Share placing to support firm to break-even position
AIM-LISTED communications group Mobile Tornado has raised £1.35m in a share placing that has been backed by some of the company’s management team and existing shareholders, as well as new institutional investors.
The Harrogate company has placed 22.5m shares, representing 9.9% of the existing share capital, to raise the money which will be used to fund the working capital requirements of the company as it targets a break-even position.
In full-year results also announced this morning, Mobile Tornado saw revenues fall by one-third, to £1.75m, as its adjusted operating losses rose by one-third to £2.67m. Cash at the bank at the year end was £40,000 with net debt more than doubling to £6.56m.
It has restructured its business “to re-focus into its key markets and customers” which it expects will deliver annualised savings of about £1m from this financial year.
Jeremy Fenn, chief executive officer of Mobile Tornado, said: “The outlook remains positive for the business as recurring revenue levels continue to increase. The macro picture is also positive and we have developed one of the leading technical platforms in this space. The current year has started in line with our expectations and I look forward to further updates as the year progresses.”
Mobile Tornado has developed an enterprise-grade instant communications platform which delivers workforce management mobile applications.
The year has seen it launch its services in Canada, Mexico and Brazil and it expected Ecuador and Columbia to add further momentum to its business across the Americas.
The company said: “The company’s business model is designed to deliver highly scalable recurring monthly subscription revenue (which has been slow to ramp up until recent months). The directors continue to believe that the change in market adoption rate, together with the agreements, relationships and customer reference sites already established, will provide the company with a clear route to profitability and material operating leverage.”
The fundraising has seen InTechnology invest £871,000 to make it a majority shareholder, with 51.18%. Chairman Peter Wilkinson has invested a further £199,000 and now holds 11.37%, and chief executive Mr Fenn has spent £46,000 to take his shareholding to 3.41%.
Mobile Tornado was advised by Richard Naish and Ed Brown from the corporate team at Walker Morris.
Richard Naish and Ed Brown (both from the Corporate Team at Walker Morris)
