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April 19, 2016
SyQic, the AIM quoted mobile TV service provider of live TV and on-demand video content across mobile and internet-enabled consumer devices, announces that it expects to release its final results for the year ended 31 December 2015 towards the end of May 2016.
Based on the Company’s management accounts, turnover for the year to 31 December 2015 was approximately £11.61 million (year ended 31 December 2014: £10.67 million). The Directors believe that turnover would have been higher had it not been for a more than 15% depreciation of the Malaysian Ringgit against Sterling, the Company’s reporting currency. In view of the depreciation of the Malaysian Ringgit against Sterling, operation and administrative costs were also lower than expected and therefore based on the management accounts, the EBITDA for the year is in line with market expectations. Due to depreciation and amortisation being lower than expected, the profit before tax for the year is expected to be materially ahead of market expectations, before any possible provisions are taken into account (as set out below). As anticipated in the Company’s half year results to 30 June 2015, the Company has made an additional charge of £0.7 million against the reserve for foreign exchange translation losses, totalling approximately £1.4 million for the year to 31 December 2015.
The results from the management accounts for the year ended 31 December 2015 are before any provision against the amounts owed by the Company’s principal trading partners. At 31 December 2015 the Company had outstanding trade receivables of £11.7 million (half year ended 30 June 2015: £8.4 million) and collections from the Company’s primary customer had been less than previously anticipated by the Board. At 29 February 2016 trade debtors totalled £14.2 million. As part of the audit of the Company for the year to 31 December 2015, the Directors will be discussing with the Company’s Statutory Auditor whether there should be a provision for impairment against the trade receivables, which could negatively affect the profit before tax for the year. In the Company’s Annual Report for the year to 31 December 2014, the Statutory Auditor raised concerns as an ‘emphasis of matter’ in respect of the Company’s credit exposure to SyQic’s two largest customers. The Directors were of the opinion, at the time, that the debts were fully recoverable and thus no provision for impairment was required.
The Company had cash balances of £0.15 million at 31 December 2015 and had net borrowings of £0.15 million at 29 February 2016. As previously announced on 24 April 2015 the Company has access to a £3 million working capital facility, dependent on certain coverage ratios on amounts place in a fixed deposit account.
Operationally, SyQic’s Yoomob service is still registering good growth and the Company has now expanded the service beyond its traditional markets in South East Asia. The Yoomob service has now been launched in the UK, Spain and Italy, with other countries in Europe to follow. The UK service has started to develop traction and the Directors believe the same will shortly be true of Spain and Italy which have just been launched. The target consumers in the Western markets will be migrant communities. SyQic’s use of social media to promote and proliferate the Yoomob service to acquire customers, as well as using Fortumo (the mobile payment aggregator) to reduce reliance on telcos, has borne fruit. SyQic will be looking to grow this acquisition channel as it primary revenue growth driver.
The Company has commenced the Yoomob technical trial service in Kenya, as a testbed for the service to be launched in the rest of Africa. The premium content for the African market will be provided by partnership with a global media group.
There are several similar initiatives in train with other major partners to reach new geographies and audiences for SyQic.
On the Cool2vu service, the Company is expanding the content genres beyond Korean dramas to leverage the success of the Yoomob platform, but with greater functionality as it is aimed at users of higher end devices. The Company is also introducing a subscription driven premium content section on Cool2vu that will widen the revenue model for the service.
The Directors expect to be able to report further growth in 2016, as the year has got off to an encouraging start.
All financial information referred to herein is extracted from management accounts and is unaudited.
David Cotterell, Chairman of the Independent BoardTel: +44 (0) 20 7933 8780