TIDMGINV

RNS Number : 6063Q

Global Invacom Group Limited

01 March 2021

Global Invacom Group Limited

("Global Invacom", the "Company" or the "Group")

Final Results for the year ended 31 December 2020

Singapore/London, 1 March 2021 - Global Invacom (SGX: QS9) (AIM: GINV), the fully integrated provider of satellite communications equipment and electronics, announces its financial results for the year ended 31 December 2020 ("FY2020").

Despite the international challenges brought about by the COVID-19 pandemic, the Group is pleased to report a profit for the year.

Key financial highlights:

   --    Revenue for FY2020 decreased 23.4% to US$103.1 million (FY2019: US$134.5 million) 
   --    Gross profit increased to US$25.7 million (FY2019: US24.1* million) 
   --    Net profit increased to US$2.6 million (FY2019: US$12.3 million net loss**) 
   --    Robust net cash at 31 December 2020 of US$7.4 million 

* includes US$4.1 million impairment costs related to the closure of the Group's Shanghai manufacturing facility.

** Includes US$16.3 million costs relating to the closure of the Shanghai manufacturing facility and the impairment loss on goodwill and receivables.

Key operational highlights:

   -- Completed the full relocation of Shanghai manufacturing operations to third-party subcontract manufacturer in the 
      Philippines 
 
   -- Group identified as an essential supplier for its supply of equipment to the communications, healthcare and 
      defence markets 
 
   -- Majority of manufacturing sites remained operational during the COVID-19 pandemic; however widespread supply 
      chain disruption continues to cause delays in forward sales 
 
   -- Continued focus on Data over Satellite ("DOS") and Direct to Home markets with management emphasising on the 
      higher growth DOS market 

The global COVID-19 pandemic has provided the economic backdrop for 2020 and the Group's performance has been impacted by the associated market and worldwide disruption and uncertainty. The health and safety of our staff, partners, suppliers and customers has been our priority throughout 2020 and into 2021. Global Invacom has always been a people-driven business, with teams across the Group being essential to our ongoing success. The board of directors would like to thank the Group's employees for their outstanding contribution, during what has been an especially challenging period for all.

The impact of the COVID-19-related restrictions, including lockdowns in all countries in which we operate and the much-publicised disruption to global supply chains and international travel was, in part, mitigated by our diversified manufacturing footprint and by our classification as an essential supplier, with the Group seeing continued demand for its equipment from the key communications and healthcare sectors. The Group was also able to safely and effectively transition some of its office and R&D staff to remote working. The Group continues to monitor the pandemic closely and, where it is safe and prudent to do so, is returning staff to work following government guidelines.

The Group's customer base was also negatively affected by the pandemic and order volume fell throughout 2020. However, Global Invacom remained profitable in three out of four quarters of the year and was profitable for the year as a whole. This was aided by a number of strategic cost-saving initiatives implemented by management last year. Most notably, our Shanghai site ceased manufacturing in July 2020, as the Group transitioned to third-party subcontractors, based in the Philippines. In Europe and the United States ("US"), the Group restructured development, sales and marketing teams to focus on emerging DOS products. We expect this transition to deliver meaningful annualised savings in 2021, while also reducing the Group's exposure to increased production costs and trade disputes between the US and China.

The Group continues to see increased demand for DOS technology and services, as consumer appetite for constant connectivity grows. With ever-growing data consumption across all geographies, underpinned by increased levels of remote working, service providers will continue to adopt satellite solutions to meet the significant growth in demand.

The Group remains well-positioned to benefit from the recovery of the global economy and the continued growth of its target, DOS market. As worldwide COVID-19 vaccination programmes have their desired effect and demand begins to normalise, Global Invacom's products will continue to play a significant role in meeting the continued growth in demand for data and connectivity.

Board Composition

Following Basil Chan's decision to step down from the board of directors (the "Board") in June 2020, we were pleased to confirm the appointment of Wayne Porritt in October 2020. Mr Porritt replaced Mr Chan as an Independent Director. Having previously held various directorship and advisory roles in corporate and non-profit organisation, including Standard Chartered Bank, Bank of America, Société Générale and Ernst & Young, Mr Porritt brings a wealth of experience to the Board.

In December 2020, the Company announced that after seven years with the business, Matthew Garner had stepped down as Chief Financial Officer ("CFO") and as a member of the Board in order to pursue other business interests. The Board has no current intention to appoint a new CFO and the Group's joint Financial Controllers, Wendy Isabel Wong and Andrew Martin have jointly assumed the overall responsibility for the Group's financial function.

Tony Taylor, Executive Chairman of Global Invacom, commented:

"2020 was a uniquely challenging year for Global Invacom and on behalf of myself and the board, I would like to thank our teams around the world for not only keeping the business running, but also helping to deliver another profitable year for the Group.

Despite the many headwinds faced during 2020, our strategic direction remains unchanged, and, whilst early in the year, we are well positioned for a constructive 2021, as the global economy recovers and the demand for uninterrupted connectivity and data expands."

Financial Review

Revenue for the 12 months ended 31 December 2020 ("FY2020") decreased 23.4% to US$103.1 million from US$ 134.5 million the previous year ("FY2019"). Revenue of US$50.3 million for the second half year ended 31 December 2020 ("2H FY2020") was 19.6% lower than the corresponding period in 2019 ("2H FY2019").

Geographically, Group revenue for FY2020 decreased in America and Europe by US$24.4 million (-26.1%) and US$7.3 million (-23.4%), respectively, offset by an increase in Rest of the World ("RoW") by US$0.2 million (+3.7%). Revenue for Asia remained constant in the comparative period. Revenue for 2H FY2020 decreased in America, Europe and Asia by US$8.1 million (-19.5%), US$4.3 million (-26.8%) and US$0.8 million (-26.2%), respectively, offset by an increase in RoW by US$0.9 million (+43.8 %) compared to the prior year.

The decrease in revenue, offset by a more profitable product mix, manufacturing efficiencies and cost reduction programs, resulted in a 6.8% increase in gross profit for FY2020 to US$25.7 million compared with FY2019 of US$24.1 million.

Administrative expenses decreased to US$23.0 million in FY2020 from US$27.4 million in FY2019, due to r eduction in travelling, marketing and trade shows during this pandemic period. Excluding the one-off compensation and restructuring costs for the closure of the Shanghai manufacturing facility and restructuring process in the UK based facilities in both FY2020 and FY2019, the administrative expenses would be US$22.5 million and US$23.2 million, respectively .

In the year ended 31 December 2020, the Group recorded a net profit of US$2.6 million (FY2019: US$12.3 million net loss). Reversing the one-off costs for the Shanghai planned closure, impairment of goodwill and receivables, would give the Group a net profit of US$4.0 million in FY2019.

The Group recorded a net increase in cash and cash equivalents amounting to US$2.3 million in FY2020 bringing cash and cash equivalents per the consolidated statement of cash flows to US$11.3 million as at 31 December 2020. Overall net cash in the Group, combining cash and cash equivalents against borrowings, improved by US$7.4 million in FY2020.

For further information, please contact:

 
 Global Invacom Group Limited                 www.globalinvacom.com 
 Tony Taylor, Executive Chairman            via Vigo Communications 
 
 Strand Hanson Limited (Nominated Adviser    www.strandhanson.co.uk 
  and Broker) 
 James Harris / Jack Botros                   Tel: +44 20 7409 3494 
 
 Vigo Communications (Media & Investor            www.vigocomms.com 
  Relations) 
 Jeremy Garcia / Charlie Neish                Tel: +44 20 7390 0238 
 ginv@vigocomms.com 
 

About Global Invacom Group Limited

Global Invacom is a fully integrated satellite equipment provider with sites across Singapore, China, Indonesia, Philippines, Malaysia, Israel, UK and the US. Its customers include satellite broadcasters such as Sky Group of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks.

Global Invacom provides a full range of satellite ground equipment including antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches, and video distribution components, as well as manufacturing services for the defence and healthcare sectors. The Group is 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 2H AND YEARED 31 DECEMBER 2020

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 2H and the year ended 31 December 2020. These figures have not been audited.

 
                                           Group                                            Group 
                    --------------------------------------------------  --------------------------------------------- 
                              2H              2H FY2019     Increase/                                     Increase/ 
                             FY2020                         (Decrease)       FY2020          FY2019       (Decrease) 
                            US$'000            US$'000          %           US$'000         US$'000           % 
 
 Revenue               50,285                  62,564          (19.6)    103,058           134,509           (23.4) 
 
 Cost of sales       (36,930)                (53,577)          (31.1)    (77,353)         (110,443)          (30.0) 
 
 Gross profit          13,355                    8,987            48.6     25,705             24,066              6.8 
 
 Other income            2,099                       275        663.3        2,224                 244       811.5 
 Distribution 
  costs                     (67)                  (120)        (44.2)         (182)              (292)       (37.7) 
 Administrative 
  expenses           (11,959)                (15,232)          (21.5)    (22,989)          (27,429)          (16.2) 
 Impairment loss 
  on other 
  receivables                     -            (2,538)       (100.0)                  -      (2,538)       (100.0) 
 Other operating 
  expenses                (516)                (5,445)         (90.5)         (894)          (5,678)         (84.3) 
 Finance income                  1                   132       (99.2)              22              230       (90.4) 
 Finance costs            (333)                   (736)        (54.8)         (762)          (1,146)         (33.5) 
 
 Profit/(Loss) 
  before 
  income tax(i)          2,580               (14,677)             N.M.       3,124         (12,543)            N.M. 
 
 Income tax 
  (expense)/credit        (313)                      802          N.M.        (515)                254         N.M. 
                    ----------------------  ------------  ------------  ---------------  -------------  ------------- 
 
   Profit/(Loss) 
   for the 
   period                            2,267     (13,875)      N.M.          2,609            (12,289)       N.M. 
                    ----------------------  ------------  ------------  ---------------  -------------  ------------- 
 
 
 
 Other comprehensive 
  income/(loss): 
 
 Items that may be reclassified 
  subsequently to profit 
  or loss 
 
   *    Exchange differences on translation of foreign 
        subsidiaries                                             358           170               110.6           253                          72               251.4 
 
   Other comprehensive 
   income for the period, 
   net of tax                                                    358           170               110.6           253                          72               251.4 
                                                        ------------  ------------  ------------------  ------------  --------------------------  ------------------ 
 
   Total comprehensive 
   income/(loss) for the 
   period                                                      2,625      (13,705)                N.M.         2,862                    (12,217)                N.M. 
                                                        ------------  ------------  ------------------  ------------  --------------------------  ------------------ 
 
 
 Profit/(Loss) for the 
  period attributable 
  to: 
  Equity holders of the 
   Company                     2,269   (13,864)     N.M.   2,614   (12,278)     N.M. 
  Non-controlling interests      (2)       (11)   (81.8)     (5)       (11)   (54.5) 
                              ------  ---------  -------  ------  ---------  ------- 
                               2,267   (13,875)     N.M.   2,609   (12,289)     N.M. 
                              ------  ---------  -------  ------  ---------  ------- 
 
 Total comprehensive 
  income/(loss) for the 
  period attributable 
  to: 
  Equity holders of the 
   Company                     2,627   (13,694)     N.M.   2,867   (12,206)     N.M. 
  Non-controlling interests      (2)       (11)   (81.8)     (5)       (11)   (54.5) 
                              ------  ---------  -------  ------  ---------  ------- 
                               2,625   (13,705)     N.M.   2,862   (12,217)     N.M. 
                              ------  ---------  -------  ------  ---------  ------- 
 

N.M.: Not Meaningful

Note:

   (i)    Profit/(Loss) before income tax was determined after (charging)/crediting the following: 

(ii)

 
                                                               Group                              Group 
                                                 ---------------------------------  -------------------------------- 
                                                    2H         2H       Increase/                         Increase/ 
                                                   FY2020    FY2019     (Decrease)   FY2020    FY2019     (Decrease) 
                                                  US$'000   US$'000         %        US$'000   US$'000        % 
 
 Interest income                                     1         132       (99.2)        22        230       (90.4) 
 Interest expense                                  (333)      (736)      (54.8)       (762)    (1,146)     (33.5) 
 Write-back of payables                              -         74        (100.0)        -        74        (100.0) 
 Waiver of loan                                    1,472        -         N.M.        1,472       -         N.M. 
 Amortisation of intangible assets                 (343)      (460)      (25.4)       (789)     (920)      (14.2) 
 Depreciation of property, plant and equipment    (1,261)    (1,710)     (26.3)      (2,649)   (3,283)     (19.3) 
 Depreciation of right-of-use assets              (1,188)    (1,252)      (5.1)      (2,264)   (2,404)      (5.8) 
 Gain on disposal of property, plant and 
  equipment                                         424        33         N.M.         424       20         N.M. 
 Impairment loss on property, plant and 
  equipment                                          -       (2,185)     (100.0)        -      (2,185)     (100.0) 
 Impairment loss on trade receivables              (35)         -         N.M.        (309)       -         N.M. 
 Impairment loss on other receivables                -       (2,538)     (100.0)        -      (2,538)     (100.0) 
 Impairment loss on goodwill                         -       (3,260)     (100.0)        -      (3,260)     (100.0) 
 Bad debts written off                               -          -           -           -       (16)       (100.0) 
 Inventory written off                            (2,663)    (1,256)      112.0      (2,663)   (1,256)      112.0 
 Restructuring costs                               (510)     (4,113)     (87.6)       (510)    (4,188)     (87.8) 
 Reinstatement costs                               (299)        -         N.M.        (299)       -         N.M. 
 Operating lease expense                           (15)       (10)        50.0        (15)      (10)        50.0 
 Write-back/(Allowance) for inventory 
  obsolescence, net                                3,229     (3,080)      N.M.        3,210    (2,816)      N.M. 
 (Loss)/Gain on foreign exchange                   (182)       166        N.M.        (284)     (214)       32.7 
 Research and development expense                  (708)      (610)       16.1       (1,589)   (1,671)      (4.9) 
 

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 
                                     2020                  2019                   2020                 2019 
                                   US$'000               US$'000                US$'000              US$'000 
 ASSETS 
 Non-current Assets 
  Property, plant and 
   equipment                          9,410               10,254                         82                 168 
  Right-of-use assets                 6,340                  7,533                    162                   144 
  Investments in 
   subsidiaries                                -                      -          27,102               27,586 
  Goodwill                            6,092                  6,092                          -                    - 
  Intangible assets                   2,291                  3,104                          -                    - 
  Other financial assets                      8                      8                      -                    - 
  Deferred tax assets                 1,363                     975                         -                    - 
  Other receivables and 
   prepayments                              54                    54             10,563               10,100 
                                    25,558                28,020                 37,909               37,998 
                             -------------------  ---------------------  --------------------  ------------------- 
 Current Assets 
  Due from subsidiaries                        -                      -            4,045                4,105 
  Inventories                       26,816                25,795                            -                    - 
  Trade receivables                 10,689                19,846                            -                    - 
  Other receivables and 
   prepayments                        2,033                  1,909                 3,513                3,407 
  Tax receivables                              -                  38                        -                    - 
  Cash and cash equivalents         11,273                   8,912                    150                   610 
                             -------------------  ---------------------  --------------------  ------------------- 
                                    50,811                56,500                   7,708                8,122 
                             -------------------  ---------------------  --------------------  ------------------- 
 Total assets                       76,369                84,520                 45,617               46,120 
                             -------------------  ---------------------  --------------------  ------------------- 
 
 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                       (11,824)               (14,691)              (28,302)             (26,853) 
                             -------------------  ---------------------  --------------------  ------------------- 
  Equity attributable to 
   owners of the Company            46,943                44,076                 44,282               45,731 
  Non-controlling interests              (16)                   (11)                        -                    - 
                             -------------------  ---------------------  --------------------  ------------------- 
 Total equity                       46,927                44,065                 44,282               45,731 
                             -------------------  ---------------------  --------------------  ------------------- 
 
 Non-current Liabilities 
  Other payables                          124                   108                         -                    - 
  Lease liabilities                   4,848                  5,948                       39                   35 
  Deferred tax liabilities                634                   428                         -                    - 
                                      5,606                  6,484                       39                   35 
                             -------------------  ---------------------  --------------------  ------------------- 
 Current Liabilities 
  Due to subsidiaries                          -                      -               835                        - 
  Trade payables                    12,509                12,903                            -                    - 
  Other payables                      5,589               10,238                      333                   238 
  Borrowings                          3,883                  8,929                          -                    - 
  Lease liabilities                   1,854                  1,897                    128                   116 
  Provision for income 
   tax                                        1                      4                      -                    - 
                             -------------------  ---------------------  --------------------  ------------------- 
                                    23,836                33,971                   1,296                    354 
                             -------------------  ---------------------  --------------------  ------------------- 
 Total liabilities                  29,442                40,455                   1,335                    389 
                             -------------------  ---------------------  --------------------  ------------------- 
 
 Total equity and 
  liabilities                       76,369                84,520                 45,617               46,120 
                             -------------------  ---------------------  --------------------  ------------------- 
 
   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 2020       As at 31 Dec 2019 
 Secured    Unsecured    Secured    Unsecured 
           -----------  ---------  ----------- 
 US$'000     US$'000     US$'000     US$'000 
           -----------  ---------  ----------- 
  3,883         -         8,929         - 
           -----------  ---------  ----------- 
 

Amount repayable after one year

 
    As at 31 Dec 2020       As at 31 Dec 2019 
 Secured    Unsecured    Secured    Unsecured 
           -----------  ---------  ----------- 
 US$'000     US$'000     US$'000     US$'000 
           -----------  ---------  ----------- 
    -           -           -           - 
           -----------  ---------  ----------- 
 

Details of any collateral

The revolving credit loans of US$3,883,000 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 
                                                                     ----------------------  ------------------- 
                                                                      2H FY2020   2H FY2019   FY2020     FY2019 
                                                                       US$'000     US$'000    US$'000   US$'000 
 Cash Flows from Operating Activities 
 Profit/(Loss) before income tax                                          2,580    (14,677)     3,124   (12,543) 
 Adjustments for: 
 Depreciation of property, plant and equipment                            1,261       1,710     2,649      3,283 
 Amortisation of intangible assets                                          343         460       789        920 
 Depreciation of right-of-use assets                                      1,188       1,252     2,264      2,404 
 Gain on disposal of property, plant and equipment                        (424)        (33)     (424)       (20) 
 Impairment loss on property, plant and equipment                             -       2,185         -      2,185 
 Impairment loss on goodwill                                                  -       3,260         -      3,260 
 (Write-back)/Allowance for inventory obsolescence, net                 (3,229)       3,080   (3,210)      2,816 
 Impairment loss on trade receivables                                        35           -       309          - 
 Impairment loss on other receivables                                         -       2,538         -      2,538 
 Unrealised exchange loss                                                   368         308       315        213 
 Interest income                                                            (1)       (132)      (22)      (230) 
 Interest expense                                                           333         736       762      1,146 
 Share-based payments                                                         -           -         -          2 
 Gain on disposal of subsidiary                                               -         (4)         -        (4) 
 Inventory written off                                                    2,663       1,256     2,663      1,256 
 Bad debts written off                                                        -           -         -         16 
 Write-back of payables                                                       -           -         -       (74) 
 Waiver of loan                                                         (1,472)           -   (1,472)          - 
                                                                     ----------  ----------  --------  --------- 
 Operating cash flow before working capital changes                       3,645       1,939     7,747      7,168 
 Changes in working capital: 
 Inventories                                                                782       1,932     (474)      1,758 
 Trade receivables                                                        9,170       2,270     8,846      5,016 
 Other receivables and prepayments                                         (70)       (988)     (465)    (1,130) 
 Trade and other payables                                               (2,432)       5,184   (5,188)      (119) 
 Cash generated from operating activities                                11,095      10,337    10,466     12,693 
 Interest paid                                                            (338)       (737)     (398)      (972) 
 Income tax paid                                                          (480)       (661)     (480)      (859) 
 Net cash generated from operating activities                            10,277       8,939     9,588     10,862 
                                                                     ----------  ----------  --------  --------- 
 
 Cash Flows from Investing Activities 
 Interest received                                                            1          29        22         59 
 Purchase of property, plant and equipment                              (1,010)     (1,473)   (1,976)    (3,315) 
 Proceeds from disposal of property, plant and equipment                    479          78       479         79 
 Acquisition of a business                                                    -           -         -      (279) 
 Payment for financial asset, at fair value through profit or loss            -           -         -      (500) 
                                                                     ----------  ----------  --------  --------- 
 Net cash used in investing activities                                    (530)     (1,366)   (1,475)    (3,956) 
                                                                     ----------  ----------  --------  --------- 
 
 
                                                             Group                               Group 
                                               ---------------------------------  ---------------------------------- 
                                                    2H FY2020        2H FY2019          FY2020            FY2019 
                                                     US$'000          US$'000           US$'000           US$'000 
 
 Cash Flows from Financing Activities 
  Proceeds from borrowings                          21,578             18,439           44,816            54,933 
  Repayment of borrowings                         (26,484)          (23,235)         (48,390)           (58,053) 
  Principal repayment of lease liabilities          (1,108)            (1,561)         (2,217)            (3,020) 
  Acquisition of non-controlling interests                      -           (11)                   -            (11) 
 Net cash used in financing activities              (6,014)            (6,368)         (5,791)            (6,151) 
                                               ------------------  -------------  ------------------  -------------- 
 
 Net increase in cash and cash equivalents             3,733             1,205            2,322                 755 
 Cash and cash equivalents at the beginning 
  of the period                                        7,478             7,891            8,912              8,381 
 Effect of foreign exchange rate changes on 
  the balance of cash held in foreign 
  currencies                                                62            (184)                 39           (224) 
                                               ------------------  -------------  ------------------  -------------- 
 Cash and cash equivalents at the end of the 
  period(i)                                         11,273               8,912          11,273               8,912 
                                               ------------------  -------------  ------------------  -------------- 
 
 

Note:

(i) For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:

 
                                                               2H            2H 
                                                             FY2020         FY2019        FY2020          FY2019 
                                                            US$'000        US$'000       US$'000         US$'000 
 
    Cash and bank balances                                  11,242          8,882        11,242              8,882 
    Fixed deposits                                                  31            30             31               30 
                                                         -------------  ------------  -------------  --------------- 
    Cash and cash equivalents per the consolidated 
     statement of cash flows                                11,273          8,912        11,273              8,912 
                                                         -------------  ------------  -------------  --------------- 
 

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

 
 
                                                                                           Foreign                  Attributable 
                                                       Capital       Share                currency                   to equity 
          Group     Share     Treasury     Merger     redemption    options    Capital   translation    Retained     holders of     Non-controlling 
                   capital     shares     reserves     reserves     reserve    reserve     reserve      profits     the 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 January 
  2020             60,423     (1,656)    (10,150)         6          725      (5,109)      (1,217)       1,054        44,076             (11)         44,065 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Profit/(Loss) 
  for the 
  period             -           -           -            -           -          -            -           345           345              (3)            342 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Other 
 comprehensive 
 loss: 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations          -           -           -            -           -          -          (105)          -           (105)              -            (105) 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Total other 
  comprehensive 
  (loss)/income 
  for the 
  period              -           -           -            -           -          -          (105)         345           240              (3)            237 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Balance as at 
  30 June 2020     60,423     (1,656)    (10,150)         6          725      (5,109)      (1,322)       1,399        44,316             (14)         44,302 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Profit/(Loss) 
  for the 
  period             -           -           -            -           -          -            -          2,269         2,269             (2)           2,267 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Other 
 comprehensive 
 income: 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations          -           -           -            -           -          -           358           -            358               -             358 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Total other 
  comprehensive 
  income/(loss) 
  for the 
  period              -           -           -            -           -          -           358         2,269         2,627             (2)           2,625 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 Balance as at 
  31 December 
  2020             60,423     (1,656)    (10,150)         6          725      (5,109)       (964)        3,668        46,943             (16)         46,927 
                 ---------  ----------  ----------  ------------  ---------  ---------  ------------  ----------  --------------  -----------------  -------- 
 
 
 
                                                                                            Foreign                   Attributable 
                                                       Capital       Share                 currency                    to equity 
                    Share     Treasury     Merger     redemption    options    Capital    translation    Retained      holders of     Non-controlling 
 Group             capital     shares     reserves     reserves     reserve    reserve      reserve       profits     the 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 January 
  2019             60,423     (1,656)    (10,150)         6          723       (3,560)      (1,289)       12,109        56,606              -             56,606 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Adoption of 
  SFRS(I) 16         -           -           -            -           -           -            -          (239)          (239)              -             (239) 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Adjusted 
  balance as at 
  1 January 
  2019             60,423     (1,656)    (10,150)         6          723       (3,560)      (1,289)       11,870        56,367              -             56,367 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Share-based 
  payments           -           -           -            -           2           -            -            -              2                -               2 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Profit for the 
  period             -           -           -            -           -           -            -          1,586          1,586              -             1,586 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Other 
 comprehensive 
 loss: 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations          -           -           -            -           -           -          (100)          -            (100)              -             (100) 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Total other 
  comprehensive 
  (loss)/income 
  for the 
  period              -           -           -            -           -           -          (100)        1,586          1,486              -             1,486 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Balance as at 
  30 June 2019     60,423     (1,656)    (10,150)         6          725       (3,560)      (1,389)       13,456        57,855              -             57,855 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Adoption of 
  SFRS(I) 16         -           -           -            -           -           -            -           (87)          (87)               -              (87) 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Adjusted 
  balance as at 
  30 June 2019     60,423     (1,656)    (10,150)         6          725       (3,560)      (1,389)       13,369        57,768              -             57,768 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Transfer from 
  capital 
  reserve in 
  accordance 
  with 
  statutory 
  requirements        -           -           -            -           -        (1,549)         -          1,549            -                -               - 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Loss for the 
  period             -           -           -            -           -           -            -         (13,864)      (13,864)            (11)          (13,875) 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Other 
 comprehensive 
 income: 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Exchange 
  differences 
  on 
  translating 
  foreign 
  operations          -           -           -            -           -           -           172           -             172               -              172 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Total other 
  comprehensive 
  income/(loss) 
  for the 
  period              -           -           -            -           -           -           172        (13,864)      (13,692)            (11)          (13,703) 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 Balance as at 
  31 December 
  2019             60,423     (1,656)    (10,150)         6          725       (5,109)      (1,217)       1,054         44,076             (11)           44,065 
                 ---------  ----------  ----------  ------------  ---------  ----------  ------------  -----------  --------------  -----------------  ----------- 
 
 
                                                                                                                          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 January 2020          74,240                  (1,656)                      725              (4,481)                  (2,506)              (20,591)                    45,731 
 Loss for the 
  period                          -                       -                        -                    -                        -                (391)                     (391) 
 Other 
 comprehensive 
 loss: 
 Exchange 
 differences                        -          -                                     -       -                                     -                      -            - 
 on translating 
 foreign 
 operations 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Total other 
  comprehensive 
  loss for the 
  period                            -          -                                     -       -                                     -                      (391)        (391) 
 Balance as at 
  30 June 2020            74,240                  (1,656)                      725              (4,481)                  (2,506)              (20,982)                    45,340 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Loss for the 
  period                          -                       -                        -                    -                        -              (1,058)                   (1,058) 
 Other 
 comprehensive 
 loss: 
 Exchange 
 differences                        -          -                                     -                    -           -                                   -            - 
 on translating 
 foreign 
 operations 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Total other 
  comprehensive 
  loss for the 
  period                            -                       -                        -       -                                     -                      (1,058)      (1,058) 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Balance as at 
  31 December 2020        74,240                  (1,656)                      725              (4,481)                  (2,506)              (22,040)                    44,282 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 
 Balance as at 
  1 January 2019          74,240                  (1,656)                      723              (4,481)                  (1,927)                (8,303)                   58,596 
 Adoption of 
  SFRS(I) 
  16                              -                       -                        -                    -                        -                    (5)                       (5) 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Adjusted balance 
  as at 1 January 
  2019                             . 
                                    74,240                  (1,656)                  723                  (4,481)     (1,927)                (8,308)                                58,591 
 Share-based 
  payments                        -                       -                        2                    -                        -                      -                         2 
 Profit for the 
  period                          -                       -                        -                    -                        -                1,812                     1,812 
 Other 
 comprehensive 
 income: 
 Exchange 
 differences                        -          -                                     -       -                                     -                      -            - 
 on translating 
 foreign 
 operations 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Total other 
  comprehensive 
  income for the 
  period                            -          -                                     -       -                                     -         1,812                     1,812 
 Balance as at 
  30 June 2019            74,240                  (1,656)                      725              (4,481)                  (1,927)                (6,496)                   60,405 
 Loss for the 
  period                          -                       -                        -                    -                        -            (14,095)                  (14,095) 
 Other 
 comprehensive 
 loss: 
 Exchange 
  differences 
  on translating 
  foreign 
  operations                        -          -                                     -                    -           (579)                               -            (579) 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Total other 
  comprehensive 
  loss for the 
  period                            -                       -                        -       -                                     (579)                  (14,095)     (14,674) 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 Balance as at 
  31 December 2019        74,240                  (1,656)                      725              (4,481)                  (2,506)              (20,591)                    45,731 
                    ----------------------  -----------------------  -------------------  -----------------------  ---------------------  ------------------------  ---------------------- 
 

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.

 
        FY2020                                        No. of shares      US$'000 
 
        Balance as at 1 Jan 2020 and 31 Dec 2020          271,662,227       72,584 
                                                   ------------------  ----------- 
 
          FY2019                                      No. of shares      US$'000 
 
        Balance as at 1 Jan 2019 and 31 Dec 2019          271,662,227       72,584 
                                                   ------------------  ----------- 
 
 

There were 10,740,072 treasury shares held by the Company as at 31 December 2020 and 31 December 2019 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 2020   31 Dec 2019 
 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.

 
 FY2020                                 No. of shares   US$'000 
 
 Balance as at 1 Jan 2020 and 31 Dec 
  2020                                   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.

 
 FY2020                                No. of shares   US$'000 
 
 Balance as at 1 Jan 2020 and 31 Dec         -            - 
  2020 
                                      --------------  -------- 
 

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.

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 2019.

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 2020. The adoption of the new and revised SFRS(I)s and IFRSs has no material financial impact on the Group's financial statements.

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 
                                                                 2H             2H 
                                                                FY2020         FY2019        FY2020         FY2019 
                                                                 US$            US$            US$            US$ 
                                                            ------------  --------------  ------------  -------------- 
 (a) Based on weighted average number of ordinary shares      0.84 cent    (5.10) cents     0.96 cent    (4.52) cents 
 on issue; and 
 (b) On a fully diluted basis                                0.84 cent*    (5.10) cents*   0.96 cent*    (4.52) cents* 
 
 Weighted average number of ordinary shares used in 
  computation of basic earnings per share                    271,662,227    271,662,227    271,662,227    271,662,227 
 Weighted average number of ordinary shares used in 
  computation of diluted earnings per share                  271,662,227    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 2020   31 Dec 2019   31 Dec 2020   31 Dec 2019 
                                                                     US$           US$           US$           US$ 
                                                                ------------  ------------  ------------  ------------ 
 Net asset value per ordinary share based on issued share        17.28 cents   16.22 cents   16.30 cents   16.83 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 2020 ("FY2020") decreased by US$31.5 million to US$103.1 million from US$134.5 million in the prior year ("FY2019"). Revenue for the second half year ended 31 December 2020 ("2H FY2020") was US$50.3 million against US$62.6 million in the prior year ("2H FY2019"). Given the Group's global footprint, the on-going COVID-19 pandemic and its impact on different countries, has impacted the ability of the Group's end customers to rollout the communications services and networks that were originally planned for 2020. This, together with component shortages, disrupted design resources and the lack of consistent availability of logistics has resulted in reduced shipments to our customers. The efficiency of our production facilities was also negatively impacted as they adapted to social distancing and other international COVID-19 best practices.

Geographically, Group revenue for FY2020 decreased in America and Europe by US$24.4 million (-26.1%) and US$7.3 million (-23.4%), respectively, and increased in Rest of the World ("RoW") by US$0.2 million (+3.7%). Revenue for Asia remained constant in the comparative period. Revenue for 2H FY2020 decreased in America, Europe and Asia by US$8.1 million (-19.5%), US$4.3 million (-26.8%) and US$0.8 million (-26.2%), respectively, offset by an increase in RoW by US$0.9 million (+43.8 %) compared to the prior year.

Gross Profit

Gross profit increased by US$1.6 million from US$24.1 million in FY2019 to US$25.7 million in FY2020; gross profit margin increased from 17.9% to 24.9%. In FY2019, the Group recognised impairment costs in the Shanghai manufacturing facility following the relocation of its operations to third-party contract manufacturers. Excluding these, gross profit in FY2019 would have been US$28.2 million, with a gross profit margin of 20.9%, which would result in a gross profit margin increase of 4.0% in FY2020, primarily due to a more profitable product mix, manufacturing efficiencies and cost reduction programs.

Similarly, gross profit margin for 2H FY2020 increased from 14.4% to 26.6%, with gross profit at US$13.4 million against US$9.0 million for 2H FY2019. Excluding the impairment costs, gross profit in 2H FY2019 would have been US$13.1 million, with a gross profit margin of 20.9%, an increase of 5.7 percentage points in FY2020.

Other Income

Other income in 2H FY2020 and FY2020 relates primarily to a loan waiver from the US government of US$1.5 million, gain on disposal of equipment of US$0.4 million and subsidy support received from various government bodies across the Group due to COVID-19 pandemic.

Administrative Expenses

Administrative expenses for FY2020 decreased 16.2% to US$23.0 million compared to US$27.4 million in FY2019, representing 22.3% and 20.4% of revenue, respectively. In FY2019, the Group included compensation to be made to the employees in the Shanghai manufacturing facility and costs related to restructuring process in the UK entities. The restructuring process continued in 2020 in the UK entities. After excluding the compensation and restructuring costs in both FY2020 and FY2019, administrative expenses were US$22.5 million and US$23.2 million, representing 21.8% and 17.3% of revenue, respectively. Reduction in travelling, marketing and trade shows during this period has also contributed to lower administrative expenses.

Administrative expenses for 2H FY2020 decreased 21.5% to US$12.0 million compared to US$15.2 million in the previous year, representing 23.8% and 24.3% of revenue respectively. After excluding the compensation and restructuring costs in both 2H FY2020 and 2H FY2019, administrative expenses were US$11.4 million and US$11.0 million, representing 22.8% and 17.8%, respectively.

Other Operating Expenses and Impairments

Other operating expenses in FY2020 relates primarily to the impairment loss on trade receivables of US$0.3 million, reinstatement cost of the Shanghai manufacturing facility of US$0.3 million as well as the loss on foreign exchange of US$0.3 million. Other operating expenses in FY2019 relates primarily to the impairment loss on goodwill of US$3.3 million, other receivables of US$2.5 million, equipment of US$2.2 million and loss on foreign exchange of US$0.2 million.

Profit Before Tax & Net Profit

The Group posted a profit before tax of US$3.1 million in FY2020, compared to a loss before tax of US$12.5 million the prior year, representing a margin of 3.0% and a negative margin of 9.3%, respectively. For 2H FY2020, the Group recorded US$2.6 million profit before tax compared to a loss before tax of US$14.7 million in the prior year, representing a margin of 5.1% and a negative margin of 23.5%, respectively. After excluding the one-off cost as described above, the Group's approximated profit before tax of US$3.7 million and US$1.5 million for FY2019 and 2H FY2019, representing a margin of 2.8% and 2.4%, respectively.

The Group posted a net profit of US$2.6 million in FY2020, compared to a net loss of US$12.3 million the prior year, representing a margin of 2.5% and a negative margin of 9.1%, respectively. For 2H FY2020, the Group recorded a net profit of US$2.3 million compared to a net loss of US$13.9 million in the prior year, representing a margin of 4.5% and a negative margin of 22.2%, respectively. Excluding the one-off costs as described above, the Group would have posted a net profit of US$4.0 million and US$2.3 million for FY2019 and 2H FY2019, representing a margin of 3.0% and 3.7%, respectively.

Review of Financial Position

Non-current assets decreased by US$2.5 million to US$25.6 million as at 31 December 2020, primarily due to the depreciation of property, plant and equipment and right-of-use assets, amortisation of intangible assets offset by the increase in deferred tax assets.

Net current assets increased by US$4.4 million to US$27.0 million as at 31 December 2020 compared to US$22.5 million as at 31 December 2019. Inventories increased by US$1.0 million offset by decrease in trade and other receivables and trade and other payables by US$9.0 million and US$5.0 million respectively, with faster collection and continuing payment to suppliers and compensation made in the Shanghai facility. Repayment of loans reduced the borrowings by US$5.0 million to US$3.9 million and cash and cash equivalents increased by US$2.4 million to US$11.3 million as at 31 December 2020 compared to US$8.9 million as at 31 December 2019.

Continuing repayment of the leases reduced the non-current portion of the lease liabilities by US$1.1 million to US$4.8 million.

The Group's net asset value stood at US$46.9 million as at 31 December 2020, compared to US$44.1 million as at 31 December 2019.

Review of Cash Flows

In 2H FY2020, net cash generated from operating activities was US$10.3 million, comprising US$3.6 million cash inflow from operating activities (before working capital changes), US$7.5 million net working capital inflow and US$0.8 million payment of interest and income tax.

In FY2020, net cash generated from operating activities was US$9.6 million, comprising US$7.7 million cash inflow from operating activities (before working capital changes), US$2.7 million net working capital inflow and US$0.8 million payment of interest and income tax.

Net cash used in investing activities in 2H FY2020 and FY2020 amounted to US$0.5 million and US$1.5 million, respectively, relating predominately to purchase of machinery and equipment, offset against proceeds from disposal of property, plant and equipment.

Net cash used in financing activities in 2H FY2020 and FY2020 was US$6.0 million and US$5.8 million, respectively, attributable to the net proceeds of borrowings and repayment of lease liabilities.

The Group recorded a net in crease in cash and cash equivalents amounting to US$3.7 million and US$2.3 million in 2H FY2020 and FY2020, respectively, bringing cash and cash equivalents per the consolidated statement of cash flows to US$11.3 million as at 31 December 2020.

Overall net cash in the Group, combining cash and cash equivalents against borrowings, improved by US$7.4 million in FY2020.

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 global COVID-19 pandemic has provided the economic backdrop for 2020 and the Group's performance has been impacted by the associated market and worldwide disruption and uncertainty. The health and safety of our staff, partners, suppliers and customers has been our priority throughout 2020 and into 2021. Global Invacom has always been a people-driven business, with teams across the Group being essential to our ongoing success.

The impact of the COVID-19-related restrictions, including lockdowns in all countries in which we operate and the much-publicised disruption to global supply chains and international travel was, in part, mitigated by our diversified manufacturing footprint and by our classification as an essential supplier, with the Group seeing continued demand for its equipment from the key communications and healthcare sectors. The Group was also able to safely and effectively transition some of its office and R&D staff to remote working. The Group continues to monitor the pandemic closely and, where it is safe and prudent to do so, is returning staff to work following government guidelines.

The Group's customer base was also negatively affected by the pandemic and order volume fell throughout 2020. However, Global Invacom remained profitable in three out of four quarters of the year and was profitable for the year as a whole. This was aided by a number of strategic cost-saving initiatives implemented by management last year. Most notably, our Shanghai site ceased manufacturing in July 2020, as the Group transitioned to third-party subcontractors, based in the Philippines. In Europe and the United States ("US"), the Group restructured development, sales and marketing teams to focus on emerging Data over Satellite ("DOS") products. We expect this transition to deliver meaningful annualised savings in 2021, while also reducing the Group's exposure to increased production costs and trade disputes between the US and China.

The Group continues to see increased demand for DOS technology and services, as consumer appetite for constant connectivity grows. With ever-growing data consumption across all geographies, underpinned by increased levels of remote working, service providers will continue to adopt satellite solutions to meet the significant growth in demand.

The Group remains well-positioned to benefit from the recovery of the global economy and the continued growth of its target, DOS market. As worldwide COVID-19 vaccination programmes have their desired effect and demand begins to normalise, Global Invacom's products will continue to play a significant role in meeting the continued growth in demand for data and connectivity.

   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 2020.

   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.

 
 FY2020                                        Sat Comms               CM                 Group 
                                                US$'000             US$'000              US$'000 
 
 Revenue                                         101,458               1,600             103,058 
 
 Operating profit/(loss)                             3,885                (21)                3,864 
                                          ------------------  ------------------- 
 Finance income                                                                                    22 
 Finance costs                                                                                (762) 
 Income tax expense                                                                           (515) 
                                                                                   ------------------ 
 Profit for the year                                                                          2,609 
                                                                                   ------------------ 
 
 Amortisation of intangible assets                       789                    -                789 
 Depreciation of property, plant 
  and equipment                                      2,648                     1              2,649 
 Depreciation of right-of-use 
  assets                                             2,122                 142                2,264 
 Addition to property, plant and 
  equipment                                          2,211                      -             2,211 
 Impairment loss on trade receivables                    296                 13                  309 
 Restructuring costs                                     510                    -                510 
 Reinstatement costs                                     219                 80                  299 
 Inventories written off                             1,947                 716                2,663 
 Write-back for inventory obsolescence, 
  net                                              (2,484)              (726)              (3,210) 
 Waiver of loan                                    (1,472)                      -          (1,472) 
 
 Assets and liabilities 
 Segment assets                                    73,953                  561             74,514 
 Unallocated assets 
 - Non-current assets                                                                              82 
 - Other receivables                                                                               98 
 - Deferred tax assets                                                                        1,363 
 - Cash and cash equivalents                                                                     150 
 - Right-of-use assets                                                                           162 
 Total assets                                                                              76,369 
                                                                                   ------------------ 
 
 
 
 FY2020                                       Sat Comms               CM                  Group 
                                               US$'000             US$'000               US$'000 
 
 Segment liabilities                              23,702             688                  24,390 
 Unallocated liabilities 
 - Other payables                                                                               367 
 - Provision for income tax                                                                          1 
 - Deferred tax liabilities                                                                     634 
 - Borrowings                                                                                3,883 
 - Lease liabilities                                                                            167 
 Total liabilities                                                                              29,442 
                                                                                  -------------------- 
 
 
   FY2019 
 
 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 
 Addition to intangible assets                          279                    -                279 
 Depreciation of property, plant 
  and equipment                                     3,144            139                     3,283 
 Depreciation of right-of-use 
  assets                                            2,282            122                     2,404 
 Addition to property, plant and 
  equipment                                         3,154            161                     3,315 
 Impairment loss on property, 
  plant and equipment                               1,777            408                     2,185 
 Impairment loss on other receivables               2,489             49                     2,538 
 Impairment loss on goodwill                        3,260              -                     3,260 
 Restructuring costs                                3,415            773                     4,188 
 Inventories written off                            1,016            240                     1,256 
 Allowance for inventory obsolescence, 
  net                                               2,367            449                     2,816 
 
 Assets and liabilities 
 Segment assets                                   79,817            2,677                 82,494 
 Unallocated assets 
 - Non-current assets                                                                           168 
 - Other receivables                                                                              91 
 - Deferred tax assets                                                                          975 
 - Cash and cash equivalents                                                                    610 
 - Tax receivables                                                                                38 
 - Right-of-use assets                                                                          144 
 Total assets                                                                                   84,520 
                                                                                  -------------------- 
 
 Segment liabilities                              28,794            1,862                 30,656 
 Unallocated liabilities 
 - Other payables                                                                               287 
 - Provision for income tax                                                                          4 
 - Deferred tax liabilities                                                                     428 
 - Borrowings                                                                                8,929 
 - Lease liabilities                                                                            151 
 Total liabilities                                                                        40,455 
                                                                                  -------------------- 
 
 
   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 
     FY2020        US$'000         US$'000        US$'000          US$'000          US$'000 
 Revenue              69,246          23,884           4,193           5,735         103,058 
               --------------  -------------  --------------  ----------------  ------------- 
 Non-current 
  assets*               8,857         12,974           2,227               129         24,187 
               --------------  -------------  --------------  ----------------  ------------- 
 
 
                                                                   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 
               --------------  -------------  --------------  ----------------  ------------- 
 

* Exclude deferred tax assets and other financial assets.

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. 
 
                                            FY2020        FY2019        % increase/ 
                                            US$'000       US$'000        (decrease) 
        Sales reported for first 
 (a)     half year                          52,773            71,945          (26.6) 
       --------------------------------  -----------  --------------  --------------- 
        Operating profit after income 
         tax before deducting minority 
         interests reported for first 
 (b)     half year                               342       1,586              (78.4) 
       --------------------------------  -----------  --------------  --------------- 
        Sales reported for second 
 (c)     half year                          50,285        62,564              (19.6) 
       --------------------------------  -----------  --------------  --------------- 
        Operating profit after income 
         tax before deducting minority 
         interests reported for second 
 (d)     half year                          2,267          (13,875)              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.

 
                          FY2020     FY2019 
                          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 2020.

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

1 March 2021

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END

FR SEMEFAEFSELE

(END) Dow Jones Newswires

March 01, 2021 02:00 ET (07:00 GMT)

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