Full Year Results

RNS Number : 0836Q

Global Invacom Group Limited

25 February 2016

 

GLOBAL INVACOM GROUP LIMITED

(Incorporated in Singapore)

(Company Registration Number 200202428H)

8 Temasek Boulevard, #20-03 Suntec Tower Three, Singapore 038988

Tel: [phone]  Fax: [phone]  Website: www.globalinvacom.com

Singapore- and London-listed Global Invacom Group Announces FY2015 Results

-       Revenue US$129.1M (FY2014: US$134.1M), including four months' contribution from Skyware Global; impacted by main customers destocking in 1H FY2015

-       Gross profit US$24.9M (FY2014: US$31.8M)

-       Loss before tax US$1.3M (FY2014 Profit before tax: US$5.5M)

-       Successfully completed R&D for next-generation of products to position the Group for improved sales

London 25 February 2016 - Global Invacom Group Limited ("Global Invacom" or "the Group"), a satellite communications ("Sat Comms") equipment provider listed on the Singapore Exchange and the U.K. AIM Market, announced today its financial results for the 12 months ended 31 December 2015 ("FY2015").

The Group has experienced a challenging year predominantly due to destocking of three main customers in the first half of the year ("1H FY2015") and one-off expenses related to the purchase and restructuring of Satellite Acquisition Corporation (trading as "Skyware Global"), completed on 24 August 2015. Despite this, the Group is pleased to report that its main customers have resumed orders in the second half of the year ("2H FY2015") and that it has successfully completed a research and development ("R&D") programme for next-generation Low Noise Block ("LNB") technology, putting the Group in a stronger market position in 2016 ("FY2016").

Revenue for FY2015 declined 3.7% to US$129.1 million from US$134.1 million the previous year. This was mainly due to delayed sales in 1H FY2015 to main customers in America, Europe and Asia who either destocked or altered their procurement procedures, with one undertaking a significant technology change which usually occurs about once every eight to ten years. While all orders restarted in 2H FY2015, effects from the technology change will persist into 1H FY2016.

The Group recognised four months' revenue of US$17.5 million, from Skyware Global. Headquartered in North Carolina, Skyware Global is a leading U.S. designer and manufacturer of antennas for Broadband, Satellite and Very Small Aperture Terminals (VSAT) covering C-band, Ku-band and Ka-band frequency platforms.

With the inclusion of Skyware Global, revenue for FY2015 from America and the Rest of the World increased by US$2.9 million (+3.9%) and US$2.3 million (+74.7%), respectively; this was offset by a fall in revenue from Europe and Asia by US$1.9 million (-5.4%) and US$8.3 million (-37.6%), respectively.

With the overall decline in revenue, gross profit for FY2015 decreased 21.7% to US$24.9 million from US$31.8 million in FY2014. Gross profit margin fell to 19.3% from 23.7% due to the reclassification of certain products in relation to import duty taxes in the U.S., the weakening of the Malaysian Ringgit against the U.S. dollar, and a lack of suitable semiconductor devices which delayed production and led to higher logistics costs. Skyware Global also accounted for the drop in the Group's gross profit margin.

Administrative expenses increased 13.6% to US$29.0 million in FY2015 from US$25.5 million in FY2014 mainly due to the recognition of four months' of manpower costs and expenses as well as one-off professional fees of US$2.3 million for the acquisition of Skyware Global. The administrative expenses included the cost of US$1.2 million for an ongoing legal dispute with a supplier of a U.K. subsidiary that the Group is strongly defending, restructuring costs for a U.K. site, and manufacturing improvements at the Group's Shanghai facility.

In line with its performance guidance announced on 10 February 2016, the Group recorded a FY2015 net loss of US$1.1 million compared to a net profit of US$5.1 million in FY2014. Loss per share on a fully diluted basis was 0.43 US cent in FY2015 while net asset value per share was 20.05 US cents as at 31 December 2015.

The Group has completed R&D work on next-generation LNB technology and is currently awaiting qualification. Access to this new technology is expected to improve sales and provide the Group with further product expertise and access to a wider customer base.

Skyware Global is expected to account for a bigger portion of the Group's revenue from 2016. Following the acquisition, Global Invacom's customer base now includes a major U.S. broadcaster that intends to launch two new satellites in 2016. The Group is focused on increasing sales and marketing activities in South America, Malaysia, Indonesia, Africa, with a focus on South Africa, and Europe in FY2016. In the meantime, the Group will continue to streamline its operations, including consolidating logistics and warehousing services at the North Carolina site.

As the Group operates in various countries, any sharp movements in foreign exchange rates can affect its financial performance. With this in mind, it intends to take advantage of lower production costs in areas in South East Asia by expanding the scope of its manufacturing operations to these regions.

Mr Tony Taylor, Executive Chairman of Global Invacom, said, "Amidst economic uncertainties, we remain optimistic about the Sat Comms industry given rising demand for digital TV services and communications infrastructure. With advancements in technology, broadcasters are rolling out new features and services, all of which bode well for us. We will continue to pursue our aim of global leadership in the R&D and production of Sat Comms equipment and are committed to developing our expertise to provide better services to new and existing clients across the world."

For media queries, please contact

Matthew Garner

Chief Financial Officer

Global Invacom Group Limited 

8 Temasek Boulevard     #20-03 Suntec Tower Three Singapore 038988 [phone]

Freeman House John Roberts Business Park Canterbury CT5 3BJ United Kingdom [phone]

On behalf of Global Invacom Group Limited:

finnCap Ltd (Nominated Adviser and Joint Broker)

Christopher Raggett / Simon Hicks (Corporate Finance)

Rhys Williams (Corporate Broking and Sales)

[phone]

Mirabaud Securities LLP (Joint Broker)

Peter Krens (Equity Capital Markets)

[phone]

Bell Pottinger LLP (UK Financial PR)

David Rydell / David Bass / Lucy Stewart

[phone]

WeR1 Consultants Pte Ltd (Singapore Financial PR)

Ian Lau, [e-mail] 

Lai Kwok Kin, [e-mail]

[phone]

About Global Invacom Group Limited 

Global Invacom Group Limited ("Global Invacom") is listed on the Singapore Exchange Securities Trading Limited Mainboard ("SGX-ST") and its shares are admitted to trading on the AIM Market of the London Stock Exchange in the U.K.

Global Invacom is a fully integrated satellite equipment provider with seven manufacturing plants across China, Israel, Malaysia, U.K. and the U.S. Its customers include satellite broadcasters such as BSkyB of the U.K. and Dish Network of the U.S.A.

On 24 August 2015, Global Invacom completed the acquisition of Skyware Global, a leading U.S.-based designer and supplier of satellite antennas products and services for C-band, Ku-band and Ka-band frequency platforms, positioning itself as the world's only full-service outdoor unit supplier.

Global Invacom provides a full range of dish antennas, LNB receivers, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications as well as manufacturing services in TV peripherals, computer peripherals, medical, and consumer electronics industries.

For more information please refer to www.globalinvacom.com

FULL YEAR FINANCIAL STATEMENT ANNOUNCEMENT FOR THE YEAR ENDED 31 DECEMBER 2015

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 the 12 months ended 31 December 2015. These figures have not been audited.

	Group
	FY2015		FY2014	Increase/ (Decrease)
	US$'000	US$'000		%
Revenue	129,107		134,135	(3.7)
Cost of sales	(104,210)		(102,344)	1.8
Gross profit	24,897		31,791	(21.7)
Other income	5,175		195	N.M.
Distribution costs	(592)		(221)	167.9
Administrative expenses	(28,996)		(25,533)	13.6
Other operating expenses	(1,538)		(767)	100.5
Finance income	17		63	(73.0)
Finance costs	(256)		(15)	N.M.
(Loss)/Profit before income tax(i)	(1,293)		5,513	N.M.
Income tax credit/(expense)	165		(411)	N.M.
(Loss)/Profit after income tax attributable to equity holders of the Company	(1,128)		5,102	N.M.

Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translation of foreign subsidiaries	(921)	(1,023)	(10.0)
-    Cumulative exchange differences in respect of the net assets of the subsidiary reclassified from equity on loss of control of subsidiary	-	208	N.M.
	(921)	(815)	13.0
Items that may not be reclassified subsequently to profit or loss	-	-
Other comprehensive loss for the year, net of tax	(921)	(815)	13.0
Total comprehensive (loss)/income for the year attributable to equity holders of the Company	(2,049)	4,287	N.M.

N.M.:  Not Meaningful

Note:

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

	Group
	FY2015	FY2014	Increase/ (Decrease)
	US$'000	US$'000	%
Write-back of contingent consideration payable	5,000	-	N.M.
Gain on disposal of intangible assets	-	14	N.M.
Gain/(Loss) on foreign exchange	154	(559)	N.M.
Interest income	17	63	(73.0)
Interest expense on borrowings	(256)	(15)	N.M.
(Loss)/Gain on disposal of property, plant and equipment	(58)	18	N.M.
Loss on de-registration of subsidiary	-	(208)	N.M.
Provision for litigation	-	(389)	N.M.
Impairment of trade receivables	(359)	(8)	N.M.
Impairment of intangible assets	(1,121)	-	N.M.
Depreciation of property, plant and equipment	(1,919)	(1,728)	11.1
Amortisation of intangible assets	(431)	(381)	13.1
Allowance for inventory obsolescence	(449)	(120)	274.2
Operating lease expense	(1,973)	(1,703)	15.9
Research and development expense	(1,082)	(477)	126.8

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 2015	31 Dec 2014		31 Dec 2015	31 Dec 2014
		US$'000	US$'000		US$'000	US$'000
ASSETS
Non-current Assets
Property, plant and equipment		13,896	11,082		1	7
Investments in subsidiaries		-	-		53,155	47,446
Goodwill		9,352	4,153		-	-
Intangible assets		3,069	4,456		-	-
Available-for-sale financial assets		8	8		-	-
Deferred tax asset		723	743		-	-
Other receivables and prepayments		56	-		8,262	8,283
		27,104	20,442		61,418	55,736
Current Assets
Due from subsidiaries		-	-		139	1,099
Inventories		27,859	27,010		-	-
Trade receivables		21,306	15,406		-	-
Other receivables and prepayments		3,973	2,669		5,705	5,541
Tax receivables		431	-		-	-
Cash and cash equivalents		8,866	21,202		1,637	7,331
		62,435	66,287		7,481	13,971
Total assets		89,539	86,729		68,899	69,707
EQUITY AND LIABILITIES
Share Capital and Reserves
Share capital		60,423	60,423		74,240	74,240
Treasury shares		(1,656)	(3,421)		(1,656)	(3,421)
Reserves		(4,305)	3,081		(11,202)	(9,201)
Total equity		54,462	60,083		61,382	61,618
Non-current Liabilities
Other payables		1,333	433		-	-
Deferred tax liabilities		171	538		-	-
		1,504	971		-	-
Current Liabilities
Due to subsidiaries		-	-		4,653	2,556
Trade payables		19,392	14,499		-	-
Other payables		8,524	10,571		2,779	5,459
Borrowings		5,348	-		-	-
Provision for income tax		309	605		85	74
		33,573	25,675		7,517	8,089
Total liabilities		35,077	26,646		7,517	8,089
Total equity and liabilities		89,539	86,729		68,899	69,707

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 2015		As at 31 Dec 2014
Secured	Unsecured	Secured	Unsecured
US$'000	US$'000	US$'000	US$'000
5,348	-	-	-

Amount repayable after one year

As at 31 Dec 2015		As at 31 Dec 2014
Secured	Unsecured	Secured	Unsecured
US$'000	US$'000	US$'000	US$'000
-	-	-	-

Details of any collateral

The loans of US$5,348,000 were secured over the subsidiaries' bank deposit of US$400,000, cash collateral of US$1,000,000 and corporate guarantees provided by the Company.

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
	FY2015	FY2014
	US$'000	US$'000
Cash Flows from Operating Activities
(Loss)/Profit before income tax	(1,293)	5,513
Adjustments for:
Depreciation of property, plant and equipment	1,919	1,728
Amortisation of intangible assets	431	381
Loss on de-registration of subsidiary	-	208
Loss/(Gain) on disposal of property, plant and equipment	58	(18)
Gain on disposal of intangible assets	-	(14)
Allowance for inventory obsolescence	449	120
Provision for litigation	-	389
Impairment of trade receivables	359	8
Unrealised exchange loss	221	499
Interest income	(17)	(63)
Interest expense	256	15
Share-based payments	222	88
Share awards	-	5
Impairment of intangible assets	1,121	-
Write-back of contingent consideration payable	(5,000)	-
Operating cash flow before working capital changes	(1,274)	8,859
Changes in working capital:
Inventories	5,584	(158)
Trade receivables	409	4,048
Other receivables and prepayments	(757)	(467)
Trade and other payables	(3,234)	(2,787)
Cash generated from operating activities	728	9,495
Interest paid	(256)	(15)
Income tax paid	(986)	(1,667)
Net cash (used in)/generated from operating activities	(514)	7,813
Cash Flows from Investing Activities
Interest received	17	63
Purchase of property, plant and equipment	(737)	(1,982)
Proceeds from disposal of property, plant and equipment	6	18
Proceeds from disposal of intangible assets	-	38
Increased in capitalised development cost	(280)	(1,778)
Acquisition of subsidiary, net of cash acquired	501	(2,156)
Cash consideration paid for reverse acquisition	(5,500)	(5,500)
(Increase)/Decrease in restricted cash	(771)	263
Net cash used in investing activities	(6,764)	(11,034)
Cash Flows from Financing Activities
Proceeds from borrowings	21,252	1,972
Repayment of borrowings	(21,321)	(2,100)
Loans from shareholders	2,850	-
Issuance of shares	-	15,060
Expenses on issuance of shares	-	(753)
Purchase of treasury shares	(8,829)	(2,471)
Sale of treasury shares	2,361	-
Dividends paid	(1,078)	(925)
Net cash (used in)/generated from financing activities	(4,765)	10,783

Net (decrease)/increase in cash and cash equivalents	(12,043)	7,562
Cash and cash equivalents at the beginning of the year	20,555	13,752
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies	(1,064)	(759)
Cash and cash equivalents at the end of the year(i)	7,448	20,555

Note:

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

	FY2015	FY2014
	US$'000	US$'000
Cash and bank balances	8,397	19,909
Fixed deposits	469	1,293
	8,866	21,202
Less: Restricted cash*	(1,418)	(647)
Cash and cash equivalents per the consolidated statement of cash flows	7,448	20,555

* Restricted cash includes cash collateral amounted to US$1,000,000 (FY2014: Nil), fixed deposits amounted to US$400,000 (FY2014: US$400,000) and bank balance amounted to US$6,000 (FY2014: US$238,000) pledged with the banks for banker's guarantee and loans granted to the Group. As at 31 December 2015, the Group had utilised US$5,348,000 of the facilities and loans granted.

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 2015	60,423	(3,421)	(10,150)	6	131	642	(360)	12,812	60,083
Purchase of treasury shares	-	(8,829)	-	-	-	-	-	-	(8,829)
Issuance of treasury shares	-	7,817	-	-	-	(4,065)	-	-	3,752
Sale of treasury shares	-	2,777	-	-	-	(416)	-	-	2,361
Share-based payments	-	-	-	-	222	-	-	-	222
Payment of dividends	-	-	-	-	-	-	-	(1,078)	(1,078)
Transfer to capital reserve in accordance with statutory requirements	-	-	-	-	-	53	-	(53)	-
Loss for the year	-	-	-	-	-	-	-	(1,128)	(1,128)
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	-	-	(921)	-	(921)
Total other comprehensive loss for the year	-	-	-	-	-	-	(921)	(1,128)	(2,049)
Balance as at    31 Dec 2015	60,423	(1,656)	(10,150)	6	353	(3,786)	(1,281)	10,553	54,462
Balance as at    1 Jan 2014	46,116	(955)	(10,150)	6	43	555	455	8,722	44,792
Share awards	-	5	-	-	-	-	-	-	5
Issuance of shares	15,060	-	-	-	-	-	-	-	15,060
Expenses on issuance of shares	(753)	-	-	-	-	-	-	-	(753)
Purchase of treasury shares	-	(2,471)	-	-	-	-	-	-	(2,471)
Share-based payments	-	-	-	-	88	-	-	-	88
Payment of dividends	-	-	-	-	-	-	-	(925)	(925)
Transfer to capital reserve in accordance with statutory requirements	-	-	-	-	-	87	-	(87)	-
Profit for the year	-	-	-	-	-	-	-	5,102	5,102
Other comprehensive (loss)/income:
Exchange differences on translating foreign operations	-	-	-	-	-	-	(1,023)	-	(1,023)
Cumulative exchange differences in respect of the net assets of the subsidiary reclassified from equity on loss of control of subsidiary	-	-	-	-	-	-	208	-	208
Total other comprehensive (loss)/ income for the year	-	-	-	-	-	-	(815)	5,102	4,287
Balance as at    31 Dec 2014	60,423	(3,421)	(10,150)	6	131	642	(360)	12,812	60,083

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 2015	74,240	(3,421)	131	-	1,714	(11,046)	61,618
Purchase of treasury shares	-	(8,829)	-	-	-	-	(8,829)
Issuance of treasury shares	-	7,817	-	(4,065)	-	-	3,752
Sale of treasury shares	-	2,777	-	(416)	-	-	2,361
Share-based payments	-	-	222	-	-	-	222
Payment of dividends	-	-	-	-	-	(1,078)	(1,078)
Profit for the year	-	-	-	-	-	7,117	7,117
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	(3,781)	-	(3,781)
Total other comprehensive (loss)/income for the year	-	-	-	-	(3,781)	7,117	3,336
Balance as at 31 Dec 2015	74,240	(1,656)	353	(4,481)	(2,067)	(5,007)	61,382
Balance as at 1 Jan 2014	59,933	(955)	43	-	4,620	(11,441)	52,200
Share awards	-	5	-	-	-	-	5
Issuance of shares	15,060	-	-	-	-	-	15,060
Expenses on issuance of shares	(753)	-	-	-	-	-	(753)
Purchase of treasury shares	-	(2,471)	-	-	-	-	(2,471)
Share-based payments	-	-	88	-	-	-	88
Payment of dividends	-	-	-	-	-	(925)	(925)
Profit for the year	-	-	-	-	-	1,320	1,320
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	(2,906)	-	(2,906)
Total other comprehensive (loss)/ income for the year	-	-	-	-	(2,906)	1,320	(1,586)
Balance as at 31 Dec 2014	74,240	(3,421)	131	-	1,714	(11,046)	61,618

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.

FY2015	No. of shares	US$'000
Balance as at 1 Jan 2015	269,059,299	70,819
Purchase of treasury shares	(37,354,900)	(8,829)
Treasury share issued pursuant to the acquisition of the entire equity interest in Satellite Acquisition Corporation*	27,957,828	7,817
Sale of treasury shares	12,000,000	2,777
Balance as at 31 Dec 2015	271,662,227	72,584

FY2014	No. of shares	US$'000
Balance as at 1 Jan 2014	231,802,299	58,978
Issuance of share awards	30,000	5
Issuance of shares	44,600,000	15,060
Expenses on issuance of shares	-	(753)
Purchase of treasury shares	(7,373,000)	(2,471)
Balance as at 31 Dec 2014	269,059,299	70,819

There were 10,740,072 and 13,343,000 treasury shares held by the Company as at 31 December 2015 and 31 December 2014 respectively.

* 24,334,179 treasury shares were transferred to the vendor on 19 February 2016 and the remaining 3,623,649 treasury shares will be transferred once the vendor lodges the share transfer form with The Central Depository (Pte) Limited ("CDP").

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 2015	31 Dec 2014
Total number of issued shares excluding treasury shares	271,662,227	269,059,299

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.

FY2015	No. of shares	US$'000
Balance as at 1 Jan 2015	13,343,000	3,421
Purchase of treasury shares	37,354,900	8,829
Treasury share issued pursuant to the acquisition of the entire equity interest in Satellite Acquisition Corporation*	(27,957,828)	(7,817)
Sale of treasury shares	(12,000,000)	(2,777)
Balance as at 31 Dec 2015	10,740,072	1,656

* 24,334,179 treasury shares were transferred to the vendor on 19 February 2016 and the remaining 3,623,649 treasury shares will be transferred once the vendor lodges the share transfer form with CDP.

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 year ended 31 December 2015 as those used in the audited financial statements for the year ended 31 December 2014, except for the adoption of the new or revised International Financial Reporting Standards ("IFRS") applicable for the financial period beginning 1 January 2015.

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 2015 and are relevant to its operations.

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
	FY2015 US$	FY2014 US$
(a)  Based on weighted average number of ordinary shares on issue; and	(0.43) cent	2.02 cents
(b)  On a fully diluted basis	(0.43) cent	2.00 cents
Weighted average number of ordinary shares used in computation of basic earnings per share	262,586,638	252,120,852
Weighted average number of ordinary shares used in computation of diluted earnings per share	263,148,798	254,747,318

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 2015 US$	31 Dec 2014 US$	31 Dec 2015 US$	31 Dec 2014 US$
Net asset value ("NAV") per ordinary share based on issued share capital	20.05 cents	22.33 cents	22.59 cents	22.90 cents
Total number of issued shares	271,662,227	269,059,299	271,662,227	269,059,299

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 decreased by US$5.0 million, or 3.7%, to US$129.1 million in FY2015 from US$134.1 million in FY2014. This was primarily due to delayed sales in 1H FY2015 to main customers in America, Europe and Asia who either destocked or altered their procurement procedures, with one undertaking a significant technology change which usually occurs about once every eight to ten years. This required the customer to reassess its inventory levels. While all orders restarted in the second half of the year ("2H FY2015"), effects from the technology change will persist into 1H FY2016. The Group also recognised approximately four months' contribution of US$17.5 million revenue in 2H FY2015 from its latest acquisition, Satellite Acquisition Corporation ("Skyware Global"), headquartered in North Carolina, United States ("U.S.").

By geography, with the inclusion of Skyware Global, revenue for FY2015 from America and the Rest of the World increased by US$2.9 million (+3.9%) and US$2.3 million (+74.7%), respectively; this was offset by a fall in revenue from Europe and Asia by US$1.9 million (-5.4%) and US$8.3 million (-37.6%), respectively.

Gross Profit

Gross profit decreased by US$6.9 million or 21.7% to US$24.9 million in FY2015 from US$31.8 million in FY2014. Gross profit margin fell to 19.3% in FY2015 from 23.7% in FY2014. This decrease was largely due to the reclassification of certain products in relation to import duty taxes for certain products shipped into the U.S. that the Group is contesting; the weakening of the Malaysian Ringgit against the U.S. dollar affecting the Group's Malaysian operations; and a lack of suitable semiconductor devices, which delayed production and led to higher logistics costs. The margin percentage was also affected by the inclusion of Skyware Global. With the exclusion of Skyware Global, gross profit margin dropped 2.9% to 20.8% in FY2015 from 23.7% in FY2014.

Other Income

Pursuant to the terms of the sale and purchase agreement entered into with the vendor of Skyware Global, an amount equal to approximately 0.5554 times of any revenue in excess of US$52,284,000 earned by Skyware Global during the period commencing on 1 June 2015 and ending on 31 May 2016 is payable to the vendor, subject to a maximum cash earn-out of US$5,000,000. As at 31 December 2015, the Company has assessed the fair value of the contingent consideration against the original assessment made at the time of the acquisition. The potential contract behind the contingent payment has not materialised and negotiations have stalled since acquisition; we expect revenues to 31 May 2016 to fall short of the lower trigger point. In accordance with IAS 39, the change in fair value has thus been recognised in the profit and loss as Other Income.

Administrative Expenses

Administrative expenses increased by US$3.5 million or 13.6% to US$29.0 million in FY2015 from US$25.5 million in FY2014, representing 22.5% and 19.0% of revenue, respectively. These expenses included a cost of US$1.2 million for an ongoing legal dispute with a supplier of its United Kingdom ("U.K.") subsidiary which the Group is strongly defending. The Group restructured one of its U.K. facilities following the completion of several large-scale R&D projects, and the Shanghai facility put in place improvements in order to streamline internal efficiencies, which the Group translated into operational cost improvements in 2H FY2015. In addition, the Group also incurred professional fees of US$2.3 million in relation to the acquisition of Skyware Global and recognised approximately four months' of Skyware Global's manpower and expenses in 2H FY2015.

Other Operating Expenses

The increase in other operating expenses were mainly attributable to the impairment of intangible assets in one of its U.K. subsidiaries, impairment of trade receivables and the loss on disposal of property, plant and equipment.

Profit before Tax

The Group recorded a loss before tax of US$1.3 million in FY2015 from a profit before tax of US$5.5 million in FY2014, with a negative margin of 1.0% compared to a margin of 4.1%, respectively.

Taxation

Income tax reduced mainly due to the reduction of taxable profits from all the subsidiaries, overprovision of tax charges in the U.K. and utilisation of unrecognised tax assets in the U.K.

Net Profit

Overall, the Group posted a net loss of US$1.1 million in FY2015, down from a net profit of US$5.1 million in FY2014, with a net loss margin of 0.9% compared to a net profit margin of 3.8%, respectively.

Review of Financial Position

Non-current assets increased due to the recognition of US$5.2 million goodwill and the addition of property, plant and equipment in relation to the acquisition of Skyware Global, offset by the impairment of capitalised development costs in one of its subsidiaries in the U.K.

Net current assets decreased by US$11.7 million to US$28.9 million as at 31 December 2015 from US$40.6 million as at 31 December 2014. Inventories increased by US$0.8 million to US$27.9 million while trade and other receivables increased by US$7.2 million to US$25.3 million. This was offset by the increase in trade and other payables by US$2.8 million to US$27.9 million. Borrowings increased to US$5.3 million. Cash and cash equivalents declined by US$12.3 million to US$8.9 million following the acquisition of Skyware Global, as well as the sale and subsequent purchase of 12.0 million and 37.4 million treasury shares, respectively. Provision for tax decreased by US$0.3 million to US$0.3 million and tax receivables was US$0.4 million as at 31 December 2015.

Non-current liabilities increased by US$0.5 million due to a US$0.9 million deposit from a customer in Skyware Global, offset by a reduction of deferred tax liabilities of US$0.4 million in the U.K.

The Group's net asset value stood at US$54.5 million as at 31 December 2015 compared to US$60.1 million as at 31 December 2014.

Review of Cash Flows

Net cash used in operating activities was US$0.5 million, comprising cash outflow from operating cash activities before working capital changes of US$1.3 million, net working capital inflow of US$2.0 million and payment of interest and income tax expense of US$1.2 million.

Net cash used in investing activities was US$6.8 million, comprising the purchase of machinery and equipment of US$0.7 million; increase in capitalised development cost of US$0.3 million; cash consideration paid for the reverse acquisition of US$5.5 million; and increase in restricted cash of US$0.8 million, offset by the cash received from the acquisition of Skyware Global.

Net cash used in financing activities was US$4.8 million, arising from the payment of dividends of US$1.1 million, sale and purchase of 12.0 million and 37.4 million treasury shares of US$6.5 million, offset by the borrowings from shareholders of US$2.9 million.

Overall, the Group recorded a net decrease in cash and cash equivalents of US$12.0 million in FY2015, bringing cash and cash equivalents per the consolidated statement of cash flows to US$7.4 million as at 31 December 2015.

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

In line with the earlier performance guidance made by the Company on 10 February 2016 that the Group expects to report a net loss between US$1.0 million and US$2.0 million for FY2015, the Group's FY2015 results have shown a net loss of US$1.1 million.

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.

Despite economic uncertainties, the global Satellite Communications ("Sat Comms") market, which grew 4% in 2014*, is expected to continue growing on rising demand for digital TV services and communications infrastructure together with the release of technical advancements allowing Broadcasters to provide new and additional features.

The Group has completed its research and development work on the next-generation Low Noise Block ("LNB") technology and is currently awaiting qualification from one of its main customers. The Group also intends to supply similar technology LNBs to other customers.

While it expects to benefit from these developments, the Group sees some headwinds in 2016 as customers continue to undergo significant technology changes which usually occur about once every eight to ten years. The customers are expected to continue to manage their inventory carefully and change their procurement patterns during the replacement cycle that will take place in this period.

The Group remains upbeat about the Sat Comms market and continues to pursue its aim of global leadership in the research and production of Sat Comms equipment.

On 24 August 2015, the Group completed the acquisition of Skyware Global in North Carolina, U.S., a leading designer and manufacturer of antennas for Broadband, Satellite and Very Small Aperture Terminals ("VSAT") covering C-band, Ku-band and Ka-band frequency platforms. The acquisition has enlarged the Group's customer base, which now includes a major U.S. broadcaster that intends to launch two new satellites in 2016. This is expected to underpin demand for VSAT terminals from the Group. Skyware Global is expected to account for a bigger portion of the Group's revenue from 2016. The Group will also streamline operations, including the consolidation of its U.S. logistics and warehousing services at its North Carolina facility, so as to drive greater operational efficiencies and cost savings for its U.S. markets.

With an enlarged global sales network following the acquisition, the Group is focused on increasing sales and marketing activities in South America, Malaysia, Indonesia, Africa, with a focus on South Africa, and Europe in FY2016.

As the Group operates in various countries, any sharp movements in foreign exchange rates can affect its financial performance. With this in mind, the Group intends to take advantage of lower production costs in areas in South East Asia by expanding the scope of its manufacturing operations to these regions.

*Source: The Satellite Industry Association's 2015 State of the Satellite Industry Report

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?

Yes.

Name of Dividend	First & Final
Dividend Type	Cash
Dividend Rate	0.525 Singapore cent per ordinary share
Tax Rate	One-tier tax exempt

(c)   Date payable

Not applicable.

(d)   Books closure date

Not applicable.

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

No dividend has been declared or recommended for the year ended 31 December 2015.

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. 

FY2015	Sat Comms	CM	Group
	US$'000	US$'000	US$'000
Revenue	101,969	27,138	129,107
Operating profit	(2,141)	1,087	(1,054)
Finance income			17
Finance costs			(256)
Income tax credit			165
Loss for the year			(1,128)
Amortisation of intangible assets	431	-	431
Depreciation of property, plant and equipment	1,632	287	1,919
Addition to property, plant and equipment	690	47	737
Addition to intangible assets	280	-	280
Allowance for inventory obsolescence	196	253	449
Impairment of trade receivables	20	339	359
Impairment of intangible assets	1,121	-	1,121
Write-back of contingent consideration payable	5,000	-	5,000
Assets and liabilities
Segment assets	75,243	12,383	87,626
Unallocated assets
- Non-current assets			5
- Other receivables			117
- Tax receivables			431
- Deferred tax assets			723
- Cash and cash equivalents			637
Total assets			89,539

FY2015	Sat Comms	CM	Group
	US$'000	US$'000	US$'000
Segment liabilities	20,844	5,626	26,470
Unallocated liabilities
- Other payables			2,779
- Borrowings			5,348
- Provision for income tax			309
- Deferred tax liabilities			171
Total liabilities			35,077
FY2014
Revenue	106,278	27,857	134,135
Operating profit	4,898	567	5,465
Finance income			63
Finance costs			(15)
Income tax expense			(411)
Profit for the year			5,102
Amortisation of intangible assets	381	-	381
Depreciation of property, plant and equipment	1,421	307	1,728
Addition to property, plant and equipment	1,866	116	1,982
Addition to intangible assets	1,778	-	1,778
Allowance for inventory obsolescence	48	72	120
Assets and liabilities
Segment assets	61,066	12,550	73,616
Unallocated assets
- Non-current assets			583
- Other receivables			2,082
- Deferred tax assets			743
- Cash and cash equivalents			9,705
Total assets			86,729
Segment liabilities	14,241	5,687	19,928
Unallocated liabilities
- Other payables			5,575
- Provision for income tax			605
- Deferred tax liabilities			538
Total liabilities			26,646

13(b)      Geographical Information

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

FY2015	America US$'000	Europe US$'000	Asia US$'000	Rest of the World US$'000	Group US$'000
Revenue	76,096	33,706	13,801	5,504	129,107
Non-current assets	5,298	13,623	7,332	120	26,373

FY2014	America US$'000	Europe US$'000	Asia US$'000	Rest of the World US$'000	Group US$'000
Revenue	73,230	35,628	22,127	3,150	134,135
Non-current assets	-	15,676	4,015	-	19,691

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.

		FY2015 US$'000	FY2014 US$'000	% increase/ (decrease)
(a)	Sales reported for first half year	53,970	69,834	(22.7)
(b)	Operating (loss)/profit after income tax before deducting minority interests reported for first half year	(2,840)	3,651	N.M.
(c)	Sales reported for second half year	75,137	64,301	16.9
(d)	Operating profit after income tax before deducting minority interests reported for second half year	1,712	1,451	18.0

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

	FY2015 US$'000	FY2014 US$'000
Ordinary	1,078	925
Preference	-	-
Total Annual Dividend	1,078	925

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 2015.

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(10) 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.

20.          Status on the use of proceeds raised from IPO and any offerings pursuant to Chapter 8 and whether the use of proceeds is in accordance with stated use.

The Company completed the listing of the Company's shares on the AIM market of the London Stock Exchange on 2 July 2014 which raised net proceeds of US$12.9 million. As at 31 December 2015, the net proceeds have been fully utilised in the following manner:

(a)   US$3.5 million was used to pay for the cash consideration less the retention in relation to the acquisition of OnePath Networks Limited;

(b)   approximately US$7.8 million was used for the buyback of 27,957,828 shares for purposes of the acquisition of Skyware Global; and

(c)   approximately US$1.6 million was used for general corporate and working capital of the Company.

The above utilisations are in accordance with the stated use and in accordance with the amount and percentage allocated to such utilisations in the Company's admission document dated 27 June 2014.

BY ORDER OF THE BOARD                                                                            

Anthony Brian Taylor

Chairman

25 February 2016

 

END

 

 

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