Came to market on 10 December 2010 with the issue of 5,641,025 placing shares @ 120p to raise gross proceeds of 6.8 million.

Type of business
InternetQ is behind a proprietary technology platform that provides mobile marketing tools to its clients, namely network operators, media companies and brands. It is currently connected with 55 mobile network operators in 24 different countries, reaching over 573 million mobile subscribers. The group also provides digital content directly to mobile subscribers through its Akazoo platform, offering its members premium content within a social network environment and allowing them to interact and get rewarded for their loyalty and usage.

Company Profile
Internetq is an AIM listed trusted global leader in mobile marketing and digital entertainment solutions reaching more than 570 million subscribers via 55 mobile operators in 23 countries. By empowering brands to engage with consumers and transforming the way consumers interact with digital content, aiming for markets and opportunity and to exciting entertainment experiences. Their technology platforms support some of todays most recognized brands and enterprises, with innovative solutions to help manage interactive communications and push the frontiers in global mobile entertainment. With offices in Athens, Limassol, Istanbul, and Warsaw, we are growing the global footprint with the aim of becoming the leading source of mobile engagement.

Company balance sheet
InternetQ is currently cash flow positive and in the first half of 2010 generated Ebitda of 2.6m, from revenues of 18m. Since 30 June 2010, the group has continued to trade profitably, generating revenues of approximately 12.6m for the four months to 31 October 2010.

What the company will do with the cash raised
The proceeds of todays fundraising will be used to expand its network technology equipment and enhance Mobi Dialogue, its mobile marketing interactive platform. Cash has also been earmarked to further develop Akazoo, the online entertainment content platform, as well as set up new offices in key markets that require a more permanent presence.

Business relations
InternetQs long-term business relations include telecommunications operators, media companies and brands around the world, including Vodafone, Orange, Vimpel, Turkcell, Oi, Wind, COSMOTE, and MTV Network. The proceeds of todays fundraising will be used to expand its network technology equipment and enhance Mobi Dialogue, its mobile marketing interactive platform. Cash has also been earmarked to further develop Akazoo, the online entertainment content platform, as well as set up new offices in key markets that require a more permanent presence.

Others
The admission to AIM gives it a market capitalisation of around 31m. The 6.8m placing was conducted by both the company and Jendens Securities, its broker, with Grant Thornton appointed nominated adviser. Based in Greece,Konstantinos Korletis, is the group chief executive

Profit forecast
Las Year InternetQ made pretax profits of 260.000 on revenues of 16.4M. Jendes Forecast profits will rise to 3.1M next year

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WATCH: Colin Miles, VP Marketing & CD at internetQ, provides an update at Innovators & Investors, London

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Impressive figures On the face of it, but look closely they seem to be capitalizing costs which increase yr on yr so I'm wary

Makes for cautious reading:

Paul Scott

A reader asked me to take a look at the next set of results from this company, and I have to say the figures look awful to me. Greek companies do seem to like creative accounting. In Globo's case that means profits that never turn into cashflow, but instead just pile up on the Balance Sheet in Debtors. In the case of InternetQ, they just capitalise everything that moves! As such the profit figure is effectively fantasy in my view. Consider this - for 2013 InternetQ reports EBITDA of E14.4m. However, it has capitalised E13.8m of costs into intangible assets. So reversing out the capitalised costs, in cash terms it was barely above breakeven, at only E0.6m! Of that E13.8m of capitalised intangible costs, E6.6m was purchased software (which could be considered alright, depending on who it was purchased from - i.e. not a connected party), and the balance of E7.2m was internal costs. So this means that the way I view it (expensing all intangibles as a cash cost), the company is not generating anywhere near as much profit as it is reporting. Debtors are large, at E36.4m (that is Debtors + Prepayments), but not outrageously large given turnover of E104.4m, which I make just over 4 months debtor days. A bit stretched, but not horrendously so. The market cap at about £150m (at 395p per share) looks aggressive to me, matching the accounting presentation, so it's not something I would invest in.



Http://www.-.com/content/small-cap-value-report-8-apr-2014-mtec-snty-intq-prv-off-rno-82557/

where the - is type s t o c k o p e d i a

And from another intelligent poster on another board:

Forgive me if this sounds like i'm teaching you to suck eggs but it might help you when you see your accounting friend.

The P&L

Revenue €104.4
operating profit €9.13m

This is after deducting cost of sales, selling and distribution costs and administration costs. Somewhere in this costs base is the amortisation of the intangible assets.

When you design the software you can either.
write the whole labour costs off immediately which means it comes off the operating profit.
or
capitalise the labour cost and add it to the balance sheet. Then annually deducting from the P&L the amortised value. This amortisation takes place annualy over the time period that the software is useful, say ten years.

So lets say the cost to produce the software is €10m then either that comes straight off the operating profit or it's capitalised and added to the balance sheet intangibles and amortised over 10 years. So, only €1m comes off the P&L each year, for ten years.

As you can see doing the latter makes the P&L look very good and eps looks great too.

If you do the former then in the first year your profits are zilch but in subsequent years if you don't develop any further software your profits are exceptional.

The latter is what INTQ have been doing.

So where are the figures in the balance sheet and cashflow statement that help
to understand this.

balance sheet - look at the difference between the goodwill and intangibles for 2012 and 2013, there's a massive increase in both. Some due to the acquisition and some due to the capitalising of the software labour cost. First red flag!

cashflow statement - look at the profit €9m now look at the depreciation and amortisation €5m, this is added back amongst other items to indicate the net cash before changes in working capital of €16.2m

Next look at the working capital changes and note further down that the net cashflow from operations is €13.2m

This looks great €9m of profit but €13m of cash generated.

a little lower acquisition costs €10.7m

Now the red flag.

A bit further down the casflow statement, capital expenditure for intangible assets €13.6m This is cash which has left the business but has been capitalised and placed on the balance sheet.

you will also notice lower down on the Cashflow statement that they raised proceeds from issue of share capital €11.1m and proceeds from long and short term borrowings roughly €7m.

so roughly
cash raised from operations €13m
software development capitalised €13 negative (so effectively no profit)
share capital raised €11.1m
net borrowing €6m (they paid €842K back, see cashflow statement)
acquisition €10.7m negative

Cash at start of year €8.7m
Cash at end of year €12.7m

The figures don't exactly balance as there are a few other itmes, like finance costs etc on the cashflow statement but these are the main items which demonstrate that the only cash being generated is from issue of equity and bank borrowing.

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MIDAS SHARE TIPS: The smart money is on mobile firm InternetQ that allows apps to carry adverts

InternetQ looks like a bargain
By Lee Wild | Wed, 21st January 2015 - 12:43 iii


InternetQ looks like a bargain. InternetQ (INTQ) rocketed as much as 10% Wednesday after the owner of mobile marketing platform Minimob and music streaming service Akazoo revealed a surge in fourth-quarter revenue. Margins improved in the second half of the year, too, and broker Canaccord Genuity has upgraded earnings per share estimates both for 2014 and the current year by 5%.
A boom in demand for mobile marketing had revenue up almost 27% in the final three months of last year to €130 million, and with margins also improving, InternetQ made an adjusted cash profit of more than €22 million and adjusted profit after tax of €14 million. It ended the year with €12 million of cash on the balance sheet, or about €1 million net cash.

B2B, or mobile marketing, made up 79% of sales and is in hot demand. Global ad spend is tipped to increase by 5% this year to $545 billion, driven largely by mobile. InternetQ's Minimob platform now has over 400 million installations and is fully integrated into 138 advertising networks/demand-side platforms. That helps it monetise its digital advertising inventory.

InternetQ has been pumping money into music streaming service Akazoo, too, and it's had success here, too. It reports "good results" from its offering with MTN and has launched lots of new partnerships in Asia. It still plans to launch Akazoo in another western European market and announce new strategic partnership deals in the Asian market by the end of the first quarter of 2015.

"The remarkable take-up of Minimob provides a significant competitive advantage, while management remains confident that it can roll out Akazoo profitably into larger Western markets, benefiting from a materially lower customer acquisition cost than its competitors," explains Canaccord.

It's why the broker has upgraded cash profit forecasts for 2014 to €22 million, giving adjusted pre-tax profit of €14.4 million and EPS of 33.9 euro cents. This year it looks for €27.9 million, €18.9 million and 41.7 cents respectively.

As we've said here before, there's a clear valuation argument in favour of InternetQ at these levels.

After the number changes, and with the shares at 294p, InternetQ trades on just 9 times forecast earnings for 2015. Next year it's only 8.3. That's incredibly cheap for a company tipped to growth EPS by an average of 16% for the next two years. "It is even on a projected 6.9% free cash flow yield, as we expect capex to be flat in FY15 (falling as a % of profits) and driving up free cash flow conversion rates," writes Canaccord which sticks with its 510p target price.

Having broken above the 200-day moving average and technical resistance at around 280p, they're certainly heading in the right direction. Full-year results are due on 31 March.

21 Jan Canaccord Genuity Buy 286.00 510.00 510.00 Reiterates
21 Jan RBC Capital Markets Outperform 286.00 500.00 500.00 Reiterates

Not such a bargain today.