Using Accounting for Decision Making

Mobile Embrace

MOBILE MARKETING AND MOBILE PAYMENTS 

Mobile Embrace is an award winning company specialising in mobile marketing and mobile payments. The company have the ability to engage consumers for its unique technology via mobiles and tablets. Mobile Embrace has been awarded for its different range of mobile marketing that includes advertising, mobile, media trading desk and content.

Mobile Embrace has two business streams. They are

1. Convey (m-payments)
2. 4th screen Advertising Australia (m-marketing/m-advertising)

Mobile Embrace is one of the most leading mobile advertising and mobile payments as of 2013 based on CEO report. Mobile Embrace takes its advantages for the companies growth in mobile marketing, mobile payments and advertising. 

The Mobile Embrace continues to generate the growth of their business and to expand their mobile marketing industry.

The current Chairman of the Mobile Embrace is David Haines. He was selected as the chairman board in May 2001. David was Secretary to the Standing Committee of Commonwealth, State and Territory Minister with Censorship Responsibilities (1988 to 1994), Deputy Chief Censor, Australian Film Censorship Board (1986 to 1994) and Member of the Australian Film Censorship Board (1981-1994). David studies a Bachelor of Education and one of the members of the audit and remuneration committees. 

Along with the Chairman, Chris Thorpe is the CEO and one of the founders of the Mobile Embrace Company. As the CEO of the Mobile Embrace, Chris brings the importance of leadership, strategies and understanding in the industries of the business.  Chris has over 15 years managerial experienced and he achieved a record in the United States, Europe and Australia. He's been an expert in the world of telecommunications and global mobile services industry. Chris performance has been acknowledge in different industry awards for Milestone achievement. 

OPERATING RESULT

Mobile Embrace increased its profit from $11.37 million to $12.23 million, EBITDA up from $0.32 million to a EBITDA of $1.068 million and a profit turn-around to full year profit after tax of $0.39 million compared to the prior year loss after tax of $0.26 million.

The companies revenues are starting to increase their rapid growth as a result of expanding their current business activities. This is known as organic growth. Increased revenue has also been achieved through cost-cutting measures.

• Sales revenue of $12.23 million (up 7.5% compared to prior year)
• EBITDA $1.068 million profit compared to prior year EBITDA of $0.32 million (up 230% on prior year)
• Group Net Profit after tax of $388.838 (up on 2011-2012 loss of ($258,536))

PERFORMANCE AND SHARE PRICE

As a result of its performance and achievements the company continues to grow strongly. Investors have acknowledge the business as a leading mobile marketing (m-marketing) and mobile payments (m-payments) in July 2013. 

The company has enjoyed success of their "rapid growth of mobile revenues and profit" helped by such companies as Facebook. It is expected that the company will continue to grow and expand over the next few years. 

FY 2013 HIGHLIGHTS

Financial achievements are listed in the financial report. 

"During Fiscal 2013 the company continued to built its assets." 

• Announces Mobile agreement with ARM and ARN
• Announces strategic Trans-Tasman mobile partnership with APN
• Integrates Premium Publisher Network with AdMarvel
• Announces Mobile Partnership with Sportsmate
• Company update over 100% growth in Mobile Ad Revenue
• Raises $1.0 million in Private Placement
• Launches Aus Largest Local-Global Premium Mobile Ad Network]
• Establishes Vietnam Development Hub with Digital Ventures
• Trading update 165% FY13 EBITDA Growth
• Expands Mobile Advertising Network Revenue Base to SE Asia
• Trading update upgrade FY13 results. 

KCQs

There are some key challenges that the firm appears to be facing. However the companies senior managers has series of strategies to overcome these challenges.  The key challenges the firm appears to be facing are some Financial Risk Management. 

Interest Rate Risk The company's consolidated group's exposure to interest rate risk which is the risk that a financial instruments value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities.

I find it hard to understand how it will fluctuate in the result of changes in market interest rates.


Liquidity Risk   The company is not receiving enough revenue to allow it to pay off its current debts or obligations related to Financial liabilities. The companies senior managers has introduce a series of strategies and procedures to manage their risk. 

• Preparing forward-looking-cash flow analysis in relation to its operational, investing and financing activities. 
• Using derivatives that are only traded in highly liquid markets; 
• Monitoring undrawn credit facilities; 

Why does liquidity risk arises from the possibility settling its debts? There is no reason provided and the company didn't discussed the meeting its obligations related to financial liabilities. I find it hard to understand.

Credit Risk The maximum exposure to credit risk by class of recognised financial assets at balance date, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets ( net of any provisions) as presented in the statement of financial position. 

The group has during the financial year reduced its previous material credit risk exposure to a debtor under financial instruments entered into by the Company. The Group's exposure to Sybase Australia Pty Ltd was reduced as a result of the Company implementing direct connections in to carries, thereby spreading debtor risk.

In what way they reduced their previous material credit risk? I don't have any idea on how they manage to reduce their previous material credit risk. It's really hard to understand without proper explanation about their financial risk.

OUTLOOK

The industry focus is on further growth of revenue and product range for 4th Screen Advertising Australia.

The Mobile payments business is to  focus on increasing their quality products and business relations as well as their business as a leading mobile advertising and mobile payment networks.