY, PLANT AND EQUIPMENT

 



Office furniture, plant and equipment



£000's

Cost


At 1 July 2015

                 568

Additions

                     8

Translation adjustments

                (20)

At 30 June 2016

                556



Depreciation


At 1 July 2015

                 474

Provided in the year


                   59

Translation adjustments


                     2

At 30 June 2016

                536



Net book value at 30 June 2016


                  20

 

 

 

 



Office furniture, plant and equipment



£000's

Cost


At 1 July 2014

                 517

Additions

                   49

Translation adjustments

                     2

At 30 June 2015

                568



Depreciation


At 1 July 2014

                 410

Provided in the year


                   59

Translation adjustments


                     5

At 30 June 2015

                474



Net book value at 30 June 2015


                  94

 

 

 

13. Goodwill AND INTANGIBLE ASSETS

The Group impaired in full the remaining value of goodwill attributable to Mobile Streams (Hong Kong) Limited and its subsidiaries in Singapore and Australia which make up the Asia Pacific operating segment at June 2014.

 


Media platform development and software

Media content

Appitalism

Other intangibles

Subtotal

Goodwill

Total


£000's

£000's

£000's

£000's

£000's

£000's

£000's

Cost








At 1 July 2015

              2,348

             332

             337

           2,364

          5,381

          2,670

        8,051

At 30 June 2016

             2,348

            332

            337

         2,364

        5,381

        2,670

        8,051









Accumulated amortisation and impairment








At 1 July 2015

              2,348

             332

             337

           2,364

          5,381

          2,670

        8,051

At 30 June 2016

             2,348

            332

            337

         2,364

        5,381

        2,670

        8,051









Net book value at 30 June 2016

                      -

                 -

                 -

                  -

                 -

                 -

                 -

 

 


Media platform development and software

Media content

Appitalism

Other intangibles

Subtotal

Goodwill

Total


£000's

£000's

£000's

£000's

£000's

£000's

£000's

Cost








At 1 July 2014

              2,348

             332

             337

           2,364

          5,381

          2,670

        8,051

At 30 June 2015

             2,348

            332

            337

         2,364

        5,381

        2,670

        8,051









Accumulated amortisation and impairment








At 1 July 2014

              2,348

             332

             337

           2,364

          5,381

          2,290

        7,671

Impairment

                      -

                 -

                 -

                  -

                 -

             380

            380

At 30 June 2015

             2,348

            332

            337

         2,364

        5,381

        2,670

        8,051









Net book value at 30 June 2015

                      -

                 -

                 -

                  -

                 -

                 -

                 -

 

 

Other intangible assets

Mobile Streams' other intangible assets comprised acquired customer relationships, technology based assets and non-compete agreements.  These assets are fully amortised.

14. Trade and other receivables



2016


2015



£000's


£000's






Trade receivables


                555


              1,010

Accrued receivables


                434


                 758

Other debtors


            1,587


              2,248



            2,576


            4,016

 

 

The carrying value of receivables is considered a reasonable approximation of fair value.

 

In addition, some of the unimpaired trade receivables are past due as at the reporting date. The age profile of trade receivables is as follows:

 

 



2016


2015



£000's


£000's






Within terms





Not more than 30 days


                238


308

Overdue





Not more than 3 months


                  97


                 365

More than 3 months but not more than 6 months


                    2


                 361

More than 6 months but not more than 1 year


                154


                 149

Provision for doubtful debts


              (192)


               (173)



                299


            1,010

 

Provision for doubtful debts reconciliation

 



2016


2015



£000's


£000's





Opening provision for doubtful debts


                173


177

Change in provision during the year


                  19


                   (4)

Closing provision for doubtful debts

                192


173

 

 

Trade and other receivables that are not past due or impaired are considered to be collectible within the Group's normal payment terms.



 

15. Cash and cash equivalents

Cash and cash equivalents include the following components:

 



2016


2015



£000's


£000's






Argentina´s cash at bank and in hand


1,178


80

Other companies


189


2,018






Cash at bank and in hand


            1,367


            2,098

 

 

 

 

16. Trade and other payables



2016


2015








£000's


£000's






Trade payables


                349


              1,001

Other payables


                161


                   74

Accruals and deferred income


            1,085


              1,015



            1,595


            2,090

 

 

All amounts are current. The carrying values are considered to be a reasonable approximation of fair value.

 

17. Deferred TAX ASSETS AND liabilities


Balance 30 Jun 2014

Recognised in income statement

Balance 30 June 2015

Recognised in income statement

Traslation Adjustment

Balance 30 June 2016


£000's

£000's

£000's

£000's

£000's

£000's

Deferred tax asset:







 - Expenses accrued

                     51

                       7

                     58

                  (35)


                   23

 - Royalties

                     76

                     13

                     89

                  (36)


                   53

 - Bonus provisions

                       -

                       -

                       -



                     -

 - Others

                   133

                       5

                   138

                  (26)


                 112

Deferred tax asset

                  260

                    26

                  285

                 (96)

                       -

                189















Deferred tax liability:







 - On intangible assets

                       -

                       -

                       -

                       -

                       -

                     -








 

 

 

18. SHARE CAPITAL

The Company only has one class of share.  The total number of shares in issue as at 30 June 2016 is 37,114,283 (30 June 2015: 37,114,283) with a par value of £0.002 per share. All issued shares are fully paid.

The Group's main source of capital is the parent company's equity shares. The policy which is met by the Group is to retain sufficient authorised share capital so as to be able to issue further shares to fund acquisitions, settle share based transactions and raise new funds.  Share based payments relate to employee share options schemes.  The schemes have restrictions on headroom so as not to dilute the value of issued shares of the Company.  The Group has not raised debt financing in the past and expects not to do so in the future. 



2016


2015



£000's


£000's

Authorised





69,150,000 ordinary shares of £0.002 each (30 June 2015: 69,150,000)

138


138






Allotted, called up and fully paid:

74


74

37,114,283 ordinary shares of £0.002 each (30 June 2015: 37,114,283)






 

Allotted, called up and fully paid

 


Year ended 
2016


Year ended 
2015









In issue at 1 July 2015

                 37,114,283


                 37,075,083

Issued

                               -  


                        39,200

In issue at 30 June 2016

                 37,114,283


                 37,114,283

 

 

Other Reserves

Share Premium Account

The balance in the share premium account represents the proceeds received above the nominal value on the issue of the Company's equity share capital.

Translation Reserve

The Translation reserve contains the exchange differences arising on translating foreign operations.

19. Share based payments

The Group operates three share option incentive plans - an Enterprise Management Incentive Scheme, a Global Share Option Plan and an ISO Sub Plan - in order to attract and retain key staff.  The remuneration committee can grant options over shares in the Company to employees of the Group.  Options are granted with a fixed exercise price equal to the market price of the shares under option at the date of grant and are equity settled, the contractual life of an option is 10 years. Exercise of an option is subject to continued employment.  Options are valued at date of grant using the Black-Scholes option pricing model.

On 12 July 2013, 2,383,594 options were granted to Company personnel. Strike value was 0.70 per option.

The volatility of the Company's share price on the date of grant was calculated as the average of volatilities of share prices of companies in the Peer Group on the corresponding date. The volatility of share price of each company in the Peer Group was calculated as the average of annualised standard deviations of daily continuously compounded returns on the Company's stock, calculated over 1, 2, 3, 4 and 5 years back from the date of grant, where applicable.  The risk-free rate is the yield to maturity on the date of grant of a UK Gilt Strip, with term to maturity equal to the life of the option.  The expected life of an employee share option is 5 years.

 

Share options in issue at the year-end under the various schemes are:

1.             Personal to the Option Holder and are not transferable, or assignable.

2.             Shall not be exercisable on or after the tenth anniversary of the grant date.

3.             Subject to the rules of the Plans, the Options shall Vest as follows - Options vest at 33.3% per year:

l    33.3% vest on the First Anniversary of the grant of option;

l    A second 33.3% vest on the Second Anniversary of the grant of option; and

l    The last 33.33% vest on the Third Anniversary of the grant of option.

 


2016


2015


Number (000's)


Weighted average       exercise price


Number (000's)


Weighted average exercise price









Outstanding at 1 July

                   4,066


£0.62


                   4,105


£0.62

Granted



-


-



Exercised

-


-


(39)


£0.03

Other leavers on vesting period

(65)


-





Outstanding at 30 June

                   4,001


£0.62


                   4,066


£0.62









Exercisable at 30 June

                   3,174


£0.62


                   2,331


£0.36

 

 


2016


2015

Range of exercise prices

Weighted average exercise price (£)

Number of Shares (000's)

Weighted average remaining life (years):


Weighted average exercise price (£)

Number of Shares (000's)

Weighted average remaining life (years):

Contractual


Contractual








£0 - £0.50

0.282

1014

5.3


                0.28

              1,014

                         1.60









£0.51 - £1.00

0.740

2987

4.0


              0.739

              3,004

                         4.70

 

No share options were exercised during the year ended on 30 June 2016. (2015: 39,200).

The total charge for the year relating to employee share based payment plans was £147k (2015: £219k), all of which related to equity-settled share based payment transactions.

 

 

20. OPERATING LEASES

The Group has commitments under operating leases for land and buildings to pay the following amounts. The reduction is due to the reduction of the remaining period of the contract, by one year.



Land and Buildings



2016


2015



£000's


£000's

Future minumum lease payments under non-cancelabble operating leases





Within one year


11


75

In two-five years


-


-

In more than five years


-


-



11


75

 

The two operating entities in Argentina and Hong Kong are obligated to lease agreements for office space. The Hong Kong office lease will expire on July 31 2017. The Argentina office lease contract has expired on March 31 2016 and an extension for 6 months has been agreed, until October 31 2016. While the new lease agreement is being negotiated.

The operating lease commitments represent the base rent payments that these entities are obligated to make for the remaining terms of the current lease agreements.

 Lease payments recognised as an expense during the period amount to £222k (2015: £199k).

 

21. Segment reporting

As at 30 June 2016, the Group was organised into 4 geographical segments: Europe, North America, Latin American, and Asia Pacific. The operating segments are organised, managed and reported to the Chief Operating Decision Maker based on their geographical location. Revenues are from external customers only and generated from three principal business activities: the sale of mobile content through Multi-National Organisation's (Mobile Operator Services), the sale of mobile content over the internet (Mobile Internet Services) and the provision of consulting and technical services (Other Service Fees).

All operations are continuing and all inter-segment transactions are priced and carried out at arm's length.



 

 The segmental results for the year ended 30 June 2016 are as follows:

 

 

£000's

Europe

Asia Pacific

North America

Latin America

Group

Mobile Operator Services

                    31

                      6

                    58

                    80

                  175

Mobile Internet Services

                      0

                    21

                    11

             12,552

             12,583

Other Service fees

                    23

                      0

                      0

                      5

                    28

Total Revenue

                    54

                    27

                    69

             12,637

             12,786







Cost of sales

                 (33)

                 (29)

                 (30)

            (9,165)

            (9,256)

Gross profit

                    21

                   (2)

                    39

               3,472

               3,530

Selling, marketing and administration expenses

               (557)

               (317)

               (113)

            (3,189)

            (4,176)







Trading EBITDA*

               (536)

               (318)

                 (74)

                  283

               (646)

Depreciation, amortisation and impairment

                      0

                   (1)

                      0

                 (57)

                 (58)

Share based compensation

               (146)

                      0

                      0

                      0

               (146)

Finance income/expense

                      0

                      0

                      0

                  113

                  113

Profit/(Loss) before tax

               (682)

               (319)

                 (74)

                  338

               (737)

Taxation

                      0

                      0

                      0

               (569)

               (569)

Profit/(loss) after tax

               (682)

               (319)

                 (74)

               (231)

            (1,306)







Segmental assets                                

                    84

                  117

                  179

               3,772

               4,152

Segmental liabilities

                  161

                 (34)

                  296

               2,168

               2,592

 



 

The segmental results for the year ended 30 June 2015 are as follows:

£000's

Europe

Asia Pacific

North America

Latin America

Group





(re-stated)


Mobile Operator Services

                 10

                151

                     29

                  440

               630

Mobile Internet Services

                   0

                    0

                     28

             28,379

          28,407

Other Service fees

                 10

                    0

                       2

                    14

                 26

Total Revenue

                 20

                151

                     59

             28,833

          29,063







Cost of sales

              (27)

                  95

                  (11)

           (21,447)

       (21,390)

Gross profit

                (7)

                246

                     48

               7,386

            7,673

Selling, marketing and administration expenses

               397

             (249)

                     42

             (6,810)

         (6,620)







Trading EBITDA*

               390

                 (3)

                     90

                  576

            1,053

Depreciation, amortisation and impairment

                   0

                 (1)

                    (1)

                  (57)

              (59)

Share based compensation

            (219)

                    0

                       0

                      0

            (219)

Finance income

                   3

                    0

                       1

                    53

                 57

Profit/(Loss) before tax

               174

                 (4)

                     90

                  572

               832

Taxation

                   0

                    0

                    (7)

                (488)

            (495)

Profit/(loss) after tax

               174

                 (4)

                     83

                    84

               337







Segmental assets                                

               866

                101

                   475

               5,093

            6,493

Segmental liabilities

               163

               (20)

                   249

               2,364

            2,755

 

* Earnings before interest, tax, depreciation, amortization, impairments of assets and share compensation

 

 

 

 



 

The totals presented in the Group's operating region segments reconcile to the Group's key financial figures as presented in its financial statements as follows:

 


2016


2015






£000's


£000's

Segment revenues




Total segment revenues

            12,786


             29,063

Group's revenues

            12,786


            29,063





Segment results




Total segment (Loss)/Profit after tax

           (1,306)


                  337

Group's (Loss)/Profit after tax

           (1,306)


                 337





Segment assets




Total segment assets

              4,152


               6,493

Consolidation eliminations

                       -


                       -

Group's assets

              4,152


              6,493





Segment liabilities




Total segment liabilities

              2,592


               2,755

Consolidation eliminations

                       -


                       -

Groups's liabilities

              2,592


              2,755

 

 

 

 

Revenue in Argentina represents 87.6% of the total revenue of the Group; then Mexico 10.3%, and finally the rest of the companies 2.1%. The Group has 3 customers which account for 10% or more of the revenues. One with  41.2%, one with 30.7% and one with 15.8% of the revenue.

 



 

INTEREST REVENUE

 

Interest Revenue for the year ended 30 June 2016 was £118k (2015: £64k)

 

 

DEFERRED TAX

 

Year ended 30 June 2016






DEFERRED TAX

Europe

Asia Pacific

North America

Latin America

Group







Deferred Tax

                   -

                    -

                       -

                  189

               189


                   -

                    -

                       -

                 189

              189

 

 

Year ended 30 June 2015






DEFERRED TAX

Europe

Asia Pacific

North America

Latin America

Group







Deferred Tax

                   -

                    -

                       -

                  285

              285





                 285

              285

 

22. Capital commitments

The Group has no capital commitments as at 30 June 2016 (30 June 2015: £Nil).


23. Related party transactions    

Key Management

The only related party transactions that occurred during the year were the remuneration of senior management disclosed in note 7. 

24.  RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group is exposed to currency and liquidity risk, which result from both its operating and investing activities. The Group's risk management is coordinated in close co-operation with the Board and focuses on actively securing the Group's short to medium term cash flows by minimising the exposure to financial markets.  The most significant financial risks to which the Group is exposed are described below.  Also refer to the accounting policies.

 

Foreign currency risk

The Group is exposed to transaction foreign exchange risk. The currencies where the Group is most exposed to volatility are US Dollars, Australian Dollars, Argentine Peso, Mexican Peso and Colombian Peso.

Currently, there is generally an alignment of assets and liabilities in a particular market and no hedging instruments are used. In Latin American markets cash in excess of working capital is converted into a hard currency such as US Dollars, except in Argentina, where domestic regulations prevented companies from acquiring US Dollars until December 2015. Given this situation, the Argentine subsidiary is considering other alternatives to hedge a possible devaluation of local currency. The Company will continue to review its currency risk position as the overall business profile changes.

Foreign currency denominated financial assets and liabilities, which are all short-term in nature and translated into local currency at the closing rate, are as follows.

 


2016

2015

000's

000's


USD

AUS

ARS

Other

USD

AUS

ARS

Other

Nominal amounts

£

£

£

£

£

£

£

£










Financial assets

         126

           59

      2,672

       336

              428

           71

      3,963

      1,092

Financial liabilities

      (295)

        (46)

   (1,477)

     (612)

           (247)

        (62)

   (1,681)

      (305)

Short-term exposure

      (169)

           13

      1,195

     (276)

              181

             9

      2,282

         787

 

Percentage movements for the period in regards to the British Pound to US Dollar, Australian Dollar and Argentine Peso exchange rates are as follows. These percentages have been determined based on the average market volatility in exchange rates during the period.

 

 



2016

2015

US Dollar


17%

-8%

Australian Dollar


14%

14%

Argentine Peso


-28%

4%

 

Effect of possible changes in currency rates












£'000


£'000


Currency: GBP





Effect on Profit

Effect on Equity









Effect of a 10% US Dollar devaluation (against the GBP)


           (128)


      (128)











Effect of a 10% US Dollar Appreciation (against the GBP)


              128


         128











Effect of a 10% Australian Dollar devaluation (against the GBP)


                75


           75











Effect of a 10% Australian Dollar appreciation (against the GBP)


             (75)


        (75)











Effect of a 20% Peso devaluation (against the GBP)



           (179)


      (179)










 

 








Year ended 
2016


Year ended 
2015




£000's


£000's







Foreign currency



        402


             (38)

 



 

Liquidity risk

The Group seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs.  Management prepares cash flow forecasts which are reviewed at Board meetings to ensure liquidity.  The Group has no borrowing arrangements.

As at 30 June 2016, the Group's financial liabilities were all current and have contractual maturities as follows:

 

30 June 2016





Within 6 months

6 to 12 months





£000's

£000's









Trade and other payables





510

-

 

The maturity of the Group's financial liabilities, which were all current at the previous year end, was as follows:

30 June 2015





Within 6 months

6 to 12 months





£000's

£000's










Trade and other payables





1,075

-

 

Capital Management Disclosures

Management assesses the Group's capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group could return capital to shareholders or issue new shares.

The Group considers its capital to comprise the following:



2016

2015



£000's

£000's





Ordiary Share capital


                              74

                    74

Share premium


                       10,579

             10,579

translation reserve


                       (3,150)

            (2,133)

Retained earnings


                       (5,943)

            (4,782)



                        1,560

             3,738

 

 

25. EVENTS AFTER THE REPORTING PERIOD

Subsequent to the end of the reporting period, in response to the fall in revenues and the loss incurred for the year ending 30 June 2016, the group initiated a significant restructuring and cost cutting exercise to bring running costs in line with current levels of revenue. These actions include bringing staff numbers down to 14 from 23 in Argentina, closing the Hong Kong office and reducing office space, server and fees for professional services. The cost of implementing these changes is expected to be approximately £0.27m.



Report of the independent auditor to the members of Mobile Streams Plc

We have audited the parent company financial statements of Mobile Streams Plc for the year ended 30 June 2016 which comprise the parent company balance sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 101 Reduced Disclosure Framework.

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditor

The directors are responsible for the preparation of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the parent company financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate.

Opinion on financial statements

In our opinion the parent company financial statements:

·           give a true and fair view of the state of the company's affairs as at 30 June 2016;

·           have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

·           have been prepared in accordance with the requirements of the Companies Act 2006.

 

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic Report and Directors' Report for the financial year for which the financial statements are prepared is consistent with the parent company financial statements.

 

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

·           adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

·           the parent company financial statements are not in agreement with the accounting records and returns; or

·           certain disclosures of directors' remuneration specified by law are not made; or

·           we have not received all the information and explanations we require for our audit.

 

 

 

Other matter

We have reported separately on the consolidated financial statements of Mobile Streams Plc for the year ended 30 June 2016.

 

 

Christopher Smith

Senior Statutory Auditor

for and on behalf of Grant Thornton UK LLP

Statutory Auditor, Chartered Accountants

London

 



 


summary of significant accounting policies

ACCOUNTING POLICIES

Statement of compliance

These financial statements have been prepared in accordance with applicable accounting standards and in accordance with Financial Reporting Standard 101 - "Reduced Disclosure Framework" (FRS 101) The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have all been applied consistently throughout the year unless otherwise stated.

The financial statements have been prepared on a historical cost basis The financial statements are presented in Sterling (£) and have been presented in round thousands (£'000) This is the first year in which the financial statements have been prepared in accordance with FRS 101. The date of transition to FRS 101 is 1 July 2014. There are no measurement differences from the previous accounting framework adopted Disclosure exemptions adopted.

In preparing these financial statements the Company has taken advantage of all disclosure exemptions conferred by FRS 101. Therefore these financial statements do not include:

1.     A statement of cash flows and related notes

2.     The requirements of IAS 24 related party disclosures to disclose related party transactions entered in to between two or more members of the group as they are wholly owned within the group.

3.     The effect of future accounting standards not adopted.

4.     Certain share based payment disclosures.

5.     Disclosures in relation to impairment of assets.

6.     Disclosures in respect of financial instruments (other than disclosures required as a result of recording financial instruments at fair value) .

Additionally, the consolidated Group prepares accounts under IFRS which should be read in conjunction with these statements.

Basis of preparation

The financial statements have been prepared on the historical cost basis.  The principal accounting policies are set out below. The company has applied the exemption under section 408 of the Companies Act 2006 and has not included the individual profit and loss account statement in the financial statements.

Investments IN SUBSIDIARIES

Investments in subsidiaries are stated in the Company's balance sheet at cost less provisions for impairment.

 

 

Deferred taxation

Deferred tax is recognised on all timing differences where the transactions or events that give the Company an obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet date. Deferred tax assets are recognised when it is more likely than not that they will be recovered.

 

Deferred tax is measured using rates of tax that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are not discounted.

 

 

 

 

FOREIGN CURRENCIES

 

Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.  Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. All exchange differences are dealt with through the profit and loss account.

 

OPERATING LEASES

Rentals in respect of leases are charged to the profit and loss account in equal amounts over the lease term.

Share based payments

Employees (including Directors) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services in exchange for shares or rights over shares ('equity-settled transactions').

Equity settled transactions

The Group has applied the requirements of IFRS 2 "Share Based Payments" to all grants of equity instruments.

The cost of equity settled transactions with employees is measured by reference to the fair value at the grant date of the equity instruments granted. The fair value is determined by using the Black-Scholes model.

The cost of equity-settled transactions is recognised, together with a corresponding increase in retained earnings, over the periods in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ('vesting date'). At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management's best estimate of the achievement or otherwise of non-market conditions and of the number of equity instruments that will ultimately vest.  Market conditions are taken into account in determining the fair value of options granted, at grant date, and are not subsequently adjusted for. The movement in cumulative expense since the previous balance sheet date is recognised in the income statement, with a corresponding entry in equity.

No expense or increase in equity is recognised for awards that do not ultimately vest. Awards where vesting is conditional upon a market condition are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance conditions are satisfied.

 

COMpany profit and loss account

The parent Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own profit and loss account in these financial statements. The parent Company's recognized loss for the year ended June 30 2016 was £ 182,413.

 












30 June 2016


30 June 2015




£000's


£000's

Fixed assets













Investments in subsidiaries

                      1

                       20


                       20

Total fixed assets



                       20


                       20

Current assets













Debtors



                      2

                  1,903


                  1,176

Cash and cash equivalents


                       29


795

Others assets


                         7


                         6

Total current assets



                  1,939


                  1,977








Creditors: amounts falling due within one year

                      3

                  (161)


                  (163)

Net current assets



                  1,778


                  1,814








Net assets



                1,798


                1,834

Capital and reserves





Called up share capital


                      4

                       74


                       74

Share premium


                      5

                10,579


                10,579

Profit and loss account


                      5

               (8,855)


               (8,819)

Shareholders funds



                1,798


                1,834

 

 

COMPANY STATEMENT OF CHANGES IN EQUITY


Share

Share

Share based

Profit




capital

premium

payment

and loss




account

account

reserve

account

Total



£000

£000

£000

£000

£000


At 1 July1 2014

                    74

             10,579

                  393

            (9,852)

               1,194


Gain/(loss) for the year




                  421

                  421


Share based payments - share options



                  219


                  219



                   74

           10,579

                 612

           (9,431)

             1,834


At 30 June 2015







(Loss)/gain for the year




               (182)

               (182)


Share based payments - share options



                  146


                  146


At 30 June 2016

                   74

           10,579

                 758

           (9,613)

             1,798


 

The financial statements were approved by the Board of Directors on 9 November 2016.

 

Enrique Benasso

Chief Financial Officer

Company registration number: 03696108

 

 



1.  Investment in subsidiary companies



30 June 2016


30 June 2015



£000's


£000's






Cost

                  3,636


                  3,636






Accumulated impairment


               (3,616)


               (3,616)






Net Book Value after impairment


                       20


                       20

 

Investments in subsidiaries are reviewed for impairment when events indicate the carrying amount may not be recoverable and are accounted for in the Company's financial statements at cost less accumulated impairment losses.

 

Investments in Subsidiary undertakings comprise:

 

 


Proportion held





Directly by Mobile Streams Plc

By other Group companies


Total held by Group

Country of incorporation

Mobile Streams Inc.

100%

-


100%

USA

Appitalism, Inc.

100%

-


100%

USA

Mobile Streams de Argentina SRL

50%

50%


100%

Argentina

Mobile Streams Chile Ltda.

50%

50%


100%

Chile

Mobile Streams de Colombia Ltda.

50%

50%


100%

Colombia

Mobile Streams of Mexico S De RL De CV

50%

50%


100%

Mexico

The Nickels Group Inc.

-

100%


100%

USA

Mobile Streams Venezuela SA

100%

-


100%

Venzuela

Mobile Streams Australia Pty Limited

-

100%


100%

Australia

Mobile Streams (Hong Kong) Limited

100%

-


100%

Hong Kong

Mobile Streams Singapore Limited

-

100%


100%

Singapore

Mobile Streams India Private Limited

99.99%

-


99.99%

India





 

All the subsidiaries' issued shares were ordinary shares and their principal activities were the distribution of licensed mobile phone content.



 

 

2.  Debtors



2016


2015



£000's


£000's






Trade debtors


                       29


                       45

Amounts owed by Group undertaking


                  1,874


                  1,131



                  1,903


                  1,176

 

We estimate these receivables are fully recoverable during the next year.

3. Creditors: amounts falling due within one year



2016


2015



£000's


£000's

Trade creditors


                       69


                       61

Accruals and deferred income


                       92


                     102



                     161


                     163

 

4.  SHARE CAPITAL

For details of share capital refer to note 18 to the Group financial statements.

 

5.  share premium account








Share Premium





£000's








At 1 July 2015


                10,579



Premium on shares issued in year


                         -



At 30 June 2016


                10,579



 

 

6. Capital commitments

The Company has no capital commitments at 30 June 2016 (2015: Nil).


7.  Contingent liabilities

As at 30 June 2016 there were no contingent liabilities (2015: Nil).

 

8. Related party transactions                                          ;                                           60;                           

During the year the Company remunerated senior management personnel as disclosed in note 7 in the consolidated financial statements.

The company is taking advantage of the exemption per IAS 24 which does not require disclosure of transactions entered into between members of a group when one of the transacting parties is a wholly owned subsidiary.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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