Interim Results
Amino Technologies PLC
31 July 2006
FOR IMMEDIATE RELEASE 31 July 2006
AMINO TECHNOLOGIES PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2006
Amino Technologies plc ('Amino'; stock code: AMO), the Cambridge based broadband
network software and systems company, presents its unaudited consolidated
results for the six-month period ended 31 May 2006.
Key points:
• Shipments of AmiNET products increased by 95% to 199,000 units.
• Since December 2003 over 700,000 AmiNET units have been shipped.
• Turnover grew 73% to £13.5m (H1 2005: £7.8m), including £0.5m of
licensing revenue.
• Gross profit doubled to £5.3m and gross profit margins up to 39.2% (H1
2005: 33.5%).
• Profit before tax was £0.1m (H1 2005: loss £0.9m) after exchange losses
of £0.4m.
• Positive cash flow increased net cash to £16.8m (30 November 2005:
£14.5m).
• Continued strong increase in customer adoption metrics.
• New MPEG-4 hardware and software products have been launched.
On outlook, Grant Masom, Chairman commented:
'Amino continues to mature as a business, balancing the demands of maintaining a
strong technical and market position in a dynamic market with the need to
strengthen operational and financial performance. We continue to be recognised
as a market leader in IPTV and one of the largest centres of excellence in this
exciting arena.
'We have a strong platform for continued growth and are confident of Amino's
prospects in the second half of the year and beyond.'
About Amino
Amino Technologies plc (www.aminocom.com) designs and supplies electronic
systems, software and consultancy for IPTV (telco triple-play applications),
on-demand video and in-home multimedia distribution delivered through three
operating divisions.
Amino Communications supplies the AmiNETTM series of high performance IPTV
set-top boxes and gateways for deployment in the telecommunications, broadcast
and hospitality markets. Generally, AmiNET products are supplied with the
IntActTM IPTV software stack pre-loaded. IntAct licenses hardware designs and
the IntActTM IPTV software stack for customer premises solutions to OEMs
enabling them to supply IPTV set-top boxes and gateways for larger scale
deployments and the hospitality sector. Modelo provides systems consultancy
services.
Amino is partnered with world-leading companies in systems integration,
middleware, conditional access, semi-conductor, head-end systems and browser
technologies.
Contacts
Amino Technologies: 01954-234100
Grant Masom, Chairman www.aminocom.com
Bob Giddy, Chief Executive
Stuart Darling, Finance Director
Bankside: 020-7367-8888
Steve Liebmann or Simon Bloomfield
CHAIRMAN'S STATEMENT
Introduction
The marketplace for internet protocol TV ('IPTV') is growing rapidly and is
global. This growth is neither linear nor entirely predictable and many of the
largest near-term volume opportunities are within the smaller Tier 2 and Tier 3
telcos (less than 1 million subscribers) and the hospitality sector. Amino's
consistent strategy has been to exploit these near-term volume opportunities and
also to position itself to compete effectively for the larger Tier 2 and Tier 1
telco business for when these network operators are ready to commit to the
substantial capital investment that wide-scale IPTV deployments require.
Since volume shipments began in December 2003, Amino has established itself as a
clear industry benchmark in terms of both performance and price, with the
principal added value being represented by its IntAct software technologies
incorporated within its AmiNET hardware products. The company has developed a
global reach with customers and industry partners around the world. To date,
approximately 700,000 units have been shipped to over 1,250 customers worldwide,
representing a significant share of a market still in the early stages of
development. The most recent report (Q1 2006) from ABI Research shows that Amino
is still the number one supplier within its segment.
In order to deliver the strategy, the interests of both shareholders and the
company are served best by striking a balance between investing for the future
and current profitability. The results for H1 2006 show that Amino is growing
strongly in both shipments and revenue, is breaking even, gross margins are
improving and it has generated cash.
The structure to support its world-wide customers is now in place. The
substantial investments in new platform development, key software integrations
and the extension of sales and marketing reach have been made, so the focus is
on enabling customers to move into volume roll-out and on improving internal
operating and financial efficiency. Although operating costs have increased by
98% and headcount has grown by 60% over the past 18 months, the increased
maturity of the business means that for the future, growth in shipments and
revenue should exceed the growth in the cost base to the benefit of
profitability in the second half, for the full year and beyond.
Results and finance
Shipments in the first half year to 31 May 2006 increased by 95% to 199,000
units (2005: 102,000). Changes in sales mix and a weakening of the US$/£
exchange rate in April and May meant that revenues grew by 73% to £13.48
million, including £0.5m of licensing revenue. (2005: £7.78 million). However,
gross margins improved to 39.2% in H1 2006, up from 33.4% in H1 2005 and 34.8%
for FY 2005; gross profit more than doubled to £5.28 million. The profit before
tax was £74,000 (H1 2005: loss of £882,000). The profit before tax was reduced
by £371,000 as a result of adverse exchange rates.
Progress was made in improving working capital over the period with the result
that net cash balances increased by £2.3 million to stand at £16.8 million at 31
May 2006 (30 November 2005: £14.5 million).
Markets and operations
The health of Amino's business and its future prospects are best measured by its
key business metrics which show the progression as customers move through the
various stages of adoption from field trials to volume roll-out in an
implementation cycle of up to three years. These metrics have continued to grow
strongly:
Number of 20 Jun 04 30 Nov 04 31 May 05 30 Nov 05 31 May 06
customers
Large volume
roll-out (over
10,000 units) 3 5 11 15 18
Small volume
roll-out (over
1,000 units) 16 19 35 43 67
Field trials (100
- 999 units) 30 44 98 140 158
Laboratory trials
(10 - 99 units) 24 94 163 217 267
Total 73 162 307 415 510
In the period under review, sales have been strongest in North America and
Europe. Amino holds a very strong position with Tier 3 operators currently
deploying MPEG2 systems. In previous statements, we have reported strong
interest in emerging markets in the Far East, South America and Eastern Europe.
These remain important areas of opportunity, but there are significant
commercial barriers to successful profitable engagement. We continue to be
active in these markets - particularly through our IntAct software licensing
business - but it is difficult to predict the timing of major revenues.
As noted in the AGM statement, we continue to have positive discussions with a
number of Tier 1 and Tier 2 telcos and systems integrators. However, deployments
through large Western Tier 1 operators are hampered by a variety of system
integration issues outside of Amino's control, notably the difficulties in
scaling up systems to cope with millions, rather than thousands, of subscribers.
Amino has chosen to focus its energies on exploiting the market opportunities
that currently exist; we remain cautious about the near-term prospects for major
Tier 1 revenues.
Revenues continue to be dominated by existing MPEG-2 based products. However, we
anticipate a significant increase in shipments of MPEG-4 products over the next
12 months, beginning towards the latter part of the current financial year. In
anticipation of this, during the first half we launched a full range of MPEG4
enabled platforms, which we believe continue to maintain Amino's price/
performance leadership. The AmiNET124, our MPEG-4/H.264 SD (standard definition)
platform recently won the NAB 2006 Award for Innovation in Media. The recently
launched AmiNET130, our MPEG-4/H.264 HD (high definition) product is expected to
have strong appeal to Tier 1 and Tier 2 telco's and within the hospitality
sector. A significant part of the increased level of investment over the past 18
months has been directed at securing Amino's long-term future as the industry
moves towards MPEG-4; we are confident that these products will show a
significant return on that investment over the next few years.
Our IntAct business has licensed our MPEG-4 software technologies to a set-top
box ('STB') manufacturer and other discussions are ongoing. We have also
completed further ports of the IntAct software stack to new generations of STB
processors, including a recently announced collaboration with Texas Instruments.
While these developments will not produce significant immediate revenues, we
believe that they are vital to sustaining Amino's leading position in IPTV
technology development over the next few years.
Board
We are pleased to announce today the strengthening of Amino's Board by the
appointment of David Gammon as a non-executive Director with effect from 1
August 2006. David has more that 20 years experience advising technology
companies and working within financial markets and private equity.
Outlook
Amino continues to grow rapidly and is widely regarded as a market leader in its
chosen section of the IPTV market. Whilst this growth poses challenges, it
creates many opportunities which Amino is well placed to exploit. The company
has successfully balanced the need for investment in worldwide sales and
support, new systems and new products, with the need to achieve profitability.
The Board is confident about the outlook for the remainder of this year and
beyond.
Grant Masom 31 July 2006
Chairman
Consolidated profit and loss account
For the six months ended 31 May 2006
Notes Six months Six months Year to 30
ended 31 May ended 31 May November 2005
2006 Unaudited 2005 Unaudited Audited
£ £ £
Turnover 3 13,480,815 7,784,383 23,460,756
Cost of sales (8,196,634) (5,179,457) (15,292,251)
__________ __________ __________
Gross profit 5,284,181 2,604,926 8,168,505
Selling,
general and
administrative
expenses (3,830,547) (2,420,514) (5,699,309)
Research and
development
expenses (1,656,120) (1,151,616) (2,808,771)
__________ __________ __________
Group
operating loss (202,486) (967,204) (339,575)
Interest
receivable and
similar income 282,743 95,448 418,782
Interest
payable and
similar
charges (5,864) (10,129) (15,293)
__________ __________ __________
Group
profit/(loss)
on ordinary
activities
before
taxation 74,393 (881,885) 63,914
Tax on
profit/(loss)
on ordinary
activities 29,571 721,000 -
__________ __________ __________
Group
profit/(loss)
on ordinary
activities
after taxation
being
profit/(loss)
for the
financial
period 103,964 (160,885) 63,914
__________ __________ __________
Basic
earnings/(loss)
per 1p
ordinary share 4 0.19p (0.33)p 0.1p
Diluted
earnings/(loss)
per 1p
ordinary
shares 4 0.18p (0.33)p 0.1p
Statement of group total recognised gains and losses for the six months ended 31
May 2006
Notes Six months Six months Year to 30
ended 31 May ended 31 May November 2005
2006 Unaudited 2005 Unaudited Audited
£ £ £
Profit/(loss)
for the
financial
period 103,964 (160,885) 63,914
Exchange
translation
difference on
consolidation 9 (35,911) 89,911 (22,383)
__________ __________ __________
Total
recognised
gains and
losses for the
period 68,053 (70,974) 41,531
__________ __________ __________
Consolidated balance sheet
As at 31 May 2006
Notes As at As at As at
31 May 31 May 30 November
2006 2005 2005
Unaudited Unaudited Audited
£ £ £
Fixed assets
Intangible assets 5 1,105,359 206,967 295,297
Tangible assets 1,330,166 984,733 1,023,610
_________ _________ _________
2,435,525 1,191,700 1,318,907
_________ _________ _________
Current assets
Stocks 2,653,022 2,210,216 1,460,756
Debtors: amounts falling
due after one year 195,406 161,563 190,898
Debtors: amounts falling
due within one year 9,951,348 8,624,120 12,846,599
Short-term investments 470,000 430,000 430,000
Cash at bank and in hand 16,308,118 17,088,485 14,038,271
_________ _________ _________
29,577,894 28,514,384 28,966,524
Creditors: Amounts falling
due within one year 6 (3,176,303) (1,590,936) (1,964,581)
_________ _________ _________
Net current assets 26,401,591 26,923,448 27,001,943
Total assets less current
liabilities 28,837,116 28,115,148 28,320,850
Creditors: Amounts falling
due after more than one year (48,498) (93,088) (71,285)
_________ _________ _________
Net assets 28,788,618 28,022,060 28,249,565
_________ _________ _________
Capital and reserves
Called-up share capital 7 582,630 582,630 582,630
Shares to be issued 5 471,000 - -
Share premium account 21,807,240 21,807,240 21,807,240
Merger reserve 16,388,755 16,388,755 16,388,755
Profit and loss account (10,461,007) (10,756,565) (10,529,060)
_________ _________ _________
Equity shareholders' funds 8 28,788,618 28,022,060 28,249,565
_________ _________ _________
Consolidated cash flow statement
For the six months ended 31 May 2006
Notes Six months Six months Year to
ended 31 May ended 31 May 30 November
2006 2005 2005
Unaudited Unaudited Audited
£ £ £
Net cash
outflow from operating
activities 9 3,166,675 (4,087,680) (7,154,539)
Returns on investments
and servicing of finance
Interest received 282,743 58,380 418,782
Interest paid (5,864) (10,129) (15,293)
__________ __________ __________
Net cash inflow from
returns on investments 276,879 48,251 403,489
__________ __________ __________
Taxation 48,171 - -
__________ __________ __________
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (448,537) (283,863) (479,085)
Purchase of intangible
fixed assets (82,319) (64,417) (216,689)
__________ __________ __________
Net cash outflow for
capital expenditure
and financial investment (530,856) (348,280) (695,774)
__________ __________ __________
Acquisitions
net of cash acquired (617,702) - -
__________ __________ __________
Net cash
inflow/(outflow) before
use of liquid
resources and financing 2,343,167 (4,387,709) (7,446,824)
__________ __________ __________
Management of liquid
resources
Increase in short-term
deposits with banks (40,000) - -
__________ __________ __________
Financing
Issue of ordinary share
capital - 15,843,100 15,840,250
Expenses of share issue
deducted from share premium - (534,637) (534,637)
Cash received from exercise
of share options - 106,479 224,329
(Decrease)/increase in other
borrowings (33,320) (18,619) (38,455)
Increase/(decrease) in bank
borrowings - 80,119 (6,144)
__________ __________ __________
Net cash inflow from
financing - 15,476,442 15,485,343
__________ __________ __________
Increase/(decrease) in net
cash 2,269,847 11,088,733 8,038,519
__________ __________ __________
Reconciliation of net
cash flow to movement in
net funds
Opening net funds 14,468,271 6,423,608 6,423,608
Increase in net cash 2,269,847 11,088,733 8,038,519
Increase in deposits 40,000 - -
(Increase)/decrease in
borrowings - (80,119) 6,144
__________ __________ __________
Closing net funds 16,778,118 17,432,222 14,468,271
__________ __________ __________
Notes to the interim financial statements
Six months ended 31 May 2006
1 Basis of preparation
The consolidated financial statements of Amino Technologies plc have been
presented under merger accounting rules. This means that the financial
statements of Amino Technologies plc and those of its wholly owned subsidiary,
Amino Holdings Limited have been aggregated and presented as if the two
companies have always been together.
The figures for the six-month periods ended 31 May 2006 and 31 May 2005 have not
been audited. The figures for the year ended 30 November 2005 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 237 Companies Act
1985.
2 Accounting policies
These interim financial statements for the six months ended 31 May 2006, which
have been prepared in accordance with the accounting policies set out in the
consolidated financial statements of Amino Technologies plc for the year ended
30 November 2005, do not constitute statutory accounts for the purpose of
section 240 of the Companies Act 1985.
3 Turnover
Turnover is wholly attributable to the Group's principal activities of
developing enabling technologies and providing price competitive, flexible and
rapidly deployable designs to manufacturers and vendors of set top boxes, home
gateways and other communications devices. The analysis of turnover by
destination is set out below.
Six months Six months Year to
ended ended 30
31 May 2006 31 May 2005 November 2005
Unaudited Unaudited Audited
£ £ £
United Kingdom and Europe 6,455,789 3,706,678 9,903,108
North America 6,704,958 2,750,687 10,988,350
Asia Pacific and Africa 320,068 1,327,018 2,569,298
__________ __________ __________
13,480,815 7,784,383 23,460,756
__________ __________ __________
4 Earnings/(loss) per share
Six months Six months Year to
ended ended 30
31 May 2006 31 May 2005 November 2005
Unaudited Unaudited Audited
£ £ £
Earnings/(loss)
attributable
to shareholders 103,964 (160,885) 63,914
_________ _________ _________
Weighted
average number
of shares
(Basic) 55,796,444 48,471,852 52,126,170
_________ _________ _________
Weighted
average number
of shares
(Diluted) 57,415,012 - 54,482,187
_________ _________ _________
The calculation of basic earnings/(loss) per share is based on profit/(loss)
after taxation and the weighted average number of ordinary shares of 1p each in
issue during the period. For diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The group has only one category of dilutive
potential ordinary share options: those share options where the exercise price
is less than the average market price of the company's ordinary shares during
the period. There is no dilutive effect in respect of the six months to 31 May
2005 since the Group made a loss.
5 Acquisition
On 21 January 2006, the Company purchased 100% of the issued share capital of SJ
Consulting Limited for a total consideration of approximately £1.3m. The Company
operates in the UK providing network software and systems solutions.
The goodwill arising on the acquisition of SJ Consulting Limited is being
amortised on a straight line basis over 6 years. The directors estimate that the
book values underlying the business acquired approximate to the fair value of
the underlying assets.
Book value
and fair value
£
SJ Consulting Limited acquisition
Tangible fixed assets 14,532
Debtors 221,065
Cash 216,449
Creditors (738)
_________
Net assets acquired 451,308
Goodwill 853,843
_________
Consideration 1,305,151
Consideration satisfied by:
Shares to be issued (300,000 ordinary shares of 1p each) 471,000
Cash 834,151
_________
1,305,151
_________
The shares to be issued are dependent upon continued service of the key
employees.
6 Creditors: Amounts falling due within one year
As at As at As at
31 May 31 May 30 November
2006 2005 2005
Unaudited Unaudited Audited
£ £ £
Bank loans and overdrafts - 86,263 -
Other loans 32,090 40,656 42,623
Trade creditors 2,317,515 537,682 1,100,453
Taxation and social security 225,804 215,932 166,029
Corporation tax 18,600 48,171 48,171
VAT - 36,025 -
Accruals and deferred income 582,294 626,207 607,305
_________ _________ _________
3,176,303 1,590,936 1,964,581
_________ _________ _________
7 Called-up share capital
Ordinary shares of 1p each As at As at Year to
31 May 31 May 30 November
2006 2005 2005
Unaudited Unaudited Audited
£ £ £
Authorised
Nominal value 1,000,000 1,000,000 1,000,000
_________ _________ _________
Number 100,000,000 100,000,000 100,000,000
_________ _________ _________
Allotted, called-up and fully-paid
Nominal value 582,630 582,630 582,630
_________ _________ _________
Number 58,263,052 58,263,052 58,263,052
_________ _________ _________
In respect of the acquisition of SJ Consulting Limited the company has the
contingent obligation to issue 300,000 ordinary shares of 1p each.
8 Reconciliation of movements in shareholders' funds
Six months Six months Year to
ended ended 30 November
31 May 2006 31 May 2005 2005
Unaudited Unaudited Audited
£ £ £
Opening
shareholders' funds 28,249,565 12,678,092 12,678,092
Profit/(loss)
for the period 103,964 (160,885) 63,914
Exchange differences on
consolidation (35,911) 89,911 (22,383)
Issue of ordinary share
capital - capital - 72,250 72,250
Shares to be issued 471,000 - -
Issue of ordinary share
capital - share premium - 15,770,850 15,768,000
Issue of ordinary share capital to - - -
Employee Benefit Trust
Expenses of share issue - (534,637) (534,637)
Exercise of employee share
options - 106,479 224,329
_________ _________ _________
28,788,618 28,022,060 28,249,565
_________ _________ _________
9 Reconciliation of operating loss/ to net cash outflow from operating
activities
Six months Six months Year to
ended ended 30 November
31 May 2006 31 May 2005 2005
Unaudited Unaudited Audited
£ £ £
Operating loss (202,485) (967,204) (339,575)
Depreciation
and amortisation
charge (including
loss on disposals) 282,613 177,223 397,510
Increase in stocks (1,192,266) (848,877) (99,417)
Decrease/(increase)
in debtors 3,111,808 (1,738,491) (6,748,373)
Increase)/(decrease)
in creditors 1,202,916 (800,242) (342,301)
Exchange
differences on
consolidation (35,911) 89,911 (22,383)
_________ _________ _________
Net cash
inflow/(outflow)
from continuing
operating activities 3,166,675 (4,087,680) (7,154,539)
_________ _________ _________
Independent review report to Amino Technologies plc
Introduction
We have been instructed by the company to review the financial information which
comprises the consolidated profit and loss account, consolidated balance sheet,
consolidated cash flow statement, statement of Group total recognised gains and
losses and the related notes. We have read the other information contained in
the interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report and the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent in
writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 May 2006.
PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge
28 July 2006
Notes:
(a) The maintenance and integrity of the Amino Technologies plc website is the
responsibility of the directors; the work carried out by the auditors does
not involve consideration of these matters and, accordingly, the auditors
accept no responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and
dissemination of financial information may differ from legislation in other
jurisdictions
This information is provided by RNS
The company news service from the London Stock Exchange
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