Zamano revenues decline on US challenges

26th Sep 2013 11:38

Mobile commerce company Zamano reported a 4.7 per cent drop in half year revenues, which were largely due to problems in the US, it said Thursday. Pre-tax profits saw modest growth, from €0.95m to €0.98, helped by lower total administration expenses and sales costs. Revenues declined from €9.46m to €9.02m, after it met with "a number of issues" relating to the sale of Mblox in the US, which meant it was no longer able to advertise its new subscription service offering, which had a "severe impact" on US revenues since mid-March. In Ireland, sales plunged 41.6% as a result of a new code of practice which distorted its subscription revenues during the first half of last year. The situation was considerably better in the UK, where sales rose 33.3% on the same period last year, resulting in a gross profit contribution of €1.64m, up 9.2% on 2012. However, the increase in gross profits did not match the increase in sales as Zamano invested heavily in advertising to acquire new subscribers which affected the outturn at gross margin level. Looking ahead, the group believes the proposed launch in three new markets in the coming months will "significantly enhance the sales contribution from new markets and, in time, reduce our sales dependency on the UK and Ireland". It continued: "During the first half of the year, Zamano improved its operating performance over the same period in 2012. While revenues declined marginally compared to the first half of 2012, EBITDA [earnings before interest, tax, depreciation and amortisation] and operating profits increased and the group's improved balance sheet position gives us a platform to grow and diversify the business during the second half of 2013 and beyond." In terms of the full year, the group said that while it is "fully aware of the many issues and challenges confronting the business on an on-going basis", it nevertheless anticipates "a satisfactory trading outturn" for the 12-month period. NR