26 September 2024
Mobile
Tornado Group plc
("Mobile
Tornado", the "Company" or the "Group")
Half
Yearly Report
Mobile Tornado (AIM: MBT), a leading
provider of resource management mobile solutions to the enterprise
market, announces its unaudited results for the
six-month period to 30 June 2024.
Financial highlights
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Six months
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Six
months
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ended
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ended
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30 June
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30
June
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2024
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2023
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Unaudited
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Unaudited
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£'000
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£'000
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Recurring revenue
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859
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964
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Non-recurring revenue*
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203
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293
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Total revenue
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1,062
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1,257
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Gross profit
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1,031
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1,129
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Administrative expenses
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(1,180)
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(1,284)
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Adjusted EBITDA**
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(149)
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(155)
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Group operating loss
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(191)
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(144)
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Loss
before tax
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(604)
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(527)
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· Total
revenue decreased by 16% to £1.06m (H1 2023: £1.26m)
o Recurring revenues decreased by 11% to £0.86m (H1 2023:
£0.96m)
o Non-recurring revenues* decreased by 31% to £0.20m (H1 2023:
£0.29m)
· Operating expenses decreased by 8% to £1.18m (H1 2023:
£1.28m)
· Adjusted EBITDA** loss of £0.15m (H1 2023: £0.16m)
· Group
operating loss for the period increased to £0.19m (H1 2023:
£0.14m) - impacted by exchange differences
of £0.04m gain (H1 2023: £0.10m gain)
· Loss
before tax of £0.60m (H1 2023: £0.53m)
· Basic
loss per share of 0.15p (H1 2023: 0.14p)
· Net
cash inflow from operating activities of £0.04m (H1 2023: £0.28m
outflow)
· Net
debt at 30 June 2024 of £11.10m (H1 2023: £10.43m)
· Cash
and cash equivalents of £0.13m (30 June 2023: £0.05m)
*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
· Multiple new partner deals signed, a result of our wider
business development strategy launched in 2023
· Deal
closed with Zain Iraq, part of Zain Group, a leading mobile network
operator ("MNO") in the Middle East and Africa through our
in-country partner
· Partner deals agreed with major systems integrators including
Wiconnect, 3GCOM and CAYES
· Development and launch of a new live video streaming service
and software radio bridge, further enhancing our offering to the
market
Jeremy Fenn, Chairman and acting CEO of Mobile Tornado,
said: "The
strategy we launched in early 2023 to widen our network of industry
partners and establish a presence in new international markets has
continued. During 2024, we have secured deals with multiple new
partners covering the Nordics, Gulf States, USA, UK and North
Africa. We have significantly expanded our addressable market over
the last 18 months and the plan is to continue investing in this
strategy as we move through this year and into 2025.
"In one of
our most significant deals in recent years, we announced on 8 May
2024 that we had been chosen to supply a range of cutting-edge
technologies to a prominent MNO and provider of innovative
technologies in the Middle East and Africa. We are now pleased to
be able to confirm that this MNO is Zain Iraq, part of Zain Group
("Zain"). Zain serves over 50 million active individual and
business customers, offering a comprehensive selection of mobile
voice and data services. Zain was in search of a range of solutions
to enhance its services for enterprise customers managing diverse
workforces across various industries. After a competitive
procurement process involving globally recognised telecoms
companies, Guardia Systems, an IT systems integrator, was selected
to deliver our push-to-talk over cellular and live video
communication services. I am delighted to see this new commercial
partnership being formally launched this week at the ITEX Expo
being held in Iraq, with members of our team in
attendance.
"The Board
is focused on growing the Company's recurring revenues as this will
be the primary driver for delivering increased shareholder value.
We are now engaged with significantly more partners and end
customers than we were 18 months ago, and I am hopeful that these
relationships will begin to deliver material uplifts in sales
activity as we move forward. We will also continue to explore
initiatives where we can improve the efficiency of the business to
ensure that our operational gearing is maximized when the revenue
streams start to grow."
Enquiries:
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Mobile Tornado Group plc
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+44
(0)7734 475 888
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Jeremy Fenn, Chairman and acting
CEO
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www.mobiletornado.com
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Allenby Capital Limited (Nominated Adviser &
Broker)
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+44
(0)20 3328 5656
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James Reeve / Piers Shimwell
(Corporate Finance)
David Johnson (Sales and Corporate
Broking)
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Financial results
Total turnover in the six-month
period to 30 June 2024 decreased by 16% to £1.06m (H1 2023:
£1.26m). Recurring revenues decreased by 11% to £0.86m (H1 2023:
£0.96m).
Non-recurring revenues, comprising
installation fees, hardware, professional services and capex
license fees decreased by 31% to £0.20m (H1 2023: £0.29m). Gross
profit decreased by 9% to £1.03m (H1 2023: £1.13m).
Administrative expenses
before depreciation, amortisation, exceptional
items and exchange differences in the year
decreased by 8% to £1.18m (2023: £1.28m),
reflecting the continued positive impact that further investment 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 £0.04m (H1 2023: £0.10m
gain) arising principally from the appreciation of Sterling against
the US Dollar compared to the start of the period. As a result of
the above, the loss after tax for the period increased to £0.63m
(H1 2023: Loss of £0.56m).
The Group reported a net cash inflow
from operating activities during the period of £0.04m (H1 2023:
£0.28m outflow). At 30 June 2024, the Group had £0.13m cash at bank
(30 June 2023: £0.05m) and net debt of £11.10m (30 June 2023:
£10.43m).
Review of operations
Recurring revenues were down
slightly because of the renegotiated exclusive contract with our
partner in South Africa, where we adjusted the commercial terms to
provide a more competitively priced proposition. We are focussed on
developing a significant uplift in recurring revenues over the next
few years and embarked, in early 2023, on a broad-based business
development strategy to materially enhance our commercial footprint
across all key global markets. Attendance at key trade shows,
marketing outreach into key industry verticals, and investment in
sales and business development personnel have been the key drivers,
and as a result, we have increased the number of our contracted
partners significantly since early 2023.
During the first half
a new partnership was entered into with Wiconnect
to make our platform available across The Cooperation Council for
the Arab States of the Gulf (GCC) region. Wiconnect was established
in 2005 and has grown into one of the leading system integrators
for carrier grade wireless communications technologies and services
in The GCC region.
We formally re-entered the Canadian
market in signing a new partner agreement with Prairie Mobile
Communications, a leading Canadian telecommunications provider
based in the Prairie provinces. They have grown into a significant
regional player, offering a wide range of services including
wireless communications, two-way radios, and satellite systems and
specialize in serving industries like agriculture, oil and gas, and
emergency services.
A new partnership agreement was
signed with One Choice Technology, a U.S.-based company that
provides comprehensive IT and telecommunications services to
businesses across various industries. Specializing in managed IT
solutions, the company offers services like cloud computing,
network security, VoIP (Voice over IP) communications, and data
backup solutions.
A further partner agreement was
signed with Excelerate, a leading UK-based provider of mobile
communications and connectivity solutions, specializing in critical
and emergency response sectors. Their solutions are widely used by
emergency services, government agencies, and organizations that
require resilient communication networks during disasters, crisis
management, or field operations. They are thus well positioned to
offer our mission-critical communications across the UK and
internationally.
We also expanded our presence in the
continent of Africa through a reseller partnership with 3GCOM one
of the leading global system integrators for IT and telecom
solutions in North Africa. 3GCOM is based in Morocco and spearheads
the promotion of innovative proven technology across a range of
government, public and private organisations.
In recent weeks we entered into the
Nordics market through a new reseller agreement with CAYES, an
enterprise security solutions provider. CAYES have worked with
industry leaders in security and mobile markets for over 20 years
and offer secure scalable solutions for businesses and public
customers of all sizes in the Nordic region.
As well as partners that sell our
solution directly into their own customer bases, we are also
collaborating with other solution providers where there is strong
compatibility between the two offerings. For example, we recently
announced a new partnership with Flic, which allows users of our
application to access PTToC and trigger the SOS alert feature with
a simple push of the discreet smart Flic button, rather than via
the device itself. The Flic button is in demand across a range of
industry sectors where efficiency, instant communication and safety
are priorities. It is ideal for users who want or need to operate
discreetly and for users who cannot readily access their device. We
are also in discussions with one of the leading bodycam
manufacturers to integrate our solution with their hardware and
hope to launch this proposition to the market before the end of the
year.
Notwithstanding the greater focus on
business development and sales, we continue to invest significant
sums into our R&D activity to ensure our solution remains at
the forefront of critical communications. Most development work is
driven by existing or prospective customer requirements and during
the period we launched two exciting new products.
Our new live video streaming service
allows users to make one-to-one video calls
with other PTToC users, either directly from their device or from
the PC dispatcher application. Video calls can also be made with
groups of up to 35 PTToC users per call. In critical situations,
push-to-video at the scene of an incident allows command centres to
get a clear, real-time understanding of what is unfolding. For
example, footage from an officer's body camera can provide
invaluable visual context, allowing a workforce to make more
informed decisions and coordinate an effective response
plan.
We also launched a new software
radio bridge which acts as a central hub
and integrates seamlessly with an existing LMR and DMR network. It
provides unparalleled flexibility and reach, without the need for a
physical gateway and donor devices.
As well as continually developing
our software platform, we must also ensure that the service can be
deployed on multiple handsets covering all key price points. During
the period, we have successfully introduced new devices from Motorola, Inrico, Nokia, Lynknex, Estalky and
Ruggear into our ecosystem.
Board Changes
The Board announced on 20 June the
appointment of Luke Wilkinson as Chief Operating Officer and Marcus
Emptage as Finance Director.
On 6 September, the Company
announced that Peter Wilkinson, Non-Executive Director, had
resigned and stepped down with immediate effect. Having joined the
Board in November 2006 Peter has made a huge contribution to the
business with significant provision of both debt and equity
finance. Peter informed the Company that he was looking to reduce
his business commitments but would continue to support the business
through the provision of the revolving credit facility. A search is
currently underway for a new Non-executive
Director.
Funding
As announced on 30 August 2024, our
revolving loan facility with InTechnology plc was assigned by them
to Holf Investments Ltd. In addition to the assignment, the term of
the loan facility was extended by 12 months to 26 September 2025.
This facility has a maximum principal amount of £500,000. The
balance drawn down at 30 June 2024 and also at today's date is
£150,000.
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 strategy we launched in early
2023 to widen our network of industry partners and establish a
presence in new international markets has continued. During 2024 we
have secured deals with multiple new partners covering the Nordics,
Gulf States, USA, UK and North Africa. We have significantly
expanded our addressable market over the last 18 months and the
plan is to continue investing in this strategy as we move through
this year and into 2025.
At the same time, we will continue
to invest in the technical platform to ensure we evolve feature
sets and functionality to meet developing market demands. The
recent launch of our Push to Video service and our software
switching functionality were driven by clear requirements from
existing and prospective customers.
In one of our most significant deals
in recent years, we announced on 8 May 2024 that we had been chosen
to supply a range of cutting-edge technologies to a prominent MNO
and provider of innovative technologies in the Middle East and
Africa. We are now pleased to be able to confirm that this MNO is
Zain Iraq, part of Zain Group ("Zain"). Zain serves over 50 million
active individual and business customers, offering a comprehensive
selection of mobile voice and data services. Zain was in search of
a range of solutions to enhance its services for enterprise
customers managing diverse workforces across various industries.
After a competitive procurement process involving globally
recognised telecoms companies, Guardia Systems, an IT systems
integrator, was selected to deliver our push-to-talk over cellular
and live video communication services. I am delighted to see this
new commercial partnership being formally launched this week at the
ITEX Expo being held in Iraq, with members of our team in
attendance.
We will continue seeking these types
of quality partner in the markets where we can see significant
growth opportunity and these efforts will continue over the coming
months with attendance at multiple trade exhibitions and expos. The
partners we have signed up are being provisioned and trained to
deploy our technology to their end user customers, and as this base
expands, we hope to see our revenue streams building as we finish
this year and move into 2025.
The Board is focused on growing the
Company's recurring revenues as this will be the primary driver for
delivering increased shareholder value. We are now engaged with
significantly more partners and end customers than we were 18
months ago, and I am hopeful that these relationships will begin to
deliver material uplifts in sales activity as we move forward. We
will also continue to explore initiatives where we can improve the
efficiency of the business to ensure that our operational gearing
is maximized when the revenue streams start to grow.
Once again, I would like to thank
our whole team for their contribution across the last few months,
and Peter for the 17 years of service and support he has given the
Company.
Jeremy Fenn
Chairman
26
September 2024