Final Results
08 Juni 2007 - 9:01AM
UK Regulatory
RNS Number:0063Y
Blue Star Mobile Group plc
08 June 2007
BLUE STAR MOBILE GROUP PLC
(AIM: BTR)
Preliminary Results
Blue Star Mobile Group PLC ("Blue Star"), the provider of mobile marketing and
content solutions, announces preliminary results for the year ended 31 March
2007.
Highlights
- Turnover up 45% to #4.4m (2006: #3.1m)
- Gross Profit up 73% to #1.8m (2006: #1.1m)
- Gross Margin % increased to 41% (2006 35%) as contribution from
higher margin brand and promotions increased significantly
- EBITDA up to #213,000 (2006: loss #41,000)
- Profit before tax up to #101,000 (2006: loss #65,000)
- Profit after tax up to #62,000 (2006: #21,000)
Operational Highlights
- David Beckham - Negotiated and now manage the global agreement
between Motorola and David Beckham.
- 20th Century Fox - Production and delivery of mobile marketing
campaigns to promote their launch of major film releases.
- Bacardi Global Brands- Appointed as the Global Mobile Marketing
Agency.
- FIFA World Cup 2006 - Significant World Cup activity including the
activation in the UK of T-Mobile's official sponsorship.
- International Sales - International sales now 26% of total sales.
- US Operation - The incorporation of Blue Star Mobile Inc and the
opening, in October 2006, of its Chicago HQ.
- China - Successful launch of "Mobile WOW" a communications platform
in China, and commencement of process to set up business subsidiary.
In his statement, David Cromwell, Chairman, said:
"Our company has continued to grow and we have seen increasing
internationalisation in our business.
"As highlighted in our previous announcements the brand and product marketing
area is where we saw the most growth opportunities and this has proved to be the
case.
"We will continue to develop relationships with new and existing partners in the
UK and Overseas. In addition we will focus on media agencies to access brands
where we see they have great opportunity to utilise the mobile channel."
For further Information, please contact
Blue Star Mobile Group PLC Parkgreen Communications Ltd
Steve Clarke, Chief Executive T: 020 7173 2360 Paul McManus T: 020 7479 7933
Adam Hayes, Finance Director T: 020 7173 2360 M: 07980 541893
About Blue Star Mobile Group PLC
The Group consists of three companies:-
Blue Star Mobile Ltd is a leading market provider in developing and delivering
mobile marketing solutions for large blue chip organisations. The company
creates compelling propositions and delivers a complete end-to-end technical
solution. Clients include: Motorola, News Group Newspapers, Sky, Bacardi and
Zenith.
Blue Star Sport Ltd specialises in providing sports marketing services to mobile
brands. Its role is to negotiate, manage and activate sponsorship contracts in
both the UK and overseas for its clients. Blue Star Sport's main clients are
T-Mobile UK, acting as their exclusive football sponsorship agency and Motorola
Inc, managing their David Beckham global partnership.
Blue Star Mobile Inc is the North American subsidiary set up to develop mobile
marketing and promotional activity in the US market. Its initial customers are
Motorola and 20th Century Fox.
Blue Star Mobile Group PLC
Chairman's Statement
The Mobile Market
The mobile phone is the device that nobody leaves at home and it is becoming
increasingly important for brands to have a "mobile strategy". Blue Star
believes that the mobile content and mobile solutions industry is however
extremely confusing to both consumers and corporates. The majority of consumers
do not know how to download content or activate WAP settings. Corporates do not
have the capability or resource to handle content rights, handset compatibility,
content formatting and the ability to develop innovative marketing solutions
using mobile. With its knowledge of the industry and its creative talents, Blue
Star addresses these issues and delivers solutions to its customers.
These solutions include building services that deliver access to both internet
and corporate intranets.
Even as consumers and corporates become more knowledgeable about mobile content
and mobile solutions, we believe the industry will become more complex as mobile
handset technology develops and mobile handset capabilities increase. Therefore
the need for cutting-edge products and services will remain for existing and new
clients alike.
Financial Results
The Group has generated a turnover of #4.4m (2006: #3.1m) in the year ending 31
March 2007.
In the same period Gross Profit rose to #1.8m (2006: #1.1m) and the Group made a
profit before tax of #101,000 (2006: loss #65,000).
The Group made a profit after tax of #62,000 (2006 #21,000).
The business held #0.3m of net cash at 31 March 2007 having invested cash in the
working capital of the business.
The Group commissioned and purchased a range of music tracks from leading DJs.
These have then been sold on, on a short term basis, to customers as part of a
promotion. The Group owns these tracks and anticipates ongoing future revenues
from the tracks.
The Directors do not propose the payment of a dividend.
Business Review
Turnover Analysis
2007 H2 H1 2006
Brand & Product Marketing 1,723 944 779 473
Channel Marketing 1,345 700 645 1,419
Sports marketing 1,366 616 750 1,172
Total 4,434 2,260 2,174 3,064
Brand & Product Marketing (turnover up 264%)
Our role is to work with Blue Chip organisations to create new and innovative
ways for them to promote their brand or specific product to their desired
audience through the mobile channel, for which we receive a development fee and
an ongoing management fee. This includes developing services that put both the
internet and intranet onto the mobile phone in an effective way. The growth in
H2 is underpinned by our expanding relationship with Motorola, for whom we
delivered a number of promotions, including one linked to their sponsorship of
the Brit awards and our first overseas orders for a sales information service
delivered over a mobile handset to Motorola employees in China. We develop
promotions and services in partnership with a number of advertising agencies and
their brand clients. Corporate Brands we have worked with in this period include
British Airways, Esselte, Virgin Mobile, Football Association and Sky.
This is the area where we see most growth potential for the business,
particularly as the capability of mobile handsets is increasing and brands and
advertising agencies are becoming aware of the need to develop and implement
mobile strategies.
Channel Marketing (turnover down 5%)
We work with media companies to develop and manage their mobile services,
operating a revenue share business model which aligns the interests of all
parties to deliver growth and offer a successful service. Growth was impacted by
a reduced level of competitions run in H2 of this year and price erosion in the
wallpapers and ringtones market. We have received approval to syndicate certain
content with the Network operators and anticipate that this will return this
channel to growth in 2007/8.
Sports Marketing (turnover up 17%)
Our role is to negotiate and manage all aspects of a customer's sports
sponsorship activity for which we receive a pre-defined fee.
As stated in previous announcements there was significant spend in H1 as
T-Mobile was a major sponsor of the World Cup and the subsequent spend in H2 was
reduced in line with expectations.
The year saw T-Mobile further extend the contract to negotiate, manage and "
activate" its English and Scottish football sponsorship until the end of the
2008 football season, although the level of activity is expected to reduce
significantly.
The year also saw the winning of the contract to manage Motorola's global
agreement with David Beckham.
2007 H2 H1 2006
Sales 4,434 2,260 2,174 3,064
Gross Profit 1,838 1,026 812 1,062
Costs (1746) (936) (809) (1,137)
Profit (Loss) before tax 101 94 7 (65)
Profit after Tax 62 57 5 21
The key objectives for the period were to establish a profitable business and to
support the growth and internationalisation of the business. We believe that we
have delivered on both of these objectives.
Gross Profit % rose to 41% reflecting higher margins in the Brand and Product
Marketing area.
Costs were up 55% reflecting the growth in salary costs as we expanded the team
to support the growing business, and an increase in travel costs linked to the
international expansion of the business. Cost control remains a key focus of the
team.
The business moved into profit at both the operating and pre tax levels in the
year.
Outlook
We believe that the business will continue to grow going forward as we exploit
opportunities within the growing mobile marketing and content solutions markets.
We will continue to encourage and exploit our entrepreneurial management skills
and culture, all of which are needed in this market place and we remain aware of
the need to continue sound financial disciplines as we grow and expand.
We will continue to develop relationships with our existing partners in the UK
and Overseas. In addition we will focus on media agencies to access brands where
we see they have great opportunity to utilise the mobile channel.
Blue Star Sport Ltd will seek to diversify its client base further whilst
targeting opportunities within the sports and mobile sectors.
Summary
We are pleased with the performance of Blue Star Mobile Group PLC to date and
whilst we understand the challenges ahead, we are very excited and optimistic
about the potential that our business can realise in a rapidly growing market.
As a start up business, now showing strong growth trends we recognise the valued
part played by our people. It takes courage, commitment and self belief to
invest one's career in a new business and it is precisely these attributes,
along with creativity and skill, that have delivered the performance to date. We
will continue to value and invest in our people and continue to safeguard the
interests of our investors.
David Cromwell
Chairman
8th June 2007
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 March 2007
Unaudited
Year Audited
ended Period ended
31 March 31 March
2007 2006
Note (Restated)
#'000 #'000
TURNOVER 4 4,434 3,064
COST OF SALES (2,596) (2,002)
GROSS PROFIT 1,838 1062
Administrative expenses (1,746) (1,137)
OPERATING PROFIT (LOSS) 92 (75)
Interest receivable and similar income 9 10
PROFIT (LOSS) ON ORDINARY ACTIVITIES
BEFORE TAXATION 101 (65)
Tax on profit on ordinary activities (39) 86
RETAINED PROFIT FOR THE FINANCIAL YEAR 62 21
BASIC PROFIT PER ORDINARY SHARE p/share 5 .21 .07
FULLY DILUTED PROFIT PER ORDINARY SHARE p/share 5 .21 .07
There are no recognised gains and losses other than those passing through the
profit and loss account.
CONSOLIDATED BALANCE SHEET
As at 31 March 2007
Unaudited Audited
As at As at
31 March 31 March
2007 2006
(Restated)
Note #'000 #'000
FIXED ASSETS
Intangible Assets 476 426
Other tangible fixed assets 30 25
506 451
CURRENT ASSETS
Debtors 1,398 805
Cash at bank and in hand 274 400
1,672 1,205
CREDITORS: amounts falling due
within one year (1211) (763)
NET CURRENT ASSETS 461 442
TOTAL ASSETS LESS CURRENT LIABILITIES 967 893
CREDITORS: amounts falling due
after more than one year - -
NET ASSETS 967 893
CAPITAL AND RESERVES
Called up share capital 7 295 295
Share premium account 7 1,225 1,225
Share option reserve 7 21 9
Reverse acquisition reserve 7 (211) (211)
Profit and loss account 7 (363) (425)
EQUITY SHAREHOLDERS' FUNDS 967 893
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 March 2007
Unaudited Audited
Year ended Period ended
31 March 31 March
2007 2006
Note (Restated)
#'000 #'000
Net cash (outflow) from operating activities 6 (112) (214)
Returns on investment and servicing of finance
Interest received 9 10
Interest paid
Net cash inflow from returns on investments and servicing of finance 9 10
Taxation
UK corporation tax paid - -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (23) (15)
Net cash outflow from capital expenditure and financial investment (23) (15)
Acquisitions and disposals
Payments to acquire subsidiary - (98)
Cash acquired in subsidiary - 26
Net cash (outflow) from acquisitions and disposals - (72)
Equity dividends paid - -
Cash (outflow) before financing (126) (291)
Financing
Issue of share capital - 1,051
Expenses incurred in issuing share capital - (155)
Repayment of borrowings - (646)
Net cash inflow from financing - 250
(Decrease) in cash (126) (41)
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
Year ended 31 March 2007
1. The financial information included in the report comprises the
consolidated profit and loss account, the consolidated balance sheet, the
consolidated cash flow statement and notes 1 to 10. These have been prepared in
accordance with the normal accounting policies of the Group.
Change in accounting policy
The group has adopted FRS 20 Share-based payments. The adoption represents a
change in accounting policy and the comparative figures have been restated
accordingly.
Employees of the group receive part of their remuneration in the form of
share-based payment transactions, whereby the employee provides services in
exchange for shares or rights over shares (equity-settled transactions).
The fair value of employee share options is calculated at the date of grant
using the Black- Scholes model. In accordance with FRS 20 the resulting cost is
charged to the Profit and Loss account over the vesting period. The value of the
charge is adjusted to reflect the expected and actual levels of vesting.
This resulted in an additional charge of #9,000 in period ended 31 March 2006
and a charge of #12,000 in the year ended 31 March 2007.
2. This financial information does not constitute statutory accounts
within the meaning of s240 (5) of the Companies Act 1985.
3. Blue Star Mobile Group PLC was incorporated on 25th February 2005. In
the consolidated financial information the group adopted reverse acquisition
accounting for its acquisition of Blue Star Mobile Ltd in March 2005.
4. Analysis of Turnover
By Segment
Unaudited Audited
Year Period
ended ended
31 March 31 March
2007 2006
#'000 #'000
Channel Marketing 1,344 1,419
Brand and Product Marketing 1,723 473
Sports Marketing 1,367 1,172
Turnover 4,434 3,064
By Destination
Unaudited Audited
Year Period
ended ended
31 March 31 March
2007 2006
#'000 #'000
UK 3,262 2,908
Overseas 1,172 156
Turnover 4,434 3,064
By Origination
Unaudited Audited
Year Period
ended ended
31 March 31 March
2007 2006
#'000 #'000
UK 4,378 3,064
USA 56 -
Turnover 4,434 3,064
5. Earnings per Share
The calculation of basic earnings per share is based on the profit for the
financial year of #62,000 and the weighted average number of ordinary shares in
issue during the year of 29,528,163. The calculation of the diluted earnings per
share is based on the basic earnings per share adjusted to allow for the
dilutive effect of contingently issuable shares.
6. Reconciliation of operating loss to net cash inflow from operating
activities
Unaudited Audited
Year Period
ended ended
31 March 31 March
2007 2006
#'000 #'000
Operating profit (loss) 92 (75)
Depreciation 19 12
Amortisation of Intangibles 80 -
Amortisation of Goodwill 22 22
Share Option Charge 12 9
(Increase) in debtors (632) (531)
Increase in creditors 295 349
Net cash (outflow) from operating activities (112) (214)
7. Statement of movements on share capital and reserves
Called up Share Reverse Profit
share Share option acquisition and loss
capital premium reserve reserve account Total
#'000 #'000 #'000 #'000 #'000 #'000
At 31 March 2006 295 1,225 - (211) (416) 893
PYA - Creation of share option reserve - - 9 - (9) -
At 31 March 2006 revised 295 1,225 9 (211) (425) 893
Retained profit for the period - - - - 62 62
Share Option Charge - - 12 - - 12
At 31 March 2007 295 1,225 21 (211) (363) 967
8. Financial Information
This preliminary announcement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985.
The statutory accounts for the period ended 31 March 2006 have been delivered to
the Registrar of Companies and included an audit report which was unqualified
and which did not contain a statement under Section 237(2) or (3) of the
Companies Act 1985. The statutory accounts for the year ended 31 March 2007,
upon which the auditors have still to report, will be delivered to the Registrar
following the Company's Annual General Meeting.
9. Annual Report & Financial Statements
The Annual report and Financial Statements will be posted to shareholders
shortly and will include notification of the date of the Annual General Meeting.
10. Copies of this statement and the annual report will be available to the
public for collection at the Company's registered office at 116 Gloucester
Place, London, W1U 6HZ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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