iPoint (AIM: IPNT), a leading provider of live interactive video
applications
and delivery platforms for web, mobile and media, announces its
audited results
for the year ended 31 December 2007.
Chairman's statement
Overview
iPoint's business focuses on developing live interactive video
calling
technologies that enable telecom and media companies to deploy a
wide variety
of applications and services over broadband internet and mobile
networks.
iPoint has developed a `telco grade' video application platform
that
incorporates a powerful service creation environment (`SCE').
The SCE is based
on a suite of software building blocks and pre-configured
application templates
that enable quick and easy deployment of video calling services
over internet
protocol (`IP') and 3G networks.
2007 was an exciting year for the Company with major
achievements in several
areas. iPoint continued its penetration of the telecom industry,
securing new
mobile operator and value added/premium entertainment aggregator
customers. The
Company also signed a marketing cooperation agreement with
Ericsson, which will
market the Company's Vitrage video services platform to its
mobile operator
customer base.
Operational review
In addition to iPoint's successes in the telecom market, the
Company expanded
its video service offerings into the broadcast and media
industry with the
introduction of its `GOliveTV' solution. GOliveTV, which
utilises the same
technology and intellectual property as Vitrage, enables media
and broadcast
companies to develop new types of interactive participation TV
show formats
that incorporate moderated user generated content (`UGC') from
viewers with 3G
mobile phones and internet webcams. During the year the Company
secured
GOliveTV deals with the BBC and Singapore-based MediaCorp.
Moderated UGC in the
television industry has the potential to provide significant
revenues for
iPoint and will be the second growth engine for the Company
after Vitrage.
In the second half of 2007, iPoint also expanded the range of
its products and
services by introducing new vertical market-orientated solutions
based on
Vitrage. `GOliveBanking', an interactive video services solution
for the
finance industry was adopted by a mid-sized European bank, and `GOliveCare',
an
interactive healthcare solution, was implemented at Southampton
Primary Care
Trust to enhance the care provided to its customers.
The Company has also converted its business model from a
software licensing
model (i.e. one-off purchases of a platform) to a leased license
model with
long-term managed service agreements, which generate recurring
revenues from
minimum fixed monthly payments with monthly fees based on usage.
Factoring in
yearly customer usage increases, managed service agreements have
the potential
to generate greater revenues in subsequent years. With such
agreements ranging
from three to five years, the new business model should result
in increased
long-term revenue generation, though it may place some
short-term pressure on
revenue recognition and cash flow.
The new business model has been favourably received by many of
the Company's
customers, especially in the media and telecom sectors, in which
companies are
accustomed to operational expense-based models in place of large
one-off
capital expenditures. It further benefits these customers by
enabling them to
focus on their core business rather than the integration and
implementation of
new technological solutions. iPoint's new managed services
business model has
been accepted by most of the Company's customers including IBM
and Orange.
Financial review
The Company generated revenues of £1,323,665 ($2,648,654) for
the year ended 31
December 2007 compared to £899,177 ($1,656,464) for the year
ended 31 December
2006 and gross profit of £1,117,133 ($2,235,383) compared to
£657,625
($1,290,518) in 2006. The results represent 45.8 per cent.
growth in revenues
and 59.5 per cent. growth in gross profits. The loss per share
for the year
ended 31 December 2007 is £0.0064 ($0.0128) compared to £0.0062
($0.0114) for
the year ended 31 December 2006.
Although revenues were still relatively modest in 2007 and the
year ended with
a pre-tax loss of £683,278 ($1,367,239) compared to £508,488
($936,737) for the
year ended 31 December 2006, the Directors believe there are
strong growth
prospects in iPoint's key markets and the Company's products and
capabilities
are well-matched to the growing requirements of the markets it
serves.
Acquisition of All New Video Plc (`All New Video')
During 2007, the Company completed the acquisition of All
New Video and
successfully integrated it into a business unit of iPoint. The
business unit is
dedicated to providing managed services to leading customers in
the telecom and
media markets. The Board expects the synergies between the two
companies to
provide iPoint with new opportunities in the media sector.
Key achievements
During 2007, iPoint succeeded in increasing the variety of
products it offers
and the range of customers and market sectors it caters to. The
Company also
continued to strengthen its position with major customers in the
3G market,
including telecom operators, content aggregators and media
broadcasters.
The key achievements for iPoint in the year ended 31 December
2007 were:
* The introduction of the GOliveTV platform
* The selection of the Vitrage platform by a medium-sized European retail
bank to deploy an interactive video call centre
* The delivery of iPoint's internet-based solution in December 2007 to
the
Southampton City Primary Care Trust in the UK to provide
remote medical
services for its patients via web and 3G mobile
* The execution of agreements with tier-one partners, including IBM and
Orange
* Two successful placings which raised approximately £2.3 million of new
funds for the Company at a price of 33p per share
* The successful sales penetration of targeted European telecom
operators,
aggregators and media companies including the BBC
* The establishment of comprehensive communications and marketing
channels
with leading blue chip companies including Ericsson, Siemens,
and Unisys
* Obtaining major reference customers such as Ericsson's hosting centre,
Vodacom, Orange and the BBC
Outlook and Strategy
2007 was an encouraging year for iPoint in penetrating new
market sectors. In
2008, iPoint will focus on establishing itself within the
broadcast and media
sector. The Board believes that participants in this market are
eager to
capitalise on the growing popularity of UGC and offer new TV
show formats,
where viewers can enter live TV sessions or record their own
unique content via
a unified web/mobile interface. iPoint is well positioned to
exploit the
growing video calling applications market through its
partnership with key
strategic global market-leading businesses. The Board also
believes that the
Company's growing list of top-tier solution partners will help
advance a number
of exciting projects, which it expects to announce over the
course of the
current year.
I would like to thank the entire iPoint team for their
commitment,
professionalism and creativity. Their dedicated service has made
iPoint one of
the leading technology pioneers in the delivery of video
applications for the
mobile broadband media market.
iPoint remains fully committed to its core values of total
quality and
innovation, increasing its revenues and expanding its
relationships in its key
markets. iPoint is constantly striving to deliver the most
innovative
technology including its unique video solutions platform to the
telecom and
media markets, together with its premium quality services.
The Board looks forward to the future with confidence.
E Sagi
Chairman
26 March 2008
For further
information:
iPoint-media plc
+(0) 972 544 450 667
Muki Geller
+44 (0) 7802 356614
Clive Garston
John East & Partners Limited
+44 (0) 207 628 2200
David Worlidge/Bidhi Bhoma
Hansard Group
+44 (0) 207 245 1100
Vikki Krause
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
2007
2006
Notes
£
£
Revenue
1,323,665
899,177
Cost of sales
206,532 198,646
Gross profit
1,117,133
700,531
Research and development
484,715 351,743
Selling and marketing
617,285 384,618
Administrative expenses
810,116 413,966
Loss from ordinary activities before
(794,983) (449,796)
income tax and finance costs
Net finance income/(costs)
111,705 (58,692)
Loss before income tax
(683,278) (508,488)
Tax on loss on ordinary activities
2
-
-
Net loss for the year
(683,278) (508,488)
Loss per share
- basic and diluted
3
0.0064
0.0062
GROUP
BALANCE SHEET
AS AT 31 DECEMBER 2007
2007
2006
Notes
£
£ ASSETS
Non-current assets
Intangible assets
1,451,771 462,871
Property, plant and equipment
138,203 41,428
Non-current receivables
1,848
6,133
1,591,822 510,432
Current assets
Trade receivables
258,714 325,158
Other receivables
45,083 102,964
Cash and cash equivalents
4
1,133,824 26,024
1,437,621 454,146
TOTAL ASSETS
3,029,443 964,578
EQUITY
AND LIABILITIES Share capital and reserves
Issued capital
528,418 475,586
Share premium
3,039,066 718,368
Other reserves
395,564 452,989
Merger reserve
854,146 108,490
Reverse acquisition reserve
1,098,894 1,098,894
Retained earnings
(3,671,205) (3,045,353)
Translation reserve
(80,714) 27,444
TOTAL EQUITY
2,164,169 (163,582)
Non-current liabilities
43,757 40,248
Current liabilities
Trade and other payables
535,243 321,183
Related party
144,893 84,892
Deferred income
112,682 160,147
Short-term borrowings
- 521,690
Finance lease obligations
28,699
-
Total current liabilities
821,517 1,087,912
TOTAL LIABILITIES
865,274 1,128,160
TOTAL EQUITY AND LIABILITIES
3,029,443 964,578
GROUP
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2007
2007 2006
Notes
£
£
Cash flows from operating activities
Cash receipts from customers
1,579,087 637,390
Cash paid to suppliers and employees
(1,983,773) (1,123,162)
Cash absorbed by operations
(404,686) (485,772)
Interest paid
(30,954) (49,254)
Interest received
49,713
940
Net cash outflow from operating activities
(385,927) (534,086)
Cash flows from investing activities
Acquisition of subsidiary, net of cash
(47,228)
-
required
Purchase of equipment
(7,059) (27,924)
Net cash outflow used in investing
(54,287)
(27,924)
activities
Cash flows from financing activities
Proceeds from issue of shares
2,286,900 1,004,671
Less: costs of issue
(199,376) (378,226)
Exercise of share options
77,990
-
Payment of finance leases
(33,588)
-
Net cash flows used in financing activities
2,131,926 626,445
Exchange differences
(62,222) 27,444
Net increase/(decrease) in cash and cash
1,629,490 91,879 equivalents
Cash and cash equivalents brought forward
(495,666) (587,545)
Cash and cash equivalents carried forward 4
1,133,824 (495,666)
Represented by:
Positive cash balances
1,133,824 26,024
Short term borrowings
- (521,690)
1,133,824 (495,666)
Group Statement of changes in equity
for the year ended 31 December 2007
At 31 December
475,586 718,369
452,989
27,444 1,098,894
108,490 (3,045,352) (163,580)
2006
Shares issued in
17,325 2,269,575
2,286,900
year for cash
Shares issued in
2,718 161,656
164,374
year for services
Shares issued on
27,217
762,080
789,297
acquisition
Exercise of share
5,572 72,418
(57,425)
57,425 77,990
options
Costs of share
(182,952)
(16,424)
(199,376)
issue
Exchange
(108,158)
(108,158)
adjustments
Loss for the year
(683,278) (683,278)
As at 31 December
528,418 3,039,066
395,564
(80,714) 1,098,894
854,146 (3,671,205) 2,164,169
2007
Notes to
the financial statements
1 Basis of preparation
These financial statements have been prepared in accordance with
International
Financial Reporting Standards and IFRIC interpretations and with
those parts of
the Companies Act 1985 applicable to companies reporting under
IFRS. The
financial statements have been prepared under the historical
cost convention
and a summary of the more important accounting policies is set
out below.
The preparation of financial statements in conformity with
generally accepted
accounting principles requires the use of estimates and
assumptions that affect
the reported amounts of revenues and expenses during the
reporting period.
Although these estimates are based on management's best
knowledge of the
amount, event or actions, actual results ultimately may differ
from those
estimates.
During the year, the Group elected to disclose its cash flows
from operating
activities using the direct method that requires the disclosure
of gross cash
receipts and gross cash payments to be disclosed. Additionally,
IAS 7
encourages the use of the direct method for the reporting of
operating cash
flows.
2.
Corporation tax
2007
2006
£
£ Income statement
Current tax on income for the period
-
-
Factors affecting the tax charge
2007
2006
£
£
Loss on ordinary activities before taxation
(638,278) (508,488)
Aggregate of loss on ordinary activities before
(201,310) (162,716)
taxation multiplied by domestic tax rate - UK:
30% (2006:30%), Israel: 29% (2006: 31%)
Effects of:
Expenditure not allowable for tax purposes
61,196
38,606
Unrelieved tax losses and other deductions
140,114
124,110
arising
Current tax charge
-
-
No deferred tax asset has been recognised as the Directors
cannot be certain
that future profits will be sufficient for this asset to be
realised. As at 31
December 2007 the Group has tax losses carried forward of
approximately £
1,887,487 in iPoint-media Limited, £515,000 in All New Video
(UK) Limited and £
280,000 in iPoint-media plc.
3.
Loss per share
The basic loss per share is calculated by dividing the loss
attributable to
equity shareholders by the weighted average number of shares in
issue. In
calculating the diluted loss per share, share options
outstanding have been
taken into account where the impact of these is diluted.
Warrants and share
options were excluded from the calculation of the total diluted
number of
shares as the impact of these is anti-dilutive.
2007
2006
Number
Number
Basic
106,565,539 81,991,356
Dilutive Ordinary Shares from share options/
-
-
warrants
Total diluted
106,565,539 81,991,356
£
£
Loss attributable to equity shareholders
(683,278) (508,488)
Basic and diluted earnings per share
(0.0064) (0.0062)
4 Cash
and cash equivalents
2007
2006
£
£
Cash at bank and in hand
1,133,824
26,024
Cash at bank and in hand earns interest at floating rates based
on daily bank
deposit rates. The fair value of cash and cash equivalents at 31
December 2007
was £1,133,824 (2006: £26,024).
The interest rate applicable on funds on deposit is LIBOR less
0.5 per cent.
For the purpose of the cash flow statement, cash and cash
equivalents comprise
the following at 31 December 2007:
2007
2006
£
£
Cash at bank and in hand
1,133,824
26,024
Short term borrowings
-
(521,690)
1,133,824 (495,666)
The Group's short term borrowings are guaranteed by Nisko
Projects Electronics
and Communications (1990) Ltd, a shareholder of the Company.
5.
Dividends
No dividends have been declared for the year ended 31 December
2007.
6.
Copies of the Report and Accounts
Copies of the Report and Accounts for the year ended 31 December
2007 will be
sent to shareholders in due course and will be available from
the Company's
registered office and from John East & Partners Limited at 10
Finsbury Square,
London EC2A 1AD. The Report and Accounts include a notice of the
Company's
annual general meeting which will be held on 28 May 2008.
