REG - BATM Advanced Comm - Full Year Results
17/03/2025 07:15
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RNS Number : 8328A BATM Advanced Communications Ld 17 March 2025
LEI: 213800FLQUB9J289RU66
17 March
2025
BATM Advanced Communications Limited
("BATM" or the "Group")
Full Year Results
BATM (LSE: BVC; TASE: BVC), a leading provider of real-time technologies for
networks and cyber solutions and medical laboratory systems, announces its
full year results for the year ended 31 December 2024.
Financial Summary*
$m 2024 2023
Revenue 117.3 116.7
Gross profit 36.8 38.3
Gross margin 31.4% 32.8%
Adj. operating profit** 3.8 5.9
Adj. EBITDA** 8.1 9.9
Adj. profit before tax** 3.0 5.9
· Cash and short-term investments at 31 December 2024 were $31.6m (30
June 2024: $32.6m)
* Results for the Group's continuing operations. See note 4 to the financial
statements for details on the discontinued operations
**Adjusted to exclude amortisation and impairments of intangible assets and
non-cash share-based payments
Operational Summary
· Increase in total revenue achieved against a backdrop of challenging
macroeconomic conditions, with strong growth in the Cyber and Diagnostics
divisions offsetting lower revenues in the Networking division
· Implemented substantial operational changes - at a Group level and
within the divisions - to align the business with the Group's strategic vision
· Continued exploring potential opportunities to add capability to core
activities through M&A and to divest non-core businesses resulting, post
period, in an agreement to dispose of the Group's entire shareholding in
Progenetics Ltd for c. $2m in cash
· During the year, the Group acted to ready its eco-med activities, which
are non-core, for sale, with operations streamlined, including halving the
workforce, to significantly reduce costs. The Group continues to seek to sell
this business, but if a sale does not occur in 2025, it will be closed.
Accordingly, the eco-med activities, which are loss making and a drain on the
Group's cash resources, have been classified as discontinued operations for
the purpose of the Group's financial reporting
Cyber
· Revenue and EBITDA increased year-on-year as the Group fulfilled its
long-term contracts and won new orders for its advanced network encryption
solutions, designed for the post-quantum era, from its long-standing
government defence department customer
· Major milestone achieved by entering a strategic partnership with a
significant global technology, engineering and defence group (the "Partner")
to globally distribute the Group's cybersecurity solution to a variety of
commercial markets and for critical national infrastructure
· A customised version of the Group's advanced encryption platform was
developed during the year, and the Group is on track to deliver the first
units to the Partner in the first half of the current year
Networking
· Towards the end of the year, the Group began to recover from the impact
of the global telecommunications market challenges thanks to the actions it
had taken to position the division for growth
· This included a management reorganisation, expansion of the sales &
marketing team and refocused go-to-market strategy, which resulted in
increased customer engagement and an uptick in orders from the fourth quarter
· While the recovery was later than anticipated, resulting in revenue for
2024 being lower than the prior year, the Group is pleased to note that the
positive momentum has been sustained into the current year
Diagnostics
· Growth was driven by the expansion of the Group's customer base for its
distributed diagnostic products
· The Group also delivered its first orders for its new MDXlab molecular
diagnostics instrument, which is designed to overcome the challenges faced by
small- to medium-sized laboratories or point-of-care by offering an
integrated, compact, cost-effective solution
Commenting on the results, Moti Nagar, Chief Executive Officer of BATM, said:
"In 2024, we made significant progress in advancing our strategic vision,
taking decisive measures to streamline our non-core businesses as we prepare
them for sale. This strategic realignment has enabled us to focus our
resources on our key activities that will drive our growth and value creation.
Despite facing challenging market conditions, we achieved several important
milestones. Most notably, we entered a partnership to deliver our cutting-edge
encryption platform to commercial markets, which has long been a key objective
for BATM. In our Networking division, we refocused our management and
strengthened our sales & marketing efforts, which resulted in us securing
several new Tier 1 customers and positions the business for a return to
growth. Accordingly, we are already witnessing the positive effects of the
initiatives we undertook in 2024, which, supported by a significant cash
position, gives us every confidence that we will see strong positive momentum
continuing in the current year."
Enquiries
BATM
Moti Nagar, Chief Executive Officer +972 9866 2525
Ran Noy, Chief Financial Officer
Shore Capital
Mark Percy, Anita Ghanekar, James Thomas (Corporate Advisory) +44 20 7408 4050
Gracechurch Group
Harry Chathli, Claire Norbury +44 20 4582 3500
The information communicated in this announcement is inside information for
the purposes of Article 7 of Regulation 596/2014.
Investor & Analyst Presentation
Moti Nagar, CEO, and Ran Noy, CFO, will be holding a webinar for analysts and
investors on 19 March 2025 at 12.00pm GMT. To register to participate or
submit a question in advance, please use the following link:
https://forms.gle/8GxpwfSKfzX4vNWd7 (https://forms.gle/8GxpwfSKfzX4vNWd7)
Forward-looking statements
This document contains forward-looking statements. Those statements reflect
the current opinions, evaluations and estimations of the Group's management,
and are based on the current data regarding the Group's business as is
detailed in this document and in the Group's periodical, interim and immediate
reports. The Group does not undertake any obligation or make any
representation that actual results and events will be in line with those
statements, and stresses that they may differ materially from those
statements, due to changes in the Group's business, market, competition,
demand for the Group's products or services, general economic factors or other
factors that can influence the Group's business and results, due to the risk
factors that are detailed in the Group's Annual Report, and due to information
and factors that are currently unknown to the Group's management and that, if
known, would affect the management's opinions, evaluations or estimations. The
Group will report the actual results and events according to its legal,
accounting and regulatory obligations, and does not undertake any other
obligation to report them or their deviations from the forward-looking
statements, or to update any of the forward-looking statements in this
document or to report that it is not valid anymore.
Strategy & Operational Update
In June 2023, the Group set out a clear strategy for the business to focus on
its core strengths of cybersecurity, networks and diagnostics, and to dispose
of non-core assets. While the macroeconomic and geopolitical
conditions posed significant challenges to execution during the year, the
Group implemented substantial operational changes to align the business with
this strategic vision. This included establishing further Group-wide corporate
functions, including a Chief Operating Officer, a Chief Marketing Officer and
Head of Diagnostics Division, and enhanced cross-selling activities in the
Networking and Cyber Divisions.
Significant changes were also made within the Group's core divisions. As
discussed further below, in the Networking division there was a management
reorganisation, expansion of the sales & marketing team and the
go-to-market strategy was refocused. In the Cyber division, the Group achieved
a major milestone in the execution on its strategy to expand its offering to
non-governmental customers by entering an agreement with a significant partner
to globally distribute the Group's advanced cybersecurity solution, which is
quantum key distribution ("QKD") ready, to a variety of commercial markets. In
the Diagnostics division, the Group reorganised its management, has refocused
its sales strategy and expanded its channel partner relationships. The Group
is already beginning to benefit from these actions, which position it well for
2025.
The Group continued exploring potential opportunities to add capability to its
core activities through M&A, and to divest its non-core businesses. This
resulted in the Group making its first disposal of a non-core asset in
entering an agreement, post period, to sell its entire shareholding in
Progenetics Ltd. Efforts are also well underway to sell the Group's eco-med
business, which was readied for sale during the year. The Group continues to
seek to sell this business, but if a sale does not occur in 2025, it will be
closed. Accordingly, the eco-med activities have been classified as
discontinued operations for the purpose of the Group's financial reporting.
Furthermore, the Group's trading in respect of the year ended 31 December 2024
has reinforced the Board's view of the strength of its core expertise and its
determination to accelerate the restructuring and streamlining of the Group as
the business environment normalises.
Cyber Division
$m 2024 2023
Revenue 13.1 10.3
Gross margin* 41.0% 40.8%
EBITDA* 3.4 2.4
* Adjusted to exclude amortisation of intangible assets and non-cash
share-based payments
The Cyber division provides integrated hardware and software solutions for
network encryption, including hardware security modules (HSMs). It is a
strategic provider to large government agency clients, primarily involving the
security of mission critical infrastructure. The Group is also in the process
of diversifying its cyber offering to target commercial markets.
There was a significant increase in revenue as the Group delivered on its
long-term contracts and won new orders. During the year, the Group received
and delivered new orders totalling over $2.3m from its long-standing
government defence department customer, which included a contract for
developing a next-generation encryption solution that is QKD ready to address
the technological demands of the next computing era.
The Group achieved a major milestone during the year by entering a strategic
partnership with a significant global technology, engineering and defence
group (the "Partner") to deliver the Group's advanced cybersecurity solution,
which is QKD ready, to a variety of commercial markets and for critical
national infrastructure. The Partner, which generated revenue of
over $11bn in 2024 and serves customers in more than 100 countries, will
distribute a customised version of BATM's advanced encryption
platform globally, with exclusivity in certain territories. During the year,
a customised version of the Group's encryption platform was developed, and
the Group is on track to deliver the first units to the Partner in the first
half of the current year.
The introduction of BATM's cybersecurity solution to non-governmental
customers has long been an important objective and represents a significant
expansion of the total addressable market, with the collaboration with the
Partner expected to significantly boost the Group's commercial market entry by
providing worldwide distribution networks and a partner with the resources to
engage in considerable sales & marketing activities. The Group is also
seeking to establish further partnerships as it builds this new channel to
market.
Networking Division
$m 2024 2023
Revenue 8.5 19.8
Gross margin* 52.5% 47.1%
EBITDA* (3.4) 1.7
* Adjusted to exclude amortisation of intangible assets and non-cash
share-based payments
The Networking division provides high-performance connectivity solutions for
the network edge, including:
· the innovative Edgility edge virtualisation and management platform
that enables the deployment and life-cycle management of apps, virtual network
functions and compute devices at the edge of the network; and
· a broad portfolio of carrier grade switching and routing hardware and
software products (carrier ethernet).
While the underlying demand for network expansion and optimisation remains
high, revenue in the Networking division continued to be impacted by the
global slowdown in the telecommunications industry, with macroeconomic
challenges resulting in organisations pausing or delaying purchasing
decisions. The reduction in EBITDA reflects the lower revenue, with the
division continuing to deliver high-margin products.
The Group took decisive action during the year to address the ongoing
challenges and to position itself for growth as conditions improve. This
included a management reorganisation, expansion of the sales & marketing
team and refocused go-to-market strategy. The Group hired salespeople for
Latin America and a new lead for carrier ethernet sales in North America. A
new team was established to focus on expanding the Group's global channel
partners, such as value-added resellers, systems integrators and distributors,
with new partners being onboarded during the year.
The Group's go-to-market strategy has been refocused on the new feature-rich
and cost-effective X-Series portfolio in carrier ethernet and on selling its
Edgility solution under several Edgility FlexConnect packages that include
different applications and deployment models - from prepackaged software and
hardware to fully customisable - to suit customer requirement. In particular,
the Group is focused on promoting its Edgility FlexConnect family of products
that offers prepackaged hardware and software solutions, which are designed to
be quicker and simpler to implement to solve immediate customer pain points
while also reducing the length of the sales cycle for the Group.
These actions resulted in increased customer engagement, with a number of new
customer wins, as discussed further below, and an uptick in orders from the
fourth quarter of the year. The orders secured in Q4 2024, which are primarily
for delivery in 2025, were over double the value of orders secured in any
other quarter during the year.
Edgility edge virtualisation and management platform
The Group signed a three-year agreement to provide Edgility to replace the
incumbent network virtualisation solution of one of the largest
telecommunications companies in Mexico. The customer will deploy Edgility to
fully virtualise, orchestrate and manage at scale its enterprise connectivity
services provided to enterprise and small- to medium-sized businesses. During
the year, the Group received orders worth over $2.4m, to be delivered over a
three-year period, and expects to receive more orders in the current year as
the customer expands the number of Edgility licences and extends their
duration.
In December 2024, Edgility secured another new customer with its selection by
Axtel, a Tier 1 telecommunications service provider in Mexico, for the
deployment of a self-developed customer experience application that utilises
the Edgility solution. The Group has commenced generating initial revenue from
this agreement, which it expects to increase as the strength of the
Edgility-powered CX solution drives growth for Axtel through increasing
customer loyalty and enhancing their competitive position. In addition, Axtel
has informed the Group of their intention to expand their use of Edgility to
include the Group's managed router-firewall service. This follows recent
trends in the market as operators seeks alternatives to previously-utilised
Chinese-based solutions.
BATM was awarded an additional contract for Edgility from Cemex, S.A.B. de
C.V. (NYSE: CX) ("Cemex"), a leading global building materials company,
following the successful rollout of the solution to Cemex sites across Europe
and Central and South America. This latest contract extends the original
five-year licence agreement entered into in 2021 by a further two years and
includes additional professional services to support the ongoing deployment.
This further contract demonstrates the value of Edgility to Cemex and
highlights the recurring nature of Edgility revenue.
Edgility continued to undergo evaluation and proof-of-concepts with leading
network operators, multi-service providers, partners and systems integrators
worldwide. This included a global managed network services provider completing
a successful proof-of-concept of Edgility, with one of its end customers that
provides critical international infrastructure, which is now entering the next
phase of the sales cycle.
Carrier ethernet solutions
The Group continued the development of new products to expand and refresh its
carrier ethernet offering. The new X-series portfolio was launched towards the
end of the year, which offers a wide selection of cost-effective, fully
scalable devices, with initial orders received in each of the Group's target
regions. The Group is currently going through an approval process for one of
the new products with a Tier 1 communications service provider in Mexico,
which, if successful, would represent a significant strategic opportunity.
Diagnostics Division
$m 2024 2023
Revenue 38.6 33.3
Gross margin* 28.0% 31.0%
EBITDA* 3.2 3.0
* Adjusted to exclude amortisation of intangible assets and non-cash
share-based payments
The Diagnostics division is mainly engaged in the sale and distribution of in
vitro diagnostics reagents and instruments, including the development and
production of proprietary products. Its proprietary product development is
focused on molecular diagnostics by test type and infectious disease by
application area.
During the year, the Group reorganised its management and refocused its
go-to-market approach for its proprietary products to prioritise reagent
sales, which are a higher margin and consumable product. The Group intends to
provide its instruments on a lease basis, or as a lower-margin sale, alongside
a reagent agreement to secure long-term, repeatable orders. The Group is
targeting public hospitals, large private clinics and laboratories and large
tenders.
Revenue in the Diagnostics division increased by 16%, with growth driven by
expansion of the Group's customer base for its distributed diagnostic
products. The reduction in gross margin was due to the contribution to revenue
from instruments that carry lower margin. This was more than offset by the
higher revenue resulting in adjusted EBITDA increasing to $3.2m.
During the year, the Group's portfolio of MOLgen MDX syndromic panels for
infectious disease was registered with the Italian Ministry of Health, which
enabled sales to commence in Italy. These panels, which are part of the
Group's molecular diagnostics offering, use the syndromic testing process to
simultaneously test for multiple pathogens with overlapping symptoms to reduce
the time to diagnosis. Sales commenced during the year, including the Group
successfully already winning a €1m tender at a major hospital in Italy.
The Group commenced receiving orders for, and generating revenue from, its
MDXlab molecular diagnostics instrument based on the real-time PCR method,
which it launched at the end of 2023. Most of today's mid-size laboratories
will either have two instruments to undertake the different steps within the
PCR process or they will have a large integrated instrument, which is not
suitable for small- to medium-sized laboratories or point-of-care. MDXlab is
designed to overcome these limitations by offering an integrated, compact,
cost-effective solution.
Work continued towards the commercial launch of EXTRAlab NGS Prep, which was
distributed to channel partners in Europe towards the end of the year.
EXTRAlab NGS Prep is a new molecular diagnostics instrument that expands the
capabilities of the Group's existing EXTRAlab with regards to NGS library
preparation.
ADOR Diagnostics, an associate company of the Group that is developing the
disruptive NATlab molecular biology platform, successfully completed
pre-clinical validation of the NATlab process, utilising a prototype
instrument, at the Tzafom Medical Center, a hospital in Israel. This generated
valuable insights, which ADOR used to enhance its biological process and
improve the NATlab product. During the year, ADOR commenced the pre-clinical
validation phase for the full NATlab product at the Lazzaro Spallanzani
National Institute for Infectious Diseases, an infectious disease hospital in
Rome, Italy. In addition, ADOR, in collaboration with the Tzafom Medical
Center, received a grant from the Israel Innovation Authority to develop a
NATlab panel for the diagnosis of stomach ulcers. The total value is NIS
3.4m (c. $1m), which is to be granted over two years based on the
achievement of milestones.
Post year end, ADOR was pleased to welcome the Rt. Hon Nadhim Zahawi as
Chairman of its Advisory Board. Mr. Zahawi, who brings a wealth of experience
in business and government, including being former Chancellor of the Exchequer
of the British Government and Minister for COVID-19 Vaccine Deployment, will
provide strategic guidance and advice to support ADOR as it enters the next
phase of its growth strategy. In addition, ADOR was granted a further European
patent, bringing the total number of patents granted to four in the EU, three
in the US, two in the UK and five internationally, with a further seven
patents pending, reflecting the significant intellectual property that ADOR is
building.
Non-core Activities
$m (For continuing operations) 2024 2023
Revenue 57.0 53.2
Gross margin* 29.0% 27.8%
EBITDA* 4.9 2.9
* Adjusted to exclude amortisation of intangible assets and non-cash
share-based payments
During the year, the Group made significant progress on executing on its
strategy to exit its non-core activities. The Group continued to explore
opportunities to divest its non-core businesses and took action to ready its
eco-med activities (which are now classified as discontinued operations) for
sale, with operations streamlined, including halving the workforce, to
significantly reduce costs. Post year end, the Group was pleased to make its
first disposal of a non-core asset with it entering into an agreement to sell
its entire shareholding in Progenetics Ltd for approximately $2m in cash.
The Group's continuing non-core activities include its businesses focused on
the distribution of pharmaceutical and environmental monitoring products, and
the administering of diagnostic tests. The growth in revenue from continuing
operations was primarily from the Group's test administration activities. The
gross margin improvement reflects the increased contribution to revenue from
sales of own-brand products. As a result of the higher revenue and improvement
in gross margin, there was significant growth in adjusted EBITDA.
Financial Review
Adjusted* Reported
$m (For continuing operations - see note 4) 2024 2023 2024 2023
Revenue 117.3 116.7 117.3 116.7
Gross margin 31.7% 33.2% 31.4% 32.8%
Operating profit 3.8 5.9 (4.7) 2.7
EBITDA 8.1 9.9 7.1 7.4
* Adjusted to exclude amortisation and impairment of intangible assets and
non-cash share-based payments
Total Group revenue was $117.3m (2023: $116.7m). This increase reflects strong
revenue growth in the Cyber and Diagnostics divisions as well as an increase
in the Group's non-core activities, which offset lower revenues in the
Networking division.
Gross margin was 31.4% (2023: 32.8%), with the reduction primarily reflecting
revenue mix, and gross profit was $36.8m (2023: $38.3m).
Sales and marketing expenses were $19.6m (2023: $18.3m), general and
administrative expenses were $12.8m (2023: $14.0m) and R&D expenses were
$4.6m (2023: $4.4m). This includes a reduction in share-based payments (a
non-cash expense) to $0.9m (2023: $2.5m), which is largely recognised in the
lower general and administrative expenses. The Group recognised other
operating expenses of $4.5m (2023: $1.2m income), which primarily reflects a
one-time non-cash impairment cost of $6.9m partly offset by a $1.8m reduction
in liabilities and other income of $0.6m including proceeds from the disposal
of a property. The impairment primarily comprises goodwill for acquisitions of
companies in the Group's non-core activities.
On an adjusted basis, to exclude amortisation and the one-time impairment of
intangible assets and non-cash share-based payments, operating profit was
$3.8m (2023: $5.9m), with the reduction primarily reflecting the lower gross
profit. On a reported basis, there was an operating loss of $4.7m (2023: $2.7m
profit), which is primarily due to the one-time impairments. Adjusted EBITDA
was $8.1m for 2024 compared with $9.9m for the prior year.
Loss before tax was $5.4m (2023: $2.8m profit), as outlined above. On an
adjusted basis, there was a profit of $3.0m.
The Group recorded a tax expense of $1.7m (2023: $0.8m) and share of loss of a
joint venture and associated companies was $0.3m (2023: $0.8m).
Net loss from continuing operations was $7.5m (2023: $1.2m profit) and loss
per share was 1.72¢ (2023: 0.27¢ earnings).
The Group recorded a loss from discontinued operations of $14.8m (2023: $1.4m
loss), which primarily reflects impairments following the operations becoming
classified as discontinued (see note 4).
Net cash from operations (before interest and tax) was $1.7m compared with
an $8.1m in 2023.
The Group continues to have a strong balance sheet, with cash and short-term
investments at 31 December 2024 of $31.6m (30 June 2024: $32.6m; 31 December
2023: $40.8m).
Outlook
Trading in the new financial year has begun in-line with management's
expectations as the Group increasingly benefits from the strategic actions
taken during 2024. In particular, the momentum that was experienced in the
Networking division in Q4 2024 has been sustained into the current year, with
a strong increase in orders received to date in both the Edgility and carrier
ethernet offerings.
The largest contributor to the Group's revenue growth in 2025 is expected to
be the Networking division as the expansion of the sales team and refocused
go-to-market strategy drive increasing sales. The Group is also encouraged by
the improving telecommunications market backdrop, with customers recommencing
purchasing as they begin to replenish their inventory levels to support
growing demand.
The Diagnostics division is expected to make a significant contribution to the
Group's revenue growth in 2025 as it executes on its new go-to-market approach
and ramps up sales of MDXlab. The Cyber division is also expected to deliver
strong growth as it continues to service its long-standing government defence
department customer as well as receive initial revenue from the delivery of
its encryption solution for the commercial markets.
The Board is continuing to actively pursue M&A and disposal opportunities
that will enable the Group to accelerate execution on its growth strategy in
its core divisions.
As a result, the Board continues to look to the future with confidence.
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
Year ended 31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Revenues 117,336 116,729
Cost of revenues 80,536 78,425
Gross profit 36,800 38,304
Operating expenses
Sales and marketing expenses 19,582 18,261
General and administrative expenses 12,790 14,024
Research and development expenses 4,636 4,443
Other operating expenses (income) 4,453 (1,155)
Total operating expenses 41,461 35,573
Operating income (loss) (4,661) 2,731
Finance income 665 1,329
Finance expenses (1,387) (1,288)
Profit (loss) before tax (5,383) 2,772
Income tax expenses (1,728) (776)
Profit (loss) for the year before share of loss of a joint venture
and associated companies
(7,111) 1,996
Share of loss of a joint venture and associated companies 345 822
Profit (loss) for the year from continuing operations (7,456) 1,174
Loss for the year from discontinued operations (14,798) (1,374)
Loss for the year (22,254) (200)
Attributable to:
Non-controlling interests 42 (7)
Owners of the Company (22,296) (193)
Earnings (loss) per share (in cents):
Basic and diluted from continuing operations (1.72) 0.27
Basic and diluted from discontinued operations (3.39) (0.32)
Basic and diluted (5.11) (0.05)
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year ended 31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Loss for the year (22,254) (200)
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign operations (5,043) 3,112
Items that will not be reclassified subsequently
to profit or loss:
Re-measurement of defined benefit obligation 19 5
Total other comprehensive income (loss) for the year (5,024) 3,117
Total comprehensive income (loss) for the year (27,278) 2,917
Attributable to:
Owners of the Company (27,105) 2,759
Non-controlling interests (173) 158
(27,278) 2,917
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Current assets
Cash and cash equivalents 25,898 32,339
Trade and other receivables 29,614 31,219
Short-term investment in deposits and other securities 5,672 8,425
Inventories 32,710 38,227
Disposal groups Held for Sale 4,660 -
98,554 110,210
Non-current assets
Property, plant and equipment 12,016 16,051
Investment property 548 612
Right of-use assets 4,178 4,351
Goodwill 3,344 12,763
Intangible assets 8,004 8,019
Investment in joint venture and associate 17,802 17,894
Investments carried at fair value 1,220 1,220
Deferred tax assets 3,498 3,507
50,610 64,417
Total assets 149,164 174,627
Current liabilities
Short-term bank credit 4,261 3,276
Trade and other 36,691 41,662
payables
Current maturities of lease liabilities 2,032 1,830
Tax liabilities 619 359
Liabilities associated with disposal groups Held for Sale 2,978 -
46,581 47,127
Non-current liabilities
Long-term bank credit - 1,328
Long-term liabilities 6,588 3,449
Long-term lease liabilities 2,358 2,650
Deferred tax liabilities - 39
Retirement benefit obligation 655 598
9,601 8,064
Total liabilities 56,182 55,191
Equity
Share capital 1,320 1,320
Share premium account 429,598 428,656
Reserves (31,073) (29,865)
Reserves associated with disposal groups Held for Sale (3,620) -
Accumulated deficit (302,162) (279,767)
Equity attributable to the:
Owners of the Company 94,063 120,344
Non-controlling interests (1,081) (908)
Total equity 92,982 119,436
Total equity and liabilities 149,164 174,627
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Year ended 31 December 2024 (Unaudited)
Share premium account Other comprehensive income attributable to disposal groups Attributable to owners of the Company Non-controlling interests
Share capital Translation reserve Other Accumulated
Total
reserve
deficit equity
Balance as at 1 January 2024 1,320 428,656 (23,092) (6,773) - (279,767) 120,344 (908) 119,436
Loss for the year - - - - - (22,296) (22,296) 42 (22,254)
Re-measurement of defined benefit obligation - - - - - 19 19 - 19
Exchange differences on translating foreign operations - - (4,828) - - - (4,828) (215) (5,043)
Total comprehensive loss for the year - - (4,828) - - (22,277) (27,105) (173) (27,278)
Dividend to non-controlling interests holding put option - - - - - (118) (118) - (118)
Recognition of share-based payments - 942 - - - - 942 - 942
Other comprehensive income attributable to disposal groups - - 3,620 - - - - -
(3,620)
Balance as at 31 December 2024 (unaudited) 1,320 429,598 (24,300) (6,773) (3,620) (302,162) 94,063 (1,081) 92,982
Year ended 31 December 2023 (Unaudited)
Share premium account Attributable to owners of the Company Non-controlling interests Total
Share capital Translation reserve Other Accumulated equity
reserve
deficit
Balance as at 1 January 2023 1,320 426,138 (26,039) (6,773) (279,579) 115,067 (1,066) 114,001
Loss for the year - - - - (193) (193) (7) (200)
Re-measurement of defined benefit obligation - - - - 5 5 - 5
Exchange differences on translating foreign operations - - 2,947 - - 2,947 165 3,112
Total comprehensive income (loss) for the year - - 2,947 - (188) 2,759 158 2,917
Recognition of share-based payments - 2,518 - - - 2,518 - 2,518
Balance as at 31 December 2023 1,320 428,656 (23,092) (6,773) (279,767) 120,344 (908) 119,436
BATM ADVANCED COMMUNICATIONS LTD.
CONSOLIDATED STATEMENT OF CASH FLOW
Year ended 31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Net cash from continuing operating activities (Appendix A) 153 7,401
Net cash used in discontinued operating activities (1,806) (2,392)
Investing activities
Purchases of property, plant and equipment (700) (2,366)
Increase of intangible assets (2,707) (2,510)
Investment in joint venture and associated companies (1,378) (2,060)
Purchases of deposits and financial assets (8,744) (1,879)
Proceeds on disposal of property, plant and equipment 791 228
Proceeds on disposal of deposits and securities 11,526 2,777
Net cash used in investing activities - Continuing Operations (1,212) (5,810)
Net cash used in investing activities - Discontinued Operations (4) (310)
Financing activities
Lease payment (2,098) (1,938)
Bank loan repayment (2,458) (7,498)
Bank loan received 2,359 7,500
Dividend paid to non-controlling interests holding put option (118) -
Net cash used in financing activities - Continuing Operations (2,315) (1,936)
Net cash used in financing activities - Discontinued Operations (297) (224)
Net decrease in cash and cash equivalents (5,480) (3,271)
Cash and cash equivalents at the beginning of the year 32,339 35,156
Effects of exchange rate changes on the balance (961) 454
of cash held in foreign currencies
Cash and cash equivalents at the end of the year 25,898 32,339
BATM ADVANCED COMMUNICATIONS LTD.
APPENDICES TO CONSOLIDATED STATEMENT OF CASH FLOW
APPENDIX A
Reconciliation of operating profit for the year to net cash from (used in)
operating activities:
Year ended 31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Operating profit (loss) from continuing operations (4,661) 2,731
Adjustments for:
Amortisation of intangible assets 680 621
Depreciation of property, plant and equipment and investment property 4,288 4,058
Impairment of goodwill and intangible assets 6,809 -
Capital gain of property, plant and equipment (263) (19)
Share-based payments 942 2,518
Increase in retirement benefit obligation 16 24
Operating cash flow before movements in working capital 7,811 9,933
Increase in inventory (521) (2,676)
Decrease (increase) in receivables (1,197) 3,438
Decrease in payables (2,630) (3,903)
Effects of exchange rate changes on the balance sheet (1,777) 1,337
Cash from operations 1,686 8,129
Income taxes paid (1,291) (694)
Interest paid (242) (34)
Net cash from continuing operating activities 153 7,401
Net cash used in discontinued operating activities (1,806) (2,392)
BATM ADVANCED COMMUNICATIONS LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General
This preliminary results announcement should be read in conjunction with the
audited annual financial statements for the year ended 31 December 2023, which
have been prepared in accordance with International Financial Reporting
Standards ("IFRS"). The final results for the year ended 31 December 2024,
which will be prepared in accordance with IFRS, will be presented in the full
annual report and accounts.
Note 2 - Earnings per share
Earnings per share is based on the weighted average number of shares in issue
for the period of 440,754,446 (2023: 440,546,454) including 4,495,000 ordinary
shares held in treasury. The number used for the calculation of the diluted
earnings per share for the period (which includes the effect of dilutive stock
option plans) is 441,946,835 shares (2023: 441,313,447).
Note 3 - Goodwill
31 December
2024 2023
$'000 $'000
Unaudited
Unaudited
Cost
Balance at 1 January 12,763 12,583
Classified as held for sale* (1,593) -
Foreign exchange difference (100) 180
Balance at 31 December 11,070 12,763
Accumulated impairment losses
Balance at 1 January - -
Impairment losses for the year (7,726) -
Balance at 31 December (7,726) -
Carrying amount 3,344 12,763
* See note 5 in respect of held for sale
During the financial year, the Group recognised an impairment loss from
continuing operations of $5.2m related to goodwill, out of which $0.9m is
related to an operation that was classified as held for sale, and an
additional $2.5m is related to an operation that was classified as
discontinued operations.
The impairment test was conducted at the level of the cash-generating units
("CGUs") to which the goodwill is allocated. The key assumptions used in the
value-in-use calculations will be presented in the full annual report and
accounts.
Note 4 - Discontinued operations
During the year, the Board resolved to dispose of the Group's non-core,
eco-med operation. The operation, which is expected to be sold within 12
months, has been classified as a discontinued operation. The comparative
consolidated statement of profit or loss has been re-presented to show the
discontinued operation separately from the continuing operations.
During the reporting period, a claim with respect to the discontinued
operation was pending regarding alleged breach of contract to supply products
and resulting damages. To the extent that the management, based on the advice
of its consultants, predicts that the claim may result in a required outflow
of funds from the Group, the management, based on the advice of its legal
advisers, is of the opinion that an adequate provision was made in the
financial statements.
The results of the discontinued operation are as follows:
Year ended 31 December
2024 2023
$'000s $'000s
Unaudited Unaudited
Revenues 3,238 6,101
Expenses 18,036 7,475
Loss for the year attributable to discontinued operations (14,798) (1,374)
A comprehensive disclosure will be provided in the full annual report and
accounts.
Note 5 - Held for sale
As part of the Group's strategy to divest its non-core businesses, the Group's
Eco-med business and Provider of genetic test operations, which are part of
the Group's non-core business, are presented as held for sale as the Group
expects these operations to be disposed within of 12 months.
Efforts to sell the disposal group held for sale operations have commenced,
and significant progress was made towards the disposal of one of the Group's
businesses for the distribution of genetic tests, Progenetics Ltd. The Group
has entered into an agreement, post year end, to sell its entire shareholding
in Progenetics. The transaction values Progenetics at NIS 14m (c. $4m), of
which BATM will receive approximately $2m in cash for its 51% shareholding.
Impairment losses relating to the disposal groups
Impairment losses of $5.1m for write-downs of the disposal group held for sale
operations to the lower of its carrying amount and its fair value less costs
to sell have been recognised on the classification of the operation as a
discontinued operation.
A comprehensive disclosure will be provided in the full annual report and
accounts.
Note 6 - Other alternative measures
The information set out below is for continuing operations:
Year ended 31 December 2024 (Unaudited( Reported results Adjustments* Adjusted results
US$ thousands
Gross profit 36,800 432 37,232
Gross margin (%) 31.4% - 31.7%
Operating (loss)/profit (4,661) 8,430 3,769
EBITDA 7,116 942 8,058
Year ended 31 December 2023 (Unaudited( Reported results Adjustments* Adjusted results
US$ thousands
Gross profit 38,304 394 38,698
Gross margin (%) 32.8% - 33.2%
Operating profit 2,731 3,140 5,871
EBITDA 7,411 2,518 9,929
(*) Adjusted to exclude amortisation and one-time impairment of intangible
assets and share-based payments.
EBITDA measurement
Year ended 31 December
2024 2023
$'000 $'000
Unaudited Unaudited
Operating (loss)/profit (4,661) 2,731
Amortisation of intangible assets 680 622
Share-based payments 942 2,518
Depreciation 4,288 4,058
Impairment 6,809 -
Adj. EBITDA 8,058 9,929
Note 7 - Business Segments
The segment information reported below is for continuing operations,
Year ended 31 December 2024 (Unaudited)
Networking Cyber Diagnostics $'000 Non-core $'000 Total
$'000 $'000 $'000
Revenues 8,550 13,131 38,617 57,038 117,336
Gross profit 4,139 5,387 10,733 16,541 36,800
Operating (loss)/profit (4,693) 2,898 (1,721) (1,145) (4,661)
Net finance expenses (722)
Loss before tax (5,383)
Year ended 31 December 2023 (Unaudited)
Networking Cyber Diagnostics $'000 Non-core $'000 Total
$'000 $'000 $'000
Revenues 19,800 10,346 33,342 53,241 116,729
Gross profit 8,967 4,222 10,293 14,822 38,304
Operating profit/(loss) (224) 1,496 334 1,125 2,731
Net finance income 41
Profit before tax 2,772
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