Synchronica halves losses in FY09, says pipeline supports FY10 expectations

In its full-year results statement, Synchronica (LON:SYNC) said it believes that its Mobile Gateway sales pipeline is sufficient to meet expectations in the current financial year. For the twelve months ended 31 December 2009, the company reported a slight increase in revenue to £3.83m (FY08: £3.71m) and a significantly improved pre-tax loss of £3.22m (FY08: £6.49m loss).

Synchronica develops industry-standard mobile push email and synchronization products. Its portfolio includes the flagship Mobile Gateway product and the device backup solution, Mobile Backup. Mobile operators in emerging and developed markets use Synchronica's white-labelled products to offer their consumer and business subscribers mobile email, PIM synchronization, and backup and restore services.

"During 2009, Synchronica invested significantly in developing our flagship product Mobile Gateway and expanding the company's global reseller network”, Synchronica chief executive Carsten Brinkschulte commented. “These efforts have started to pay off and the company now enjoys a much improved competitive positioning and a global sales channel with local presence”.
“Synchronica was able to sign a record 13 new contracts with mobile operators throughout 2009, predominantly in the company's target emerging markets of Africa, Asia and Latin America”.

In FY09, Synchronica increased gross profit by 80% to £3.67m (FY08: £2.03m) ans realised a number of cost savings and operational efficiencies, including a £1.59m reduction in administrative costs to £6.91m (FY08: £8.5m). Consequently, the company more than halved its pre-tax losses compared to the previous year. On a per share basis, Synchronica reported a narrowed loss of 0.6p (FY08: 2.9p loss).

As of the 31 December 2009, the company had a cash position of £2.63m (FY08: £3.49m), and shortly after the year-end it raised further capital through a £2.79m placing.

The company noted that due to a client’s on-going acquisition discussions, certain Mobile Gateway orders were not closed in time for Synchronica to realise the revenues in the 2009 reporting period, as it had previously flagged.

The company said that it has successfully restarted discussions with the client, aiming to conclude the transaction soon after the acquisition is completed.  In terms of its guidance for the current financial year, Synchronica believes that its sales pipeline is sufficient to meet market expectations for the year, provided there is an accelerated rate of conversion to revenue in the remainder of the year.

Since the year-end, Synchronica has made further strides forward with the launch of the latest Mobile Gateway release - ‘Mobile Gateway 5’ - in February, which introduced Instant Messaging (IM) and to Social Networking onto the push-email service.

The company’s IM offering is set to be expanded further, after April’s acquisition of Colibria AS, an established mobile IM business with 13 operator contracts. With the integration of both the Colibria business and technology, Synchronica expects the transaction to accelerate its entry into the mobile IM market.

“The introduction of Mobile Gateway 5 in February 2010 and the acquisition of the IM business of Colibria AS in April further improves our competitive position and market share accelerating the Company's commercial development, bringing us closer to our aim of becoming the market leader for next-generation messaging in emerging economies", Brinkschulte added.