Motive Television (LON:MTV) is an AIM listed software developer that sets out to create software that takes TV mobile (through smart phones and notebooks).
As a starting point, it may be worth looking at the financials of the company before moving onto recent and upcoming events. Their 2013 annual report hasn’t been released yet so the following figures are from their 2012 accounts. Revenue dropped 46.14% to £1.09m, Gross profit dropped 32.124% to £0.511m and total Net loss after tax lessened from £2.447m to £1.2m (51%). The Net loss decrease was due to a one off financial income of £1.7m before appropriate costs. Gearing stood at 59%, up from 44.17% due to an increase in liabilities. Cash increased from £55,173 to £148,554. These are some reasonably good figures for an AIM company but cash is a little concerning. However, increasing cash is a an improvement but not enough to cover the decline in Profit and Loss figures (Sales and Gross profit for this company).
Their operations are quite interesting to say the least. They deliver subscription on demand movie services to 360,000 houses in Italy – this service has been run since the last quarter of 2009 and so must be feeling the pitch with the downturn of the Italian economy. So much so that when the Italian economy recovers, Motive plans on working with Mediaset to update it’s software and provide more features. Their second largest client, Digiturk, have a contract with Motive to develop new solutions to push Digiturks video on demand software, which has now been delivered and tested. They are now working on enhancing the features of this software. They continue to receive earnings form engineering development, support and maintenance. Motive have also signed a partnership with Central European Enterprises Ltd which has allowed Motive’s TV Anytime Anywhere software to enter Czech Republic. Meanwhile Motive are hoping they can expand on this base into Central and Eastern Europe. Motive have a joint venture with Granite Broadcasting Corporation in North America to promote their Tablet TV software which involves the development, implementation, and use of existing broadcast spectrum to provide live television, Personal Video Recorder functionality and Video-on-Demand directly to portable devices such as iPads, Android tablets and smart phones. This software has been commercially available in Europe for a couple of years but this joint venture will allow for commercial access in North America. Motive also have an agreement to provide Media Networks clients in Latin America with Motive’s direct-to-home software.
At the time of the 2012 annual report, Motive had made an agreement with Siyaya Free to Air (Pty) Ltd of Johannesburg, South Africa (Siyaya) for the use of Motive’s Television Anytime Anywhere technology in a new pay television service for the South African market. Motive have since signed an agreement with Shenzhen Skyworth Digital Technology Co Ltd who produce set top boxes for TV’s. Under this agreement, Motive will receive royalties for the software their providing on every set top box that is manufactured in South Africa. Skyworth Digital Technology is the largest manufacturer of set top boxes in China, with an annual sales volume over 10 million units and is ranked first in its domestic market in China and fifth in the global set-top box business. The joint venture with Granite Broadcasting Corporation in North America seems to be becoming fruitful as software that will allow consumers to watch TV on their tablets. This software is set to be released in the ‘Fall’ (Autumn) of this year. Motive are hoping that their Tablet TV software in the UK will start being tested on the 28th April 2014 and be commercially ready in time for the World Cup. If this occurs, it will present significant advantages to Motive. However, all this news combined is positive for the company in the long term.
With this all said and done, whilst this is positive news, negative news could arise in the future. And like all AIM listed stocks, this is still a risky stock. However, if positive news continues to flow out of this company like it has in recent months, it could boost the potential of this company.
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