REG - Global Invacom Group - Results for three months ended 31 March 2019
RNS Number : 1384ZGlobal Invacom Group Limited15 May 2019
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Results for three months ended 31 March 2019
Singapore/London, 15 May 2019 - Global Invacom (SGX: QS9) (AIM: GINV), the global provider of satellite communications equipment, is pleased to announce its results for the three months ended 31 March 2019 ("Q1 FY2019").
Key financial highlights:
· The Company announced a ninth consecutive quarter of profitability in Q1 FY2019
· Revenue increased 32.4% to US$38.3 million (Q1 FY2018: US$28.9 million)
· Gross profit increased 27.4% to US$7.8 million (Q1 FY2018: US$6.1 million)
· Net profit increased 127.3% to US$0.7 million (Q1 FY2018: US$0.3 million)
· Cash and cash equivalents of US$7.8 million as at 31 March 2019
Key operation highlights:
· Secured US$6.0 million contract to supply Direct-to-Home Satellite Outdoor Units in Asia
· Completed first shipments of FiberGo, the Group's fully integrated fibre Data over Satellite product
· Announced partnership with Edgewater Wireless Systems Inc. to further develop Broadcast WiFi
· Ongoing commitment to R&D to further enhance and develops the Group's product portfolio
The Group has made a strong start to FY2019, as evidenced by another quarter of profitable growth. The demand for satellite services continues to thrive with the growing trend of compact, but equally powerful transmitters fuelling the Company's sales momentum.
Revenue for the quarter rose 32.4% to US$38.3 million (Q1 FY2018: US$28.9 million), a third consecutive quarterly increase, driven by an increase in order intake from major customers in the United Kingdom and United States.
Revenue in the period increased in America, Europe and Rest of the World by US$7.6 million (+38.6%), US$1.3 million (+18.6%) and US$1.2 million (+228.0%), respectively, offset by a weak performance in Asia, down 49.7% to US$0.7 million.
Gross profit rose 27.4% in the period to US$7.8 million (Q1 FY2018: US$6.1 million) with gross profit margin falling slightly to 20.3% (Q1 FY2018: 21.0%). This reflected some localised issues at our U.S manufacturing facility in Q4 FY2018, which have now been rectified.
Net profit increased 127.3% to US$0.7 million (Q1 FY2018: US$0.3 million), the Group's ninth consecutive quarter of profitability.
Administrative expenses rose to US$6.3 million in Q1 FY2019 from US$5.4 million in Q1 FY2018, due to the inclusion of Global Skyware Limited which was acquired in late Q3 FY2018, the Group's continued emphasis on product development through R&D, and professional fees incurred for the, now terminated, reverse takeover.
Earnings per share on a fully diluted basis rose to 0.27 US cent for Q1 FY2019 (Q1 FY2018: 0.12 US cent). Net asset value per share increased to 21.04 US cents as at 31 March 2019 from 20.84 US cents as at 31 December 2018. The Group's cash and cash equivalents amounted to US$7.8 million as at 31 March 2019.
As announced on 7 May 2019, the Group secured new contracts worth US$6.0 million to supply Direct-to-Home Satellite Outdoor Units to a major Asian Satellite Service Provider. The contracts will run for 24 months and are expected to contribute to the Group's financial performance for the current financial year.
The Group announced on 6 March 2019 that it made the first shipment of FiberGo, a fully integrated and cost-effective fibre Data over Satellite ("DOS") product. This compact, flexible, easy to install system is designed for all working conditions, including inclement weather, lightning damage, humidity and salt corrosion. Global Skyware will introduce FiberGo to Asia and the Americas initially, before extending distribution to the rest of the world during the second half of 2019.
On 14 March 2019, the Group announced a strategic partnership with Edgewater Wireless Systems Inc. ("Edgewater") to further develop Broadcast WiFi ("Bx-WiFi"), a technology that enables live, high-quality and large-scale event video streaming over a WiFi network. Bx-WiFi was first unveiled and successfully live-tested by the BBC and Global Invacom in August 2017 at the Edinburgh Fringe Festival, the largest arts festival in the world. The Company believes that there are a number of scalable applications for the technology globally.
The Group continues to monitor the ongoing development of 5G throughout the world and the potential for satellite and satellite ground equipment in particular, to play its part in this evolving infrastructure. The Group is also reviewing the development of Mid Earth Orbit ("MEO") and Low Earth Orbit ("LEO") satellite constellations and the opportunities they provide.
Mr. Tony Taylor, Executive Chairman of Global Invacom, commented:
"The Group continued to deliver both revenue and profit growth, buoyed by strong contract momentum. Our focus on R&D remains our core growth engine and pleasingly, product demand from our blue-chip client base continues to be strong.
This is reflected in the healthy mix of both new contracts and renewals by long-time customers, highlighting their ongoing confidence in our products. We will continue to leverage R&D to improve and enhance our technology, so that we remain at the forefront of the satellite communications industry and continue to provide customers with the highest quality products."
**End of Press Release**
For further information, please contact:
Global Invacom Group Limited
Matthew Garner, Chief Financial Officer
Tel: +65 6431 0782
Tel: +44 203 053 3523
finnCap Ltd (Nominated Adviser and Joint Broker)
Christopher Raggett / Matthew Radley (Corporate Finance)
Tel: +44 207 220 0500
Mirabaud Securities LLP (Joint Broker)
Peter Krens (Equity Capital Markets)
Tel: +44 207 878 3362
WeR1 Consultants Pte Ltd (Singapore Investor Relations)
Jordan Teo / Ryan del Agua
Tel: +65 6737 4844
Vigo Communications (UK Media & Investor Relations)
Jeremy Garcia / Fiona Henson / Charlie Neish
Tel: +44 207 390 0238
About Global Invacom Group Limited
Global Invacom is a fully integrated satellite equipment provider with six manufacturing plants across China, Israel, Malaysia, 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 Networks.
Global Invacom provides a full range of antennas, LNB receivers, fibre distribution equipment, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in military, medical, and consumer electronics industries. Following the acquisition in 2015 of Global Skyware, a leading US‐based designer and supplier of satellite antennas products and services, the Company became 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 THREE MONTHS ENDED 31 MARCH 2019
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 three months ended 31 March 2019. These figures have not been audited.
Group
Q1
FY2019Q1
FY2018Increase/
(Decrease)
US$'000
US$'000
%
Revenue
38,293
28,925
32.4
Cost of sales
(30,534)
(22,837)
33.7
Gross profit
7,759
6,088
27.4
Other income
-
63
(100.0)
Distribution costs
(80)
(99)
(19.2)
Administrative expenses
(6,278)
(5,433)
15.6
Other operating expenses
(231)
-
N.M.
Finance income
28
3
833.3
Finance costs
(211)
(113)
86.7
Profit before income tax(i)
987
509
93.9
Income tax expense
(246)
(183)
34.4
Profit after income tax attributable to equity holders of the Company
741
326
127.3
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries
53
124
(57.3)
Other comprehensive income for the period, net of tax
53
124
(57.3)
Total comprehensive income for the period attributable to equity holders of the Company
794
450
76.4
N.M.: Not Meaningful
Note:
(i) Profit before income tax was determined after (charging)/crediting the following:
Group
Q1
FY2019Q1
FY2018Increase/
(Decrease)
US$'000
US$'000
%
Interest income
28
3
833.3
Interest expense
(211)
(113)
86.7
(Loss)/Gain on foreign exchange
(223)
62
N.M.
Allowance for inventory obsolescence
(110)
(86)
27.9
Loss on disposal of property, plant and equipment
(8)
-
N.M.
Depreciation of property, plant and equipment
(784)
(699)
12.2
Amortisation of intangible assets
(230)
(175)
31.4
Research and development expense
(647)
(586)
10.4
1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
Group
Company
31 Mar 2019
31 Dec 2018
31 Mar 2019
31 Dec 2018
US$'000
US$'000
US$'000
US$'000
ASSETS
Non-current Assets
Property, plant and equipment
12,951
12,606
76
85
Right-of-use assets
2,846
-
228
-
Investments in subsidiaries
-
-
44,893
44,892
Goodwill
9,352
9,352
-
-
Intangible assets
3,446
3,656
-
-
Other financial assets
2,043
1,519
2,035
1,511
Deferred tax assets
109
109
-
-
Other receivables and prepayments
55
55
9,727
9,608
30,802
27,297
56,959
56,096
Current Assets
Due from subsidiaries
-
-
390
939
Inventories
33,327
31,625
-
-
Trade receivables
27,031
24,874
-
-
Other receivables and prepayments
1,836
1,900
3,492
3,433
Tax receivables
5
15
-
-
Cash and cash equivalents
7,751
8,381
175
526
69,950
66,795
4,057
4,898
Total assets
100,752
94,092
61,016
60,994
EQUITY AND LIABILITIES
Equity
Share capital
60,423
60,423
74,240
74,240
Treasury shares
(1,656)
(1,656)
(1,656)
(1,656)
Reserves
(1,604)
(2,161)
(14,476)
(13,988)
Total equity
57,163
56,606
58,108
58,596
Non-current Liabilities
Other payables
104
104
-
-
Lease liabilities
1,582
-
110
-
Deferred tax liabilities
406
406
-
-
2,092
510
110
-
Current Liabilities
Due to subsidiaries
-
-
2,151
2,109
Trade payables
18,900
19,381
-
-
Other payables
5,975
5,326
456
221
Borrowings
14,626
11,974
-
-
Lease liabilities
1,503
-
123
-
Provision for income tax
493
295
68
68
41,497
36,976
2,798
2,398
Total liabilities
43,589
37,486
2,908
2,398
Total equity and liabilities
100,752
94,092
61,016
60,994
1(b)(ii) Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 31 Mar 2019
As at 31 Dec 2018
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
14,626
-
11,974
-
Amount repayable after one year
As at 31 Mar 2019
As at 31 Dec 2018
Secured
Unsecured
Secured
Unsecured
US$'000
US$'000
US$'000
US$'000
-
-
-
-
Details of any collateral
The revolving credit loans of US$14,626,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.
1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Q1
FY2019Q1
FY2018
US$'000
US$'000
Cash Flows from Operating Activities
Profit before income tax
987
509
Adjustments for:
Depreciation of property, plant and equipment
784
699
Amortisation of intangible assets
230
175
Loss on disposal of property, plant and equipment
8
-
Allowance for inventory obsolescence
110
86
Unrealised exchange loss/(gain)
214
(102)
Interest income
(28)
(3)
Interest expense
211
113
Share-based payments
2
8
Operating cash flow before working capital changes
2,518
1,485
Changes in working capital:
Inventories
(1,812)
1,730
Trade receivables
(2,026)
923
Other receivables and prepayments
87
1,548
Trade and other payables
(232)
(1,355)
Cash (used in)/generated from operating activities
(1,465)
4,331
Interest paid
(60)
(55)
Income tax paid
(64)
(77)
Net cash (used in)/generated from operating activities
(1,589)
4,199
Cash Flows from Investing Activities
Interest received
4
2
Purchase of property, plant and equipment
(1,137)
(290)
Proceeds from disposal of property, plant and equipment
1
-
Payment for financial asset, at fair value through profit or loss
(500)
-
Net cash used in investing activities
(1,632)
(288)
Cash Flows from Financing Activities
Proceeds from borrowings
19,377
11,641
Repayment of borrowings
(16,725)
(10,225)
Net cash generated from financing activities
2,652
1,416
Net (decrease)/increase in cash and cash equivalents
(569)
5,327
Cash and cash equivalents at the beginning of the period
8,381
7,152
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies
(61)
33
Cash and cash equivalents at the end of the period(i)
7,751
12,512
Note:
(i) For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:
Q1
FY2019Q1
FY2018
US$'000
US$'000
Cash and bank balances
7,721
12,481
Fixed deposits
30
31
Cash and cash equivalents per the consolidated statement of cash flows
7,751
12,512
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.
Group
Share
capital
Treasury shares
Merger reserves
Capital redemption reserves
Share options reserve
Capital reserve
Foreign currency translation reserve
Retained profits
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2019
60,423
(1,656)
(10,150)
6
723
(3,560)
(1,289)
12,109
56,606
Effect of adoption of SFRS(I) 16
-
-
-
-
-
-
-
(239)
(239)
Share-based payments
-
-
-
-
2
-
-
-
2
Profit for the period
-
-
-
-
-
-
-
741
741
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
53
-
53
Total other comprehensive income for the period
-
-
-
-
-
-
53
741
794
Balance as at 31 Mar 2019
60,423
(1,656)
(10,150)
6
725
(3,560)
(1,236)
12,611
57,163
Balance as at 1 Jan 2018
60,423
(1,656)
(10,150)
6
706
(3,695)
(872)
10,708
55,470
Share-based payments
-
-
-
-
8
-
-
-
8
Profit for the period
-
-
-
-
-
-
-
326
326
Other comprehensive income:
Exchange differences on translating foreign operations
-
-
-
-
-
-
124
-
124
Total other comprehensive income for the period
-
-
-
-
-
-
124
326
450
Balance as at 31 Mar 2018
60,423
(1,656)
(10,150)
6
714
(3,695)
(748)
11,034
55,928
Company
Share
capital
Treasury shares
Share options reserve
Capital reserve
Foreign currency translation reserve
Accumulated losses
Total
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
US$'000
Balance as at 1 Jan 2019
74,240
(1,656)
723
(4,481)
(1,927)
(8,303)
58,596
Effect of adoption of SFRS(I) 16
-
-
-
-
-
(5)
(5)
Share-based payments
-
-
2
-
-
-
2
Loss for the period
-
-
-
-
-
(485)
(485)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(485)
(485)
Balance as at 31 Mar 2019
74,240
(1,656)
725
(4,481)
(1,927)
(8,793)
58,108
Balance as at 1 Jan 2018
74,240
(1,656)
706
(4,481)
(1,927)
(7,618)
59,264
Share-based payments
-
-
7
-
-
-
7
Loss for the period
-
-
-
-
-
(234)
(234)
Other comprehensive loss:
Exchange differences on translating foreign operations
-
-
-
-
-
-
-
Total other comprehensive loss for the period
-
-
-
-
-
(234)
(234)
Balance as at 31 Mar 2018
74,240
(1,656)
713
(4,481)
(1,927)
(7,852)
59,037
1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on.
State the number of shares that may be issued on conversion of all the outstanding convertibles, if any, against the total number of issued shares excluding treasury shares and subsidiary holdings of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.
State also the number of shares held as treasury shares and the number of subsidiary holdings, if any, and the percentage of the aggregate number of treasury shares and subsidiary holdings held against the total number of shares outstanding in a class that is listed as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.
Q1 FY2019
No. of shares
US$'000
Balance as at 1 Jan 2019 and 31 Mar 2019
271,662,227
72,584
Q1 FY2018
No. of shares
US$'000
Balance as at 1 Jan 2018 and 31 Mar 2018
271,662,227
72,584
There were 10,740,072 treasury shares held by the Company as at 31 March 2019 and 31 March 2018 and there were no subsidiary holdings.
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.
31 Mar 2019
31 Dec 2018
Total number of issued shares excluding treasury shares
271,662,227
271,662,227
1(d)(iv) A statement showing all sales, transfers, cancellation and/or use of treasury shares as at the end of the current financial period reported on.
Q1 FY2019
No. of shares
US$'000
Balance as at 1 Jan 2019 and 31 Mar 2019
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.
Q1 FY2019
No. of shares
US$'000
Balance as at 1 Jan 2019 and 31 Mar 2019
-
-
2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.
These figures have not been audited or reviewed.
3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).
Not applicable.
4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.
Except as disclosed in Note 5 below, 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 2018.
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 2019. Except as disclosed below, the adoption of the new and revised SFRS(I)s and IFRSs has no material financial impact on the Group's financial statements.
SFRS(I) 16 and IFRS 16, Leases sets out a revised framework for the recognition, measurement, presentation and disclosure of leases, and replaces existing lease accounting guidance. SFRS(I) 16 and IFRS 16 requires lessees to recognise right-of-use assets and lease liabilities for all leases with a term of more than 12 months, except where the underlying asset is of low value. The right-of-use asset is depreciated and interest expense is recognised on the lease liability. The accounting requirements for lessors have not been changed substantially and continue to be based on classification as operating and finance leases. Disclosure requirements have been enhanced for both lessors and lessees.
The Group adopted SFRS(I) 16 and IFRS 16 on 1 January 2019 based on a permitted transition approach that does not restate comparative information, but recognised the cumulative effect of initially applying SFRS(I) 16 and IFRS 16 as an adjustment to the opening balance of retained earnings on 1 January 2019. The Group also adopted an expedient offered by SFRS(I) 16 and IFRS 16, exempting the Group from having to reassess whether pre-existing contracts contain a lease.
The Group and the Company have entered into several leasing arrangements with lessors for factory buildings and office premises. Prior to the adoption of SFRS(I) 16 and IFRS 16, the Group and the Company recognised these arrangement as operating leases and payments made under operating leases are recognised in the income statement on a straight-line basis over the period of the lease. Upon adoption of SFRS(I) 16 and IFRS 16, the Group and the Company recognised the right-of-use assets and lease liabilities. The nature of expenses related to those leases will change as SFRS(I) 16 and IFRS 16 replaces the straight-line operating lease expense with depreciation charge for right-of-use assets and interest expenses on lease liabilities. The Group does not restate the comparative information for the effect of adopting SFRS(I) 16 and IFRS 16 due to the exemption in SFRS(I) 16 and IFRS 16 but has instead recognised the effect in retained earnings and other reserves as at 1 January 2019.
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
Q1
FY2019US$
Q1
FY2018US$
(a) Based on weighted average number of ordinary shares on issue; and
0.27 cent
0.12 cent
(b) On a fully diluted basis
0.27 cent*
0.12 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 for Q1 FY2019 is 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
31 Mar 2019
US$
31 Dec 2018
US$
31 Mar 2019
US$
31 Dec 2018
US$
Net asset value per ordinary share based on issued share capital
21.04 cents
20.84 cents
21.39 cents
21.57 cents
Total number of issued shares
271,662,227
271,662,227
271,662,227
271,662,227
8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following:
(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and
(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.
Review of Financial Performance
Revenue
The Group's revenue was US$38.3 million in Q1 FY2019, US$9.4 million higher than US$28.9 million in Q1 FY2018, attributed to the increase in orders from key customers in the UK and US.
Geographically, Group revenue for Q1 FY2019 from America, Europe and Rest of the World regions increased by US$7.6 million (+38.6%), US$1.3 million (+18.6%) and US$1.2 million (+228.0%), respectively against Q1 FY2018 which was offset by a decline in revenue from Asia by US$0.7 million (-49.7%).
Gross Profit
In line with the increase in revenue, gross profit increased by US$1.7 million or 27.4% to US$7.8 million in Q1 FY2019 from US$6.1 million in Q1 FY2018. Gross profit margin ("GPM") dipped slightly to 20.3% in Q1 FY2019 from 21.0% in Q1 FY2018 as a result from the variation of the product mix but remains level with Q4 FY2018.
Administrative Expenses
Administrative expenses increased to US$6.3 million in Q1 FY2019 from US$5.4 million in Q1 FY2018, but are reduced as a percentage of revenue representing 16.4% and 18.8% respectively, with continued emphasis on R&D to strengthen its product offerings, increase in depreciation with the additions in machineries and the professional fees incurred for the reverse takeover. Q1 FY2019 also recognises a full quarter of costs from the Group's Data Over Satellite electronics sites which were not acquired until Q3 FY2018.
Other Operating Expenses
Other operating expenses arose mainly from foreign exchange losses.
Profit Before Tax & Net Profit
The Group recorded a profit before tax of US$1.0 million in Q1 FY2019 compared to US$0.5 million in Q1 FY2018, representing a margin of 2.6% compared to a margin of 1.8%, respectively.
Overall, the Group posted a net profit of US$0.7 million in Q1 FY2019 compared to US$0.3 million in Q1 FY2018, representing a net margin of 1.9% compared to 1.1%, respectively.
Review of Financial Position
Non-current assets increased by US$3.5 million to US$30.8 million as at 31 March 2019, primarily due to the adoption of SFRS(I) 16 on leases, addition of property, plant and equipment as well as the interest accrued on the convertible loans subscribed in Tactilis Sdn. Bhd.
Net current assets decreased by US$1.3 million to US$28.5 million as at 31 March 2019 compared to US$29.8 million as at 31 December 2018. Inventories, trade and other receivables and trade and other payables increased by US$1.7 million, US$2.1 million and US$0.2 million, respectively, in preparation of the next quarter orders and with the increased sales towards the end of the quarter. Borrowings also increased by US$2.6 million to US$14.6 million, offset by a decrease in cash and cash equivalents of US$0.6 million to US$7.8 million as at 31 March 2019 compared to US$8.4 million as at 31 December 2018. Provision for income tax increased by US$0.2 million, in line with the increase in profits. The adoption of SFRS(I) 16 on leases increased the current portion of lease liabilities by US$1.5 million.
Similarly, the non-current portion of the lease liabilities increased to US$1.6 million.
The Group's net asset value stood at US$57.2 million as at 31 March 2019, compared to US$56.6 million as at 31 December 2018.
Review of Cash Flows
Net cash used in operating activities in Q1 FY2019 was US$1.6 million, comprising cash inflow from operating activities before working capital changes of US$2.5 million, net working capital outflow of US$4.0 million and payment of interest and income tax expense of US$0.1 million.
Net cash used in investing activities was US$1.6 million in Q1 FY2019, mainly attributable to the purchase of machinery and equipment and investment in convertible notes in Tactilis Sdn. Bhd.
Net cash generated from financing activities was US$2.6 million in Q1 FY2019, arising mainly from the net proceeds of borrowings.
Overall, the Group recorded a net decrease in cash and cash equivalents of US$0.6 million in Q1 FY2019, bringing cash and cash equivalents per the consolidated statement of cash flows to US$7.8 million as at 31 March 2019.
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 Group continues to see revenue growth resulting from its introduction of new and improved products to its key customers which they, in turn, have established as their standard products for all their suppliers. This has resulted in good volumes of product sales and a competitive advantage which the Group will strive to maintain.
As a result of the above successes, the Group continues to emphasise R&D to address customer preferences while striving to improve product performance, as well as cost savings from more efficient operations and smaller form factors requiring less raw materials. The Group continues to believe that the investment in R&D for electronics and antennas in both the Direct to Home and Data over Satellite ("DOS") markets will place it in a strong position compared to their competitors.
The Group continues to monitor the ongoing development of 5G throughout the world and the potential for satellite and satellite ground equipment in particular, to play its part in this evolving infrastructure. The Group is also reviewing the development of Medium Earth Orbit ("MEO") and Low Earth Orbit ("LEO") satellite constellations and the opportunities it provides.
The Group is also mindful of the further recent tariff increases imposed by the United States of America ("USA") on products manufactured in the People's Republic of China ("China") and it has been working internally on processes and externally with its affected end customers to limit the exposure to these increases.
The shortages of electronic components which significantly impacted the Group's gross margins in FY2018 began to decrease during the quarter and its logistics teams continue to find greater availability thus reducing the potential additional cost of spot buys in FY2019.
As part of its continuing processes, the Group monitors the cost, efficiency and effectiveness of its various manufacturing sites around the world being particularly conscious of increasing labour costs.
As announced on 21 April 2019, the proposed acquisition of Tactilis has been mutually terminated by the company and the vendor with immediate effect. All fees, costs and expenses incurred in relation to the proposed acquisition will be borne equally by both sides. The portion to be borne by the vendor, which had been advanced by the company, will be fully reimbursed on or before 16 July 2019.
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.
Due to the operating conditions faced by the Group, no dividend has been declared or recommended for the three months ended 31 March 2019.
13. If the Group has obtained a general mandate from shareholders for Interested Person Transactions ("IPTs"), the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPTs mandate has been obtained, a statement to that effect.
The Company does not have a shareholders' mandate for IPTs and there were no IPTs for the three months ended 31 March 2019.
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 three months ended 31 March 2019 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
15 May 2019
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.ENDQRFLLFVLEVIELIA
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