TIDMQXT
RNS Number : 5759N
Quixant PLC
10 September 2013
10 September 2013
Quixant plc
("Quixant" or the "Company")
Interim Results
Quixant (AIM:QXT), a leading provider of specialised computing
platforms for casino gaming and slot machine applications, is
pleased to announce its interim results for the six months ended 30
June 2013.
H1 2013 Highlights
-- Revenue of US$9.508 million (H1 2012: US$9.448 million)
-- Gross profit of US$4.512 million (H1 2012: US$4.350 million)
-- Profit before tax of US$1.846 million (H1 2012: US$2.215
million, including one-off profit on the disposal of a property of
US$0.198 million)
-- Trading is in line with expectations
-- Successful admission to AIM on 21 May 2013, raising in aggregate US$6.899 million.
-- AIM status has further strengthened the Company's position
amongst "Tier 1" and "Tier 2" customers
-- First volume shipments commenced to two new "Tier 2" customers
-- Commenced design work with several new customers
Nick Jarmany, Chief Executive of Quixant, commented, "These
results are in line with our forecasts and we are confident of
achieving full year expectations. As anticipated the listing on AIM
has enhanced our profile with larger customers and we believe we
are well placed to continue to grow both revenues and profits."
Copies of the interim results of the Company for the six months
ended 30 June 2013 are being posted to shareholders today and are
available on the Company's website at www.quixant.com.
For further information please contact:
Quixant plc Tel: +44 (0) 1223 892696
Nick Jarmany, Chief Executive
Jon Jayal, General Manager
Nominated Adviser and Broker:
Smith & Williamson Corporate Finance Limited Tel: +44 (0) 207 131 4000
Azhic Basirov, Siobhan Sergeant
Financial PR:
Newgate Threadneedle Tel: +44 (0) 207 653 9850
John Coles, Fiona Conroy, Hilary Millar
About Quixant
Quixant, founded in 2005, designs and manufactures complete
advanced hardware and software solutions (Gaming Platforms) for the
pay-for-play gaming and slot machine industry. The Company is
headquartered outside of Cambridge in the UK. Quixant UK Ltd is
responsible for the group's global (excluding North America) sales
function and its Las Vegas based subsidiary, Quixant USA Inc, is
responsible for sales and sales support to the North American
market. Quixant has its own manufacturing and engineering operation
in Taiwan, which has evolved with the rapid growth of the Company.
Quixant's Italian subsidiary, Quixant Italia, houses the Group's
software engineering and customer support team.
Quixant's high quality, specialised products provide an
all-in-one solution, based on PC technology but with augmentative
hardware features and operating software developed specifically to
address the requirements of the gaming industry. Products feature
innovative mechanical designs which are optimised for operation in
the gaming and slot machine environment. Quixant's proprietary
hardware and embedded software is flexible in its design, enabling
Quixant to easily respond to changes in regulation or customers
operating in different markets or jurisdictions.
In-depth information on the Company's products, markets,
activities and history can be found on the corporate website as
well as in the Admission Document, which is also available on the
website at www.quixant.com.
Chairman's Statement
I am pleased to report to the shareholders on the Company's
performance for the six months ended 30 June 2013. Pre-tax profits
were US$1.846 million (H1 2012: US$2.215 million, including one-off
profit on the disposal of a property of US$0.198 million) from
turnover of US$9.508 million (H1 2012: US$9.448 million and gross
profit of US$4.512m (H1 2012: US$4.350m); which are in line with
full year expectations, and as expected given that Quixant's
financial year is traditionally second half weighted.
Quixant PLC was admitted to AIM on 21 May 2013, following the
raising in aggregate of US$6.899 million. The Company raised
US$5.887 million gross (US$4.753 million net after expenses)
through an oversubscribed placing of 8,434,782 new ordinary shares
at a price of 46p (US$0.70) principally with institutional
investors. In addition, 1,452,174 existing ordinary shares were
placed with investors on behalf of existing shareholders raising
US$1.012 million.
Since the half year end the Board has approved capital
expenditure for the purchase of a new building in Las Vegas to
house the Company's US sales and support operation. This is located
in close proximity to many existing and potential customers.
Approval was also given for the purchase of sophisticated high
speed signal integrity and power test equipment, which will further
enhance the product development and quality control procedures at
the manufacturing facilities in Taiwan.
Investment in technical innovation continues to be a key factor
for growth. Specifically, the Company will formally launch the
QXi-300 platform at a major industry exhibition in Las Vegas in
September 2013. The QXi-300 is the next generation development of
the QXi-200, which has been the Company's best-selling standard
product.
Despite strong growth over several years, Quixant still has a
relatively small share of the existing market and the market
continues to develop. With new territories approving or considering
approving gambling, there remain good opportunities for growth.
Quixant has a tremendous team which I would like to thank for
their efforts. The Board would also like to thank shareholders for
their support and we look forward to enjoying a constructive and
mutually fruitful relationship as the Company continues to
grow.
Michael Peagram
Chairman
Chief Executive's Review
Introduction
Quixant's successful listing on AIM in May 2013 is a major
milestone in Quixant's evolution. The benefits of the Company's
listing on AIM are already being evidenced in further strengthening
the Company's position with larger customers and enhancing
Quixant's visibility and profile as a leading supplier to gaming
machine manufacturers.
The Company's focus on the gaming market, a deep understanding
of global gaming regulations and the requirements of the machine
manufacturers operating in the market, combined with a strong
product catalogue, technical expertise and in-house manufacturing
capabilities are key strengths which provide Quixant with a strong
platform for growth.
Broadened customer base
The Directors view gaming and slot machine manufacturers in
three tiers. "Tier 1" consists of the largest gaming and slot
machine manufacturers, typically producing over 25,000 machines per
annum. Outsourced specialised gaming computer solutions are
increasingly being considered by this tier, which traditionally
have produced their own PC-based systems in-house. "Tier 2"
typically produce between 5,000 and 25,000 machines per annum.
"Tier 3" typically produce less than 5,000 machines per annum.
During the half, Quixant made its first volume shipments to two
new "Tier 2" customers which are expected to contribute to sales
during the latter half of 2013 and into 2014.
Quixant has commenced "design-ins" during the half-year with
several new customers, where the engineering teams from Quixant and
the respective customers interact in order to design the Quixant
gaming platforms into the customers' machines. This process
typically takes several months, but represents the start of long
term relationships with the customers which usually last 5 years or
more.
Strong customer relationships
Given the nature of the gaming industry and in particular the
highly regulated environment in which they operate, gaming and slot
machine manufacturers tend to develop long term working
relationships with trusted suppliers who can provide a consistent
and reliable product. Quixant's customer relationships provide a
level of access and visibility into customer plans and an insight
into order expectations. These close relationships are evidenced
across the customer base, but also through the development projects
currently underway with existing and new customers.
People
Quixant's global headcount has grown from 50 at the start of the
year to 64 as of early August. The Company has made several
important hires in the Taiwan branch to ensure our manufacturing
operation has adequate scalability as the business grows.
Quixant has also appointed John Malin as Sales Director for
Quixant UK Ltd. John Malin has over 27 years' experience of selling
electronic systems to gaming machine manufacturers, including
several senior sales roles in high profile gaming companies. His
skills, contacts and experience further strengthen Quixant's global
sales team.
Product Development
Quixant provides all-in-one computing platforms for gaming.
These platforms leverage PC technology for processing and
performance graphics together with specialised electronics and
software, developed by Quixant specifically to address the unique
requirements of the gaming industry. Quixant products also feature
innovative mechanical design, which further enhances their value
for operation in the gaming and slot machine environment.
The software developed by Quixant communicates with the
electronic hardware and connected gaming accessories in gaming and
slot machines. Using this as a foundation, Quixant's customers can
focus their resources on game development, which ultimately has the
greatest impact on their commercial success, as well as reducing
the time required to bring new gaming machines to market.
Quixant invests heavily both in the development of specific new
products for launch into the market and also in improving the
functionality and performance of the underlying technology utilised
in these products. During the first half of this year, the Company
completed the development of the QXi-300 platform, which will be
formally launched at the Global Gaming Expo in Las Vegas at the end
of September 2013. The QXi-300 is the next generation development
of the QXi-200 and utilises the same CPU technology from AMD that
is being used in the up-coming Sony PlayStation 4 and Microsoft
Xbox One consumer products.
Technology Partners
Quixant is a Microsoft Windows Embedded Silver Partner and an
AMD Fusion Partner Elite Member. AMD is a leading designer and
manufacturer of graphics cards and microprocessors. Quixant is
unique in being an AMD Elite Embedded Partner which has several
benefits including early access to AMD's latest embedded technology
in advance of the rest of the market. This enables Quixant to bring
products based on the newest AMD technology to market in advance of
its competition.
Financial review
Pre-tax profits for the six months ended 30 June 2013 were
US$1.846 million (H1 2012: US2.215 million, including one-off
profit on the disposal of a property of US$0.198m) and turnover for
the period was US$9.508 million (H1 2012: US$9.448 million. Our
overheads for the six months ended 30 June 2013 were US$2.680m (H1
2012: US$2.306m), higher than prior due to additional costs
associated with functioning as a listed company and investment in
people to enable scalability of the business going forward.
On its admission to AIM in May 2013, Quixant raised net proceeds
of US$4.753 million. Combined with a strong positive operational
cash flow in the six months to 30 June 2013 of US$1.444 million (H1
2012: US$(0.763) million), the Company had a cash balance of
US$7.448 million at 30 June 2013 (31 December 2012: US$1.803
million).
Outlook
On the basis of all the factors set out above and customer
indications and firm orders, we remain confident of a strong second
half and that 2013 full year results will represent a significant
increase in both revenue and profit over the prior year.
Nick Jarmany
Chief Executive
Consolidated income statement
for the six months ended 30 June 2013 and 2012 and year ended 31
December 2012
30 June 2013 30 June 2012 31 December
Unaudited Unaudited 2012
Audited
US$000 US$000 US$000
Revenue 9,508 9,448 21,577
Cost of sales (4,996) (5,098) (11,677)
Gross profit 4,512 4,350 9,900
Profit on sale of building - 198 198
Other operating expenses (2,680) (2,306) (5,056)
Operating Profit 1,832 2,242 5,042
--------------------------- ------------ ------------ -----------
Financial expenses (32) (27) (59)
Other income 46 - 7
Profit before tax 1,846 2,215 4,990
Taxation (433) (574) (1,199)
Profit for the period 1,413 1,641 3,791
--------------------------- ------------ ------------ -----------
Basic earnings per share US$0.02452 US$0.0297 US$0.0687
Fully diluted earnings per US$0.02435 US$0.0297 US$0.0687
share
Consolidated statement of comprehensive income
for the six months ended 30 June 2013 and 2012 and year ended 31
December 2012
US$000 US$000 US$000
Profit for the period 1,413 1,641 3,791
Foreign currency translation
differences (22) (85) 77
Total comprehensive income
for the period 1,391 1,556 3,868
----------------------------- ------ ------ ------
Consolidated statements of financial position
as at 30 June 2013 and 2012 and at 31 December 2012
30 June 2013 30 June 2012 31 December
2012
Unaudited Unaudited Audited
US$000 US$000 US$000
Non-current assets
Property, plant and
equipment 3,734 2,451 3,800
Intangible assets -
research
and development 919 306 502
Total non-current assets 4,653 2,757 4,302
Current assets
Inventories 3,089 2,248 2,419
Trade and other
receivables 3,962 3,316 4,370
Cash and cash equivalents 7,448 688 1,803
Total current assets 14,499 6,252 8,592
Total assets 19,152 9,009 12,894
------------------------- ----------------------------- ----------------------------- -----------------------------
Current liabilities
Other financial
liabilities (92) (92) (92)
Trade and other payables (3,405) (2,398) (3,675)
Corporation tax payable (1,249) (681) (913)
Total current liabilities (4,746) (3,171) (4,680)
Non-current liabilities
Other financial
liabilities (2,112) (2,166) (2,187)
Deferred tax liability (241) (95) (138)
Total non-current
liabilities (2,353) (2,261) (2,325)
Total liabilities (7,099) (5,432) (7,005)
Net assets 12,053 3,577 5,889
Equity
Share capital 104 27 27
Share based payments
reserve 20 - -
Share Premium 5,181 505 505
Retained earnings 6,698 3,135 5,285
Translation reserve 50 (90) 72
Total equity 12,053 3,577 5,889
------------------------- ----------------------------- ----------------------------- -----------------------------
Consolidated statements of changes in equity
for the six months ended 30 June 2013, 31 December 2012 and 30
June 2012
Share Share Share Retained Translation Total
Capital Based Premium Earnings Reserve Equity
Payments
US$000 US$000 US$000 US$000 US$000 US$000
At 1 January 2012 27 - 505 1,494 (5) 2,021
Profit for the six months - - - 1,641 - 1,641
Total other comprehensive
income - - - - (85) (85)
At 30 June 2012 27 - 505 3,135 (90) 3,577
Profit for the six months - - - 2,150 - 2,150
Total other comprehensive
income - - - - 162 162
At 31 December 2012 27 - 505 5,285 72 5,889
Profit for the six months - - - 1,413 - 1,413
Share bonus issue 63 - (63) - - -
Issue of new shares 14 - 5,873 - - 5,887
Share issue expenses - - (1,134) - - (1,134)
Share based payments - 20 - - - 20
Total other comprehensive
income - - - - (22) (22)
At 30 June 2013 104 20 5,181 6,698 50 12,053
-------------------------- -------- --------- -------- --------- ----------- -------
Consolidated cash flow statements
for the six months ended 30 June 2013 and 2012 and year ended 31
December 2012
30 June 30 June 31 December
2013 Unaudited 2012 Unaudited 2012
Audited
US$000 US$000 US$000
Cash flows from operating activities
Profit for the year 1,413 1,641 3,791
Depreciation 98 53 212
Amortisation 28 10 18
(Profits) on disposal - (198) (198)
Financial expenses 32 27 59
Taxation 433 574 1,199
Share based payments reserve 20 - -
2,024 2,107 5,081
Decrease/(increase) in trade and
other receivables 408 (2,902) (3,956)
(Increase) in inventories (670) (616) (787)
(Decrease)/increase in trade and
other payables (292) 705 2,007
1,470 (706) 2,345
Interest paid (32) (27) (59)
Tax Paid 6 (30) (380)
Net cash generated from/(expensed
by) operating activities 1,444 (763) 1,906
Cash flows from investing activities
Acquisition of property, plant and
equipment (32) (145) (1,521)
Development expenditure (445) (206) (410)
Proceeds from sale of property,
plant and equipment - 936 941
Net cash from investing activities (477) 585 (990)
Cash flows from financing activities
Proceeds from borrowings - - 760
Repayment of borrowings (75) (84) (824)
Net cash received on issue of new
shares 4,753 - -
Net cash from financing activities 4,678 (84) (64)
Net increase in cash and cash equivalents 5,645 (262) 852
Cash and cash equivalents at 1 January 1,803 950 951
Cash and cash equivalents at 30
June 7,448 688 1,803
------------------------------------------ --------------- --------------- -----------
General Information and Reporting entity
Quixant PLC ("Quixant" or the "Company") is a public limited
company incorporated and domiciled in England and Wales, whose
shares are publically traded on the AIM market of the London Stock
Exchange. The address of the Company's registered office is Aisle
Barn, 100 High Street, Balsham, Cambridge, CB21 4EP. Quixant
develops and supplies specialist computer systems. This condensed
consolidated interim financial information for The Quixant group
comprises the Company, its branch in Taiwan and its subsidiaries
(the "Group").
The condensed consolidated interim financial information is
neither audited nor reviewed and the results of operations for the
six months ended 30 June 2013 are not necessarily indicative of the
operating results for future operating periods.
The financial information shown for the year ended 31 December
2012 in the interim financial information does not constitute
statutory financial statements as defined in Section 435 of the
Companies Act 2006 and has been extracted from the Company's AIM
Admission Document. The accountant's report on the Historical
Financial Information contained in the AIM Admission Document was
unqualified.
1. Principal Accounting Policies
Statement of compliance
This condensed consolidated interim financial report has been
prepared in accordance with IAS 34 Interim Financial Reporting.
Selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in financial position and performance of the Group since
the last annual consolidated financial statements as at and for the
year ended 31 December 2012. This condensed interim financial
report does not include all the information required for full
annual financial statements prepared in accordance with
International Financial Reporting Standards. The reporting currency
adopted by the Quixant group is US$ as this is the trading currency
of the Group.
This condensed consolidated interim financial report was
approved by the Board of Directors on 9 September 2013.
Judgements and estimates
Preparing the interim financial report requires Management to
make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual results may
differ from these estimates.
In preparing this condensed consolidated interim financial
report, other than for share based payments as noted below,
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements as at and for the year ended 31 December 2012.
Judgement and estimation is required in determining the fair
value of shares at the date of award. The fair value is estimated
using valuation techniques which take into account the award's
term, the risk free interest rate and the expected volatility of
the market price of the Company's shares.
Segmental analysis
The Quixant group has determined that it only has one operating
and reportable segment. The Quixant group assesses the performance
of that segment based on a measure of revenue, and profit/(loss)
before interest and taxation. All significant assets and
liabilities are located within the UK and Taiwan.
The segmental information is therefore presented in the income
statement and statement of financial position and has not been
reproduced here. A single customer accounted for 67 per cent, 81
per cent and 79 per cent of reported revenues in the six month
period to 30 June 2013, the six month period to 30 June 2012 and
the year to 31 December 2012 respectively.
Significant accounting policies
Except as described below, the accounting policies applied by
the Group in this condensed consolidated interim financial report
are the same as those applied by the Group in its consolidated
financial statements as at and for the year ended 31 December 2012.
The following new accounting policy is also expected to be
reflected in the Group's consolidated financial statements as at
and for the year ended 31 December 2013.
Share based payments
The grant date fair value of share-based payments awards granted
to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period in which the
employees become unconditionally entitled to the awards. The fair
value of the awards granted is measured using an option valuation
model, taking into account the terms and conditions upon which the
awards were granted. The amount recognised as an expense is
adjusted to reflect the actual number of awards for which the
related service and non-market vesting conditions are expected to
be met, such that the amount ultimately recognised as an expense is
based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For
share-based payment awards with non-vesting conditions, the grant
date fair value of the share-based payment is measured to reflect
such conditions and there is no true-up for differences between
expected and actual outcomes.
2. Share based payments
During the period the Company issued share options to employees.
To be able to exercise these options, employees are required to be
employed by the Company for a period of three years from the grant
date. In addition exercise is conditional on the Company achieving
a minimum level of EPS growth over the vesting period.
Options have been issued over 1,895,200 shares, with an exercise
price of GBP0.49. Options issued under the scheme expire 10 years
from grant date.
The fair value of employee share options is measured using a
Black Scholes model. Measurement inputs and assumptions are as
follows:
30 June
2013
Fair value at grant date GBP0.19
Share price GBP0.46
Exercise price GBP0.49
Expected volatility 50%
Expected option life 5 years
Risk-free interest rate 0.9%
The fair value at grant date of GBP0.19 was converted at the
exchange rate on the grant date to give a fair value of US$0.29 per
option. The total expense recognised in the period in respect of
share options is US$20,000.
3. Share capital
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2013 Unaudited 2012 Unaudited 2012
Audited
US$000 US$000 US$000
Allocated, called up and fully
paid
At beginning of period
276,000 ordinary shares of 5p
each 27 27 27
Bonus issue of 828,000 shares
of 5p each 63 - -
20,000 shares of 5p each issued 1 - -
Share sub division into 56,200,000 - - -
shares of 0.1p each
8,434,782 ordinary shares of
0.1p issued 13 - -
At end of period 104 27 27
----------------------------------- --------------- --------------- ------------
On 4 February 2013 a bonus issue of three shares for every one
share held was awarded to the shareholders by a transfer from the
share premium account to the share capital of GBP41,400.
On 25 April 2013, the company subdivided the existing 5p
ordinary shares into 56,200,000 ordinary shares of GBP0.001
each.
On 21 May 2013 the company was listed on the AIM market and
issued an additional 8,434,782 ordinary shares of 0.1p for an
aggregate consideration of GBP3,880,000 (US$5,887,000). Share issue
expenses totalling US$1,134,000 were deducted from the share
premium account.
4. Related party transactions
There were no related party transactions other than transactions
with Key Management Personnel, who are the directors. In addition,
during the period the Group implemented share based incentive
scheme for the benefit of employees as discussed in note 2.
5. Subsequent events
There are no significant events which have taken place after 30
June 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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