Final Results

RNS Number : 5847R
Global Invacom Group Limited
01 March 2019
 

 

 

Global Invacom Records Eighth Consecutive Quarter of Profitability in Q4 FY2018

 

Singapore/London, 1 March 2019 - Global Invacom (SGX:QS9) (AIM:GINV), the global provider of satellite communications, is pleased to announce its results for the full year ended 31 December 2018 ("FY2018") and the three months ended 31 December 2018 ("Q4 FY2018"). 

 

The Group recorded their eighth consecutive quarter of net profit attributable to shareholders of US$0.9 million, a 14.2% increase from the three months ended 31 December 2017 ("Q4 FY2017"), lifted by higher revenue which grew 22.2% to US$36.4 million in Q4 FY2018. Revenue for the full year of FY2018 increased by US$6.6 million or 5.7% to US$122.3 million from US$115.7 million in the prior year ("FY2017"). The rise in revenue, particularly for Q4 FY2018, was mainly due to the supply of new designs for key products to some of the Group's major customers.


Gross profit ("GP") saw an 18.2% increase to US$7.4 million from US$6.3 million in the previous corresponding quarter. Gross profit margin dipped slightly by 0.7 percentage points from 21.1% to 20.4% in the same period.

 

In Q4 FY2018, the Group recorded higher volume of shipments for its recently launched Western Arc Slimline Low Noise Block (LNB) to a major U.S. customer. The Group will remain the sole supplier to this customer until end of Q1 FY2019. Reflecting confidence in the Group's product quality and capabilities, shipments of the Eastern Arc model have also commenced from Q1 FY2019 to this same customer.

 

Data over satellite continues to be important for the Group, having made shipments of its new 90 cm satellite antenna throughout FY2018, as sole supplier, to another U.S. customer. Shipments on a non-exclusive basis are expected to continue throughout FY2019 and beyond. 

 

In addition, one of the Group's existing customers, a major global VSAT integrator, which has been purchasing antennas from the Group, has now added new orders for data over satellite transceiver electronics resulting from the Skyware Technologies purchase in Q3 FY2018.

 

Mr. Tony Taylor, Executive Chairman of Global Invacom, commented, "Notwithstanding the slower pace of the transition to DCSS products, growth of the satellite communications equipment market will continue. With the emerging trends of the Internet of Things, 5G and autonomous vehicles, satellite communications technology will continue to be a vital part of modern society, and we are in a good position to capitalise on the growing demand in this market.

 

"We will continue to build on our foundation as the leading global manufacturer of satellite equipment by developing new and innovative products that address the customer's needs," he added.

 

On a geographical basis, FY2018 revenue increased in the U.S. and Europe by US$4.8 million (+5.9%) and US$3.3 million (+14.0%), respectively, which were offset by decreases in Asia and Rest of the World by US$1.4 million (-20.7%) and US$0.1 million (-3.2%), respectively.

 

The Group's GP for FY2018 rose to US$25.2 million from US$24.2 million last year ("FY2017"). However, GP margin decreased by 0.3 percentage points from 20.9% to 20.6% for FY2018 due to cost of sales outpacing revenue growth.

 

Global Invacom's U.S. operations faced supply chain issues in Q4 FY2018 which impacted profitability. Had it not been for these issues, GP for Q4 FY2018 would have been higher for Global Skyware which, nonetheless, closed off FY2018 with a second year of profitability, following a turnaround that resulted from changes to operations since FY2016.

 

The Group's continuing emphasis on product development through R&D spending contributed to the 9.4% increase in administrative expenses for FY2018 to US$22.9 million from US$21.0 million in FY2017.

 

Earnings per share on a fully diluted basis declined to 0.57 US cent for FY2018 (FY2017: 1.08 US cents). Net asset value per share increased to 20.84 US cents as at 31 December 2018 from 20.42 US cents as at 31 December 2017. The Group's cash and cash equivalents amounted to US$8.4 million as at 31 December 2018. 

 

The Group had announced in Q4 FY2018 a proposal to acquire Tactilis Sdn. Bhd., a manufacturer and distributor of biometric system-on-card solutions which, if completed, will constitute a reverse takeover. Subsequent to the end of the review period, the Group appointed a Financial Adviser. The Group will provide further updates on this transaction in due course.

 

**End of Press Release**

 

For further information, please contact:

 

Global Invacom Group Limited

www.globalinvacom.com

Matthew Garner, Chief Financial Officer

Tel: +65 6431 0782

Tel: +44 203 053 3523

 

 

finnCap Ltd (Nominated Adviser and Joint Broker)

www.finncap.com

Christopher Raggett / Matthew Radley (Corporate Finance)

Tel: +44 207 220 0500

 

 

Mirabaud Securities LLP (Joint Broker)

www.mirabaud.com

Peter Krens (Equity Capital Markets)

Tel: +44 207 878 3362

 

 

WeR1 Consultants Pte Ltd (Singapore Investor Relations)

www.wer1.net

Lai Kwok Kin

Tel: +65 6737 4844

ginv@wer1.net

 

 

 

Vigo Communications (UK Media & Investor Relations)

www.vigocomms.com

Jeremy Garcia / Fiona Henson / Charlie Neish

Tel: +44 207 390 0238

ginv@vigocomms.com

 

 

About Global Invacom Group Limited

 

Global Invacom is a fully integrated satellite equipment provider with six manufacturing plants across China, Israel, Malaysia, UK and the US.  Its customers include satellite broadcasters such as BSkyB of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks.

 

Global Invacom provides a full range of antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in military, medical, and consumer electronics industries.    Following the acquisition in 2015 of Global Skyware, a leading US‐based designer and supplier of satellite antennas products and services, the Company became the world's only full‐service outdoor unit supplier.

 

Global Invacom is listed on the Mainboard of the Singapore Exchange Securities Trading Limited and its shares are admitted to trading on the AIM Market of the London Stock Exchange.  

 

For more information, please refer to www.globalinvacom.com

 

 

 

 

FINANCIAL STATEMENT ANNOUNCEMENT FOR Q4 AND YEAR ENDED 31 DECEMBER 2018

 

PART I  -      INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

 

1(a)         A statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

 

Consolidated Statement of Comprehensive Income for Q4 and the year ended 31 December 2018. These figures have not been audited.

 

 

Group
 
Group

 

Q4

FY2018

Q4 FY2017

Increase/
(Decrease)

 

FY2018

FY2017

Increase/

(Decrease)

 

US$'000

US$'000

%

 

US$'000

US$'000

%

 

 

 

 

 

 

 

 

Revenue

   36,366

   29,757

        22.2

 

122,292

   115,706

          5.7

 

 

Cost of sales

          6.1

 

 

Gross profit

          4.1

 

 

 

 

 

 

 

 

Other income

     (57.4)

Distribution costs

        11.0

Administrative expenses

          9.4

Other operating expenses

     (89.9)

Finance income

     220.0

Finance costs

          8.3

 

 

Profit before income tax(i)

     1,181

         971

        21.6

 

     2,081

       3,694

     (43.7)

 

 

Income tax expense

     (26.8)

 

Profit after income tax attributable to equity holders of the Company

 

 

 

         895

 

 

 

         784

 

 

               

        14.2

 

 

 

 

     1,536

 

 

 

       2,949

 

 

 

     (47.9)

 

 

 

 

Other comprehensive (loss)/income:

 

 

 

 

 

 

 

 

 

 

 

 

 

Items that may be reclassified subsequently to profit or loss

 

 

             

 

 

 

             

-  Exchange differences on translation of foreign subsidiaries

        N.M.

 

      (417)

           114

        N.M.

 

Other comprehensive (loss)/income for the period, net of tax

      (483)

        (38)

        N.M.

 

      (417)

           114

        N.M.

 

Total comprehensive income for the period attributable to equity holders of the Company

         412

         746

               

     (44.8)

 

                     1,119

       3,063

               

     (63.5)

 

N.M.:  Not Meaningful

 

Note:

 

(i)    Profit before income tax was determined after (charging)/crediting the following:

 

 

Group

 

Group

 

Q4

FY2018

Q4 FY2017

Increase/
(Decrease)

 

FY2018

FY2017

Increase/

(Decrease)

 

US$'000

US$'000

%

 

US$'000

US$'000

%

 

 

 

 

 

 

 

 

Interest income

          46

       16

    187.5

 

         96

           30

Interest expense

     (146)

  (165)

   (11.5)

 

    (523)

      (483)

(Loss)/Gain on foreign exchange

        (21)

     325

      N.M.

 

         (9)

         599

Gain on bargain purchase

        482

           -

      N.M.

 

       482

               -

Write-back of payables

              -

           -

      N.M.

 

         73

         578

Gain/(Loss) on disposal of property, plant and equipment

              -

          7

(100.0)

 

         (5)

           (6)

Impairment of property, plant and equipment

              -

           -

             -

 

             -

         (86)

Depreciation of property, plant and equipment

     (791)

  (693)

      14.1

 

(2,890)

   (2,563)

Amortisation of intangible assets

     (146)

  (154)

      (5.2)

 

    (673)

      (628)

Impairment of intangible assets

        (93)

           -

      N.M.

 

       (93)

               -

Write-back for inventory obsolescence, net

        706

     160

    341.3    

 

       412

         351

(Allowance)/Write-back for impairment of trade receivables, net

              -

     (46)

(100.0)

 

             -

         (46)

Operating lease expense

     (706)

  (595)

      18.7    

 

(3,212)

   (2,857)

Research and development expense

     (665)              

  (453)

      46.8

 

(2,805)

   (1,646)

 

 

 

 

 

 

 

 

 

 

 

1(b)(i)     A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

 

 

 

 

Group

 

Company

 

31 Dec 2018

31 Dec 2017

 

31 Dec 2018

31 Dec 2017

 

US$'000

US$'000

 

US$'000

US$'000

ASSETS

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

Property, plant and equipment

 

Investments in subsidiaries

 

Goodwill

 

Intangible assets

 

Equity instruments

 

Deferred tax assets

 

Other receivables and prepayments

 

 

 

Current Assets

 

 

 

 

 

Due from subsidiaries

 

Inventories

 

Trade receivables

 

Other receivables and prepayments

 

Tax receivables

 

Cash and cash equivalents

 

 

 

 

Total assets

 

       94,092

        82,992

 

        60,994

       61,926

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

 

Treasury shares

 

Reserves

 

Total equity

 

       56,606

        55,470

 

        58,596

       59,264

 

 

 

 

 

 

Non-current Liabilities

 

 

 

 

 

Other payables

 

Deferred tax liabilities

 

 

 

﷐     

Current Liabilities

 

 

 

 

 

Due to subsidiaries

 

Trade payables

 

Other payables

 

Borrowings

 

Provision for income tax

 

﷐     

 

 

 

 

Total liabilities

 

       37,486

        27,522

 

          2,398

         2,662

 

 

 

 

 

 

Total equity and liabilities

 

       94,092

        82,992

 

        60,994

       61,926

 

1(b)(ii)    Aggregate amount of group's borrowings and debt securities.

                               

Amount repayable in one year or less, or on demand

 

As at 31 Dec 2018

As at 31 Dec 2017

 

Secured

Unsecured

Secured

Unsecured

 

 

US$'000

US$'000

US$'000

US$'000

 

 

11,974

-

8,025

-

 

 

 

Amount repayable after one year

 

As at 31 Dec 2018

As at 31 Dec 2017

 

Secured

Unsecured

Secured

Unsecured

 

 

US$'000

US$'000

US$'000

US$'000

 

 

-

-

-

-

 

 

 

Details of any collateral

 

The revolving credit loans of US$11,974,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.

 

 

1(c)         A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

 

 

Group
 
Group

Q4 FY2018

Q4 FY2017

 

FY2018

FY2017

 

US$'000

US$'000

 

US$'000

US$'000

Cash Flows from Operating Activities

 

 

 

 

 

Profit before income tax

        2,081

Adjustments for:

 

Depreciation of property, plant and equipment

        2,890

Amortisation of intangible assets

           673

(Gain)/Loss on disposal of property, plant and equipment

                5

Impairment of property, plant and equipment

                 -

Impairment of intangible assets

              93

Write-back for inventory obsolescence, net

         (412)

Impairment of allowance for trade receivables

                 -

Unrealised exchange loss/(gain)

           166

Interest income

           (96)

Interest expense

           523

Share-based payments

              17

Gain on bargain purchase

        (482)

Write-back of payables

           (73)

Operating cash flow before working capital changes

        1,137

      1,624

 

        5,385

Changes in working capital:

 

Inventories

     (2,191)

Trade receivables

     (5,618)

Other receivables and prepayments

        1,477

Trade and other payables

        5,211

Cash (used in)/generated from operating activities

     (1,364)

       (617)

 

        4,264

Interest paid

         (227)

Income tax (paid)/refund

         (271)

Net cash (used in)/generated from operating activities

 

        3,766

 

 

 

Cash Flows from Investing Activities

 

 

Interest received

              85

Purchase of property, plant and equipment

     (1,533)

Proceeds from disposal of property, plant and equipment

              36

Decrease in intangible assets

                 -

Acquisition of a business

     (3,500)

Investment in convertible notes

     (1,500)

Decrease in restricted cash

                 -

Net cash used in investing activities

 

     (6,412)

 

 

 

Cash Flows from Financing Activities

 

 

Proceeds from borrowings

      54,686

Repayment of borrowings

   (50,811)

Net cash generated from/(used in) financing activities

        2,005

       (697)

 

        3,875

       1,917

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

     (1,420)

 

        1,229

          408

Cash and cash equivalents at the beginning of the period

        9,772

 

        7,152

       6,742

Effect of foreign exchange rate changes on the balance of cash held in foreign currencies

                 -

Cash and cash equivalents at the end of the period(i)

        8,381

 

        8,381

 

 

Note:

 

(i)    For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:

 

 

Q4

FY2018

Q4

FY2017

 

FY2018

FY2017

 

US$'000

US$'000

 

US$'000

US$'000

 

 

 

 

 

 

Cash and bank balances

   8,351

  7,122

 

     8,351

Fixed deposits

         30

        30

 

           30

 

   8,381

  7,152

 

     8,381

Less: Restricted cash

            -

           -

 

              -

Cash and cash equivalents per the consolidated statement of cash flows

            

   8,381

            

  7,152

 

            

     8,381

            

        7,152

 

 

 

 

               

 


 

 

1(d)(i)     A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

 

 

 

 

Group

 

 

Share

capital

 

 

Treasury shares

 

 

Merger reserves

 

Capital redemption reserves

 

Share options reserve

 

 

Capital reserve

Foreign currency translation reserve

 

 

Retained profits

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

 

 

 

 

Balance as at 1 Jan 2018

   60,423

   (1,656)

(10,150)

             6

       706

   (3,695)

        (872)

    10,708

   55,470

Share-based payments

Profit for the period

Other comprehensive income:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            31 Mar 2018

   60,423

   (1,656)

(10,150)

             6

       714

   (3,695)

        (748)

    11,034

   55,928

Share-based payments

Profit for the period

Other comprehensive income:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            30 Jun 2018

   60,423

   (1,656)

(10,150)

             6

       717

   (3,695)

        (679)

    11,240

   56,206

Share-based payments

Profit for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at            30 Sep 2018

   60,423

   (1,656)

(10,150)

             6

       720

   (3,695)

        (806)

    11,349

   56,191

Share-based payments

Transfer to capital reserve in accordance with statutory requirements

Profit for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            31 Dec 2018

   60,423

   (1,656)

(10,150)

             6

       723

   (3,560)

     (1,289)

    12,109

   56,606

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Group

 

 

Share

capital

 

 

Treasury shares

 

 

Merger reserves

 

Capital redemption reserves

 

Share options reserve

 

 

Capital reserve

Foreign currency translation reserve

 

 

Retained profits

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

 

 

 

 

Balance as at 1 Jan 2017

   60,423

   (1,656)

(10,150)

             6

       613

   (3,695)

        (986)

      7,759

   52,314

Share-based payments

Profit for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            31 Mar 2017

   60,423

   (1,656)

(10,150)

             6

       653

   (3,695)

     (1,099)

      8,364

   52,846

Share-based payments

Profit for the period

Other comprehensive income:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            30 Jun 2017

   60,423

   (1,656)

(10,150)

             6

       688

   (3,695)

        (878)

      9,237

   53,975

Share-based payments

Profit for the period

Other comprehensive income:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            30 Sep 2017

   60,423

   (1,656)

(10,150)

             6

       698

   (3,695)

        (834)

      9,924

   54,716

Share-based payments

Profit for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at            31 Dec 2017

   60,423

   (1,656)

(10,150)

             6

       706

   (3,695)

        (872)

    10,708

   55,470

 

 

 

 

 

 

Company

 

Share

capital

 

 

Treasury shares

 

Share options reserve

 

 

Capital reserve

Foreign currency translation reserve

 

 

Accumulated losses

 

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

 

 

Balance as at 1 Jan 2018

      74,240

      (1,656)

          706

      (4,481)

      (1,927)

      (7,618)

      59,264

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 31 Mar 2018

      74,240

      (1,656)

          713

      (4,481)

      (1,927)

      (7,852)

      59,037

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 30 Jun 2018

      74,240

      (1,656)

          717

      (4,481)

      (1,927)

      (8,092)

      58,801

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 30 Sep 2018

      74,240

      (1,656)

          720

      (4,481)

      (1,927)

      (8,297)

      58,599

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 31 Dec 2018

      74,240

      (1,656)

          723

      (4,481)

      (1,927)

      (8,303)

      58,596

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

Share

capital

 

 

Treasury shares

 

Share options reserve

 

 

Capital reserve

Foreign currency translation reserve

 

 

Accumulated losses

 

 

 

Total

 

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

US$'000

 

 

 

 

 

 

 

 

Balance as at 1 Jan 2017

      74,240

      (1,656)

          613

      (4,481)

      (2,067)

      (6,994)

      59,655

Share-based payments

Loss for the period

Other comprehensive income:

Exchange differences on translating foreign operations

Total other comprehensive income for the period

Balance as at 31 Mar 2017

      74,240

      (1,656)

          651

      (4,481)

      (1,927)

      (7,079)

      59,748

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 30 Jun 2017

      74,240

      (1,656)

          688

      (4,481)

      (1,927)

      (7,135)

      59,729

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 30 Sep 2017

      74,240

      (1,656)

          698

      (4,481)

      (1,927)

      (7,506)

      59,368

Share-based payments

Loss for the period

Other comprehensive loss:

Exchange differences on translating foreign operations

Total other comprehensive loss for the period

Balance as at 31 Dec 2017

      74,240

      (1,656)

          706

      (4,481)

      (1,927)

      (7,618)

      59,264

 

 

 

 

 

1(d)(ii)    Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on.   

State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

 

FY2018

No. of shares

US$'000

 

 

 

 

 

Balance as at 1 Jan 2018 and 31 Dec 2018

       271,662,227

     72,584

 

 

FY2017

No. of shares

US$'000

 

 

 

 

 

Balance as at 1 Jan 2017 and 31 Dec 2017

       271,662,227

     72,584

 

 

 

 

There were 10,740,072 treasury shares held by the Company as at 31 December 2018 and 31 December 2017 and there was no subsidiary holdings.

 

1(d)(iii)   To show the total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year.

 

 

31 Dec 2018

31 Dec 2017

Total number of issued shares excluding treasury shares

271,662,227

271,662,227

 

1(d)(iv)   A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

               

FY2018

No. of shares

US$'000

 

 

 

Balance as at 1 Jan 2018 and 31 Dec 2018

10,740,072

1,656

 

 

1(d)(v)    A statement showing all sales, transfers, cancellation and/or use of subsidiary holdings as at the end of the current financial period reported on.

 

FY2018

No. of shares

US$'000

 

 

 

Balance as at 1 Jan 2018 and 31 Dec 2018

-

-

 

 

2.             Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.

 

These figures have not been audited or reviewed.

 

 

3.             Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).

 

Not applicable.

 

 

 

 

4.             Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.

 

The accounting policies and methods of computation have been applied consistently for the current financial period ended 31 December 2018 as those used in the audited financial statements for the year ended 31 December 2017, except for the adoption of the new or revised International Financial Reporting Standards ("IFRS") applicable for the financial period beginning 1 January 2018.

 

 

5.             If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

 

The Group has adopted all of the new or revised IFRS that are effective for the financial period beginning 1 January 2018 and are relevant to its operations. The adoption of these IFRS does not have financial impact on the Group's financial position or results.

 

 

6.             Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

 

Earnings per ordinary share of the Group, after deducting any provision for preference dividends

Group

Group

Q4

FY2018

US$

Q4

FY2017

US$

FY2018

 US$

FY2017

US$

(a)  Based on weighted average number of ordinary shares on issue; and

0.33 cent

0.29 cent

0.57 cent

1.09 cents

(b)  On a fully diluted basis

0.33 cent*

0.29 cent*

0.57 cent*

1.08 cents

 

 

 

 

 

Weighted average number of ordinary shares used in computation of basic earnings per share

271,662,227

271,662,227

271,662,227

271,662,227

Weighted average number of ordinary shares used in computation of diluted earnings per share

271,662,227

224,888,356

271,662,227

271,915,839

 

* Diluted earnings per share for Q4 FY2018 and FY2018 are the same as the basic earnings per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the share conversion would be to increase the earnings per share.

 

 

7.             Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:

(a) current financial period reported on; and

(b) immediately preceding financial year.

 

 

Group

Company

31 Dec 2018

US$

31 Dec 2017

US$

31 Dec 2018

US$

31 Dec 2017

US$

Net asset value per ordinary share based on issued share capital

 

20.84 cents

20.42 cents

21.57 cents

21.82 cents

Total number of issued shares

271,662,227

271,662,227

271,662,227

271,662,227

 

8.             A review of the performance of the group, to the extent necessary for a reasonable   understanding of the group's business.  It must include a discussion of the following:

(a)   any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and

(b)   any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

 

Review of Financial Performance

 

Revenue

 

The Group's revenue for the year ended 31 December 2018 ("FY2018") increased by US$6.6 million to US$122.3 million from US$115.7 million in the prior year ("FY2017"). Revenue for the quarter ended ("Q4 FY2018") amounted to US$36.4 million against US$29.8 million in the prior year quarter ("Q4 FY2017"). The increases, in particular that for Q4 FY2018, have arisen from supply of new designs for key products to some of our major customers.  

 

Geographically, Group revenue for FY2018 increased in America and Europe by US$4.8 million (+5.9%) and US$3.3 million (+14.0%), respectively, offset by reductions in Asia and Rest of the World ("RoW") by US$1.4 million (-20.7%) and US$0.1 million (-3.2%), respectively. Revenue for Q4 FY2018 increased in America, Europe and RoW by US$5.3 million (+25.3%), US$0.2 million (+3.8%) and US$1.5 million (+175.3%), respectively but declined in Asia by US$0.4 million (-32.5%) compared to the earlier year.

 

Gross Profit

 

Gross profit margin decreased 0.3 percentage points from 20.9% to 20.6% with gross profit for FY2018 at US$25.2 million against US$24.2 million for FY2017.

 

For Q4 FY2018, gross profit margin decreased by 0.7 percentage points from 21.1% to 20.4% with gross profit at US$7.4 million against US$6.3 million for Q4 FY2017.

 

The shortage of key components continued to impact the Group where demand has outstripped supply. Our US operation experienced increased steel prices resulting from the US-China tariff imposition, and a broken tool resulted in high expediting, freight and duty costs which impacted the Group's margin by US$2.1 million during the quarter.

 

Other Income

 

Other income in Q4 FY2018 pertained to a bargain purchase price gain as a result of the acquisition of business from Skyware Technologies at the end of Q3 FY2018.

 

Administrative Expenses

 

Administrative expenses for FY2018 increased 9.4% to US$22.9 million compared to US$21.0 million in FY2017, representing 18.7% and 18.1% of revenue, respectively, with continued spending on new product introduction through research and development (Q4 FY2018 - US$0.7 million; Q4 FY2017 - US$0.5 million; FY2018 - US$2.8 million; FY2017 - US$1.6 million) being a major contributor. In Q4 FY2018, the UK tax authorities finalised an enquiry from 2010, which resulted in a P&L liability of US$254 thousand. The enquiry related to a subsidiary for a period prior to the Group acquisition so the cash to pay this liability was secured and held in escrow. Administrative expenses for Q4 FY2018 increased to US$6.5 million from US$5.4 million compared to the previous year.

 

Other operating expenses

 

Other operating expenses in Q4 FY2018 derived primarily from foreign exchange losses.

 

 

Profit Before Tax & Net Profit

 

The Group posted a profit before tax of US$2.1 million in FY2018, compared to US$3.7 million the year earlier, representing margins of 1.7% and 3.2%, respectively. For Q4 FY2018, the Group recorded US$1.2 million profit before tax compared to US$1.0 million in the prior year quarter, representing margins of 3.2% and 3.3%, respectively.

 

Overall, the Group posted a net profit of US$1.5 million in FY2018, compared to US$2.9 million in FY2017, representing net margins of 1.3% and 2.5%, respectively. The Group recorded a net profit of US$0.9 million in Q4 FY2018 compared to US$0.8 million the prior year quarter, representing net margins of 2.5% and 2.6%, respectively.

 

Review of Financial Position

 

Non-current assets increased by US$3.1 million to US$27.3 million as at 31 December 2018, due to the intangibles acquired in 2018 from Skyware Technologies and the convertible loans subscribed in Tactilis Sdn. Bhd.

 

Net current assets decreased by US$2.1 million to US$29.8 million as at 31 December 2018 compared to US$31.9 million as at 31 December 2017. Inventories and trade and other receivables increased by US$2.6 million and US$4.1 million, respectively, in preparation of the orders in 2019 and in line with the increased sales towards the end of the year. Trade and other payables increased US$6.1 million due to late quarter purchases as well as stringent payments to the trade suppliers. To ease the working capital, borrowings increased by US$3.9 million to US$12.0 million, offset by an increase in cash and cash equivalents of US$1.2 million to US$8.4 million as at 31 December 2018 compared to US$7.2 million as at 31 December 2017.

 

The Group's net asset value stood at US$56.6 million as at 31 December 2018, compared to US$55.5 million as at 31 December 2017.

 

Review of Cash Flows

 

In Q4 FY2018, net cash used in operating activities amounted to US$1.6 million, comprising US$1.1 million cash inflow from operating activities (before working capital changes), US$2.5 million net working capital outflow and US$0.2 million payment of interest and income tax.

 

In FY2018, net cash generated from operating activities amounted to US$3.8 million, comprising US$5.4 million cash inflow from operating activities (before working capital changes), US$1.1 million net working capital outflow and US$0.5 million payment of interest and income tax.

 

Net cash used in investing activities in Q4 FY2018 and FY2018 amounted to US$1.9 million and US$6.4 million, respectively, relating predominately to purchase of machinery, the acquisition of Skyware Technologies and investment in convertible notes in Tactilis Sdn. Bhd.

 

Net cash generated from financing activities amounted to US$2.0 million in Q4 FY2018 and US$3.9 million in FY2018, attributable to the net proceeds of borrowings.

 

Overall, the Group recorded a net decrease in cash and cash equivalents amounting to US$1.4 million in Q4 FY2018 and a net increase in cash and cash equivalents amounting to US$1.2 million in FY2018, bringing cash and cash equivalents per the consolidated statement of cash flows to US$8.4 million as at 31 December 2018.

 

 

9.             Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

 

No prospect statement was made.

 

 

 

10.          A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

 

Growth of the global satellite communications equipment market is expected to continue over the coming years, underpinned by worldwide expansion in the IT and telecommunication sectors. Satellite communications continues to be an integral part of modern technology, amid the emerging trends of 5G convergence, Ultra High Definition/4K transmission, autonomous self-navigating vehicles and interconnected electronic devices.

 

The satellite broadcasting sector is still undergoing its technological shift towards DCSS products. However, the pace of this transition has been slower than expected. This shift is taking place amidst a greater emphasis on price competitiveness and improved product performance. In the past few years, the Group has been developing and rolling out a series of reduced form factor products to address these issues which exceed customer expectations. This new range of products provide the prospect of better margins arising from ongoing operational improvements, and the reduced form factor which should lead to a lower cost of raw materials.

 

During Q4 FY2018, the Group recorded higher volume of shipments for the recently launched Western Arc Slimline Low Noise Block ("LNB") to a major U.S. customer. The Group will continue to be the sole supplier for this product to this customer until the end of Q1 FY2019. Reflecting confidence in the Group's product quality and capabilities, shipments of the Eastern Arc model have also commenced to the same customer from Q1 FY2019.

 

Data over satellite continues to be important for the Group which made shipments of its new 90 cm satellite antenna throughout FY2018, as sole supplier, to another U.S. customer. Shipments on a non-exclusive basis are expected to continue throughout FY2019 and beyond. 

 

In addition, one of the Group's existing customers, a major global VSAT integrator, which has been purchasing antennas from the Group, has now added new orders for data over satellite transceiver electronics resulting from the Skyware Technologies purchase in Q3 FY2018. The Group anticipates that overall VSAT shipments in FY2019 will exceed that of FY2018.

 

Our U.S. operations faced supply chain issues in Q4 FY2018 which impacted profitability. Had it not been for these issues, gross profit for Q4 FY2018 would have been higher for Global Skyware, which nonetheless closed off FY2018 with a second year of profitability, following a turnaround that resulted from changes to operations since FY2016.

 

The Group had announced in 4Q FY2018 a proposal to acquire Tactilis Sdn. Bhd., a manufacturer and distributor of biometric system-on-card solutions which, if completed, will constitute a reverse takeover. Subsequent to the end of the review period the Group appointed a Financial Adviser. The Group will provide further updates on this transaction in due course.

 

 

 

 

11.          Dividend

 

(a)   Current Financial Period Reported On 

 

Any dividend declared for the current financial period reported on? 

 

None.

 

(b)   Corresponding Period of the Immediately Preceding Financial Year

 

Any dividend declared for the corresponding period of the immediately preceding financial year?

 

None.

 

(c)   Date payable

 

Not applicable.

 

(d)   Books closure date

 

Not applicable.

 

 

12.          If no dividend has been declared/recommended, a statement to that effect.

 

Due to the operating conditions faced by the Group, no dividend has been declared or recommended for the year ended 31 December 2018.

 

 

 

PART II -      ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT

                     (This part is not applicable to Q1, Q2, Q3 or Half Year Results)

 

 

13.          Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year.

               

13(a)      Reportable Operating Segments

 

The business of the Group is organised into the following product segments:

 

·      Satellite Communications ("Sat Comms")

·      Contract Manufacturing ("CM")

 

For management purposes, the Group is organised into business segments based on their products as the Group's risks and rates of return are affected predominantly by differences in the products produced.  Each product segment represents a strategic business unit and management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

 

Segment results represent the profit earned by each segment without allocation of finance income/costs and taxation. Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprised mainly corporate assets and liabilities, borrowings and income taxes. Segment revenue includes transfers between operating segments. Such transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods. The transfers are eliminated on consolidation. No operating segments have been aggregated to form the following reportable operating segments. 

 

FY2018

Sat Comms

CM

Group

 

US$'000

US$'000

US$'000

 

 

 

 

Revenue

       114,110

         8,182

      122,292

 

 

 

 

Operating profit/(loss)

           2,682

          (174)

           2,508

Finance income

 

 

                96

Finance costs

 

 

           (523)

Income tax expense

 

 

           (545)

Profit for the year

 

 

           1,536

 

 

 

 

Gain on bargain purchase

               482

                  -

              482

Amortisation of intangible assets

               673

                  -

              673

Depreciation of property, plant and equipment

           2,729

             161

           2,890

Addition to property, plant and equipment

           1,468

               65

           1,533

Impairment of intangible assets

                 93

                  -

                93

Write-back for inventory obsolescence, net

            (412)

                  -

           (412)

 

 

 

 

Assets and liabilities

 

 

 

Segment assets

         85,054

         6,507

        91,561

Unallocated assets

 

 

 

- Non-current assets

 

 

           1,597

- Other receivables

                     

 

              230

- Deferred tax assets

 

 

              109

- Cash and cash equivalents

 

 

              580

- Tax receivables

 

 

                15

Total assets

 

 

        94,092

 

 

 

 

 

 

FY2018

Sat Comms

CM

Group

 

US$'000

US$'000

US$'000

 

 

 

 

Segment liabilities

         21,229

         3,300

        24,529

Unallocated liabilities

 

 

 

- Other payables

 

 

              282

- Provision for income tax

 

 

              295

- Deferred tax liabilities

 

 

              406

- Borrowings

 

 

        11,974

Total liabilities

 

 

        37,486

 

 

FY2017

 

 

 

 

 

 

 

Revenue

       109,314

         6,392

      115,706

 

 

 

 

Operating profit

           3,494

             653

           4,147

Finance income

 

 

                30

Finance costs

 

 

           (483)

Income tax expense

 

 

           (745)

Profit for the year

 

 

           2,949

 

 

 

 

Amortisation of intangible assets

               628

                  -

              628

Depreciation of property, plant and equipment

           2,479

               84

           2,563

Addition to property, plant and equipment

           1,816

             107

           1,923

Impairment of property, plant and equipment

                    -

               86

                86

Write-back for inventory obsolescence, net

            (351)

                  -

           (351)

Allowance for impairment of trade receivables, net

                 46

                  -

                46

 

 

 

 

Assets and liabilities

 

 

 

Segment assets

         73,930

         7,857

        81,787

Unallocated assets

 

 

 

- Non-current assets

 

 

                   9

- Other receivables

                     

 

              254

- Deferred tax assets

 

 

              198

- Cash and cash equivalents

 

 

              733

- Tax receivables

 

 

                11

Total assets

 

 

        82,992

 

 

 

 

Segment liabilities

         16,641

         1,711

        18,352

Unallocated liabilities

 

 

 

- Other payables

 

 

              493

- Provision for income tax

 

 

              163

- Deferred tax liabilities

 

 

              489

- Borrowings

 

 

           8,025

Total liabilities

 

 

        27,522

 

 

 

13(b)      Geographical Information

 

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

 

 

 

FY2018

America

US$'000

Europe

US$'000

Asia

US$'000

Rest of the World

US$'000

Group

US$'000

Revenue

       85,831

       27,006

         5,210

         4,245

     122,292

Non-current assets

         4,689

       16,562

         5,818

             111

       27,180

 

 

 

FY2017

America

US$'000

Europe

US$'000

Asia

US$'000

Rest of the World

US$'000

Group

US$'000

Revenue

       81,066

       23,687

         6,569

         4,384

     115,706

Non-current assets

         5,256

       15,941

         2,661

             114

       23,972

 

 

14.          In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments.

 

Please refer to Note 8.

 

 

15.          A breakdown of sales.

                         

 

 

FY2018

US$'000

FY2017

US$'000

% increase/

(decrease)

(a)

Sales reported for first half year

        55,396

        57,424

           (3.5)

(b)

Operating profit after income tax before deducting minority interests reported for first half year

             532

          1,478

        (64.0)

(c)

Sales reported for second half year

        66,896

        58,282

           14.8

(d)

Operating profit after income tax before deducting minority interests reported for second half year

          1,004

          1,471

        (31.7)

 

 

16.          A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year.

 

 

FY2018

US$'000

FY2017

US$'000

Ordinary

-

-

Preference

-

-

Total Annual Dividend

-

-

 

 

 

 

 

17.          If the Group has obtained a general mandate from shareholders for Interested Person Transactions ("IPTs"), the aggregate value of such transactions as required under Rule 920(1)(a)(ii).  If no IPTs mandate has been obtained, a statement to that effect.

 

The Company does not have a shareholders' mandate for IPTs and there were no IPTs for the year ended 31 December 2018.

 

 

18.          Confirmation that the Company has procured undertaking from all its directors and executive officers pursuant to Rule 720(1).

 

The Company confirms that it has procured undertakings from all its directors and executive officers under Rule 720(1) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

 

 

19.          Disclosure of person occupying a managerial position in the issuer or any of its principal subsidiaries who is a relative of a director or chief executive officer or substantial shareholder of the issuer pursuant to Rule 704(13) in the format below.  If there are no such persons, the issuer must make an appropriate negative statement.

 

Neither Global Invacom Group Limited nor any of its principal subsidiaries have any person occupying a managerial position who is related to a director, chief executive officer or substantial shareholder.

 

 

BY ORDER OF THE BOARD                                                                            

Anthony Brian Taylor

Executive Chairman

 

 

1 March 2019

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
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