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Mirada PLC: DEEP DIVE
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Mirada's switch to a new business model should boost recurring revenues

"The business model is proving solid and with a higher percentage of revenues coming from recurrent subscriber-based licence fees, we are steadily reaching the point of profitability," said chief executive, Jose Luis Vazquez.
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Audio-visual interaction specialist Mirada Plc (LON:MIRA) is leaning heavily on its main shareholder while it develops its order pipeline and the Mexican economy recovers.

Kaptungs, a substantial shareholder of Mirada, is pumping £3mln into the over-the-top TV software specialist by subscribing for 3mln shares at 1p each.

READ Mirada set for cash-for-shares infusion at substantial premium

The company has also entered into a conditional agreement with Kaptungs in respect of the capitalisation of an outstanding £3mln loan facility, which will result in Mirada's obligation to repay the 2018 secured facility being waived, while Kaptungs will receive another 300mln Mirada shares.

If the proposed share issues are approved by shareholders, Kaptungs would hold around 67.35% of the enlarged issued share capital of Mirada; Ernesto Tinajero, through his interest in Kaptungs, would, therefore, be beneficially interested in around 87.21% of Mirada.

Tinajero is a long-term supporter of the company. Between 1996 and 2003, he was a majority shareholder, chairman and chief executive officer of Group Cable TV (Cablecom), the third largest multiple systems operator in Mexico. Cablecom was a customer of Mirada and is now part of the Televisa Group, a current major customer of Mirada.

Little alternative to the dilution of existing shareholders

In an ideal world, Tinajero’s stake would not be so high; existing shareholders are no doubt unhappy about their stakes being substantially diluted by the issue of new equity but there was little alternative given management’s decision to make the transition to a new business model.

The new operating expenditure business model, whereby Mirada provides subscriber-based licences on a 'software-as-a-service' basis; makes life easier for customers, through lower set-up fees, but requires a significant initial working capital commitment from Mirada.

READ Mirada expects World Cup to boost 2019 revenues after robust 2018 results​

Customers perceive that the model is aligned with their business plans, increasing Mirada's chance to land new deals, chief executive Jose Luis Vazquez said in the company’s full-year results statement.

Revenue in the year to the end of March 2018 increased to US$8.82mln from US$8.49mln the year before, lifted by contracts wins with ATN International in the Caribbean and Digital TV Cable Edmund in Bolivia as well as the revaluation of the US dollar against the euro, which contributed US$0.63mln to revenues.

Revenues from Mexican telecoms giant izzi Telecom, which uses Mirada’s Iris multi-screen solution, fell as it decreased investments in foreign goods and services due to a stronger dollar against the peso. The peso weakened following the election of US President Donald Trump, who wants to build a wall at the Mexican border.

However, Mirada said the situation “normalised” after a few months with higher confidence in the market during the second half of 2017.

Gross profit rose to US$7.94mln from US$7.88mln last year while the net loss narrowed to US$4.87mln from US$7.10mln a year ago.

"Mirada participated in a significant number of advanced stage tenders during the year and is seen as an increasingly relevant supplier as new bids appear in the market. I am glad to say that we currently have a strong pipeline in terms of the number of opportunities we are participating in. This pipeline and an increasing number of successful references is helping us secure new opportunities and we are confident of announcing new relevant contract wins in the near future," said Jose Luis Vazquez, the chief executive officer of Mirada.

What is the Iris solution?

Mirada's Iris TV Everywhere solution enables content to be viewed across set-top boxes, smartphones and tablets.

All of them working seamlessly through Mirada's state-of-the-art Inspire user interface.

Subscribers enjoy multi-screen viewing, the ability to pause viewing on one device and resume viewing on another, as well as access to more content and on-demand TV.

Mirada's products and solutions have been deployed by some of the biggest names in digital media and broadcasting including Televisa, Telefonica, Sky, Virgin Media, BBC, ITV and France Telecom.

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Mirada PLC Timeline

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