TIDMQXT
RNS Number : 1636Z
Quixant PLC
16 September 2015
16 September 2015
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 2015.
1H 2015 Financial Highlights
-- Revenue up 10% to US$13.59m (1H 2014: US$12.35m)
-- Gross profit up 6% to US$6.00m (1H 2014: US$5.64m)
-- Adjusted profit before tax(1) up 20% to US$2.70m (1H 2014: US$2.25m)
-- Adjusted fully diluted EPS(2) up 10% to US$0.032 (1H 2014: US$0.029)
-- Net cash from operating activities of US$5.12m (1H 2014: US$2.34m), growth of 119%
-- Net cash as at 30 June 2015 of $6.76m (31 December 2014 $3.42m)
-- Trading over the half is in line with management expectations
-- On target to achieve full year management expectations
1. Profit before tax is adjusted by adding back $0.097 million
(1H 2014: $0.082 million) in respect of share based payments.
2. Fully diluted EPS are adjusted by adding back $0.097 million
in respect of share based payments and subtracting the associated
tax effect of $0.019 million (1H 2014: $0.082 million adjustment
less tax effect of $0.016 million).
Nick Jarmany, Chief Executive of Quixant, commented:
"We have again delivered strong growth over the first six months
of the year in line with management expectations and enter the
second half of the year with a healthy order book, keeping us on
track for the full year. We are pleased with our continued progress
in expanding the breadth and depth of our customer
relationships.
We now have greater clarity on the impact of last year's M&A
activity among the larger manufacturers has had on our markets.
With their focus on cost efficiencies, we believe that in the long
term this will be of considerable benefit to Quixant."
Copies of the interim results of the Company for the six months
ended 30 June 2015 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:
finnCap Ltd Tel: +44 (0) 20 7220 0500
Matt Goode (Corporate Finance)
Grant Bergman (Corporate Finance)
Simon Johnson (Corporate Broking)
Financial PR:
Alma PR
John Coles Tel: +44 (0) 7836 273 660
Josh Royston Tel: +44 (0) 7780 901 979
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 at
www.quixant.com.
CHAIRMAN'S STATEMENT
I am pleased to report on the Company's performance for the six
months ended 30 June 2015. We continue to exhibit growth in both
turnover and profits, posting turnover of US$13.59 million and
adjusted pre-tax profits of US$2.70 million during the first six
months of the year.
We have continued to see progress in attracting the business of
the largest of the industry's gaming machine manufacturers. It is
pleasing that we frequently receive feedback from our customers
that our product set, philosophy and business model are well
aligned to their requirements for the supply of computer platforms.
We are a key partner to our customers who recognise our specialist
expertise and quality of service.
Quixant has evolved to excel at a range of key disciplines,
combining innovation, commercial awareness, computer hardware,
software and mechanical design capabilities. Together, this unique
combination has made Quixant recognised as the leading supplier of
advanced computer platforms for gaming machines. Our complementary
monitor products, which were engineered with the same principles as
our gaming boards are now also gathering traction in the market and
it is pleasing to have received our first volume orders for these
products, some of which have shipped since period end.
Quixant continues to occupy a small but growing share of the
existing market. New opportunities also continue to arise through
changes within existing gaming markets and new markets being opened
to regulated gaming. We look to the future with confidence.
Michael Peagram
Chairman
CHIEF EXECUTIVE'S REVIEW
Introduction
I am delighted that we have continued to grow Quixant's revenue
and profits in line with our expectations for the first six months
of 2015. We have been efficient in delivering this growth, but have
nonetheless invested to ensure we are well positioned as we enter
the second half of the year, which has historically carried the
higher weighting of sales.
New business
Sales from our established customer base remain buoyant and
there is a breadth of exciting opportunities in the new business
pipeline. Following a lengthy period of pitching for business, it
is also very rewarding to have received volume orders from our
first major customer for Quixant's monitor range. These monitor
products are complementary to our gaming platforms and benefit from
the same design principles and stable supply lifetime.
Industry consolidation
As previously reported, there was widespread M&A activity
announced among the larger gaming machine manufacturers during
2014. Not surprisingly the effects of this consolidation continues
to impact our market and we are gaining greater visibility on this
as time progresses.
A common feature amongst the majority of the transactions was
the announcement of significant synergistic cost savings to deliver
earnings enhancement. From Quixant's perspective, whilst it is not
surprising that in the short term these major customer changes have
brought about challenges in terms of operating "business as usual",
over the longer term we view the consolidation as having a positive
effect on our prospects. We expect to start small scale shipments
to some major manufacturers over the next few months.
Quixant supplies a key component of gaming machines which is
expensive to develop but has little impact on the success of the
machine in gaming venues. It is therefore reasonable to assume
that, if Quixant can supply this component at a competitive price
and reduce manufacturers R&D overhead, this plays well into the
backdrop of customer cost savings. The consolidation activity
appears to have forced the hand of several companies to consider
the outsourced route.
New products
We have been working hard on an exciting new product tier which
elevates the power of the computer platforms Quixant can offer to a
new level. "QMax" draws on our extensive experience in mechanical
and hardware design to bring together a product which offers
processing and graphics performance at a significantly higher level
to that available in Quixant's previous flagship products. It also
offers greater thermal scalability to cater for higher powered
future models. QMax brings high end graphics and processing
performance previously only available using consumer-grade products
to the slot machine market, along with all the other benefits which
Quixant's products offer. We will be previewing QMax at the G2E
trade show in Las Vegas, which starts at the end of September.
Enhanced software engineering and support centre
In July, we opened a new, significantly enhanced Italian office
which has dedicated customer training facilities, a purpose built
test lab, extensive meeting space and, crucially, space for
expansion of the team in Italy. Our Italian engineers are a vital
component in developing our products and IP, and also in ensuring
our customers receive high quality, prompt responses to technical
queries. Customers frequently cite our responsiveness and technical
expertise as a major attraction to working with Quixant. We also
regularly invite our customers' engineers to our office for
training sessions which build strong collaborative relationships
and also help fast-track customer development schedules.
Financial review
Adjusted pre-tax profits for the six months ended 30 June 2015
were US$2.70 million (1H 2014: US$2.25 million) and turnover for
the period was US$13.59 million (1H 2014: US$12.35 million).
Adjusted fully diluted earnings per share (EPS) for the period were
US$0.032 (1H 2014: US$0.029). Profit before tax is adjusted to add
back US$0.097 million (1H 2014: US$0.082 million) in respect of
share based payments. Fully diluted EPS are adjusted by adding back
US$0.097 million in respect of share based payments and subtracting
the associated tax effect of US$0.019 million (1H 2014: US$0.082
million adjustment less tax effect of US$0.016 million).
(MORE TO FOLLOW) Dow Jones Newswires
September 16, 2015 02:00 ET (06:00 GMT)
Operations generated cash in the six months to 30 June 2015 of
US$5.12 million (1H 2014: US$2.34 million). We reduced our debtors
to US$6.58 million compared to US$10.05 million at the end of
December 2014. The Company had a cash balance of US$8.03 million at
30 June 2015 (31 December 2014: US$4.72 million). This was after
payment in May 2015 of a 1.2p per share dividend in respect of full
year 2014, totalling US$1.18 million. Net cash was US$6.76 million
at 30 June 2015 (31 December 2014: US$3.42 million).
Outlook
The Company is on track to meet the Board's full year
expectations. We have a strong order book and healthy pipeline of
new business. The round of M&A activity among the major
manufacturers appears to have completed and we expect to benefit
from their renewed focus on cost efficiencies. We look forward to
delivering further strong performance during the second half of
2015 and beyond.
Nick Jarmany
Chief Executive
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015 AND 2014 AND YEAR ENDED 31
DECEMBER 2014
Note 30 June 2015 30 June 2014 31 December
Unaudited Unaudited 2014
Audited
$000 $000 $000
Revenue 13,587 12,346 31,919
Cost of sales (7,579) (6,705) (17,857)
Gross profit 6,008 5,641 14,062
Operating expenses (3,395) (3,464) (6,973)
Operating Profit 2,613 2,177 7,089
Financial expenses (11) (18) (30)
Other income - 14 -
Profit before tax 2,602 2,173 7,059
Taxation 2 (549) (289) (943)
Profit for the period 2,053 1,884 6,116
Basic earnings per
share 4 $0.0318 $0.02915 $0.0946
Fully diluted earnings
per share 4 $0.0309 $0.02832 $0.0922
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2015 AND 2014 AND YEAR ENDED 31
DECEMBER 2014
$000 $000 $000
Profit for the period 2,053 1,884 6,116
Foreign currency translation
differences (24) (44) (183)
Total comprehensive
income for the period 2,029 1,840 5,933
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015 AND 2014 AND AT 31 DECEMBER 2014
Note 30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
$000 $000 $000
Non-current assets
Property, plant and
equipment 5,220 4,966 5,218
Intangible assets 2,451 1,592 2,231
Deferred tax asset 63 - 63
Total non-current assets 7,734 6,558 7,512
Current assets
Inventories 5,215 5,462 5,505
Trade and other receivables 6,579 5,209 10,049
Cash and cash equivalents 8,029 6,459 4,722
Total current assets 19,823 17,130 20,276
Total assets 27,557 23,688 27,788
Current liabilities
Other financial liabilities (94) (95) (100)
Trade and other payables (4,322) (4,344) (5,410)
Corporation tax payable (83) (1,277) (211)
Total current liabilities (4,499) (5,716) (5,721)
Non-current liabilities
Other financial liabilities (1,171) (1,314) (1,200)
Deferred tax liability (463) (349) (388)
Total non-current liabilities (1,634) (1,663) (1,588)
Total liabilities (6,133) (7,379) (7,309)
Net assets 21,424 16,309 20,479
Equity
Share capital 3 104 104 104
Share based payments
reserve 370 195 273
Share premium 5,181 5,181 5,181
Retained earnings 15,933 10,830 15,061
Translation reserve (164) (1) (140)
Total equity 21,424 16,309 20,479
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015, 31 DECEMBER 2014 AND 30
JUNE 2014
Share Share Share Retained Translation Total
Based Equity
Capital Payments Premium Earnings Reserve
$000 $000 $000 $000 $000 $000
At 1 January 2014 104 113 5,181 10,035 43 15,476
Profit for the six
months - - - 1,884 - 1,884
Dividend paid - - - (1,090) - (1,090)
Share based payments - 82 - - - 82
Other comprehensive
income - - - - (44) (44)
At 30 June 2014 104 195 5,181 10,829 (1) 16,308
Profit for the six
months - - - 4,232 - 4,232
Share based payments - 78 - - - 78
Other comprehensive
income - - - - (139) (139)
At 31 December 2014 104 273 5,181 15,061 (140) 20,479
Profit for the six
months - - - 2,053 - 2,053
Share based payments - 97 - - - 97
Dividend paid - - - (1,181) - (1,181)
Other comprehensive
income - - - - (24) (24)
At 30 June 2015 104 370 5,181 15,933 (164) 21,424
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015 AND 2014 AND YEAR ENDED 31
DECEMBER 2014
30 June 2015 30 June 2014 31 December
2014
Unaudited Unaudited Audited
$000 $000 $000
Cash flows from operating
activities
Profit for the period 2,053 1,884 6,116
Adjustments for:
Depreciation 135 136 142
Amortisation 208 173 503
Financial expenses 11 18 30
Taxation expense 549 289 943
Share based payments expense 97 82 160
3,053 2,582 7,894
Decrease/(increase) in trade
and other receivables 3,470 730 (4,110)
Decrease/(increase) in inventories 290 (2,831) (2,874)
(Decrease)/increase in trade
and other payables (1,085) 1,623 2,682
5,728 2,104 3,592
Interest paid (11) (18) (30)
Tax (paid)/refunded (602) 251 (1,493)
Net cash from operating
activities 5,115 2,337 2,069
Cash flows from investing
activities
Acquisition of property,
plant and equipment (164) (548) (938)
Acquisition of intangible
(MORE TO FOLLOW) Dow Jones Newswires
September 16, 2015 02:00 ET (06:00 GMT)
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