The results for the year ended 31 January 2013 are currently being finalised and whilst these have not yet been audited, the Coms board anticipates announcing results approximately as follows. The results will include the results of VCOMM (UK) Limited, the Company's wholly owned subsidiary focused on the distribution of telecoms equipment that, as announced on 21 December 2012, it sold for a total consideration (subject to adjustment) of £250,000 in cash. The Company has shown separately the results of its continuing operations to provide a meaningful comparison with future results.
The financial performance for the first 3 months of the current financial year have shown both an improvement in revenue and gross profit as well as a significant reduction in operating losses, reflecting the changes to the management team and the operational cost reductions introduced by Dave Breith since he became CEO of the Company on 9 January 2013. Since the start of the year under Dave Breith’s leadership the newly re-structured Company has announced several contract wins including agreements to supply Vonage and Worldstone and the substantial business announced on 26 April 2013.
Prospects
The Company’s new in-direct sales (wholesale) division has built a pipeline of sales prospects, which represents a potential of just over £7m annualised revenue. The retail division has won 3 new contracts with two NHS Trusts based in the North and a Police Constabulary based in the South East. Its sales pipeline is currently showing a potential gross margin of over £100,000 per month. The Company has commenced its Government sales activity initiative and anticipates that this will generate additional sales for the remainder of this financial year and beyond.
Dave Breith (CEO) states “Last year’s results are disappointing but not unexpected. As I joined the Company just three weeks before the end of the last financial I could not influence last year’s performance, however I do have control over the future of the business and I believe we have already demonstrated to investors, in the space of three months what can be achieved and the exciting potential for this business.
While there is much still to be done, I remain every bit as enthusiastic about this business as when I joined and would like to thank all Coms team members for their hard work in helping me achieve so much in so little time”
Issue of Equity
Coms has also announced that it has raised GBP1.5m, before expenses, through the issue of 81,081,081 new ordinary shares of 0.1 pence each at a price of 1.85 pence per share to Novum Securities Limited. Under the terms of the deal, each new Ordinary Share has a Warrant attached, entitling its holder to subscribe for additional Ordinary Shares at an agreed exercise price of 3.7 pence per share. The Warrants, which will be granted subject to shareholder consent, can be exercised at any time up to 24-months from the date of signature or, at the Company's election, if the share price achieves and remains at 130% of the Warrant exercise price (i.e. 4.8p) for a period of 10 business days, whichever is the sooner. A notice will be sent to Shareholders convening a general meeting to grant the Coms directors authorities to issue these Warrants.
The new management team has set internal sales targets that require the Company to deliver significant and transformational growth. It is expected that this will be achieved through a combination of organic growth and suitable acquisitions. The Company believes that this issue of equity heralds a strong endorsement of the new management's ambitious plans and materially strengthens the Company's balance sheet. The exercise of the warrants would provide up to GBP3.0m additional cash, before expenses, providing an even more solid platform for the Company to pursue new business lines and execute strategic transactions, a number of which are currently under consideration.
Breith, stated: "We consider this fundraising to be a significant vote of confidence and it allows us to immediately invest in additional resources to progress our plans to rapidly grow this business. We look forward to working for the benefit of our wider shareholder base."
Application will be made for the admission of the new Ordinary Shares to trading on AIM with admission expected to take place on 21 May 2013.
The Company's enlarged issued ordinary share capital immediately following the issue of these shares will be 466,196,128 Ordinary Shares.