Zamano swings to profit in 2009, despite revenue fall

2 Mar 2010

Dublin and London-listed mobile software firm Zamano has reported net profits of €1.1 million in 2009, which it said was largely due to lower interest costs, a reduction in operating costs and no impairment charges.

This 2009 profit compares to the €3.8-million loss the group reported in 2008.

However, Zamano’s revenue fell 39pc in 2009 to €25.1 million, which the company said was largely due to its transition to higher-margin, lower-volume revenue and its shift away from advertising services on print and TV to advertising on mobile devices.

The UK market contributed to 80pc of this revenue decline with the balance in Ireland and Australia, Zamano said.  

The group reduced its net debt by 69pc during 2009 to €2.2 million, which compares to net debt of €7.2 million in 2008.

Zamano also completed a €2.5-million fund raising last year, with the money set to be used for growth initiatives and to strengthen its balance sheet.

“The board is pleased with the group’s progress during 2009. In a difficult environment, we successfully managed cash reserves, and despite a decline in revenue the group increased profits,” said Zamano chairman Mike Watson.

Huge changes in mobile market

According to Watson, the interactive mobile content and applications market is going through a period of rapid transition, which he said offered the group “tremendous opportunities, as well as presenting challenges”.

Zamano said there had been a “fundamental disruption” in the mobile industry, brought about through the entry of Apple and Google and the widespread adoption of mobile broadband.  

“The iPhone has demonstrated the full potential of mobile technology to deliver compelling interaction and experiences to consumers. This has provoked other handset manufacturers and new entrants such as Google to think ‘mobile first’ when planning new developments and to introduce enhanced smart phones with a multitude of new services,” Zamano said. 

“Mobile search is now finally a viable technology, and is helping discoverability and navigation through the mobile internet. Use of Wi-Fi has presented low-cost and free data download capabilities to consumers, and is of particular benefit for data-intensive content and services,” the group added.

According to Zamano, the impact of these changes on its business is “mixed”: “On the positive side, mobile advertising and search technologies offer the group the potential to improve discovery of its services by mobile consumers in multiple geographies. The potential negative impact is that many of the new services being made available via smart phones are free, and compete with Zamano’s offerings.”

Zamano also said that while smart phones at present make up a small percentage of the global market, it believes these phones will make up the majority of handsets in its core markets by 2012, and that this likely market transition is now driving its strategy.

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Photo: Mobile software firm Zamano has reported net profits of €1.1 million last year