Interim Results
Amino Technologies PLC
25 July 2005
FOR IMMEDIATE RELEASE 25 July 2005
AMINO TECHNOLOGIES PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2005
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 2005.
Key points:
• Shipments of AmiNET products increased by 32% to 102,000 units
• Turnover increased to £7.78m from £6.14m in the first half of 2004
• Loss before tax was £ 0.88m (1H 2004: loss of £0.1m; full year 2004:
profit of £0.2m)
• Following a successful share placing in May 2005, net cash balances
stood at £17.5 million at the end of the period (November 2004: £6.4
million)
• Record order intake: backlog currently stands at 328,000 units, valued
at £23.5m for the second half of the year and beyond
• Continued strong increase in customer adoption metrics:
- 11 customers now with over 10,000 units installed (November 2004:5)
- field trials and roll-outs increased to a total of 144 worldwide
(November 2004: 68)
• Eastern Europe and the Far East show largest volume near term potential.
• Hospitality applications showing promise in initial deployments
• Board strengthened: Paul Fellows, chief technology officer, appointed a
director
Regarding the outlook, Grant Masom, Chairman stated:
'Amino has successfully consolidated its early advantage and is widely
recognised as a leader in the burgeoning IPTV market. We are developing enduring
relationships with key partners and suppliers. We also have strengthened the
balance sheet to enable Amino to maintain its market leadership. The benefits of
the stronger balance sheet are already reflected in improved terms of trade.
Order intake is strong and new product launches have been well received, all of
which makes us confident of Amino's prospects in the second half of the year and
beyond.'
About Amino
Amino (www.aminocom.com) is a designer and supplier of electronic systems and
consultancy, specialising in products for digital broadcast and on-demand TV,
IPTV (telco triple-play applications) and in-home multimedia distribution.
Its range of small, low cost, high functionality set-top boxes and gateway
products is designed for consumer applications in telecom, satellite and digital
terrestrial broadcast markets, as well as on-demand systems for hotels and
hospitality markets, healthcare, retail and education. Amino also provides
systems consultancy and partners with world-leading companies in content
aggregation, middleware, conditional access and head-end systems.
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 Susan Scott
CHAIRMAN'S STATEMENT
Introduction
During the past year, Amino has established itself as a market leader in the
field of internet protocol TV ('IPTV') technologies for customer premises
equipment, usually described as a set-top-box ('STB'). The Group has developed a
global reach with customers and industry partners around the world. The
marketplace for IPTV is growing explosively but, as with any market growing so
quickly, the rate of development is neither linear nor entirely predictable.
Amino recognises this as a fact of life at this early stage in the development
of the IPTV market and the half year results now reported reflect these factors.
The Board has taken the firm view that the interests of both shareholders and
the Group will be served best by ensuring that investment in Amino's
technologies, products and markets should be sustained at the level required to
consolidate its positioning and market leadership.
As previously flagged, the full year results will be heavily weighted
towards the second half. As the Group's operating costs are largely fixed,
significant profitability will be linked to expected revenue growth - a view
supported by the record level of order intake and backlog.
Following the change in year-end, effected in November 2004, comparative half
year figures are for the six months to 31 May 2004.
Results and finance
Shipments in the first half-year to 31 May 2005 increased by 32% to 102,000
units (2004: 77,000). The backlog of unshipped orders increased substantially
due to continued delays in deliveries of MPEG-2 (High Definition) and MPEG-4
silicon and software drivers. Recent availability of these key components will
allow the start of the delayed customer trials and volume orders which have been
deferred. Gross margins were lower than the comparable period due to a higher
level of customer support required for one large customer project and the need
to provide for additional import duties following an unexpected reversal of a
previous ruling by HM revenue and Customs. As a result, the loss before tax was
£882,000 (2004: loss of £105,000). The loss after tax was £161,000 (2004: profit
of £414,000).
The increase in trade debtors to £5.51 m (2H'04: £3.60 m) reflects the balance
of sales towards the end of the period and deferred payment terms on two
customer contracts.
Following the successful share placing in May, which raised £15.3 million (net
of expenses), net cash at 31 May 2005 was £17.5 m (£6.4 m at 30 November 2004).
As indicated at the time of the placing, the rapid growth in the business has
required additional working capital. Tangible benefits of the strengthened
balance sheet have already been seen in increased confidence and improved terms
of trade with key customers and suppliers. As a result, completion of the
proposed increase in banking facilities has not been taken up at this time, but
remains an option for the future.
Markets and operations
In the short term, the speed of development of the IPTV market varies according
to the territory and the size of the telecoms operator (telco). To date, Amino
products have been adopted for field trials by 144 operators across all
territories worldwide. However, tier 2 and tier 3 telcos (defined here as having
less than 10 million phone subscribers) are currently more advanced in moving
from trials to commercial introduction of IPTV services, mostly using our
existing MPEG-2 technologies. The large tier 1 telcos (with more than 10 million
phone subscribers), particularly in the Americas and EMEA, have been taking a
more measured approach - reflecting both the scale of investment required and
the desire to move straight to the new MPEG-4 technologies which are only just
becoming available. 45% of total shipments were destined for Eastern Europe and
the Far East, with the balance split between Western Europe and the USA. We
believe the earliest significant volume opportunities will be in Eastern Europe,
the Far East and South America.
Against this background, Amino has made excellent progress in all its key
customer metrics - evaluations, laboratory and field trials, and service
roll-outs. In particular, the number of customers currently rolling out with
orders placed with Amino for more than 10,000 units has grown to 11 at the end
of May - up from five at the last year end and just two a year ago. These
roll-out orders are for Amino's established MPEG-2 products for which volume
shipments are expected for the foreseeable future.
Amino has sustained its product development programme, with recent product
launches including the AmiNET 124 (a standard definition MPEG-4/H264
set-top-box), the AmiNET 120 (a high definition TV MPEG-2 set-top-box), and the
AmiNET 110H (an MPEG-2 product for the hospitality industry). Lead time for key
components is the major dependency for the volume shipment of the next
generation of products. This affected shipments in the first half, but we are
confident that this situation is resolving to our satisfaction. Future planned
products are expected to include further MPEG-4 derivatives and a combined
MPEG-4/MSTV set-top-box, ensuring that Amino continues to be able to supply
customer premises equipment for all significant system software solutions.
In addition to the delivery of IPTV over public networks through telcos, there
is a substantial new market developing for private network delivery of IPTV,
into hotels, hospitals, education and apartment complexes. This 'hospitality'
business, although again at an early stage, is progressing well and provides the
opportunity to supply a full range of system and support services. New
deployments are taking place with On Command (USA), San Jose State University
(USA) and Communications Hospitaliaire (France).
The development of significant licensing revenues is likely to track the
progress of larger tier 1 telcos in their IPTV deployments. We believe there is
a growing appreciation of the difficulties involved in implementing complex,
multi-vendor client-end solutions, and the part that Amino's software can play
in simplifying the implementation process for operators, integrators, and other
IPTV product vendors. We have sold a number of software developer kits to third
party application developers and licensed Philips Semiconductors to manufacture
'Amino enabled' IPTV silicon chips. We anticipate being able to announce further
progress with licensing in due course.
The development of Amino's partnership programme has continued with new global
supply agreements signed with the major tier 1 telco suppliers.
Board
I am delighted to announce that Paul Fellows, our highly respected chief
technology officer, was appointed to the Board on 22 July. We welcome his input
and counsel.
Outlook
Since Q2 order intake has been particularly strong, leading to our highest ever
order book. At present, the total of shipped and unshipped orders for the second
half year and beyond stands at 328,000 units with a total value of £23.5m. Of
these, 150,000 units are firmly scheduled for shipment in the second half, and
we expect to schedule a significant proportion of the balance for shipment in
H2. In addition, we anticipate closing a number of significant opportunities for
volume shipment in Q4 and beyond in Asia Pacific and South America.
In support of the continued strong increase in customer adoption metrics, we
have orders for the recently launched products (i.e. AmiNET124, AmiNET120 and
AmiNET110H). The AmiNET124 is the first implementation of a single chip H.264
(MPEG-$) set-top box to be made available in the market.
Amino has successfully consolidated its early advantage and is widely recognised
as a leader in the burgeoning IPTV market. We are developing enduring
relationships with key partners and suppliers. Whilst this growth poses
challenge, it creates many opportunities which Amino is well placed to exploit.
The Board is confident about the outlook for the remainder of this year and
beyond.
Grant Masom 22 July 2005
Chairman
Consolidated profit and loss account
For the six months ended 31 May 2005
Notes Six months Six months 11 months to
ended ended 30 November
31 May 2005 31 May 2004 2004
Unaudited Unaudited Audited
£ £ £
Turnover 3 7,784,383 6,139,970 13,247,054
Cost of sales (5,179,457) (3,602,626) (7,779,916)
__________ __________ __________
Gross profit 2,604,926 2,537,344 5,467,138
Selling,
general and
administrative
(non-exception
al expenses) (2,420,514) (1,785,589) (3,739,718)
Selling,
general and
administrative
(exceptional
expenses) - (217,019) (331,254)
Selling,
general and
administrative
expenses (2,420,514) (2,002,608) (4,070,972)
Research and
development
expenses (1,151,616) (723,601) (1,444,513)
Other
operating
income - 45,000 94,873
__________ __________ __________
Group
operating
(loss)/profit (967,204) (143,865) 46,526
Interest
receivable and
similar income 95,448 54,384 185,625
Interest
payable and
similar
charges (10,129) (15,488) (35,117)
__________ __________ __________
Group
(loss)/profit
on ordinary
activities
before
taxation (881,885) (104,969) 197,034
Tax on
(loss)/profit
on ordinary
activities 721,000 519,000 1,130,829
__________ __________ __________
Group
(loss)/profit
on ordinary
activities
after taxation
being
(loss)/profit
for the
financial
period (160,885) 414,031 1,327,863
__________ __________ __________
Basic
(loss)/earnings
per 1p
ordinary share 4 (0.33)p 1.0p 3.0 p
Diluted
(loss)/earnings
per 1p
ordinary
shares 4 (0.33)p 0.9p 2.8p
Statement of Group total recognised gains and losses
for the six months ended 31 May 2005
Notes Six months Six months 11 months to
ended 31 May ended 31 May 30 November
2005 2004 2004
Unaudited Unaudited Audited
£ £ £
(Loss)/profit
for the
financial
period (160,885) 414,031 1,327,863
Exchange
translation
difference on
consolidation 8 89,911 - (36,185)
__________ __________ __________
Total
recognised
gains and
losses for the
period (70,974) 414,031 1,291,678
__________ __________ __________
All amounts relate to continuing activities.
The accompanying notes are an integral part of these interim financial
statements.
Consolidated balance sheet
As at 31 May 2005
Notes Six months Six months 11 months to
ended 31 May ended 31 May 30 November
2005 2004 2004
Unaudited Unaudited Audited
£ £ £
Fixed assets
Intangible assets 206,967 49,855 186,759
Tangible assets 984,733 453,572 833,884
_________ _________ _________
1,191,700 503,427 1,020,643
_________ _________ _________
Current assets
Stocks 2,210,216 500,273 1,361,339
Debtors: amounts falling due
after one year 161,563 82,250 161,563
Debtors: amounts falling due
within one year 5 8,624,120 2,164,555 6,127,561
Trade debtors
subject to financing
stated net of non-returnable
amounts received 5 - 1,421,999 -
Short-term investments 430,000 1,930,000 430,000
Cash at bank and in hand 17,088,485 1,111,199 5,999,752
_________ _________ _________
28,514,384 7,210,276 14,080,215
Creditors:
Amounts falling due
within one year 6 (1,590,936) (2,383,237) (2,305,485)
_________ _________ _________
Net current
assets 26,923,448 4,827,039 11,774,730
Total assets less current
liabilities 28,115,148 5,330,466 12,795,373
Creditors:
Amounts falling due
after more than one year (93,088) (135,382) (117,281)
_________ _________ _________
Net assets 28,022,060 5,195,084 12,678,092
_________ _________ _________
Capital and reserves
Called-up
share capital 7 582,630 452,047 510,380
Share premium
account 21,807,240 - 6,571,027
Merger reserve 16,388,755 16,388,755 16,388,755
Profit and
loss account (10,756,565) (11,645,718) (10,792,070)
_________ _________ _________
Equity
shareholders'
funds 8 28,022,060 5,195,084 12,678,092
_________ _________ _________
Consolidated cash flow statement
For the six months ended 31 May 2005
Notes Six months Six months 11 months to
ended 31 May ended 31 May 30 November
2005 2004 2004
Unaudited Unaudited Audited
£ £ £
Net cash outflow from
operating activities 9 (4,087,680) (2,525,790) (3,836,286)
Returns on investments
and servicing of
finance
Interest received 58,380 54,384 185,625
Interest paid (10,129) (15,488) (35,117)
__________ __________ __________
Net cash inflow from
returns on investments 48,251 38,896 150,508
__________ __________ __________
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (283,863) (198,374) (603,340)
Purchase of intangible
fixed assets (64,417) (34,998) (184,810)
__________ __________ __________
Net cash outflow for
capital expenditure
and financial investment (348,280) (233,372) (788,150)
__________ __________ __________
Net cash outflow before
use of liquid resources and
financing (4,387,709) (2,720,266) (4,473,928)
__________ __________ __________
Management of liquid
resources
(Decrease)/inc
rease in
short-term
deposits with
banks - (1,930,000) 3,300,000
__________ __________ __________
Financing
Issue of ordinary share
capital 15,843,100 - 6,999,999
Expenses of share issue
deducted from share premium (534,637) - (370,639)
Cash received from exercise
of share options 106,479 26,000 354,824
(Decrease)/increase in other
borrowings (18,619) 5,382 (23,907)
Increase/(decr
ease) in bank
borrowings 80,119 500,247 (1,001,523)
__________ __________ __________
Net cash inflow from
financing 15,476,442 531,629 5,958,754
__________ __________ __________
Increase/(decr
ease) in net
cash 11,088,733 (4,118,637) 4,784,826
__________ __________ __________
Reconciliation of net
cash flow to movement in
net funds
Opening net funds 6,423,608 5,229,815 3,937,259
Increase in net cash 11,088,733 (4,118,637) 4,784,826
Decrease in deposits - 1,930,000 (3,300,000)
(Increase)/decrease in
borrowings (80,119) (500,247) 1,001,523
__________ __________ __________
Closing net funds 17,432,222 2,540,931 6,423,608
Notes to the interim financial statements
Six months ended 31 May 2005
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 2005 and 31 May 2004 have not
been audited. The figures for the year ended 30 November 2004 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 2005, 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 2004, 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 11 months to
ended ended 30 November
31 May 2005 31 May 2004 2004
Unaudited Unaudited Audited
£ £ £
United Kingdom
and Europe 3,706,678 2,100,566 5,001,383
North America 2,750,687 2,702,371 6,467,504
Asia Pacific
and Africa 1,327,018 1,337,033 1,778,167
_________ __________ __________
7,784,383 6,139,970 13,247,054
__________ __________ __________
4. Earnings/(loss) per share
Six months Six months 11 months to
ended ended 30 November
31 May 2005 31 May 2004 2004
Unaudited Unaudited Audited
£ £ £
(Loss)/earnings
attributable
to shareholders (160,885) 414,031 1,327,863
__________ _________ __________
Weighted
average number
of shares
(Basic) 48,471,852 39,712,533 43,662,984
__________ __________ __________
Weighted
average number
of shares
(Diluted) 44,823,151 48,174,055
__________ __________
The calculation of basic earnings/(loss) per share is based on profit/(loss)
after taxation and the weighted average 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. Debtors
Six months Six months 11 months to
ended ended 30 November
31 May 2005 31 May 2004 2004
Unaudited Unaudited Audited
£ £ £
Amounts falling due within one year:
Trade debtors
(not subject
to financing) 5,510,069 877,355 3,602,001
VAT - 84,451 56,232
Deferred tax 2,440,000 1,059,000 1,719,000
Other debtors - 3,317 23,196
Prepayments
and accrued
income 674,051 140,432 727,132
_________ _________ _________
8,624,120 2,164,555 6,127,561
___________ __________ __________
Amounts falling due within one year:
Trade debtors
subject to financing - 1,922,268 -
Less:
Non-returnable amounts
received - (500,269) -
_________ _________ _________
- 1,421,999 -
__________ __________ _________
6. Creditors: Amounts falling due within one year
Six months Six months 11 months to
ended 31 May ended 31 May 30 November
2005 2004 2004
Unaudited Unaudited Audited
£ £ £
Bank loans and overdrafts 86,263 - 6,144
Other loans 40,656 35,082 35,082
Trade creditors 537,682 623,730 1,377,088
Taxation and social security 215,932 131,569 163,342
Corporation tax 48,171 - 48,171
VAT 36,025 - -
Other creditors - - 644
Accruals and deferred income 626,207 1,592,856 675,014
_________ _________ _________
1,590,936 2,383,237 2,305,485
__________ __________ __________
Bank loans and overdrafts are secured by a fixed and floating charge over the
assets of Amino Communications Limited.
7. Called-up share capital
Ordinary shares of 1p each Six months Six months 11 months
ended ended to November
31 May 2005 31 May 2004 2004
Unudited 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 582,630 452,047 510,380
_________ _________ _________
Number 58,263,052 45,204,719 51,038,000
__________ __________ __________
Share issues
On 14 December 2004 Amino Technologies plc allotted 10,000 ordinary shares of 1p
each at par and on 3 February 2005 issued 15,000 ordinary shares at 1p each at
20p per share. Both share issues related to the exercising of sales
representatives' (non-employee) share options.
On 17 May 2005 Amino Technologies plc allotted 7,200,000 ordinary shares of 1p
each at 220p per share for cash consideration of £15,840,000 in order to
increase the working capital base of the Group and enable it to take advantage
of the increased opportunities for growth. The net proceeds of the private
placement amounted to £15,305,363 after costs of £534,637.
8. Reconciliation of movements in shareholders' funds
Six months Six months 11 months to 30
ended 31 May ended 31 May November 2004
2005 Unaudited 2004 Unaudited Audited
£ £ £
Opening
shareholders'
funds 12,678,092 4,755,053 4,402,230
(Loss)/Profit
for the period (160,885) 414,031 1,327,863
Exchange
differences on
consolidation 89,911 - (36,185)
Issue of
ordinary share
capital -
capital 72,250 9,375 67,708
Issue of
ordinary share
capital -
share premium 15,770,850 - 6,941,666
Issue of
ordinary share
capital to
Employee
Benefit Trust - (300,000) (300,000)
Expenses of
share issue (534,637) - (370,639)
Exercise of
employee share
options 106,479 26,000 354,824
Movement on
merger reserve - 290,625 290,625
_________ _________ _________
28,020,060 5,195,084 12,678,092
_________ _________ _________
9. Reconciliation of operating loss/profit to net cash outflow from
operating activities
Six months Six months 11 months to 30
ended 31 May ended 31 May November 2004
2005 Unaudited 2004 Unaudited Audited
£ £ £
Operating
(loss)/profit (967,204) (143,865) 46,526
Depreciation
and
amortisation
charge
(including
loss on
disposals) 177,223 69,221 154,834
Increase in
stocks (848,877) (373,454) (1,129,292)
Increase in
debtors (1,738,491) (2,041,248) (3,085,128)
(Decrease)/inc
rease in
creditors (800,242) (36,444) 212,959
Exchange
differences on
consolidation 89,911 - (36,185)
_________ _________ _________
Net cash
outflow from
continuing
operating
activities (4,087,680) (2,525,790) (3,836,286)
_________ _________ _________
10. Interim Report
The Interim Report will be posted to shareholders shortly and copies will be
available from Amino Technologies plc's Registered Office: Prospect House,
Buckingway Business Park, Anderson Road, Swavesey, Cambridge, CB4 5UQ.
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, the consolidated balance
sheet, the consolidated cash flow statement, the 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 2005.
PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge
22 July 2005
ENDS
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