Interim Results

RNS Number : 7444D
Amino Technologies PLC
11 July 2016
 

 

11 July 2016

 

 

AMINO TECHNOLOGIES PLC

 

("Amino", the "Company" or the "Group")

 

 

INTERIM RESULTS

 

FOR THE SIX MONTHS ENDED 31 MAY 2016

 

 

Transformation in action: delivering from increased scale and broadened product and service portfolio, following successful acquisition integration

 

 

Amino Technologies plc (LSE AIM: AMO), the Cambridge-based leader in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, announces unaudited consolidated results for the six months ended 31 May 2016.

 

 

Financial highlights:

 

·      Revenue of £33.0m (H1 2015: £17.9m), up by £15.1m after y-o-y growth of 84%

 

·      Gross profit up 58% to £14.4m (H1 2015: £9.1m)

 

Gross margin remains strong at 43.6% (H1 2015: 50.8%), resulting from a blended margin from the acquisitions in 2015

 

·      Adjusted EBITDA before exceptional items increased by 30% to £5.2m(1) (H1 2015: £4.0m)

 

·      Adjusted profit before tax up 40% to £4.2m(2)  (H1 2015: £3.0m)

 

·      Statutory loss before tax of £(0.5)m (H1 2015: statutory profit £3.6m), after exceptional items of £3.5m and amortisation of acquired intangibles of £1.1m

 

·      Adjusted basic earnings per share of 6.0p(3) (H1 2015: 5.5p).  Basic earnings per share after exceptional items was (0.8)p (H1 2015: 6.9p)

 

·      Adjusted diluted earnings per share of 5.9p(3) (H1 2015: 5.5p). Diluted earnings per share after exceptional items was (0.8)p (H1 2015: 6.8p)

 

·      Cash generated from operations of £6.4m (H1 2015: £3.1m) before £1.4m of exceptional cash outflows (£5.0m of cash generated after these outflows)

 

·      Net cash of £3.1m at 31 May 2016 (H1 2015: £17.3m) after record payments of £3.0m in dividends and £1.4m of exceptional cash outflows

 

·      Increase in interim dividend to 1.391p per share (H1 2015: 1.265p), up by 10% year on year in line with progressive dividend policy

 

 

(1) Stated after adding back exceptional costs of £3.5m and share based payment costs of £0.1m.  EBITDA after these costs was £1.5m (H1 2015: £4.7m).  Full details of these items are contained within notes 4 and 5 to this announcement.

 

(2) Stated after adding back £3.5m of exceptional costs, share based payment costs of £0.1m and £1.1m of amortisation of intangible assets on the acquisition of Booxmedia Oy ("Booxmedia") and Entone Inc. ("Entone") in 2015. 

 

(3) As per (2) above, net of the tax effect of these adjustments (which were zero for the respective periods).

 

 

Operational highlights:

 

·      Integration of 2015 acquisitions of Booxmedia and Entone successfully completed, creating a single enhanced portfolio aligned with current and future market trends

 

·      Enhanced sales team making encouraging progress with improved sales pipeline visibility into the second half of the year

 

·      Encouraging progress made in Latin America as operators transition to IPTV deployments in response to de-regulation

 

·      Position in North America strengthened with tier 2/3 operators

Contract won with Cincinatti Bell Inc. to migrate its legacy IPTV devices to the Amino Enable™ TV software platform

New contracts secured with regional operators including the first deployment of the Fusion Home monitoring solution

 

·      Solid European performance as operators transition to 4K UHD rollout

Renewal of contract with Vodafone Netherlands demonstrates ability to retain and grow key customer accounts

Launch by Dutch operator DELTA in May of cloud TV services, based on an Amino platform, underlines the growing appetite for multiscreen entertainment service delivery

 

 

 

Commenting on today's results, Keith Todd CBE, Non-Executive Chairman said:

 

"This has been an encouraging first half performance by Amino.  Following the acquisitions in 2015, Amino has developed and launched an enhanced product offering, including a new 4K UHD device range, and it is pleasing to see the positive traction gained in our markets.  Revenue and profit before tax and exceptional items are in line with our expectations and the closing cash position is ahead of expectations.  We look forward to the second half of the year with confidence."

 

The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

 

For further information please contact:

 

Amino Technologies plc

+44 (0)1954 234100

Keith Todd CBE, Chairman

 

Donald McGarva, Chief Executive Officer

 

Julian Sanders, Interim Chief Financial Officer

 

 

 

FTI Consulting LLP (Financial PR)

+44 (0)20 3727 1000

Chris Lane / Alex Le May / Darius Alexander

 

 

 

finnCap Limited (NOMAD and Joint Broker)

+44 (0)20 7220 0500

Matt Goode / Carl Holmes / Simon Hicks - Corporate Finance

 

Simon Johnson - Corporate Broking

 

 

 

Canaccord Genuity Limited (Financial Adviser and Joint Broker)

+44 (0)20 7523 8000

Simon Bridges / James Craven / Emma Gabriel

 

 

 

 

About Amino Technologies plc

Amino Technologies plc specialises in the development and delivery of IPTV/OTT solutions. With over seven million devices sold to 1,000 customers in 100 countries, Amino's award-winning solutions are deployed by major network operators and service providers worldwide. Amino Technologies plc is headquartered near Cambridge, in the UK, and is listed on the AIM market of the London Stock Exchange (AIM: symbol AMO). www.aminocom.com

 

 

 

Chairman's review:

 

The Company has delivered an encouraging first half performance with record order intake and a very strong order backlog for the second half of the year. At the same time, it has successfully completed the integration of the acquisitions made in 2015, creating a single enhanced portfolio that is aligned with current and future market trends.

 

As announced in the Company's trading update on 6 June 2016, revenue and profit before tax and exceptional items were in line with our expectations, with a closing cash position pleasingly ahead of expectations, as a result of continued strong cash generation.  Cost savings from synergies between the businesses remain in line with previously increased expectations.

 

Dividends are further increased in line with the progressive dividend policy of no less than 10% growth per annum up until 30 November 2016, with a proposed interim dividend of 1.391 pence per share (H1 2015: 1.265 pence per share).

 

As stated at the time of the Final Results, the Company has been successfully realigned to create two drivers of growth and shareholder value - focusing on hybrid TV and Cloud services respectively.  The enhanced portfolio and clear propositions have allowed the unified and enhanced and better focused sales team to make encouraging early traction demonstrated by improved sales pipeline visibility into the second half of the year.

 

 

Growth across customers and markets:

 

Amino's addressable markets are at varying stages of maturity but all offer opportunities for elements of the Company's enhanced portfolio, underlining the strategic rationale of the acquisitions successfully completed in 2015.

 

Latin America remains a key focus of sales and marketing activity as operators transition to IPTV deployments as they build out fibre networks and de-regulation opens up new opportunities for agile new market entrants.  Encouraging progress was made with existing customers, with the Company securing substantial proportions of dual sourced contracts and new wins with national operators rolling out IPTV services for the first time.

 

The Company now enjoys a strong position in the North American tier 2/3 market with continued traction with both cable and IPTV customers.  In February, a contract was announced with Cincinatti Bell Inc. to migrate its legacy IPTV devices to the Amino Enable™ TV software platform and it's pleasing to report that this is progressing well.  New contracts have also been secured with a number of regional operators, including the first deployment of the Fusion Home monitoring solution.  Increasingly, customers are also looking for ways to better manage network quality, with growing demand for the Engage™ service assurance platform as a value-added element in an IP device sale.

 

The Company has performed solidly in the European market as operators transition for the rollout of 4K Ultra HD services.  The renewal of an existing contract with Vodafone Netherlands was a positive signal of the Company's ability to retain and grow key customer accounts.  Likewise, the launch by Dutch operator DELTA in May of cloud TV services, based on an Amino platform, underlines the growing appetite for multiscreen entertainment service delivery.

 

 

Focused strategy:

 

Amino operates at the intersection of a number of key trends in the pay-TV industry.  The shifting pattern in viewing behaviours and content consumption - particularly amongst younger age groups - is radically re-shaping the wider industry, and specifically the strategies of pay TV operators.  At the same time, uncertainties over likely consumer take-up of 4K Ultra High Definition devices have now clarified with more certainty over likely operator deployment timescales.

 

The Company now sees a new era of the "connected consumer" - where all media and services will be delivered via Internet Protocol, on-demand from "the cloud" to any device, anytime and anywhere.  The acquisitions made in the second half of 2015 have enabled the Company to significantly broaden its offering to align closely with this significant trend.

 

The successful integration and launch of a new enhanced portfolio - under a single brand - was well received at the major TV Connect industry showcase in London.  Industry feedback from a number of events, including the Mobile World Congress and key trade shows in Dubai and Singapore, has also been very positive with a strong sense that Amino has successfully re-positioned itself for this new exciting era in entertainment service delivery.

 

 

Financial progress

 

A strong sales performance in the first half delivered revenue for the period of £33.0m (H1 2015: £17.9m), which was up by 84%, or £15.1m, with the benefit of the acquisitions of Entone Inc. and Booxmedia Oy made in during the second half of 2015.

 

Gross margins remained robust at 43.6%, a decrease of 7.2 percentage points from the prior year, resulting from a blended margin from the acquisitions. Gross profit increased by £5.3m to £14.4m (H1 2015: £9.1m) which represented an increase of 58%.

 

Operating costs were £9.3m (H1 2015: £5.2m) during the period within the enlarged Group, which included selling, general and administrative expenses of £6.1m (H1 2015: £2.9m) and research and development expenses of £3.2m (H1 2015: £2.3m).

 

EBITDA before exceptional items increased by 29% to £5.1m (H1 2015: £3.9m) as a result of the higher overall gross profit generated by the Group following the acquisitions, offset by a higher proportion of expensed research and development costs.  EBITDA after exceptional costs of £3.5m was £1.5m (H1 2015: £4.7m).

 

Depreciation and amortisation of £2.1m within the period (H1 2015: £1.1m) included amortisation of £2.0m (H1 2015: £1.0m) arising within the larger Group.

 

Operating profit increased by 7% to £3.0m (H1 2015: £2.8m) before exceptional costs of £3.5m (H1 2015: exceptional income of £0.7m).  There was a small operating loss of £(0.5)m after these exceptional items (H1 2015: £3.6m).   

 

The exceptional costs of £3.5m incurred by the Group during the six months to 31 May 2016 can be attributed to three categories:  (i) contingent post acquisition remuneration payable relating to the acquisition of Entone of £2.3m; (ii) integration costs of £0.4m (which includes additional travel and contractor costs resulting from activities to integrate the new enlarged Group) and (iii) redundancy and associated costs of £0.8m.

 

After exceptional cash outflows of £1.4m arising in the period (H1 2015: exceptional cash inflow of £0.7m), and a 2015 final dividend which was increased by 10%, the Company still generated cash of £5.0m from operations (H1 2015: £3.8m), which was up by £1.2m or 32% year-on-year.  Operating cash flow before these exceptional items increased by £2.6m or 68% to £6.4m. 

 

Despite the fact that record dividends of £3.0m were paid (up by £0.9m year-on-year), the Company closed the period with a net cash balance of £3.1m (H1 2015:  £17.3m).

 

 

Dividend Policy

 

The Board is pleased to confirm that it intends to recommend an interim dividend of 1.391p per share (H1 2015: 1.265p per share), representing a 10% year-on-year increase, in line with Amino's previously stated progressive dividend policy.  This will be payable on 22 September 2016. The record date for the interim dividend is 2 September 2016 and the corresponding ex-dividend date is 1 September 2016. 

 

 

Outlook

 

With the successful integration of Booxmedia and Entone now underpinning Amino's new differentiated portfolio, and following a strong first half performance, Amino is well positioned globally in its industry and the Board remains confident of meeting market expectations for the full year.

 

 

 

Consolidated Income Statement

For the six months ended 31 May 2016

 

 

Six months ended 31 May 2016 Unaudited

Six months ended 31 May 2015

Unaudited

 

 

 

 

Notes

Recurring items

£000s

Exceptional items

£000s

Total

 

£000s

Recurring items

£000s

Exceptional items

£000s

Total

 

£000s

Revenue

3

33,004

-

33,004

17,935

-

17,935

Cost of sales

 

(18,605)

-

(18,605)

(8,822)

-

(8,822)

 

 

__________

__________

__________

__________

__________

__________

Gross profit

 

14,399

-

14,399

9,113

-

9,113

 

 

 

 

 

 

 

 

Other income

Operating expenses

4

-

(11,395)

-

(3,549)

-

(14,944)

-

(6,276)

744

-

744

(6,276)

 

 

__________

__________

_________

__________

__________

_________

Operating profit/(loss)

 

3,004

(3,549)

(545)

2,837

744

3,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

14,399

-

14,399

9,113

-

9,113

 

 

 

 

 

 

 

 

Selling, general and administrative expenses

4

(6,077)

(1,327)

 

(7,404)

(2,911)

-

(2,911)

Research and development expenses

4

(3,225)

(2,222)

(5,447)

(2,265)

-

(2,265)

Duties refund

4

-

-

-

-

744

744

 

 

__________

__________

__________

__________

__________

__________

EBITDA

 

5,097

(3,549)

1,548

3,937

744

4,681

 

 

 

 

 

 

 

 

Depreciation

 

(136)

-

(136)

(75)

-

(75)

Amortisation

7

(1,957)

-

(1,957)

(1,025)

-

(1,025)

 

 

__________

__________

__________

__________

__________

__________

Operating profit/(loss)

 

3,004

(3,549)

(545)

2,837

744

3,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance expense

 

(4)

-

(4)

-

-

-

Finance income

 

-

-

-

27

-

27

 

 

__________

__________

__________

__________

__________

__________

Net finance income

 

(4)

-

(4)

27

-

27

 

 

__________

__________

__________

__________

__________

__________

Profit/(loss) before tax

 

3,000

(3,549)

(549)

2,864

744

3,608

Corporation tax charge

 

1

-

1

(13)

-

(13)

 

 

__________

__________

__________

__________

__________

__________

Profit/(loss) for the period from continuing operations attributable to equity holders

3,001

(3,549)

(548)

2,851

744

3,595

 

 

__________

__________

__________

__________

__________

__________

 

 

 

 

 

 

 

 

Basic earnings per 1p ordinary share

6

4.30p

 

(0.79)p

5.44p

 

6.85p

Diluted earnings per 1p ordinary share

6

4.18p

 

(0.76)p

5.43p

 

6.84p

 

 

 

All amounts relate to continuing activities. The accompanying notes are an integral part of these financial statements.

 

Consolidated Income Statement (continued)

For the six months ended 31 May 2016

 

 

 

 

Year ended 30 November 2015 Audited

 

 

 

 

 

 

Notes

Recurring

items

 

Exceptional items

 

Total

 

 

£000s

 

£000s

 

£000s

Revenue

3

41,660

 

-

 

41,660

Cost of sales

 

(23,016)

 

-

 

(23,016)

Gross profit

 

18,644

 

-

 

18,644

Other income

4

-

 

744

 

744

Operating expenses

4

(14,453)

 

(4,678)

 

(19,131)

Operating profit/(loss)

 

4,191

 

(3,934)

 

257

 

 

 

 

 

 

 

Analysed as:

 

 

 

 

 

 

Gross profit

 

18,644

 

-

 

18,644

Selling, general and administrative expenses

4

(6,689)

 

(2,073)

 

(8,762)

Research and development expenses

4

(4,604)

 

(1,313)

 

(5,917)

Duties refund

4

-

 

744

 

744

EBITDA

 

7,351

 

(2,642)

 

4,709

Depreciation

 

(190)

 

-

 

(190)

Amortisation

7

(2,970)

 

(1,292)

 

(4,262)

Operating profit/(loss)

 

4,191

 

(3,934)

 

257

 

 

 

 

 

 

 

Finance expense

 

(3)

 

-

 

(3)

Finance income

 

68

 

-

 

68

Net finance income

 

65

 

-

 

65

 

 

 

 

 

 

 

Profit before corporation tax

 

4,256

 

(3,934)

 

322

Corporation tax credit

 

34

 

-

 

34

Profit for the period from continuing operations attributable to equity holders

 

4,290

 

(3,934)

 

356

 

 

 

 

 

 

 

 

Basic earnings per 1p ordinary share

6

7.30p

 

 

 

0.61p

Diluted earnings per 1p ordinary share

6

7.26p

 

 

 

0.60p

 

The accompanying notes are an integral part of these interim financial statements.

 

 

Consolidated Statement of Comprehensive Income

For the six months ended 31 May 2016

 

 

 

 

 

Six months

 ended 31 May 2016

Unaudited

 

Six months

 ended 31 May 2015

Unaudited

 

Year ended

30 November

2015

Audited

 

 

£000s

 

£000s

 

£000s

(Loss)/profit for the period

 

(548)

 

3,595

 

356

 

 

 

 

 

 

 

Foreign exchange difference arising on consolidation

 

(100)

 

11

 

234

Other comprehensive (expense)/ income

 

(100)

 

11

 

234

Total comprehensive (loss)/income for the period

 

 

(648)

 

3,606

 

590

 

 

Consolidated Balance Sheet

As at 31 May 2016

 

 

 

 

 

Notes

As at

31 May 2016

Unaudited

 

As at

31 May 2015

Unaudited

 

As at

30 November 2015

Audited

Assets

 

£000s

 

£000s

 

£000s

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

 

452

 

388

 

553

Intangible assets

7

48,164

 

11,231

 

46,342

Deferred tax assets

 

560

 

560

 

560

Other receivables

 

216

 

162

 

162

 

 

49,392

 

12,341

 

47,617

Current assets

 

 

 

 

 

 

Inventories

 

2,621

 

1,303

 

3,651

Trade and other receivables

 

12,122

 

9,419

 

11,673

Corporation tax receivable

 

-

 

-

 

601

Cash and cash equivalents

 

4,052

 

17,298

 

2,094

 

 

18,795

 

28,020

 

18,019

Total assets

 

68,187

 

40,361

 

65,636

 

 

 

 

 

 

 

Capital and reserves attributable to equity holders of the business

 

 

 

 

 

 

Called-up share capital

 

747

 

583

 

744

Share premium

 

20,510

 

605

 

20,193

Capital redemption reserve

Foreign exchange reserves

 

6

718

 

6

595

 

6

818

Other reserves

 

16,389

 

16,389

 

16,389

Equity reserve

 

1,826

 

-

 

665

Retained earnings

 

3,001

 

10,280

 

6,235

Total equity

 

43,197

 

28,458

 

45,050

 

Liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

18,131

 

11,367

 

14,338

Corporation tax payable

 

458

 

-

 

321

Bank loans

 

1,004

 

-

 

-

 

 

19,593

 

11,367

 

14,659

Non-current liabilities

 

 

 

 

 

 

Trade and other payables

 

1,416

 

-

 

1,775

Provisions

 

1,922

 

-

 

1,869

Deferred tax liability

 

2,059

 

536

 

2,283

 

 

5,397

 

536

 

5,927

 

 

 

 

 

 

 

Total liabilities

 

24,990

 

11,903

 

20,586

 

 

 

 

 

 

 

Total equity and liabilities

 

68,187

 

40,361

 

65,636

 

 

The interim financial statements on pages 6 to 19 were approved by the Board of directors on 8 July 2016 and were signed on its behalf by Donald McGarva, Director

 

The accompanying notes are an integral part of these interim financial statements.

 

 

Consolidated Cash Flow Statement

As at 31 May 2016

 

 

 

 

 

Notes

Six months

ended 31 May

 2016

Unaudited

 

Six months

ended 31 May 2015

Unaudited

 

Year to 30 November

2015

Audited

 

 

£000s

 

£000s

 

£000s

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operations

8

5,028

 

3,799

 

5,836

Corporation tax received/(paid)

 

508

 

(13)

 

1

Net cash generated from operating activities

 

5,536

 

3,786

 

5,837

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Expenditure on intangible assets

 

(1,874)

 

(1,139)

 

(3,201)

Purchase of property, plant and equipment

 

(35)

 

(34)

 

(118)

Proceeds on disposal of property, plant and equipment

 

-

 

-

 

9

Interest received

 

0

 

 

65

Acquisition of subsidiary

 

-

 

(4,512)

 

(38,776)

Net cash used in investing activities

 

(1,909)

 

(5,658)

 

(42,021)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from exercise of employee share options

 

202

 

567

 

574

Proceeds from issue of new shares

 

-

 

-

 

19,858

Dividends paid

 

(2,971)

 

(2,043)

 

(2,924)

Repayment of borrowings

 

-

 

-

 

(5,100)

New bank loans raised

 

1,000

 

-

 

5,166

Net cash used in financing activities

 

(1,769)

 

(1,476)

 

17,574

 

Net increase in cash and cash equivalents

 

 

1,858

 

 

(3,348)

 

 

(18,610)

Cash and cash equivalents at start of the period

 

2,094

 

20,758

 

20,758

Effects of exchange rate fluctuations on cash held

 

100

 

(112)

 

(54)

Cash and cash equivalents at end of period

 

4,052

 

17,298

 

2,094

 

 

The accompanying notes are an integral part of these interim financial statements.

 

 

Consolidated Statement of Changes in Equity

 

 

 

Share

capital

Share premium

 

Merger reserve

Equity reserve

Foreign exchange reserve

Capital redemption reserve

Profit and loss account

Total

 

£000s

£000s

£000s

£000s

£000s

£000s

£000s

£000s

 

 

 

 

 

 

 

 

 

Shareholders' equity at 30 November 2014 (audited)

579

126

16,389

-

584

6

8,113

25,797

Comprehensive income

 

 

 

 

 

 

 

 

Profit for the period

-

-

-

-

-

-

3,595

3,595

Other comprehensive expense

-

-

-

-

11

-

-

11

Total comprehensive income for the period attributable to equity holders

-

-

-

-

11

-

3,595

3,606

Share option compensation charge

-

-

-

-

-

-

48

48

Exercise of employee share options

-

-

-

-

-

-

567

567

Issue of new shares

4

479

-

-

-

-

-

483

Dividends paid

-

-

-

-

-

-

(2,043)

(2,043)

Total transactions with owners

4

479

-

-

-

-

(1,428)

(945)

 

 

 

 

 

 

 

 

 

Total movement in shareholders' equity

4

479

-

-

11

-

2,167

2,661

 

 

 

 

 

 

 

 

 

At 31 May 2015 (unaudited)

583

605

16,389

-

595

6

10,280

28,458

Comprehensive income

 

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

-

(3,239)

(3,239)

Other comprehensive expense

-

-

-

-

223

-

-

223

Total comprehensive loss for the period attributable to equity holders

-

-

-

-

223

-

(3,239)

(3,016)

Share option compensation charge

-

-

-

-

-

-

68

68

Exercise of employee share options

-

-

-

-

-

-

7

7

Issue of new shares

161

20,839

-

-

-

-

-

21,000

Transactional costs on issue of share capital

-

(1,251)

-

-

-

-

-

(1,251)

Equity to be issued

-

-

-

665

-

-

-

665

Dividends paid

-

-

-

-

-

-

(881)

(881)

Total transactions with owners

161

19,588

-

665

-

-

(806)

19,608

 

 

 

 

 

 

 

 

 

Total movement in shareholders' equity

161

19,588

-

665

223

-

(4,045)

16,592

 

 

 

 

 

 

 

 

 

Shareholders' equity at 30 November 2015 (audited)

744

20,193

16,389

665

818

6

6,235

45,050

 

 

Comprehensive income

 

 

 

 

 

 

 

 

 

Share

capital

Share premium

 

Merger reserve

Equity reserve

Foreign exchange reserve

Capital redemption reserve

Profit and loss account

Total

 

£000s

£000s

£000s

£000s

£000s

£000s

£000s

£000s

Loss for the period

-

-

-

-

-

-

(548)

(548)

Other comprehensive expense

-

-

-

-

(100)

-

-

(100)

Total comprehensive loss for the period attributable to equity holders

-

-

-

-

(100)

-

(548)

(648)

 

 

 

 

 

 

 

 

 

Share option compensation charge

-

-

-

-

-

-

83

83

Movement on EBT reserves

-

-

-

-

-

-

202

202

Issue of new shares

3

317

-

-

-

-

-

320

Equity to be issued

-

-

-

1,161

-

-

-

1,161

Dividends paid

-

-

-

-

-

-

(2,971)

(2,971)

Total transactions with owners

3

317

-

1,161

-

-

(2,686)

(1,205)

 

 

 

 

 

 

 

 

 

Total movement in shareholders' equity

3

317

-

1,161

(100)

-

(3,234)

(1,853)

 

 

 

 

 

 

 

 

 

At 31 May 2016 (unaudited)

747

20,510

16,389

1,826

718

6

3,001

43,197

 

 

Notes to the interim financial statements

Six months ended 31 May 2016

 

 

1          General information

 

Amino Technologies plc ('the Company') and its subsidiaries (together 'the Group') specialises in IPTV software technologies and hardware platforms that enable delivery of digital programming and interactivity over IP networks, including the internet. 

 

The Company is a public limited company which is listed on the AIM market of the London Stock Exchange and is incorporated and domiciled in the UK.

 

 

2          Basis of preparation

 

The financial information has been prepared in accordance with all relevant International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations that had been published by 31 May 2016 as endorsed by the European Union (EU). The accounting policies adopted are consistent with those of the financial statements for the year ended 30 November 2015, as described in those financial statements. In preparing these interim financial statements the Board has not sought to adopt IAS 34 "Interim financial reporting".

 

The figures for the six-month periods ended 31 May 2016 and 31 May 2015 have not been audited. The figures for the year ended 30 November 2015 have been extracted from, but do not constitute, the consolidated financial statements of Amino Technologies plc for that year. Those financial statements have been delivered to the Registrar of Companies and included an auditors' report, which was unqualified and did not contain a statement under Section 498(2) or Section 498(3) Companies Act 2006.

 

 

3          Revenue

 

The Group has only one operating segment, being the development and sale of broadband network software and systems. All revenues, costs, assets and liabilities relate to this segment.

 

The geographical analysis of revenue is as follows:

 

 

Six months

 ended

31 May 2016

Unaudited

 

Six months

 ended

 31 May 2015

Unaudited

 

Year to

30 November

2015

Audited

 

£000s

 

£000s

 

£000s

 

 

 

 

 

 

USA

17,727

 

9,262

 

19,402

Canada

280

 

1,439

 

1,546

 

18,007

 

10,701

 

20,948

Netherlands

7,264

 

2,327

 

7,959

Rest of Europe

3,116

 

2,071

 

5,666

Finland

1,454

 

77

 

1,149

Chile

1,358

 

930

 

2,122

Rest of the World

1,805

 

1,829

 

3,816

 

33,004

 

17,935

 

41,660

 

 

4          Exceptional items

 

The Group incurred exceptional costs of £3,549k during the six months to 31 May 2016.

 

These are summarised as follows:

 

Six months

 ended

31 May 2016

Unaudited

 

Six months

 ended

 31 May 2015

Unaudited

 

Year to

30 November

2015

Audited

 

£000s

 

£000s

 

£000s

Costs

 

 

 

 

 

Contingent post acquisition remuneration

2,285

 

-

 

1,310

Integration costs

447

 

-

 

272

Redundancy and associated costs

817

 

-

 

342

Acquisition costs

-

 

-

 

1,359

Development project rationalisation

-

 

-

 

1,395

 

3,549

 

-

 

4,678

Income

 

 

 

 

 

Duties rebate

-

 

(744)

 

(744)

Total exceptional costs/(income)

3,549

 

(744)

 

3,934

 

 

5          Adjusted Results Summary

 

 

 

 

 

Six months

 ended 31 May 2016

Unaudited

 

Six months

 ended 31 May 2015

Unaudited

 

Year ended

30 November

2015

Audited

 

 

£m

 

£m

 

£m

Statutory (loss)/profit before tax (PBT)

 

(0.5)

 

3.6

 

0.3

Exceptional items (see note 4)

 

3.5

 

(0.7)

 

3.9

PBT before exceptional items

 

3.0

 

2.9

 

4.2

 

 

 

 

 

 

 

Amortisation of acquired intangible assets

 

1.1

 

-

 

0.8

Share based payment costs

 

0.1

 

0.1

 

0.1

Adjusted PBT before exceptional items

 

4.2

 

3.0

 

5.1

 

 

 

 

 

 

 

EBITDA

 

1.6

 

4.6

 

4.7

Exceptional items (see note 4)

 

3.5

 

(0.7)

 

2.6

EBITDA before exceptional items

 

5.1

 

3.9

 

7.3

 

 

 

 

 

 

 

Share based payment costs

 

0.1

 

0.1

 

0.1

Adjusted EBITDA before exceptional items

 

5.2

 

4.0

 

7.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months

 ended 31 May 2016

Unaudited

 

Six months

 ended 31 May 2015

Unaudited

 

Year ended

30 November

2015

Audited

 

 

 

 

 

 

 

Number of shares in Basic EPS

 

69,838,968

 

52,453,196

 

58,799,386

Statutory Basic EPS (pence)

 

(0.79)

 

6.85

 

0.61

Basic EPS before exceptional items

 

4.30

 

5.44

 

7.30

Adjusted Basic EPS

 

6.03(1)

 

5.53(2)

 

8.83(3)

 

 

 

 

 

 

 

Number of shares in Diluted EPS

 

71,804,664

 

52,561,432

 

59,128,979

Statutory Diluted EPS (pence)

 

(0.76)

 

6.84

 

0.60

Diluted EPS before exceptional items

 

4.18

 

5.43

 

7.26

Adjusted Diluted EPS

 

5.86(1)

 

5.52(2)

 

8.78(3)

 

 

 

 

 

 

 

 

 

Cash generated from operations

 

5.0

 

3.8

 

5.8

Exceptional cash outflows (see note 7)

 

1.4

 

(0.7)

 

1.9

 

 

 

 

 

 

 

Adjusted cash generated from operations

 

6.4

 

3.1

 

7.7

 

 

 

 

 

 

 

 

 

(1) Stated after adding back £3.5m of exceptional costs, share based payment costs of £0.1m and £1.1m of amortisation of intangible assets on the acquisition of Booxmedia Oy ("Booxmedia") and Entone Inc. ("Entone") in 2015, net of the tax effect of these adjustments (which were zero for the respective periods).

 

(2) Stated after adding back £0.7m of exceptional income and share based payment costs of £0.1m, net of the tax effect of these adjustments (which were zero for the respective periods).

 

(3) Stated after adding back £3.9m of exceptional costs, share based payment costs of £0.1m and £0.8m of amortisation of intangible assets on the acquisition of Booxmedia Oy ("Booxmedia") and Entone Inc. ("Entone") in 2015, net of the tax effect of these adjustments (which were zero for the respective periods).

 

 

6          Earnings per share

 

 

Six months

ended 31 May

2016

Unaudited

 

Six months

ended 31 May

2015

Unaudited

 

Year to

30 November

2015

Audited

 

£000s

 

£000s

 

£000s

 

 

 

 

 

 

(Loss)/profit attributable to shareholders

(548)

 

3,595

 

356

Profit attributable to shareholders excluding exceptional items

3,001

 

2,851

 

4,290

 

 

 

 

 

 

 

Number

 

Number

 

Number

Weighted average number of shares (Basic)

69,838,968

 

52,453,196

 

58,799,386

Weighted average number of shares (Diluted)

71,804,664

 

52,561,432

 

59,128,979

 

 

The calculation of basic earnings per share is based on profit after taxation and the weighted average number of ordinary shares of 1p each in issue during the period, as adjusted for shares held by an Employee Benefit Trust and held by the Company in treasury.

 

The profit attributable to shareholders excluding exceptional items is derived by adding back the exceptional items disclosed in note 4 to the profit attributable to ordinary shareholders.

 

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary share options and shares to be issued in respect of the contingent post acquisition remuneration relating to the acquisition of Entone Inc.  The Group has only one category of dilutive potential ordinary share options: those share options where the vesting conditions have not yet been met.

 

 

7          Intangible Assets

 

 

 

Goodwill

Customer relation-ships

Trade name

IPR

Software licenses

Develop-ment costs

Acquired platform

Total

 

£000s

£000s

£000s

£000s

£000s

£000s

£000s

£000s

 

 

 

 

 

 

 

 

 

Cost at 30 November 2014 (audited)

4,138

-

-

291

2,024

9,789

-

16,242

Additions

-

-

-

-

23

1,116

-

1,139

Acquired on acquisition of subsidiary

4,720

398

190

-

-

-

2,092

7,400

Costs at 31 May 2015 (unaudited)

8,858

398

190

291

2,047

10,905

2,092

24,781

Additions

-

-

-

-

47

2,015

-

2,062

Acquired on acquisition of subsidiary

25,480

5,972

868

-

-

-

3,966

36,286

Cost at 30 November 2015 (audited)

34,338

6,370

1,058

291

2,094

12,920

6,058

63,129

Additions

1,883

-

-

-

31

1,842

-

3,756

Reclassified from PPE

-

-

-

-

130

-

-

130

Foreign exchange adjustment

-

-

-

-

4

14

-

18

 

 

 

 

 

 

 

 

 

Costs at 31 May 2016 (unaudited)

36,221

6,370

1,058

291

2,259

14,776

6,058

67,033

 

 

 

 

 

 

 

 

 

Amortisation at 30 November 2014 (audited)

4,138

-

-

291

1,968

6,128

-

12,525

Charge for the period

-

-

-

-

15

1,010

-

1,025

Amortisation at 31 May 2015 (unaudited)

4,138

-

-

291

1,983

7,138

-

13,550

Charge for the period

-

267

72

-

17

2,431

450

3,237

Amortisation at 30 November 2015 (audited)

4,138

267

291

2,000

9,569

450

16,787

Charge for the period

-

413

106

-

31

801

606

1,957

Reclassified from PPE

-

-

-

-

121

-

-

121

Foreign exchange adjustment

-

-

-

-

4

-

-

4

Amortisation at 31 May 2016 (unaudited)

4,138

680

178

291

2,156

10,370

1,056

18,869

 

 

 

 

 

 

 

 

 

Net book amount

 

 

 

 

 

 

 

 

At 31 May 2016 (unaudited)

32,083

5,690

880

-

103

4,406

5,002

48,164

At 31 May 2015 (unaudited)

4,720

398

190

-

64

3,767

2,092

11,231

At 30 November 2015 (audited)

30,200

6,103

986

-

94

3,351

5,608

46,342

 

 

8          Cash generated from operations

 

 

Six months ended

31 May 2016

Unaudited

Six months ended

31 May 2015

Unaudited

Year to 30

November 2015

Audited

 

£000s

£000s

£000s

 

 

 

 

Operating profit before exceptional items

3,004

2,837

4,191

Exceptional costs

(3,549)

-

(4,678)

Exceptional income

-

744

744

Operating (loss)/profit

(545)

3,581

257

 

Amortisation charge

 

1,957

 

1,025

 

4,262

Depreciation charge

136

75

190

Loss on disposal of property, plant & equipment

-

10

8

Share-based payment charge

83

48

116

Contingent post acquisition remuneration share expense

 

1,161

 

-

 

665

Loss on derivative financial instruments

-

(4)

 

Exchange differences

(163)

124

163

Decrease in inventories

1,030

959

3,044

(Increase) in trade and other receivables

(503)

(2,069)

(1,264)

Increase/(decrease) in trade and other payables

1,872

50

(1,605)

Cash generated from operations

5,028

3,799

5,836

 

 

 

 

 

 

Cash generated from operations was after £1,411k of exceptional cash outflows, which included payments of £399k for integration costs, £652k of redundancy and associated costs and £360k of contingent consideration relating to the acquisition of Booxmedia Oy which was accrued for at completion.

Cash generated from operations before these exceptional cash outflows was £6,439k (H1 2015: £3,055k).

 

9          Acquisition of a subsidiary      

 

The fair value adjustments in respect of the acquisition of Entone Inc. during the year ended 30 November 2015 were provisional adjustments made using information available at that point and should have been described as such.

 

Since that time, an additional fair value adjustment of £1,883k has been made to non-current trade and other payables as these values have been further refined during the integration process, which has resulted in a corresponding increase in goodwill.

 

The revised identifiable assets acquired and liabilities assumed are as set out in the table below:

 

 

 

Book value

Provisional fair value adjustment

Fair value

 

£000s

£000s

£000s

 

 

 

 

Property, plant and equipment

198

-

198

Identifiable intangible assets

-

10,805

10,805

Inventory

4,432

-

4,432

Current financial assets

 

 

 

   Trade and other receivables

2,992

-

2,992

   Cash and cash equivalents

6,867

-

6,867

Non-current trade and other receivables

77

-

77

Current financial liabilities

 

 

 

   Trade and other payables

(4,835)

(3,163)

(7,998)

Non-current trade and other payables

(360)

-

(360)

Non-current provision

(1,419)

-

(1,419)

Deferred tax liability

-

(1,905)

(1,905)

Total identifiable assets

7,952

5,737

13,689

Goodwill

 

 

27,442

Total consideration

 

 

41,131

 

 

 

 

Satisfied by:

 

 

 

Cash

 

 

41,131

Total consideration transferred

 

 

41,131

 


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