REG - Global Invacom Group - Q3 FY2016 Results <Origin Href="QuoteRef">GLOB.SI</Origin> - Part 1
RNS Number : 9214OGlobal Invacom Group Limited11 November 201611 November 2016
Global Invacom Group Limited
Q3 FY2016 Results
Singapore and U.K. AIM Market-listed Global Invacom Group Extends Turnaround, Reports Net Profit of US$0.7 Million in Q3 FY2016
Net profit of US$0.7 million (Q3 FY2015: US$2.7 million loss)
Gross profit of US$7.2 million (Q3 FY2015: US$6.3 million)
Secured approval to supply next-generation products; positioned for improved sales
Global Invacom Group Limited ("Global Invacom" or "the Group"), a satellite communications ("Sat Comms") equipment provider listed on the Singapore Exchange and the U.K. AIM Market, today announces a net profit of US$0.7 million for the three months ended 30 September 2016 ("Q3 FY2016") compared to a US$2.7 million loss a year earlier.
The second consecutive quarter of profitability came on the back of increased demand in the United States for the Group's electronics products. Net profit for the nine months ended 30 September 2016 ("9M FY2016") was US$0.3 million compared to a loss of US$5.6 million in 9M FY2015.
Revenue for Q3 FY2016 was basically flat, down 0.4% to US$32.1 million from US$32.2 million in Q3 FY2015, due mainly to a US$2.4 million reduction in the Electronics Manufacturing Services and lower year-on-year sales orders in Asia. However, revenue for 9M FY2016 rose 11.8% to US$96.3 million from US$86.2 million a year ago.
With the inclusion of Global Skyware, Q3 FY2016 revenue from America and Europe rose US$2.3 million (+11.9%) and US$0.5 million (+6.9%), respectively, offset by a fall in revenue from Asia and the Rest of the World by US$2.1 million (-61.5%) and US$0.8 million (-54.6%), respectively.
Gross profit increased by US$0.9 million, or 15.4%, to US$7.2 million in Q3 FY2016 from US$6.3 million in Q3 FY2015. Gross profit margin improved to 22.6% from 19.5% due to a favourable product mix, improved efficiencies and tighter factory cost control.
-
Administrative expenses fell 34.1% to US5.7 million in Q3 FY2016 from US$8.7 million in Q3 FY 2015, representing 17.9% and 27.1% of revenue, respectively. This was due to the absence of professional fees in relation to the Global Skyware acquisition, lower legal costs related to a dispute in Q3 FY2015 and cost savings arising from restructuring and rationalisation in FY2016.
Earnings per share on a fully diluted basis was 0.26 U.S. cent in Q3 FY2016 compared to a loss per share of 1.04 U.S. cents in Q3 FY2015. Net asset value per share improved to 20.31 U.S. cents as at 31 September 2016 compared to 20.05 U.S. cents as at 31 December 2015.
The Group has completed the first phase of research and development for next-generation Low Noise Block ("LNB") products that support digital channel stacking switch ("DCSS") technology, and has secured production approval for volume supply to its largest customer, which will commence in Q4 FY2016. The Group will complete R&D and deploy DCSS technology across its LNBs for all customers and territories over the next 12 months.
Mr. Tony Taylor, Executive Chairman of Global Invacom, said, "The Group-wide restructuring and cost improvement has clearly contributed to our second consecutive quarter of profit. We have consolidated our supply chain, strengthened our management team and widened our sales network. We will continue to build on this momentum to drive sustainable growth and strengthen our global leadership in the R&D and production of Sat Comms equipment."
For media queries, please contact
Matthew Garner
Chief Financial Officer
Global Invacom Group Limited
8 Temasek Boulevard
#20-03 Suntec Tower Three
Singapore 038988
+65 6884 3423
Freeman House
John Roberts Business Park
Canterbury CT5 3BJ
+44 203 053 3523
On behalf of Global Invacom Group Limited:
finnCap Ltd (Nominated Adviser and Joint Broker)
Christopher Raggett / Simon Hicks (Corporate Finance)
Rhys Williams (Corporate Broking and Sales)
+44 207 220 0500
Mirabaud Securities LLP (Joint Broker)
Peter Krens (Equity Capital Markets)
+44 207 878 3362
Bell Pottinger LLP (UK Financial PR)
David Rydell / Lucy Stewart
+44 203 772 2500
WeR1 Consultants Pte Ltd (Singapore Financial PR)
Grace Yew, graceyew@wer1.net
Wendy Sim, wendysim@wer1.net
+65 6737 4844
About Global Invacom Group Limited
Global Invacom Group Limited ("Global Invacom") is listed on the Singapore Exchange Securities Trading Limited Mainboard ("SGX-ST") and its shares are admitted to trading on the AIM Market of the London Stock Exchange in the U.K.
Global Invacom is a fully integrated satellite equipment provider with seven manufacturing plants across China, Israel, Malaysia, U.K. and the U.S. Its customers include satellite broadcasters such as BSkyB of the U.K. and Dish Network of the U.S.
On 24 August 2015, Global Invacom completed the acquisition of Global Skyware, a leading U.S.-based designer and supplier of satellite antennas products and services for C-band, Ku-band and Ka-band frequency platforms, positioning itself as the world's only full-service outdoor unit supplier.
Global Invacom provides a full range of dish antennas, LNB receivers, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in TV peripherals, computer peripherals, medical, and consumer electronics industries.
For more information, please refer to www.globalinvacom.com
FINANCIAL STATEMENT ANNOUNCEMENT FOR Q3 AND NINE MONTHS ENDED 30 SEPTEMBER 2016
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 the nine months period ended 30 September 2016. These figures have not been audited.
Group
Group
Q3
FY2016
Q3 FY2015
Increase/
(Decrease)
9 Months FY2016
9 Months FY2015
Increase/
(Decrease)
US$'000
US$'000
%
US$'000
US$'000
%
Revenue
32,068
32,192
(0.4)
96,343
86,162
11.8
Cost of sales
(24,833)
(25,921)
(4.2)
(76,128)
(68,739)
10.7
Gross profit
7,235
6,271
15.4
20,215
17,423
16.0
Other income
-
224
100.0
17
193
(91.2)
Distribution costs
(46)
(217)
(78.8)
(232)
(273)
(15.0)
Administrative expenses
(5,747)
(8,721)
(34.1)
(18,526)
(22,322)
(17.0)
Other operating expenses
(24)
-
N.M.
(87)
(41)
112.2
Finance income
1
-
N.M.
13
15
(13.3)
Finance costs
(227)
(74)
206.8
(551)
(94)
486.2
Profit/(Loss) before income tax(i)
1,192
(2,517)
N.M.
849
(5,099)
N.M.
Income tax expense
(494)
(194)
154.6
(580)
(452)
28.3
Profit/(Loss) after income tax
attributable to equity holders of the
Company
698
(2,711)
N.M.
269
(5,551)
N.M.
Other comprehensive (loss)/ income:
Items that may be reclassified
subsequently to profit or loss
- Exchange differences on translation of
foreign subsidiaries
(248)
(941)
(73.6)
231
(995)
N.M.
Items that may not be reclassified
subsequently to profit or loss
-
-
-
-
-
-
Other comprehensive (loss)/income for
the period, net of tax
(248)
(941)
(73.6)
231
(995)
N.M.
Total comprehensive income/(loss) for
the period attributable to equity holders
of the Company
450
(3,652)
N.M.
500
(6,546)
N.M.
N.M.: Not Meaningful
Note:
(i) Profit/(Loss) before income tax was determined after (charging)/crediting the following:
Group
Group
Q3
FY2016
Q3 FY2015
Increase/
(Decrease)
9 Months FY2016
9 Months
FY2015
Increase/
(Decrease)
US$'000
US$'000
%
US$'000
US$'000
%
Interest income
1
-
N.M.
13
15
(13.3)
Interest expense on borrowings
(227)
(74)
206.8
(551)
(94)
486.2
(Loss)/Gain on foreign exchange
(24)
249
N.M.
(87)
171
N.M.
Gain/(Loss) on disposal of property,
plant and equipment
-
4
(100.0)
-
(41)
(100.0)
Depreciation of property, plant and
equipment
(643)
(597)
7.7
(1,875)
(1,394)
34.5
Amortisation of intangible assets
(40)
(129)
(69.0)
(116)
(305)
(62.0)
Allowance for inventory obsolescence
(156)
(37)
321.6
(483)
(290)
66.6
Operating lease expense
(818)
(425)
92.5
(2,501)
(1,212)
106.4
Research and development expense
(422)
(212)
99.1
(1,177)
(600)
96.2
1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
Group
Company
30 Sep 2016
31 Dec 2015
30 Sep 2016
31 Dec 2015
US$'000
US$'000
US$'000
US$'000
ASSETS
Non-current Assets
Property, plant and equipment
13,512
13,896
4
1
Investments in subsidiaries
-
-
53,373
53,155
Goodwill
9,352
9,352
-
-
Intangible assets
3,027
3,069
-
-
Available-for-sale financial assets
8
8
-
-
Deferred tax assets
685
723
-
-
Other receivables and prepayments
56
56
7,476
8,262
26,640
27,104
60,853
61,418
Current Assets
Due from subsidiaries
-
-
933
139
Inventories
29,181
27,859
-
-
Trade receivables
17,849
21,306
-
-
Other receivables and prepayments
3,566
3,973
4,077
5,705
Tax receivables
524
431
-
-
Cash and cash equivalents
11,457
8,866
1,331
1,637
62,577
62,435
6,341
7,481
Total assets
89,217
89,539
67,194
68,899
EQUITY AND LIABILITIES
Equity
Share capital
60,423
60,423
74,240
74,240
Treasury shares
(1,656)
(1,656)
(1,656)
(1,656)
Reserves
(3,587)
(4,305)
(12,457)
(11,202)
Total equity
55,180
54,462
60,127
61,382
Non-current Liabilities
Other payables
944
1,333
-
-
Deferred tax liabilities
171
171
-
-
1,115
1,504
?
-
-
Current Liabilities
Due to subsidiaries
-
-
6,610
4,653
Trade payables
19,476
19,392
-
-
Other payables
5,723
8,524
372
2,779
Borrowings
7,404
5,348
-
-
Provision for income tax
319
309
?
85
85
32,922
33,573
7,067
7,517
Total liabilities
34,037
35,077
7,067
7,517
Total equity and liabilities
89,217
89,539
67,194
68,899
1(b)(ii) Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 30 Sep 2016
As at 31 Dec 2015
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
7,404
-
5,348
-
Amount repayable after one year
As at 30 Sep 2016
As at 31 Dec 2015
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
-
-
-
-
Details of any collateral
The loans of US$7,404,000 were secured over the subsidiaries' bank deposit of US$400,000, cash collateral of US$1,000,000 and corporate guarantees provided by the Company.
1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Group
Q3 FY2016
Q3 FY2015
9 Months FY2016
9 Months FY2015
US$'000
US$'000
US$'000
US$'000
Cash Flows from Operating Activities
Profit/(Loss) before income tax
1,192
(2,517)
849
(5,099)
Adjustments for:
Depreciation of property, plant and equipment
643
597
1,875
1,394
Amortisation of intangible assets
40
129
116
305
(Gain)/Loss on disposal of property, plant and equipment
-
(4)
-
41
Allowance for inventory obsolescence
156
37
483
290
Unrealised exchange gain
(289)
(617)
(70)
(455)
Interest income
(1)
-
(13)
(15)
Interest expense
227
74
551
94
Share-based payments
45
88
218
134
Operating cash flow before working capital changes
2,013
(2,213)
4,009
(3,311)
Changes in working capital:
Inventories
(2,563)
169
(1,802)
580
Trade receivables
(474)
(370)
3,481
335
Other receivables and prepayments
(819)
(165)
516
(665)
Trade and other payables
2,648
(1,693)
(468)
1,623
Cash generated from/(used in) operating activities
805
(4,272)
5,736
(1,438)
Interest paid
(302)
(74)
(534)
(94)
Income tax paid
(208)
(215)
(513)
(667)
Net cash generated from/(used in) operating activities
295
(4,561)
4,689
(2,199)
Cash Flows from Investing Activities
Interest received
1
-
13
15
Purchase of property, plant and equipment
(256)
(100)
(1,371)
(335)
Proceeds from disposal of property, plant and
equipment
-
6
-
6
Increase in capitalised development cost
-
(14)
-
(279)
Acquisition of subsidiary, net of cash acquired
-
501
-
501
Cash consideration paid for reverse acquisition
-
(5,500)
-
(5,500)
Decrease/(Increase) in restricted cash
-
2,016
5
(765)
Net cash used in investing activities
(255)
(3,091)
(1,353)
(6,357)
Cash Flows from Financing Activities
Proceeds from borrowings
11,569
4,763
35,203
7,403
Repayment of borrowings
(9,765)
(5,998)
(33,069)
(6,164)
Proceeds from shareholders' loan
-
2,850
-
2,850
Repayment of shareholders' loan
(2,850)
-
(2,850)
-
Dividends paid
-
-
-
(1,078)
Purchase of treasury shares
-
(1,656)
-
(8,829)
Sale of treasury shares
-
-
-
2,361
Net cash used in financing activities
(1,046)
(41)
(716)
(3,457)
Group
Group
Q3 FY2016
Q3 FY2015
9 Months FY2016
9 Months FY2015
US$'000
US$'000
US$'000
US$'000
Net (decrease)/increase in cash and cash equivalents
(1,006)
(7,693)
2,620
(12,013)
Cash and cash equivalents at the beginning of the period
11,066
15,955
7,448
20,555
Effect of foreign exchange rate changes on the balance
of cash held in foreign currencies
(16)
(474)
(24)
(754)
Cash and cash equivalents at the end of the period(i)
10,044
7,788
10,044
7,788
Note:
(i) For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:
Q3
FY2016
Q3
FY2015
9 Months FY2016
9 Months FY2015
US$'000
US$'000
US$'000
US$'000
Cash and bank balances
11,014
8,731
11,014
8,731
Fixed deposits
443
469
443
469
11,457
9,200
11,457
9,200
Less: Restricted cash*
(1,413)
(1,412)
(1,413)
(1,412)
Cash and cash equivalents per the consolidated
statement of cash flows
10,044
7,788
10,044
7,788
* Restricted cash includes cash collateral amounted to US$1,000,000 (9 Months FY2015: US$1,000,000) and fixed deposits amounted to US$400,000 (9 Months FY2015: US$400,000) pledged with the banks for facilities and loans granted to the Group. As at 30 September 2016, the Group had utilised US$7,404,000 of the facilities and loans granted.
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Share
capital
Treasury shares
Merger reserves
Capital redemption reserves
Share options reserve
Capital reserve
Foreign currency translation reserve
Retained profits
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2016
60,423
(1,656)
(10,150)
6
353
(3,786)
(1,281)
10,553
54,462
Share-based payments
-
-
-
-
87
-
-
-
87
Loss for the period
-
-
-
-
-
-
-
(654)
(654)
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
578
-
578
Total other comprehensive income/(loss) for the period
-
-
-
-
-
-
578
(654)
(76)
Balance as at 31 Mar 2016
60,423
(1,656)
(10,150)
6
440
(3,786)
(703)
9,899
54,473
Share-based payments
-
-
-
-
86
-
-
-
86
Profit for the period
-
-
-
-
-
-
-
225
225
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(99)
-
(99)
Total other comprehensive (loss)/income for the period
-
-
-
-
-
-
(99)
225
126
Balance as at 30 Jun 2016
60,423
(1,656)
(10,150)
6
526
(3,786)
(802)
10,124
54,685
Share-based payments
-
-
-
-
45
-
-
-
45
Transfer to capital reserve in accordance with statutory requirements
-
-
-
-
-
91
-
(91)
-
Profit for the period
-
-
-
-
-
-
-
698
698
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(248)
-
(248)
Total other comprehensive (loss)/income for the period
-
-
-
-
-
-
(248)
698
450
Balance as at 30 Sep 2016
60,423
(1,656)
(10,150)
6
571
(3,695)
(1,050)
10,731
55,180
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$'000
Balance as at 1 Jan 2015
60,423
(3,421)
(10,150)
6
131
642
(360)
12,812
60,083
Purchase of treasury shares
-
(3,424)
-
-
-
-
-
-
(3,424)
Share-based payments
-
-
-
-
22
-
-
-
22
Loss for the period
-
-
-
-
-
-
-
(933)
(933)
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
168
-
168
Total other comprehensive income/(loss) for the period
-
-
-
-
-
-
168
(933)
(765)
Balance as at 31 Mar 2015
60,423
(6,845)
(10,150)
6
153
642
(192)
11,879
55,916
Purchase of treasury shares
-
(3,749)
-
-
-
-
-
-
(3,749)
Sale of treasury shares
-
2,777
-
-
-
(416)
-
-
2,361
Share-based payments
-
-
-
-
24
-
-
-
24
Payment of dividends
-
-
-
-
-
-
-
(1,078)
(1,078)
Transfer to capital reserve in accordance with statutory requirements
-
-
-
-
-
53
-
(53)
-
Loss for the period
-
-
-
-
-
-
-
(1,907)
(1,907)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(222)
-
(222)
Total other comprehensive loss for the period
-
-
-
-
-
-
(222)
(1,907)
(2,129)
Balance as at 30 Jun 2015
60,423
(7,817)
(10,150)
6
177
279
(414)
8,841
51,345
Purchase of treasury shares
-
(1,656)
-
-
-
-
-
-
(1,656)
Issuance of treasury shares
-
7,817
-
-
-
(4,065)
-
-
3,752
Share-based payments
-
-
-
-
88
-
-
-
88
Loss for the period
-
-
-
-
-
-
-
(2,711)
(2,711)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(941)
-
(941)
Total other comprehensive loss for the period
-
-
-
-
-
-
(941)
(2,711)
(3,652)
Balance as at 30 Sep 2015
60,423
(1,656)
(10,150)
6
265
(3,786)
(1,355)
6,130
49,877
Company
Share
capital
Treasury shares
Share options reserve
Capital reserve
Foreign currency translation reserve
Accumulated losses
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2016
74,240
(1,656)
353
(4,481)
(2,067)
(5,007)
61,382
Share-based payments
-
-
87
-
-
-
87
Loss for the period
-
-
-
-
-
(527)
(527)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(527)
(527)
Balance as at 31 Mar 2016
74,240
(1,656)
440
(4,481)
(2,067)
(5,534)
60,942
Share-based payments
-
-
86
-
-
-
86
Loss for the period
-
-
-
-
-
(996)
(996)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(996)
(996)
Balance as at 30 Jun 2016
74,240
(1,656)
526
(4,481)
(2,067)
(6,530)
60,032
Share-based payments
-
-
45
-
-
-
45
Profit for the period
-
-
-
-
-
50
50
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive income for the period
-
-
-
-
-
50
50
Balance as at 30 Sep 2016
74,240
(1,656)
571
(4,481)
(2,067)
(6,480)
60,127
Balance as at 1 Jan 2015
74,240
(3,421)
131
-
1,714
(11,046)
61,618
Purchase of treasury shares
-
(3,424)
-
-
-
-
(3,424)
Share-based payments
-
-
22
-
-
-
22
Loss for the period
-
-
-
-
-
(294)
(294)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
(2,296)
-
(2,296)
Total other comprehensive loss for the period
-
-
-
-
(2,296)
(294)
(2,590)
Balance as at 31 Mar 2015
74,240
(6,845)
153
-
(582)
(11,340)
55,626
Purchase of treasury shares
-
(3,749)
-
-
-
-
(3,749)
Sale of treasury shares
-
2,777
-
(416)
-
-
2,361
Share-based payments
-
-
24
-
-
-
24
Payment of dividends
-
-
-
-
-
(1,078)
(1,078)
Profit for the period
-
-
-
-
-
3,156
3,156
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
1,318
-
1,318
Total other comprehensive income for the period
-
-
-
-
1,318
3,156
4,474
Balance as at 30 Jun 2015
74,240
(7,817)
177
(416)
736
(9,262)
57,658
Purchase of treasury shares
-
(1,656)
-
-
-
-
(1,656)
Issuance of treasury shares
-
7,817
-
(4,065)
-
-
3,752
Share-based payments
-
-
89
-
-
-
89
Loss for the period
-
-
-
-
-
(249)
(249)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
(3,198)
-
(3,198)
Total other comprehensive loss for the period
-
-
-
-
(3,198)
(249)
(3,447)
Balance as at 30 Sep 2015
74,240
(1,656)
266
(4,481)
(2,462)
(9,511)
56,396
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.
9 Months FY2016
No. of shares
US$'000
Balance as at 1 Jan 2016 and 30 Sep 2016
271,662,227
72,584
9 Months FY2015
No. of shares
US$'000
Balance as at 1 Jan 2015
269,059,299
70,819
Purchase of treasury shares
(11,610,000)
(3,424)
Balance as at 31 Mar 2015
257,449,299
67,395
Purchase of treasury shares
(15,004,900)
(3,749)
Sale of treasury shares
12,000,000
2,777
Balance as at 30 Jun 2015
254,444,399
66,423
Purchase of treasury shares
(10,740,000)
(1,656)
Issuance of treasury shares pursuant to the acquisition of the entire equity interest in Satellite Acquisition Corporation
27,957,828
7,817
Balance as at 30 Sep 2015
271,662,227
72,584
There were 10,740,072 treasury shares held by the Company as at 30 September 2016 and 30 September 2015.
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.
30 Sep 2016
31 Dec 2015
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.
9 Months FY2016
No. of shares
US$'000
Balance as at 1 Jan 2016 and 30 Sep 2016
10,740,072
1,656
2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.
These figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).
Not applicable.
4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
The accounting policies and methods of computation have been applied consistently for the current financial period ended 30 September 2016 as those used in the audited financial statements for the year ended 31 December 2015, except for the adoption of the new or revised International Financial Reporting Standards ("IFRS") applicable for the financial period beginning 1 January 2016.
5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as thereasons for, and the effect of, the change.
The Group has adopted all of the new or revised IFRS that are effective for the financial period beginning 1 January 2016 and are relevant to its operations. The adoption of these IFRS does not have financial impact on the Group's financial position or results.
6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.
Earnings per ordinary share of the Group, after deducting any provision for preference dividends
Group
Group
Q3
FY2016
US$
Q3
FY2015
US$
9 Months FY2016
US$
9 Months FY2015
US$
(a) Based on weighted average number of ordinary shares on issue; and
0.26 cent
(1.04) cents
0.10 cent
(2.14) cents
(b) On a fully diluted basis
0.26 cent
(1.04) cents
0.10 cent
(2.13) cents
Weighted average number of ordinary shares used in computation of basic earnings per share
271,662,227
259,528,197
271,662,227
259,528,197
Weighted average number of ordinary shares used in computation of diluted earnings per share
271,763,615
259,528,197
271,662,227
260,405,588
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
30 Sep 2016
US$
31 Dec 2015
US$
30 Sep 2016
US$
31 Dec 2015
US$
Net asset value ("NAV") per ordinary share based on issued share capital
20.31 cents
20.05 cents
22.13 cents
22.59 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 was US$32.1 million in Q3 FY2016, US$0.1 million lower than US$32.2 million in Q3 FY2015. It recognised three months' revenue contribution of US$10.4 million in Q3 FY2016 from its latest acquisition, Satellite Acquisition Corporation ("Global Skyware") of the United States. Despite the reduction in its Contract Manufacturing segment of US$2.4 million and lower sales orders in Asia in Q3 FY2016 against Q3 FY2015, the Group's revenue for the nine months ended 30 September 2016 increased 11.8% to US$96.3 million from US$86.2 million a year ago.
By geography, with the inclusion of Global Skyware, revenue for Q3 FY2016 from America and Europe increased by US$2.3 million (+11.9%) and US$0.5 million (+6.9%), respectively; offset by a fall in revenue from Asia and the Rest of the World by US$2.1 million (-61.5%) and US$0.8 million (-54.6%), respectively, against Q3 FY2015.
Gross Profit
Gross profit increased by US$0.9 million or 15.4% to US$7.2 million in Q3 FY2016 from US$6.3 million in Q3 FY2015. Gross profit margin improved to 22.6% in Q3 FY2016 from 19.5% in Q3 FY2015. Excluding Global Skyware, gross profit margin would have risen by 4.8% against Q3 FY2015 to 29.0% in Q3 FY2016. The favourable product mix variation, efficiency improvement and Group-wide factory cost control have resulted in the increased gross profit margin.
Administrative Expenses
Administrative expenses decreased significantly to US$5.7 million in Q3 FY2016 from US$8.7 million in Q3 FY2015, representing 17.9% and 27.1% of revenue, respectively. This was primarily due to the absence of professional fees in relation to the acquisition of Global Skyware and the reduction in legal costs on a dispute with a supplier that was incurred in Q3 FY2015, cost savings incurred from streamlining programmes, as well as a restructuring and rationalisation exercise in FY2016.
Finance Costs
The increase in finance costs was mainly attributable to the increase in borrowings in Q3 FY2016 relating to Global Skyware.
Profit before Tax & Net Profit
The Group recorded a profit before tax of US$1.2 million in Q3 FY2016 compared to a loss before tax of US$2.5 million in Q3 FY2015, with a positive margin of 3.7% compared to a negative margin of 7.8%, respectively. On an organic basis, excluding the loss from Global Skyware, the Group would have posted a profit before tax in the quarter of US$1.6 million.
Overall, the Group posted a net profit of US$0.7 million in Q3 FY2016 compared to a net loss of US$2.7 million in Q3 FY2015, with a positive margin of 2.2% compared to a negative margin of 8.4%, respectively. On an organic basis, excluding Global Skyware, the Group would have posted a net profit of US$1.1 million.
Review of Financial Position
Non-current assets decreased primarily with the depreciation of property, plant and equipment.
Net current assets increased by US$0.8 million to US$29.7 million as at 30 September 2016 compared to US$28.9 million as at 31 December 2015. Inventories increased by US$1.3 million in preparation of anticipated and confirmed orders for the next few months and improved collections has resulted in trade and other receivables decreased by US$3.9 million. The repayment of the shareholders' loan has also resulted in the decrease of other payables by US$2.8 million. On the other hand, borrowings increased by US$2.0 million to US$7.4 million and cash and cash equivalents improved by US$2.6 million to US$11.5 million as at 30 September 2016.
Non-current liabilities decreased by US$0.4 million due to the release of a provision for litigation that the Group settled with a former supplier.
The Group's net asset value stood at US$55.2 million as at 30 September 2016, compared to US$54.5 million as at 31 December 2015.
Review of Cash Flows
Net cash generated from operating activities was US$0.3 million, comprising cash inflow from operating cash activities before working capital changes of US$2.0 million, net working capital outflow of US$1.2 million and payment of interest and income tax expense of US$0.5 million.
Net cash used in investing activities was US$0.3 million, mainly comprising the purchase of machinery and equipment.
Net cash used in financing activities was US$1.0 million, arising from the repayment of shareholders' loan, offset by the receipt of bank loans.
Overall, the Group recorded a net decrease in cash and cash equivalents of US$1.0 million in Q3 FY2016, bringing cash and cash equivalents per the consolidated statement of cash flows to US$10.0 million as at 30 September 2016.
9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
No forecast or prospect statement was made by the Company in the previous announcement made on 4 August 2016.
10. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
The Q3 FY2016 results mark the Group's second consecutive quarter of profitability. The Group intends to build on this turnaround in the coming quarters as it continues to reap the benefits of its restructuring and cost improvement initiatives.
The integration of the Group's US subsidiary, Raven Antenna Systems - previously trading as Skyware Global - has progressed significantly although there are still further improvements and research and development projects to complete. Since completing the acquisition on 24 August 2015, the subsidiary has been rebranded as Global Skyware to bring the business in line with the Group's wider brand and to fully consolidate its US supply chain. The Group will recognise Global Skyware's first full-year revenue contributions in FY2016.
Further to the announcement of 8 November 2016, the Group is exploring the potential consolidation of its activities in China under its wholly-owned subsidiary, Global Invacom Manufacturing (Shanghai) Co., Ltd ("Shanghai subsidiary"), to optimise manufacturing cost efficiencies. Critical equipment and customer inventory from the Group's Shenzhen subsidiary, Radiance Electronics (Shenzhen) Co., Ltd, may be transferred to the Shanghai subsidiary. The Group will announce any material developments relating to this matter as and when appropriate.
The Group believes the expected launch of two new communication satellites in the coming months by a leading US broadcaster will underpin demand for its next-generation Satellite Communications ("Sat Comms") products. Worldwide, the global satellite manufacturing and launch market is expected to grow at a CAGR of 5.14% between 2014 and 2019.* Developing markets in Latin America, the Middle East and Southeast Asia continue to offer potential for the adoption of new Sat Comms services.
Despite global concerns about Britain's economic prospects following its decision in June to leave the European Union ("Brexit"), the Group remains upbeat about its Sat Comms business. The weakening of the British Pound against major currencies has provided, and is expected to continue to provide, short-term foreign exchange benefits for the Group's UK-based operating costs. Pending the outcome of a UK parliamentary vote on Brexit - as announced by a UK High Court recently - the Group will consider establishing a logistics hub in an EU country to continue tariff-free transactions via a possible UK-EU Free Trade Agreement that may need to be negotiated. Revenue from the Group's Sat Comms sales is predominantly transacted in US Dollars, as well as the bulk of its raw material spend.
The Group remains mindful of the significant technology change that recently swept the satellite ground equipment industry with the introduction of digital channel stacking switch ("DCSS") technology, which allows up to 32 continuous video streams from a single Low Noise Block ("LNB"). This impacted the Group's FY2015 performance as major customers had to destock, and is likely to persist for the remainder of 2H FY2016.
The Group has completed research on next-generation LNBs that support DCSS, and has secured approval to supply LNBs from a main customer. It is one of only two main suppliers for this project. This approval marks a significant achievement for the Group, which has invested in the new generation of LNBs since 2014. The Group expects to deploy the DCSS technology across its LNBs for all customers and territories. Delivery of the new products will commence in Q4 FY2016, following which the Group will supply similar LNBs to other customers.
*Source: The Satellite Industry Association's 2015 State of the Satellite Industry Report
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.
No dividend has been declared or recommended for the nine months period ended 30 September 2016.
13. 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 nine months period ended 30 September 2016.
14. 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.
CONFIRMATION BY THE BOARD OF DIRECTORS (THE "BOARD") 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 nine months period ended 30 September 2016 to be false or misleading in any material aspect.
On behalf of the Board
Anthony Brian Taylor Matthew Jonathan Garner
Director Director
BY ORDER OF THE BOARD
Anthony Brian Taylor
Chairman
11 November 2016
The information communicated in this announcement contains inside information for the purpose of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
This information is provided by RNSThe company news service from the London Stock ExchangeENDQRTDMMMMNGDGVZM
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