Cdialogues : 11 April 2016: Final Results

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11 April 2016

CDialogues plc ("CDialogues", the "Company" or the "Group") Final Results for the year ended 31 December 2015

CDialogues plc (AIM: CDOG), the provider of mobile marketing solutions to Mobile Network Operators ("MNOs"), announces its audited final results for the year ended 31 December 2015.

Financial highlights

 Revenues of €8.71m (2014: €9.92m)

o Subscription revenues accounted for 82% of total revenues (2014:76%)

 EBITDA (adjusted*) of €1.55m (2014: €2.94m)

• Profit before tax of €0.98m (2014: €2.61m)

• Earnings per share of €0.15 (2014: €0.43)

 Free Cash Flow up 22% to €1.49m (2014: €1.22m**)

 Net cash as of 31 December 2015 up 49% to €3.61m (2014: €2.42m)

• Earnings before interest charges, taxation, depreciation, amortisation and share-based payment charges

  ** After development costs and capitalexpenditure and excluding one-off items relating to AIM listing

  
  

  Operational highlights

  
  

  • During 2015, the Company operated a total of eight mobile marketing projects in six countries across the Middle East and Southeast Asia

  • Delivery of Mobile Marketing projects to a total subscriber base of above 20 million customers (2014:35 million) which attracted more than 1.4 million unique subscribers

  • Ongoing implementation of subscription-based recurring revenue model to existing clients

Pale Spanos, Chief Executive Officer, commented: "Whilst the financial performance for the 12 months to 31 December 2015 was below our expectations, as had been highlighted in previous announcements, the Company continued to invest in our products and further strengthened its balance sheet.

During the period we focussed on serving our existing clients and ensuring that these projects were well executed.

Whilst our existing client base has remained unchanged during the first quarter of 2016, and we expect revenues from these existing projects to decline during the course of the year, the business remains well placed and well-funded to capitalise on the new business opportunities that may arise this year."

Enquiries:

CDialogues Plc	Tel: +30 2106 300 930
George Karakovounis Pale Spanos
Allenby Capital Limited	Tel: 0203 328 5656
David Hart
Alex Brearley
Walbrook PR Ltd	Tel: 020 7933 8780
Paul Cornelius	cdialogues@walbrookpr. com
Nick Rome

About CDialogues

CDialogues provides mobile marketing solutions enabling MNOs to retain and acquire market share, increase average revenue per user (ARPU) and reducing subscriber churn.

The Company's products and services deliver fully managed solutions, utilizing advanced Data analytics techniques combined with Linguistic engineering marketing, to build awareness and multiply sales and opt-ins of promotional offerings and other mobile content being offered by the MNOs.

The solutions designed by the Company, are tailored and served with the appropriate Linguistic format, to each individual mobile network subscriber typology and geography it operates in, using its proprietary software and scalable infrastructure.

The majority of CDialogues' revenues are derived from a recurring subscription-based revenue model, which has been pioneered by the Company. As a result, the Company benefits from incremental cash flow growth from each new campaign customer and mobile network subscriber.

The Company's near-term focus is on growing both its customer base and expanding its geographic footprint in selected markets in the Middle East, Africa and Southeast Asia, where mobile device penetration and mobile network usage is growing rapidly.

CHAIRMAN'S STATEMENT

The 12-month period to 31 December 2015 was clearly a challenging one.

The period was therefore one of consolidation for the Company as we focused on delivery of existing contracts across geographies where MNO subscriber churn has traditionally been high, due to the fact that mobile phone subscribers typically use pre-pay mobile phone tariffs.

A decision was also made to focus on further product development during the period, and whilst certain project launches were delayed, the company remains confident that its product offerings remain competitive in the marketplace.

Given the disappointing revenue performance, we are able to report that the Company has continued to generate cash during the year and maintain a strong balance sheet as of 31 December 2015.

Reassuringly, our solutions achieved direct results for our existing clients by demonstrably reducing subscriber churn, which helps to underpin the basis of our client relationships. We believe that our continued product investment will result in an improved value proposition, which should also result in further customer loyalty and a reference point for us to generate new business and relationships .

Our first full year on the Alternative Investment Market has been challenging, and we must continue to improve the foundations of the business model. The key to the future is the development of stable new revenue opportunities. The number of MNOs and countries in which we could operate means that there are still plenty of opportunities ahead.

The Board remains focused on improving the business model, whilst preserving the balance sheet and seeking to deliver increased shareholder value, following a disappointing share price performance over the period.

Mark Horrocks

Non-Executive Chairman

CHIEF EXECUTIVE OFFICER REVIEW

When we joined the AIM Market in 2014, the focus was on diversifying revenue through multiple client engagements across the Middle East and beyond. As such we invested in both products and personnel to ensure that we are well placed to take advantage of the growing range of global opportunities.

However, as announced during the period, the Company suffered a number of project delays as MNOs pushed back project start dates due to the poor economic environment during 2015. This impacted our second half revenue performance significantly and resulted in lower revenues and EBITDA for the year.

Notwithstanding the poor income performance, cash generation remained strong during the year with free cash flow for the year further enhancing the Company's net cash position to €3.6 million at 31 December 2015 (2014: €2.4 million).

During 2015, CDialogues delivered a total of eight mobile marketing projects in six countries to a total subscriber base of above 20 million customers (2014: 35 million) across the Middle East and Southeast Asia. These projects attracted more than 1.4 million unique subscribers.

Our continued investment on the evolution of our solutions and strategic direction towards a loyalty centric offering has already resulted in an increased interest on our value proposition from potential customers. Further to the Company's prior announcement, it is unfortunate to report that our initial customer in Central America for this proposition faced different challenges on integration that could not be resolved.

I would like to thank our staff and shareholders for their continued support during 2015 as we consolidated our position as one of the leading providers in the space.

Outlook

Despite the challenging environment and poor financial performance, we continued to invest in the business whilst maintaining our strong balance sheet and therefore remain well positioned to capitalise on any new opportunities in the regions where we have presence or active business development activities.

Given that net contributions from some mature projects are expected to decrease during 2016, the Company is now focused on building the new business pipeline while maintaining cash generation to preserve our balance sheet during this challenging period for the Company.

Pale Spanos

Chief Executive Officer