Results for the six months ended 30 June 2020

Global Invacom

13/08/2020 07:00

RNS Number : 9805V

Global Invacom Group Limited

13 August 2020

 

Global Invacom Group Limited

("Global Invacom", the "Company" or the "Group")

 

Results for the six months ended 30 June 2020

("1H FY2020")

 

Singapore/London, 13 August 2020 - Global Invacom (SGX: QS9) (AIM: GINV), the global provider of satellite communications equipment and electronics, is pleased to announce its financial results for the six months ended 30 June 2020.

 

Key financial highlights:

 

·    Revenue for 1H FY2020 of US$52.8m (1H FY2019: US$71.9m)

·    Gross Profit for 1H FY2020 of US$12.4m (1H FY2019: US$15.1m)

·    Net profit for 1H FY2020 of US$342k (1H FY2019: US$1.6m)

·    Cash and cash equivalents of US$7.5m (31 December 2019: US$8.9m)

 

Key operational highlights:

 

·    The Group achieved profitability through a challenging half year

·    As expected, the COVID-19 pandemic has impacted demand, though the majority of the Group's factories have remained operational during this time

·    Gross Profit margin increased by 2.4% when compared with 1H FY2019, underpinned by new product designs and benefit of manufacturing shift to the Philippines

·    Direct to Home ("DTH") satellite connectivity equipment continues to support growth within the business

·    Ongoing focus on both product development, especially within Data Over Satellite ("DOS"), and diversification, remains central to growth strategy

 

The performance of the Group in the first half of the year reflects the impact of the global COVID-19 pandemic. The Group experienced lockdowns of varying degrees of interruption and length in all countries in which it operates, although this was mitigated in part by our diversity of manufacturing sites and their classification as essential suppliers.

 

As covered above, the majority of our factories remained operational, with office and R&D staff also successfully transitioning to working remotely. The Group has carried out rigorous risk assessments and continues to implement safe-distancing and hygiene procedures throughout our business, meaning employees are now slowly and safely returning to work. The Group continues to monitor the situation closely and will continue to act within all relevant Government guidelines for the regions in which it has sites.

 

The Group delivered sales of US$52.8 million in the first half of the year, with US$26.4 million of sales in the second quarter. Geographically, lower demand in America and Europe was marginally offset by increased demand across Asia. The United States, which remains a significant market for the Group, continues to be severely impacted by COVID-19, which has translated to a fall in anticipated orders.

 

The Group's Shanghai site ceased manufacturing in July 2020, though certain supply chain functions will continue within China going forward. Despite COVID-19, the Group has continued its transition to its third-party subcontract manufacturer in the Philippines. This relocation of manufacturing to the Philippines is already delivering manufacturing efficiencies to the Group, while maximising our sales pipeline across Asia and reducing the Group's exposure to trade disputes between China and the United States.

 

In the last six months, the Group has reduced its administration costs through the reduction in activity at its site in China and through reduced costs, such as travelling, which are a by-product of the COVID-19 pandemic.

 

Despite the negative headwinds caused by the pandemic, Global Invacom's products are expected to continue to play a crucial role in meeting global demand for data and connectivity, especially where security of transmission is important, for telecoms data backhaul or in rural areas and less developed regions where physical fibre or cable is not commercially viable. As evidenced by the Group's ability to remain profitable despite the impact of COVID-19, our combination of DTH and DOS products continues to provide a strong foundation for our business. Moving forward, the Group will continue to invest not only in R&D for DTH, but also increasingly in our DOS offering as we look to capitalise on the opportunities within this burgeoning market.

 

Tony Taylor, Executive Chairman of Global Invacom, commented:

 

"The first six months of the year have, as expected, been impacted by the global COVID-19 pandemic. The safety of our people around the world has been of paramount importance and we continue to monitor the situation in each of our key regions, to ensure the highest levels of compliance are maintained.

 

Our business has continued to weather these unforeseen circumstances and, pleasingly, has remained profitable for 1H FY2020, which is a testament not only to our robust business model, but also to the ability of our people to adapt to and overcome significant challenges. I would like to thank our teams worldwide for their tenacity during this difficult period.

 

Going forward, we will continue to focus on maximising the significant market potential of our product stack and I believe we remain well placed to return to growth as the market emerges from lockdown."

 

 

For further information, please contact:

 

Global Invacom Group Limited
www.globalinvacom.com
Matthew Garner, Chief Financial Officer
Tel: +65 6431 0782
Tel: +44 203 053 3523
Strand Hanson Limited (Nominated Adviser and Broker)
James Harris / Richard Tulloch / Jack Botros
www.strandhanson.co.uk
Tel: +44 20 7409 3494
Vigo Communications (UK Media & Investor Relations)
www.vigocomms.com
Jeremy Garcia / Charlie Neish
Tel: +44 207 390 0238
ginv@vigocomms.com


 

 

About Global Invacom Group Limited

 

Global Invacom is a fully integrated satellite equipment provider with sites across China, Singapore, Indonesia, Philippines, Malaysia, Israel, 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 satellite ground equipment including antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components as well as manufacturing services in military and medical industries. The Group is 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 THE HALF-YEAR ENDED 30 JUNE 2020

 

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 half-year ended 30 June 2020. These figures have not been audited.

 

Group
1H
 FY2020
1H
 FY2019
Increase/
(Decrease)
US$'000
US$'000
%
Revenue
52,773
71,945
(26.6)
Cost of sales
(40,423)
(56,866)
(28.9)
Gross profit
12,350
15,079
(18.1)
Other income
125
145
(13.8)
Distribution costs
(115)
(172)
(33.1)
Administrative expenses
(11,030)
(12,197)
(9.6)
Other operating expenses
(378)
(409)
(7.6)
Finance income
21
98
(78.6)
Finance costs
(429)
(410)
4.6
Profit before income tax(i)
544
2,134
(74.5)
Income tax expense
(202)
(548)
(63.1)
Profit for the period
342
1,586
(78.4)


 

 

Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries
(105)
(98)
7.1
Other comprehensive loss for the period, net of tax
(105)
(98)
7.1
Total comprehensive income for the period
237
1,488
(84.1)

 

Profit for the period attributable to:
Equity holders of the Company
345
1,586
(78.2)
Non-controlling interests
(3)
-
N.M.
342
1,586
(78.4)
Total comprehensive income for the period attributable to:
Equity holders of the Company
240
1,488
(83.9)
Non-controlling interests
(3)
-
N.M.
237
1,488
(84.1)

 

N.M.:  Not Meaningful

 

Note:

 

(i)    Profit before income tax was determined after (charging)/crediting the following:

 

Group
1H
 FY2020
1H
 FY2019
Increase/
(Decrease)
US$'000
US$'000
%
Interest income
21
98
(78.6)
Interest expense
(429)
(410)
4.6
Loss on foreign exchange
(102)
(380)
(73.2)
Write-back of payables
-
74
(100.0)
Loss on disposal of property, plant and equipment
-
(13)
(100.0)
Depreciation of property, plant and equipment
(1,388)
(1,573)
(11.8)
Amortisation of intangible assets
(446)
(460)
(3.0)
Depreciation of right-of-use assets
(1,076)
(1,152)
(6.6)
(Allowance)/Write-back for inventory obsolescence, net
(19)
264
N.M.
Impairment of trade receivables
(274)
-
N.M.
Bad debts written off
-
(16)
(100.0)
Research and development expense
(881)
(1,061)
(17.0)


 

 

 

 

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 Jun 2020
31 Dec 2019
30 Jun 2020
31 Dec 2019
US$'000
US$'000
US$'000
US$'000
ASSETS
Non-current Assets
Property, plant and equipment
9,707
10,254
138
168
Right-of-use assets
6,655
7,533
88
144
Investments in subsidiaries
-
-
27,586
27,586
Goodwill
6,092
6,092
-
-
Intangible assets
2,678
3,104
-
-
Other financial assets
8
8
-
-
Deferred tax assets
975
975
-
-
Other receivables and prepayments
54
54
10,335
10,100
26,169
28,020
38,147
37,998
Current Assets
Due from subsidiaries
-
-
3,763
4,105
Inventories
27,032
25,795
-
-
Trade receivables
19,878
19,846
-
-
Other receivables and prepayments
2,286
1,909
3,479
3,407
Tax receivables
1
38
-
-
Cash and cash equivalents
7,478
8,912
274
610
56,675
56,500
7,516
8,122
Total assets
82,844
84,520
45,663
46,120
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
(14,451)
(14,691)
(27,244)
(26,853)
Equity attributable to owners of the Company
44,316
44,076
45,340
45,731
Non-controlling interests
(14)
(11)
-
-
Total equity
44,302
44,065
45,340
45,731
Non-current Liabilities
Other payables
108
108
-
-
Lease liabilities
5,766
5,948
-
35
Deferred tax liabilities
428
428
-
-
6,302
6,484
-
35
Current Liabilities
Due to subsidiaries
-
-
-
-
Trade payables
11,509
12,903
-
-
Other payables
9,165
10,238
233
238
Borrowings
10,261
8,929
-
-
Lease liabilities
1,162
1,897
90
116
Provision for income tax
143
4
-
-
32,240
33,971
323
354
Total liabilities
38,542
40,455
323
389
Total equity and liabilities
82,844
84,520
45,663
46,120


 

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 Jun 2020
As at 31 Dec 2019
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
10,261
-
8,929
-


 

Amount repayable after one year

 

As at 30 Jun 2020
As at 31 Dec 2020
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
-
-
-
-


 

Details of any collateral

 

The revolving credit loans of US$10,261,000 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
1H
 FY2020
1H
 FY2019
US$'000
US$'000
Cash Flows from Operating Activities
Profit before income tax
544
2,134
Adjustments for:
Depreciation of property, plant and equipment
1,388
1,573
Amortisation of intangible assets
446
460
Loss on disposal of property, plant and equipment
-
13
Depreciation of right-of-use assets
1,076
1,152
Allowance/(Write-back) for inventory obsolescence, net
19
(264)
Impairment of trade receivables
274
-
Bad debts written off
-
16
Unrealised exchange gain
(53)
(95)
Interest income
(21)
(98)
Interest expense
429
410
Share-based payments
-
2
Write-back of payables
-
(74)
Operating cash flow before working capital changes
4,102
5,229
Changes in working capital:
Inventories
(1,256)
(174)
Trade receivables
(324)
2,746
Other receivables and prepayments
(395)
(142)
Trade and other payables
(2,756)
(5,303)
Cash (used in)/generated from operating activities
(629)
2,356
Interest paid
(60)
(235)
Income tax paid
-
(198)
Net cash (used in)/generated from operating activities
(689)
1,923
Cash Flows from Investing Activities
Interest received
21
30
Purchase of property, plant and equipment
(966)
(1,842)
Proceeds from disposal of property, plant and equipment
-
1
Acquisition of a business
-
(279)
Payment for financial asset, at fair value through profit or loss
-
(500)
Net cash used in investing activities
(945)
(2,590)
Cash Flows from Financing Activities
Proceeds from borrowings
23,238
36,494
Repayment of borrowings
(21,906)
(34,818)
Principal payment of lease liabilities
(1,109)
(1,459)
Net cash generated from financing activities
223
217
Net decrease in cash and cash equivalents
(1,411)
(450)
Cash and cash equivalents at the beginning of the period
8,912
8,381
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies
(23)
(40)
Cash and cash equivalents at the end of the period(i)
7,478
7,891

 

 

 

 

Note:

 

(i)    For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:

 

1H
 FY2020
1H
 FY2019
US$'000
US$'000
Cash and bank balances
7,449
7,861
Fixed deposits
29
30
Cash and cash equivalents per the consolidated statement of cash flows
7,478
7,891

 

               

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
Attributable to equity holders of the Company
Non-controlling interests
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 January 2020
60,423
(1,656)
(10,150)
6
725
(5,109)
(1,217)
1,054
44,076
(11)
44,065
Profit/(Loss) for the period
-
-
-
-
-
-
-
345
345
(3)
342
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(105)
-
(105)
-
(105)
Total other comprehensive (loss)/income for the period
-
-
-
-
-
-
(105)
345
240
(3)
237
Balance as at 30 June 2020
60,423
(1,656)
(10,150)
6
725
(5,109)
(1,322)
1,399
44,316
(14)
44,302
Balance as at 1 January 2019
60,423
(1,656)
(10,150)
6
723
(3,560)
(1,289)
12,109
56,606
-
56,606
Adoption of SFRS(I) 16
-
-
-
-
-
-
-
(239)
(239)
-
(239)
Adjusted balance at 1 January 2019
60,423
(1,656)
(10,150)
6
723
(3,560)
(1,289)
11,870
56,367
-
56,367
Share-based payments
-
-
-
-
2
-
-
-
2
-
2
Profit for the period
-
-
-
-
-
-
-
1,586
1,586
-
1,586
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
(100)
-
(100)
-
(100)
Total other comprehensive (loss)/income for the period
-
-
-
-
-
-
(100)
1,586
1,486
-
1,486
Balance as at 30 June 2019
60,423
(1,656)
(10,150)
6
725
(3,560)
(1,389)
13,456
57,855
-
57,855

 

 

 

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 January 2020
74,240
(1,656)
725
(4,481)
(2,506)
(20,591)
45,731
Loss for the period
-
-
-
-
-
(391)
(391)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(391)
(391)
Balance as at 30 June 2020
74,240
(1,656)
725
(4,481)
(2,506)
(20,982)
45,340
Balance as at 1 January 2019
74,240
(1,656)
723
(4,481)
(1,927)
(8,303)
58,596
Adoption of SFRS(I) 16
-
-
-
-
-
(5)
(5)
Adjusted balance at 1 January 2019
74,240
(1,656)
723
(4,481)
(1,927)
(8,308)
58,591
Share-based payments
-
-
2
-
-
-
2
Profit for the period
-
-
-
-
-
1,812
1,812
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive income for the period
-
-
-
-
-
1,812
1,812
Balance as at 30 June 2019
74,240
(1,656)
725
(4,481)
(1,927)
(6,496)
60,405

 

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.

 

1H FY2020
No. of shares
US$'000
Balance as at 1 Jan 2020 and 30 Jun 2020
271,662,227
72,584
1H FY2019
No. of shares
US$'000
Balance as at 1 Jan 2019 and 30 Jun 2019
271,662,227
72,584


 

There were 10,740,072 treasury shares held by the Company as at 30 June 2020 and 30 June 2019 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.

 

30 Jun 2020
31 Dec 2019
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.

               

1H FY2020
No. of shares
US$'000
Balance as at 1 Jan 2020 and 30 Jun 2020
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.

 

1H FY2020
No. of shares
US$'000
Balance as at 1 Jan 2020 and 30 Jun 2020
-
-

 

 

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.

 

 

3A.          Where the latest financial statements are subject to an adverse opinion, qualified opinion or disclaimer of opinion: -

(a)   Updates on the efforts taken to resolve each outstanding audit issues.

(b)   Confirmation from the Board that the impact of all outstanding audit issues on the financial statements have been adequately disclosed.

 

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 Group has applied the same accounting policies and methods of computation consistent with those used in the most recent audited financial statements for the year ended 31 December 2019.

 

 

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 various new and revised SFRS(I)s and IFRSs that are relevant to its operations and effective for the period beginning 1 January 2020. The adoption of the new and revised SFRS(I)s and IFRSs has no material financial impact on the Group's financial statements.

 

 

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
1H
 FY2020
US$
1H
 FY2019
US$
(a) Based on weighted average number of ordinary shares on issue; and
0.13 cent
0.58 cent
(b) On a fully diluted basis
0.13 cent*
0.58 cent*
Weighted average number of ordinary shares used in computation of basic earnings per share
271,662,227
271,662,227
Weighted average number of ordinary shares used in computation of diluted earnings per share
271,662,227
271,662,227

 

* Diluted earnings per share are the same as the basic earnings per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the share conversion would be to increase the earnings per share.

 

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 Jun 2020
US$
31 Dec 2019
US$
30 Jun 2020
US$
31 Dec 2019
US$
Net asset value per ordinary share based on issued share capital
16.31 cents
16.22 cents
16.69 cents
16.83 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 six months ended 30 June 2020 ("1H FY2020") decreased by US$19.1 million to US$52.8 million from US$71.9 million in the prior year ("1H FY2019"). The current COVID-19 pandemic situation has impacted on the business of the Group globally. It has resulted in the reduced orders from our customers and some impact on our production facilities around the world as we adapted our working practices to comply with regional variations on social distancing and best practices during this pandemic.

 

Geographically, the Group's revenue for 1H FY2020 decreased in America, Europe and Rest of the World by US$16.3 million (-31.3%), US$3.0 million (-19.8%) and US$0.6 million (-19.3%), respectively, offset by an increase in Asia by US$0.8 million (+71.2%). 

 

Gross Profit

 

The decrease in revenue has resulted in a 18.1% decrease in gross profit from US$15.1 million in 1H FY2019 to US$12.4 million in 1H FY2020. Despite the decrease in gross profit, gross profit margin improved by 2.4 percentage points from 21.0% to 23.4% from improved product mix and manufacturing improvements.

 

Other Income

 

Other income in 1H FY2020 derived mainly from the government support in Singapore and Israel pertaining to the COVID-19 pandemic and government subsidies in China.

 

Administrative Expenses

 

Administrative expenses for 1H FY2020 decreased 9.6% to US$11.0 million compared to US$12.2 million in 1H FY2019, representing 20.9% and 17.0% of revenue, respectively. The ongoing cost control measures across the Group globally, coupled with reduction in travelling, marketing, trade shows etc during this pandemic period has resulted in lower administrative expenses incurred.   

 

Other Operating Expenses

 

Other operating expenses in 1H FY2020 were attributed mainly from foreign exchange losses and the impairment of trade receivables from the UK customers.

 

Profit Before Tax & Net Profit

 

The Group posted a profit before tax of US$0.5 million in 1H FY2020, compared to US$2.1 million the prior year, representing margins of 1.0% and 3.0%, respectively.

 

Overall, the Group posted a net profit of US$0.3 million in 1H FY2020, compared to US$1.6 million in 1H FY2019, representing net margins of 0.6% and 2.2%, respectively.

 

Review of Financial Position

 

Non-current assets decreased by US$1.9 million to US$26.2 million as at 30 June 2020, due to the depreciation of plant and equipment and the right-of-use assets and the amortisation of intangible assets.

 

Net current assets increased by US$1.9 million to US$24.4 million as at 30 June 2020 compared to US$22.5 million as at 31 December 2019. Inventories and trade and other receivables increased by US$1.2 million and US$0.4 million, respectively, due to slower movement of goods during this period, offset by a decrease in trade and other payables of US$2.4 million, attributed to the continuing payment to suppliers and the settlement of compensation costs in Shanghai. Cash and cash equivalents decreased by US$1.4 million to US$7.5 million from US$8.9 million and borrowings increased by US$1.3 million to US$10.3 million from US$8.9 million as at 30 June 2020 and 31 December 2019, respectively. Provision for income tax increased by US$0.1 million and the repayment of leases has resulted in a decrease in the current portion of lease liabilities by US$0.7 million.

 

Similarly, with the repayment of leases, the non-current portion of the lease liabilities decreased by US$0.2 million to US$5.8 million as at 30 June 2020.

 

The Group's net asset value stood at US$44.3 million as at 30 June 2020, compared to US$44.1 million as at 31 December 2019.

 

Review of Cash Flows

 

In 1H FY2020, net cash used in operating activities amounted to US$0.7 million, comprising US$4.1 million cash inflow from operating activities (before working capital changes), US$4.7 million net working capital outflow and US$0.1 million payment of interest.

 

Net cash used in investing activities in 1H FY2020 amounted to US$0.9 million, mainly due to the purchase of machinery and equipment.

 

Net cash generated from financing activities amounted to US$0.2 million in 1H FY2020, attributable to the net proceeds of borrowings offset by the repayment of lease liabilities.

 

Overall, the Group recorded a net decrease in cash and cash equivalents amounting to US$1.4 million in 1H FY2020, bringing cash and cash equivalents per the consolidated statement of cash flows to US$7.5 million as at 30 June 2020.

 

 

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.

 

The COVID-19 global pandemic has impacted sales and profit growth in the period. However, the Group is pleased to report that the majority of its factories remained operational, with office and R&D staff successfully transitioning to remote working. Our people are now slowly and safely returning to work, after the Group carried out rigorous risk assessments and implemented safe-distancing and hygiene procedures throughout the business.

 

The Group's manufacturing sites continued to see demand from key customers throughout the pandemic as the Group and the markets which it serves, including the Communication and Medical markets, are deemed an essential supply. Despite these sites remaining open, significant market-wide disruption to our global sales efforts has ultimately impacted growth. The Group has particularly noted slowdowns in areas where installers are required to be physically on site - something that the lockdown procedures in many regions would not allow. We anticipate that, as lockdown eases, this business will gradually return.

 

The Group delivered 1H FY2020 sales of US$52.8 million, with lower demand in America and Europe partiality offset by increased demand across Asia. The United States, which remains a significant market for the Group, remains in lockdown and has seen a fall in anticipated orders.

 

The Group's Shanghai site ceased manufacturing in July 2020, though it will continue to support certain supply chain functions going forward. The Group has continued the transition to its third-party subcontract manufacturer in the Philippines and this should deliver manufacturing efficiencies to the Group, while maximising our sales pipeline across Asia and reducing the Group's exposure to trade disputes between China and the United States.

 

Despite the current negative headwinds caused by the pandemic, Global Invacom's products are expected to continue to play a crucial role in meeting global demand for data and connectivity, especially where security of transmission is important, for telecoms data backhaul or in rural areas and less developed regions where physical fibre or cable is not commercially viable. 

 

 

 

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 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 2020.

 

 

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 for the six months ended 30 June 2020.

 

 

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 six months ended 30 June 2020 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

Executive Chairman

 

 

13 August 2020

 

 

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.

 
  END

 

 
IR VLLFFBVLXBBB