Wednesday March 26, 12:41 PM
Mobile Streams hit by goodwill charge
By John Harrington
LONDON (ShareCast) - Mobile content provider Mobile Streams (LSE: MOS.L - news) saw pre-tax losses more than double in the second half
of 2007 after depreciation, amortisation and impairment charges increased six-fold.Losses before tax in the six months to 31 December 2007 widened to £4.66m from £1.97m a year earlier after the company took charges of £3.36m, compared with charges of £0.53m in 2006. The 2007 charges include a write off of £1.5m for impairment of goodwill. Revenue advanced to £9.1m from £8.2m. Cash reserves at the end of 2007 had dipped to £2.3m from £4.1 at the end of 2006. Since the end of the year the company has experienced a small monthly cash outflow as a result of its investment in Vuesia, the company's proprietary media platform. Overall gross margin slipped to 54.8% from 58.6% in the second half of 2006.
The company said that 2007 was a transitional year for the mobile content industry, with a move away from distributing mobile content through portals operated by the mobile network companies to delivery via companies such as Google (NASDAQ: GOOG - news) and Yahoo (NASDAQ: YHOO - news) ! This affected the performance of Mobile Streams, which relies on the traditional mobile content portal model for much of its business. The company foresaw this change and appointed a head of Consumer Services in 2006 to forge new partnerships, but the need to adapt to new technology placed a strain on delivery schedules, and the company now expects it will take longer for the Consumer Services business to reach critical mass and scale. The company expects overall revenues from managed operator services in 2008 to remain broadly flat. It (Frankfurt: A0MLX5 - news) will continue to launch new consumer services in select markets where it has current operations and where the search engines are forging partnerships with local mobile operators, but initially these will attract small volumes of business.
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