Financials

InternetQ entered 2012 having delivered its strongest ever performance in terms of revenues in 2011. We continued to be reassured by our new business pipeline and believe this performance further endorses our multi-territory strategy.  InternetQ is guided by strict principles and prudent decision-making policies when it comes to cash management, cost control, investments, and the Group’s overall capital structure. This prudent approach is the basis for the continued long term success of the Group.

Group revenues generated 34% growth in 2011, with two out of five segments delivering substantial sales growth. Revenues from Mobile Marketing activities grew by 37% to €41.2 million (2010: €30 million) while revenues from Akazoo grew by 73% to €6 million (2010: €3.5 million).

Selling and administration costs increased by 42%, primarily due to one-off costs from the acquisition of I-POP Networks Pte Ltd and the share incentive plan granted to employees. Adjusted EBITDA (after adjustment for share incentive plans amounting to €394,369 and one off acquisition costs amounting to €499,774 grew by 32.4% to €7.4 million (2010: €5.6 million) a margin of 14.7% (2010: 14.9%). The Profit after Income tax for the year reached €2.4 million compared to €2.3 million for 2010.

As we continue to invest to support our expansion plans, we have experienced increased working capital needs, which we expect to persist in the future. Given that most new market penetration came into force during the second half of the year and the last quarter in particular the level of working capital appears inflated on the 31st of December 2011. 

Likewise, given our investments to improve the Mobi-Dialogue and Akazoo platforms and introduce new consumer profiling and content management systems, capital expenditure was also increased. Total capital expenditure including intangibles for the year ended 31 December 2011 stood at €5.5 million, an increase of 81% from the previous year (2010: €3 million).

The Group ended 2011 with €8.2 million net cash, which consisted of €10.6 million cash and cash equivalents and restricted cash and €2.4 million bank debt. The terms and conditions of the Group’s borrowing agreements continue to be relatively favorable. Our €0.4 million term loan matures in March 2014 and another €0.5 million loan arrangement matures in April 2013.

The Group continues to manage all non-essential costs conservatively in the current macroeconomic environment, as well as continuing to invest where we see particularly strong opportunities to advance our positions, such as our investments this year in Southeast Asia. Most importantly, we have managed to reduce our exposure to the weak Greek economy as less than 7% of  2011 revenue was generated in that country, with a diminishing outlook for this year.

With our solid financial position, we have the flexibility to make selective investments into the long-term growth of the Company and continue to deliver shareholder value.