RNS Number : 5141I
Global Invacom Group Limited
13 August 2021
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Results for the six months ended 30 June 2021
Singapore/London, 13 August 2021 - 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 2021 ("1H FY2021").
Key financial highlights:
· Revenue for 1H FY2021 of US$40.4m (1H FY2020: US$52.8m)
· Gross Profit for 1H FY2021 of US$8.8m (1H FY2020: US$12.4m)
· Net loss for 1H FY2021 of US$1.2m (1H FY2020: US$0.3m net profit)
· Cash and cash equivalents as at 30 June 2021 of US$9.4m (31 December 2020: US$11.3m)
Key operational highlights:
· Continued demand for Direct to Home ("DTH") products through the Company's key customer in the United States, providing an ongoing revenue base albeit at lower levels than previous years
· Demand for Data Over Satellite ("DOS") products continues to grow, driven by ongoing demand for connectivity and data delivery through the COVID-19 pandemic
· Global supply chains continue to be impacted by COVID-19 pandemic
· The Group has undertaken cost reduction measures
The financial performance of the Group in the first half of 2021 reflects broader ongoing COVID-19 challenges. The much-publicised disruption to supply chains and problems with the availability of key products, including semi-conductors and capacitors, continues to be a challenge for the Company. Furthermore, the Company has also been impacted by supply chain and global transportation network issues as a result of government restrictions, the introduction of quarantine and additional checks and measures, coupled with a shortage of personnel at key sites such as ports. This has ultimately led to a delay in the transport of products from the manufacturing facility to customer sites.
The Group delivered sales of US$40.4 million in the first half of the year. Geographically, we saw ongoing sales pressure in America, Europe and Asia, with an increase in demand across the Rest of the World. The United States, which remains a significant market for the Group, continues to be impacted by the ongoing pandemic, which has translated to a fall in anticipated orders.
As reported in the FY2020 full year results statement, in 2020 the Group restructured its development, sales and marketing teams to focus on the DOS products, a growth market, leaving just a core team focused on the DTH markets. The Group has also undertaken, and is continuing, a restructuring across the Group to reduce its cost base, removing excess headcount in non-core functions, and a reduction in administrative costs.
DOS continues to underpin 4G/5G and high-speed broadband access, service providers are adopting satellite solutions to meet the significant growth in demand where traditional fibre and cable solutions are not viable. We continue to work to position ourselves to take advantage of this potential growth in demand.
The Group's DTH products continue to generate good sales, albeit at lower levels than in previous years. As such, we continue to invest in the development of bespoke new products for our key customer in the United States but have reduced the size of the team focused on this segment.
The Group continues to monitor the pandemic situation closely, carrying out rigorous risk assessments and implementing stringent hygiene procedures across our sites. This has enabled us to allow our employees to return to work safely should they wish to do so. As a global business, the Group continues to monitor the situation closely and to adhere to all relevant Government guidelines for the regions in which it is present.
The challenges faced by the Group in the first half will likely continue to impact the Group's business throughout FY2021. Notwithstanding that, the Group believes Global Invacom's products have a key role to play in the provision of this connectivity as restrictions ease across territories, supply chains recover, and demand starts to normalise.
Tony Taylor, Executive Chairman of Global Invacom, commented:
"The first half of 2021 has been challenging as we faced down a number of operational and macroeconomic headwinds. Despite this, our business has delivered a solid performance, supported by a highly skilled and talented workforce.
"As global restrictions ease, and supply chains move more freely, I firmly believe our business is ideally placed to deliver a sustainable recovery in the medium term."
For further information, please contact:
Global Invacom Group Limited
www.globalinvacom.com
Tony Taylor, Executive Chairman
via Vigo Consulting
Strand Hanson Limited (Nominated Adviser and Broker)
www.strandhanson.co.uk
James Harris / Rob Patrick
Tel: +44 20 7409 3494
Vigo Consulting (UK Media & Investor Relations)
www.vigoconsulting.com
Jeremy Garcia / Fiona Hetherington / Kendall Hill
Tel: +44 207 390 0238
ginv@vigoconsulting.com
About Global Invacom Group Limited
Global Invacom is a fully integrated satellite equipment provider with sites across Singapore, China, Indonesia, Philippines, Malaysia, Israel, UK and the US. Its customers include satellite broadcasters such as Sky Group 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 for the defence and healthcare sectors. 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.
GLOBAL INVACOM GROUP LIMITED
(Incorporated in Singapore)
(Company Registration Number 200202428H)
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
For the Six Months Ended 30 June 2021
Table of Contents
Page
A.
Condensed Interim Consolidated Statement of Comprehensive Income
4
B.
Condensed Interim Statements of Financial Position
5
C.
Condensed Interim Statements of Changes in Equity
6
D.
Condensed Interim Consolidated Statement of Cash Flows
8
E.
Notes to the Condensed Interim Consolidated Financial Statements
9
F.
Other Information Required by Listing Rule Appendix 7.2
20
A. Condensed Interim Consolidated Statement of Comprehensive Income
Group
1H FY2021
1H FY2020
Increase/ (Decrease)
US$'000
US$'000
%
Revenue
40,439
52,773
(23.4)
Cost of sales
(31,653)
(40,423)
(21.7)
Gross profit
8,786
12,350
(28.9)
Other income
1,478
125
N.M.
Distribution costs
(137)
(115)
19.1
Administrative expenses
(10,877)
(11,030)
(1.4)
Other operating expenses
(52)
(378)
(86.2)
Finance income
30
21
42.9
Finance costs
(352)
(429)
(17.9)
(Loss)/Profit before income tax
(1,124)
544
N.M.
Income tax expense
(54)
(202)
(73.3)
(Loss)/Profit for the period
(1,178)
342
N.M.
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries
325
(105)
N.M.
Other comprehensive income/(loss) for the period, net of tax
325
(105)
N.M.
Total comprehensive (loss)/income for the period
(853)
237
N.M.
(Loss)/Profit for the period attributable to:
Equity holders of the Company
(1,177)
345
N.M.
Non-controlling interests
(1)
(3)
(66.7)
(1,178)
342
N.M.
Total comprehensive (loss)/income for the period attributable to:
Equity holders of the Company
(852)
240
N.M.
Non-controlling interests
(1)
(3)
(66.7)
(853)
237
N.M.
N.M.: Not Meaningful
B. Condensed Interim Statements of Financial Position
Group
Company
30 Jun 2021
31 Dec 2020
30 Jun 2021
31 Dec 2020
US$'000
US$'000
US$'000
US$'000
ASSETS
Non-current Assets
Property, plant and equipment
8,775
9,410
46
82
Right-of-use assets
5,472
6,340
105
162
Investments in subsidiaries
-
-
27,102
27,102
Goodwill
6,092
6,092
-
-
Intangible assets
1,998
2,291
-
-
Other financial assets
8
8
-
-
Deferred tax assets
1,363
1,363
-
-
Other receivables and prepayments
54
54
10,793
10,563
23,762
25,558
38,046
37,909
Current Assets
Due from subsidiaries
-
-
4,168
4,045
Inventories
25,714
26,816
-
-
Trade receivables
13,373
10,689
-
-
Other receivables and prepayments
2,466
2,033
3,059
3,513
Tax receivables
1
-
-
-
Cash and cash equivalents
9,435
11,273
165
150
50,989
50,811
7,392
7,708
Total assets
74,751
76,369
45,438
45,617
EQUITY AND LIABILITIES
Equity
Share capital
60,423
60,423
74,240
74,240
Treasury shares
(1,656)
(1,656)
(1,656)
(1,656)
Reserves
(12,676)
(11,824)
(28,441)
(28,302)
Equity attributable to owners of the Company
46,091
46,943
44,143
44,282
Non-controlling interests
(17)
(16)
-
-
Total equity
46,074
46,927
44,143
44,282
Non-current Liabilities
Other payables
124
124
-
-
Lease liabilities
4,309
4,848
39
39
Deferred tax liabilities
634
634
-
-
5,067
5,606
39
39
Current Liabilities
Due to subsidiaries
-
-
919
835
Trade payables
10,815
12,509
-
-
Other payables
4,969
5,589
272
333
Borrowings
6,199
3,883
-
-
Lease liabilities
1,372
1,854
65
128
Provision for income tax
255
1
-
-
23,610
23,836
1,256
1,296
Total liabilities
28,677
29,442
1,295
1,335
Total equity and liabilities
74,751
76,369
45,438
45,617
C. Condensed Interim Statements of Changes in Equity
Group
Share capital
Treasury shares
Merger reserves
Capital redemption reserves
Share options reserve
Capital reserve
Foreign currency translation reserve
Retained profits
Attributable to equity holders of the Company
Non-controlling interests
Total
US$'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 2021
60,423
(1,656)
(10,150)
6
725
(5,109)
(964)
3,668
46,943
(16)
46,927
Loss for the period
-
-
-
-
-
-
-
(1,177)
(1,177)
(1)
(1,178)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
325
-
325
-
325
Total other comprehensive income/(loss) for the period
-
-
-
-
-
-
325
(1,177)
(852)
(1)
(853)
Balance as at 30 June 2021
60,423
(1,656)
(10,150)
6
725
(5,109)
(639)
2,491
46,091
(17)
46,074
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
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$'000
Balance as at 1 January 2021
74,240
(1,656)
725
(4,481)
(2,506)
(22,040)
44,282
Loss for the period
-
-
-
-
-
(139)
(139)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(139)
(139)
Balance as at 30 June 2021
74,240
(1,656)
725
(4,481)
(2,506)
(22,179)
44,143
Balance as at 1 January 2020
74,240
(1,656)
725
(4,481)
(2,506)
(20,591)
45,731
Loss for the period
-
-
-
-
-
(391)
(391)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(391)
(391)
Balance as at 30 June 2020
74,240
(1,656)
725
(4,481)
(2,506)
(20,982)
45,340
D. Condensed Interim Consolidated Statement of Cash Flows
Group
1H FY2021
1H FY2020
US$'000
US$'000
Cash Flows from Operating Activities
(Loss)/Profit before income tax
(1,124)
544
Adjustments for:
Depreciation of property, plant and equipment
1,143
1,388
Amortisation of intangible assets
266
446
Depreciation of right-of-use assets
996
1,076
Gain on disposal of property, plant and equipment
(1,143)
-
(Write-back)/Allowance for inventory obsolescence
(2)
19
Impairment of trade receivables
-
274
Bad debts written off
17
-
Unrealised exchange loss/(gain)
124
(53)
Interest income
(30)
(21)
Interest expense
352
429
Gain on lease modifications
(207)
-
Operating cash flow before working capital changes
392
4,102
Changes in working capital:
Inventories
1,104
(1,256)
Trade receivables
(2,702)
(324)
Other receivables and prepayments
422
(395)
Trade and other payables
(2,424)
(2,756)
Cash used in operating activities
(3,208)
(629)
Interest paid
(116)
(60)
Income tax paid
(2)
-
Net cash used in operating activities
(3,326)
(689)
Cash Flows from Investing Activities
Interest received
-
21
Purchase of property, plant and equipment
(679)
(966)
Proceeds from disposal of property, plant and equipment
581
-
Net cash used in investing activities
(98)
(945)
Cash Flows from Financing Activities
Proceeds from borrowings
17,026
23,238
Repayment of borrowings
(14,710)
(21,906)
Principal payment of lease liabilities
(740)
(1,109)
Net cash generated from financing activities
1,576
223
Net decrease in cash and cash equivalents
(1,848)
(1,411)
Cash and cash equivalents at the beginning of the period
11,273
8,912
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies
10
(23)
Cash and cash equivalents at the end of the period
9,435
7,478
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 2021 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 2021 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 2020.
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 2020, 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 2021. 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 2020.
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
· Note 12 - impairment test on investments in subsidiaries
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 2021.
4. Segment and Revenue Information
The Group is organised into the following main business segments:
· Satellite Communications ("Sat Comms"); and
· Contract Manufacturing ("CM")
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
Sat Comms
CM
Group
US$'000
US$'000
US$'000
1H FY2021
Revenue
40,439
-
40,439
Operating loss
(785)
(17)
(802)
Finance income
30
Finance costs
(352)
Income tax expense
(54)
Loss for the Period
(1,178)
Amortisation of intangible assets
266
-
266
Depreciation of property, plant and equipment
1,143
-
1,143
Depreciation of right-of-use assets
996
-
996
Addition to property, plant and equipment
679
-
679
Bad debts written off
-
17
17
Gain on lease modifications
(207)
-
(207)
Write-back for inventory obsolescence, net
(2)
-
(2)
Sat Comms
CM
Group
US$'000
US$'000
US$'000
Assets and liabilities
Segment assets
70,826
1,825
72,651
Unallocated assets
- Non-current assets
46
- Other receivables
85
- Deferred tax assets
1,363
- Cash and cash equivalents
500
- Tax receivables
1
- Right-of-use assets
105
Total assets
74,751
Segment liabilities
19,581
1,570
21,151
Unallocated liabilities
- Other payables
334
- Provision for income tax
255
- Deferred tax liabilities
634
- Borrowings
6,199
- Lease liabilities
104
Total liabilities
28,677
1H FY2020
Revenue
51,174
1,599
52,773
Operating profit
875
77
952
Finance income
21
Finance costs
(429)
Income tax expense
(202)
Profit for the period
342
Amortisation of intangible assets
446
-
446
Depreciation of property, plant and equipment
1,387
1
1,388
Depreciation of right-of-use assets
1,014
62
1,076
Addition to property, plant and equipment
966
-
966
Impairment loss on trade receivables
274
-
274
Allowance for inventory obsolescence, net
58
(39)
19
Assets and liabilities
Segment assets
80,032
1,239
81,271
Unallocated assets
- Non-current assets
138
- Other receivables
97
- Deferred tax assets
975
- Cash and cash equivalents
274
- Tax receivables
1
- Right-of-use assets
88
Total assets
82,844
Segment liabilities
18,870
1,606
20,476
Unallocated liabilities
- Other payables
306
- Provision for income tax
143
- Deferred tax liabilities
428
- Borrowings
10,261
- Lease liabilities
6,928
Total liabilities
38,542
4.2 Disaggregation of revenue
The Group's revenue is disaggregated by principal geographical areas, major product lines and timing of revenue recognition.
Group
1H FY2021
1H FY2020
US$'000
US$'000
Principal geographical market
America
- Sale of goods
23,165
35,862
Europe
- Sale of goods
10,997
12,059
Asia
- Sale of goods
1,209
2,014
Rest of the World
- Sale of goods
5,068
2,838
Total
40,439
52,773
Major product lines
Sale of goods
40,439
52,773
The Group recognises revenue from sale of goods at a point in time, when the Group satisfies a performance obligation and the customers obtain control of the goods.
5. Financial Assets and Financial Liabilities
Set out below is an overview of the financial assets and financial liabilities of the Group as at 30 June 2021 and 31 December 2020:
Level 1
Level 2
Level 3
Total
US$'000
US$'000
US$'000
US$'000
Group and Company
30 June 2021
Financial asset at fair value through other comprehensive income
-
-
8
8
31 December 2020
Financial asset at fair value through other comprehensive income
-
-
8
8
5.1 Significant items
Group
1H FY2021
1H FY2020
US$'000
US$'000
Interest income
30
21
Interest expense
(352)
(429)
Gain on disposal of property, plant and equipment
1,143
-
Gain on lease modifications
207
-
Impairment of trade receivables
-
(274)
Loss on foreign exchange
(34)
(102)
Bad debts written off
(17)
-
Write-back/(Allowance) for inventory obsolescence
2
(19)
Depreciation of property, plant and equipment
(1,143)
(1,388)
Depreciation of right-of-use assets
(996)
(1,076)
Amortisation of intangible assets
(266)
(446)
Research and development expense
(792)
(881)
5.2 Related party transactions
There are no material related party transactions apart from those disclosed elsewhere in the condensed interim financial statements.
6. Taxation
The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.
7. Earnings Per Share
Earnings per ordinary share of the Group, after deducting any provision for preference dividends
Group
1H FY2021 US$
1H FY2020 US$
(a) Based on weighted average number of ordinary shares on issue; and
(0.43) cent
0.13 cent
(b) On a fully diluted basis
(0.43) cent*
0.13 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.
8. Net Asset Value
Group
Company
30 Jun 2021 US$
31 Dec 2020 US$
30 Jun 2021 US$
31 Dec 2020 US$
Net asset value per ordinary share based on issued share capital
16.97 cents
17.28 cents
16.25 cents
16.30 cents
Total number of issued shares
271,662,227
271,662,227
271,662,227
271,662,227
9. Fair Value Measurement
The Group and the Company categories fair value measurement using a fair value hierarchy that is dependent on the valuation inputs used as follows:
(i) quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date (Level 1);
(ii) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(iii) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
The following table presents the financial assets and financial liabilities measurement at fair value as at the statement of financial position date by level of the fair value hierarchy:
Level 1
Level 2
Level 3
Total
US$'000
US$'000
US$'000
US$'000
Group and Company
30 June 2021
Financial asset at fair value through other comprehensive income
-
-
8
8
31 December 2021
Financial asset at fair value through other comprehensive income
-
-
8
8
9.1 Fair value of the Group's and the Company's financial assets and liabilities that are measured at fair value on a recurring basis
The Group and Company's financial asset, at fair value through profit or loss as at the statement of financial position date is considered not significant.
9.2 Fair value of the Group's and the Company's financial assets and liabilities that are not measured at fair value on a recurring basis (but fair value disclosure is required)
(i) The carrying amounts of financial assets and liabilities with a maturity of less than 1 year, which include cash and cash equivalents, borrowings, receivables and payables are assumed to approximate their fair values due to their short-term maturities.
(ii) The carrying amount of non-current portion of loans to subsidiaries, non-current portion of other payables and non-current lease liabilities to the financial statements are reasonable approximation of their fair value.
9.3 Valuation Policies and Procedures
The Group and the Company has established a control framework with respect to the measurement of fair values. This framework includes the finance team that reports directly to the Chief Executive Officer and has overall responsibility for all significant fair value measurements, including Level 3 fair values.
The finance team regularly reviews significant unobservable inputs and valuation adjustments. If third party information is used to measure fair value, then the finance team assesses and documents the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of SFRS(I), including the level in the fair value hierarchy the resulting fair value estimate should be classified.
Significant valuation issues are reported to the Company's Audit and Risk Committee.
10. Intangible Assets
Trading name
Intellectual property rights
Capitalised development costs
Total
US$'000
US$'000
US$'000
US$'000
Group
2021
Cost
Balance at 1 January and 30 June
16
2,674
4,834
7,524
Amortisation and impairment
Balance at 1 January
16
757
4,460
5,233
Amortisation charge
-
113
153
266
Currency realignment
-
27
-
27
Balance at 30 June
16
897
4,613
5,526
Net book value
Balance at 30 June
-
1,777
221
1,998
2020
Cost
Balance at 1 January
16
2,685
4,823
7,524
Currency realignment
-
(11)
11
-
Balance at 31 December
16
2,674
4,834
7,524
Amortisation and impairment
Balance at 1 January
16
483
3,921
4,420
Amortisation charge
-
250
539
789
Currency realignment
-
24
-
24
Balance at 31 December
16
757
4,460
5,233
Net book value
Balance at 31 December
-
1,917
374
2,291
11. Goodwill
Group
30 June 2021
31 December 2020
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 and end of the period
3,260
3,260
Net carrying amount
6,092
6,092
11.1 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 2021
31 December 2020
US$'000
US$'000
Satellite Communications
- OnePath Networks Limited ("OPN") - Israel
893
893
- Satellite Acquisition Corporation ("SAC") - United States of America
5,199
5,199
6,092
6,092
12. Property, Plant and Equipment
Freehold
Machinery &
Motor
Furniture, fittings &
property
equipment
vehicles
equipment
Renovations
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Group
2021
Cost
Balance at 1 January
2,883
17,639
40
7,649
1,458
29,669
Currency realignment
-
(18)
-
11
(1)
(8)
Additions
-
627
-
51
1
679
Balance at 30 June
2,883
18,248
40
7,711
1,458
30,340
Accumulated Depreciation
Balance at 1 January
928
11,187
40
6,969
1,135
20,259
Currency realignment
-
153
-
11
(1)
163
Depreciation charge
20
1,010
-
79
34
1,143
Balance at 30 June
948
12,350
40
7,059
1,168
21,565
Net book value
Balance at 30 June
1,935
5,898
-
652
290
8,775
2020
Cost
Balance at 1 January
2,807
28,069
220
8,377
1,376
40,849
Currency realignment
76
(12)
-
53
184
301
Additions
-
1,462
-
410
104
1,976
Disposals
-
(146)
-
-
(10)
(156)
Write-off
-
(11,734)
(180)
(1,191)
(196)
(13,301)
Balance at 31 December
2,883
17,639
40
7,649
1,458
29,669
Accumulated Depreciation
Balance at 1 January
849
20,640
220
7,629
1,257
30,595
Currency realignment
-
419
-
(1)
(1)
417
Depreciation charge
79
1,963
-
532
75
2,649
Disposals
-
(101)
-
-
-
(101)
Write-off
-
(11,734)
(180)
(1,191)
(196)
(13,301)
Balance at 31 December
928
11,187
40
6,969
1,135
20,259
Net book value
Balance at 31 December
1,955
6,452
-
680
323
9,410
Furniture,
fittings &
equipment
Renovations
Total
US$'000
US$'000
US$'000
Company
2021
Cost
Balance at 1 January and 30 June
211
80
291
Accumulated depreciation
Balance at 1 January
137
72
209
Depreciation charge
28
8
36
Balance at 30 June
165
80
245
Net book value
Balance at 30 June
46
-
46
2020
Cost
Balance at 1 January
209
80
289
Additions
2
-
2
Balance at 31 December
211
80
291
Accumulated depreciation
Balance at 1 January
76
45
121
Depreciation charge
61
27
88
Balance at 31 December
137
72
209
Net book value
Balance at 31 December
74
8
82
The proceeds from disposal of property, plant and equipment of US$581,000 and gain on disposal of property, plant and equipment of US$1,143,000 pertains to machinery and equipment that was fully written off in the prior financial year ended 31 December 2020.
13. Investment in Subsidiaries
Company
30 Jun 2021
31 Dec 2020
US$'000
US$'000
Unquoted equity shares, at cost
40,533
40,533
Accounting for employee share options
725
725
Currency realignment
131
131
Less: Allowance for impairment loss
(14,287)
(14,287)
27,102
27,102
Movement in the allowance for impairment loss are as follows:
At the beginning of the period
14,287
13,803
Impairment loss recognised during the period
-
484
At the end of the period
14,287
14,287
Allowance for impairment loss
(i) Global Invacom Manufacturing Pte Ltd ("GIMPL")
As at 30 June 2021 and 31 December 2020, 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 2021 and 31 December 2020, an allowance for impairment loss of US$5,639,000 was made on the cost of investment in GIHL Group, as the allocated CGU, to which the investment relates to, was incurring losses from operations. The recoverable amount was based on management's estimate of the fair value less costs to sell, with reference to the fair value of the net assets of GIHL Group, which is considered to be Level 3 in the fair value hierarchy.
14. Borrowings
Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 30 Jun 2021
As at 31 Dec 2020
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
6,199
-
3,883
-
Amount repayable after one year
As at 30 Jun 2021
As at 31 Dec 2020
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
-
-
-
-
The revolving credit loans of US$6,199,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.
15. Share Capital
1H FY2021
No. of shares
US$'000
Balance as at 1 Jan 2021 and 30 Jun 2021
271,662,227
72,584
1H FY2020
No. of shares
US$'000
Balance as at 1 Jan 2020 and 30 Jun 2020
271,662,227
72,584
There were 10,740,072 treasury shares held by the Company as at 30 June 2021 and 30 June 2020 and there was no subsidiary holdings.
Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year:
30 Jun 2021
31 Dec 2020
Total number of issued shares excluding treasury shares
271,662,227
271,662,227
Total number of treasury shares as at the end of the current financial period reported on:
1H FY2021
No. of shares
US$'000
Balance as at 1 Jan 2021 and 30 Jun 2021
10,740,072
1,656
16. 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 2021 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 2021 ("1H FY2021") decreased by 23.4% to US$40.4 million from US$52.8 million in the prior year ("1H FY2020"). The current COVID-19 pandemic situation has impacted the business of the Group globally. The Group has seen a reduction in orders from our customers and selected 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 FY2021 decreased in America, Europe and Asia by US$12.7 million (-35.4%), US$1.1 million (-8.8%) and US$0.8 million (-40.0%), respectively, offset by an increase in Rest of the World by US$2.2 million (+78.6%).
Gross Profit
The decrease in revenue has resulted in a 28.9% decrease in gross profit from US$12.4 million in 1H FY2020 to US$8.8 million in 1H FY2021. Gross profit margin has decreased marginally by 1.7 percentage points from 23.4% to 21.7%, mainly attributable to higher materials, shipping and logistics costs due to the ongoing pandemic and supply chain constraints.
Other Income
Other income in 1H FY2021 was derived mainly from gains on the disposal of equipment of US$1.1 million, gain on lease modifications of US$0.2 million, with the remainder comprising subsidy support received from various government bodies across the Group due to the pandemic.
Administrative Expenses
Administrative expenses for 1H FY2021 decreased 1.4% to US$10.9 million compared to US$11.0 million in 1H FY2020, representing 26.9% and 20.9% 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 FY2021 were attributed mainly to foreign exchange losses and bad debts written off.
Profit Before Tax & Net Profit
The Group posted a loss before tax of US$1.1 million in 1H FY2021, compared to a profit of US$0.5 million in 1H FY2020.
Overall, the Group posted a net loss of US$1.2 million in 1H FY2021, compared to a net profit of US$0.3 million in 1H FY2020.
2.2 Review of Financial Position
Non-current assets decreased by US$1.8 million to US$23.8 million as at 30 June 2021, due to the depreciation of plant and equipment, the right-of-use assets and the amortisation of intangible assets.
Net current assets increased by US$0.4 million to US$27.4 million as at 30 June 2021 compared to US$27.0 million as at 31 December 2020. Trade and other receivables increased by US$3.1 million due to slower collections, offset by a decrease in inventories and trade and other payables of US$1.1 million and US$2.3 million respectively, resulting from inventory control, longer shipment lead times and continuing payment to suppliers.
Cash and cash equivalents decreased by US$1.8 million to US$9.4 million as at 30 June 2021 from US$11.3 million at 31 December 2020 and borrowings increased by US$2.3 million to US$6.2 million as at 30 June 2021 from US$3.9 million as at 31 December 2020.
Provision for income tax increased by US$0.3 million and the repayment of leases has resulted in a decrease of US$0.5 million in the current portion of lease liabilities.
With the repayment of leases, the non-current portion of the lease liabilities decreased by US$0.5 million to US$4.3 million as at 30 June 2021.
The Group's net asset value stood at US$46.1 million as at 30 June 2021, compared to US$46.9 million as at 31 December 2020.
2.3 Review of Cash Flows
In 1H FY2021, net cash used in operating activities amounted to US$3.3 million, comprising US$0.4 million cash inflow from operating activities (before working capital changes), US$3.6 million net working capital outflow and US$0.1 million payment of interest and income tax.
Net cash used in investing activities in 1H FY2021 amounted to US$0.1 million, mainly due to the purchase and proceeds from the disposal of machinery and equipment.
Net cash generated from financing activities amounted to US$1.6 million in 1H FY2021, 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$1.8 million in 1H FY2021, bringing cash and cash equivalents per the consolidated statement of cash flows to US$9.4 million as at 30 June 2021.
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.
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.
The COVID-19 global pandemic has continued to impact sales and profit growth in the period. We have now implemented processes enabling our employees to return to work safely should they wish to do so. As a global business, the Group continues to monitor the situation closely and to adhere to all relevant Government guidelines for the regions in which it is present and has adopted stringent hygiene procedures and safe-distancing measures throughout the business.
The Group's manufacturing sites have continued to experience delays due to global supply chains and availability of core components within its key markets, which has adversely impacted the Group's growth as well as our customers' sales. Equally, shutdowns in certain territories and geographies have also adversely impacted our sales.
Global Invacom's products are expected to play a crucial role in meeting global demand for data and connectivity in the future. The COVID-19 pandemic has served to accelerate global demand for constant connectivity and service providers are increasingly seeking satellite solutions where traditional fibre and cable networks aren't suitable or capable of satisfying demand.
According to Fortune Business Insights, the global satellite market was valued at US$23.4 billion in 2020 and is projected to grow to US$46.5 billion by 2028, driven by universal demand for greater connectivity, coupled with the launch of smaller satellites for use across multiple industries including civil engineering, energy, oil and gas and others.[1]
The Group delivered 1H FY2021 sales of US$40.4 million, with lower demand in America, Europe and Asia, offset by increased demand across the Rest of the World. The United States remains a significant market for the Group.
The challenges faced by the Group in the first half will continue to impact the Group's business throughout FY2021. Notwithstanding that, the Group believes Global Invacom's products have a key role to play in the provision of this connectivity as restrictions ease across territories, supply chains recover, and demand starts to normalise.
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 2021.
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 2021.
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 2021 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
Anthony Brian Taylor Gordon Blaikie
Executive Director Executive Director
BY ORDER OF THE BOARD
Anthony Brian Taylor
Executive Chairman
13 August 2021
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] fortunebusinessinsights.com/satellite-communication-satcom-market-102679
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