RNS Number : 2760N
Mobile Tornado Group PLC
29 September 2021
 

29 September 2021

Mobile Tornado Group plc

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

Half Yearly Report

Mobile Tornado (AIM: MBT), the leading provider of instant communication mobile applications to the enterprise market, announces its unaudited results for the six-month period to 30 June 2021.

Financial highlights

 

 

 

 

 

 

 

Six months

 

 

Six months

 

ended

 

 

ended

 

30 June

 

 

30 June

 

2021

 

 

2020

 

Unaudited

 

 

Unaudited

 

£'000

 

 

£'000

 

 

 

 

 

Recurring revenue

1,066

 

 

1,014

Non-recurring revenue*

203

 

 

280

Total revenue

1,269

 

 

1,294

 

 

 

 

 

Gross profit

1,232

 

 

1,169

 

 

 

 

 

Administrative expenses

(1,219)

 

 

(1,374)

 

 

 

 

 

Adjusted EBITDA**

13

 

 

(205)

 

 

 

 

 

Group operating loss

(76)

 

 

(533)

 

 

 

 

 

Loss before tax

(378)

 

 

(835)

 

 

·             

·             

·             

·             

·             

·             

·            Net cash inflow from operating activities of £0.11m (H1 2020: £0.31m)                  

·             

·             

*Non-recurring revenues comprising installation fees, hardware, professional services and capex license fees

**Earnings before interest, tax, depreciation, amortisation, exceptional items and excluding exchange differences

 

 

 

 

 

Operating Highlights

 

·              Continued resilience of our recurring revenue base in the face of a challenging global trading environment

·              Significant deal closed in Columbia with a global security company

·             

·              workforce management functionality and device management capabilities.

 

Jeremy Fenn, Chairman of Mobile Tornado, said: "The biggest challenge we have faced during the last 18 months has been customer engagement and new customer acquisition due to the enforced travel restrictions as a result of COVID-19. This problem has been particularly acute in two of our primary markets, South America and Africa. The strength of our customer base, technical platform and recurring revenue streams has allowed us to trade through the period without incurring material losses or requiring further cash injections. Given the relative size of our business, this has been a notable achievement.

 

"Notwithstanding the difficulties it has caused us, the COVID-19 pandemic has positively impacted the workforce management market, driving digitisation and automation across business sectors globally. In the wake of the disruption that has been caused, many businesses have identified the need to improve employee time, attendance and scheduling processes, thereby driving the efficiency of their workforces.

 

"We have identified this wider opportunity and believe that the addition of WFM and MDM functionality to our real time communication platform, will offer something unique and compelling to the market. We look forward to updating shareholders in November when we expect to formally launch this new platform to the market.

 

"In the meantime, we are continuing to support our existing partners across the many geographies within which we operate. We have reached a position where the cost base is broadly covered by core recurring revenues, and we are now seeing increasing levels of activity. I am hopeful that we may see some revenue growth in the second half as we continue to be engaged with some significant prospects across all key markets."

 

Enquiries:

Mobile Tornado Group plc

+44 (0)7734 475 888

Jeremy Fenn, Chairman

 

Allenby Capital Limited (Nominated Adviser & Broker)

+44 (0)20 3328 5656

James Reeve / Piers Shimwell (Corporate Finance)

David Johnson (Sales and Corporate Broking)

 

 

Walbrook PR Ltd

+44 (0)20 7933 8780

Paul Vann / Nick Rome

 

mobiletornado@walbrookpr.com

 

Financial results

 

Total turnover in the six-month period to 30 June 2021 decreased by 2% to £1.27m (H1 2020: £1.29m). Recurring revenues increased by 5% to £1.07m (H1 2020: £1.01m). Non-recurring revenues, comprising installation fees, hardware, professional services and capex license fees decreased by 28% to £0.20m (H1 2020: £0.28m). Gross profit increased by 5% to £1.23m (H1 2020: £1.17m), a result of the increase in higher margin recurring revenues.

 

Operating expenses before depreciation, amortisation, exceptional items and exchange differences in the period continued on a downward trajectory, decreasing by 11% to £1.22m (H1 2020: £1.37m) and reflecting the continued positive impact those previous investments in the development and operating efficiencies of our enhanced technical platform have delivered.

 

Due to the annual revaluation of certain financial liabilities on the balance sheet, the Group reported a currency translational gain of £0.08m (H1 2020: £0.16m loss) arising from the appreciation of Sterling comparative to the start of the period. As a result of the above, the loss after tax for the period decreased by 57% to £0.36m (H1 2020: Loss £0.84m).

 

The Group reported a net cash inflow from operating activities during the period of £0.11m (H1 2020: £0.31m) reflecting the continued strong focus on cash management. At 30 June 2021, the Group had £0.16m cash at bank (30 June 2020: £0.45m) and net debt of £9.09m (30 June 2020: £8.16m).

 

 

Review of operations

 

The continued resilience of our recurring revenue base has been the key highlight of our first half trading performance. We have seen a 5% overall increase, with positive uplifts in South America offsetting some churn from our customer in Canada.

 

Our partner in Colombia closed out a significant deal with a global security company, which provides further validation that our communication platform is attractive to major corporate enterprises with large remote workforces.

 

The COVID-19 related restrictions that have continued in our primary markets of South America and South Africa have made it difficult to engage and deploy trials with prospective customers, which has made winning new business challenging. As a result, our non-recurring revenues are slightly down on the prior period. There are, however, clear signs that enterprises and government agencies are engaging again with our partners in these territories and I am optimistic that we will see activity levels increasing as we finish the year.

 

To counter the challenging trading environment, we have kept tight control of our cost base, and the platform efficiencies we have driven through the business has allowed us to deliver a saving on operating expenses, which has enabled us to announce a positive EBITDA outcome for the period. We have also continued to report a net cash inflow from operating activities which, given the challenges we have faced during the last 18 months, is a further testament to the strength of our business model and the quality of the customers deploying our platform.

 

 

Research and development

 

Given the lull in activity levels during the last 12 months, and the reduction in demands on our technical team, we have taken the opportunity to continue the development of our proposition, with a view to expanding our addressable market.

 

We have been developing a comprehensive resource management solution, which combines the current Push to Talk ('PTT') application with workforce management functionality ('WFM') and mobile device management ('MDM'). Many of our customers are currently using our PTT service alongside separate WFM and MDM applications. We believe this new approach will offer customers a more efficient and cost-effective way to optimise the management of remote workforces and streamline back-office operations.

 

Our target market will be businesses with remote workforces, but initially we will focus on the security, hospitality and public utility verticals. We will continue to distribute the new proposition through resellers and mobile network operators, but in the future, we may look to sell direct through the internet.

 

We have commenced beta trials with several companies and expect to formally launch the new service in November of this year, when more detail around the features and functionality of the new platform will be released.

 

 

Funding

 

We announced on 24 September 2021 a 12-month extension of our £0.3m revolving loan facility with principal shareholder, Intechnology plc. This facility now has a term ending on 26 September 2022 and as at today's date, the balance drawn down is £nil.

 

Whilst we recognise the continued uncertainty COVID-19 brings to our projections, we remain confident that our available cash resources together with our long-established recurring revenue customer base and anticipated future contracts will provide us with adequate financial resources for the foreseeable future.

 

 

Outlook

 

The biggest challenge we have faced during the last 18 months has been customer engagement and new customer acquisition due to the enforced travel restrictions as a result of COVID-19. This problem has been particularly acute in two of our primary markets, South America and Africa. The strength of our customer base, technical platform and recurring revenue streams has allowed us to trade through the period without incurring material losses or requiring further cash injections. Given the relative size of our business, this has been a notable achievement.

 

Notwithstanding the difficulties it has caused us, the COVID-19 pandemic has positively impacted the workforce management market, driving digitisation and automation across business sectors globally. In the wake of the disruption that has been caused, many businesses have identified the need to improve employee time, attendance and scheduling processes, thereby driving the efficiency of their workforces.

 

We have identified this wider opportunity and believe that the addition of WFM and MDM functionality to our real time communication platform, will offer something unique and compelling to the market. We look forward to updating shareholders in November when we expect to formally launch this new platform to the market.

 

In the meantime, we are continuing to support our existing partners across the many geographies within which we operate. We have reached a position where the cost base is broadly covered by core recurring revenues, and we are now seeing increasing levels of activity. I am hopeful that we may see some revenue growth in the second half as we continue to be engaged with some significant prospects across all key markets.

 

 

 

 

Jeremy Fenn

Chairman

29 September 2021

Consolidated income statement

For the six months ended 30 June 2021

 

 

 

 

 

Six months

 

Six months

 

Year

 

 

ended

 

ended

 

ended

 

 

30 June

 

30 June

 

31 December

 

 

2021

 

2020

 

2020

 

 

Unaudited

 

Unaudited

 

Audited

 

Note

£'000

 

£'000

 

£'000

Continuing Operations

 

 

 

 

 

 

Revenue

 

1,269

 

1,294

 

2,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

(37)

 

(125)

 

(181)

Gross profit

 

1,232

 

1,169

 

2,351

 

 

 

 

 

 

 

Other operating expenses

 

(1,219)

 

(1,374)

 

(2,722)

Group operating profit/(loss) before exchange

 

 

 

 

 

 

differences, exceptional items, depreciation

 

 

 

 

 

 

and amortisation expense

 

13

 

(205)

 

(371)

Exchange differences

 

78

 

(155)

 

(69)

Depreciation and amortisation expense

 

(167)

 

(173)

 

(344)

 

 

 

 

 

 

 

Total operating expenses

 

(1,307)

 

(1,702)

 

(3,135)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group operating loss

 

(76)

 

(533)

 

(784)

 

 

 

 

 

 

 

Finance costs

 

(302)

 

(302)

 

(606)

 

 

 

 

 

 

 

Loss before tax

 

(378)

 

(835)

 

(1,390)

Income tax credit

 

22

 

(1)

 

248

Loss for the period

 

(356)

 

(836)

 

(1,142)

 

 

 

 

 

 

 

Loss per share (pence)

 

 

 

 

 

 

Basic and diluted

3

        (0.09)

 

          (0.22)

 

          (0.30)

 

 

 

 

Consolidated statement of comprehensive income

For the six months ended 30 June 2021

 

 

 

 

Six months

 

Six months

 

Year ended

 

 

ended

 

ended

 

ended

 

 

30 June

 

30 June

 

31 December

 

 

2021

 

2020

 

2020

 

 

Unaudited

 

Unaudited

 

Audited

 

 

£'000

 

£'000

 

£'000

 

 

 

 

 

 

 

Loss for the period

 

(356)

 

(836)

 

(1,142)

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translation

 

 

 

 

 

 

of foreign operations

 

7

 

(38)

 

16

 

 

 

 

 

 

 

Total comprehensive loss for the period

 

(349)

 

(874)

 

(1,126)

 

 

 

 

 

Consolidated statement of changes in equity

For the six months ended 30 June 2021 

 

 

Share

Share

Reverse acquisition

Merger

Translation

Retained

Total

 

capital

premium

reserve

reserve

reserve

earnings

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance at 1 January 2020

        7,595

        15,797

         (7,620)

        10,938

          (2,220)

        (36,466)

        (11,976)

 

 

 

 

 

 

 

 

Equity settled share-based payments

             -

               -

                 -

               -

                  -

                 9

                 9

 

 

 

 

 

 

 

 

Transactions with owners

                -

                  -

                    -

                  -

                     -

                    9

                    9

 

 

 

 

 

 

 

 

Loss for the period

             -

               -

                 -

               -

                  -

            (836)

            (836)

 

 

 

 

 

 

 

 

Exchange differences on translation

 

 

 

 

 

 

 

of foreign operations

             -

               -

                 -

               -

              (38)

                 -

              (38)

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

 

 

for the period

                -

                  -

                    -

                  -

                (38)

             (836)

             (874)

 

 

 

 

 

 

 

 

Balance at 30 June 2020

        7,595

        15,797

         (7,620)

        10,938

          (2,258)

        (37,293)

        (12,841)

 

 

 

 

 

 

 

 

 

Share

Share

Reverse acquisition

Merger

Translation

Retained

Total

 

capital

premium

reserve

reserve

reserve

earnings

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance at 1 July 2020

        7,595

        15,797

         (7,620)

        10,938

          (2,258)

        (37,293)

        (12,841)

 

 

 

 

 

 

 

 

Equity settled share-based payments

             -

               -

                 -

               -

                  -

               16

               16

 

 

 

 

 

 

 

 

Issue of share capital

             -

               -

                 -

               -

                  -

                 -

               -  

 

 

 

 

 

 

 

 

Transactions with owners

                -

                  -

                    -

                  -

                     -

                  16

                  16

 

 

 

 

 

 

 

 

Loss for the period

             -

               -

                 -

               -

                  -

            (306)

            (306)

 

 

 

 

 

 

 

 

Exchange differences on translation

 

 

 

 

 

 

 

of foreign operations

             -

               -

                 -

               -

                54

                 -

               54

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

 

 

for the period

             -

               -

                 -

               -

                   54

             (306)

             (252)

 

 

 

 

 

 

 

 

Balance at 31 December 2020

        7,595

        15,797

         (7,620)

        10,938

          (2,204)

        (37,583)

        (13,077)

 

 

 

 

 

 

 

 

 

Share

Share

Reverse acquisition

Merger

Translation

Retained

Total

 

capital

premium

reserve

reserve

reserve

earnings

equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance at 1 January 2021

        7,595

        15,797

         (7,620)

        10,938

          (2,204)

        (37,583)

        (13,077)

 

 

 

 

 

 

 

 

Equity settled share-based payments

             -

               -

                 -

               -

                  -

               10

               10

 

 

 

 

 

 

 

 

Issue of share capital

             -

               -

                 -

               -

                  -

                 -

                 -

 

 

 

 

 

 

 

 

Transactions with owners

                -

                  -

                    -

                  -

                     -

                  10

                  10

 

 

 

 

 

 

 

 

Loss for the period

             -

               -

                 -

               -

                  -

            (356)

            (356)

 

 

 

 

 

 

 

 

Exchange differences on translation

 

 

 

 

 

 

 

of foreign operations

             -

               -

                 -

               -

                 7

                 -

                 7

 

 

 

 

 

 

 

 

Total comprehensive income

 

 

 

 

 

 

 

for the period

                -

                  -

                    -

                  -

                     7

             (356)

             (349)

 

 

 

 

 

 

 

 

Balance at 30 June 2021

        7,595

        15,797

         (7,620)

        10,938

          (2,197)

        (37,929)

        (13,416)

                                                                                     

Consolidated balance sheet

As at 30 June 2021

 

 

 

 

30 June

 

30 June

 

31 December

 

 

2021

 

2020

 

2020

 

 

Unaudited

 

Unaudited

 

Audited

 

Note

£'000

 

£'000

 

£'000

Assets

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Property, plant & equipment

 

116

 

194

 

148

Intangible assets

 

                  -

 

31

 

12

Right-of-use assets

 

200

 

437

 

316

 

 

316

 

662

 

476

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Trade and other receivables

 

1,620

 

1,590

 

1,906

Inventories

 

43

 

88

 

56

Cash and cash equivalents

 

159

 

446

 

187

 

 

1,822

 

2,124

 

2,149

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

(4,318)

 

(4,839)

 

(4,968)

Borrowings

 

(3,504)

 

(8,604)

 

(8,902)

Lease liabilities

 

(213)

 

(275)

 

(252)

 

 

 

 

 

 

 

Net current liabilities

 

(6,213)

 

(11,594)

 

(11,973)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Trade and other payables

 

(1,776)

 

(1,728)

 

(1,451)

Borrowings

 

(5,743)

 

                   -

 

(46)

Lease liabilities

 

                  -

 

(181)

 

(83)

 

 

(7,519)

 

(1,909)

 

(1,580)

 

 

 

 

 

 

 

Net liabilities

 

(13,416)

 

(12,841)

 

(13,077)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

Share capital

4

7,595

 

7,595

 

7,595

Share premium

4

15,797

 

15,797

 

15,797

Reverse acquisition reserve

 

(7,620)

 

(7,620)

 

(7,620)

Merger reserve

 

10,938

 

10,938

 

10,938

Foreign currency translation reserve

 

(2,197)

 

(2,258)

 

(2,204)

Retained earnings

 

(37,929)

 

(37,293)

 

(37,583)

Total equity

 

(13,416)

 

(12,841)

 

(13,077)

Consolidated cash flow statement

For the six months ended 30 June 2021

 

 

 

 

Six months

Six months

Year

 

 

ended

ended

ended

 

 

30 June

30 June

31 December

 

 

2021

2020

2020

 

 

Unaudited

 

Unaudited

Audited

 

Note

£'000

£'000

£'000

 

 

 

 

 

Operating activities

 

 

 

 

Cash (used in)/from operations

5

        (187)

 

              26

 

             (101)

Tax credit received

 

           293

            279

               238

Interest paid

 

                -

 

                -

 

                 -  

Net cash inflow from operating activities

 

           106

 

            305

 

               137

 

 

 

 

 

Investing activities

 

 

 

 

Purchase of property, plant & equipment

 

             (9)

 

              (1)

 

                 (3)

Purchase of right-of-use assets

 

                -

                -

                   -

Net cash used in investing activities

 

             (9)

 

              (1)

 

                 (3)

 

 

 

 

 

 

 

 

 

 

Financing

 

 

 

 

Proceeds from/(repayment of) borrowings

 

                -

 

                -

 

                 50

IFRS 16 leases

 

        (124)

 

          (130)

 

             (259)

Net cash (outflow)/inflow from financing

 

        (124)

 

          (130)

 

             (209)

 

 

 

 

 

 

 

Effects of exchange rates on cash

 

 

 

 

 

 

and cash equivalents

 

             (1)

 

                8

 

                 (2)

 

 

 

 

 

Net increase/(decrease) in cash and

 

 

 

 

cash equivalents in the period

 

           (28)

 

            182

 

               (77)

Cash and cash equivalents at beginning of period

 

           187

 

            264

 

               264

Cash and cash equivalents at end of period

 

           159

 

            446

 

               187

 

Notes to the interim report

For the six months ended 30 June 2021

 

 

1          General information

 

The financial information in the interim report does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and has not been audited or reviewed. The financial information relating to the year ended 31 December 2020 is an extract from the latest published financial statements on which the auditor gave an unmodified report that did not contain statements under section 498 (2) or (3) of the Companies Act 2006 and which have been filed with the Registrar of Companies.

 

 

2          Basis of preparation

 

These interim financial statements are for the six months ended 30 June 2021. They have been prepared using the recognition and measurement principles of IFRS.

 

The interim financial statements have been prepared under the historical cost convention.

 

The interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year ended 31 December 2020. The accounting policies have been applied consistently throughout the Group for the purpose of preparation of the interim financial statements.

 

 

3          Loss per share

 

Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders of £356,000 (30 June 2020: £836,000, 31 December 2020: £1,142,000) by the weighted average number of ordinary shares in issue during the period of 379,744,923 (30 June 2020: 379,744,923, 31 December 2020: 379,744,923).

 

 

 

Six months ended

 

Six months ended

 

Year ended

 

30 June 2021

 

30 June 2020

 

31 December 2020

 

Unaudited

 

Unaudited

 

Audited

 

Basic and diluted

 

Basic and diluted

 

Basic and diluted

 

Loss

Loss

 

Loss

Loss

 

Loss

Loss

 

 

per share

 

 

per share

 

 

per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

£'000

pence

 

£'000

pence

 

£'000

pence

 

 

 

 

 

 

 

 

 

Loss attributable to

 

 

 

 

 

 

 

 

ordinary shareholders

      (356)

     (0.09)

 

      (836)

       (0.22)

 

     (1,142)

      (0.30)

 

 

 

4          Share capital and share premium

 

 

Number of

Share

Share

Total

 

shares

capital

premium

 

 

'000

£'000

£'000

£'000

 

 

 

 

 

At 30 June 2020, 31 December 2020 & 30 June 2021

  379,745

  7,595

  15,797

   23,392

 

 

Non-voting preference shares

 

 

 

 

Number of

Nominal

 

 

 

shares

Value

 

 

 

'000

£'000

 

 

 

 

 

At 30 June 2020, 31 December 2020 and 30 June 2021

 

  71,277

     5,702

 

 

Liabilities and preference shares totalling £5,702k were converted into 71,277k 8p preference shares on 28 August 2013. The preference shares are non-voting, non-convertible redeemable preference shares currently redeemable at par value on 31 December 2022, or, at the Company's discretion, at any earlier date. The Preference Shares accrue interest at a fixed rate of 10% per annum.

 

 

5          Cash used in operations

 

 

Six months

Six months

Year

 

ended

ended

ended

 

30 June

30 June

31 December

 

2021

2020

2020

 

Unaudited

Unaudited

Audited

 

£'000

£'000

£'000

 

 

 

 

Loss before taxation

           (378)

             (835)

             (1,390)

 

 

 

 

Adjustments for:

 

 

 

Depreciation and amortisation

             167

               173

                  344

Share based payment charge

                10

                   9

                    25

Interest expense

             302

               302

                  606

 

 

 

 

Changes in working capital:

 

 

 

 

 

 

 

Decrease in inventories

                13

                 28

                    52

Decrease/(Increase) in trade and other receivables

                12

               125

                    76

Increase/(Decrease) in trade and other payables

           (313)

               224

                  186

Net cash inflow from/(used in) operations

           (187)

                 26

                (101)

 

 

6          Shareholder information

 

The interim announcement will be published on the company's website www.mobiletornado.com on 29 September 2021.

 

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