REG - Global Invacom Group - Final Results
Global Invacom Records Eighth Consecutive Quarter of Profitability in Q4 FY2018
Singapore/London, 1 March 2019 - Global Invacom (SGX:QS9) (AIM:GINV), the global provider of satellite communications, is pleased to announce its results for the full year ended 31 December 2018 ("FY2018") and the three months ended 31 December 2018 ("Q4 FY2018").
The Group recorded their eighth consecutive quarter of net profit attributable to shareholders of US$0.9 million, a 14.2% increase from the three months ended 31 December 2017 ("Q4 FY2017"), lifted by higher revenue which grew 22.2% to US$36.4 million in Q4 FY2018. Revenue for the full year of FY2018 increased by US$6.6 million or 5.7% to US$122.3 million from US$115.7 million in the prior year ("FY2017"). The rise in revenue, particularly for Q4 FY2018, was mainly due to the supply of new designs for key products to some of the Group's major customers.
Gross profit ("GP") saw an 18.2% increase to US$7.4 million from US$6.3 million in the previous corresponding quarter. Gross profit margin dipped slightly by 0.7 percentage points from 21.1% to 20.4% in the same period.
In Q4 FY2018, the Group recorded higher volume of shipments for its recently launched Western Arc Slimline Low Noise Block (LNB) to a major U.S. customer. The Group will remain the sole supplier to this customer until end of Q1 FY2019. Reflecting confidence in the Group's product quality and capabilities, shipments of the Eastern Arc model have also commenced from Q1 FY2019 to this same customer.
Data over satellite continues to be important for the Group, having made shipments of its new 90 cm satellite antenna throughout FY2018, as sole supplier, to another U.S. customer. Shipments on a non-exclusive basis are expected to continue throughout FY2019 and beyond.
In addition, one of the Group's existing customers, a major global VSAT integrator, which has been purchasing antennas from the Group, has now added new orders for data over satellite transceiver electronics resulting from the Skyware Technologies purchase in Q3 FY2018.
Mr. Tony Taylor, Executive Chairman of Global Invacom, commented, "Notwithstanding the slower pace of the transition to DCSS products, growth of the satellite communications equipment market will continue. With the emerging trends of the Internet of Things, 5G and autonomous vehicles, satellite communications technology will continue to be a vital part of modern society, and we are in a good position to capitalise on the growing demand in this market.
"We will continue to build on our foundation as the leading global manufacturer of satellite equipment by developing new and innovative products that address the customer's needs," he added.
On a geographical basis, FY2018 revenue increased in the U.S. and Europe by US$4.8 million (+5.9%) and US$3.3 million (+14.0%), respectively, which were offset by decreases in Asia and Rest of the World by US$1.4 million (-20.7%) and US$0.1 million (-3.2%), respectively.
The Group's GP for FY2018 rose to US$25.2 million from US$24.2 million last year ("FY2017"). However, GP margin decreased by 0.3 percentage points from 20.9% to 20.6% for FY2018 due to cost of sales outpacing revenue growth.
Global Invacom's U.S. operations faced supply chain issues in Q4 FY2018 which impacted profitability. Had it not been for these issues, GP for Q4 FY2018 would have been higher for Global Skyware which, nonetheless, closed off FY2018 with a second year of profitability, following a turnaround that resulted from changes to operations since FY2016.
The Group's continuing emphasis on product development through R&D spending contributed to the 9.4% increase in administrative expenses for FY2018 to US$22.9 million from US$21.0 million in FY2017.
Earnings per share on a fully diluted basis declined to 0.57 US cent for FY2018 (FY2017: 1.08 US cents). Net asset value per share increased to 20.84 US cents as at 31 December 2018 from 20.42 US cents as at 31 December 2017. The Group's cash and cash equivalents amounted to US$8.4 million as at 31 December 2018.
The Group had announced in Q4 FY2018 a proposal to acquire Tactilis Sdn. Bhd., a manufacturer and distributor of biometric system-on-card solutions which, if completed, will constitute a reverse takeover. Subsequent to the end of the review period, the Group appointed a Financial Adviser. The Group will provide further updates on this transaction in due course.
**End of Press Release**
For further information, please contact:
Global Invacom Group Limited
Matthew Garner, Chief Financial Officer
Tel: +65 6431 0782
Tel: +44 203 053 3523
finnCap Ltd (Nominated Adviser and Joint Broker)
Christopher Raggett / Matthew Radley (Corporate Finance)
Tel: +44 207 220 0500
Mirabaud Securities LLP (Joint Broker)
Peter Krens (Equity Capital Markets)
Tel: +44 207 878 3362
WeR1 Consultants Pte Ltd (Singapore Investor Relations)
Lai Kwok Kin
Tel: +65 6737 4844
Vigo Communications (UK Media & Investor Relations)
Jeremy Garcia / Fiona Henson / Charlie Neish
Tel: +44 207 390 0238
About Global Invacom Group Limited
Global Invacom is a fully integrated satellite equipment provider with six manufacturing plants across China, Israel, Malaysia, UK and the US. Its customers include satellite broadcasters such as BSkyB of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks.
Global Invacom provides a full range of antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in military, medical, and consumer electronics industries. Following the acquisition in 2015 of Global Skyware, a leading US‐based designer and supplier of satellite antennas products and services, the Company became the world's only full‐service outdoor unit supplier.
Global Invacom is listed on the Mainboard of the Singapore Exchange Securities Trading Limited and its shares are admitted to trading on the AIM Market of the London Stock Exchange.
For more information, please refer to www.globalinvacom.com
FINANCIAL STATEMENT ANNOUNCEMENT FOR Q4 AND YEAR ENDED 31 DECEMBER 2018
PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS
1(a) A statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.
Consolidated Statement of Comprehensive Income for Q4 and the year ended 31 December 2018. These figures have not been audited.
Group
Group
Q4
FY2018
Q4 FY2017
Increase/
(Decrease)
FY2018
FY2017
Increase/
(Decrease)
US$'000
US$'000
%
US$'000
US$'000
%
Revenue
36,366
29,757
22.2
122,292
115,706
5.7
Cost of sales
(28,963)
(23,493)
23.3
(97,104)
(91,515)
6.1
Gross profit
7,403
6,264
18.2
25,188
24,191
4.1
Other income
482
335
43.9
569
1,335
(57.4)
Distribution costs
(69)
(27)
155.6
(322)
(290)
11.0
Administrative expenses
(6,514)
(5,405)
20.5
(22,913)
(20,950)
9.4
Other operating expenses
(21)
(47)
(55.3)
(14)
(139)
(89.9)
Finance income
46
16
187.5
96
30
220.0
Finance costs
(146)
(165)
(11.5)
(523)
(483)
8.3
Profit before income tax(i)
1,181
971
21.6
2,081
3,694
(43.7)
Income tax expense
(286)
(187)
52.9
(545)
(745)
(26.8)
Profit after income tax attributable to equity holders of the Company
895
784
14.2
1,536
2,949
(47.9)
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries
(483)
(38)
N.M.
(417)
114
N.M.
Other comprehensive (loss)/income for the period, net of tax
(483)
(38)
N.M.
(417)
114
N.M.
Total comprehensive income for the period attributable to equity holders of the Company
412
746
(44.8)
1,119
3,063
(63.5)
N.M.: Not Meaningful
Note:
(i) Profit before income tax was determined after (charging)/crediting the following:
Group
Group
Q4
FY2018
Q4 FY2017
Increase/
(Decrease)
FY2018
FY2017
Increase/
(Decrease)
US$'000
US$'000
%
US$'000
US$'000
%
Interest income
46
16
187.5
96
30
220.0
Interest expense
(146)
(165)
(11.5)
(523)
(483)
8.3
(Loss)/Gain on foreign exchange
(21)
325
N.M.
(9)
599
N.M.
Gain on bargain purchase
482
-
N.M.
482
-
N.M.
Write-back of payables
-
-
N.M.
73
578
(87.4)
Gain/(Loss) on disposal of property, plant and equipment
-
7
(100.0)
(5)
(6)
(16.7)
Impairment of property, plant and equipment
-
-
-
-
(86)
(100.0)
Depreciation of property, plant and equipment
(791)
(693)
14.1
(2,890)
(2,563)
12.8
Amortisation of intangible assets
(146)
(154)
(5.2)
(673)
(628)
7.2
Impairment of intangible assets
(93)
-
N.M.
(93)
-
N.M.
Write-back for inventory obsolescence, net
706
160
341.3
412
351
17.4
(Allowance)/Write-back for impairment of trade receivables, net
-
(46)
(100.0)
-
(46)
(100.0)
Operating lease expense
(706)
(595)
18.7
(3,212)
(2,857)
12.4
Research and development expense
(665)
(453)
46.8
(2,805)
(1,646)
70.4
1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
Group
Company
31 Dec 2018
31 Dec 2017
31 Dec 2018
31 Dec 2017
US$'000
US$'000
US$'000
US$'000
ASSETS
Non-current Assets
Property, plant and equipment
12,606
12,393
85
7
Investments in subsidiaries
-
-
44,892
44,874
Goodwill
9,352
9,352
-
-
Intangible assets
3,656
2,172
-
-
Equity instruments
8
8
-
-
Deferred tax assets
109
198
-
-
Other receivables and prepayments
1,566
55
11,119
9,154
27,297
24,178
56,096
54,035
Current Assets
Due from subsidiaries
-
-
939
1,895
Inventories
31,625
29,022
-
-
Trade receivables
24,874
19,268
-
-
Other receivables and prepayments
1,900
3,361
3,433
5,263
Tax receivables
15
11
-
-
Cash and cash equivalents
8,381
7,152
526
733
66,795
58,814
4,898
7,891
Total assets
94,092
82,992
60,994
61,926
EQUITY AND LIABILITIES
Equity
Share capital
60,423
60,423
74,240
74,240
Treasury shares
(1,656)
(1,656)
(1,656)
(1,656)
Reserves
(2,161)
(3,297)
(13,988)
(13,320)
Total equity
56,606
55,470
58,596
59,264
Non-current Liabilities
Other payables
104
111
-
-
Deferred tax liabilities
406
489
-
-
510
600
-
-
Current Liabilities
Due to subsidiaries
-
-
2,109
2,140
Trade payables
19,381
12,206
-
-
Other payables
5,326
6,528
221
454
Borrowings
11,974
8,025
-
-
Provision for income tax
295
163
68
68
36,976
26,922
2,398
2,662
Total liabilities
37,486
27,522
2,398
2,662
Total equity and liabilities
94,092
82,992
60,994
61,926
1(b)(ii) Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 31 Dec 2018
As at 31 Dec 2017
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
11,974
-
8,025
-
Amount repayable after one year
As at 31 Dec 2018
As at 31 Dec 2017
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
-
-
-
-
Details of any collateral
The revolving credit loans of US$11,974,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.
1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Group
Q4 FY2018
Q4 FY2017
FY2018
FY2017
US$'000
US$'000
US$'000
US$'000
Cash Flows from Operating Activities
Profit before income tax
1,181
971
2,081
3,694
Adjustments for:
Depreciation of property, plant and equipment
791
693
2,890
2,563
Amortisation of intangible assets
146
154
673
628
(Gain)/Loss on disposal of property, plant and equipment
-
(7)
5
6
Impairment of property, plant and equipment
-
-
-
86
Impairment of intangible assets
93
-
93
-
Write-back for inventory obsolescence, net
(706)
(160)
(412)
(351)
Impairment of allowance for trade receivables
-
46
-
46
Unrealised exchange loss/(gain)
11
(230)
166
(203)
Interest income
(46)
(16)
(96)
(30)
Interest expense
146
165
523
483
Share-based payments
3
8
17
93
Gain on bargain purchase
(482)
-
(482)
-
Write-back of payables
-
-
(73)
(578)
Operating cash flow before working capital changes
1,137
1,624
5,385
6,437
Changes in working capital:
Inventories
(2,134)
2,176
(2,191)
171
Trade receivables
(4,085)
(1,101)
(5,618)
(2,242)
Other receivables and prepayments
87
(1,056)
1,477
(242)
Trade and other payables
3,631
(2,260)
5,211
(4,867)
Cash (used in)/generated from operating activities
(1,364)
(617)
4,264
(743)
Interest paid
(56)
(58)
(227)
(333)
Income tax (paid)/refund
(131)
255
(271)
205
Net cash (used in)/generated from operating activities
(1,551)
(420)
3,766
(871)
Cash Flows from Investing Activities
Interest received
37
16
85
30
Purchase of property, plant and equipment
839
(593)
(1,533)
(1,923)
Proceeds from disposal of property, plant and equipment
-
23
36
55
Decrease in intangible assets
2,250
-
-
-
Acquisition of a business
(3,500)
-
(3,500)
-
Investment in convertible notes
(1,500)
-
(1,500)
-
Decrease in restricted cash
-
-
-
1,200
Net cash used in investing activities
(1,874)
(554)
(6,412)
(638)
Cash Flows from Financing Activities
Proceeds from borrowings
16,093
8,216
54,686
49,193
Repayment of borrowings
(14,088)
(8,913)
(50,811)
(47,276)
Net cash generated from/(used in) financing activities
2,005
(697)
3,875
1,917
Net (decrease)/increase in cash and cash equivalents
(1,420)
(1,671)
1,229
408
Cash and cash equivalents at the beginning of the period
9,772
8,873
7,152
6,742
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies
29
(50)
-
2
Cash and cash equivalents at the end of the period(i)
8,381
7,152
8,381
7,152
Note:
(i) For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:
Q4
FY2018
Q4
FY2017
FY2018
FY2017
US$'000
US$'000
US$'000
US$'000
Cash and bank balances
8,351
7,122
8,351
7,122
Fixed deposits
30
30
30
30
8,381
7,152
8,381
7,152
Less: Restricted cash
-
-
-
-
Cash and cash equivalents per the consolidated statement of cash flows
8,381
7,152
8,381
7,152
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Share
capital
Treasury shares
Merger reserves
Capital redemption reserves
Share options reserve
Capital reserve
Foreign currency translation reserve
Retained profits
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2018
60,423
(1,656)
(10,150)
6
706
(3,695)
(872)
10,708
55,470
Share-based payments
-
-
-
-
8
-
-
-
8
Profit for the period
-
-
-
-
-
-
-
326
326
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
124
-
124
Total other comprehensive income for the period
-
-
-
-
-
-
124
326
450
Balance as at 31 Mar 2018
60,423
(1,656)
(10,150)
6
714
(3,695)
(748)
11,034
55,928
Share-based payments
-
-
-
-
3
-
-
-
3
Profit for the period
-
-
-
-
-
-
-
206
206
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
69
-
69
Total other comprehensive income for the period
-
-
-
-
-
-
69
206
275
Balance as at 30 Jun 2018
60,423
(1,656)
(10,150)
6
717
(3,695)
(679)
11,240
56,206
Share-based payments
-
-
-
-
3
-
-
-
3
Profit for the period
-
-
-
-
-
-
-
109
109
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(127)
-
(127)
Total other comprehensive loss for the period
-
-
-
-
-
-
(127)
109
(18)
Balance as at 30 Sep 2018
60,423
(1,656)
(10,150)
6
720
(3,695)
(806)
11,349
56,191
Share-based payments
-
-
-
-
3
-
-
-
3
Transfer to capital reserve in accordance with statutory requirements
-
-
-
-
-
135
-
(135)
-
Profit for the period
-
-
-
-
-
-
-
895
895
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(483)
-
(483)
Total other comprehensive income for the period
-
-
-
-
-
-
(483)
895
412
Balance as at 31 Dec 2018
60,423
(1,656)
(10,150)
6
723
(3,560)
(1,289)
12,109
56,606
Group
Share
capital
Treasury shares
Merger reserves
Capital redemption reserves
Share options reserve
Capital reserve
Foreign currency translation reserve
Retained profits
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2017
60,423
(1,656)
(10,150)
6
613
(3,695)
(986)
7,759
52,314
Share-based payments
-
-
-
-
40
-
-
-
40
Profit for the period
-
-
-
-
-
-
-
605
605
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(113)
-
(113)
Total other comprehensive income for the period
-
-
-
-
-
-
(113)
605
492
Balance as at 31 Mar 2017
60,423
(1,656)
(10,150)
6
653
(3,695)
(1,099)
8,364
52,846
Share-based payments
-
-
-
-
35
-
-
-
35
Profit for the period
-
-
-
-
-
-
-
873
873
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
221
-
221
Total other comprehensive income for the period
-
-
-
-
-
-
221
873
1,094
Balance as at 30 Jun 2017
60,423
(1,656)
(10,150)
6
688
(3,695)
(878)
9,237
53,975
Share-based payments
-
-
-
-
10
-
-
-
10
Profit for the period
-
-
-
-
-
-
-
687
687
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
44
-
44
Total other comprehensive income for the period
-
-
-
-
-
-
44
687
731
Balance as at 30 Sep 2017
60,423
(1,656)
(10,150)
6
698
(3,695)
(834)
9,924
54,716
Share-based payments
-
-
-
-
8
-
-
-
8
Profit for the period
-
-
-
-
-
-
-
784
784
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(38)
-
(38)
Total other comprehensive income for the period
-
-
-
-
-
-
(38)
784
746
Balance as at 31 Dec 2017
60,423
(1,656)
(10,150)
6
706
(3,695)
(872)
10,708
55,470
Company
Share
capital
Treasury shares
Share options reserve
Capital reserve
Foreign currency translation reserve
Accumulated losses
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2018
74,240
(1,656)
706
(4,481)
(1,927)
(7,618)
59,264
Share-based payments
-
-
7
-
-
-
7
Loss for the period
-
-
-
-
-
(234)
(234)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(234)
(234)
Balance as at 31 Mar 2018
74,240
(1,656)
713
(4,481)
(1,927)
(7,852)
59,037
Share-based payments
-
-
4
-
-
-
4
Loss for the period
-
-
-
-
-
(240)
(240)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(240)
(240)
Balance as at 30 Jun 2018
74,240
(1,656)
717
(4,481)
(1,927)
(8,092)
58,801
Share-based payments
-
-
3
-
-
-
3
Loss for the period
-
-
-
-
-
(205)
(205)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(205)
(205)
Balance as at 30 Sep 2018
74,240
(1,656)
720
(4,481)
(1,927)
(8,297)
58,599
Share-based payments
-
-
3
-
-
-
3
Loss for the period
-
-
-
-
-
(6)
(6)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(6)
(6)
Balance as at 31 Dec 2018
74,240
(1,656)
723
(4,481)
(1,927)
(8,303)
58,596
Company
Share
capital
Treasury shares
Share options reserve
Capital reserve
Foreign currency translation reserve
Accumulated losses
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2017
74,240
(1,656)
613
(4,481)
(2,067)
(6,994)
59,655
Share-based payments
-
-
38
-
-
-
38
Loss for the period
-
-
-
-
-
(85)
(85)
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
140
-
140
Total other comprehensive income for the period
-
-
-
-
140
(85)
55
Balance as at 31 Mar 2017
74,240
(1,656)
651
(4,481)
(1,927)
(7,079)
59,748
Share-based payments
-
-
37
-
-
-
37
Loss for the period
-
-
-
-
-
(56)
(56)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(56)
(56)
Balance as at 30 Jun 2017
74,240
(1,656)
688
(4,481)
(1,927)
(7,135)
59,729
Share-based payments
-
-
10
-
-
-
10
Loss for the period
-
-
-
-
-
(371)
(371)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(371)
(371)
Balance as at 30 Sep 2017
74,240
(1,656)
698
(4,481)
(1,927)
(7,506)
59,368
Share-based payments
-
-
8
-
-
-
8
Loss for the period
-
-
-
-
-
(112)
(112)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(112)
(112)
Balance as at 31 Dec 2017
74,240
(1,656)
706
(4,481)
(1,927)
(7,618)
59,264
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.
FY2018
No. of shares
US$'000
Balance as at 1 Jan 2018 and 31 Dec 2018
271,662,227
72,584
FY2017
No. of shares
US$'000
Balance as at 1 Jan 2017 and 31 Dec 2017
271,662,227
72,584
There were 10,740,072 treasury shares held by the Company as at 31 December 2018 and 31 December 2017 and there was no subsidiary holdings.
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.
31 Dec 2018
31 Dec 2017
Total number of issued shares excluding treasury shares
271,662,227
271,662,227
1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.
FY2018
No. of shares
US$'000
Balance as at 1 Jan 2018 and 31 Dec 2018
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.
FY2018
No. of shares
US$'000
Balance as at 1 Jan 2018 and 31 Dec 2018
-
-
2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.
These figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).
Not applicable.
4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
The accounting policies and methods of computation have been applied consistently for the current financial period ended 31 December 2018 as those used in the audited financial statements for the year ended 31 December 2017, except for the adoption of the new or revised International Financial Reporting Standards ("IFRS") applicable for the financial period beginning 1 January 2018.
5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
The Group has adopted all of the new or revised IFRS that are effective for the financial period beginning 1 January 2018 and are relevant to its operations. The adoption of these IFRS does not have financial impact on the Group's financial position or results.
6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.
Earnings per ordinary share of the Group, after deducting any provision for preference dividends
Group
Group
Q4
FY2018
US$
Q4
FY2017
US$
FY2018
US$
FY2017
US$
(a) Based on weighted average number of ordinary shares on issue; and
0.33 cent
0.29 cent
0.57 cent
1.09 cents
(b) On a fully diluted basis
0.33 cent*
0.29 cent*
0.57 cent*
1.08 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
224,888,356
271,662,227
271,915,839
* Diluted earnings per share for Q4 FY2018 and FY2018 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 2018
US$
31 Dec 2017
US$
31 Dec 2018
US$
31 Dec 2017
US$
Net asset value per ordinary share based on issued share capital
20.84 cents
20.42 cents
21.57 cents
21.82 cents
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
The Group's revenue for the year ended 31 December 2018 ("FY2018") increased by US$6.6 million to US$122.3 million from US$115.7 million in the prior year ("FY2017"). Revenue for the quarter ended ("Q4 FY2018") amounted to US$36.4 million against US$29.8 million in the prior year quarter ("Q4 FY2017"). The increases, in particular that for Q4 FY2018, have arisen from supply of new designs for key products to some of our major customers.
Geographically, Group revenue for FY2018 increased in America and Europe by US$4.8 million (+5.9%) and US$3.3 million (+14.0%), respectively, offset by reductions in Asia and Rest of the World ("RoW") by US$1.4 million (-20.7%) and US$0.1 million (-3.2%), respectively. Revenue for Q4 FY2018 increased in America, Europe and RoW by US$5.3 million (+25.3%), US$0.2 million (+3.8%) and US$1.5 million (+175.3%), respectively but declined in Asia by US$0.4 million (-32.5%) compared to the earlier year.
Gross Profit
Gross profit margin decreased 0.3 percentage points from 20.9% to 20.6% with gross profit for FY2018 at US$25.2 million against US$24.2 million for FY2017.
For Q4 FY2018, gross profit margin decreased by 0.7 percentage points from 21.1% to 20.4% with gross profit at US$7.4 million against US$6.3 million for Q4 FY2017.
The shortage of key components continued to impact the Group where demand has outstripped supply. Our US operation experienced increased steel prices resulting from the US-China tariff imposition, and a broken tool resulted in high expediting, freight and duty costs which impacted the Group's margin by US$2.1 million during the quarter.
Other Income
Other income in Q4 FY2018 pertained to a bargain purchase price gain as a result of the acquisition of business from Skyware Technologies at the end of Q3 FY2018.
Administrative Expenses
Administrative expenses for FY2018 increased 9.4% to US$22.9 million compared to US$21.0 million in FY2017, representing 18.7% and 18.1% of revenue, respectively, with continued spending on new product introduction through research and development (Q4 FY2018 - US$0.7 million; Q4 FY2017 - US$0.5 million; FY2018 - US$2.8 million; FY2017 - US$1.6 million) being a major contributor. In Q4 FY2018, the UK tax authorities finalised an enquiry from 2010, which resulted in a P&L liability of US$254 thousand. The enquiry related to a subsidiary for a period prior to the Group acquisition so the cash to pay this liability was secured and held in escrow. Administrative expenses for Q4 FY2018 increased to US$6.5 million from US$5.4 million compared to the previous year.
Other operating expenses
Other operating expenses in Q4 FY2018 derived primarily from foreign exchange losses.
Profit Before Tax & Net Profit
The Group posted a profit before tax of US$2.1 million in FY2018, compared to US$3.7 million the year earlier, representing margins of 1.7% and 3.2%, respectively. For Q4 FY2018, the Group recorded US$1.2 million profit before tax compared to US$1.0 million in the prior year quarter, representing margins of 3.2% and 3.3%, respectively.
Overall, the Group posted a net profit of US$1.5 million in FY2018, compared to US$2.9 million in FY2017, representing net margins of 1.3% and 2.5%, respectively. The Group recorded a net profit of US$0.9 million in Q4 FY2018 compared to US$0.8 million the prior year quarter, representing net margins of 2.5% and 2.6%, respectively.
Review of Financial Position
Non-current assets increased by US$3.1 million to US$27.3 million as at 31 December 2018, due to the intangibles acquired in 2018 from Skyware Technologies and the convertible loans subscribed in Tactilis Sdn. Bhd.
Net current assets decreased by US$2.1 million to US$29.8 million as at 31 December 2018 compared to US$31.9 million as at 31 December 2017. Inventories and trade and other receivables increased by US$2.6 million and US$4.1 million, respectively, in preparation of the orders in 2019 and in line with the increased sales towards the end of the year. Trade and other payables increased US$6.1 million due to late quarter purchases as well as stringent payments to the trade suppliers. To ease the working capital, borrowings increased by US$3.9 million to US$12.0 million, offset by an increase in cash and cash equivalents of US$1.2 million to US$8.4 million as at 31 December 2018 compared to US$7.2 million as at 31 December 2017.
The Group's net asset value stood at US$56.6 million as at 31 December 2018, compared to US$55.5 million as at 31 December 2017.
Review of Cash Flows
In Q4 FY2018, net cash used in operating activities amounted to US$1.6 million, comprising US$1.1 million cash inflow from operating activities (before working capital changes), US$2.5 million net working capital outflow and US$0.2 million payment of interest and income tax.
In FY2018, net cash generated from operating activities amounted to US$3.8 million, comprising US$5.4 million cash inflow from operating activities (before working capital changes), US$1.1 million net working capital outflow and US$0.5 million payment of interest and income tax.
Net cash used in investing activities in Q4 FY2018 and FY2018 amounted to US$1.9 million and US$6.4 million, respectively, relating predominately to purchase of machinery, the acquisition of Skyware Technologies and investment in convertible notes in Tactilis Sdn. Bhd.
Net cash generated from financing activities amounted to US$2.0 million in Q4 FY2018 and US$3.9 million in FY2018, attributable to the net proceeds of borrowings.
Overall, the Group recorded a net decrease in cash and cash equivalents amounting to US$1.4 million in Q4 FY2018 and a net increase in cash and cash equivalents amounting to US$1.2 million in FY2018, bringing cash and cash equivalents per the consolidated statement of cash flows to US$8.4 million as at 31 December 2018.
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.
Growth of the global satellite communications equipment market is expected to continue over the coming years, underpinned by worldwide expansion in the IT and telecommunication sectors. Satellite communications continues to be an integral part of modern technology, amid the emerging trends of 5G convergence, Ultra High Definition/4K transmission, autonomous self-navigating vehicles and interconnected electronic devices.
The satellite broadcasting sector is still undergoing its technological shift towards DCSS products. However, the pace of this transition has been slower than expected. This shift is taking place amidst a greater emphasis on price competitiveness and improved product performance. In the past few years, the Group has been developing and rolling out a series of reduced form factor products to address these issues which exceed customer expectations. This new range of products provide the prospect of better margins arising from ongoing operational improvements, and the reduced form factor which should lead to a lower cost of raw materials.
During Q4 FY2018, the Group recorded higher volume of shipments for the recently launched Western Arc Slimline Low Noise Block ("LNB") to a major U.S. customer. The Group will continue to be the sole supplier for this product to this customer until the end of Q1 FY2019. Reflecting confidence in the Group's product quality and capabilities, shipments of the Eastern Arc model have also commenced to the same customer from Q1 FY2019.
Data over satellite continues to be important for the Group which made shipments of its new 90 cm satellite antenna throughout FY2018, as sole supplier, to another U.S. customer. Shipments on a non-exclusive basis are expected to continue throughout FY2019 and beyond.
In addition, one of the Group's existing customers, a major global VSAT integrator, which has been purchasing antennas from the Group, has now added new orders for data over satellite transceiver electronics resulting from the Skyware Technologies purchase in Q3 FY2018. The Group anticipates that overall VSAT shipments in FY2019 will exceed that of FY2018.
Our U.S. operations faced supply chain issues in Q4 FY2018 which impacted profitability. Had it not been for these issues, gross profit for Q4 FY2018 would have been higher for Global Skyware, which nonetheless closed off FY2018 with a second year of profitability, following a turnaround that resulted from changes to operations since FY2016.
The Group had announced in 4Q FY2018 a proposal to acquire Tactilis Sdn. Bhd., a manufacturer and distributor of biometric system-on-card solutions which, if completed, will constitute a reverse takeover. Subsequent to the end of the review period the Group appointed a Financial Adviser. The Group will provide further updates on this transaction in due course.
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.
Due to the operating conditions faced by the Group, no dividend has been declared or recommended for the year ended 31 December 2018.
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.
FY2018
Sat Comms
CM
Group
US$'000
US$'000
US$'000
Revenue
114,110
8,182
122,292
Operating profit/(loss)
2,682
(174)
2,508
Finance income
96
Finance costs
(523)
Income tax expense
(545)
Profit for the year
1,536
Gain on bargain purchase
482
-
482
Amortisation of intangible assets
673
-
673
Depreciation of property, plant and equipment
2,729
161
2,890
Addition to property, plant and equipment
1,468
65
1,533
Impairment of intangible assets
93
-
93
Write-back for inventory obsolescence, net
(412)
-
(412)
Assets and liabilities
Segment assets
85,054
6,507
91,561
Unallocated assets
- Non-current assets
1,597
- Other receivables
230
- Deferred tax assets
109
- Cash and cash equivalents
580
- Tax receivables
15
Total assets
94,092
FY2018
Sat Comms
CM
Group
US$'000
US$'000
US$'000
Segment liabilities
21,229
3,300
24,529
Unallocated liabilities
- Other payables
282
- Provision for income tax
295
- Deferred tax liabilities
406
- Borrowings
11,974
Total liabilities
37,486
FY2017
Revenue
109,314
6,392
115,706
Operating profit
3,494
653
4,147
Finance income
30
Finance costs
(483)
Income tax expense
(745)
Profit for the year
2,949
Amortisation of intangible assets
628
-
628
Depreciation of property, plant and equipment
2,479
84
2,563
Addition to property, plant and equipment
1,816
107
1,923
Impairment of property, plant and equipment
-
86
86
Write-back for inventory obsolescence, net
(351)
-
(351)
Allowance for impairment of trade receivables, net
46
-
46
Assets and liabilities
Segment assets
73,930
7,857
81,787
Unallocated assets
- Non-current assets
9
- Other receivables
254
- Deferred tax assets
198
- Cash and cash equivalents
733
- Tax receivables
11
Total assets
82,992
Segment liabilities
16,641
1,711
18,352
Unallocated liabilities
- Other payables
493
- Provision for income tax
163
- Deferred tax liabilities
489
- Borrowings
8,025
Total liabilities
27,522
13(b) Geographical Information
Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:
FY2018
America
US$'000
Europe
US$'000
Asia
US$'000
Rest of the World
US$'000
Group
US$'000
Revenue
85,831
27,006
5,210
4,245
122,292
Non-current assets
4,689
16,562
5,818
111
27,180
FY2017
America
US$'000
Europe
US$'000
Asia
US$'000
Rest of the World
US$'000
Group
US$'000
Revenue
81,066
23,687
6,569
4,384
115,706
Non-current assets
5,256
15,941
2,661
114
23,972
14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments.
Please refer to Note 8.
15. A breakdown of sales.
FY2018
US$'000
FY2017
US$'000
% increase/
(decrease)
(a)
Sales reported for first half year
55,396
57,424
(3.5)
(b)
Operating profit after income tax before deducting minority interests reported for first half year
532
1,478
(64.0)
(c)
Sales reported for second half year
66,896
58,282
14.8
(d)
Operating profit after income tax before deducting minority interests reported for second half year
1,004
1,471
(31.7)
16. A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year.
FY2018
US$'000
FY2017
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 and there were no IPTs for the year ended 31 December 2018.
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 2019
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.ENDFR SSSSUFFUSEFD
Recent news on Global Invacom
See all newsRCS - Global Invacom Group - Contract to supply U.S. Navy
AnnouncementREG - AIM Global Invacom Group - Cancellation - Global Invacom Group Ltd
AnnouncementREG - Global Invacom Group - Result of EGM
AnnouncementREG - Global Invacom Group - Notice of EGM
AnnouncementRCS - Global Invacom Group - Global Skyware announces contract with Eutelsat
Announcement