Zamano plc, a leading European provider of interactive applications and services to mobile devices, provides the following business update arising from the recent introduction of the Payforit initiative in the UK.
Payforit was introduced on 1 November 2016 across all of Zamano’s UK business lines. As anticipated in the Company’s announcement of 30 September 2016, the Company has experienced a significant reduction in new business in the UK market as a direct result of this change. We believe however, that as the market starts to adapt to the new regulatory regime, Zamano may be able to gradually improve the current run rate being experienced by its UK business.
In the interim the company has taken appropriate steps to reduce the cost base of the business as detailed below. It is anticipated that the implementation of these cost savings will allow the Company to continue to operate profitably into the future.
At the same time, the Board has decided to cease all ongoing M&A discussions and focus on maximising cashflow from the existing business in the UK, Irish and International markets. The Company will continue to focus on maximising shareholder value whilst continuing to explore options for further value creation.
As a consequence of these developments, Mr. Pat Landy and Mr. Ed Murphy have decided to step down from the Board with effect from 25 November 2016.
Mr Landy joined the Board in February 2011. He was CEO from November 2011 to January 2014. During his time as director, Mr. Landy made a significant and valuable contribution to the business.
Mr Murphy joined the Board in August 2016 principally to help implement the findings of the strategic review. As the Company is no longer actively pursuing an M&A strategy, Mr. Murphy has decided to step down.
The Board would like to thank both Mr. Landy and Mr. Murphy for their contributions to the business during their tenure as directors.
Cost saving measures
The Company has decided to implement a redundancy programme comprising seven persons out of a total staff of eighteen. These redundancies will be across all divisions and will reduce payroll and related costs by approximately €330,000 on an annualised basis.
It is not currently intended to replace Mr. Landy and Mr. Murphy with new non-executive directors in the short term. The impact of this will be to reduce directors’ fees and expenses by approximately 50% or €48,000 on an annualised basis.
A number of other cost saving measures are also being evaluated by the Company and it is expected that these cost savings will be delivered in the coming months.
The regulatory environment for Zamano’s core business has always posed an ongoing challenge to the Company’s operations. The measures outlined herein will assist the Company with its efforts to maintain a cash generative and profitable business in the future whilst also protecting the Company’s existing cash position and shareholder value. In this regard, the unaudited cash balances of zamano at the date of this announcement are €7,298,000.