Recurring revenues to the rescue at listed communications provider
Harrogate-headquartered Mobile Tornado says it expects its revenues for the six months to 31 December 2020 to be approximately £1.23m with an approximate EBITDA loss of £0.19m.
Based on the firm’s unaudited management accounts and subject to audit, full year revenues for 2020 are expected to show revenue of approximately £2.52m with an EBITDA loss of approximately £0.40m.
The business, a provider of instant communication mobile solutions to the enterprise market, has published a trading update ahead of the publication of its audited results for the year ended 31 December 2020.
Its directors note that despite the huge impact of COVID-19 across all the Group’s main markets, its recurring revenues remained stable at approximately £2.03m (2019: £2.06m).
But they add it has been much more challenging to close out new business during the period, particularly as two of their most important markets, South America and South Africa, have been particularly severely impacted by the pandemic.
Mobile Tornado’s update states: “This has made it difficult to conduct the necessary trials with new customers, many of whom have been ‘working from home’ most of the year, and to secure the attention and budget from Government departments, who have inevitably been more focused on the public health challenges.
“As a result, non-recurring revenues were approximately £0.49m compared to £1.39m in 2019.
“Some of this shortfall has been offset by further efficiencies in operations, driven by the continuing performance improvements of our technical platform and resulted in total operating expenses falling to approximately £2.73m in the year from £3.16m in 2019.”
The company anticipates activity levels will begin to pick up again in its other key markets, and is focused on driving towards an EBITDA positive position during 2021.
Jeremy Fenn, chairman, said: “Despite the unprecedented challenges that were presented during 2020, where it was very difficult to generate new business, I am pleased the robustness of our business model and recurring revenue streams has allowed us to trade through the period with only modest losses.
“Our team has worked hard during the year to support our customers and partners around the world and we are seeing early signs that the business environment in our key markets is improving, and activity levels are beginning to pick up.
“There is still a huge amount of uncertainty in the marketplace, so it is difficult to make forecasts for the year.
“However, we have started the year brightly and the Board is totally focused on moving the business into sustainable profit during the current financial year.”
