Messaging International Plc / Market: AIM / Epic: MES / Sector: Technology

Messaging International Plc ('the Company')

Trading update

Messaging International Plc, the AIM traded developer of messaging solutions, is pleased to provide the following trading update in advance of its results for the year ended 31 December 2014 which are expected to be released in June 2015. 

In recent months the Company has reached agreement on a change of the business model for its Text-to-Landline Service with one of its key mobile carrier customers in North America with which the Company has a number of products not affected by this change.  The change transitions the Text-to-Landline Service from a standard SMS fee to a premium SMS fee resulting in a lower amount of transmitted messages with a corresponding decline in the revenue generated from this customer.  The Company is forecasting a decrease of approximately $1m from the annual revenues generated from this service for 2015 compared to 2014. However, as this service has substantial direct costs, under the new business model the profit margins are much higher and therefore the impact on the bottom line is expected to be less than $400k.

Foreseeing that Value Added Services for Telecom operators are going through a global market shift due to Smartphone penetration, the Company initiated over a year ago a new Business Mobile Messaging solution.  Unlike other messaging applications such as Viber and WhatsApp, TeleMessage's app is targeted at business clients and offers a "managed, secure, reliable and IT ready" app and service.

Companies recognise the need to embed their mobile messaging in the organization in a way similar to other communication systems such as phone and emails.  The mobile environment is even more challenging because employees communicate internally with other employees and externally with partners and clients using public apps of which companies have no ability to secure or to audit the interaction. Groups' are formed on sensitive subjects such as business transactions.  In addition, the security and management challenge is intensified by the fact that more and more employees use their own devices at work, 

Guy Levit, CEO of Messaging International Plc, said, "Even though the product has been commercially available for only a few months, we have seen a growing interest from existing clients and newcomers.  In particular, healthcare and financial organizations that need to comply with strict security policies and need to keep all company information confidential. Initial commercial deals for this product have been signed and more substantial deals are expected during the second half of this year and beyond. 

TeleMessage has made a strategic move to develop this product and market.  In addition to substantial investment in R&D, we have made substantial investments in marketing including the implementation of automated sales and marketing systems, content creation and branding, all of which should lead to higher exposure to businesses and ultimately generate sales.  To facilitate its growth the Company secured the new venture lending finance announced on January 27^th and may seek additional funding to allow it to seize the opportunity of this product".

**ENDS**

For further information visit www.telemessage.com or contact:

Guy Levit                                 Messaging International Plc                   Tel: + 972 3 9225252

Mark Percy                              Cantor Fitzgerald Europe                      Tel: +44 (0) 20 7894 7000

Catherine Leftley                      Cantor Fitzgerald Europe                      Tel: +44 (0) 20 7894 7000

Messaging International Plc joined AIM in August 2005.  Its 100% owned subsidiary, TeleMessage Ltd (www.telemessage.com), delivers smart and secure messaging seamlessly over any communication device. Designed specifically for mobile operators and enterprises, the enterprise and VAS consumer solutions intelligently and seamlessly handle text, voice, data, and multimedia messages as well as IP messaging via Smartphone push notifications or RCS over mobiles, tablets, the web, Office, APIs and IT infrastructure.  The Company has a number of contracts with major blue chip companies including Sprint, one of the largest wireless providers in the US, Rogers Wireless, the largest wireless provider in Canada, and many more.