TIDMGINV
RNS Number : 4010X
Global Invacom Group Limited
10 August 2018
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Results for the six months ended 30 June 2018
("1H FY2018")
Global Invacom (SGX: QS9) (AIM: GINV), the global provider of
satellite communications equipment, is pleased to announce its
financial results for the six months ended 30 June 2018 ("1H
FY2018") and three months ended 30 June 2018 ("Q2 FY2018").
Key financial highlights:
-- The Company announced sixth consecutive quarter of profitability in Q2 FY2018
-- Revenue remained stable at US$55.4m (1H FY2017: US$57.4m)
-- Gross profit margin improved 0.6% point to 21.2% (1H FY2017: 20.6%)
-- Gross profit constant at US$11.8m (1H FY2017: US$11.8m)
-- Cash and cash equivalents of US$13.4m (31 December 2017: US$7.2m)
Key operational highlights:
-- Continued progress and sales momentum from increased adoption
of Digital Channel Stacking Switch ("DCSS") products
-- Group continues to leverage and grow its existing position in
the sizeable and expanding Very Small Apertune Terminal ("VSAT")
market for data/internet by satellite
-- Focused on further product deployment and diversification to
expand the Group's product offering and geographical reach
-- Appointment of Malcolm John Burrell as Chief Technology
Officer, to drive new technology development in global satellite
communications sector
The Group's sales reflected continued demand across the global
footprint, with notable sales growth in Europe, particularly for
VSAT and DCSS products.
The global market for satellite communications equipment remains
robust, amidst a period of major industry-wide change. The
transition of technology to DCSS products presents Global Invacom
with a number of opportunities, in particular for ground equipment
for Direct-to-Home ("DTH") televison viewing via satellite, and the
increased global demand for data/internet everywhere through its
VSAT equipment.
The Group expects to roll out more advanced satellite
broadcasting products in the US and Europe to meet growing demand
for DCSS products as broadcasters continue to migrate to the new
technology. The Group remains confident of its ability to
capitalise on the opportunity through leveraging its customer
relationships as the adoption of DCSS continues apace.
The Group also notes that despite a slowdown in the US, there is
still a global increase in demand for DTH satellite broadcast
services, and therefore demand from broadcasters for the associated
equipment required to deliver services. The Group notes however
that the US still has a sizeable target market with over 169
million pay TV subscribers(1) who are still transitioning to DCSS
technology.
Demand for data/internet continues to grow globally, with VSAT
technology key in delivering connectivity in many territories and
geographies. In 1H FY2018, 38.7% of revenues for the Group were
generated from sales of VSAT products around the world, and we
continue to see demand increasing for these products across the
Group's global footprint.
As one of only seven companies capable of delivering fully
integrated satellite communications design, manufacture and
innovation services, Global Invacom is well positioned in both
markets to capitalise on the opportunity.
In the second half of 2018, the Group will continue to build on
the manufacturing improvements made in 2017 and the first half of
the year, and research and development will remain a key priority.
In June 2018, Global Invacom announced the appointment of Malcolm
John Burrell as Chief Technology Officer who will oversee the
continued innovation to provide best in class solutions to
broadcasters, developers and mobile systems integrators.
Technological improvements such as the new slimline products will
allow the Group to continue to improve margins and Global Invacom
will continue to develop efficient and cost-effective products.
The first half of the year has also seen the successful roll out
of the Group's Iridium In-hanger GPS solution through its wholly
owned subsidiary Foxcom. Initially aimed at the aerospace sector,
this product has broad applications and demonstrates the Group's
ability to diversify into new markets.
Tony Taylor, Executive Chairman of Global Invacom,
commented:
"The satellite ground equipment sector is undergoing a
once-in-a-decade technological shift, and the Company is very well
placed to benefit. The innovative products that we are developing
such as new slimline products, low-cost LNBs and new satellite
antennas are in continual demand.
In the VSAT market, the Group is observing rising demand driven
by developing countries and rural communities demanding enhanced
connectivity where cable or fibre is not a viable solution, proving
satellites can be an attractive option compared to other
communication technologies.
Our core focus remains to leverage our position in the market to
drive sales, and to continue driving R&D, to develop
innovative, market leading products that meet customer demands. We
have laid strong foundations in the first half of the year which
will allow the Group to build momentum through the second half of
FY2018 and beyond."
The full financial statements can be viewed on Global Invacom's
website: www.globalinvacom.com
(1) -
https://www.hollywoodreporter.com/news/directvs-subscriber-slide-drags-at-t-1131159
For further information, please contact:
Global Invacom Group Limited www.globalinvacom.com
Matthew Garner, Chief Financial Officer Tel: +65 6431 0782
Tel: +44 203 053 3523
finnCap Ltd (Nominated Adviser and Joint www.finncap.com
Broker)
Christopher Raggett / Simon Hicks (Corporate Tel: +44 207 220 0500
Finance)
Mirabaud Securities LLP (Joint Broker) www.mirabaud.com
Peter Krens (Equity Capital Markets) Tel: +44 207 878 3362
WeR1 Consultants Pte Ltd (Singapore Investor www.wer1.net
Relations)
Lai Kwok Kin / Roshan Singh Tel: +65 6737 4844
roshansingh@wer1.net
gigl@wer1.net
Vigo Communications (UK Media & Investor www.vigocomms.com
Relations)
Jeremy Garcia / Fiona Henson Tel: +44 207 390 0238
ginv@vigocomms.com
About Global Invacom Group Limited
Global Invacom is a fully integrated satellite equipment
provider with six manufacturing plants across China, Israel,
Malaysia, UK and the US. Its customers include satellite
broadcasters such as BSkyB of the UK and Dish Network of the
USA.
Global Invacom provides a full range of antennas, LNB receivers,
fibre distribution equipment, transmitters, switches and video
distribution components and electronics manufacturing services in
satellite communications as well as manufacturing services in
military, medical, and consumer electronics industries. Following
the acquisition in 2015 of Global Skyware, a leading US-based
designer and supplier of satellite antennas products and services,
the Company became the world's only full-service outdoor unit
supplier.
Global Invacom is listed on the Mainboard of the Singapore
Exchange Securities Trading Limited and its shares are admitted to
trading on the AIM Market of the London Stock Exchange.
For more information, please refer to www.globalinvacom.com
FINANCIAL STATEMENT ANNOUNCEMENT FOR Q2 AND HALF-YEARED 30 JUNE
2018
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 Q2 and the
half-year ended 30 June 2018. These figures have not been
audited.
Group Group
----------------------------------- ----------------------------------
Q2 Q2 FY2017 Increase/ 1H 1H Increase/
FY2018 (Decrease) FY2018 FY2017 (Decrease)
US$'000 US$'000 % US$'000 US$'000 %
Revenue 26,471 29,893 (11.4) 55,396 57,424 (3.5)
Cost of sales (20,788) (24,089) (13.7) (43,625) (45,595) (4.3)
Gross profit 5,683 5,804 (2.1) 11,771 11,829 (0.5)
Other income 10 711 (98.6) 31 915 (96.6)
Distribution costs (81) (83) (2.4) (180) (229) (21.4)
Administrative expenses (5,177) (5,246) (1.3) (10,610) (10,315) 2.9
Other operating expenses (55) - N.M. (13) (106) (87.7)
Finance income 41 5 720.0 44 10 340.0
Finance costs (134) (95) 41.1 (247) (207) 19.3
Profit before income
tax(i) 287 1,096 (73.8) 796 1,897 (58.0)
Income tax expense (81) (223) (63.7) 264) (419) (37.0)
--------- ---------- ------------ --------- --------- ------------
Profit after income
tax attributable to
equity holders of the
Company 206 873 (76.4) 532 1,478 (64.0)
--------- ---------- ------------ --------- --------- ------------
Other comprehensive
income:
Items that may be reclassified
subsequently to profit
or loss
Exchange differences
on translation of foreign
subsidiaries 70 221 (68.3) 194 108 (79.6)
Other comprehensive
income for the period,
net of tax 70 221 (68.3) 194 108 (79.6)
---- ------ --------- ---- ------ ---------
Total comprehensive
income for the period
attributable to equity
holders of the Company 276 1,094 (74.8) 726 1,586 (54.2)
---- ------ --------- ---- ------ ---------
N.M.: Not Meaningful
Note:
(i) Profit before income tax was determined after (charging)/crediting the following:
Group Group
-------------------------------- --------------------------------
Q2 Q2 Increase/ 1H 1H Increase/
FY2018 FY2017 (Decrease) FY2018 FY2017 (Decrease)
US$'000 US$'000 % US$'000 US$'000 %
Interest income 41 5 720.0 44 10 340.0
Interest expense (134) (95) 41.1 (247) (207) 19.3
(Loss)/Gain on foreign exchange (42) 131 N.M. 20 184 (89.1)
Write-back of payables - 578 (100.0) - 578 (100.0)
Loss on disposal of property, plant and
equipment (13) - N.M. (13) (20) (35.0)
Impairment of property, plant and equipment - - - - (86) (100.0)
Depreciation of property, plant and equipment (704) (629) 11.9 (1,403) (1,222) 14.8
Amortisation of intangible assets (176) (160) 10.0 (351) (308) 14.0
(Allowance)/Write-back for inventory
obsolescence, net (68) (126) (46.0) (154) 263 N.M.
Operating lease expense (1,008) (795) 26.8 (1,717) (1,611) 6.6
Research and development expense (727) (413) 76.0 (1,313) (803) 63.5
1(b)(i) A statement of financial position (for the issuer and
group), together with a comparative statement as at the end of the
immediately preceding financial year.
Group Company
------------------ --------------------
30 Jun 31 Dec 30 Jun 31 Dec
2018 2017 2018 2017
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current Assets
Property, plant and
equipment 11,645 12,393 103 7
Investments in subsidiaries - - 44,885 44,874
Goodwill 9,352 9,352 - -
Intangible assets 1,872 2,172 - -
Available-for-sale
financial assets 8 8 - -
Deferred tax assets 198 198 - -
Other receivables and
prepayments 54 55 9,371 9,154
23,129 24,178 54,359 54,035
-------- -------- --------- ---------
Current Assets
Due from subsidiaries - - 1,250 1,895
Inventories 28,532 29,022 - -
Trade receivables 16,769 19,268 - -
Other receivables and
prepayments 1,714 3,361 5,361 5,263
Tax receivables - 11 - -
Cash and cash equivalents 13,386 7,152 213 733
-------- -------- --------- ---------
60,401 58,814 6,824 7,891
-------- -------- --------- ---------
Total assets 83,530 82,992 61,183 61,926
-------- -------- --------- ---------
EQUITY AND LIABILITIES
Equity
Share capital 60,423 60,423 74,240 74,240
Treasury shares (1,656) (1,656) (1,656) (1,656)
Reserves (2,561) (3,297) (13,783) (13,320)
Total equity 56,206 55,470 58,801 59,264
-------- -------- --------- ---------
Non-current Liabilities
Other payables 103 111 - -
Deferred tax liabilities 489 489 - -
592 600 - -
-------- -------- --------- ---------
Current Liabilities
Due to subsidiaries - - 2,121 2,140
Trade payables 14,128 12,206 - -
Other payables 3,869 6,528 193 454
Borrowings 8,595 8,025 - -
Provision for income
tax 140 163 68 68
-------- -------- --------- ---------
26,732 26,922 2,382 2,662
-------- -------- --------- ---------
Total liabilities 27,324 27,522 2,382 2,662
-------- -------- --------- ---------
Total equity and liabilities 83,530 82,992 61,183 61,926
-------- -------- --------- ---------
1(b)(ii) Aggregate amount of group's borrowings and debt
securities.
Amount repayable in one year or less, or on demand
As at 30 Jun 2018 As at 31 Dec 2017
Secured Unsecured Secured Unsecured
----------- --------- -----------
US$'000 US$'000 US$'000 US$'000
----------- --------- -----------
8,595 - 8,025 -
----------- --------- -----------
Amount repayable after one year
As at 30 Jun 2018 As at 31 Dec 2017
Secured Unsecured Secured Unsecured
----------- --------- -----------
US$'000 US$'000 US$'000 US$'000
----------- --------- -----------
- - - -
----------- --------- -----------
Details of any collateral
The revolving credit loans of US$8,595,000 were secured over the
assets of the subsidiaries and corporate guarantees provided by the
Company and the subsidiaries.
1(c) A statement of cash flows (for the group), together with a
comparative statement for the corresponding period of the
immediately preceding financial year.
Group Group
--------------------- --------------------
Q2 Q2 FY2017 1H 1H
FY2018 FY2018 FY2017
US$'000 US$'000 US$'000 US$'000
Cash Flows from Operating Activities
Profit before income tax 287 1,096 796 1,897
Adjustments for:
Depreciation of property, plant and equipment 704 629 1,403 1,222
Amortisation of intangible assets 176 160 351 308
Loss on disposal of property, plant and equipment 13 - 13 20
Impairment of property, plant and equipment - - - 86
Allowance/(Write-back) for inventory obsolescence, net 68 126 154 (263)
Unrealised exchange loss 312 235 210 17
Interest income (41) (5) (44) (10)
Interest expense 134 95 247 207
Share-based payments 3 35 11 75
Write-back of payables - (578) - (578)
Operating cash flow before working capital changes 1,656 1,793 3,141 2,981
Changes in working capital:
Inventories (1,394) 108 336 (730)
Trade receivables 1,585 (2,015) 2,508 (28)
Other receivables and prepayments 92 2,700 1,640 2,124
Trade and other payables 253 (1,292) (1,102) (3,417)
--------- ---------- --------- ---------
Cash generated from operating activities 2,192 1,294 6,523 930
Interest paid (64) (105) (119) (217)
Income tax paid (2) (331) (79) (135)
Net cash generated from operating activities 2,126 858 6,325 578
--------- ---------- --------- ---------
Cash Flows from Investing Activities
Interest received 42 7 44 10
Purchase of property, plant and equipment (421) (601) (711) (861)
Proceeds from disposal of property, plant and equipment 28 - 28 27
Decrease in restricted cash - 1,000 - 1,000
Net cash (used in)/generated from investing activities (351) 406 (639) 176
--------- ---------- --------- ---------
Cash Flows from Financing Activities
Proceeds from borrowings 12,629 17,837 24,270 28,542
Repayment of borrowings (13,475) (15,628) (23,700) (26,138)
--------- ---------- --------- ---------
Net cash (used in)/generated from financing activities (846) 2,209 570 2,404
--------- ---------- --------- ---------
Net increase in cash and cash equivalents 929 3,473 6,256 3,158
Cash and cash equivalents at the beginning of the period 12,512 6,442 7,152 6,742
Effect of foreign exchange rate changes on the balance of cash held in
foreign currencies (55) 18 (22) 33
--------- ---------- --------- ---------
Cash and cash equivalents at the end of the period(i) 13,386 9,933 13,386 9,933
--------- ---------- --------- ---------
Note:
(i) For the purpose of presentation in the consolidated
statement of cash flows, the consolidated cash and cash equivalents
comprise the following:
Q2 Q2 1H 1H
FY2018 FY2017 FY2018 FY2017
US$'000 US$'000 US$'000 US$'000
Cash and bank balances 13,356 9,904 13,356 9,904
Fixed deposits 30 229 30 229
-------- -------- -------- --------
13,386 10,133 13,386 10,133
Less: Restricted cash* - (200) - (200)
-------- -------- -------- --------
Cash and cash equivalents per the consolidated statement of cash flows 13,386 9,933 13,386 9,933
-------- -------- -------- --------
* Restricted cash in Q2 FY2017 included fixed deposits amounted
to US$200,000 pledged with the banks for banker's guarantee and
loans granted to the Group. As at 30 June 2018, the Group had
utilised US$8,595,000 of the facilities and loans granted.
1(d)(i) A statement (for the issuer and group) showing either
(i) all changes in equity or (ii) changes in equity other than
those arising from capitalisation issues and distributions to
shareholders, together with a comparative statement for the
corresponding period of the immediately preceding financial
year.
Foreign
Capital Share currency
Share Treasury Merger redemption options Capital translation Retained
Group capital shares reserves reserves reserve reserve reserve profits Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at
1 Jan 2018 60,423 (1,656) (10,150) 6 706 (3,695) (872) 10,708 55,470
Share-based
payments - - - - 8 - - - 8
Profit for the
period - - - - - - - 326 326
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - - 124 - 124
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Total other
comprehensive
income for
the
period - - - - - - 124 326 450
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Balance as at
31 Mar 2018 60,423 (1,656) (10,150) 6 714 (3,695) (748) 11,034 55,928
Share-based
payments - - - - 3 - - - 3
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Profit for the
period - - - - - - - 206 206
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - - 69 - 69
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Total other
comprehensive
income for
the
period - - - - - - 69 206 275
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Balance as at
30 Jun 2018 60,423 (1,656) (10,150) 6 717 (3,695) (679) 11,240 56,206
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
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
Share-based
payments - - - - 35 - - - 35
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Profit for the
period - - - - - - - 873 873
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - - 221 - 221
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Total other
comprehensive
income for
the
period - - - - - - 221 873 1,094
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
Balance as at
30 Jun 2017 60,423 (1,656) (10,150) 6 688 (3,695) (878) 9,237 53,975
--------- --------- --------- ----------- --------- --------- ------------ --------- --------
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 2018 74,240 (1,656) 706 (4,481) (1,927) (7,618) 59,264
Share-based payments - - 7 - - - 7
Loss for the period - - - - - (234) (234)
Other comprehensive
loss:
Exchange differences - - - -
on translating - - -
foreign operations
--------- --------- --------- --------- ------------- ------------ --------
Total other comprehensive
loss for the period - - - - - (234) (234)
Balance as at
31 Mar 2018 74,240 (1,656) 713 (4,481) (1,927) (7,852) 59,037
Share-based payments - - 4 - - - 4
Loss for the period - - - - - (240) (240)
Other comprehensive
loss:
Exchange differences - - - -
on translating - - -
foreign operations
--------- --------- --------- --------- ------------- ------------ --------
Total other comprehensive
loss for the period - - - - - (240) (240)
--------- --------- --------- --------- ------------- ------------ --------
Balance as at
30 Jun 2018 74,240 (1,656) 717 (4,481) (1,927) (8,092) 58,801
--------- --------- --------- --------- ------------- ------------ --------
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
Share-based payments - - 37 - - - 37
Loss for the period - - - - - (56) (56)
Other comprehensive
loss:
Exchange differences - - - -
on translating - - -
foreign operations
--------- --------- --------- --------- ------------- ------------ --------
Total other comprehensive
loss for the period - - - - - (56) (56)
--------- --------- --------- --------- ------------- ------------ --------
Balance as at
30 Jun 2017 74,240 (1,656) 688 (4,481) (1,927) (7,135) 59,729
--------- --------- --------- --------- ------------- ------------ --------
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 also the number of shares that may be issued on conversion
of all the outstanding convertibles, as well as the number of
shares held as treasury shares, if any, against the total number of
issued shares excluding treasury shares 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.
1H FY2018 No. of shares US$'000
Balance as at 1 Jan 2018 and 30 Jun 2018 271,662,227 72,584
-------------- --------
1H FY2017 No. of shares US$'000
Balance as at 1 Jan 2017 and 30 Jun 2017 271,662,227 72,584
-------------- --------
There were 10,740,072 treasury shares held by the Company as at
30 June 2018 and 30 June 2017 and there was no subsidiary
holdings.
1(d)(iii) To show the total number of issued shares excluding
treasury shares as at the end of the current financial period and
as at the end of the immediately preceding year.
30 Jun 2018 31 Dec 2017
Total number of issued shares excluding treasury shares 271,662,227 271,662,227
------------ ------------
1(d)(iv) A statement showing all sales, transfers, disposal,
cancellation and/or use of treasury shares as at the end of the
current financial period reported on.
1H FY2018 No. of shares US$'000
Balance as at 1 Jan 2018 and 30 Jun
2018 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.
1H FY2018 No. of shares US$'000
Balance as at 1 Jan 2018 and 30 Jun - -
2018
-------------- --------
2. Whether the figures have been audited or reviewed and in
accordance with which auditing standard or practice.
These figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the
auditors' report (including any qualifications or emphasis of a
matter).
Not applicable.
4. Whether the same accounting policies and methods of
computation as in the issuer's most recently audited annual
financial statements have been applied.
The accounting policies and methods of computation have been
applied consistently for the current financial period ended 30 June
2018 as those used in the audited financial statements for the year
ended 31 December 2017, except for the adoption of the new or
revised International Financial Reporting Standards ("IFRS")
applicable for the financial period beginning 1 January 2018.
5. If there are any changes in the accounting policies and
methods of computation, including any required by an accounting
standard, what has changed, as well as the reasons for, and the
effect of, the change.
The Group has adopted all of the new or revised IFRS that are
effective for the financial period beginning 1 January 2018 and are
relevant to its operations. The adoption of these IFRS does not
have financial impact on the Group's financial position or
results.
6. Earnings per ordinary share of the group for the current
financial period reported on and the corresponding period of the
immediately preceding financial year, after deducting any provision
for preference dividends.
Earnings per ordinary share of the Group, after deducting any Group Group
provision for preference dividends
Q2 Q2 1H
FY2018 FY2017 FY2018 1H
US$ US$ FY2017
US$ US$
------------ ------------ ------------ ------------
(a) Based on weighted average number of ordinary shares on 0.08 cent 0.32 cent 0.20 cent 0.54 cent
issue; and
(b) On a fully diluted basis 0.08 cent 0.32 cent 0.20 cent 0.54 cent
Weighted average number of ordinary shares used in
computation of basic earnings per share 271,662,227 271,662,227 271,662,227 271,662,227
Weighted average number of ordinary shares used in
computation of diluted earnings per share 271,662,227 272,196,579 271,662,227 272,501,910
------------ ------------ ------------ ------------
* Diluted earnings per share for Q2 FY2018 and 1H FY2018 are the
same as the basic earnings per share because the potential ordinary
shares to be converted are anti-dilutive as the effect of the share
conversion would be to increase the earnings per share.
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
30 Jun 2018 31 Dec 2017 30 Jun 2018 31 Dec 2017
US$ US$ US$ US$
------------ ------------ ------------ ------------
Net asset value per ordinary share based on issued share 20.69 cents 20.42 cents 21.64 cents 21.82 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 for the six months ended 30 June 2018 ("1H
FY2018") was US$55.4 million from US$57.4 million in the prior year
("1H FY2017") partly driven by slower orders from key customers in
the US and expected delays for Very Small Aperture Terminal
("VSAT") projects. Revenue for the quarter ended ("Q2 FY2018")
amounted to US$26.5 million against US$29.9 million in the prior
year quarter ("Q2 FY2017").
Geographically, Group revenue for 1H FY2018 increased in Europe
by US$3.7 million (+37.1%) although offset by reductions in
America, Asia and Rest of the World ("RoW") by US$3.5 million
(-8.5%), US$0.6 million (-16.5%) and US$1.6 million (-55.3%),
respectively. Similarly, revenue for Q2 FY2018 increased in Europe
by US$1.8 million (+38.4%) but declined in America, Asia and RoW by
US$4.3 million (-19.4%), US$0.3 million (-18.5%) and US$0.6 million
(-43.1%), respectively compared to the earlier year.
Reflecting the satellite broadcasting industry's growing
adoption of the technological change to Digital Channel Stacking
Switch ("DCSS"), the Group is now providing 100% DCSS product to
its largest customer.
In addition to its provision of services for the Direct-to-Home
("DTH") market, 38.7% of its revenue in 1H FY2018 has been derived
from the fast growing data/internet market including VSAT products
where the Group holds a strong position following the acquisition
of Global Skyware in FY2015.
Gross Profit
Gross profit margin improved 0.6 percentage point from 20.6% to
21.2% with gross profit for 1H FY2018 remaining level at US$11.8
million on reduced revenue.
Similarly, for Q2 FY2018, gross profit margin improved by 2.1
percentage points from 19.4% to 21.5% from product mix and
manufacturing improvements with gross profit remaining on a level
with previous year at US$5.7 million from US$5.8 million on lower
revenues.
Administrative Expenses
Administrative expenses for 1H FY2018 increased 2.9% to US$10.6
million compared to US$10.3 million in 1H FY2017, representing
19.2% and 18.0% of revenue, respectively, with more spent on
research and development on new initiatives and projects.
Administrative expenses for Q2 FY2018 maintained at US$5.2 million
compared to the previous year.
Other Operating Expenses
Other operating expenses in Q2 FY2018 derived primarily from
foreign exchange losses and loss on disposal of machinery and
equipment.
Profit Before Tax & Net Profit
The Group posted a profit before tax of US$0.8 million in 1H
FY2018, compared to US$1.9 million the year earlier, representing
margins of 1.4% and 3.3%, respectively. Excluding a one-off
write-back of payables amounting to US$0.6 million following the
closure of the non-core subcontracting site in 1H FY2017, margins
would be 1.4% and 2.3%, respectively.
For Q2 FY2018, the Group recorded US$0.3 million profit before
tax compared to US$1.1 million in the prior year quarter,
representing margins of 1.1% and 3.7%, respectively. Similarly,
excluding the write-back of payables amounting to US$0.6 million in
Q2 FY2017, margins would be 1.1% and 1.7%, respectively.
Overall, the Group posted a net profit of US$0.5 million in 1H
FY2018, compared to US$1.5 million in 1H FY2017, representing net
margins of 1.0% and 2.6%, respectively. Excluding the write-back of
payables amounting to US$0.6 million following the closure of the
non-core subcontracting site in 1H FY2017, margins would be 1.0%
and 1.6%, respectively.
The Group recorded a net profit of US$0.2 million in Q2 FY2018
compared to US$0.9 million the prior year quarter, representing net
margins of 0.8% and 2.9%, respectively. Excluding the write-back of
payables amounting to US$0.6 million following the closure of the
non-core subcontracting site in Q2 FY2017, margins would be 0.8%
and 1.0%, respectively.
Review of Financial Position
Non-current assets decreased, primarily due to the depreciation
of property, plant and equipment as well as the amortisation of
intangible assets.
Net current assets increased by US$1.8 million to US$33.7
million as at 30 June 2018 compared to US$31.9 million as at 31
December 2017. Inventories and trade and other receivables
decreased by US$0.5 million and US$4.1 million, respectively, owing
to tighter control and faster collections from the customers. Trade
and other payables decreased by US$0.8 million following the
continuing rectification of trade supplier payments. Borrowings
increased by US$0.6 million to US$8.6 million offset by an increase
in cash and cash equivalents of US$6.2 million to US$13.4 million
as at 30 June 2018 compared to US$7.2 million as at 31 December
2017.
The Group's net asset value stood at US$56.2 million as at 30
June 2018, compared to US$55.5 million as at 31 December 2017.
Review of Cash Flows
In Q2 FY2018, net cash generated from operating activities
amounted to US$2.1 million, comprising US$1.7 million cash inflow
from operating activities (before working capital changes), US$0.5
million net working capital inflow and US$0.1 million payment of
interest.
In 1H FY2018, net cash generated from operating activities
amounted to US$6.3 million, comprising US$3.1 million cash inflow
from operating activities (before working capital changes), US$3.4
million net working capital inflow and US$0.2 million payment of
interest and income tax.
Net cash used in investing activities in Q2 FY2018 and 1H FY2018
amounted to US$0.4 million and US$0.6 million, respectively,
relating predominately to purchase of machinery.
Net cash used in financing activities amounted to US$0.8 million
in Q2 FY2018 and net cash generated from financing activities
amounted to US$0.6 million in 1H FY2018, attributable to the net
repayment and proceeds of borrowings, respectively.
Overall, the Group recorded a net increase in cash and cash
equivalents amounting to US$0.9 million and US$6.3 million in Q2
FY2018 and 1H FY2018, respectively, bringing cash and cash
equivalents per the consolidated statement of cash flows to US$13.4
million as at 30 June 2018.
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.
According to the research report by MarketsandMarkets(1) the
Satellite Communications ("Sat Comms") equipment market - Global
Forecast to 2022 - is estimated to be US$20.2 billion in 2017,
driven by the growing demand for dynamic and uninterrupted
communication cross-industries. Moreover, as satellite equipment
manufacturers leverage on infrastructure constraints to make
available higher bandwidth (4K and developing 8K) amidst emerging
trends including 5G convergence, the growth of autonomous vehicles
and connected devices.
Amidst media reports that the growing popularity of OTT
streaming, or 'cord-cutting', could threaten the satellite
broadcasting industry, there is a growing consensus of co-existence
with traditional pay TV. Instead of customer defection and direct
substitute, the industry views OTT as a complementary layer to
linear television services. Distribution and monetisation models
are still evolving ahead of the advent of broadcasting technologies
such as the UHD/4K transmissions and even 8K, amidst the ongoing
migration of the satellite broadcasting industry to DCSS
technology. These will require stable infrastructure that can
handle spikes in bandwidth consumption. Sat Comms technology, which
can save costly investments in terrestrial technology is able to
distribute such content over many parts of the globe.
In the data/internet segment, the demand for high-bandwidth
connectivity is growing worldwide as operators in developing
countries seek lower-cost equipment to meet demand in emerging
markets. The Group's acquisitions recently, including Global
Skyware in FY2015, recognised this fast-growing demand in this
segment and has given it a strong position with this segment now
accounting for close to 40% of revenues in 1H FY2018.
The DCSS technological shift and the demand for new, less costly
data/internet components continues to underpin the Group's
commitment to R&D.
The forward strategy of the Group will revolve on:
i) Rolling out product pipelines to include more advanced Sat
Comms broadcasting equipment products to customers in Americas and
Europe. These include DCSS products such as the new Western Arc
Hybrid LNB, launched in 2H FY2017. Other new products - including
slimline products and low-cost LNBs based on a new chip design -
are expected to enter production throughout the rest of FY2018.
ii) Developing and rolling out new products and antennas for
satellite ground equipment for data and internet usage. Of the
Group's subsidiaries, Global Skyware will supply 100% new design
antennas to its major customer from August 2018 and Foxcom recently
launched its Hangar Repeater Solution to enable aircraft ground
engineers to undertake 24/7 avionics testing of Inmarsat, Iridium
and GPS satellite signals indoors.
iii) Having achieved the financial turnaround of its US and
Israel subsidiaries through oprerational refinement and cost
reductions, the Group will further streamline the supply chain
across its global footprint.
iv) Refining product development across its global footprint to
meet requirements and match demand in key markets. To this end, the
Group announced on 1 June 2018 the appointment of Mr Malcolm John
Burrell as Chief Technology Officer. Mr Burrell will remain
Executive Director and Chief Risk Officer.
The Group will also increase investor engagement with a view to
exiting the SGX-Watch List (having been included since June 2018
due to the Minimum Trading Price criterion).
(1) Source: Satellite Communications Equipment Market by
Product, Technology, End-Use, Vertical and Region - Global Forecast
to 2022 by MarketsandMarkets.
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 six months
ended 30 June 2018.
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 six months ended 30 June 2018.
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 six months
ended 30 June 2018 to be false or misleading in any material
aspect.
On behalf of the Board
Anthony Brian Taylor Matthew Jonathon Garner
Director Director
--------------------- ------------------------
BY ORDER OF THE BOARD
Anthony Brian Taylor
Executive Chairman
10 August 2018
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR FKCDPABKDKFK
(END) Dow Jones Newswires
August 10, 2018 02:00 ET (06:00 GMT)
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