Listed communications business announces subscription to raise £750,000
Harrogate-based communications technology firm Mobile Tornado has announced a subscription for 15,000,000 new ordinary shares of two pence each to raise £750,000 worth of capital.
These shares represent about 4.3% of the existing issued ordinary share capital of the company, at a price of five pence per Subscription Share.
Raising this cash will enable the firm to boost the amount of handsets it has in stock, so it can exploit a recent deal made with a manufacturer.
The company has also today announced the capitalisation of £775,234 of indebtedness owed by the firm to InTechnology into 15,504,687 new ordinary shares.
Jeremy Fenn, Chairman of Mobile Tornado, said: “I’m pleased to report further trading momentum during the first half and some positive developments in our key trading markets.
“To provide us with a little more flexibility when negotiating contracts with new customers, and to facilitate an increase in handset stock levels following an exclusive agreement we have recently signed, we have chosen to raise £750,000 of additional working capital.
“The fundraise has been completed at a small premium to the current share price and I’m grateful to our shareholders for their continued support. I look forward to further updating the market with our half year results during the week commencing 16 September.”
Mobile Tornado offers an enterprise-grade Instant Communications platform. It sells its workforce management applications such as Push to Talk (“PTT”) to Tier 1 Mobile Network Operators and large multinational clients.
The company said it had seen a significant increase in demand for its Bundled PTT sales solution, that combines a perpetual software licence, handset and dispatch console.
Mobile Tornado has recently concluded an exclusive deal with a major rugged handset manufacturer to enhance the bundled solution offered in Israel. To maintain its exclusivity, the company must commit to buying at least 5,000 handsets across the first 12 months, which will necessitate an increase in stock.
The firm’s directors said the Subscription would provide them with the resources to increase their handset stock levels, providing the Group with more flexibility when negotiating Bundled PTT contracts with potential new customers and for working capital purposes.
The company says it expects to announce its unaudited interim results for the six-months ending on 30 June 2019 in the week commencing 16 September 2019.
Revenue for the period is expected to be approximately £1.46m, compared to £1.23m in H1 2018, an increase of 18%. Gross margin is expected to be approximately £1.37m (H1 2018: £1.14 million), an increase of 20%.
Mobile Tornado said its first half performance has been driven by solid performance across its three main markets, namely Israel, South Africa and South America.
The business’s 2018 accounts highlighted a significant outstanding receivable with one of Mobile Tornado’s partners. This stood at £638,000 as at 31 December 2018 and £796,000 as at 30 June 2019.
The 2018 accounts noted Mobile Tornado was hoping to collect the outstanding debt in the short term following an equity investment into this partner.
However, the equity investment was not completed as anticipated, and the company has now entered into discussions with the partner to determine a way forward. A further update will be provided in due course.
