TIDMCDOG
RNS Number : 5907Z
CDialogues PLC
21 September 2015
21 September 2015
CDialogues plc
("CDialogues" or the "Company")
Half Yearly Report - Announcement of interim dividend
CDialogues plc (AIM: CDOG), the provider of mobile marketing
solutions to Mobile Network Operators ("MNOs"), is pleased to
announce its unaudited Half Yearly Report for the six months ended
30 June 2015.
Financial highlights
-- Revenues increased 31% to EUR5.31m (1H 2014: EUR4.05m)
o Subscription revenues accounted for 82% of total revenues (1H
2014: 79%)
-- EBITDA increased 12% to EUR1.62m (1H 2014: EUR1.44m)
-- Profit before tax increased 8% to EUR1.39m (1H 2014: EUR1.29m)
-- Earnings per share of EUR0.217 (1H 2014: EUR0.227)
-- Free cash flow* increased 214% to EUR1.47m (1H 2014: EUR0.47m)
-- Net cash as of 30 June 2015 at EUR3.70m (31.12.2014: EUR2.42m) increased by 53%
-- Interim dividend of 1.25p
*After development costs and capital expenditure and excluding
one-off items relating to AIM listing
Operational highlights
-- During the period, the Company operated mobile marketing
projects in five countries across Middle East and Southeast
Asia
-- Delivery of mobile marketing projects to a total subscriber base of 20 million customers
-- Continuous and successful implementation of subscription-based recurring revenue model
The Board has declared an interim dividend for the year ending
31 December 2015 of 1.25 pence per share which will be paid on 30
October 2015 to shareholders on the register on 2 October 2015. The
Company's shares will go ex-dividend on 1 October 2015.
Pale Spanos, Chief Executive Officer, commented: "We continue to
focus on extending our geographic reach and establishing
relationships with new MNOs via our growing network of regional
representatives. Whilst it has taken longer than we anticipated to
commence some new contracts, we continue to have a strong pipeline
of new projects and remain excited by the potential scalability of
our services and customer base"
Enquiries:
CDialogues Plc Tel: +30 2106 300 930
------------------------ --------------------------
George Karakovounis
------------------------ --------------------------
Pale Spanos
------------------------ --------------------------
Allenby Capital Limited Tel: 0203 328 5656
------------------------ --------------------------
David Hart
------------------------ --------------------------
Alex Brearley
------------------------ --------------------------
Walbrook PR Ltd Tel: 020 7933 8780
------------------------ --------------------------
Paul Cornelius cdialogues@walbrookpr.com
------------------------ --------------------------
Nick Rome
------------------------ --------------------------
About CDialogues
CDialogues provides mobile marketing solutions enabling Mobile
Netwrok Operators (MNOs) to retain and acquire market share,
increase average revenue per user (ARPU) and reducing subscriber
churn.
The Company's products and services deliver fully managed
solutions, utilizing advanced Data analytics techniques combined
with Linguistic engineering marketing, to build awareness and
multiply sales and opt-ins of promotional offerings and other
mobile content being offered by the MNOs.
The solutions designed by the Company, are tailored and served
with the appropriate Linguistic format, to each individual mobile
network subscriber typology and geography it operates in, using its
proprietary software and scalable infrastructure.
The majority of CDialogues' revenues are derived from a
recurring subscription-based revenue model, which has been
pioneered by the Company. As a result, the Company benefits from
incremental cash flow growth from each new campaign customer and
mobile network subscriber.
The Company's near-term focus is on growing both its customer
base and expanding its geographic footprint in selected markets in
the Middle East, East Africa, Eastern Europe and Latin America,
where mobile device penetration and mobile network usage is growing
rapidly.
CDialogues has been profitable and cash flow positive since
commercial operations began in early 2012.
CHIEF EXECUTIVE OFFICER REVIEW
We are pleased to report our financial results for the six
months ended 30June 2015.This was a very productive period for the
Company as we built on the momentum achieved last year. Growing
revenues, profits and cash generation were driven by increases in
subscriber numbers, the number of active campaigns and our extended
geographic reach.
This time last year we were new to the market and were bedding
in our position as a public entity having joined AIM in June 2014.
The focus since then has been on building relationships with MNOs,
moving into new territories and diversifying our geographic reach.
At the time we joined AIM, our sales were derived from a small
number of contracts and territories. As such it was a key objective
to diversify our revenue streams via successful market penetration.
During the first half of 2015 we operated in five countries across
the Middle East and Southeast Asia.
Our focus remains on growing our presence in the Middle East,
East Africa, Eastern Europe and Latin America, where subscriber
churn has traditionally been high due to the fact that mobile phone
subscribers typically utilise pre-pay mobile phone tariffs, making
these markets price sensitive.
Our products and services deliver fully managed solutions,
utilizing advanced data analytics techniques combined with
linguistic engineering marketing, to build awareness and multiply
sales and opt-ins of promotional offerings and other mobile content
being offered by the MNOs. As such, our solutions are tailored and
served with the appropriate linguistic format, to each individual
mobile network subscriber typology and geography the Company
operates in, using its proprietary software and scalable
infrastructure.
By providing these services through our software and marketing
tools, MNOs have for the first time been able to facilitate
subscriber growth and increase customer loyalty as well as
potential revenues. In order to boost our presence, we grew our
regional reach and established relationships with a number of new
MNOs, enabling us to increase subscriber numbers at a low marginal
cost. As a result, during the period we operated mobile marketing
projects for seven MNOs addressing a total subscriber base of 20
million customers. Currently we operate four mobile marketing
projects in two countries across the Middle East.
The opt-in nature of our model and resultant recurring
subscription-based revenue streams provide high levels of
visibility. In addition this ensures that the Company benefits from
incremental cash flow growth for each new campaign customer and
mobile network subscriber.
Outlook
CDialogues announced a trading update on 18 September 2015. In
this it stated that the Company has continued to develop its
operations during the final third of the year, focusing on
extending its customer network and accelerating subscriber
growth.
However, whilst the momentum achieved to date has been pleasing,
some projects which were due to commence in the final quarter of
the current financial year have been delayed, due to decisions
taken by the MNOs regarding the potential start date. As a result,
the Board now anticipates that the Company will generate revenue
and EBITDA in the second half of the current financial year similar
to that achieved in the first half.
Notwithstanding, the Board remains confident that the Company
will continue to expand its client base, subscriber numbers and
geographical footprint. CDialogues remains well placed to
capitalise on the long-term growth opportunities across its
addressable markets. Given the strong existing pipeline of new
projects and indicative launch dates, the Company expects to
announce a number of new launches over the coming quarters.
The Board is pleased to announce today an interim dividend for
the year ending 31 December 2015 of 1.25 pence per share,
demonstrating its confidence in the ongoing opportunities available
to CDialogues.
Pale Spanos
Chief Executive Officer
CHIEF FINANCIAL OFFICER REVIEW
In the six month period ended 30 June 2015, the Company was able
to further leverage its position within a number of countries. The
business model, which derives higher gross margins as campaigns
mature and benefits incrementally from the addition of each new
campaign customer and mobile network subscriber, continued to
demonstrate its viability and scalability during the period.
We are delighted with another six months of strong financial
performance, which resulted in the Company ending the period with a
strong balance sheet and, as such, it remains well placed to grow
further and continue its progressive dividend policy.
Revenues for the six months to 30 June 2015 increased 31.2% to
EUR5.31m (1H 2014: EUR4.05m) as a result of the increased number of
projects the Company operated within the period.
Gross profit was up by 22.0% to EUR2.01m (1H 2014: EUR1.65m)
representing a gross margin of 37.8% (1H 2014: 40.6%). The
reduction in gross margin resulted from increased cost of sales as
new projects came on stream. Administration and selling &
distribution costs were EUR0.61m (1H 2014: EUR0.35) representing
11.4% of revenues (1H 2014:8.6%).
Operating profit (after depreciation and amortisation) was up by
8.2% to EUR1.40m (1H 2014: EUR1.30m) representing a margin of 26.4%
(1H 2014: 32.0%). While variable costs increase with each new
project, due to marketing and associated incentive costs, our
subscription revenue model and 'opt-in' nature of our service
ensures we have high revenue visibility as the number of
participants in each project increases.
EBITDA increased by 12.4% to EUR1.62m (1H 2014: EUR1.44m)
representing a margin of 30.4% (1H 2014: 35.6% and FY2014:
29.6%).
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Profit before tax increased by 7.7% to EUR1.39m (1H 2014:
EUR1.29m) with a margin of 26.2% (1H 2014: 31.9%) while basic
earnings per share were EUR0.217 (1H 2014: EUR0.227).
Operating cash flow remained strong with net cash flows before
changes in working capital increased by 13.8% to EUR1.64m (1H 2014:
EUR1.44m) representing over a 100% of EBITDA. After taking into
account working capital movements, cash flow from operating
activities increased by 181.3% to EUR1.96m (1H 2014: EUR0.70m) as a
result of the efficient working capital management. Cash flows used
in investing activities (which comprise primarily investment in
software development) were EUR 0.49m (1H 2014: 0.23m).
Free Cash Flow (being net operating cash flows less net cash
flows used in investing activities) was up by 213.6% to EUR1.47m
(1H 2014: EUR0.47m) which illustrates the ability within the
business to manage working capital requirements as the business
expands.
As a result, net cash as of 30 June 2015 was EUR3.70m
(31.12.2014: EUR2.42m) increased by 53.0%, which provides a firm
foundation for further growth. The Company (and its subsidiaries)
maintains over 90% of its cash in banks in the United Kingdom and
does not generate any revenues in the Greek market.
George Karakovounis
Vice Chairman & Chief Financial Officer
CDialogues Plc - Financial Statements in accordance with
IFRS
30 June 2015
Consolidated statement of comprehensive income for the period
ended 30 June 2015
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Period ended Period ended Year ended 31 December
Notes 30 June 2015 Unaudited 30 June 2014 Unaudited 2014 Audited
------ ------------------------ ------------------------ -------------------------
Revenue 5,312,384 4,048,286 9,924,449
Cost of sales 5 (3,304,675) (2,403,225) (6,401,796)
------------------------ ------------------------ -------------------------
Gross profit 2,007,709 1,645,061 3,522,653
Administrative expenses 5 (319,207) (116,650) (353,167)
Selling and distribution
costs 5 (287,771) (233,301) (543,135)
Other operating income - - 1,758
Operating profit 1,400,731 1,295,110 2,628,109
Finance income 27 638 1,660
Finance costs (11,680) (5,803) (15,934)
------------------------ ------------------------ -------------------------
Profit before tax 1,389,078 1,289,945 2,613,835
Income tax expense 7 (37,113) (35,463) (60,924)
------------------------ ------------------------ -------------------------
PROFIT FOR THE PERIOD 1,351,965 1,254,482 2,552,911
======================== ======================== =========================
Other comprehensive
income:
Other comprehensive
income to be
reclassified to profit
or loss in subsequent
periods:
Exchange differences on
translation of foreign
operations 209 7,693 (1,349)
Net loss on
available-for-sale
financial assets - - (80,212)
------------------------ ------------------------ -------------------------
209 7,693 (81,561)
Net other comprehensive
income to be
reclassified to profit
or loss in subsequent
periods 209 7,693 (81,561)
Other comprehensive
income not to be
reclassified to profit
or loss in subsequent
periods:
Actuarial loss - - (1,223)
Income tax effect - - 318
------------------------ ------------------------ -------------------------
- - (905)
Net other comprehensive
income not to be
reclassified to profit
or loss in subsequent
periods - - (905)
Other comprehensive
income/(loss) for the
period, net of tax 209 7,693 (82,466)
------------------------ ------------------------ -------------------------
Total comprehensive
income for the period,
net of tax 1,352,174 1,262,175 2,470,445
======================== ======================== =========================
Profit for the period
attributable to:
Equity holders of the
parent 1,351,965 1,254,482 2,552,911
1,351,965 1,254,482 2,552,911
======================== ======================== =========================
Total comprehensive
income for the period,
attributable to:
Equity holders of the
parent 1,352,174 1,262,175 2,470,445
1,352,174 1,262,175 2,470,445
======================== ======================== =========================
Earnings per share
Basic, profit for the
period attributable to
ordinary equity holders
of the parent 8 0.2166 0.2269 0.4336
Diluted, profit for the
period attributable to
ordinary equity holders
of the parent 8 0.2154 0.2265 0.4313
Consolidated statement of financial position as at 30 June
2015
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Notes 30 June 2015 Unaudited 30 June 2014 Unaudited 31 December 2014 Audited
------ ----------------------- ----------------------- -------------------------
ASSETS
Non-current Assets
Property, plant and
equipment 9 37,671 43,793 37,185
Intangible Assets 10 1,020,459 638,714 749,440
Deferred tax assets 16,286 18,695 25,880
Trade and other
receivables 11 9,508 9,508 9,508
----------------------- ----------------------- -------------------------
1,083,924 710,710 822,013
Current Assets
Trade and other
receivables 11 2,493,117 2,069,183 3,952,938
Available for sale
financial assets 22,230 102,443 22,230
Cash and cash equivalents 3,702,381 1,752,480 2,419,927
----------------------- ----------------------- -------------------------
6,217,728 3,924,106 6,395,095
TOTAL ASSETS 7,301,652 4,634,816 7,217,108
======================= ======================= =========================
EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Issued share capital 12 75,213 24,213 75,213
Share premium 12 579,583 570,673 565,572
Reserves 21,862 95,679 16,745
Retained earnings 5,328,188 2,919,800 4,156,004
----------------------- ----------------------- -------------------------
Total Equity 6,004,846 3,610,365 4,813,534
----------------------- ----------------------- -------------------------
Non-current liabilities
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Employee benefit liability 23,905 13,514 16,505
----------------------- ----------------------- -------------------------
23,905 13,514 16,505
Current liabilities
Trade and other payables 13 1,207,190 919,392 2,311,912
Income tax payable 65,711 91,545 75,157
----------------------- ----------------------- -------------------------
1,272,901 1,010,937 2,387,069
Total liabilities 1,296,806 1,024,451 2,403,574
----------------------- ----------------------- -------------------------
TOTAL EQUITY AND
LIABILITIES 7,301,652 4,634,816 7,217,108
======================= ======================= =========================
Consolidated statement of changes in equity for the period ended
30 June 2015
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Ordinary share capital Share premium Reserves Retained earnings Total equity
----------------------- -------------- --------- ------------------ -------------
Balance at 1 January
2014 15,000 - 93,743 1,659,561 1,768,304
======================= ============== ========= ================== =============
Profit for the period - - - 1,254,482 1,254,482
Other comprehensive
income - - - 7,693 7,693
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - - 1,262,175 1,262,175
Issue of share capital
net of issue cost 9,213 570,673 - - 579,886
Transfers to reserves - - 1,936 (1,936) -
Balance at 30 June
2014 (Unaudited) 24,213 570,673 95,679 2,919,800 3,610,365
======================= ============== ========= ================== =============
Profit for the period - - - 1,298,429 1,298,429
Other comprehensive
loss - - (80,212) (9,947) (90,159)
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - (80,212) 1,288,482 1,208,270
Issue of share capital
net of issue cost - (5,101) - - (5,101)
Share capital increase
through
capitalization of
profits 51,000 - - (51,000) -
Transfers to reserves - - 1,278 (1,278) -
Balance at 31 December
2014 (Audited) 75,213 565,572 16,745 4,156,004 4,813,534
======================= ============== ========= ================== =============
Profit for the period - - - 1,351,965 1,351,965
Other comprehensive
income - - - 209 209
----------------------- -------------- --------- ------------------ -------------
Total comprehensive
income - - - 1,352,174 1,352,174
Share-based payments - 14,011 - - 14,011
Transfers to reserves - - 5,117 (5,117) -
Dividends (Note 14) - - - (174,873) (174,873)
Balance at 30 June
2015 (Unaudited) 75,213 579,583 21,862 5,328,188 6,004,846
======================= ============== ========= ================== =============
Consolidated statement of cash flows for the period ended 30
June 2015
(Amounts in Euro, except share information, per share data and
unless otherwise stated)
Period ended 30 June Period ended 30 June Year ended 31 December
Notes 2015 Unaudited 2014 Unaudited 2014 Audited
------ ------------------------ ------------------------ -------------------------
Cash flows from
Operating Activities
Profit before income tax 1,389,078 1,289,945 2,613,835
Adjustment to reconcile
profit before tax to net
cash flows
Non-cash items:
Depreciation of
property, plant and
equipment 5 7,201 8,207 16,050
Amortization of
intangible assets 5 208,623 134,477 294,063
Share-based payment
expense 14,011 - -
Finance income (27) (638) (1,660)
Finance costs 11,680 5,803 15,934
Movements in provisions
and provisions for
employee benefits 6 7,400 1,706 3,474
Operating cash flows
before changes in
working capital 1,637,966 1,439,500 2,941,696
Working capital
adjustments:
(Increase)/Decrease in
trade and other
accounts
receivable 1,459,821 (938,194) (2,977,503)
Increase/(Decrease) in
trade and other
accounts
payable (1,104,722) 209,169 1,815,756
Income tax paid (36,759) (14,976) (64,296)
Net cash flows from
operating activities 1,956,306 695,499 1,715,653
------------------------ ------------------------ -------------------------
Cash flows from
investing activities
Purchase of property,
plant and equipment (7,687) (2,091) (3,326)
Purchase of intangible
assets (479,642) (225,589) (495,900)
Interest received 27 638 1,660
Net cash flows used in
investing activities (487,302) (227,042) (497,566)
------------------------ ------------------------ -------------------------
Cash flows from
financing activities
Proceeds from the
issuance of share
capital net of
issue costs 638,399 574,785
Interest paid (11,680) (5,803) (15,934)
Dividends paid to
equity holders of the
parent 14 (174,873) - -
Net cash flows
from/(used in)
financing activities (186,553) 632,596 558,851
------------------------ ------------------------ -------------------------
Net increase in cash and
cash equivalents 1,282,451 1,101,053 1,776,938
Cash and cash
equivalents at
beginning of year 2,419,927 643,717 643,717
Net foreign exchange
differences 3 7,710 (728)
Cash and cash
equivalents at end of
the period 3,702,381 1,752,480 2,419,927
======================== ======================== =========================
Notes to the unaudited interim consolidated financial statements
for the period ended 30 June 2015
(Throughout the notes to the financial statements all amounts
are presented in Euros except share information, per share data and
unless otherwise stated)
1. Corporate information
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The interim consolidated financial statements of CDialogues plc
and its subsidiaries (collectively, the "Group") for the six months
ended 30 June 2015 have been prepared on the basis set out
below.
CDialogues plc (the "Company") was incorporated in England and
Wales as a Limited Liability Company in June 2011 and during 2014
as a consequence of its listing on AIM became a public company
limited by shares.
The operations of CDialogues Plc are not affected by seasonal
variations.
The interim report for the six months ended 30 June 2015 was
approved by the Directors on 18 September 2015.
2. Basis of preparation
Basis of preparation and statement of compliance
The interim consolidated financial statements of the Group have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and issued by the
International Accounting Standards Board (IASB).
The interim consolidated financial statements have been prepared
on a historical cost basis, except for, available-for-sale (AFS)
financial assets that have been measured at fair value.
The interim consolidated financial statements have been prepared
in accordance with IAS 34 Interim Financial Reporting. The
Directors have assessed the Group to continue operating as a going
concern and believe that the preparation of these financial
statements on the going concern basis is appropriate.
The interim consolidated financial statements do not include all
the information and disclosures required in the annual financial
statements, and should be read in conjunction with the Group's
annual consolidated financial statements for the year ended 31
December 2014.
3. Changes in accounting policies and disclosures
New standards, interpretations and amendments adopted by the
Group
The accounting policies adopted in the preparation of the
interim consolidated financial statements are consistent with those
followed in the preparation of the Group's annual consolidated
financial statements for the year ended 31 December 2014, except
for the adoption of new standards and interpretations effective as
of 1 January 2015. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is
not yet effective.
The nature and the effect of these changes are disclosed below.
Although these new standards and amendments apply for the first
time in 2015, they do not have a material impact on the annual
consolidated financial statements of the Group or the interim
condensed consolidated financial statements of the Group. The
nature and the impact of each new standard or amendment are
described below:
Amendments to IAS 19 Defined Benefit Plans: Employee
Contributions
IAS 19 requires an entity to consider contributions from
employees or third parties when accounting for defined benefit
plans. Where the contributions are linked to service, they should
be attributed to periods of service as a negative benefit. These
amendments clarify that, if the amount of the contributions is
independent of the number of years of service, an entity is
permitted to recognise such contributions as a reduction in the
service cost in the period in which the service is rendered,
instead of allocating the contributions to the periods of service.
This amendment is effective for annual periods beginning on or
after 1 July 2014. This amendment is not relevant to the Group,
since none of the entities within the Group has defined benefit
plans with contributions from employees or third parties.
The IASB has issued the Annual Improvements to IFRSs 2011 - 2013
Cycle, which is a collection of amendments to IFRSs. The amendments
are effective for annual periods beginning on or after 1 January
2015.
Ø IFRS 3 Business Combinations: This improvement clarifies that
IFRS 3 excludes from its scope the accounting for the formation of
a joint arrangement in the financial statements of the joint
arrangement itself.
Ø IFRS 13 Fair Value Measurement: This improvement clarifies
that the scope of the portfolio exception defined in paragraph 52
of IFRS 13 includes all contracts accounted for within the scope of
IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9
Financial Instruments, regardless of whether they meet the
definition of financial assets or financial liabilities as defined
in IAS 32 Financial Instruments: Presentation.
Ø IAS 40 Investment Properties: This improvement clarifies that
determining whether a specific transaction meets the definition of
both a business combination as defined in IFRS 3 Business
Combinations and investment property as defined in IAS 40
Investment Property requires the separate application of both
standards independently of each other.
Standards issued but not yet effective and not early adopted
In addition to those standards and interpretations that have
been disclosed in the financial statements for the year ended 31
December 2014, the following new standards, amendments to standards
and interpretations have been issued but are not effective for the
financial year beginning 1 January 2015 and have not been early
adopted from the Group:
-- IAS 16 Property, Plant & Equipment and IAS 38 Intangible
assets (Amendment): Clarification of Acceptable Methods of
Depreciation and Amortization
-- IFRS 9 Financial Instruments: Classification and Measurement
-- IFRS 11 Joint arrangements (Amendment): Accounting for
Acquisitions of Interests in Joint Operations
-- IFRS 14 Regulatory Deferral Accounts
-- IFRS 15 Revenue from Contracts with Customers
-- IAS 27 Separate Financial Statements (amended)
-- Amendment in IFRS 10 Consolidated Financial Statements and
IAS 28 Investments in Associates and Joint Ventures: Sale or
Contribution of Assets between an Investor and its Associate or
Joint Venture
-- IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying
the Consolidation Exception (Amendments)
-- IAS 1: Disclosure Initiative (Amendment)
-- The IASB has issued the Annual Improvements to IFRSs 2010 -
2012 Cycle, which is a collection of amendments to IFRSs. The
amendments are effective for annual periods beginning on or after 1
February 2015. Management estimates that those amendments will not
affect the financial statements except from possible additional
disclosures.
Ø IFRS 2 Share-based Payment
Ø IFRS 3 Business combinations
Ø IFRS 8 Operating Segments
Ø IFRS 13 Fair Value Measurement
Ø IAS 16 Property Plant & Equipment
Ø IAS 24 Related Party Disclosures
Ø IAS 38 Intangible Assets
-- The IASB has issued the Annual Improvements to IFRSs 2012 -
2014 Cycle, which is a collection of amendments to IFRSs. The
amendments are effective for annual periods beginning on or after 1
January 2016. These annual improvements have not yet been endorsed
by the EU. Management estimates that those amendments will not
affect the financial statements except from possible additional
disclosures.
Ø IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations
Ø IFRS 7 Financial Instruments: Disclosures
Ø IAS 19 Employee Benefits
Ø IAS 34 Interim Financial Reporting
4. Operating segment information
For the purpose of IFRS 8, the chief operating decision-maker
("CODM"), who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the
Board of Directors. The CDialogues Group is a provider of Mobile
Marketing services. The Group's revenue and profit before taxation
were all derived from its principal activity. Over 95% of revenues
from the period were derived from external customers based in the
Middle East which is considered as one geographical segment. Based
on the above considerations, there is considered to be one
reportable segment: mobile marketing services in the Middle East.
Internal and external reporting is on a consolidated basis, with
transactions between Group companies eliminated on consolidation.
Therefore the financial information of the single segment is the
same as that set out in the consolidated statement of comprehensive
income, the consolidated statement of financial position, the
consolidated statement of changes in equity and the consolidated
statement of cash flows.
5. Expenses by nature
Period ended 30 June Period ended 30 June Year ended 31 December
Note 2015 2014 2014
------------------------- ------------------------- -------------------------
Payroll and related costs 6 190,834 153,000 266,845
Depreciation of property,
plant and equipment 9 7,201 8,207 16,050
Amortization of
intangible assets 10 208,623 134,477 294,063
Operating lease payments 34,599 39,064 73,888
Cost of mobile marketing
projects 3,058,304 2,260,498 6,193,677
Connectivity & hosting
costs 64,864 64,024 124,712
Auditors' remuneration 21,832 9,750 58,299
Third parties fees 199,196 8,270 135,948
Directors' salaries and
fees 91,455 - 116,373
Traveling expenses 63,487 24,053 46,255
Net foreign exchange
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differences (79,018) 8,783 (124,199)
Other 50,276 43,050 96,187
Total 3,911,653 2,753,176 7,298,098
========================= ========================= =========================
Allocation of expenses by category:
-------------------------------------
Cost of sales 3,304,675 2,403,225 6,401,796
Administrative expenses 319,207 116,650 353,167
Selling and distribution costs 287,771 233,301 543,135
Total 3,911,653 2,753,176 7,298,098
========== ========== ==========
Allocation of depreciation and amortization by category:
-----------------------------------------------------------
Cost of sales 212,944 139,401 301,668
Administrative expenses 1,440 1,642 5,910
Selling and distribution costs 1,440 1,641 2,535
Total 215,824 142,684 310,113
======== ======== ========
6. Payroll and related costs
Period ended Period ended
30 June 30 June
2015 2014 Year ended 31 December 2014
------------- ------------- ----------------------------
Wages and salaries 249,082 160,975 332,605
Social security costs 54,944 44,288 83,947
Pension costs 7,400 1,706 3,474
Less: Amounts transferred to development cost (120,592) (53,969) (153,181)
Total 190,834 153,000 266,845
============= ============= ============================
7. Income tax
The amounts of income taxes which are reflected in the
accompanying interim financial statements are analysed as
follows:
Period ended Period ended
30 June 30 June
2015 2014 Year ended 31 December 2014
------------- ------------- ----------------------------
Current income tax 27,313 42,511 75,443
Deferred income tax 9,800 (7,048) (14,519)
Income tax in the income statement 37,113 35,463 60,924
============= ============= ============================
The reconciliation of income taxes reflected in the statements
of comprehensive income and the amount of income taxes determined
by the application of the composite rate is as follows:
Period ended Period ended
30 June 30 June
2015 2014 Year ended 31 December 2014
------------- ------------- ----------------------------
Profit before tax 1,389,078 1,289,945 2,613,835
At United Kingdom statutory income tax rate of 21.5%
(2014: 21.5%) 298,652 257,989 561,975
Income not subject to taxation (53,161) (148,896) (108,657)
Expenses not deductible for taxation purposes - 1,017 21,609
Differences in tax rates (208,384) (74,647) (417,847)
10% additional charge - - 2,353
Defence contribution current year 6 - 491
Business tax - - 1,000
Total 37,113 35,463 60,924
============= ============= ============================
8. Earnings per share
Basic earnings per share amounts are calculated by dividing net
profit for the reporting period attributable to ordinary equity
holders of the parent by the weighted average number of ordinary
shares outstanding during the respective period.
Diluted earnings per share amounts are calculated by dividing
the net profit attributable to ordinary equity holders of the
parent by the weighted average number of ordinary shares
outstanding during the period plus the weighted average number of
ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
Period ended Period ended
30 June 30 June
2015 2014 Year ended 31 December 2014
------------- ------------- ----------------------------
Net profit attributable to ordinary equity holders of
the parent 1,351,965 1,254,482 2,552,911
Weighted average number of ordinary shares for basic
earnings per share 6,240,550 5,529,851 5,888,121
Earnings per share basic 0.2166 0.2269 0.4336
============= ============= ============================
Weighted average number of ordinary shares for basic
earnings per share 6,240,550 5,529,851 5,888,121
Effect on dilution:
Warrants 36,307 9,608 30,617
------------- ------------- ----------------------------
36,307 9,608 30,617
Weighted average number of ordinary shares adjusted
for the effect of dilution 6,276,857 5,539,459 5,918,738
------------- ------------- ----------------------------
Earnings per share diluted 0.2154 0.2265 0.4313
============= ============= ============================
9. Property plant and equipment
Property plant and equipment in the accompanying interim
financial statements of the Group are analysed as follows:
Transportation assets Furniture & other office equipment Total
---------------------- ----------------------------------- -------
Cost
Balance at 1 January 2014 22,500 51,431 73,931
Additions - 3,326 3,326
Balance at 31 December 2014 22,500 54,757 77,257
---------------------- ----------------------------------- -------
Balance at 1 January 2015 22,500 54,757 77,257
Additions 7,687 7,687
Balance at 30 June 2015 22,500 62,444 84,944
---------------------- ----------------------------------- -------
Accumulated Depreciation
Balance at 1 January 2014 1,688 22,334 24,022
Depreciation expense 3,375 12,675 16,050
Balance at 31 December 2014 5,063 35,009 40,072
---------------------- ----------------------------------- -------
Balance at 1 January 2015 5,063 35,009 40,072
Depreciation expense 1,688 5,513 7,201
Balance at 30 June 2015 6,751 40,522 47,273
---------------------- ----------------------------------- -------
Net book value at 1 January 2014 20,812 29,097 49,909
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====================== =================================== =======
Net book value at 31 December 2014 17,437 19,748 37,185
====================== =================================== =======
Net book value at 30 June 2015 15,749 21,922 37,671
====================== =================================== =======
10. Intangible assets
Intangible assets in the accompanying interim financial
statements of the Group are analysed as follows:
Software development cost (internally
Purchased software generated) Total
------------------- ------------------------------------------- ----------
Cost
Balance at 1 January 2014 376,690 384,065 760,755
Additions 321,720 174,180 495,900
Balance at 31 December 2014 698,410 558,245 1,256,655
------------------- ------------------------------------------- ----------
Balance at 1 January 2015 698,410 558,245 1,256,655
Additions 290,250 189,392 479,642
Balance at 30 June 2015 988,660 747,637 1,736,297
------------------- ------------------------------------------- ----------
Accumulated amortization
Balance at 1 January 2014 63,143 150,010 213,153
Amortisation expense 160,157 133,905 294,062
Balance at 31 December 2014 223,300 283,915 507,215
------------------- ------------------------------------------- ----------
Balance at 1 January 2015 223,300 283,915 507,215
Amortisation expense 126,834 81,789 208,623
Balance at 30 June 2015 350,134 365,704 715,838
------------------- ------------------------------------------- ----------
Net book value at 1 January 2014 313,547 234,055 547,602
=================== =========================================== ==========
Net book value at 31 December 2014 475,110 274,330 749,440
=================== =========================================== ==========
Net book value at 30 June 2015 638,526 381,933 1,020,459
=================== =========================================== ==========
11. Trade and other receivable
Trade and other receivable in the accompanying interim financial
statements of the Group are analysed as follows:
Period ended Period ended
30 June 30 June Year ended
2015 2014 31 December 2014
------------- ------------- ------------------
Trade receivables - - 47,360
V.A.T. receivable 37,028 201,303 39,620
Accrued Income 2,422,425 1,730,779 3,850,737
Prepaid expenses 33,450 121,837 14,896
Other receivables 9,722 24,772 9,833
Total 2,502,625 2,078,691 3,962,446
============= ============= ==================
Non current assets 9,508 9,508 9,508
Current assets 2,493,117 2,069,183 3,952,938
Total 2,502,625 2,078,691 3,962,446
============= ============= ==================
12. Share capital and share premium
The movement of the Company's share capital and share premium is
analysed as follows:
For the period ended 30 June 2015 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2015 6,240,550 75,213 565,572 640,785
Share-based payments - - 14,011 14,011
At 30 June 2015 6,240,550 75,213 579,583 654,796
============= ============== ============== ===============
For the year ended 31 December 2014 No of shares Share capital Share premium Total increase
------------- -------------- -------------- ---------------
At 1 January 2014 15,000 15,000 - 15,000
Bonus shares issued 11/06/2014 51,000 51,000 - 51,000
Share split on 11/06/2014 5,500,000 - - -
Issued on 11/06/2014 152,550 1,950 - 1,950
Issued on 27/06/2014 588,000 7,263 1,532,780 1,540,043
Shares issue costs - - (967,208) (967,208)
At 31 December 2014 6,240,550 75,213 565,572 640,785
============= ============== ============== ===============
On 16 April 2013, pursuant to a written resolution of the
Founders the 5,000 issued ordinary shares of EUR1.00 each were
re-designated A Ordinary Shares of EUR1.00 each.
On 16 April 2013 10,000 A ordinary shares of EUR1.00 each were
issued to the Founders.
On 11 June 2014, pursuant to written resolutions of the
Founders:
-- each of the issued existing A ordinary shares of EUR1.00 in
the capital of the Company was redesignated as an ordinary share of
EUR1.00 each;
-- the sum of EUR51,000 (being part of the Company's
distributable reserves) was capitalised and appropriated as capital
to the Founders and the Directors were authorised to apply such sum
in paying up in full 51,000 new ordinary shares in the Company (the
"Bonus Shares") and to allot and issue such Bonus Shares, credited
as fully paid up, to the Founders at the rate of 3.4 Bonus Shares
for every 1 existing ordinary share of EUR1.00 each held by
them;
-- the entire issued share capital of the Company was
redenominated from Euros (EUR) to Pounds Sterling (GBP) at a then
prevailing exchange rate of EUR 1.2 to GBP1
-- the issued existing ordinary shares of EUR1.00 in the capital
of the Company were consolidated on the basis of 1 new ordinary
share of GBP1.00 each in the capital of the Company for every 1.2
existing ordinary shares of EUR1.00 previously held; and each of
the issued existing ordinary shares of GBP1.00 in the capital of
the Company arising from the consolidation was subdivided into 100
new ordinary shares of GBP0.01 each in the capital of the Company
for every 1 existing ordinary share of GBP1.00 previously held.
On 11 June 2014 152,550 ordinary shares of GBP0.01 each were
allotted and fully paid in cash by certain employees and
consultants of the Group resulting in a total net increase of
EUR1,950.
On 27 June 2014, 588,000 ordinary shares of GBP0.01 each were
allotted and fully paid in cash at a price of GBP2.12 resulting in
a total net increase of EUR572,835 (after transactions costs of
EUR967,208).
The company issued a total of 182,947 warrants over ordinary
shares to advisers and non-executive directors at the date of its
admission to AIM. The warrants are exercisable at a price of
GBP2.12 per ordinary share for a period of five years. The
directors do not consider the intrinsic value of the services
provided in exchange for the issue of the warrants to be
material.
As at 30 June 2015 the Company had 6,240,550 Ordinary Shares in
issue (including 23,533 treasury shares).
13. Trade and other payable
Trade and other payable in the accompanying interim financial
statements of the Group are analysed as follows:
Period ended Period ended
30 June 30 June Year ended
2015 2014 31 December 2014
------------- ------------- ------------------
Trade payables 123,995 138,662 12,242
Accrued expenses 1,050,304 762,094 2,257,540
Social security and other taxes 32,891 18,636 42,130
Total 1,207,190 919,392 2,311,912
============= ============= ==================
Short term 1,207,190 919,392 2,311,912
Long term - - -
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