TIDMGINV
RNS Number : 5316E
Global Invacom Group Limited
28 February 2020
Global Invacom Group Limited
("Global Invacom", the "Group" or the "Group")
Final results for the year ended 31 December 2019
Singapore/London, 28 February 2020 - Global Invacom (SGX: QS9)
(AIM: GINV), the global provider of satellite communications
equipment and electronics, is pleased to announce its financial
results for the year ended 31 December 2019 ("FY2019") and the
three months ended 31 December 2019 ("Q4 FY2019").
Key financial highlights:
-- Revenue for FY2019 increased 10.0% to US$134.5 million (FY2018: US$122.3 million)
-- Adjusted gross profit (before exceptional items) increased by
11.8% to US$28.2 million (FY2018: US25.2 million). Actual gross
profit of US$24.1 million includes US$4.1 million impairment costs
related to the closure of the Group's Shanghai manufacturing
facility.
-- Strong cash generation as net cash at 31 December 2019 increases US$3.6 million
-- Adjusted net profit (before exceptional items) increased by
158.3% to US$4.0 million (FY2018: US$1.5 million). Actual net loss
of US$12.3 million includes US$16.3 million costs relating to the
closure of the Shanghai manufacturing facility and the impairment
of goodwill and loans.
Key operational highlights:
-- Announced a complete review of the Group. As a result of the
review, the Group will focus on the following strategic
initiatives:
o Continued drive in product development across both Data Over
Satellite ("DOS") and Direct to Home ("DTH") markets although focus
on DOS
o Completion of the Shanghai manufacturing operations'
relocation to a third-party subcontract manufacturer in the
Philippines by the end of June 2020; 80% complete to date
o R etention of key procurement and quality assurance personnel for the Group in China
Global Invacom's core operations focus on two key end markets:
Direct to home ("DTH") and Data Over Satellite ("DOS").
DTH continues to play a central role in delivering satellite
broadcast services, despite an increase in Over-The-Top services
("OTT"). As such, the Group believes DTH sales will continue to
provide a profitable foundation for the business.
More importantly, the Group is seeing a strong increase in
demand for its DOS technology and services as consumer appetite for
constant connectivity increases unabated. With increasing data
consumption across all geographies and with existing physical
infrastructure incapable of responding to, and servicing, this
demand, it is anticipated that service providers will continue to
adopt satellite solutions to fill the insatiable demands for data
growth.
The Group also now offers integrated antenna and electronics
solutions for Medium Earth Orbit ("MEO") and Low Earth Orbit
("LEO") satellites, and is seeking to leverage its existing
customer base and engage with new customers in order to become a
key industry partner for operators seeking to launch satellites
into these orbits.
The DOS market continues to grow unabated as demand for constant
connectivity from end consumers grows. According to a report from
Statista published in September 2019, global mobile data traffic is
projected to increase nearly sevenfold between 2017 and 2022[1].
Existing physical infrastructure is not capable of satisfying this
demand, and the speed and scope of the task to provide connectivity
to all has seen operators seek satellite solutions, which are more
economically viable and capable of providing coverage across an
extensive geography.
Despite the rise of OTT media services, the demand for DTH
connectivity continues. With a limited peer group, Global Invacom
continues to focus on product innovation, and believes it will
benefit from manufacturing efficiencies following the move from
Shanghai to the Philippines.
Global Invacom boasts an enviable customer list which includes a
number of the leading DTH providers worldwide, such as Sky in the
UK and Dish Network in the United States ("US"), as well as
leading, worldwide DOS providers such as Hughes Network Systems,
Viasat, Gilat and ST Electronics. The Group believes continued
demand for DTH products from this blue-chip customer base will
remain a good revenue stream for the Group going forward with DOS
products bringing strong growth.
In June 2019, Global Invacom completed the acquisition of
Apexsat Pte Ltd ("Apexsat"), a group specialising in the design and
manufacture of steerable earth station solutions and motorised and
transportable antenna systems including systems capable of
acquiring and retaining LEO and MEO satellites and drone tracking.
The acquisition of Apexsat has enabled the Group to leverage its
existing customer base, and to offer products for the LEO and MEO
satellite communication constellations markets.
The Group has experienced continued increased pressure on wages
and production costs in China, with the average cost per employee
rising 89% between FY2012 and FY2019 added to an overall production
cost increase exasperated by tariffs imposed by the US. The
relocation of the manufacturing facility to the Philippines will
help protect margins on the affected products.
As a result of the transition to the Philippines, Global Invacom
will incur one-off charges closing the Global Invacom owned
facility in Shanghai. These non-recurring charges of US$10.6
million have been recognised in FY2019.
Following from the review, the Group has also recognised a
further US$5.5 million impairment from the impairment of goodwill
and loans.
Alongside Global Invacom's existing product set compromising
hardware and electronics for satellite antenna products - the Group
continues to drive research and development of new products
throughout its teams in UK, US, Malaysia, Indonesia, Germany and
Israel.
Apart from the economic uncertainty as a result of the ongoing
trade tensions between the US and China, the Group is also mindful
of the COVID-19 outbreak which has disrupted many businesses
operating in China and the risk around its supply chain of
components. The Group has established a core team of approximately
30 supply chain specialists located in Shanghai to source such
products. This team is closely monitoring the situation to ensure
stable supplies to the Philippines and US although we believe it is
too soon to comment on its long-term impact for the business.
Tony Taylor, Executive Chairman of Global Invacom,
commented:
"We are delighted with the progress we have made in 2019 and
believe the decisive actions taken by management to restructure the
business will ensure that the Group is well placed to capitalise on
a number of growth opportunities. Our transition to the Philippines
which will continue over the course of the first six months of 2020
will help protect our overall margins, now unencumbered by tariffs
and increasing production costs in China.
The demand for satellite communications solutions continues to
gain momentum as operators strive to put in place infrastructure
that is capable of responding to the ever-increasing demand for
connectivity and data regardless of location. The Group continues
to be uniquely positioned to supply antenna and electronics
products, and with our blue-chip customer base and industry
reputation, we feel we are very well placed going in to 2020 to
drive further growth."
Revenue for the 12 months ended 31 December 2019 increased 10.0%
to US$134.5 million from US$122.3 million the previous year.
Revenue of US$30.1 million for the quarter ended 31 December 2019
was 17.3% lower than the corresponding quarter in 2018 when the
Group received strong demand from two of its major customers.
Geographically, Group revenue for FY2019 increased in America,
Europe and Rest of the World ("RoW") by US$7.8 million (+9.1%),
US$4.2 million (+15.5%) and US$1.3 million (+30.3%), respectively,
offset by reductions in Asia by US$1.1 million (-20.7%). Revenue
for Q4 FY2019 increased in Europe and Asia by US$1.6 million
(+22.4%) and US$0.9 million (+110.6%), respectively but declined in
America and RoW by US$7.0 million (-26.8%) and US$1.8 million
(-77.3%), respectively, compared to the prior year.
The increase in revenue alongside product mix resulted in an
adjusted 11.8% increase in gross profit for FY2019 to US$28.2
million, excluding the Shanghai facility impairments, compared with
FY2018 of US$25.2 million.
In the year ended 31 December 2019, the Group recorded a net
loss of US$12.3 million (FY2018: US$1.5 million net profit), as a
result of one-off costs for the Shanghai planned closure and
transition of manufacturing to the Philippines. Reversing these
costs would give the Group a net profit of US$4.0 million.
Administrative expenses increased to US$27.4 million in FY2019
from US$22.9 million in FY2018, due to the inclusion of salaries
and related costs from the acquisition of Skyware Technologies in
September 2018, along with US$4.2 million for the closure of the
Shanghai manufacturing facility and a small-scale restructuring in
one of its UK facilities. Other operating expenses also reflected
US$8.0 million in one-off costs relating to the closure of the
Shanghai manufacturing facility and the impairment of goodwill and
loans.
The Group recorded a net increase in cash and cash equivalents
amounting to US$0.8 million in FY2019 bringing cash and cash
equivalents per the consolidated statement of cash flows to US$8.9
million as at 31 December 2019. Overall net cash in the Group,
combining cash and cash equivalents against borrowings, improved by
US$3.6 million in FY2019.
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 / Matthew Radley (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)
Jordan Teo / Ryan del Agua Tel: +65 6737 4844
ginv@wer1.net
Vigo Communications (UK Media & Investor www.vigocomms.com
Relations)
Jeremy Garcia / Fiona Henson / Charlie Tel: +44 207 390 0233
Neish / Fiona Norman
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 US and
Data over Satellite providers including Hughes Network Systems,
Viasat and Gilat Satellite Networks.
Global Invacom provides a full range of antennas, LNB receivers,
transceivers, 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 Group 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 Q4 AND YEARED 31 DECEMBER
2019
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 Q4 and the
year ended 31 December 2019. These figures have not been
audited.
Group Group
------------------------------------------------------ -------------------------------------------
Q4 Q4 FY2018 Increase/ Increase/
FY2019 (Decrease) FY2019 FY2018 (Decrease)
US$'000 US$'000 % US$'000 US$'000 %
Revenue 30,068 36,366 (17.3) 134,509 122,292 10.0
Cost of sales (27,295) (28,963) (5.8) (110,443) (97,104) 13.7
Gross profit 2,773 7,403 (62.5) 24,066 25,188 (4.5)
Other income 223 482 (53.7) 244 569 (57.1)
Distribution
costs (71) (69) 2.9 (292) (322) (9.3)
Administrative
expenses (9,427) (6,514) 44.7 (27,429) (22,913) 19.7
Other operating
expenses (8,200) (21) N.M. (8,216) (14) N.M.
Finance income 75 46 63.0 230 96 139.6
Finance costs (344) (146) 135.6 (1,146) (523) 119.1
(Loss)/Profit
before
income tax(i) (14,971) 1,181 N.M. (12,543) 2,081 N.M.
Income tax
credit/(expense) 870 (286) N.M. 254 (545) N.M.
------------------------ ------------- ------------- ------------ --------------- ------------
(Loss)/Profit
after
income tax (14,101) 895 N.M. (12,289) 1,536 N.M.
------------------------ ------------- ------------- ------------ --------------- ------------
Other comprehensive
income/(loss):
Items that may be reclassified
subsequently to profit
or loss
* Exchange differences on translation of foreign
subsidiaries 325 (483) N.M. 72 (417) N.M.
Other comprehensive
income/(loss) for the
period, net of tax 325 (483) N.M. 72 (417) N.M.
------------ ------------ -------------- ------------- ---------------- ----------------
Total comprehensive
(loss)/income (13,776) 412 N.M. (12,217) 1,119 N.M.
------------ ------------ -------------- ------------- ---------------- ----------------
Loss for the year
attributable
to:
Owners of the
Company (14,092) 895 N.M. (12,278) 1,536 N.M.
Non-controlling
interests (9) - N.M. (11) - N.M.
-------------- --------------- ------------ ------------ ----------------- ------------
(14,101) 895 N.M. (12,289) 1,536 N.M.
-------------- --------------- ------------ ------------ ----------------- ------------
Total comprehensive
(loss)/income
attributable
to:
Owners of the
Company (13,767) 412 N.M. (12,206) 1,119 N.M.
Non-controlling
interests (9) - N.M. (11) - N.M.
-------------- --------------- ------------ ------------ ----------------- ------------
N.M.: Not Meaningful
Note:
(i) Profit before income tax was determined after (charging)/crediting the following:
Group Group
---------------------------------------------- -----------------------------------------------
Q4 Q4 Increase/ Increase/
FY2019 FY2018 (Decrease) FY2019 FY2018 (Decrease)
US$'000 US$'000 % US$'000 US$'000 %
Interest income 75 46 63.0 230 96 139.6
Interest expense (344) (146) 135.6 (1,146) (523) 119.1
Gain on bargain
purchase - 482 (100.0) - 482 (100.0)
Write-back of payables - - - 74 73 1.4
Gain/(Loss) on disposal
of property, plant and
equipment 3 - N.M. 20 (5) N.M.
Gain on disposal of
subsidiary 4 - N.M. 4 - N.M.
Loss on foreign
exchange (37) (21) 76.2 (214) (9) N.M.
Impairment of property,
plant and equipment (2,185) - N.M. (2,185) - N.M.
Depreciation of
property, plant and
equipment (852) (791) 7.7 (3,283) (2 ,890 ) 13.6
Amortisation of
intangible assets (230) (146) 57.5 (920) (673) 36.7
Impairment of
intangible assets - (93) (100.0) - (93) (100.0)
Depreciation of
right-of-use assets (673) - N.M. (2,404) - N.M.
(Allowance)/Write-back
for inventory
obsolescence, net (2,931) 706 N.M. (2,816) 412 N.M.
Inventory written off (1,256) - N.M. (1,256) - N.M.
Impairment of
receivables (357) - N.M. (357) - N.M.
Impairment of loans (2,181) - N.M. (2,181) - N.M.
Bad debts written off - - - (16) - N.M.
Research and
development expense (159) (665) (76.1) (1,671) (2 ,805 ) (40.4)
Impairment of goodwill (3,260) - N.M. (3,260) - N.M.
Restructuring costs (4,188) - N.M. (4,188) - N.M.
1(b)(i) A statement of financial position (for the issuer and
group), together with a comparative statement as at the end of the
immediately preceding financial year.
Group Company
------------------------------------------ -----------------------------------------
31 Dec 31 Dec 31 Dec 31 Dec
2019 2018 2019 2018
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current Assets
Property, plant and
equipment 10,254 12,606 168 85
Right-of-use assets 7,533 - 144 -
Investments in
subsidiaries - - 27,586 44,892
Goodwill 6,092 9,352 - -
Intangible assets 3,104 3,656 - -
Other financial assets 8 1,519 - 1,511
Deferred tax assets 975 109 - -
Other receivables and
prepayments 54 55 10,100 9,608
28,020 27,297 37,998 56,096
------------------- --------------------- -------------------- -------------------
Current Assets
Due from subsidiaries - - 4,105 939
Inventories 25,795 31,625 - -
Trade receivables 19,846 24,874 - -
Other receivables and
prepayments 1,909 1,900 3,407 3,433
Tax receivables 38 15 - -
Cash and cash equivalents 8,912 8,381 610 526
------------------- --------------------- -------------------- -------------------
56,500 66,795 8,122 4,898
------------------- --------------------- -------------------- -------------------
Total assets 84,520 94,092 46,120 60,994
------------------- --------------------- -------------------- -------------------
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 (14,691) (2,161) (26,853) (13,988)
------------------- --------------------- -------------------- -------------------
Equity attributable to
owners of the Company 44,076 56,606 45,731 58,596
Non-controlling (11) - - -
interests
------------------- --------------------- -------------------- -------------------
Total equity 44,065 56,606 45,731 58,596
------------------- --------------------- -------------------- -------------------
Non-current Liabilities
Other payables 108 104 - -
Lease liabilities 5,948 - 35 -
Deferred tax liabilities 428 406 - -
6,484 510 35 -
------------------- --------------------- -------------------- -------------------
Current Liabilities
Due to subsidiaries - - - 2,109
Trade payables 12,903 19,381 - -
Other payables 10,238 5,326 238 221
Borrowings 8,929 11,974 - -
Lease liabilities 1,897 - 116 -
Provision for income
tax 4 295 - 68
------------------- --------------------- -------------------- -------------------
33,971 36,976 354 2,398
------------------- --------------------- -------------------- -------------------
Total liabilities 40,455 37,486 389 2,398
------------------- --------------------- -------------------- -------------------
Total equity and
liabilities 84,520 94,092 46,120 60,994
------------------- --------------------- -------------------- -------------------
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 Dec 2019 As at 31 Dec 2018
Secured Unsecured Secured Unsecured
----------- --------- -----------
US$'000 US$'000 US$'000 US$'000
----------- --------- -----------
8,929 - 11,974 -
----------- --------- -----------
Amount repayable after one year
As at 31 Dec 2019 As at 31 Dec 2018
Secured Unsecured Secured Unsecured
----------- --------- -----------
US$'000 US$'000 US$'000 US$'000
----------- --------- -----------
- - - -
----------- --------- -----------
Details of any collateral
The revolving credit loans of US$8,929,000 were secured over the
assets of the subsidiaries and corporate guarantees provided by the
Company and the subsidiaries.
1(c) A statement of cash flows (for the group), together with a
comparative statement for the corresponding period of the
immediately preceding financial year.
Group Group
------------------------------------ -------------------------------------
Q4 FY2019 Q4 FY2018 FY2019 FY2018
US$'000 US$'000 US$'000 US$'000
Cash Flows from Operating Activities
(Loss)/Profit before income tax (14,971) 1,181 (12,543) 2,081
Adjustments for:
Depreciation of property, plant and
equipment 852 791 3,283 2,890
Amortisation of intangible assets 230 146 920 673
Impairment of property, plant and
equipment 2,185 93 2,185 93
(Gain)/Loss on disposal of property,
plant and equipment (3) - (20) 5
Depreciation of right-of-use assets 673 - 2,404 -
Impairment of intangible assets - 93 - 93
Allowance/(Write-back) for inventory
obsolescence, net 2,931 (706) 2,816 (412)
Inventory written off 1,256 - 1,256 -
Bad debts written off - - 16 -
Impairment of receivables 357 - 357 -
Impairment of loans 2,181 - 2,181 -
Unrealised exchange loss 445 11 213 166
Interest income (75) (46) (230) (96)
Interest expense 344 146 1,146 523
Share-based payments - 3 2 17
Gain on disposal of subsidiary (4) - (4) -
Gain on bargain purchase - (482) - (482)
Write-back of payables - - (74) (73)
Impairment of goodwill 3,260 - 3,260 -
Operating cash flow before working
capital changes (339) 1,137 7,168 5,385
Changes in working capital:
Inventories (1,833) (2,134) 1,758 (2,191)
Trade receivables 1,983 (4,085) 5,016 (5,618)
Other receivables and prepayments (1,139) 87 (1,130) 1,477
Trade and other payables 6,254 3,631 (119) 5,211
------------------ ---------------- ------------------ -----------------
Cash generated from/(used in)
operating activities 4,926 (1,364) 12,693 4,264
Interest paid (458) (56) (972) (227)
Income tax refund/(paid) (494) (131) (859) (271)
Net cash generated from/(used in)
operating activities 3,974 (1,551) 10,862 3,766
------------------ ---------------- ------------------ -----------------
Cash Flows from Investing Activities
Interest received 23 37 59 85
Purchase of property, plant and
equipment (421) 839 (3,315) ( 1,533 )
Proceeds from disposal of property,
plant and equipment 16 - 79 36
Decrease in intangible assets - 2,250 - -
Payment for intangible assets - - (279) -
Acquisition of a business - (3,500) - (3,500)
Payment for financial asset, at fair
value through profit or loss - (1,500) (500) (1,500)
Net cash used in investing activities (382) (1,874) (3,956) (6,412)
------------------ ---------------- ------------------ -----------------
Group Group
--------------------------------- -------------------------------------
Q4 FY2019 Q4 FY2018 FY2019 FY2018
US$'000 US$'000 US$'000 US$'000
Cash Flows from Financing Activities
Proceeds from borrowings 13,367 16,093 54,933 54,686
Repayment of borrowings (17,318) (14,088) (58,053) (50,811)
Repayment of lease liabilities (1,382) - (3,020) -
Capital contribution from (32) - - -
non-controlling interests
Acquisition of non-controlling interests (11) - (11) -
Net cash (used in)/generated from
financing activities (5,376) 2,005 (6,151) 3,875
--------------- ---------------- ------------------ -----------------
Net (decrease)/increase in cash and cash
equivalents (1,784) (1,420) 755 1,229
Cash and cash equivalents at the
beginning of the period 10,818 9,772 8,381 7,152
Effect of foreign exchange rate changes
on the balance of cash held in foreign
currencies (122) 29 (224) -
--------------- ---------------- ------------------ -----------------
Cash and cash equivalents at the end of
the period(i) 8,912 8,381 8,912 8,381
--------------- ---------------- ------------------ -----------------
Note:
(i) For the purpose of presentation in the consolidated
statement of cash flows, the consolidated cash and cash equivalents
comprise the following:
Q4 Q4
FY2019 FY2018 FY2019 FY2018
US$'000 US$'000 US$'000 US$'000
Cash and bank balances 8,882 8,351 8,882 8,351
Fixed deposits 30 30 30 30
------------- ------------ ------------- ---------------
Cash and cash equivalents per the consolidated
statement of cash flows 8,912 8,381 8,912 8,381
------------- ------------ ------------- ---------------
1(d)(i) A statement (for the issuer and group) showing either
(i) all changes in equity or (ii) changes in equity other than
those arising from capitalisation issues and distributions to
shareholders, together with a comparative statement for the
corresponding period of the immediately preceding financial
year.
Attributable
Foreign to equity
Group Capital Share currency holders
Share Treasury Merger redemption options Capital translation Retained of the Non-controlling
capital shares reserves reserves reserve reserve reserve profits Company interests Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Balance as at 1
Jan 2019 60,423 (1,656) (10,150) 6 723 (3,560) (1,289) 12,109 56,606 - 56,606
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Effect of
adoption
of SFRS(I) 16 - - - - - - - (239) (239) - (239)
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Share-based
payments - - - - 2 - - - 2 - 2
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 741 741 - 741
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Other
comprehensive
income:
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Exchange
differences
on translating
foreign
operations - - - - - - 53 - 53 - 53
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Total other
comprehensive
income for the
period - - - - - - 53 741 794 - 794
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Balance as at 31
Mar 2019 60,423 (1,656) (10,150) 6 725 (3,560) (1,236) 12,611 57,163 - 57,163
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 845 845 - 845
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Other
comprehensive
loss:
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Exchange
differences
on translating
foreign
operations - - - - - - (153) - (153) - (153)
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Total other
comprehensive
income for the
period - - - - - - (153) 845 692 - 692
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Balance as at 30
Jun 2019 60,423 (1,656) (10,150) 6 725 (3,560) (1,389) 13,456 57,855 - 57,855
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Capital
subscribed
by
non-controlling
interests - - - - - - - - - 32 32
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Transfer to
capital
reserve in
accordance
with statutory
requirements - - - - - (1,549) - 1,549 - - -
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 228 228 (2) 226
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Other
comprehensive
loss:
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Exchange
differences
on translating
foreign
operations - - - - - - (153) - (153) - (153)
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Total other
comprehensive
income for the
period - - - - - - (153) 228 75 (2) 73
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Balance as at 30
Sep 2019 60,423 (1,656) (10,150) 6 725 (5,109) (1,542) 15,233 57,930 30 57,960
-------------- -------------- ---------------- ---------------- -------------- --------------------- ---------------- ------------------- --------------- ----------------- ----------------
Attributable
Foreign to equity
Group Capital Share currency holders
Share Treasury Merger redemption options Capital translation Retained of the Non-controlling
capital shares reserves reserves reserve reserve reserve profits Company interests Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Effect of
adoption
of SFRS(I) 16 - - - - - - - (87) (87) - (87)
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Acquisition of
non-controlling
interests - - - - - - - - - (32) (32)
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Loss for the
period - - - - - - - (14,092) (14,092) (9) (14,101)
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Other
comprehensive
income:
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Exchange
differences
on translating
foreign
operations - - - - - - 325 - 325 - 325
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Total other
comprehensive
income for the
period - - - - - - 325 (14,092) (13,767) (9) (13,776)
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Balance as at 31
Dec 2019 60,423 (1,656) (10,150) 6 725 (5,109) (1,217) 1,054 44,076 (11) 44,065
------------- ------------- --------------- --------------- ------------- ------------- --------------- ------------- -------------- ----------------- ------------
Attributable
Foreign to equity
Group Capital Share currency holders
Share Treasury Merger redemption options Capital translation Retained of the Non-controlling
capital shares reserves reserves reserve reserve reserve profits Company interests Total
US$'000 US$'000 US$'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 - 55,470
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Share-based
payments - - - - 8 - - - 8 - 8
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 326 326 - 326
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Other
comprehensive
income:
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Exchange
differences
on
translating
foreign
operations - - - - - - 124 - 124 - 124
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Total other
comprehensive
income for
the
period - - - - - - 124 326 450 - 450
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Balance as at
31
Mar 2018 60,423 (1,656) (10,150) 6 714 (3,695) (748) 11,034 55,928 - 55,928
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Share-based
payments - - - - 3 - - - 3 - 3
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 206 206 - 206
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Other
comprehensive
income:
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Exchange
differences
on
translating
foreign
operations - - - - - - 69 - 69 - 69
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Total other
comprehensive
income for
the
period - - - - - - 69 206 275 - 275
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Balance as at
30
Jun 2018 60,423 (1,656) (10,150) 6 717 (3,695) (679) 11,240 56,206 - 56,206
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Share-based
payments - - - - 3 - - - 3 - 3
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 109 109 - 109
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Other
comprehensive
loss:
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Exchange
differences
on
translating
foreign
operations - - - - - - (127) - (127) - (127)
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Total other
comprehensive
loss for the
period - - - - - - (127) 109 (18) - (18)
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Balance as at
30
Sep 2018 60,423 (1,656) (10,150) 6 720 (3,695) (806) 11,349 56,191 - 56,191
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Share-based
payments - - - - 3 - - - 3 - 3
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Transfer to
capital
reserve in
accordance
with
statutory
requirements - - - - - 135 - - 135 - 135
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Profit for the
period - - - - - - - 895 895 - 895
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Other
comprehensive
loss:
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Exchange
differences
on
translating
foreign
operations - - - - - - (483) - (483) - (483)
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Total other
comprehensive
income for
the
period - - - - - - (483) 895 412 - 412
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
Balance as at
31
Dec 2018 60,423 (1,656) (10,150) 6 723 (3,560) (1,289) 12,109 56,606 - 56,606
-------------- -------------- ---------------- ---------------- -------------- ----------------- ---------------- -------------- --------------- ----------------- ----------------
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 2019 74,240 (1,656) 723 (4,481) (1,927) (8,303) 58,596
Effect of
adoption
of SFRS(I) 16 - - - - - (5) (5)
Share-based
payments - - 2 - - - 2
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Loss for the
period - - - - - (485) (485)
Other
comprehensive
loss:
Exchange
differences - - - - - - -
on translating
foreign
operations
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Total other
comprehensive
loss for the
period - - - - - (485) (485)
Balance as at
31 Mar 2019 74,240 (1,656) 725 (4,481) (1,927) (8,793) 58,108
Profit for the
period - - - - - 2,297 2,297
Other
comprehensive
income:
Exchange
differences - - - - - - -
on translating
foreign
operations
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Total other
comprehensive
income for
the
period - - - - - 2,297 2,297
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Balance as at
30 Jun 2019 74,240 (1,656) 725 (4,481) (1,927) (6,496) 60,405
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Profit for the
period - - - - - 1,889 1,889
Other
comprehensive
loss:
Exchange
differences
on
translating
foreign
operations - - - - (579) - (579)
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Total other
comprehensive
income for
the
period - - - - (579) 1,889 1,310
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Balance as at
30 Sep 2019 74,240 (1,656) 725 (4,481) (2,506) (4,607) 61,715
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Loss for the
period - - - - - (15,984) (15,984)
Other
comprehensive
loss:
Exchange
differences - - - - - - -
on translating
foreign
operations
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Total other
comprehensive
income for
the
period - - - - - (15,984) (15,984)
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
Balance as at
31 Dec 2019 74,240 (1,656) 725 (4,481) (2,506) (20,591) 45,731
---------------- ---------------- ---------------- ---------------- --------------------- ------------------------ ---------------
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
Share-based
payments - - 3 - - - 3
Loss for the
period - - - - - (205) (205)
Other
comprehensive
loss:
Exchange
differences - - - - - - -
on translating
foreign
operations
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
Total other
comprehensive
loss for the
period - - - - - (205) (205)
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
Balance as at
30 Sep 2018 74,240 (1,656) 720 (4,481) (1,927) (8,297) 58,599
Share-based
payments - - 3 - - - 3
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
Loss for the
period - - - - - (6) (6)
Other
comprehensive
loss:
Exchange
differences - - - - - - -
on translating
foreign
operations
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
Total other
comprehensive
loss for the
period - - - - - (6) (6)
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
Balance as at
31 Dec 2018 74,240 (1,656) 723 (4,481) (1,927) (8,303) 58,596
---------------- ---------------- ---------------- ---------------- ---------------- --------------------- ---------------
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.
FY2019 No. of shares US$'000
Balance as at 1 Jan 2019 and 31 Dec 2019 271,662,227 72,584
------------------ -----------
FY2018 No. of shares US$'000
Balance as at 1 Jan 2018 and 31 Dec 2018 271,662,227 72,584
------------------ -----------
There were 10,740,072 treasury shares held by the Company as at
31 December 2019 and 31 December 2018 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 Dec 2019 31 Dec 2018
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.
FY2019 No. of shares US$'000
Balance as at 1 Jan 2019 and 31 Dec
2019 10,740,072 1,656
-------------- --------
1(d)(v) A statement showing all sales, transfers, cancellation
and/or use of subsidiary holdings as at the end of the current
financial period reported on.
FY2019 No. of shares US$'000
Balance as at 1 Jan 2019 and 31 Dec - -
2019
-------------- --------
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 modifications or emphasis of a
matter).
Not applicable.
3A. Where the latest financial statements are subject to an
adverse opinion, qualified opinion or disclaimer of opinion: -
(a) Updates on the efforts taken to resolve each outstanding audit issues.
(b) Confirmation from the Board that the impact of all
outstanding audit issues on the financial statements have been
adequately disclosed.
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.
Except as disclosed in Note 5 below, the Group has applied the
same accounting policies and methods of computation consistent with
those used in the most recent audited financial statements for the
year ended 31 December 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 various new and revised SFRS(I)s and IFRSs
that are relevant to its operations and effective for the period
beginning 1 January 2019. Except as disclosed below, the adoption
of the new and revised SFRS(I)s and IFRSs has no material financial
impact on the Group's financial statements.
SFRS(I) 16 and IFRS 16, Leases sets out a revised framework for
the recognition, measurement, presentation and disclosure of
leases, and replaces existing lease accounting guidance. SFRS(I) 16
and IFRS 16 requires lessees to recognise right-of-use assets and
lease liabilities for all leases with a term of more than 12
months, except where the underlying asset is of low value. The
right-of-use asset is depreciated and interest expense is
recognised on the lease liability. The accounting requirements for
lessors have not been changed substantially and continue to be
based on classification as operating and finance leases. Disclosure
requirements have been enhanced for both lessors and lessees.
The Group adopted SFRS(I) 16 and IFRS 16 on 1 January 2019 based
on a permitted transition approach that does not restate
comparative information, but recognised the cumulative effect of
initially applying SFRS(I) 16 and IFRS 16 as an adjustment to the
opening balance of retained earnings on 1 January 2019. The Group
also adopted an expedient offered by SFRS(I) 16 and IFRS 16,
exempting the Group from having to reassess whether pre-existing
contracts contain a lease.
The Group and the Company have entered into several leasing
arrangements with lessors for factory buildings and office
premises. Prior to the adoption of SFRS(I) 16 and IFRS 16, the
Group and the Company recognised these arrangement as operating
leases and payments made under operating leases are recognised in
the income statement on a straight-line basis over the period of
the lease. Upon adoption of SFRS(I) 16 and IFRS 16, the Group and
the Company recognised the right-of-use assets and lease
liabilities. The nature of expenses related to those leases will
change as SFRS(I) 16 and IFRS 16 replaces the straight-line
operating lease expense with depreciation charge for right-of-use
assets and interest expenses on lease liabilities. The Group does
not restate the comparative information for the effect of adopting
SFRS(I) 16 and IFRS 16 due to the exemption in SFRS(I) 16 and IFRS
16 but has instead recognised the effect in retained earnings and
other reserves as at 1 January 2019.
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 Group Group
any provision for preference dividends
Q4 Q4
FY2019 FY2018 FY2019 FY2018
US$ US$ US$ US$
------------- ------------ -------------- ------------
(a) Based on weighted average number of ordinary shares on (5.19) cents 0.33 cent (4.52) cents 0.57 cent
issue; and
(b) On a fully diluted basis (5.18) cents 0.33 cent* (4.52) cents* 0.57 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 272,126,126 271,662,227 271,662,227 271,662,227
------------- ------------ -------------- ------------
* Diluted earnings per share 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
31 Dec 2019 31 Dec 2018 31 Dec 2019 31 Dec 2018
US$ US$ US$ US$
------------ ------------ ------------ ------------
Net asset value per ordinary share based on issued share 16.22 cents 20.84 cents 16.83 cents 21.57 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
T he Group's revenue for the year ended 31 December 2019
("FY2019") increased by US$12.2 million (10.0%) to US$134.5 million
from US$122.3 million in the prior year ("FY2018"), reflecting the
increasing demand in the global market for the Group products.
Revenue for the quarter ended 31 December 2019 ("Q4 FY2019")
amounted to US$30.1 million against US$36.4 million in the prior
year quarter ("Q4 FY2018") which experienced extremely high demand
from two major customers .
Geographically, Group revenue for FY2019 increased in America,
Europe and Rest of the World ("RoW") by US$7.8 million (+9.1%),
US$4.2 million (+15.5%) and US$1.3 million (+30.3%), respectively,
offset by reductions in Asia by US$1.1 million (-20.7 %). Revenue
for Q4 FY2019 increased in Europe and Asia by US$1.6 million
(+22.4%) and US$0.9 million (+110.6%), respectively but declined in
America and RoW by US$7.0 million (-26.8 %) and US$1.8 million
(-77.3%), respectively, compared to the prior year.
Gross Profit
Gross profit decreased by US$1.1 million from US$25.2 million in
FY2018 to US$24.1 million in FY2019, with gross profit margin
decreased by 4.6 percentage points from 20.6% to 17.9%, mainly due
to the impairment costs in the Shanghai manufacturing facility
following the relocation of its operations to the Philippines.
Excluding these, gross profit in FY2019 would have increased by
US$3.0 million to US$28.2 million, with a gross profit margin of
20.9%. Similarly, for Q4 FY2019, gross profit margin decreased from
20.4% to 9.2%, with gross profit at US$2.8 million against US$7.4
million for Q4 FY2018. Excluding the impairment costs, gross profit
in Q4 FY2019 would be US$6.9 million, with a gross profit margin of
21.8%, an increase of 2.5 percentage points on Q4 FY2018.
Other Income
Other income in Q4 FY2019 and FY2019 relates primarily to
government subsidies received in China, write-back of payables and
gain on disposal of equipment.
Administrative Expenses
Administrative expenses for FY2019 increased 19.7% to US$27.4
million compared to US$22.9 million in FY2018, representing 20.4%
and 18.7% of revenue, respectively. The increase arose from the
inclusion of salaries and related costs from the acquisition of
Skyware Technologies in September 2018, the compensation to be made
to the employees in the Shanghai manufacturing facility following
the relocation to the Philippines where the employees having been
made redundant based on the Labour Law in China and a small-scale
restructuring in one of the UK manufacturing facilities. If the
compensation and restructuring costs were excluded, administrative
expenses for FY2019 would be US$23.2 million, representing 17.3% of
revenue.
Similarly, administrative expenses for Q4 FY2019 increased 44.7%
to US$9.4 million compared to US$6.5 million in the previous
quarter, representing 31.4% and 17.9% of revenue respectively. If
the compensation and restructuring costs were excluded,
administrative expenses for Q4 FY2019 would be US$5.5 million,
representing 18.2% of revenue.
Other Operating Expenses
Other operating expenses in Q4 FY2019 relates primarily to the
impairment of equipment and other receivables in the Shanghai
manufacturing facility, impairment of goodwill in one of the UK
manufacturing facilities, as well as the impairment of loans.
Profit Before Tax & Net Profit
The Group posted a loss before tax of US$12.5 million in FY2019,
compared to a profit before tax of US$2.1 million the prior year,
representing a negative margin of 9.3% and a margin of 1.7%,
respectively. For Q4 FY2019, the Group recorded US$15.0 million
loss before tax compared to a profit before tax of US$1.2 million
in the prior year quarter, representing a negative margin of 49.8%
and a margin of 3.2%, respectively. Excluding the one-off cost in
the Shanghai manufacturing facility, impairment of goodwill and
loans, the Group would have posted a profit before tax of US$3.7
million and US$1.1 million for FY2019 and Q4 FY2019, representing a
margin of 2.8% and 3.5%, respectively.
With the recognition of a US$1.0 million deferred tax asset gain
in the US manufacturing facility, the Group posted a net loss of
US$12.3 million in FY2019, compared to a net profit of US$1.5
million the prior year, representing a negative margin of 9.1% and
a margin of 1.3%, respectively. For Q4 FY2019, the Group recorded a
net loss of US$14.1 million compared to a net profit of US$0.9
million in the prior year quarter, representing a negative margin
of 46.9% and a margin of 2.5%, respectively. Excluding the one-off
costs, the Group would have posted a net profit before tax of
US$4.0 million and US$1.9 million for FY2019 and Q4 FY2019,
representing a margin of 3.0% and 6.4%, respectively
Review of Financial Position
Non-current assets increased by US$0.7 million to US$28.0
million as at 31 December 2019, primarily due to the adoption of
SFRS(I) 16 on leases, the acquisition of Apexsat Pte Ltd
("Apexsat") and the recognition of deferred tax assets, offset
against the impairment of equipment, goodwill and loans.
Net current assets decreased by US$0.7 million to US$22.5
million as at 31 December 2019 compared to US$29.8 million as at 31
December 2018. Inventories, trade and other receivables and trade
payables decreased by US$5.8 million, US$5.0 million and US$6.5
million respectively, with better procurement control, faster
collection and continuing payment to suppliers, together with
inventory impairment from the relocation of the Shanghai
manufacturing facility, offset by an increase in other payables of
US$5.3 million including the compensation costs in Shanghai.
Repayment of loans reduced the borrowings by US$3.0 million to
US$8.9 million and cash and cash equivalents increased by US$0.5
million to US$8.9 million as at 31 December 2019 compared to US$8.4
million as at 31 December 2018. Provision for income tax decreased
by US$0.3 million and the adoption of SFRS(I) 16 on leases
increased the current portion of lease liabilities by US$1.9
million.
Similarly, the non-current portion of the lease liabilities
increased to US$5.9 million.
The Group's net asset value stood at US$44.1 million as at 31
December 2019, compared to US$56.6 million as at 31 December
2018.
Review of Cash Flows
In Q4 FY2019, net cash generated from operating activities
amounted to US$4.0 million, comprising US$0.4 million cash outflow
used in operating activities (before working capital changes),
US$5.3 million net working capital inflow and US$0.9 million
payment of interest and income tax.
In FY2019, net cash generated from operating activities amounted
to US$10.9 million, comprising US$7.2 million cash inflow from
operating activities (before working capital changes), US$5.5
million net working capital inflow and US$1.8 million payment of
interest and income tax.
Net cash used in investing activities in Q4 FY2019 and FY2019
amounted to US$0.4 million and US$4.0 million, respectively,
relating predominately to purchase of machinery and equipment,
payment for Apexsat and the investment in convertible notes.
Net cash used in financing activities in Q4 FY2019 and FY2019
amounted to US$5.4 million and US$6.1 million, respectively,
attributable to the net proceeds of borrowings and repayment of
lease liabilities.
The Group recorded a net de crease in cash and cash equivalents
amounting to US$1.8 million and a net increase of US$0.8 million in
Q4 FY2019 and FY2019, respectively, bringing cash and cash
equivalents per the consolidated statement of cash flows to US$8.9
million as at 31 December 2019.
Overall net cash in the Group, combining cash and cash
equivalents against borrowings, improved by US$3.6 million in
FY2019.
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 Group has seen the Direct to Home ("DTH") sector continue to
provide a solid foundation to support the future growth of the
Group. It is also expanding its range of Data Over Satellite
("DOS") products to capitalise on the huge growth opportunity in
this market through accelerated product development and R&D
efforts.
The global satellite communications equipment market generated
revenues of US$22 billion in 2018 and is expected to grow to over
US$53 billion in 2027 according to a recent report by Research and
Markets[2] with the VSAT/DOS market accounting for US$12.3 billion
of this total in 2022. Furthermore, there has been a recent drive
to launch satellites into Low Earth Orbit ("LEO") and Medium Earth
Orbit ("MEO"), with satellite launches and related initiatives by
SpaceX (led by Elon Musk) and Blue Origin (led by Jeff Bezos). In
anticipation of this trend, the Group acquired the assets and
intellectual property of Apexsat in June 2019, giving it the
capability to manufacture products for the satellite communications
constellation market with tracking DOS systems.
The Group seeks to capitalise on the growing opportunity within
these markets, particularly within the DOS vertical. A recent
report by Ericsson, predicts that by 2025, 5G networks will carry
45% of total mobile data traffic, with smartphones generating more
than 95% of the mobile data traffic.[3]. With data backhaul via
satellite technology being a key component to carry this additional
data on the 5G networks, the Group is well placed to supply this
market including through one of its main DOS electronics customers
who services 35% of this market currently[4].
Global Invacom has established itself as an innovative partner
to deliver reliable and cutting-edge products to market including
supply to the largest US provider of residential satellite-based
internet connections who services a 60% share of that market[5].
Global Invacom has also bolstered its capabilities through
acquisitions over the past few years and is now capable of
delivering integrated hardware and electronics solutions to its
blue-chip DOS and DTH customers. In line with the above trend, the
Group reported an increase in contribution for DOS products by 19%
from FY2018 to FY2019.
As of end-January 2020, the Group has completed 80% of the move
from the Group's Shanghai site to the Philippines and expects to
complete the remaining 20% of the process by June 2020.
Apart from the economic uncertainty as a result of the ongoing
trade tensions between the United States ("US") and China, the
Group is also mindful of the COVID-19 outbreak which has disrupted
many businesses operating in China. An area of concern revolves
around the supply chain of components manufactured out of China.
The Group has established a core team of approximately 30 supply
chain specialists located in Shanghai to source such products. This
team is closely monitoring the situation to ensure stable supplies
to the Philippines and US although we believe it is too soon to
comment on its full impact for the business.
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 and the reason(s) for the decision.
Due to the operating conditions faced by the Group, no dividend
has been declared or recommended for the year ended 31 December
2019.
PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half Year
Results)
13. Segmented revenue and results for business or geographical
segments (of the group) in the form presented in the issuer's most
recently audited annual financial statements, with comparative
information for the immediately preceding year.
13(a) Reportable Operating Segments
The business of the Group is organised into the following
product segments:
-- Satellite Communications ("Sat Comms")
-- Contract Manufacturing ("CM")
For management purposes, the Group is organised into business
segments based on their products as the Group's risks and rates of
return are affected predominantly by differences in the products
produced. Each product segment represents a strategic business unit
and management monitors the operating results of its business units
separately for the purpose of making decisions about resource
allocation and performance assessment.
Segment results represent the profit earned by each segment
without allocation of finance income/costs and taxation. Segment
assets and liabilities include items directly attributable to a
segment as well as those that can be allocated on a reasonable
basis. Unallocated items comprised mainly corporate assets and
liabilities, borrowings and income taxes. Segment revenue includes
transfers between operating segments. Such transfers are accounted
for at competitive market prices charged to unaffiliated customers
for similar goods. The transfers are eliminated on consolidation.
No operating segments have been aggregated to form the following
reportable operating segments.
FY2019 Sat Comms CM Group
US$'000 US$'000 US$'000
Revenue 129,262 5,247 134,509
Operating loss (9,359) (2,268) (11,627)
------------------ -------------------
Finance income 230
Finance costs (1,146)
Income tax credit 254
------------------
Loss for the year (12,289)
------------------
Amortisation of intangible assets 920 - 920
Depreciation of property, plant
and equipment 3,144 139 3,283
Addition to property, plant and
equipment 3,154 161 3,315
Impairment of property, plant
and equipment 1,777 408 2,185
Depreciation of right-of-use
assets 2,282 122 2,404
Addition to intangible assets 279 - 279
Allowance for inventory obsolescence,
net 2,367 449 2,816
Write-off of inventory 1,016 240 1,256
Impairment of loans 2,181 - 2,181
Impairment of receivables 308 49 357
Impairment of goodwill 3,260 - 3,260
Restructuring costs 3,415 773 4,188
Assets and liabilities
Segment assets 79,817 2,677 82,494
Unallocated assets
- Non-current assets 312
- Other receivables 91
- Deferred tax assets 975
- Cash and cash equivalents 610
- Tax receivables 38
Total assets 84,520
------------------
FY2019 Sat Comms CM Group
US$'000 US$'000 US$'000
Segment liabilities 28,794 1,862 30,656
Unallocated liabilities
- Other payables 287
- Lease liabilities 151
- Provision for income tax 4
- Deferred tax liabilities 428
- Borrowings 8,929
Total liabilities 40,455
--------------------
FY2018
Revenue 114,110 8,182 122,292
Operating profit/(loss) 2,682 (174) 2,508
------------------- -------------------
Finance income 96
Finance costs (523)
Income tax expense (545)
--------------------
Profit for the year 1,536
--------------------
Amortisation of intangible assets 673 - 673
Depreciation of property, plant
and equipment 2,729 161 2,890
Addition to property, plant and
equipment 1,468 65 1,533
Impairment of intangible assets 93 - 93
Gain on bargain purchase 482 - 482
Write-back for inventory obsolescence,
net (412) - (412)
Assets and liabilities
Segment assets 85,054 6,507 91,561
Unallocated assets
- Non-current assets 1,597
- Other receivables 230
- Deferred tax assets 109
- Cash and cash equivalents 580
- Tax receivables 15
Total assets 94,092
--------------------
Segment liabilities 21,229 3,300 24,529
Unallocated liabilities
- Other payables 282
- Provision for income tax 295
- Deferred tax liabilities 406
- Borrowings 11,974
Total liabilities 37,486
--------------------
13(b) Geographical Information
Revenue and non-current assets information based on the
geographical location of customers and assets respectively are as
follows:
Rest of
America Europe Asia the World Group
FY2019 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 93,657 31,191 4,129 5,532 134,509
-------------- ------------- -------------- ---------------- -------------
Non-current
assets 9,271 15,259 2,356 151 27,037
-------------- ------------- -------------- ---------------- -------------
Rest of
America Europe Asia the World Group
FY2018 US$'000 US$'000 US$'000 US$'000 US$'000
Revenue 85,831 27,006 5,210 4,245 122,292
-------------- ------------- -------------- ---------------- -------------
Non-current
assets 4,689 16,562 4,307 111 25,669
-------------- ------------- -------------- ---------------- -------------
14. In the review of performance, the factors leading to any
material changes in contributions to turnover and earnings by the
business or geographical segments.
Please refer to Note 8.
15. A breakdown of sales.
FY2019 FY2018 % increase/
US$'000 US$'000 (decrease)
Sales reported for first
(a) half year 71,945 55,396 29.9
-------------------------------- --------------- ---------------- ----------------
Operating profit after income
tax before deducting minority
interests reported for first
(b) half year 1,586 532 198.1
-------------------------------- --------------- ---------------- ----------------
Sales reported for second
(c) half year 62,564 66,896 (6.5)
-------------------------------- --------------- ---------------- ----------------
Operating profit after income
tax before deducting minority
interests reported for second
(d) half year (13,875) 1,004 N.M.
-------------------------------- --------------- ---------------- ----------------
16. A breakdown of the total annual dividend (in dollar value)
for the issuer's latest full year and its previous full year.
FY2019 FY2018
US$'000 US$'000
Ordinary - -
Preference - -
--------- ---------
Total Annual Dividend - -
--------- ---------
17. 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 for
the year ended 31 December 2019.
18. 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.
19. Disclosure of person occupying a managerial position in the
issuer or any of its principal subsidiaries who is a relative of a
director or chief executive officer or substantial shareholder of
the issuer pursuant to Rule 704(13) in the format below. If there
are no such persons, the issuer must make an appropriate negative
statement.
Neither Global Invacom Group Limited nor any of its principal
subsidiaries have any person occupying a managerial position who is
related to a director, chief executive officer or substantial
shareholder.
BY ORDER OF THE BOARD
Anthony Brian Taylor
Executive Chairman
28 February 2020
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
[1] https://www.statista.com/topics/779/mobile-internet/
[2]
https://www.businesswire.com/news/home/20191007005332/en/Global-SATCOM-Equipment-Market-Outlook-Report-2018
[3]
https://www.ericsson.com/en/mobility-report/reports/november-2019/mobile-data-traffic-outlook?fbclid=IwAR3uzTAuS_f_qCw8pYwKy79UaAZpaUWHWFWWr-qjk4a5XeiMlcF1t5XoyyI
[4]
https://www.satellite-evolution.com/single-post/2019/04/29/Gilat-is-world-leader-in-shipments-of-cellular-backhaul-over-satellite-according-to-NSR
[5]
https://arstechnica.com/gadgets/2017/08/hughes-signs-deal-to-launch-100mbps-satellite-internet-service-in-2021/
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
FR SEAFEAESSELE
(END) Dow Jones Newswires
February 28, 2020 08:00 ET (13:00 GMT)
Global Invacom (LSE:GINV)
Historical Stock Chart
From Apr 2024 to May 2024
Global Invacom (LSE:GINV)
Historical Stock Chart
From May 2023 to May 2024