REG - PeerTV PLC - Half Yearly Report <Origin Href="QuoteRef">PTV.L</Origin> <Origin Href="QuoteRef">THRL.L</Origin>

Thor EnergyAnnouncement

28/09/2015 07:02

RNS Number : 3178A
PeerTV PLC
28 September 2015
 
PeerTV PLC
("PeerTV" or the "Company")
Half Yearly Report
PeerTV plc (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market, and PCB (printed circuit board) production solutions is pleased to announce its interim report for the six month period ended 30 June 2015.
Chairman's Statement
Key Developments
 Consolidated turnover of $970,000 (H1 2014: $793,000) and total comprehensive loss of $1,600,000 (H1 2014: $2,025,000).
 Operating loss for the period was $1,353,000 (H1 2014: $1,530,000). Financial charges for the period totalled $655,000 (H1 2014: $1,120,000).
 Net Liabilities of $5,607,000 as at 30 June 2015 compared to net liabilities of $6,624,000 as at 31 December 2014.
 Group has adopted strategies aimed at bringing its two business units to profitability. The main elements are in PeerTV to bring on board a new management and marketing team with extensive industry experience and in Digitek to acquire a new assembly line facilitating increases in capacity and improved efficiencies.
 To provide working capital, purchase the new assembly line and meet loan repayment and other commitments, the Group has raised 2,193,774 (about $3,345,000).
Peer TV
 The appointments of Wes Wilcox as Chief Executive Officer and Jim Lomax as Vice President Sales and Marketing are designed to provide PeerTV with leadership with industry expertise. It is expected to result in sales to both established OTT operators and new entries to the market around the world.
 We have been successful in recruiting two new European based customers and although their initial orders were low we expect to receive more substantial orders from them in the near future. During the period we delivered an initial order to 2,500 units to PolskyTV. This was the first half of an order received in December 2014 and we are currently awaiting instructions regarding the remainder.
 Unfortunately during the period there was no progress with the conditional order for $1.2 million from Kartina GmbH and consequently we have curtailed our R&D efforts in support of that customer.
 Attended the IBC Trade Show for television and related technologies in Amsterdam in September 2015 as part of the deployment of the new marketing strategy. 
 Cooperation agreements have been signed with Speech Modules Holdings Ltd ("Speech") a leading provider of voice recognition systems, quoted on the Tel Aviv Stock Exchange. We are developing two exciting new products, incorporating the Speech technology, which we believe will start contributing revenues in 2016. We hold about 14% of the share capital of Speech. It is an ambitious company with proprietary technologies for huge global markets. 
Digitek
Sales in the first six months of 2015 were at a similar level to the same period in 2014 with some improvement in the subsequent three months. In the period the strategy was to:
 Complete the deployment of the new assembly line and start to exploit its technological advantages to attract additional customers and to obtain increased business from existing customers.
 Maintain and expand Digitek's traditional core business of SMT production.
 Exploit its expertise across a wide range of product categories to offer major customers complete products designed to meet their specific needs by way of full turnkey projects with the aim of achieving higher margins.
All the trading activities during the period were undertaken by Digitek SMT Assemblies ("Assemblies").
The new assembly line is providing access to customers requiring high accuracy SMT and mass production, a major part of which were previously beyond Digitek's technical capabilities. Of particular importance is the new testing equipment including Automated Optical Inspection (AOI) and XRAY machines which enable Digitek to identify and eliminate failures, in a way far beyond the capabilities of the pre-existing assembly lines. Raising awareness of this capability is resulting in increased approaches from customers in the military and medical sectors. 
However, Digitek still faces the challenge of financing the full turnkey projects, which are the preference for a major part of the base of potential customers. Approval has been obtained from the loan noteholders of Assemblies to enable Digitek to obtain purchase order financing to enable it to finance full turnkey projects. Discussions with potential sources of purchase order financing are in progress and the outcome will determine whether full turnkey production from an Israeli developer and producer of advanced fleet management systems will be delivered by end of October as previously announced. 
Outlook
 The global Over the Top ("OTT") Video market, in which PeerTV operates is growing strongly, particularly in our target sectors. Online distribution is cost-effective when targeting small audiences, and the nature of the web means that small niches attain a significant scale when applied to a global market. A recent study by Horowitz Research claims that 88% of urban TV viewers now have the ability to stream video and states that multicultural viewers are more likely to have made OTT video a part of their lifestyle.
 As OTT video starts to mature, the market is increasingly giving rise to players that cater for specific audiences. There is a new wave of online players specialising in specific genres and PeerTV's challenge is to access these players at a sufficiently early stage to become their preferred supplier. Success is dependent on having adequate financial and manpower resources to market effectively and to support an increasing customer base from a technical point of view. 
 On the Digitek side, following deployment of the new assembly line we have the opportunity to attract higher volume, higher margin customers. However, to a great extent the ability to exploit this opportunity is dependent on obtaining the funding necessary to finance the purchase of components for full turnkey projects and the expected increase in customer receivables. As yet this issue has not been resolved.
 The Group has remained loss making since the period end. The Group continues to need to raise funds to provide the working capital necessary to support the development of both business units, meet loan repayments and other commitments.
Further enquiries: 
PeerTV Plc
Eitan Yanuv, Chairman   
Tel: +972 974 07315
ZAI Corporate Finance Limited
Richard Morrison / Jamie Spotswood 
Tel: +44 20 7060 2220
Daniel Stewart & Company plc
David Coffman
Tel: +44 207 7766550
CONDENSED GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2014


Six months to
Six months to
Year to


30 June 2015
30 June 2014
31 December 2014

Note
$'000
$'000
$'000





TURNOVER
3
970
793
1,512





Cost of sales

(1,024)
(1,285)
(2,330)


---------------
---------------
----------------
GROSS PROFIT / (LOSS)

(54)
(492)
(818)





Research and development

(402)
(375)
(714)
Sales and marketing

(34)
(69)
(103)
General and administrative 

(880)
(539)
(1,384)
Other expenditure

17
(55)
(492)
Exceptional item - impairment of intangibles

-
-
(957)


---------------
---------------
----------------
OPERATING LOSS

(1,353)
(1,530)
(4,468)

Finance costs
Other expense

(655)
-
(1,120)
-
(2,065)
-


---------------
---------------
----------------
LOSS BEFORE TAXATION

(2,009)
(2,650)
(6,533)

Taxation

-
-
-
Minority interest

408
625
1,342


---------------
---------------
----------------
TOTAL COMPREHENSIVE LOSS

(1,600)
(2,025)
(5,191)

=======
========
========



Loss per share

4
$(0.01)
$(0.01)
$(0.01)
Basic

========
========
========

Diluted

$(0.01)
$(0.01)
$(0.01)

========
========
========



CONDENSED GROUP BALANCE SHEET
FOR THE SIX MONTHS ENDED 30 JUNE 2015
As at 
As at
As at
30 June 2015
30 June 2014
31 December 2014
$'000
$'000
$'000
Unaudited
Unaudited
Audited
ASSETS



Non-current assets


Intangible assets 
1,603
2,978
1,877
Property, plant and equipment
1,224
1,194
839
-------------
-------------
------------
2,827
4,172
2,716
Current assets



Inventories
-
116
-
Trade and other receivables 
1,453
410
486
Cash and cash equivalents
25
103
201
-------------
-------------
------------
1,478
629
687
-------------
-------------
------------
Total assets
4,305
4,801
3,403
======
======
======
LIABILITIES



Non-current liabilities



Other payables 
79
78
76
Loans and loan notes 
1
545
148
-------------
-------------
------------
80
623
224
Current liabilities



Bank overdraft 
1,355
1,080
1,681
Trade and other payables
3,546
3,417
3,095
Bank and other borrowing 
4,515
6,297
4,727
Provisions
416
83
300
-------------
-------------
------------
9,832
10,877
9,803
-------------
-------------
------------
Total liabilities
9,912
11,500
10,027
-------------
-------------
------------
Net liabilities
(5,607)
(6,699)
(6,624)
=======
=======
======
EQUITY






Called up share capital
6,162
2,116
4,834
Share premium account
26,341
24,356
24,354
Share options, warrants and deferred shares
2,684
2,625
2,628
Minority interest 
(4,316)
(3,191)
(3,908)
Foreign exchange rate reserves
498
(395)
844
Other reserves - on consolidation under
predecessor accounting 
(1,817)
(1,817)
(1,817)
Other reserves - equity component of
Preference shares 
490
490
490
Retained earnings
(35,649)
(30,883)
(34,049)
-------------
-------------
 ------------ 
Total equity
(5,607)
(6,699)
(6,624)
=======
=======
======

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015



Share


Other
Other





options

Foreign
reserves -
reserves -



Share 
Share 
and deferred
Minority 
Exchange
equity 
on 
Retained


capital
premium
shares
rights
reserve
component
consolidation
earnings
Total

$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000
$'000










As at 1 January 2014
838
23,759
2,112
(2,566)
(297)
490
(1,817)
(28,858)
(6,339)
Share issues
1,278
783
-
-
-
-
-
-
2,061
Share issue costs 
-
(186)
-
-
-
-
-
-
(186)
Net loss for the period
Warrants issued to loan note holders
Movement in the period
Minority interest for the period
-
-
-
-
-
-
-
-
-
513
-
-
-
-
(625)
-
-
(98)
-
-
-
-
-
-
-
-
-
(2,025)
-
-
-
(2,025)
513
(98)
(625)

------------
-----------------
-----------------
--------------
-------------
--------------
------------------
---------------------
-------------------
At 30 June 2014
2,116
24,356
2,625
(3,191)
(395)
490
(1,817)
(30,883)
(6,699)










Share issues
2,718
68
-
-
-
-
-
-
2,786
Share issue costs
-
(70)
-
-
-
-
-
-
(70)
Total comprehensive loss for the period
-
-
-
-
-
-
-
(3,166)
(3,166)
Movements in the period
-
-
-
-
1,239
-
-
-
1,239
Minority interest for the period
Options to loan note holders
-
-
-
-
-
3
(717)
-
-
-
-
-
-
-
-
-
(717)
3

-------------
----------------
----------------
-----------------
--------------
-------------
-----------------
---------------------
-------------------
At 31 December 2014
4,834
24,354
2,628
(3,908)
844
490
(1,817)
(34,049)
(6,624)










Share issues
1,328
2,028
-
-
-
-
-
-
3,356
Share issue costs
-
(41)
-
-
-
-
-
-
(41)
Total comprehensive loss for the









period
-
-
-
-
-
-
-
(1,600)
(1,600)
Warrants issued to loan note holders
-
-
56
-
-
-
-
-
56
Movements in the period
-
-
-
-
(346)
-
-
-
(346)
Minority interest for the period
-
-
-
(408)
-
-
-
-
(408)

------------
----------------
----------------
--------------
-------------
-------------
-----------------
---------------------
------------------
At 30 June 2015
6,162
26,341
2,684
(4,316)
498
490
(1,817)
(35,649)
(5,607)

======
========
========
=======
======
=======
========
=========
========











CONDENSED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months to
Six months to
Year to 31
30 June 2015
30 June 2014
December 2014
$'000
$'000
$'000
Unaudited
Unaudited
Audited
Cash flows from operating activities



Loss before taxation
(2,008)
(2,650)
(6,533)
Adjustments for:

Finance expense
(493)
1,038
(1,051)
Foreign exchange loss
(382)
(14)
139
Depreciation and amortisation
576
473
984
Movement in provisions, trades and other receivables
(1,263)
509
433
Movement in inventories
-
54
170
Movement in trade and other payables
451
(580)
(555)
Share options changes
-
-
-
Impairment of intangible
-
-
957
------------
------------
--------------
Net cash outflow from operating activities
(3,119)
(1,170)
(5,456)



Cash flow from investing activities



Purchase of fixed assets
(504)
-
-
Intangible assets additions
(102)
(124)
(289)
Withdrawal/ (investment) in restricted bank deposit
-
-
-
------------
------------
--------------
Net cash outflow from investing activities
(606)
(124)
(289)



Cash flows from financing activities



Proceeds from borrowings
695
337
298
Repayment of borrowings
(185)
(223)
(391)
Proceeds from loan notes
-
-
-
Issue of shares
3,371
952
5,107
------------
------------
--------------
Cash (outflow) / inflow from financing activities
3,881
1,066
5,014






Net cash (outflow) / inflow from all activities
156
(228)
(731)
Cash and cash equivalents at beginning of period
(1,486)
(749)
(755)
------------
------------
--------------
Cash and cash equivalents at end of period
(1,330)
(977)
(1,486)
======
======
======



Cash and cash equivalents are made up as follows:



Cash at bank and hand
25
103
195
Bank overdraft
(1,355)
(1,080)
(1,681)
------------
------------
--------------
(1,330)
(977)
(1,486)
======
======
======


NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS 
FOR THE SIX MONTHS ENDED 30 JUNE 2015
1. BASIS OF PREPARATION
The condensed group financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as endorsed for use by Companies listed on an EU regulated market and in accordance with IAS34 - "Interim Financial Reporting". The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Group's latest annual audited financial statements. It is not expected that there will be any changes or additions to these in the 2014 annual financial statements. 
This statement does not comprise statutory accounts as defined in Section 434 of the Companies Act 2006 and the results for the six months ended 30 June 2015 and for the six months ended 30 June 2014 are unaudited.
The financial information for the year ended 31 December 2014 is an extract from the latest group accounts. Statutory financial statements for the year ended 31 December 2014, prepared in accordance with IFRS, on which the auditors gave an unmodified opinion but did include reference to matters to which the auditors drew attention by way of emphasis without modifying their report.
The condensed group financial statements are presented in US Dollars and all values are rounded to the nearest thousand dollars ($'000) except when otherwise indicated.
During the six month period ended 30 June 2015 the group incurred a loss of $1,600,000 and had net liabilities of $5,607,000 as at that date. 
Subject to the group's ability to raise required funds, the directors consider that it is appropriate to prepare the financial statements on the going concern basis. If additional financing by whatever means is not secured in the next twelve statutory months, then it is unlikely that the group be able to continue in its present form.
2. RAISING OF CAPITAL
 
During the period the company issued 402,387,164 New Ordinary Shares of 0.01p each with an aggregate value of 2,193,774 (about $3,345,000) in order to provide adequate working capital, repay certain loans, accrued interest and fees, purchase equipment and to meet obligations under cooperation agreements with Speech. These shares were issued at an average price of 0.545 pence per share.
During the period the company's subsidiary Digitek SMT Assemblies Limited made payments totalling 20,000 to loan note holders requesting redemption through the issue of Ordinary Shares of PeerTV plc.
3. BUSINESS SEGMENT ANALYSIS
 Class of business
 The turnover, loss on ordinary activities before taxation and net liabilities of the group are attributable to two classes of business.
 PeerTV Ltd is engaged in developing and providing hardware and software to enable the delivery of live broadcasts and video on demand over the internet to the television. The company develops, manufactures and supplies end-to-end technology systems for a new breed of TV operator that seeks to deliver rich, personalized and highly cost-effective internet TV services.
 Through its wholly owned subsidiary Digitek SMT Assemblies, Digitek Holdings Ltd's principal activities are the assembly of electronic products and components and the associated sourcing and logistics for companies principally engaged in the hi-tech and telecommunications industries in Israel. It uses electronic and computerized equipment, which operates robotically and is geared to the accurate assembly of the electronic components on the circuit board in the least possible time.

Geographical areas

Turnover by location of customer



Six months to
Six months to
Year to



30 June 2015
30 June 2014
31 December 2014



%
%
%



Unaudited
Unaudited
Audited







Europe

30
7
5

Israel

70
93
95

Canada

-
-
-

Other

-
-
-



-----------
-----------
----------


100
100
100



=====
=====
=====
4. LOSS PER SHARE
Basic loss per share is calculated by reference to the loss on ordinary activities after taxation of $1,600,000 (30 June 2014- loss of $2,025,000 and 31 December 2014 - loss of $5,191,000) and on the weighted average of 179,107,416 (30 June 2014 - 166,851,497 and 31 December 2014 - 287,584,845) shares in issue. The calculation of diluted earnings per share is based on the loss on ordinary activities after taxation and the diluted weighted average of 192,200,080 (30 June 2014 - 183,075,160and 31 December 2014 - 303,592,173) shares calculated as follows:
Number of shares
30 June 2015
30 June 2014
31 December 2014
Number
Number
Number
Basic weighted average number of shares
179,107,416
166,851,497
287,584,845
Dilutive potential ordinary shares: Share options
17,092,663
16,223,663
16,007,328
-------------------------
--------------------------
--------------------------
Diluted weighted average number of shares
192,200,080
183,075,160
303,592,173
============
============
============





5.
POST BALANCE SHEET EVENTS
In July 2015 a meeting of secured loan noteholders of Assemblies was convened to consider restructuring the loan notes. It was agreed that the annual rate of interest on the principal amount of all outstanding Loan Notes be modified with effect from 31 March 2015 to 6% per annum and to waive and release the Company from all breaches of the terms of the Loan Notes arising by reason of the failure to make payment of any interest or principal sum in respect of the Loan Note falling due on or prior to the date of the meeting. It was also agreed to sanction the suspension of the payment of any interest and principal sum which may become due in respect of the outstanding Loan Notes between the date of the meeting and 1 January 2016 and to sanction the waiver and release of the Company from all liability in respect of all unpaid interest accrued and accruing to 30 June 2015 in respect of the outstanding Loan Notes to the extent of and subject to a payment of an equivalent sum in repayment of principal amounts, no later than 1 January 2016, due in respect of the outstanding Loan Notes which repayment shall be accepted by the holders of Loan Notes. The loan note holders agreed that the Company may enter into purchase order financing arrangements with third party lenders for the purpose of providing working capital to the Company notwithstanding any terms of the Loan Notes or security in respect thereof. Finally, it was agreed that a further informal meeting of the Loan Noteholders be held in October 2015 to review Digitek's financial position.
Since 30 June 2015 the company has issued 543,210,406 New Ordinary Shares of 0.01p each with an aggregate value of 403,888 (about $640,000) in order to provide adequate working capital, repay certain loans, accrued interest and fees, purchase equipment and to meet obligations under cooperation agreements with Speech. These shares were issued at an average price of 0.0744 pence per share.

This information is provided by RNS
The company news service from the London Stock Exchange
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