REG - Global Invacom Group - Half-year Report
12/08/2022 07:00
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RNS Number : 7106V Global Invacom Group Limited 12 August 2022
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Results for the six months ended 30 June 2022
Singapore/London, 12 August 2022 - Global Invacom Group Limited (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 2022 ("1H FY2022").
Key financial highlights:
· Revenue for 1H FY2022 of US$37.4m (1H FY2021: US$40.4m)
· Gross Profit for 1H FY2022 of US$7.4m (1H FY2021: US$8.8m)
· Net loss for 1H FY2022 of US$3.3m (1H FY2021: US$1.2m net loss)
· Cash and cash equivalents as at 30 June 2022 of US$10.0m (31 December
2021: US$10.8m)
Key operational highlights:
· Shortage of semiconductors globally, alongside material availability,
price increases and labour challenges, continues to impact the Company's
ability to satisfy existing orders and has impacted revenue growth in the
period
· The Group has embarked on a business review exercise, to better
manage our operations, and to improve the performance of the Group
· The Group's partnership with Methera Global Communications Limited
("Methera") and its subcontractors, announced in October 2021, is progressing
well
· In the first half of 2022, launched latest Supervisory Control and
Data Acquisition ("SCADA") products for hubs and remote locations
· In May 2022, launched innovative Mini-Global Navigation Satellite
System repeater kit, increasing the Group's footprint in the commercial,
military and aviation markets
Global Invacom remains well positioned to capitalise on the expected growth
opportunities in the Data Over Satellite ("DOS") market, as well as the
normalisation of remote working, with individuals and workforces around the
globe now increasingly dependent on reliable connectivity for their daily
lives.
The Group delivered sales of US$37.4 million in the first half of the year,
versus US$40.4 million in 1H FY2021. This decrease was due to the shortage of
semiconductors globally which continues to impact the Company's ability to
satisfy existing orders and generate associated additional revenue as well as
the delay in the launch of Jupiter 3. Furthermore, the Group continues to be
impacted by cost price increases, compounded by labour challenges as well as
business challenges faced by our customers.
The Group continues to assess its cost base to streamline certain core
functions and continues to reduce administrative costs, whilst not impacting
its offering to customers.
Research and development continue to be an area of importance for management
with ongoing focus on product development, underpinning Global Invacom's
market-leading position in the satellite communications equipment and
electronics sector.
DOS remains a key product category for Global Invacom, with the accelerated
demand for dependable and affordable DOS devices across a wide range of
industries, including the healthcare and defence sectors, showing no signs of
abating. Consequently, the Group introduced new SCADA products for hubs and
remote locations which continue Global Invacom's legacy of developing
world-leading satellite communications ground equipment. New products launched
include antennas and Very-small-aperture Terminal ("VSAT") transceivers,
alongside advanced Radio Frequency ("RF") equipment designed and manufactured
by Global Skyware.
These new equipment bundles create a straightforward set up to receive and
transmit signals for a full private networking solution, capable of reaching
any SCADA and Machine-to-machine ("M2M") Telemetry site. It is compatible with
both Internet Protocol ("IP") and legacy serial devices, and operates
independently from terrestrial communications systems, thus providing
dedicated and secure data communications for mission-critical traffic.
In addition to the development of new satellite communications ground
equipment bundles, Global Invacom's subsidiary OnePath Networks Limited,
trading as Global Foxcom, broadened its range of Satcom Repeater solutions
with the launch of its innovative Mini-Global Navigation Satellite System
("GNSS") repeater kit, increasing its footprint in the commercial, military
and aviation markets.
The Group's partnership with Methera and its subcontractors, announced in
October 2021, is progressing well, and Global Invacom remains on track to
deliver Ka-band user terminals to market in 2024 to help meet the fast-growing
demand for connectivity to non-geostationary satellite orbit constellations,
leveraging funding awarded by the European Space Agency.
Given the market challenges that the Group has faced over the past two years
and what may become "new normals", the Group has embarked on a business review
exercise, to better manage our operations, and to improve the performance of
the Group.
Tony Taylor, Executive Chairman of Global Invacom, commented:
"Trading across the first six months of the year has not been without its
challenges, as we continue to adjust to the ongoing shortages for
semiconductors globally, alongside inflationary pressures across our business.
These factors are not unique to our business, and we continue to drive the
Company forward, which for us means an unrivalled commitment to our customers
to remain at the cutting edge of innovation and product development.
Whilst we are fully aware the broader macro picture will take time to improve,
Global Invacom remains well placed to capitalise on the growing demand for
satellite communications services globally."
For further information, please visit www.globalinvacom.com or contact:
Global Invacom Group Limited www.globalinvacom.com (http://www.globalinvacom.com/)
Tony Taylor, Executive Chairman via Vigo Consulting
Strand Hanson Limited (Nominated Adviser and Broker) www.strandhanson.co.uk (http://www.strandhanson.co.uk/)
James Harris / Richard Johnson / David Asquith Tel: +44 20 7409 3494
Vigo Consulting (UK Media & Investor Relations) www.vigoconsulting.com (http://www.vigoconsulting.com/)
Jeremy Garcia / Kendall Hill Tel: +44 20 7390 0238
ginv@vigoconsulting.com (mailto: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
U.S. 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
(http://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 2022
A. Condensed Interim Consolidated Statement of Comprehensive Income
Group
1H 1H Increase/
FY2022
FY2021
(Decrease)
US$'000 US$'000 %
Revenue 37,420 40,439 (7.5)
Cost of sales (30,051) (31,653) (5.1)
Gross profit 7,369 8,786 (16.1)
Other income 37 1,478 (97.5)
Distribution costs (156) (137) 13.9
Administrative expenses (8,106) (8,460) (4.2)
Research and development expenses (1,969) (2,417) (18.5)
Other operating expenses (257) (52) 394.2
Finance income - 30 (100.0)
Finance costs (171) (352) (51.4)
Loss before income tax (3,253) (1,124) 189.4
Income tax expense (39) (54) (27.8)
Loss for the period (3,292) (1,178) 179.5
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries (19) 325 N.M.
(19) 325 N.M.
Other comprehensive (loss)/income for the period, net of tax
(3,311) (853) 97.1
Total comprehensive loss for the period
Loss for the period attributable to:
Equity holders of the Company (3,289) (1,177) 179.4
Non-controlling interests (3) (1) 200.0
(3,292) (1,178) 179.5
Total comprehensive loss for the period attributable to:
Equity holders of the Company (3,308) (852) 288.2
Non-controlling interests (3) (1) 200.0
(3,311) (853) 97.1
N.M.: Not Meaningful
B. Condensed Interim Statements of Financial Position
Group Company
30 Jun 2022 31 Dec 2021 30 Jun 2022 31 Dec 2021
US$'000 US$'000 US$'000 US$'000
ASSETS
Non-current Assets
Property, plant and equipment 7,495 8,126 - 20
Right-of-use assets 3,608 4,396 104 39
Investments in subsidiaries - - 25,375 25,375
Goodwill 6,092 6,092 - -
Intangible assets 1,553 1,698 - -
Deferred tax assets 1,780 1,780 - -
Other receivables and prepayments 54 54 11,297 11,032
20,582 22,146 36,776 36,466
Current Assets
Due from subsidiaries - - 3,201 3,265
Inventories 25,172 25,764 - -
Trade receivables 9,612 13,772 - -
Other receivables and prepayments 5,602 5,302 2,098 2,588
Tax receivables 218 169 - -
Cash and cash equivalents 10,000 10,771 325 155
50,604 55,778 5,624 6,008
Total assets 71,186 77,924 42,400 42,474
EQUITY AND LIABILITIES
Equity
Share capital 60,423 60,423 74,240 74,240
Treasury shares (1,656) (1,656) (1,656) (1,656)
Reserves (14,691) (11,383) (30,706) (30,462)
Equity attributable to owners of the Company 44,076 47,384 41,878 42,122
Non-controlling interests (22) (19) - -
Total equity 44,054 47,365 41,878 42,122
Non-current Liabilities
Other payables 152 152 - -
Lease liabilities 2,907 3,088 - -
Deferred tax liabilities 646 646 - -
3,705 3,886 - -
Current Liabilities
Due to subsidiaries - - - 1
Trade payables 12,089 14,479 - -
Other payables 4,555 4,447 422 313
Borrowings 5,714 6,120 - -
Lease liabilities 1,069 1,627 100 38
23,427 26,673 522 352
Total liabilities 27,132 30,559 522 352
Total equity and liabilities 71,186 77,924 42,400 42,474
C. Condensed Interim Statements of Changes in Equity
Foreign currency translation reserve
Capital redemption reserves Share options reserve Attributable to equity holders of the Company
Share Treasury shares Merger reserves Capital reserve Retained profits Non-controlling interests Total
Group capital
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,084) 4,229 47,384 (19) 47,365
Loss for the period - - - - - - - (3,289) (3,289) (3) (3,292)
Other comprehensive loss:
Exchange differences on translating foreign operations
- - - - - - (19) - (19) - (19)
Total other comprehensive loss for the period
- - - - - - (19) (3,289) (3,308) (3) (3,311)
Balance as at 30 June 2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,103) 940 44,076 (22) 44,054
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
C. Condensed Interim Statements of Changes in Equity (cont'd)
Foreign currency translation reserve
Share options reserve
Share Treasury shares Capital reserve Accumulated losses Total
Company capital
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Balance as at 1 January 2022 74,240 (1,656) 725 (4,481) (2,506) (24,200) 42,122
Loss for the period - - - - - (244) (244)
Other comprehensive loss:
Exchange differences on translating foreign operations - - - - - - -
Total other comprehensive loss for the period - - - - - (244) (244)
Balance as at 30 June 2022 74,240 (1,656) 725 (4,481) (2,506) (24,444) 41,878
Balance as at 1 January 2021 74,240 (1,656) 725 (4,481) (2,506) (22,040) 44,282
Loss for the period - - - - - (139) (139)
Other comprehensive loss:
Exchange differences on translating foreign operations - - - - - - -
Total other comprehensive loss for the period - - - - - (139) (139)
Balance as at 30 June 2021 74,240 (1,656) 725 (4,481) (2,506) (22,179) 44,143
D. Condensed Interim Consolidated Statement of Cash Flows
Group
1H 1H
FY2022
FY2021
US$'000 US$'000
Cash Flows from Operating Activities
Loss before income tax (3,253) (1,124)
Adjustments for:
Depreciation of property, plant and equipment 895 1,143
Amortisation of intangible assets 141 266
Depreciation of right-of-use assets 847 996
Gain on disposal of property, plant and equipment (5) (1,143)
Allowance/(Write-back) for inventory obsolescence 255 (2)
Impairment loss of trade receivables 175 -
Bad debts written off - 17
Unrealised exchange (gain)/loss (67) 124
Interest income - (30)
Interest expense 171 352
Gain on lease modifications - (207)
Operating cash flow before working capital changes (841) 392
Changes in working capital:
Inventories 337 1,104
Trade receivables 3,944 (2,702)
Other receivables and prepayments (340) 422
Trade and other payables (2,016) (2,424)
Cash generated from/(used in) operating activities 1,084 (3,208)
Interest paid (196) (116)
Income tax paid (122) (2)
Net cash generated from/(used in) operating activities 766 (3,326)
Cash Flows from Investing Activities
Purchase of property, plant and equipment (251) (679)
Proceeds from disposal of property, plant and equipment 5 581
Net cash used in investing activities (246) (98)
Cash Flows from Financing Activities
Proceeds from borrowings 17,177 17,026
Repayment of borrowings (17,583) (14,710)
Principal payment of lease liabilities (877) (740)
Net cash (used in)/generated from financing activities (1,283) 1,576
Net decrease in cash and cash equivalents (763) (1,848)
Cash and cash equivalents at the beginning of the period 10,771 11,273
Effect of foreign exchange rate changes on the balance of cash held in foreign (8) 10
currencies
Cash and cash equivalents at the end of the period 10,000 9,435
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 2022 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
2022 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
2021.
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 2021, 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 2022. 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 2021.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that
have the most significant effect on the amounts recognised in the financial
statements is included in the following notes:
· Note 9 - capitalised development costs
· Note 11 - impairment test on property, plant and equipment
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
2. Basis of Preparation (cont'd)
2.2 Use of judgements and estimates (cont'd)
Information about assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment to the carrying amounts
of assets and liabilities within the next interim period are included in the
following notes:
· Note 10 - impairment test of goodwill: key assumptions underlying
recoverable amounts
· Note 11 - useful lives of property, plant and equipment
3. Seasonal Operations
The Group's businesses are not affected significantly by seasonal or cyclical
factors during the six months ended 30 June 2022.
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 FY2022
Revenue 37,420 - 37,420
Operating loss (2,999) (83) (3,082)
Finance costs (171)
Income tax expense (39)
Loss for the period (3,292)
Amortisation of intangible assets 141 -
Depreciation of property, plant and equipment 895 -
Depreciation of right-of-use assets 847 -
Addition to property, plant and equipment 251 -
Impairment loss on trade receivables 175 -
Allowance for inventory obsolescence, net 255 -
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
4. Segment and Revenue Information (cont'd)
4.1 Reportable segments (cont'd)
Sat
Comms CM Group
US$'000 US$'000 US$'000
Assets and liabilities
Segment assets 67,324 1,262 68,586
Unallocated assets
- Other receivables 63
- Deferred tax assets 1,780
- Cash and cash equivalents 325
- Tax receivables 218
- Right-of-use assets 214
Total assets 71,186
Segment liabilities 20,179 - 20,179
Unallocated liabilities
- Other payables 493
- Deferred tax liabilities 646
- Borrowings 5,714
- Lease liabilities 100
Total liabilities 27,132
1H FY2021
Revenue 40,439 - 40,439
Operating loss (785) (17) (802)
Finance income 30
Finance costs (352)
Income tax expense (54)
Loss for the period (1,178)
Amortisation of intangible assets 266 - 266
Depreciation of property, plant and equipment 1,143 - 1,143
Depreciation of right-of-use assets 996 - 996
Addition to property, plant and equipment 679 - 679
Bad debts written off - 17 17
Gain on lease modifications (207) - (207)
Write-back of inventory obsolescence, net (2) - (2)
Assets and liabilities
Segment assets 70,826 1,825 72,651
Unallocated assets
- Non-current assets 46
- Other receivables 85
- Deferred tax assets 1,363
- Cash and cash equivalents 500
- Tax receivables 1
- Right-of-use assets 105
Total assets 74,751
Segment liabilities 19,581 1,570 21,151
Unallocated liabilities
- Other payables 334
- Provision for income tax 255
- Deferred tax liabilities 634
- Borrowings 6,199
- Lease liabilities 104
Total liabilities 28,677
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
4. Segment and Revenue Information (cont'd)
4.2 Disaggregation of revenue
The Group's revenue is disaggregated by principal geographical areas, major
product lines and timing of revenue recognition.
Group
1H 1H
FY2022
FY2021
US$'000 US$'000
Principal geographical market
America
- Sale of goods 17,395 23,165
Europe
- Sale of goods 11,488 10,997
Asia
- Sale of goods 1,219 1,209
Rest of the World
- Sale of goods 7,318 5,068
Total 37,420 40,439
Major product lines
Sale of goods 37,420 40,439
The Group recognises revenue from sale of goods at a point in time, when the
Group satisfies a performance obligation and the customers obtain control of
the goods.
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
5. Financial Assets and Financial Liabilities (cont'd)
5.1 Significant items
Group
1H 1H
FY2022
FY2021
US$'000 US$'000
Interest income - 30
Interest expense (171) (352)
Gain on disposal of property, plant and equipment 5 1,143
Gain on lease modifications - 207
Gain/(Loss) on foreign exchange 30 (34)
Impairment loss on trade receivables (175) -
Bad debts written off - (17)
(Allowance)/Write-back of inventory obsolescence (255) 2
Depreciation of property, plant and equipment (895) (1,143)
Depreciation of right-of-use assets (847) (996)
Amortisation of intangible assets (141) (266)
5.2 Related party transactions
There are no material related party transactions apart from those disclosed
elsewhere in the condensed interim financial statements.
6. Taxation
The Group calculates the period income tax expense using the tax rate that
would be applicable to the expected total annual earnings.
7. Earnings Per Share
Earnings per ordinary share of the Group, after deducting any provision for Group
preference dividends
1H 1H
FY2022
FY2021
US$ US$
(a) Based on weighted average number of ordinary shares on issue; and (1.21) cents (0.43) cent
(b) On a fully diluted basis (1.21) cents* (0.43) cent*
Weighted average number of ordinary shares used in computation of basic 271,662,227 271,662,227
earnings per share
Weighted average number of ordinary shares used in computation of diluted 271,662,227 271,662,227
earnings per share
* Diluted earnings per share are the same as the basic earnings per share
because the potential ordinary shares to be converted are anti-dilutive as the
effect of the share conversion would be to increase the earnings per share.
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
8. Net Asset Value
Group Company
30 Jun 2022 31 Dec 2021 30 Jun 2022 31 Dec 2021
US$ US$ US$ US$
Net asset value per ordinary share based on issued share capital 16.22 cents 17.44 cents 15.42 cents 15.51 cents
Total number of issued shares 271,662,227 271,662,227 271,662,227 271,662,227
9. Intangible Assets
Trading name Intellectual property rights Capitalised development Total
costs
US$'000 US$'000 US$'000 US$'000
Group
2022
Cost
Balance at 1 January and 30 June 16 2,674 4,834 7,524
Amortisation and impairment
Balance at 1 January 16 1,043 4,767 5,826
Amortisation charge - 74 67 141
Currency realignment - 4 - 4
Balance at 30 June 16 1,121 4,834 5,971
Net book value
Balance at 30 June - 1,553 - 1,553
2021
Cost
Balance at 1 January and 31 December 16 2,674 4,834 7,524
Amortisation and impairment
Balance at 1 January 16 757 4,460 5,233
Amortisation charge - 284 307 591
Currency realignment - 2 - 2
Balance at 31 December 16 1,043 4,767 5,826
Net book value
Balance at 31 December - 1,631 67 1,698
10. Goodwill
Group
30 June 2022 31 December 2021
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
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
11. Goodwill (cont'd)
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 2022 31 December 2021
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 & Furniture, fittings & Motor
property equipment equipment vehicles Renovations Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Group
2022
Cost
Balance at 1 January 2,871 17,907 7,813 40 1,438 30,069
Currency realignment - 3 (2) - (1) -
Additions - 240 11 - - 251
Disposals - (159) (2) - - (161)
Balance at 30 June 2,871 17,991 7,820 40 1,437 30,159
Accumulated
Depreciation
Balance at 1 January 960 12,523 7,244 40 1,176 21,943
Currency realignment - (10) (2) - (1) (13)
Depreciation charge - 873 21 - 1 895
Disposals - (159) (2) - - (161)
Balance at 30 June 960 13,227 7,261 40 1,176 22,664
Net book value
Balance at 30 June 1,911 4,764 559 - 261 7,495
2021
Cost
Balance at 1 January 2,883 17,639 7,649 40 1,458 29,669
Currency realignment - (19) 12 - (1) (8)
Additions - 814 152 - 97 1,063
Disposals (12) (527) - - (116) (655)
Balance at 31 December 2,871 17,907 7,813 40 1,438 30,069
Accumulated
Depreciation
Balance at 1 January 928 11,187 6,969 40 1,135 20,259
Currency realignment 44 322 - - 70 436
Depreciation charge - 1,541 275 - 87 1,903
Disposals (12) (527) - - (116) (655)
Balance at 31 December 960 12,523 7,244 40 1,176 21,943
Net book value
Balance at 31 December 1,911 5,384 569 - 262 8,126
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
12. Property, Plant and Equipment (cont'd)
Furniture,
fittings &
equipment Renovations Total
US$'000 US$'000 US$'000
Company
2022
Cost
Balance at 1 January and 30 June 211 80 291
Accumulated depreciation
Balance at 1 January 192 79 271
Depreciation charge 19 1 20
Balance at 30 June 211 80 291
Net book value
Balance at 30 June - - -
2021
Cost
Balance at 1 January and 31 December 211 80 291
Accumulated depreciation
Balance at 1 January 137 72 209
Depreciation charge 55 7 62
Balance at 31 December 192 79 271
Net book value
Balance at 31 December 19 1 20
13. Investment in Subsidiaries
Company
30 Jun 2022 31 Dec 2021
US$'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 (16,014) (16,014)
25,375 25,375
Movement in the allowance for impairment loss are as follows:
At the beginning of the period 16,014 14,287
Impairment loss recognised during the period - 1,727
At the end of the period 16,014 16,014
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
13. Investment in Subsidiaries (cont'd)
Allowance for impairment loss
(i) Global Invacom Manufacturing Pte Ltd ("GIMPL")
As at 30 June 2022 and 31 December 2021, 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 2022 and 31 December 2021, an allowance for impairment loss of
US$7,366,000 was made on the cost of investment in GIHL Group, as the
allocated CGU, to which the investment relates to, was incurring losses from
operations. The recoverable amount was based on management's estimate of the
fair value less costs to sell, with reference to the fair value of the net
assets of GIHL Group, which is considered to be Level 3 in the fair value
hierarchy.
14. Borrowings
Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 30 Jun 2022 As at 31 Dec 2021
Secured Unsecured Secured Unsecured
US$'000 US$'000 US$'000 US$'000
5,714 - 6,120 -
Amount repayable after one year
As at 30 Jun 2022 As at 31 Dec 2021
Secured Unsecured Secured Unsecured
US$'000 US$'000 US$'000 US$'000
- - - -
The revolving credit loans of US$5,714,000 were secured over the assets of the
subsidiaries and corporate guarantees provided by the Company and the
subsidiaries.
15. Share Capital
1H FY2022 No. of shares US$'000
Balance as at 1 Jan 2022 and 30 Jun 2022 271,662,227 72,584
No. of shares US$'000
1H FY2021
Balance as at 1 Jan 2021 and 30 Jun 2021 271,662,227 72,584
There were 10,740,072 treasury shares held by the Company as at 30 June 2022
and 30 June 2021 and there were no subsidiary holdings.
E. Notes to the Condensed Interim Consolidated Financial Statements
(cont'd)
15. Share Capital (cont'd)
Total number of issued shares excluding treasury shares as at the end of the
current financial period and as at the end of the immediately preceding year:
30 Jun 2022 31 Dec 2021
Total number of issued shares excluding treasury shares 271,662,227 271,662,227
Total number of treasury shares as at the end of the current financial period
reported on:
1H FY2022 No. of shares US$'000
Balance as at 1 Jan 2022 and 30 Jun 2022 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 2022 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 2022 ("1H FY2022")
decreased by 7.5% to US$37.4 million from US$40.4 million in the prior year
("1H FY2021"). The ongoing shortage of semiconductors globally and the delay
in the launch of Jupiter 3 continues to impact the Group's ability to satisfy
existing orders and generate associated additional revenue.
Geographically, the Group's revenue for 1H FY2022 decreased in America by
US$5.8 million (-24.9%), partially offset by an increase in Europe, Asia and
Rest of the World by US$0.5 million (+4.5%), US$0.01 million (+0.8%) and
US$2.3 million (+44.4%), respectively.
Gross Profit
The decrease in revenue has resulted in a 16.1% decrease in gross profit from
US$8.8 million in 1H FY2021 to US$7.4 million in 1H FY2022. Gross profit
margin has decreased marginally by 2.0 percentage points from 21.7% to 19.7%,
impacted by cost price increases, compounded by labour shortages.
Other Income
Other income in 1H FY2022 were mainly from gains on the disposal of equipment
and foreign exchange gains. Other income in 1H FY2021 were 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 comprised subsidy support received from
various government bodies across the Group due to the pandemic.
Administrative and Research and Development Expenses
Administrative expenses, together with research and development expenses, for
1H FY2022 decreased 7.4% to US$10.1 million compared to US$10.9 million in 1H
FY2021, representing 26.9% of revenue in both periods. The ongoing cost
control measures across the Group to streamline certain core functions, in
line with the challenging market dynamics, have resulted in lower
administrative expenses being incurred, whilst not impacting its offering to
the customers.
Other Operating Expenses
Other operating expenses in 1H FY2022 were attributed mainly to impairment
loss on trade receivables and final liquidation fees of a subsidiary in China.
Loss Before Tax & Net Loss
The Group posted a loss before tax of US$3.3 million in 1H FY2022, compared to
a loss before tax of US$1.1 million in 1H FY2021.
Overall, the Group posted a net loss of US$3.3 million in 1H FY2022, compared
to a net loss of US$1.2 million in 1H FY2021.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
2. Review of Performance of the Group (cont'd)
2.2 Review of Financial Position
Non-current assets decreased by US$1.6 million to US$20.6 million as at 30
June 2022, due to the depreciation of plant and equipment, the right-of-use
assets and the amortisation of intangible assets.
Net current assets decreased by US$1.9 million to US$27.2 million as at 30
June 2022 compared to US$29.1 million as at 31 December 2021. Inventories,
trade and other receivables and trade and other payables decreased by US$0.6
million, US$3.9 million and US$2.3 million respectively, with the decrease in
sales. Tax receivables increased by US$0.1 million to US$0.2 million.
Cash and cash equivalents decreased by US$0.8 million to US$10.0 million as at
30 June 2022 from US$10.8 million at 31 December 2021 and borrowings decreased
by US$0.4 million to US$5.7 million as at 30 June 2022 from US$6.1 million as
at 31 December 2021.
Repayment of leases has resulted in a decrease of US$0.6 million in the
current portion of lease liabilities and US$0.2 million in the non-current
portion of lease liabilities.
The Group's net asset value stood at US$44.1 million as at 30 June 2022,
compared to US$47.4 million as at 31 December 2021.
2.3 Review of Cash Flows
In 1H FY2022, net cash generated from operating activities amounted to US$0.8
million, comprising US$0.8 million cash outflow from operating activities
(before working capital changes), US$1.9 million net working capital inflow
and US$0.3 million payment of interest and income tax.
Net cash used in investing activities in 1H FY2022 amounted to US$0.3 million,
mainly due to the purchase of machinery and equipment, set off against the
proceeds from the disposal of machinery and equipment.
Net cash used in financing activities amounted to US$1.3 million in 1H FY2022,
attributable to the repayment of borrowings and lease liabilities.
Overall, the Group recorded a net decrease in cash and cash equivalents
amounting to US$0.8 million in 1H FY2022, bringing cash and cash equivalents
per the consolidated statement of cash flows to US$10.0 million as at 30 June
2022.
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 Group's financial and operational performance in the next reporting period
and the next 12 months will continue to be influenced by the much-publicised
shortage of semiconductors globally, which continues to impact the Company's
ability to satisfy existing orders and generate associated additional revenue.
Furthermore, the Group continues to be impacted by cost price increases,
compounded by labour challenges as well as business challenges faced by our
customers.
As a direct consequence of the above external factors, the Group continues to
assess its cost base to streamline certain core functions and continues to
reduce administrative costs, whilst not impacting its offering to customers.
Given the market challenges that the Group has faced over the past two years
and what may become "new normals", the Group has embarked on a business review
exercise, to better manage our operations, and to improve the performance of
the Group.
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 2022.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
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 2022.
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 2022 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
12 August 2022
The information communicated in this announcement contains inside information
for the purposes of Article 7 of the Market Abuse Regulation (EU) No.
596/2014.
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