TIDMGINV
RNS Number : 7681E
Global Invacom Group Limited
11 May 2017
Singapore and U.K. AIM-listed Global Invacom Group Reverses Last
Year's Loss To Announce Net Profit of US$0.6 Million in Q1
FY2017
-- Net profit of US$0.6 million (Q1 FY2016:
US$0.7 million loss)
-- Gross profit of US$6.0 million (Q1 FY2016:
US$5.7 million)
-- Gross profit margin improved to 21.9% (Q1
FY2016: 18.5%)
-- Release of next-generation products has helped
Group make profit in Q1 FY2017
Singapore, 11 May 2017 - Global Invacom Group Limited ("Global
Invacom" or "the Group"), a satellite communications ("Sat Comms")
equipment provider listed on the Singapore Exchange and the U.K.
AIM Market, today announces a net profit of US$0.6 million for the
three months ended 31 March 2017 ("Q1 FY2017"), reversing a loss of
US$0.7 million in the comparable period last year.
The turnaround was lifted by the first full quarter of profit
for some time by the Group's U.S. subsidiary, Ravens Antenna
Systems (trading as "Global Skyware"). The Group acquired Global
Skyware, which designs and manufactures antennas for Broadband,
Satellite and Very Small Aperture Terminals covering C-band,
Ku-band and Ka-band frequency platforms, on 24 August 2015.
The Group has commenced sales of next generation Low Noise
Blocks ("LNBs") utilising Digital Channel Stacking Switch ("DCSS")
technology - which allows up to 32 continuous video streams from a
single LNB - as global broadcasters began transitioning to the
latest DCSS based solutions. The Group expects sales of
DCSS-generation products to increase throughout the year ending 31
December 2017 ("FY2017").
Group revenue for Q1 FY2017 declined to US$27.5 million (Q1
FY2016: US$30.8 million) mainly due to lower turnover in the
contract manufacturing segment following the closure of a non-core
manufacturing subsidiary in Shenzhen, China, which was completed in
Q4 FY2016. The Group's manufacturing activity in China is now
consolidated at its manufacturing facility in Shanghai.
Q1 FY2017 revenue from America, Europe and Asia regions declined
by US$0.7 million (-3.5%), US$2.2 million (-29.8%) and US$0.5
million (-20.1%), respectively. Revenue from the Rest of the World
increased by US$0.1 million (+10.7%).
Reflecting improvements in internal efficiencies, gross profit
improved 6.1% to US$6.0 million in Q1 FY2017 versus US$5.7 million
in Q1 FY2016. Gross profit margin increased to 21.9% compared to
18.5% the previous year, helped by on-going manufacturing
efficiencies across the Group, and specifically at Global Skyware
in the U.S. Lower research and development costs due to the
weakened U.K. pound helped costs in the U.K.
Administrative expenses decreased to US$5.1 million in Q1 FY2017
from US$6.3 million in Q1 FY2016, representing 18.4% and 20.4% of
revenue, respectively. This was due to operational cost savings
from restructuring, rationalisation and consolidation exercises
across the Group.
Cash and cash equivalents as at 31 March 2017 stood at US$7.6
million. Net cash used in operating activities was US$0.3 million
in Q1 FY2017 compared to US$0.4 million generated from operating
activities in Q1 FY2016; offset by the purchase of property, plant
and equipment of US$0.2 million and US$0.7 million, respectively.
Net cash generated from financing activities was US$0.2 million in
Q1 FY2017 and US$1.6 million in Q1 FY2016, respectively.
Earnings per share on a fully diluted basis improved to 0.22 US
cent for Q1 FY2017, a positive swing from a loss per share of 0.24
US cent a year earlier. Net asset value per share edged up to 19.45
US cents as at 31 March 2017 from 19.26 US cents as at 31 December
2016.
Mr Tony Taylor, Executive Chairman of Global Invacom, said:
"This set of results underscores the strong foundation we have
laid to improve the Group's performance. The better margins and
improved bottom line reflect the consolidation of our global
manufacturing network and supply chain, as well as our efforts to
expand our product portfolio through ongoing research and
development and acquisitions.
"We intend to build on this momentum throughout FY2017 and
beyond as we roll out DCSS-generation equipment for our broadcaster
customers and Ka VSAT antenna's for the rapidly growing fleet of
HTS (High Throughput Satellites), providing data over satellite
around the world."
**End of Press Release**
The information communicated in this press release contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
For media queries, please contact
Matthew Garner
Chief Financial Officer
Global Invacom Group Limited
8 Temasek Boulevard Freeman House
#20-03 Suntec Tower John Roberts Business
Three Park
Singapore 038988 Canterbury CT5 3BJ
+65 6884 3423 +44 203 053 3523
On behalf of Global Invacom Group Limited:
finnCap Ltd (Nominated Adviser and Joint Broker)
Christopher Raggett / Simon Hicks (Corporate Finance)
Rhys Williams (Corporate Broking and Sales)
+44 207 220 0500
Mirabaud Securities LLP (Joint Broker)
Peter Krens (Equity Capital Markets)
+44 207 878 3362
Bell Pottinger LLP (UK Financial PR)
David Rydell / Joanna Davidson
+44 203 772 2500
WeR1 Consultants Pte Ltd (Singapore Financial PR)
Grace Yew, graceyew@wer1.net
Wendy Sim, wendysim@wer1.net
+65 6737 4844
About Global Invacom Group Limited
Global Invacom Group Limited ("Global Invacom") is listed on the
Singapore Exchange Securities Trading Limited Mainboard ("SGX-ST")
and its shares are admitted to trading on the AIM Market of the
London Stock Exchange in the U.K.
Global Invacom is a fully integrated satellite equipment
provider with six manufacturing plants across China, Israel,
Malaysia, U.K. and the U.S. Its customers include satellite
broadcasters such as BSkyB of the U.K. and Dish Network of the
U.S.A.
On 24 August 2015, Global Invacom completed the acquisition of
Global Skyware, a leading U.S.-based designer and supplier of
satellite antennas products and services for C-band, Ku-band and
Ka-band frequency platforms, positioning itself as the world's only
full-service outdoor unit supplier.
Global Invacom provides a full range of dish antennas, LNB
receivers, transmitters, switches and video distribution components
and electronics manufacturing services in satellite communications
as well as manufacturing services in TV peripherals, computer
peripherals, medical, and consumer electronics industries.
For more information, please refer to www.globalinvacom.com
FINANCIAL STATEMENT ANNOUNCEMENT FOR THE THREE MONTHSED 31 MARCH
2017
PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY
(Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS
1(a) A statement of comprehensive income (for the group)
together with a comparative statement for the corresponding period
of the immediately preceding financial year.
Consolidated Statement of Comprehensive Income for the three
months ended 31 March 2017. These figures have not been
audited.
Group
--------------------------------------------------------------------
Q1 Q1 Increase/
FY2017 FY2016 (Decrease)
US$'000 US$'000 %
Revenue 27,531 30,758 (10.5)
Cost of sales (21,506) (25,079) (14.2)
Gross profit 6,025 5,679 6.1
Other income 204 197 3.6
Distribution costs (146) (110) 32.7
Administrative expenses (5,069) (6,263) (19.1)
Other operating expenses (106) - N.M.
Finance income 5 7 (28.6)
Finance costs (112) (140) (20.0)
Profit/(Loss) before
income tax(i) 801 (630) N.M.
Income tax expense (196) (24) 716.7
----------------------- -------------------- ---------------------
Profit/(Loss) after
income tax attributable
to equity holders of
the Company 605 (654) N.M.
----------------------- -------------------- ---------------------
Other comprehensive
(loss)/income:
Items that may be reclassified
subsequently to profit
or loss
* Exchange differences on translation of foreign
subsidiaries (113) 578 N.M.
Other comprehensive
(loss)/income for the
period, net of tax (113) 578 N.M.
---------------- ------------------ ------------
Total comprehensive
income/(loss) for the
period attributable
to equity holders of
the Company 492 (76) N.M.
---------------- ------------------ ------------
N.M.: Not Meaningful
Note:
(i) Profit/(Loss) before income tax was determined after (charging)/crediting the following:
Group
-------------------------------------------------------
Q1 Q1 Increase/
FY2017 FY2016 (Decrease)
US$'000 US$'000 %
Interest income 5 7 (28.6)
Interest expense (112) (140) (20.0)
Gain on foreign exchange 53 192 (72.4)
Write-back/(Allowance) for inventory obsolescence 389 (210) N.M.
Loss on disposal of property, plant and equipment (20) - N.M.
Impairment of property, plant and equipment (86) - N.M.
Depreciation of property, plant and equipment (593) (595) (0.3)
Amortisation of intangible assets (148) (38) 289.5
Operating lease expense (816) (842) (3.1)
Research and development expense (390) (389) 0.3
1(b)(i) A statement of financial position (for the issuer and
group), together with a comparative statement as at the end of the
immediately preceding financial year.
Group Company
------------------------------------------ ------------------------------------------
31 Mar 31 Dec 31 Mar 31 Dec
2017 2016 2017 2016
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current
Assets
Property, plant
and equipment 12,669 13,177 4 4
Investments
in subsidiaries - - 44,819 53,415
Goodwill 9,352 9,352 - -
Intangible assets 2,684 2,828 - -
Available-for-sale
financial assets 8 8 - -
Deferred tax
assets 355 355 - -
Other receivables
and prepayments 55 55 8,871 -
25,123 25,775 53,694 53,419
------------------- --------------------- -------------------- --------------------
Current Assets
Due from subsidiaries - - 867 867
Inventories 30,077 28,841 - -
Trade receivables 14,956 16,934 - -
Other receivables
and prepayments 3,854 3,110 11,492 11,202
Tax receivables 503 1,002 - -
Cash and cash
equivalents 7,642 7,942 1,198 1,251
------------------- --------------------- -------------------- --------------------
57,032 57,829 13,557 13,320
------------------- --------------------- -------------------- --------------------
Total assets 82,155 83,604 67,251 66,739
------------------- --------------------- -------------------- --------------------
EQUITY AND LIABILITIES
Equity
Share capital 60,423 60,423 74,240 74,240
Treasury shares (1,656) (1,656) (1,656) (1,656)
Reserves (5,921) (6,453) (12,836) (12,929)
Total equity 52,846 52,314 59,748 59,655
------------------- --------------------- -------------------- --------------------
Non-current
Liabilities
Other payables 1,222 1,222 - -
Deferred tax
liabilities 681 681 - -
1,903 1,903 - -
------------------- --------------------- -------------------- --------------------
Current Liabilities
Due to subsidiaries - - 7,272 6,820
Trade payables 16,280 16,602 - -
Other payables 4,424 6,323 163 196
Borrowings 6,303 6,108 - -
Provision for
income tax 399 354 68 68
------------------- --------------------- -------------------- --------------------
27,406 29,387 7,503 7,084
------------------- --------------------- -------------------- --------------------
Total liabilities 29,309 31,290 7,503 7,084
------------------- --------------------- -------------------- --------------------
Total equity
and liabilities 82,155 83,604 67,251 66,739
------------------- --------------------- -------------------- --------------------
1(b)(ii) Aggregate amount of group's borrowings and debt
securities.
Amount repayable in one year or less, or on demand
As at 31 Mar As at 31 Dec
2017 2016
------------------ ------------------
Secured Unsecured Secured Unsecured
------- --------- ------- ---------
US$'000 US$'000 US$'000 US$'000
------- --------- ------- ---------
6,303 - 6,108 -
------- --------- ------- ---------
Amount repayable after one year
As at 31 Mar As at 31 Dec
2017 2016
------------------ ------------------
Secured Unsecured Secured Unsecured
------- --------- ------- ---------
US$'000 US$'000 US$'000 US$'000
------- --------- ------- ---------
- - - -
------- --------- ------- ---------
Details of any collateral
The loans of US$6,303,000 were secured over the subsidiaries'
bank deposit of US$200,000, cash collateral of US$1,000,000 and
corporate guarantees provided by the Company.
1(c) A statement of cash flows (for the group), together with a
comparative statement for the corresponding period of the
immediately preceding financial year.
Group
-----------------------------------------
Q1 Q1
FY2017 FY2016
US$'000 US$'000
Cash Flows from Operating Activities
Profit/(Loss) before income tax 801 (630)
Adjustments for:
Depreciation of property, plant and equipment 593 595
Amortisation of intangible assets 148 38
Loss on disposal of property, plant and equipment 20 -
Impairment of property, plant and equipment 86 -
(Write-back)/Allowance for inventory obsolescence (389) 210
Unrealised exchange (gain)/loss (218) 225
Interest income (5) (7)
Interest expense 112 140
Share-based payments 40 87
Operating cash flow before working capital changes 1,188 658
Changes in working capital:
Inventories (838) (62)
Trade receivables 1,987 4,359
Other receivables and prepayments (576) (229)
Trade and other payables (2,125) (3,931)
-------------------- -------------------
Cash (used in)/generated from operating activities (364) 795
Interest paid (112) (92)
Income tax refund/(paid) 196 (255)
Net cash (used in)/generated from operating activities (280) 448
-------------------- -------------------
Cash Flows from Investing Activities
Interest received 3 7
Purchase of property, plant and equipment (260) (657)
Proceeds from disposal of property, plant and equipment 27 -
Net cash used in investing activities (230) (650)
-------------------- -------------------
Cash Flows from Financing Activities
Proceeds from borrowings 10,705 12,881
Repayment of borrowings (10,510) (11,278)
Net cash generated from financing activities 195 1,603
-------------------- -------------------
Net (decrease)/increase in cash and cash equivalents (315) 1,401
Cash and cash equivalents at the beginning of the period 6,742 7,448
Effect of foreign exchange rate changes on the balance of cash held in
foreign currencies 15 162
-------------------- -------------------
Cash and cash equivalents at the end of the period(i) 6,442 9,011
-------------------- -------------------
Note:
(i) For the purpose of presentation in the consolidated
statement of cash flows, the consolidated cash and cash equivalents
comprise the following:
Q1 Q1
FY2017 FY2016
US$'000 US$'000
Cash and bank balances 7,413 9,987
Fixed deposits 229 442
---------------- -----------------------
7,642 10,429
Less: Restricted cash* (1,200) (1,418)
---------------- -----------------------
Cash and cash equivalents per the consolidated statement of cash
flows 6,442 9,011
---------------- -----------------------
* Restricted cash includes cash collateral amounted to
US$1,000,000 (Q1 FY2016: US$1,000,000) and fixed deposits amounted
to US$200,000 (Q1 FY2016: US$400,000) pledged with the banks for
facilities and loans granted to the Group. As at 31 March 2017, the
Group had utilised US$6,303,000 of the facilities and loans
granted.
1(d)(i) A statement (for the issuer and group) showing either
(i) all changes in equity or (ii) changes in equity other than
those arising from capitalisation issues and distributions to
shareholders, together with a comparative statement for the
corresponding period of the immediately preceding financial
year.
Foreign
Capital Share currency
Share Treasury Merger redemption options Capital translation Retained
Group capital shares reserves reserves reserve reserve reserve profits Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as
at 1 Jan 2017 60,423 (1,656) (10,150) 6 613 (3,695) (986) 7,759 52,314
Share-based
payments - - - - 40 - - - 40
Profit for
the period - - - - - - - 605 605
Other
comprehensive
loss:
Exchange
differences
on
translating
foreign
operations - - - - - - (113) - (113)
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Total other
comprehensive
income for
the period - - - - - - (113) 605 492
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Balance as
at 31 Mar
2017 60,423 (1,656) (10,150) 6 653 (3,695) (1,099) 8,364 52,846
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Balance as
at 1 Jan 2016 60,423 (1,656) (10,150) 6 353 (3,786) (1,281) 10,553 54,462
Share-based
payments - - - - 87 - - - 87
Loss for the
period - - - - - - - (654) (654)
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - - 578 - 578
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Total other
comprehensive
loss for the
period - - - - - - 578 (654) (76)
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Balance as
at 31 Mar
2016 60,423 (1,656) (10,150) 6 440 (3,786) (703) 9,899 54,473
------------------ ------------------ ------------------ ---------------------- ------------------ ------------------- ---------------------- -------------------- ----------------
Foreign
Share currency
Share Treasury options Capital translation Accumulated
Company capital shares reserve reserve reserve losses Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as
at 1 Jan 2017 74,240 (1,656) 613 (4,481) (2,067) (6,994) 59,655
Share-based
payments - - 38 - - - 38
Loss for the
period - - - - - (85) (85)
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - 140 - 140
------------------------ ----------------------- ------------------------ ----------------------- --------------------------- ------------------------ --------------------
Total other
comprehensive
income for
the period - - - - 140 (85) 55
Balance as
at 31 Mar
2017 74,240 (1,656) 651 (4,481) (1,927) (7,079) 59,748
------------------------ ----------------------- ------------------------ ----------------------- --------------------------- ------------------------ --------------------
Balance as
at 1 Jan 2016 74,240 (1,656) 353 (4,481) (2,067) (5,007) 61,382
Share-based
payments - - 87 - - - 87
Loss for the
period - - - - - (527) (527)
Other
comprehensive
loss:
Exchange
differences - - - - - - -
on translating
foreign
operations
------------------------ ----------------------- ------------------------ ----------------------- --------------------------- ------------------------ --------------------
Total other
comprehensive
loss for the
period - - - - - (527) (527)
Balance as
at 31 Mar
2016 74,240 (1,656) 440 (4,481) (2,067) (5,534) 60,942
------------------------ ----------------------- ------------------------ ----------------------- --------------------------- ------------------------ --------------------
1(d)(ii) Details of any changes in the company's share capital
arising from rights issue, bonus issue, share buy-backs, exercise
of share options or warrants, conversion of other issues of equity
securities, issue of shares for cash or as consideration for
acquisition or for any other purpose since the end of the previous
period reported on.
State the number of shares that may be issued on conversion of
all the outstanding convertibles, if any, against the total number
of issued shares excluding treasury shares and subsidiary holdings
of the issuer, as at the end of the current financial period
reported on and as at the end of the corresponding period of the
immediately preceding financial year.
State also the number of shares held as treasury shares and the
number of subsidiary holdings, if any, and the percentage of the
aggregate number of treasury shares and subsidiary holdings held
against the total number of shares outstanding in a class that is
listed as at the end of the current financial period reported on
and as at the end of the corresponding period of the immediately
preceding financial year.
No. of
Q1 FY2017 shares US$'000
Balance as at 1 Jan 2017 and
31 Mar 2017 271,662,227 72,584
--------------------- ------------
No. of
Q1 FY2016 shares US$'000
Balance as at 1 Jan 2016 and
31 Mar 2016 271,662,227 72,584
--------------------- ------------
There were 10,740,072 treasury shares held by the Company as at
31 March 2017 and 31 March 2016 and there was no subsidiary
holdings.
1(d)(iii) To show the total number of issued shares excluding
treasury shares as at the end of the current financial period and
as at the end of the immediately preceding year.
31 Mar 2017 31 Dec 2016
--------------------------------------------------------- ------------ ------------
Total number of issued shares excluding treasury shares 271,662,227 271,662,227
--------------------------------------------------------- ------------ ------------
1(d)(iv) A statement showing all sales, transfers, cancellation
and/or use of treasury shares as at the end of the current
financial period reported on.
No. of
Q1 FY2017 shares US$'000
Balance as at 1 Jan 2017
and 31 Mar 2017 10,740,072 1,656
----------- --------
1(d)(v) A statement showing all sales, transfers, cancellation
and/or use of subsidiary holdings as at the end of the current
financial period reported on.
No. of
Q1 FY2017 shares US$'000
Balance as at 1 Jan 2017 - -
and 31 Mar 2017
-------- --------
2. Whether the figures have been audited or reviewed and in
accordance with which auditing standard or practice.
These figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the
auditors' report (including any qualifications or emphasis of a
matter).
Not applicable.
4. Whether the same accounting policies and methods of
computation as in the issuer's most recently audited annual
financial statements have been applied.
The accounting policies and methods of computation have been
applied consistently for the current financial period ended 31
March 2017 as those used in the audited financial statements for
the year ended 31 December 2016, except for the adoption of the new
or revised International Financial Reporting Standards ("IFRS")
applicable for the financial period beginning 1 January 2017.
5. If there are any changes in the accounting policies and
methods of computation, including any required by an accounting
standard, what has changed, as well as the reasons for, and the
effect of, the change.
The Group has adopted all of the new or revised IFRS that are
effective for the financial period beginning 1 January 2017 and are
relevant to its operations. The adoption of these IFRS does not
have financial impact on the Group's financial position or
results.
6. Earnings per ordinary share of the group for the current
financial period reported on and the corresponding period of the
immediately preceding financial year, after deducting any provision
for preference dividends.
Earnings per ordinary share of the Group, after deducting any provision for preference Group
dividends
------------------------------------------------------------------------------------------ --------------------------
Q1 Q1
FY2017 FY2016
US$ US$
------------------------------------------------------------------------------------------ ------------ ------------
(a) Based on weighted average number of ordinary shares on issue; and 0.22 cent (0.24) cent
(b) On a fully diluted basis 0.22 cent (0.24) cent
Weighted average number of ordinary shares used in computation of basic earnings per
share 271,662,227 271,662,227
Weighted average number of ordinary shares used in computation of diluted earnings per
share 271,722,501 271,662,227
------------------------------------------------------------------------------------------ ------------ ------------
7. Net asset value (for the issuer and group) per ordinary share
based on the total number of issued shares excluding treasury
shares of the issuer at the end of the:
(a) current financial period reported on; and
(b) immediately preceding financial year.
Group Company
-------------------------------------------------------------- -------------------------- --------------------------
31 Mar 2017 31 Dec 2016 31 Mar 2017 31 Dec 2016
US$ US$ US$ US$
-------------------------------------------------------------- ------------ ------------ ------------ ------------
Net asset value per ordinary share based on issued share 19.45 cents 19.26 cents 21.99 cents 21.96 cents
capital
Total number of issued shares 271,662,227 271,662,227 271,662,227 271,662,227
-------------------------------------------------------------- ------------ ------------ ------------ ------------
8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following:
(a) any significant factors that affected the turnover, costs,
and earnings of the group for the current financial period reported
on, including (where applicable) seasonal or cyclical factors;
and
(b) any material factors that affected the cash flow, working
capital, assets or liabilities of the group during the current
financial period reported on.
Review of Financial Performance
Revenue
The Group's revenue was US$27.5 million in Q1 FY2017, US$3.3
million lower than US$30.8 million in Q1 FY2016. This related
mainly to reductions in revenue in the Contract Manufacturing
segment following the consolidation of the subsidiaries in the
People's Republic of China ("PRC").
By geography, revenue for Q1 FY2017 from America, Europe and
Asia regions declined, US$0.7 million (-3.5%), US$2.2 million
(-29.8%) and US$0.5 million (-20.1%), respectively. This was offset
by an increase in revenue from the Rest of the World by US$0.1
million (+10.7%), against that in Q1 FY2016.
Gross Profit
Despite the decrease in revenue, gross profit increased by
US$0.3 million or 6.1% to US$6.0 million in Q1 FY2017 from US$5.7
million in Q1 FY2016. Gross profit margin ("GPM") improved to 21.9%
in Q1 FY2017 from 18.5% in Q1 FY2016 as a result of savings from
the PRC consolidation as well as on-going Group-wide factory cost
control, including the Global Skyware site which has undertaken
substantial improvements.
Other Income
Other income increased primarily due to excess materials sold by
the Shenzhen subsidiary that ceased operations and foreign exchange
gains in Q1 FY2017.
Administrative Expenses
Administrative expenses decreased to US$5.1 million in Q1 FY2017
from US$6.3 million in Q1 FY2016, representing 18.4% and 20.4% of
revenue, respectively, attributed to strong cost savings from the
streamlining programmes, restructuring, rationalisation and
consolidation exercises in FY2016.
Other Operating Expenses
Other operating expenses relates to the impairment and loss on
property, plant and equipment in the Shenzhen subsidiary that was
no longer in use.
Profit Before Tax & Net Profit
The Group recorded a profit before tax of US$0.8 million in Q1
FY2017 compared to a loss before tax of US$0.6 million in Q1
FY2016, representing a positive margin of 2.9% compared to a
negative margin of 2.0%, respectively.
Overall, the Group posted a net profit of US$0.6 million in Q1
FY2017 compared to a net loss of US$0.7 million in Q1 FY2016,
representing a positive margin of 2.2% compared to a negative
margin of 2.1%, respectively.
Review of Financial Position
Non-current assets decreased, primarily due to the depreciation
of property, plant and equipment and the amortisation of intangible
assets.
Net current assets increased by US$1.2 million to US$29.6
million as at 31 March 2017 compared to US$28.4 million as at 31
December 2016. Inventories increased by US$1.2 million in
preparation for orders for the next quarter, and prompt collections
have resulted in trade and other receivables decreasing by US$1.2
million. Trade and other payables decreased by US$2.2 million.
Borrowings increased slightly by US$0.2 million to US$6.3 million
and cash and cash equivalents decreased by US$0.3 million to US$7.6
million as at 31 March 2017, primarily relating to the purchase of
inventory relating to future orders. Net tax receivables decreased
by US$0.5 million to US$0.1 million as at 31 March 2017.
The Group's net asset value stood at US$52.8 million as at 31
March 2017, compared to US$52.3 million as at 31 December 2016.
Review of Cash Flows
Net cash used in operating activities in Q1 FY2017 was US$0.3
million, comprising cash inflow from operating activities before
working capital changes of US$1.2 million, net working capital
outflow of US$1.6 million and payment of interest and refund of
income tax expense of US$0.1 million and US$0.2 million,
respectively.
Net cash used in investing activities was US$0.2 million in Q1
FY2017, mainly attributable to the purchase of machinery and
equipment.
Net cash generated from financing activities was US$0.2 million
in Q1 FY2017, arising mainly from the net proceeds of
borrowings.
Overall, the Group recorded a net decrease in cash and cash
equivalents of US$0.3 million in Q1 FY2017, bringing cash and cash
equivalents per the consolidated statement of cash flows to US$6.4
million as at 31 March 2017.
9. Where a forecast, or a prospect statement, has been
previously disclosed to shareholders, any variance between it and
the actual results.
No prospect statement was made.
10. A commentary at the date of the announcement of the
significant trends and competitive conditions of the industry in
which the group operates and any known factors or events that may
affect the group in the next reporting period and the next 12
months.
The first quarter of 2017 has seen the beginning of the roll out
of new technology Low Noise Block's ("LNB") utilising Digital
Channel Stacking Switch ("DCSS") technology, which allows up to 32
continuous video streams from a single LNB. Having secured
qualification from a key customer in FY2016, the Group has seen a
pick-up in sales and orders over Q1 FY2016 and it expects the
deployment of DCSS-generation products to gradually improve
throughout FY2017, stabilising in 2018 and beyond as more
broadcasters transition to the new technology.
The Group also benefitted from the launch in December 2016 of
the high-speed communications satellite Jupiter 2 which commenced
services this quarter. This launch significantly expanded the
broadband capacity and subscriber base of Hughes Network Systems,
LLC ("Hughes"), a key customer for which the Group is the primary
provider of ground antennae, resulting in significant demand for
equipment.
Elsewhere, the Foxcom operation in Israel has made some inroads
with new RF products into the world's largest TV broadcaster and
with new fibre solutions for remote antennas and in-hangar GPS and
Iridium testing, the latter of which has been taken up by a major
airline.
New processes and technologies to improve productivity across
its global manufacturing network which began in 2016 have started
to bear fruit. Global Skyware made its first contribution to the
Group's profitability in Q1 FY2017, after making losses in FY2016,
brought about, in some part, by the increased demand from Hughes
but assisted by a lower breakeven point resulting from improvements
to its manufacturing processes made during FY2016. In addition, the
Group has begun to see the benefits from the restructuring in the
UK and Asia. Lower costs in the UK and the consolidation the
Group's presence in the PRC, which involved the closure of a
non-core manufacturing facility in Shenzhen in Q4 FY2016, have led
to improved gross profit margins and lower breakeven points in both
regions which should assist the Group through the remainder of the
year.
The international satellite manufacturing and launch market is
expected to grow at a compounded annual rate of 4.95% between 2016
and 2020*, amid higher demand for satellite ground equipment
("SGE") as well as low-cost HD and 4K broadcast content. The Group
remains vigilant about challenges in the global economy, such as
political changes in the UK, USA and Europe that may affect
international trade, in order to mitigate impact on its business
activities.
The Group will continue to invest in innovation and automation
as it pursues its aim of global leadership in the research and
production of Sat Comms equipment. The Board is confident, barring
unexpected challenges to the Global economy, that the new DCSS
products, along with the expected growth of other new products,
will enable the Group to improve performance.
*Source: Global Satellite Manufacturing and Launch Market
2016-2020 - TechNavio
11. Dividend
(a) Current Financial Period Reported On
Any dividend declared for the current financial period reported
on?
None.
(b) Corresponding Period of the Immediately Preceding Financial Year
Any dividend declared for the corresponding period of the
immediately preceding financial year?
None.
(c) Date payable
Not applicable.
(d) Books closure date
Not applicable.
12. If no dividend has been declared/recommended, a statement to that effect.
No dividend has been declared or recommended for the three
months ended 31 March 2017.
13. If the Group has obtained a general mandate from
shareholders for Interested Person Transactions ("IPTs"), the
aggregate value of such transactions as required under Rule
920(1)(a)(ii). If no IPTs mandate has been obtained, a statement to
that effect.
The Company does not have a shareholders' mandate for IPTs and
there were no IPTs for the three months ended 31 March 2017.
14. Confirmation that the Company has procured undertaking from
all its directors and executive officers pursuant to Rule
720(1).
The Company confirms that it has procured undertakings from all
its directors and executive officers under Rule 720(1) of the
Listing Manual of the Singapore Exchange Securities Trading
Limited.
CONFIRMATION BY THE BOARD OF DIRECTORS (THE "BOARD") PURSUANT TO
RULE 705(5) OF THE LISTING MANUAL
We do hereby confirm, for and on behalf of the Board of Global
Invacom Group Limited (the "Company"), that to the best of our
knowledge, nothing has come to the attention of the Board of the
Company which may render the financial results for the three months
ended 31 March 2017 to be false or misleading in any material
aspect.
On behalf of the Board
Anthony Brian Taylor Matthew Jonathan Garner
Director Director
BY ORDER OF THE BOARD
Anthony Brian Taylor
Executive Chairman
11 May 2017
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFEALSEFFKXEFF
(END) Dow Jones Newswires
May 11, 2017 02:00 ET (06:00 GMT)
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