REG - Global Invacom Group - Half-year Report
11/08/2023 07:30
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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 (http://www.globalinvacom.com/)
Gordon Blaikie, Interim Chief Executive Officer via Vigo Consulting
Strand Hanson Limited (Nominated Adviser and Broker) www.strandhanson.co.uk (http://www.strandhanson.co.uk/)
James Harris / Richard Johnson / David Asquith Tel: +44 20 7409 3494
Vigo Consulting (UK Media & Investor Relations) www.vigoconsulting.com (http://www.vigoconsulting.com/)
Jeremy Garcia / Fiona Hetherington / Kendall Hill Tel: +44 20 7390 0238
ginv@vigoconsulting.com (mailto: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
(http://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$'000 %
Revenue 31,338 37,420 (16.3)
Cost of sales (23,031) (30,051) (23.4)
Gross profit 8,307 7,369 12.7
Other income 432 37 N.M.
Distribution costs (113) (156) (27.6)
Administrative expenses (8,518) (8,106) 5.1
Research and development expenses (1,847) (1,969) (6.2)
Other operating expenses (194) (257) (24.5)
Finance costs (174) (171) 1.8
Loss before income tax (2,107) (3,253) (35.2)
Income tax expense (29) (39) (25.6)
Loss for the period (2,136) (3,292) (35.1)
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries 917 (19) N.M.
917 (19) N.M.
Other comprehensive income/(loss) for the period, net of tax
(1,219) (3,311) (63.2)
Total comprehensive loss for the period
Loss for the period attributable to:
Equity holders of the Company (2,136) (3,289) (35.1)
Non-controlling interests - (3) (100.0)
(2,136) (3,292) (35.1)
Total comprehensive loss for the period attributable to:
Equity holders of the Company (1,219) (3,308) (63.1)
Non-controlling interests - (3) (100.0)
(1,219) (3,311) (63.2)
N.M.: Not Meaningful
B. Condensed Interim Statements of Financial Position
Group Company
30 Jun 2023 31 Dec 2022 30 Jun 2023 31 Dec 2022
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current Assets
Property, plant and equipment 6,343 6,641 6 -
Right-of-use assets 2,314 3,095 - 41
Investments in subsidiaries - - 17,877 17,824
Goodwill 893 893 - -
Intangible assets 1,280 1,417 - -
Deferred tax assets 235 585 - -
Other receivables and prepayments 54 54 - -
11,119 12,685 17,883 17,865
Current Assets
Due from subsidiaries - - 2,009 2,499
Inventories 22,894 22,869 - -
Trade receivables 12,384 10,011 - -
Other receivables and prepayments 2,371 1,274 14,274 13,786
Tax receivables 190 167 - -
Cash and cash equivalents 5,502 9,244 182 168
43,341 43,565 16,465 16,453
Total assets 54,460 56,250 34,348 34,318
EQUITY AND LIABILITIES
Equity
Share capital 60,423 60,423 74,240 74,240
Treasury shares (1,656) (1,656) (1,656) (1,656)
Reserves (26,326) (25,160) (38,388) (38,472)
Equity attributable to owners of the Company 32,441 33,607 34,196 34,112
Non-controlling interests (24) (24) - -
Total equity 32,417 33,583 34,196 34,112
Non-current Liabilities
Other payables 172 172 - -
Lease liabilities 1,446 1,599 - -
Deferred tax liabilities 211 684 - -
1,829 2,455 - -
Current Liabilities
Trade payables 11,672 10,006 - -
Other payables 3,385 3,109 152 168
Borrowings 4,200 5,488 - -
Lease liabilities 957 1,607 - 38
Provision for income tax - 2 - -
20,214 20,212 152 206
Total liabilities 22,043 22,667 152 206
Total equity and liabilities 54,460 56,250 34,348 34,318
C. Condensed Interim Statements of Changes in Equity
Foreign currency translation reserve
Capital redemption reserves Share options reserve Attributable to equity holders of the Company
Share Treasury shares Merger reserves Capital reserve Retained profits Non-controlling interests Total
Group capital
US$'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 currency translation reserve
Share options reserve
Share Treasury shares Capital reserve Accumulated losses Total
Company capital
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 (17) (8)
currencies
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 271,662,227 271,662,227
earnings per share
Weighted average number of ordinary shares used in computation of diluted 271,662,227 271,662,227
earnings per share
* 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 capital 11.94 cents 12.37 cents 12.59 cents 12.56 cents
Total number of issued shares 271,662,227 271,662,227 271,662,227 271,662,227
9. Intangible Assets
Trading name Intellectual property rights Capitalised development Total
costs
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
Freehold Machinery & Furniture, fittings & 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$'000
Company
2023
Cost
Balance at 1 January and 30 June 211 80 291
Additions 6 - 6
Disposals (36) (80) (116)
Balance at 1 January and 30 June 181 - 181
Accumulated depreciation
Balance at 1 January 211 80 291
Depreciation charge - - -
Disposals (36) (80) (116)
Balance at 30 June 175 - 175
Net book value
Balance at 30 June 6 - 6
2022
Cost
Balance at 1 January and 31 December 211 80 291
Accumulated depreciation
Balance at 1 January 192 79 271
Depreciation charge 19 1 20
Balance at 31 December 211 80 291
Net book value
Balance at 31 December - - -
12. Investment in Subsidiaries
Company
30 Jun 2023 31 Dec 2022
US$'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
No. of shares US$'000
1H FY2022
Balance as at 1 Jan 2022 and 30 Jun 2022 271,662,227 72,584
There were 10,740,072 treasury shares held by the Company as at 30 June 2023
and 30 June 2022 and there was no subsidiary holdings.
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
14. Share Capital (cont'd)
Total number of issued shares excluding treasury shares as at the end of the
current financial period and as at the end of the immediately preceding year:
30 Jun 2023 31 Dec 2022
Total number of issued shares excluding treasury shares 271,662,227 271,662,227
Total number of treasury shares as at the end of the current financial period
reported on:
1H FY2023 No. of shares US$'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
The 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. The 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
(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
(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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