zamano PLC (AIM:ZMNO, ESM:ZAZ), a provider of interactive applications and services to mobile devices, has today announced results for the 12 months ended 31 December 2016.
Highlights:
- Revenue of €32.1M (up 32.2% on revenue of €24.3M, 2015);
- Adjusted EBITDA of €1.7M (down 44.2% on Adjusted EBITDA of €3.0M, 2015);
- Post-tax profit, excluding €6.4M impairment, of €1.0M ( 2015, €2.1M);
- Pre-tax loss, including €6.4M impairment, of €5.2M (pre-tax profit of €2.5M, 2015);
- Post-tax loss, including €6.4M impairment, of €5.4M (post-tax profit of €2.1M, 2015); and
- Significant improvement in net cash during 2016 to €7.2M at 31 December 2016 (€6.3M at 31 December 2015).
PayForIt, a UK Mobile Network Operators joint initiative to further regulate mobile payments was mandated by all UK Mobile Network Operators on 1 November 2016. Prior to this revenue growth was maintained in 2016 but since its introduction the Group has seen a significant negative impact on business performance. Furthermore, regulatory changes that have come into effect in Ireland in 2017 will also further significantly impact the Group’s business.
Following the implementation of PayForIt in November 2016 the Group has taken steps to reduce the cost base of the business. This included the implementation of a redundancy programme across all divisions, reducing payroll and related costs by approximately €330,000 on an annualised basis. A number of other cost saving measures were also evaluated and implemented which included reducing the number of Directors and streamlining I.T. and customer service costs.
These actions achieved material cost reductions. However, it is increasingly likely that the impact of regulatory changes across zamano’s business lines will prevent the Group from maintaining a cashflow positive trading position going forward. As a consequence of this outlook, goodwill and intangible assets were reduced to zero by an impairment charge of €6.4 million.
In light of this, the Group took the decision in early February 2017 to formally wind down the existing business lines in order to protect the cash position on the balance sheet. The wind down of the existing business lines is ongoing and the Board is currently considering alternative strategic options. In the absence of a timely strategic alternative, the Group will look to maximise its cash position and make a distribution back to shareholders.
The zamano Board is focused on conserving the Group’s strong cash position by optimising our withdrawal from our existing business lines and the Group remains fully committed to supporting its clients and providing a high level of customer experience and service during the wind down process.
Further announcements will be made in due course as appropriate.