RNS Number : 3567V
Broca Plc
28 May 2008
BROCA PLC
("Broca" or "the Company")
Interim Results for the six months ended 29 February 2008
Broca Plc is a provider of secure advanced mobile data technology. Protected by a number of patents, its unique products enable the
secure capture and delivery of mobile data. Its presentation on the handset ensures an excellent consumer experience. Having launched its
initial products in late 2007, the Company is now initiating pilots with leading players in the mobile operator, handset manufacturer and
banking sectors.
Broca is pleased to announce today its interim results for the 6 months ended 29th February 2008.
Highlights
* Building on initial revenues through substantial pilots * * Strengthening sales pipeline with emphasis on mobile operators in
Europe and Asia * Continued progress in achieving market validation of the technology * * Handset application pilot in Sweden
for Sony Ericsson
* UK pilot with T-Mobile (UK)
* Expansion of strategic partnerships
* * a Hong Kong-based mobile services innovator added to address key markets including Philippines and Hong Kong expanding later
to China, India and South East Asia
* Expansion of the portfolio
* * Launch of "MyOperator" as a flexible handset-based tool for the mobile operator to communicate and transact with the
consumer
Commenting on the interim results Ian Price, Chief Executive, said, "The Company has made important progress during the period, seeing
its technology used in live consumer pilots by a number of significant companies. Broca is continuing to exploit its unique technology and
has a healthy pipeline of major prospects."
For further information:
Ian Price Lulu Bridges David Poutney
Chief Executive Andrew Dunn Stuart Skinner
Broca Plc Tavistock Communications Numis Securities Limited
Tel: 0845 0066661 Tel: 020 7920 3150 Tel: 020 7260 1000
BROCA PLC
Interim Results for the six months ended 29 February 2008
The Board is pleased with the progress made by Broca during the period. The main technology investment phase has been largely completed,
additional patents and trademarks have been secured and the Company is working with several leading brands to pilot its services, which
represents a significant step towards the adoption of its technology and the commencement of revenue generation.
SAMS, the Company's secure SMS product, was implemented by a major international bank for a pilot which involved transmitting sensitive
data via SMS to a number of individuals in different countries. The success to date of this pilot has proven not just the security of
Broca's technology, but also its ability to track and guarantee message delivery. The pilot also demonstrates the growing readiness of the
banking industry to use Broca's technology in the increasingly important area of data security.
In addition to the continued trialling of Broca's security products, the period also saw the initiation of two significant pilots of the
Company's secure data capture technology. One pilot was for Sony Ericsson, one of the world's leading mobile handset manufacturers, which
has embedded Broca's technology directly into its trial handsets.
This was accompanied by an additional pilot with Sony Ericsson, run jointly with T-Mobile (UK). Both pilots, involving a total sample of
live customers measured in thousands, are still ongoing at the period end with further expanded projects being discussed.
Strategy
In the mobile operator community there is a growing requirement to improve handset-based communication with the consumer for both
m-commerce and customer service applications. In markets such as Asia-Pacific where mobiles are, in some regions, already the primary device
for digital transactions, there is even greater market readiness for Broca's technology.
Therefore, as well as continuing to develop its pipeline for its managed service products, Broca has engaged in discussions with a
number of potential customers in many geographies regarding licensing its core technology. This commercial approach is particularly
attractive to the mobile operators since it enables them to improve their relationship with their customers by utilising Broca's technology
in a range of handset applications - including customer registration, capture of payment details, pre-pay top-up, secure messaging,
self-service and feedback. In this way, the operator can take advantage of the three core benefits of the technology:
* secure delivery of sensitive information
* data capture from the handset in a user-friendly manner
* the ability to design and deliver remotely new handset applications
To this end, Broca has announced the launch of "MyOperator", a mass-market handset-based proposition which will enable customer
engagement and secure transactions for the mobile operator. This will provide the operator with a branded and embedded presence on the
handset which can be activated either by the consumer or the operator. The Broca Studio, a message creation tool, allows the operator to
design and deliver new handset applications quickly and remotely.
In addition, Broca is continuing to expand its geographic reach by establishing strategic partnerships with companies that have existing
relationships with target operators and with the capacity to deliver a service locally. The new partnership in Asia-Pacific is an example of
this, extending Broca's reach to the fast developing markets of the Philippines, Hong Kong and China.
In the UK, Broca's expertise in mobile security has led to repeated media exposure of the risks of "plain" data services, including SMS,
when used for financial transactions. The Board is optimistic that this increased focus on data security and the continued demand for mobile
applications will prove of benefit, expanding the market potential of Broca's products.
Finance
Broca was incorporated on 1 February 2007 and commenced trading in March 2007. There are therefore no comparative financial results for
the first half of 2007.
Revenue for the six months to 29th February 2008 was £28,503 compared to £1,200 for second half of 2007. These revenues were as a
result of activity in the UK, Europe and Asia and reflect the fact that the Company is still in its infancy in terms of revenue generation.
The operating loss before interest, depreciation and amortisation for the period was £675,228, compared to a loss of £713,016 for the
previous six months. The loss before taxation was £831,458 (H2 2007: £704,201), in line with the Board's expectations.
Deferred tax assets for tax losses carried forward are only recognised to the extent that realisation of the related tax benefit is
expected in the near future. Accordingly no tax credit has been recognised in the period.
Cash and cash equivalents at 29 February 2008 were £389,288. The Company is exploring a number of commercial arrangements and financing
options with the full support of its major shareholders. The Board has every confidence that these discussions will be resolved to its
satisfaction.
The balance sheet at 29 February 2008 showed net assets of £2,396,690.
Outlook
The addressable market for Broca's operator proposition alone currently comprises over 700 mobile network operators in 218 countries
with a combined customer base of 3 billion and growing.
The Board has identified accelerating market readiness for its technology in all parts of the world. Initial emphasis is on Europe and
Asia-Pacific, with prospects in the latter demonstrating great demand for technology that will enable m-commerce. The ultimate vision for
the Company is to see its technology adopted as a de facto standard for customer engagement on the mobile device.
The technology is scaleable and ready to deliver in licensed form. Given the unique attributes of its products and following the proof
of its technology in a number of pilots, the Board anticipates significant revenue growth and profitability through its activities over the
coming years.
Broca Plc
Consolidated Income Statement
For the six months ended 29 February 2008
Unaudited Unaudited Audited
6 months 1 to 28 1 February
to February
29 2007 to 31
February August
2008 2007
Note £ £ £
28,503 - 1,200
Revenue
Cost of sales 22,603 - 765
5,900 - 435
Gross profit
775,795 - 665,805
Administrative expenses
Share based payments 65,869 - 59,528
(835,764) - (724,898)
Operating loss
4,306 - 20,697
Net finance income
(831,458) - (704,201)
Loss before taxation
2 - - 164,995
Taxation
(831,458) - (539,206)
Loss for the period
3 (2.21) - (1.43)
Basic loss per share (pence)
3 (2.21) - (1.43)
Diluted loss per share (pence)
There are no recognised income and expenses other than those recognised in the Income Statement
Broca Plc
Consolidated Balance Sheet
As at 29 February 2008
Unaudited Unaudited Audited
29 February 28 31 August
February 2007
2008 2007
£ £ £
Non-current assets
Property, plant and equipment 78,540 - 64,166
Intangible assets 2,813,308 - 2,817,934
Deferred tax assets 164,995 - 164,995
3,056,843 - 3,047,095
Total non-current assets
Current assets
Trade and other receivables 39,968 49,998 49,101
Cash and cash equivalents 389,288 2 964,956
429,256 50,000 1,014,057
Total current assets
3,486,099 50,000 4,061,152
Total assets
Current liabilities
Trade and other payables 141,480 - 448,873
Short-term borrowings 500,000 - -
Short-term provisions 100,000 - 100,000
741,480 - 548,873
Total current liabilities
Non-current liabilities
Long-term provisions 347,929 - 350,000
347,929 - 350,000
Total non-current liabilities
1,089,409 - 898,873
Total liabilities
2,396,690 50,000 3,162,279
Total assets less total liabilities
Equity
Share capital 376,298 50,000 376,298
Share premium account 3,567,081 - 3,567,081
Merger reserve (857,672) - (857,672)
Other reserve 681,647 - 615,778
Retained losses (1,370,664) - (539,206)
2,396,690 50,000 3,162,279
Total equity
Broca Plc
Consolidated Cash Flow Statement
For the six months ended 29 February 2008
Unaudited Unaudited Audited
6 months 1 to 28 1 February
to February to 31
29 2007 August
February 2007
2008
£ £ £
Cash flows from operating activities
Loss before taxation (831,458) - (704,201)
Share based payments 65,869 - 59,528
Depreciation of property, plant and 16,462 - 11,882
equipment
Amortisation of intangible assets 144,074 - -
Interest received (20,546) - (20,697)
Interest paid 16,240 - -
Decrease/(increase) in trade and other 9,133 (49,998) (49,101)
receivables
(Decrease)/increase in trade and other (307,393) - 448,873
payables
(Decrease) in provisions (2,071) - -
(909,690) (49,998) (253,716)
Total cash outflow from operating
activities
(30,836) - (76,048)
Cash flows from investing activities
Purchase of property, plant and
equipment
Purchase of intangible assets (139,448) - (2,367,934)
(170,284) - (2,443,982)
Total cash outflow from investing
activities
- 50,000 3,900,000
Cash flows from financing activities
Proceeds from the issue of shares
Expenses of public offering - - (258,043)
Proceeds from new borrowings 500,000 - -
Interest received 20,546 - 20,697
Interest paid (16,240) - -
504,306 50,000 3,662,654
Total cash outflow from financing
activities
(575,668) 2 964,956
Net (decrease)/increase in cash and
cash equivalents
Cash and cash equivalents at beginning 964,956 - -
of period
389,288 2 964,956
Cash and cash equivalents at end of
period
Broca Plc
Consolidated Statement of Changes in Equity
Share Share Merger Other Retained Total
capital premium reserve reserve losses £
£ £ £ £ £
At 1 February 2007 (date of - - - - - -
incorporation)
Issue of share capital 50,000 - - - - 50,000
50,000 - - - - 50,000
At 28 February 2007
(unaudited)
Issue of share capital 326,298 3,825,124 - - - 4,151,422
Share issue costs - (258,043) - - - (258,043)
Arising on consolidation - - (857,672) - - (857,672)
Share based payments - - - 615,778 - 615,778
Loss for the period - - - - (539,206) (539,206)
376,298 3,567,081 (857,672) 615,778 (539,206) 3,162,279
At 31 August 2007 (audited)
Share based payments - - - 65,869 - 65,869
Loss for the period - - - - (831,458) (831,458)
376,298 3,567,081 (857,672) 681,647 (1,370,664) 2,396,690
At 29 February 2008
(unaudited)
Broca Plc
Notes to the Interim Statements
1. Basis of Preparation
The interim financial statements of the Company as at and for the six months ended 29 February 2008 comprise the company and its
subsidiary (together referred to as "the Group").
The financial statements of the Group for the period from incorporation on 1 February 2007 to 31 August 2007 are available from the
Company's registered office, or from the website www.brocaplc.com.
These interim financial statements have been prepared in accordance with International Financial Reporting Standard ("IFRS") IAS 34
Interim Financial Reporting. They do not include all the information required for full annual statements, and should be read in conjunction
with the Group's consolidated financial statements for the period from incorporation on 1 February 2007 to 31 August 2007. The accounting
policies applied by the Group in these interim financial statements are the same as those applied by the Group in its consolidated financial
statements for the period from incorporation on 1 February 2007 to 31 August 2007.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from
these estimates. In preparing the interim financial statements, the significant judgements made by management in applying the Group's
accounting policies and key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements
for the period from incorporation on 1 February 2007 to 31 August 2007.
The financial information in this interim statement does not constitute statutory accounts as defined in section 240 of the Companies
Act 1985. The financial information for the period from incorporation on 1 February 2007 to 31 August 2007 is based on the statutory
accounts for that financial period. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of
Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 237(2) or (3) of the
Companies Act 1985.
2. Taxation
Deferred tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefit is probable
in the near future.
3. Loss per share
Basic loss per share has been calculated by dividing the loss after taxation in the period by 37,629,696 shares (2007: 37,629,696),
being the weighted average number of shares in issue during the period.
The loss for the period and the weighted average number of shares for the purpose of calculating the diluted loss per share are the same
as for the basic loss per share calculation. This is because the outstanding share options would have the effect of reducing the loss per
share and would therefore not be dilutive under the terms of IAS 33.
4. Contingent liabilities
The Group has not recognised contingent consideration, up to a maximum of £1,730,000, in respect of the purchase of intellectual
property. This maximum contingent consideration is payable on achieving £15,000,000 of related sales which the Group is not yet in a
position to forecast with reasonable certainty.
5. General notes
Copies of this report will be made available from the website www.brocaplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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