TIDMGINV
RNS Number : 9937I
Global Invacom Group Limited
11 August 2023
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic
law.
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Half year results for the six months ended 30 June 2023
Singapore/London, 11 August 2023 - Global Invacom (SGX: QS9)
(AIM: GINV), the global provider of satellite communications
equipment and electronics , announces its financial results for the
six months ended 30 June 2023 ("1H FY2023").
The Group continues to see some lag in demand for certain legacy
products as a result of delays to launch schedules which are being
seen across the industry. This, alongside continued supply chain
issues, has resulted in the Group recording a net loss after tax
for the year. However due to increased business focus on product
mix, gross profit improved.
Key financial highlights:
-- Revenue for 1H FY2023 decreased 16.3% to US$31.3 million (1H FY2022: US$37.4 million)
-- Gross profit increased 12.7% to US$8.3 million (1H FY2022: US$7.4 million)
-- Gross profit margin increased to 26.5% (1H FY2022: 19.7%)
-- Net loss after tax of US$2.1 million (1H FY2022: US$3.3 million)
-- Cash and cash equivalents of US$5.5 million at 30 June 2023
(30 December 2022: US$9.2 million)
Key operational highlights:
-- Sustained focus on development and launch of market-leading
products to respond to client and sector demands
-- Management is pleased to report that we have started to ship
our new XRJ Ka Band transceiver product to customers. Whilst the
completion of the manufacturing process has taken longer than
initially planned, which has impacted 1H sales levels, we continue
to see encouraging levels of market interest for the product
-- Development of two new non-geostationary gateway antenna ("NGSO") products in the period:
o Titan, the Group's latest multi-constellation and multi-band
gateway antenna platform for permanent or temporary deployment
o Obliquiti, a new Low Earth Orbit ("LEO") and Medium Earth
Orbit ("MEO") platform for broadband and narrowband use, equipped
with AI-based software for satellite acquisition, tracking and
switching
-- Delays to launches across the satellite industry have
resulted in customers postponing orders for certain legacy
products, which has had an impact on trading in the first half of
the year
-- Whilst pressures on global supply chains have started to ease, there remains pressure on the semiconductors supply chain, which has impacted on the Company's revenue generation capabilities
-- We are starting to see the benefits of the strategic review,
which was announced in Q3 FY2022, with progress made in stabilising
our operations and streamlining core functions
-- The Board strategic review remains ongoing, as it continues
to assess the Group's existing corporate and operational structure,
the Company's cost base, and to streamline certain core functions
in order to maximise stakeholder returns in the medium term
There has been continued supply chain disruption experienced in
the satellite communications sector. As a designer, manufacturer,
and provider of technologically advanced satellite communication
products to an international customer base, this disruption has
inevitably resulted in sustained challenging trading conditions for
the Group. Despite customers continuing to delay the purchase of
some products and with postponements to launch schedules, the Group
moved quickly to optimise efficiencies at our US manufacturing
facilities, which has resulted in an improvement in our net loss
compared to 1H FY2022. We envisage these challenging macro-economic
dynamics will be present for some time to come, and remain focused
on mitigating these pressures while ensuring the Group is well
poised to respond to customer demands and requirements for new
products.
Despite the continued headwinds, the Group has made progress in
1H FY2023 with gross profit increasing 12.7% to US$8.3 million, and
delivering a 6.8 percentage points improvement in gross profit
margin to 26.5%, driven by increased business focus on product
mix.
Our research and development ("R&D") team continue to bring
new products to market in response to customer demands and on the
assessment of the broader marketplace. The Group's latest
multi-constellation and multi-band gateway antenna, Titan, was
developed in the first half of the year. Titan is a NGSO which uses
an ultra-robust lightweight carbon fibre composite and provides
operators with deployment flexibility and uncompromised
performance. During the period the Group also continued to develop
the Obliquiti NGSO, a novel platform for broadband and narrowband
use. Obliquiti is suitable for fixed, nomadic and mobile
applications, and is equipped with SatSenz, the Group's AI-based
software for satellite acquisition, tracking and switching.
We continue to see increasing demand for satellite communication
systems, driven by growth in the demand for data and connectivity
globally. A recent report shows that the number of global Internet
of Things ("IoT") connections grew by 18% in 2022 to 14.3 billion
active IoT endpoints, with a further 16% growth expected in
2023[1]. Furthermore, there is increasing awareness of the need for
mission critical communications systems which are able to maintain
communications when land-based infrastructure is disrupted or
unable to cope with challenging geographical terrain.
The Company remains focused on enhancing its R&D team to
ensure the Group is well-placed to deliver cutting-edge,
market-leading products, and thereby maintaining its position as a
technological pioneer, supporting the ever-growing satellite
industry. We are building the right team to continue to deliver
best-in-class solutions, and to work alongside customers to respond
to specific demands and requirements, cementing our role as an
integral equipment provider and partner in the satellite
communications ecosystem.
Outlook
Due to the continued pressures in the broader trading
environment, the current financial year is expected to continue to
be challenging for the Group.
The Board strategic review remains ongoing, as it continues to
assess the Group's existing corporate and operational structure,
and to streamline certain core functions, whilst seeking to secure
new markets and customers and maximise stakeholder returns in the
medium term.
Gordon Blaikie, Interim Chief Executive Officer of Global
Invacom, commented:
"We continue to make steady progress, as we have focused our
attentions on situations under our control, which - alongside our
ongoing strategic review - has resulted in delivering an improved
gross profit for the first half of the year.
"We are cognisant of market demands, and the need to develop and
launch new products and have seen our R&D team develop exciting
new NGSO products for the market.
"Whilst the market continues to experience delays to satellite
launches, we are now seeing signs of renewed customer activity and
an acceleration of timetables. We remain committed to our
technology and working with our partners to ensure we are an
integral part of the supply chain process.
"The Board and management would like to thank the entire team at
Global Invacom for their continued efforts and dedication to the
business, without whom we would not be able to deliver the quality
of products required for such a demanding environment."
For further information, please contact:
Global Invacom Group Limited www.globalinvacom.com
Gordon Blaikie, Interim Chief Executive via Vigo Consulting
Officer
Strand Hanson Limited (Nominated Adviser www.strandhanson.co.uk
and Broker)
James Harris / Richard Johnson / David Tel: +44 20 7409
Asquith 3494
Vigo Consulting (UK Media & Investor www.vigoconsulting.com
Relations)
Jeremy Garcia / Fiona Hetherington / Tel: +44 20 7390
Kendall Hill 0238
ginv@vigoconsulting.com
About Global Invacom Group Limited
Global Invacom Group comprises a number of companies
specialising in innovative technology, products and solutions for
the satellite ground equipment sector. Uniquely, the Group provides
fully integrated manufacturing for most of its product lines
providing additional quality and supply chain assurance to a global
blue-chip customer base in the satellite communications, satellite
TV and satellite navigation markets.
The Group has an established global presence with sales offices,
research and development centres and manufacturing facilities
across the world, including Singapore, China, Indonesia, the
Philippines, Malaysia, Israel, the UK, and the USA.
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
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
For The Six Months Ended 30 June 2023
A. Condensed Interim Consolidated Statement of Comprehensive Income
Group
------------------------------------------------------------------------------------
1H 1H Increase/
FY2023 FY2022 (Decrease)
US$'000 US$'000 %
Revenue 31,338 37,420 (16.3)
Cost of sales (23,031) (30,051) (23.4)
Gross profit 8,307 7,369 12.7
Other income 432 37 N.M.
Distribution costs (113) (156) (27.6)
Administrative expenses (8,518) (8,106) 5.1
Research and development expenses (1,847) (1,969) (6.2)
Other operating expenses (194) (257) (24.5)
Finance costs (174) (171) 1.8
Loss before income tax (2,107) (3,253) (35.2)
Income tax expense (29) (39) (25.6)
--------------------------- --------------------------- --------------------------
Loss for the period (2,136) (3,292) (35.1)
--------------------------- --------------------------- --------------------------
Other comprehensive income/(loss):
Items that may be reclassified
subsequently to profit or loss
* Exchange differences on translation of foreign
subsidiaries 917 (19) N.M.
Other comprehensive income/(loss)
for the period, net of tax 917 (19) N.M.
--------------------------- --------------------------- --------------------------
Total comprehensive loss for
the period (1,219) (3,311) (63.2)
--------------------------- --------------------------- --------------------------
Loss for the period attributable
to:
Equity holders of the Company (2,136) (3,289) (35.1)
Non-controlling interests - (3) (100.0)
(2,136) (3,292) (35.1)
------------------ ------------------- ---------------
Total comprehensive loss for
the period attributable to:
Equity holders of the Company (1,219) (3,308) (63.1)
Non-controlling interests - (3) (100.0)
(1,219) (3,311) (63.2)
------------------ ------------------- ---------------
N.M.: Not Meaningful
B. Condensed Interim Statements of Financial Position
Group Company
------------------------------------------- -----------------------------------------
30 Jun 31 Dec 30 Jun 31 Dec
2023 2022 2023 2022
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current Assets
Property, plant and
equipment 6,343 6,641 6 -
Right-of-use assets 2,314 3,095 - 41
Investments in
subsidiaries - - 17,877 17,824
Goodwill 893 893 - -
Intangible assets 1,280 1,417 - -
Deferred tax assets 235 585 - -
Other receivables and
prepayments 54 54 - -
11,119 12,685 17,883 17,865
-------------------- --------------------- -------------------- -------------------
Current Assets
Due from subsidiaries - - 2,009 2,499
Inventories 22,894 22,869 - -
Trade receivables 12,384 10,011 - -
Other receivables and
prepayments 2,371 1,274 14,274 13,786
Tax receivables 190 167 - -
Cash and cash equivalents 5,502 9,244 182 168
-------------------- --------------------- -------------------- -------------------
43,341 43,565 16,465 16,453
-------------------- --------------------- -------------------- -------------------
Total assets 54,460 56,250 34,348 34,318
-------------------- --------------------- -------------------- -------------------
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 (26,326) (25,160) (38,388) (38,472)
-------------------- --------------------- -------------------- -------------------
Equity attributable
to owners of the Company 32,441 33,607 34,196 34,112
Non-controlling interests (24) (24) - -
-------------------- --------------------- -------------------- -------------------
Total equity 32,417 33,583 34,196 34,112
-------------------- --------------------- -------------------- -------------------
Non-current Liabilities
Other payables 172 172 - -
Lease liabilities 1,446 1,599 - -
Deferred tax liabilities 211 684 - -
1,829 2,455 - -
-------------------- --------------------- -------------------- -------------------
Current Liabilities
Trade payables 11,672 10,006 - -
Other payables 3,385 3,109 152 168
Borrowings 4,200 5,488 - -
Lease liabilities 957 1,607 - 38
Provision for income
tax - 2 - -
20,214 20,212 152 206
-------------------- --------------------- -------------------- -------------------
Total liabilities 22,043 22,667 152 206
-------------------- --------------------- -------------------- -------------------
Total equity and
liabilities 54,460 56,250 34,348 34,318
-------------------- --------------------- -------------------- -------------------
C. Condensed Interim Statements of Changes in Equity
Attributable
to
Group equity
Foreign holders
Capital Share currency of
Share Treasury Merger redemption options Capital translation Retained 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 January
2023 60,423 (1,656) (10,150) 6 761 (7,836) 581 (8,522) 33,607 (24) 33,583
Share-based
payments - - - - 4 - 49 - 53 - 53
Transfer to
capital
reserve
in accordance
with
statutory
requirements - - - - - 14 - (14) - - -
Loss for the
period - - - - - - - (2,136) (2,136) - (2,136)
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - - - - 917 - 917 - 917
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
Total other
comprehensive
income/(loss)
for the
period - - - - - - 917 (2,136) (1,219) - (1,219)
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
Balance as
at 30 June
2023 60,423 (1,656) (10,150) 6 765 (7,822) 1,547 (10,672) 32,441 (24) 32,417
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
Balance as
at 1 January
2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,084) 4,229 47,384 (19) 47,365
Loss for the
period - - - - - - - (3,289) (3,289) (3) (3,292)
Other
comprehensive
loss:
Exchange
differences
on
translating
foreign
operations - - - - - - (19) - (19) - (19)
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
Total other
comprehensive
loss for the
period - - - - - - (19) (3,289) (3,308) (3) (3,311)
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
Balance as
at 30 June
2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,103) 940 44,076 (22) 44,054
--------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- ---------------------
C. Condensed Interim Statements of Changes in Equity (cont'd)
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$'000
Balance as at
1 January 2023 74,240 (1,656) 713 (4,481) (2,506) (32,198) 34,112
Share-based payments - - 53 - - - 53
Profit for the
period - - - - - 31 31
Other comprehensive
income:
Exchange differences - - - - - - -
on translating
foreign operations
---------- ----------- ---------- ---------- ------------- -------------- --------
Total other comprehensive
income for the
period - - - - - 31 31
---------- ----------- ---------- ---------- ------------- -------------- --------
Balance as at
30 June 2023 74,240 (1,656) 766 (4,481) (2,506) (32,167) 34,196
---------- ----------- ---------- ---------- ------------- -------------- --------
Balance as at
1 January 2022 74,240 (1,656) 725 (4,481) (2,506) (24,200) 42,122
Loss for the
period - - - - - (244) (244)
Other comprehensive
loss:
Exchange differences - - - - - - -
on translating
foreign operations
---------- ----------- ---------- ---------- ------------- -------------- --------
Total other comprehensive
loss for the
period - - - - - (244) (244)
---------- ----------- ---------- ---------- ------------- -------------- --------
Balance as at
30 June 2022 74,240 (1,656) 725 (4,481) (2,506) (24,444) 41,878
---------- ----------- ---------- ---------- ------------- -------------- --------
D. Condensed Interim Consolidated Statement of Cash Flows
Group
-----------------------------------------
1H 1H
FY2023 FY2022
US$'000 US$'000
Cash Flows from Operating Activities
Loss before income tax (2,107) (3,253)
Adjustments for:
Depreciation of property, plant and equipment 788 895
Amortisation of intangible assets 140 141
Depreciation of right-of-use assets 777 847
Gain on disposal of property, plant and equipment - (5)
Allowance for inventory obsolescence 258 255
Impairment loss of trade receivables - 175
Bad debts written back (2) -
Unrealised exchange loss/(gain) 906 (67)
Interest expense 174 171
Share-based payments 4 -
Operating cash flow before working capital changes 938 (841)
Changes in working capital:
Inventories (283) 337
Trade receivables (2,367) 3,944
Other receivables and prepayments (1,123) (340)
Trade and other payables 1,622 (2,016)
-------------------- -------------------
Cash (used in)/generated from operating activities (1,213) 1,084
Interest paid (174) (196)
Income tax paid (8) (122)
Net cash (used in)/generated from operating activities (1,395) 766
-------------------- -------------------
Cash Flows from Investing Activities
Purchase of property, plant and equipment (205) (251)
Proceeds from disposal of property, plant and equipment - 5
Net cash used in investing activities (205) (246)
-------------------- -------------------
Cash Flows from Financing Activities
Proceeds from borrowings 13,338 17,177
Repayment of borrowings (14,626) (17,583)
Principal payment of lease liabilities (837) (877)
Net cash used in financing activities (2,125) (1,283)
-------------------- -------------------
Net decrease in cash and cash equivalents (3,725) (763)
Cash and cash equivalents at the beginning of the period 9,244 10,771
Effect of foreign exchange rate changes on the balance of cash held in
foreign currencies (17) (8)
-------------------- -------------------
Cash and cash equivalents at the end of the period 5,502 10,000
-------------------- -------------------
E. Notes to the Condensed Interim Consolidated Financial Statements
1. General Information
Global Invacom Group Limited (the "Company") is a public limited
company incorporated and domiciled in Singapore and is listed on
the Mainboard of the Singapore Exchange Securities Trading Limited
("SGX-ST"). The Company is also listed on the AIM Market of the
London Stock Exchange ("AIM") in the United Kingdom (UK). These
condensed interim consolidated financial statements as at and for
the six months ended 30 June 2023 comprise the Company and its
subsidiaries (the "Group"). The principal activity of the Company
is that of an investment holding company.
The principal activities of the Group are design, manufacture
and supply of a full range of satellite ground equipment, including
antennas, LNB receivers, transceivers, fibre distribution
equipment, transmitters, switches and video distribution
components.
2. Basis of Preparation
The condensed interim financial statements for the six months
ended 30 June 2023 have been prepared in accordance with Singapore
Financial Reporting Standards (International) ("SFRS(I)") 1-34
Interim Financial Reporting issued by the Accounting Standards
Council Singapore. The condensed interim financial statements do
not include all the information required for a complete set of
financial statements. However, selected explanatory notes are
included to explain events and transactions that are significant to
an understanding of the changes in the Group's financial position
and performance of the Group since the last annual financial
statements for the year ended 31 December 2022.
The accounting policies adopted are consistent with those of the
previous financial year which were prepared in accordance with
SFRS(I)s and International Financial Reporting Standards ("IFRSs"),
except for the adoption of new and amended standards as set out in
Note 2.1.
The condensed interim financial statements are presented in
United States dollar which is the Company's functional
currency.
2.1 New and amended standards adopted by the Group
There has been no change in the accounting policies and methods
of computation adopted by the Group for the current reporting
period compared with the audited financial statements for the year
ended 31 December 2022, except for the adoption of new or revised
SFRS(I) and interpretations of SFRS(I) ("INT SFRS(I)") that are
mandatory for the financial year beginning on or after 1 January
2023. The adoption of these SFRS(I) and INT SFRS(I) has no
significant impact on the Group.
2.2 Use of judgements and estimates
In preparing the condensed interim financial statements,
management has made judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial statements as at and for the year ended 31 December
2022.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following
notes:
-- Note 9 - capitalised development costs
-- Note 11 - impairment test on property, plant and equipment
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
2. Basis of Preparation (cont'd)
2.2 Use of judgements and estimates (cont'd)
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment to
the carrying amounts of assets and liabilities within the next
interim period are included in the following notes:
-- Note 10 - impairment test of goodwill: key assumptions underlying recoverable amounts
-- Note 11 - useful lives of property, plant and equipment
3. Seasonal Operations
The Group's businesses are not affected significantly by
seasonal or cyclical factors during the six months ended 30 June
2023.
4. Segment and Revenue Information
Prior to FY2023, the business of the Group was organised into
Satellite Communications and Contract Manufacturing segments.
With the completion of the deregistration of its wholly-owned
subsidiary, Global Invacom Manufacturing (Shanghai) Co Ltd, the
Group is re-organised into the following main business
segments:
-- Very Small Aperture Terminal ("VSAT"); and
-- Non-VSAT
These operating segments are reported in a manner consistent
with internal reporting provided to the executive directors who are
responsible for allocating resources and assessing performance of
the operating segments.
4.1 Reportable segments
VSAT Non-VSAT Group
US$'000 US$'000 US$'000
1H FY2023
Revenue 19,084 12,254 31,338
======== ========= ========
Operating loss (1,282) (651) (1,933)
======== =========
Finance costs (174)
Income tax expense (29)
--------
Loss for the period (2,136)
========
Amortisation of intangible assets 113 27 140
Depreciation of property, plant
and equipment 391 397 788
Depreciation of right-of-use assets 574 203 777
Addition to property, plant and
equipment 68 137 205
Bad debts written back - (2) (2)
Allowance for inventory obsolescence,
net 251 7 258
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
4. Segment and Revenue Information (cont'd)
4.1 Reportable segments (cont'd)
VSAT Non-VSAT Group
US$'000 US$'000 US$'000
Assets and liabilities
Segment assets 28,596 25,190 53,786
Unallocated assets
- Non-current assets 6
- Other receivables 61
- Deferred tax assets 235
- Cash and cash equivalents 182
- Tax receivables 190
Total assets 54,460
========
Segment liabilities 9,053 8,427 17,480
Unallocated liabilities
- Other payables 152
- Deferred tax liabilities 211
- Borrowings 4,200
Total liabilities 22,043
========
1H FY2022
Revenue 22,334 15,086 37,420
======== ======== ========
Operating loss (1,644) (1,438) (3,082)
======== ========
Finance costs (171)
Income tax expense (39)
--------
Loss for the period (3,292)
========
Amortisation of intangible assets 113 28 141
Depreciation of property, plant
and equipment 479 416 895
Depreciation of right-of-use assets 607 240 847
Addition to property, plant and
equipment 106 145 251
Impairment loss on trade receivables - 175 175
Write-back of inventory obsolescence,
net 228 27 255
-------- -------- --------
Assets and liabilities
Segment assets 41,179 27,523 68,702
Unallocated assets
* Non-current assets 104
* Other receivables 57
* Deferred tax assets 1,780
* Cash and cash equivalents 325
* Tax receivables 218
Total assets 71,186
=======
Segment liabilities 13,200 7,050 20,250
Unallocated liabilities
* Other payables 422
* Deferred tax liabilities 646
* Borrowings 5,714
* Lease liabilities 100
-------
Total liabilities 27,132
=======
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
4. Segment and Revenue Information (cont'd)
4.2 Disaggregation of revenue
The Group's revenue is disaggregated by principal geographical
areas, major product lines and timing of revenue recognition.
Group
1H 1H
FY2023 FY2022
US$'000 US$'000
Principal geographical market
America
- Sale of goods 18,754 17,395
-------- --------
Europe
- Sale of goods 7,950 11,488
-------- --------
Asia
- Sale of goods 1,523 1,219
-------- --------
Rest of the World
- Sale of goods 3,111 7,318
-------- --------
Total 31,338 37,420
======== ========
Major product lines
Sale of goods 31,338 37,420
======== ========
The Group recognises revenue from sale of goods at a point in
time, when the Group satisfies a performance obligation and the
customers obtain control of the goods.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
5. Financial Assets and Financial Liabilities (cont'd)
5.1 Significant items
Group
1H 1H
FY2023 FY2022
US$'000 US$'000
Interest expense (174) (171)
Gain on disposal of property, plant and
equipment - 5
(Loss)/Gain on foreign exchange (194) 30
Impairment loss on trade receivables - (175)
Bad debts written back 2 -
Allowance for inventory obsolescence (258) (255)
Depreciation of property, plant and equipment (788) (895)
Depreciation of right-of-use assets (777) (847)
Amortisation of intangible assets (140) (141)
5.2 Related party transactions
There are no material related party transactions apart from
those disclosed elsewhere in the condensed interim financial
statements.
6. Taxation
The Group calculates the period income tax expense using the tax
rate that would be applicable to the expected total annual
earnings.
7. Earnings Per Share
Earnings per ordinary share of the Group, after deducting any provision for Group
preference dividends
1H 1H
FY2023 FY2022
US$ US$
-------------- --------------
(a) Based on weighted average number of ordinary shares on issue; and (0.79) cents (1.21) cents
(b) On a fully diluted basis (0.79) cents* (1.21) cents*
Weighted average number of ordinary shares used in computation of basic earnings per
share 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
-------------- --------------
* 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.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
8. Net Asset Value
Group Company
30 Jun 2023 31 Dec 2022 30 Jun 2023 31 Dec 2022
US$ US$ US$ US$
------------ ------------ ------------ ------------
Net asset value per ordinary share based on issued share 11.94 cents 12.37 cents 12.59 cents 12.56 cents
capital
Total number of issued shares 271,662,227 271,662,227 271,662,227 271,662,227
------------ ------------ ------------ ------------
9. Intangible Assets
Intellectual Capitalised
Trading property development
name rights costs Total
US$'000 US$'000 US$'000 US$'000
Group
2023
Cost
Balance at 1 January 16 2,674 4,834 7,524
Currency realignment - 14 - 14
-------- ------------- ------------- --------
Balance at 30 June 16 2,688 4,834 7,538
-------- ------------- ------------- --------
Amortisation and impairment
Balance at 1 January 16 1,257 4,834 6,107
Amortisation charge - 143 - 143
Currency realignment - 8 - 8
-------- ------------- ------------- --------
Balance at 30 June 16 1,408 4,834 6,258
-------- ------------- ------------- --------
Net book value
Balance at 30 June - 1,280 - 1,280
======== ============= ============= ========
2022
Cost
Balance at 1 January
and 31 December 16 2,674 4,834 7,524
Amortisation and impairment
Balance at 1 January 16 1,043 4,767 5,826
Amortisation charge - 211 67 278
Currency realignment - 3 - 3
-------- ------------- ------------- --------
Balance at 31 December 16 1,257 4,834 6,107
-------- ------------- ------------- --------
Net book value
Balance at 31 December - 1,417 - 1,417
======== ============= ============= ========
10. Goodwill
Group
30 June 2023 31 December
2022
US$'000 US$'000
Cost
Balance at the beginning and
end of the period 9,352 9,352
============= ============
Allowance for impairment loss
Balance at the beginning 8,459 3,260
Impairment loss recognised during
the period - 5,199
------------- ------------
Balance at the end of the period 8,459 8,459
------------- ------------
Net carrying amount 893 893
============= ============
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
10. Goodwill (cont'd)
10.1 Allocation of goodwill
Goodwill has been allocated to the Group's cash generating unit
("CGU") identified according to the business segment as
follows:
Group
30 June 2023 31 December
2022
US$'000 US$'000
Satellite Communications
- OnePath Networks Limited ("OPN")
- Israel 893 893
11. Property, Plant and Equipment
Furniture,
Machinery fittings
Freehold & & Motor
property equipment equipment vehicles Renovations Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Group
2023
Cost
Balance at 1 January 2,871 17,968 7,826 40 1,457 30,162
Currency realignment - 244 1 - 154 399
Additions - 110 95 - - 205
Write-off - - (14) - - (14)
Disposals - - (36) - (80) (116)
Balance at 30
June 2,871 18,322 7,872 40 1,531 30,636
--------- ---------- ----------- --------- ------------ --------
Accumulated
Depreciation
Balance at 1 January 970 13,793 7,385 40 1,333 23,521
Currency realignment 6 6 3 (1) 100 114
Depreciation charge 15 615 104 - 54 788
Write-off - - (14) - - (14)
Disposals - - (36) - (80) (116)
Balance at 30
June 991 14,414 7,442 39 1,407 24,293
--------- ---------- ----------- --------- ------------ --------
Net book value
Balance at 30
June 1,880 3,908 430 1 124 6,343
========= ========== =========== ========= ============ ========
2022
Cost
Balance at 1 January 2,871 17,907 7,813 40 1,438 30,069
Currency realignment - 96 (3) - 8 101
Additions - 429 19 - 22 470
Write-off - (183) (2) - - (185)
Disposals - (281) (1) - (11) (293)
Balance at 31
December 2,871 17,968 7,826 40 1,457 30,162
--------- ---------- ----------- --------- ------------ --------
Accumulated
Depreciation
Balance at 1 January 960 12,523 7,244 40 1,176 21,943
Currency realignment (6) 15 8 - 9 26
Depreciation charge 16 1,438 136 - 159 1,749
Write-off - (183) (2) - - (185)
Disposals - - (1) - (11) (12)
Balance at 31
December 970 13,793 7,385 40 1,333 23,521
--------- ---------- ----------- --------- ------------ --------
Net book value
Balance at 31
December 1,901 4,175 441 - 124 6,641
========= ========== =========== ========= ============ ========
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
11. Property, Plant and Equipment (cont'd)
Furniture,
fittings
&
equipment Renovations Total
US$'000 US$'000 US$'000
Company
2023
Cost
Balance at 1 January and 30 June 211 80 291
Additions 6 - 6
Disposals (36) (80) (116)
----------- ------------ --------
Balance at 1 January and 30 June 181 - 181
----------- ------------ --------
Accumulated depreciation
Balance at 1 January 211 80 291
Depreciation charge - - -
Disposals (36) (80) (116)
----------- ------------ --------
Balance at 30 June 175 - 175
----------- ------------ --------
Net book value
Balance at 30 June 6 - 6
=========== ============ ========
2022
Cost
Balance at 1 January and 31 December 211 80 291
----------- ------------ --------
Accumulated depreciation
Balance at 1 January 192 79 271
Depreciation charge 19 1 20
Balance at 31 December 211 80 291
----------- ------------ --------
Net book value
Balance at 31 December - - -
=========== ============ ========
12. Investment in Subsidiaries
Company
30 Jun 31 Dec
2023 2022
US$'000 US$'000
Unquoted equity shares, at cost 40,533 40,533
Accounting for employee share options 766 713
Currency realignment 130 130
Less: Allowance for impairment loss (23,552) (23,552)
17,877 17,824
========= =========
Movement in the allowance for impairment
loss are as follows:
At the beginning of the period 23,552 16,014
Impairment loss recognised during the period - 7,538
--------- ---------
At the end of the period 23,552 23,552
========= =========
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
12. Investment in Subsidiaries (cont'd)
Allowance for impairment loss
(i) Global Invacom Manufacturing Pte Ltd ("GIMPL")
As at 30 June 2023 and 31 December 2022, an allowance for
impairment loss of US$8,648,000 was made on the cost of investment
in GIMPL, as the allocated CGU, to which the investment relates to,
was incurring losses from operations due to the restructuring costs
incurred. The recoverable amount was based on management's estimate
of the fair value less costs to sell, with reference to the fair
value of the net assets of GIMPL, which is considered to be Level 3
in the fair value hierarchy.
(ii) Global Invacom Holdings Limited and its subsidiaries ("GIHL Group")
As at 30 June 2023 and 31 December 2022, an allowance for
impairment loss of US$14,904,000 was made on the cost of investment
in GIHL Group, as the allocated CGU, to which the investment
relates to, was incurring losses from operations. The recoverable
amount was based on management's estimate of the fair value less
costs to sell, with reference to the fair value of the net assets
of GIHL Group, which is considered to be Level 3 in the fair value
hierarchy.
13. Borrowings
Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 30 Jun 2023 As at 31 Dec 2022
Secured Unsecured Secured Unsecured
--------- -------- ---------
US$'000 US$'000 US$'000 US$'000
--------- -------- ---------
4,200 - 5,488 -
--------- -------- ---------
Amount repayable after one year
As at 30 Jun 2023 As at 31 Dec 2022
Secured Unsecured Secured Unsecured
--------- -------- ---------
US$'000 US$'000 US$'000 US$'000
--------- -------- ---------
- - - -
--------- -------- ---------
The revolving credit loans of US$4,200,000 were secured over the
assets of the subsidiaries and corporate guarantees provided by the
Company and the subsidiaries.
14. Share Capital
1H FY2023 No. of shares US$'000
Balance as at 1 Jan 2023 and 30 Jun
2023 271,662,227 72,584
----------------------- -------------
1H FY2022 No. of shares US$'000
Balance as at 1 Jan 2022 and 30 Jun
2022 271,662,227 72,584
----------------------- -------------
There were 10,740,072 treasury shares held by the Company as at
30 June 2023 and 30 June 2022 and there was no subsidiary
holdings.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd)
14. Share Capital (cont'd)
Total number of issued shares excluding treasury shares as at
the end of the current financial period and as at the end of the
immediately preceding year:
30 Jun 2023 31 Dec 2022
Total number of issued shares excluding treasury shares 271,662,227 271,662,227
------------ ------------
Total number of treasury shares as at the end of the current
financial period reported on:
1H FY2023 No. of shares US$'000
Balance as at 1 Jan 2023 and 30 Jun
2023 10,740,072 1,656
-------------- --------
15. Subsequent events
There are no known subsequent events which have led to
adjustments to this set of interim financial statements.
F. Other Information Required by Listing Rule Appendix 7.2
1. Review
The condensed consolidated statement of financial position of
Global Invacom Group Limited and its subsidiaries as at 30 June
2023 and the related condensed interim consolidated statement of
comprehensive income, condensed interim statements of financial
position, condensed interim consolidated statement of changes in
equity and condensed interim consolidated statement of cash flows
for the six-month period then ended and certain explanatory notes
have not been audited or reviewed by the auditors.
2. Review of Performance of the Group
2.1 Review of Financial Performance
Revenue
T he Group's revenue for the six months ended 30 June 2023 ("1H
FY2023") decreased by 16.3% to US$31.3 million from US$37.4 million
in the prior year ("1H FY2022"). The market requirement for our
products has been impacted by the ongoing delays to the launch of
satellites, resulting in a delay to demand for some of our legacy
products, and in bringing new products to market.
Geographically, the Group's revenue for 1H FY2023 increased in
America and Asia by US$1.3 million (+7.8%) and US$0.3 million
(+24.9%), respectively, offset by a decrease in Europe and Rest of
the World by US$3.5 million (-30.8%) and US$4.2 million (-57.5%),
respectively.
Gross Profit
Despite the decrease in revenue, gross profit has increased by
12.7% to US$8.3 million in 1H FY2023 from US$7.4 million in 1H
FY2022. Gross profit margin has increased by 6 .8 percentage points
from 19.7% to 26 .5 %, due to increased business focus on product
mix.
Other Income
Other income in 1H FY2023 was primarily from the sale of the
Group's 49% investment in Fibre TV to Home Limited, for a total
consideration, including repayment of loan, of US$372,000.
Administrative and Research and Development Expenses
Administrative expenses, together with research and development
expenses, for 1H FY2023 increased 2.9% to US$10.4 million compared
to US$10.1 million in 1H FY2022, representing 33.1% and 26.9% of
revenue, respectively. In Q3 FY2022, the Group commenced a
comprehensive review of its operations, with the help of external
professionals, to assess the Group's assets and cost base to
streamline certain core functions. This has resulted in an increase
in professional fees and other related costs.
Other Operating Expenses
Other operating expenses in 1H FY2023 and 1H FY2022 were
attributed mainly to foreign exchange losses.
Profit Before Tax & Net Profit
The Group posted a loss and net loss before tax of US$2.1
million in 1H FY2023, compared to a loss and net loss before tax of
US$3.3 million in 1H FY2022.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
2. Review of Performance of the Group (cont'd)
2.2 Review of Financial Position
Non-current assets decreased by US$1.6 million to US$11.1
million as at 30 June 2023, due to the depreciation of plant and
equipment, the right-of-use assets, the amortisation of intangible
assets and the reduction of deferred tax assets.
Net current assets decreased by US$0.2 million to US$23.1
million as at 30 June 2023 compared to US$23.3 million as at 31
December 2022. Trade and other receivables increased by US$3.5
million due to slower collections, whilst trade and other payables
increased by US$2.0 million with controlled payments to suppliers.
Tax receivables were steady at US$0.2 million as at 30 June
2023.
Cash and cash equivalents decreased by US$3.7 million to US$5.5
million as at 30 June 2023 from US$9.2 million at 31 December 2022,
and borrowings decreased by US$1.3 million to US$4.2 million as at
30 June 2023 from US$5.5 million as at 31 December 2022. The
repayment of leases has resulted in a decrease of US$0.7 million in
the current portion of lease liabilities.
Non-current liabilities decreased by US$0.6 million to US$1.8
million as at 30 June 2023, resulting from the repayment of
non-current portion of the lease liabilities and the reduction of
deferred tax liabilities.
The Group's net asset value stood at US$32.4 million as at 30
June 2023, compared to US$33.6 million as at 31 December 2022.
2.3 Review of Cash Flows
In 1H FY2023, net cash used in operating activities amounted to
US$1.4 million, comprising US$0.9 million cash inflow from
operating activities (before working capital changes), US$2.1
million net working capital outflow and US$0.2 million payment of
interest and income tax.
Net cash used in investing activities in 1H FY2023 amounted to
US$0.2 million, mainly due to the purchase of machinery and
equipment .
Net cash used in financing activities amounted to US$2.1 million
in 1H FY2023, attributable to the repayment of borrowings and lease
liabilities.
Overall, the Group recorded a net decrease in cash and cash
equivalents amounting to US$3.7 million in 1H FY2023, bringing cash
and cash equivalents per the consolidated statement of cash flows
to US$5.5 million as at 30 June 2023.
3. 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.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
4. 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.
As we articulated in 2022, there has been continued supply chain
disruption experienced in the satellite communications sector as we
entered 2023. As a designer, manufacturer, and provider of
technologically advanced satellite communication products to an
international customer base, this disruption has inevitably
resulted in challenging trading conditions for the Group. Despite
customers continuing to delay the purchase of some products with
delays to launch schedules, the Group moved quickly to optimise
efficiencies at our US manufacturing facilities, which has resulted
in a slight improvement in our net loss from FY2022.
Nevertheless, the Group continued to develop innovative products
to further expand its diverse portfolio of satellite communications
devices. Recognising the growing need for Non-Geostationary Orbit
("NGSO") antenna platforms, Global Invacom announced the
development of Titan in 1H FY2023, its latest multi-constellation
and multi-band gateway antenna platform, which uses an ultra-robust
lightweight carbon fibre composite and provides operators with
deployment flexibility and uncompromised performance. The Group
also continues to develop the Obliquiti NGSO, a new Low Earth Orbit
("LEO") and Medium Earth Orbit ("MEO") platform for broadband and
narrowband use. It is suitable for fixed, nomadic and mobile
applications, and equipped with SatSenz, the Group's AI-based
software for satellite acquisition, tracking and switching.
In Q3 FY2022, the Group announced a strategic review to assess
the Group's existing corporate and operational structure,
streamline core functions and reduce the cost base of the business.
Having now implemented certain parts of our strategic plan, we have
seen the immediate benefits of this long-term strategy. T he
Board's strategic review remains ongoing.
Looking more broadly at the market, we continue to see
increasing demand for satellite communication systems, driven by
demand for data and connectivity globally. A recent report shows
that the number of global Internet of Things ("IoT") connections
grew by 18% in 2022 to 14.3 billion active IoT endpoints, with a
further 16% growth expected in 2023 [2] . Furthermore, there is
increasing awareness of the need for mission critical
communications systems which are able to maintain communications
when land-based infrastructure is disrupted or unable to cope with
challenging geographical terrain.
The Company remains focused on supporting its research and
development team to ensure the Group is well-placed to continue to
deliver cutting-edge, market-leading products, thereby maintaining
its position as a technological pioneer, supporting the
ever-growing satellite industry. We are building the right team to
continue to deliver best-in-class solutions, and to work alongside
customers to respond to specific demands and requirements,
cementing our role as an integral equipment provider and partner in
the satellite communications ecosystem.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
5. 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.
6. 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 six months ended 30 June
2023.
7. 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 six months ended 30 June 2023.
CONFIRMATION PURSUANT TO RULE 705(5) OF THE LISTING MANUAL
We do hereby confirm, for and on behalf of the Board of Global
Invacom Group Limited (the "Company"), that to the best of our
knowledge, nothing has come to the attention of the Board of the
Company which may render the financial results for the six months
ended 30 June 2023 to be false or misleading in any material
aspect.
CONFIRMATION PURSUANT TO RULE 720(1) OF THE LISTING MANUAL
Global Invacom Group Limited confirms that undertakings under
Rule 720(1) have been obtained from all its directors and executive
officers in the format set out in Appendix 7.7.
On behalf of the Board
Wayne Robert Porritt Gordon Blaikie
Independent Non-Executive Chairman Executive Director
BY ORDER OF THE BOARD
Wayne Robert Porritt
Independent Non-Executive Chairman
11 August 2023
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://iot-analytics.com/number-connected-iot-devices/#::text=The%20latest%20IoT%20Analytics%20%E2%80%9CState,
to%2016.7%20billion%20active%20endpoints .
[2]
https://iot-analytics.com/number-connected-iot-devices/#::text=The%20latest%20IoT%20Analytics%20%E2%80%9CState,
to%2016.7%20billion%20active%20endpoints .
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END
IR BLGDIRGBDGXG
(END) Dow Jones Newswires
August 11, 2023 02:30 ET (06:30 GMT)
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