Interim Results

RNS Number : 6685I
MTI Wireless Edge Limited
16 August 2021
 

16 August 2021

MTI Wireless Edge Ltd

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

Interim Results

MTI Wireless Edge Ltd (AIM: MWE), the technology group focused on comprehensive communication and radio frequency solutions across multiple sectors, is pleased to today announce its financial results for the six month period ended 30 June 2021.

 

 

Financial highlights

· Solid revenue growth, up by 9% to $21.3m (H1 2020: $19.6m)

· 14% increase in operating profit to $2.2m   (H1 2020: $1 . 9m)

· 13% rise in net profit to $1.73m (H1 2020: $1.54m)

· Earnings per share increased by 14% to  1.89 US cents (H1 2020: 1.65 US cents)

· Cash flow from operations increased by 53% to $3.1m (H1 2020: $2.0m)

· Strong balance sheet with net cash at $9.7m as of 30 June 2021 (30 June 2020: $7.6m)

· 20 20 dividend of $0.02 5 per share (201 9 dividend: $0.0 2 per share) paid on 31   March 2021

 

Operational highlights

· Another positive trading period with good contributions from all three divisions

· MTI Summit continues to benefit from increased government spending on defence

· Mottech opened a new, wholly owned subsidiary and office in Canada and retained key city centre contracts in Israel and internationally

· The Antenna division secured its first contract to develop antennas for use in space and the take up of 5G antennas is in line with internal forecasts

 

Moni Borovitz, Chief Executive Officer of MTI Wireless Edge, said:

"This has been another good trading period for the Company. We are winning new, and retaining existing contracts, and several of the new contracts we have won are with substantial corporations which may well lead to greater opportunities in the future.  Alongside this, we made solid progress across all three divisions and as a result we are well placed to continue to grow our revenue streams and profitability."

 

Moni Borovitz, Chief Executive Officer, will provide a short investor presentation giving an overview of the results for the six month period ended 30 June 2021, via the Investor Meet Company (IMC) platform, today at 10.00am UK time.

 

Investors can sign up for free via: https://www.investormeetcompany.com/mti-wireless-edge-ltd/register-investor

 

 

For further information please contact:

 

MTI Wireless Edge Ltd

+972 3 900 8900

Moni Borovitz, CEO

http://www.mtiwirelessedge.com



Allenby Capital Limited (Nomad and Joint Broker)

+44 20 3328 5656

Nick Naylor/Alex Brearley (Corporate Finance)


Amrit Nahal/David Johnson (Sales and Corporate Broking)




Peterhouse Capital Limited (Joint Broker)

+44 20 7469 0930

Lucy Williams/ Eran Zucker




Novella (Financial PR)


Tim Robertson/Fergus Young

+44 20 3151 7008

 

 

 

Chief Executive's Statement

 

I am pleased to be able to report on a strong six months of trading. All three divisions are focused on addressing growth markets and this is reflected in the high demand for their services. Whether it is increased defence spending, demand for 5G mobile backhaul connectivity or the need for efficient irrigation due to water scarcity, our products and services are set up to provide solutions to these significant growth markets. As part of completing a successful trading period, the Company continues to be strongly cash generative with net cash now at $9.7 million at the end of the half-year, providing the capital to support future investment, if required and to pursue potential acquisitions.

 

Antenna Division

 

This division is a one stop shop for the sale of 'off the shelf' flat and parabolic antennas, combined with the provision of custom-developed antenna solutions to a range of commercial and military customers, with a growing focus on providing 5G backhaul antenna solutions to support mobile phone operators as they roll-out their 5G networks.

 

Trading was positive with consistent demand for antennas and associated products across the customer base. The roll-out of 5G networks across the world continues apace. Network operators are responding by rolling out higher bandwidth 5G services to their customers which presents a major opportunity for MTI's multi band and flat antennas, as operators will need to increase the backhaul connectivity between cell towers to deliver these faster services. Sales of MTI's 5G backhaul products are continuing to grow in line with the Company's internal targets.

 

After the half-year end, the Antenna division announced that it had been selected to partner with US engineering and technology firm, Craig Technologies and its subsidiary Sidus Space, to develop a new range of space antennas as part of a funded project. This represents a new market for the Antenna division and one perhaps which the Company can expand into.

 

Water Control & Management Division 

 

This division provides wireless control systems to manage irrigation and water distribution for agriculture, municipal authorities and commercial entities. It operates under the Mottech brand and utilises part of the hardware technology from Motorola, integrated with the Company's own proprietary management software. Our solutions reduce water and power usage, whilst providing higher revenue from accurate irrigation, leading to more and higher quality crops and plants being grown.

 

2021 thus far has been another good trading period for Mottech. Awareness of the issue of water scarcity globally is increasing and this is leading to greater demand for the division's services. During the period, there was a healthy mix of retaining existing contracts and winning new mandates.

 

Six months ago, Mottech launched a new office in Alberta, Canada following the retirement of the Company's long-term Canadian re-seller. This office was quick to establish itself and has retained its key clients for both services contracts and upgrades of systems, which we consider to be an excellent beginning for a new venture with the potential to be an important long-term profit centre.

 

Since the successful launch of the Tethys system, a new wireless irrigation solution developed for the French wine market, demand for the system has been high and it is now installed in hundreds of French vineyards covering over 6,000 hectares.

 

It has been two years since the successful acquisition of 50% of our partner, Parkland PTY Ltd, now renamed Mottech Parkland in Australia and in that period the business has delivered over 35% growth in revenue, principally through winning new customers and it continues to see interesting opportunities for further expansion in this market.

 

Distribution & Professional Consulting Services Division 

 

Operating under the MTI Summit Electronics brand, this division exclusively represents approximately 40 international suppliers of radio frequency/microwave components and sells these products to Israeli customers. Expert knowledge of both the international suppliers and customers further enables MTI to act as a consultant to all parties and assist with devising complete radio frequency/microwave solutions.

 

MTI Summit continues to benefit from high levels of spending by governments on defence and the demand for continued development of new wireless/radio frequency (RF) commercial solutions in Israel. During the period, the Company secured new orders from a number of significant military customers which bodes well for the future.

 

The Russian satellite office continued to perform well, while revenues from the large tethered balloon project that contributed strongly in the second half of 2020 and first quarter of 2021 were soft in Q2 as some delays occurred. However, we believe the remainder of 2021 will deliver good revenue streams and the prospect of a long term tethered balloon service contract. With the consistent increases in spending on defence and wireless solutions globally, MTI Summit looks well positioned for the future.

 

Outlook

 

Some markets are behind others in terms of recovering from the global COVID-19 pandemic, however, the diversity of the Group across multiple countries and markets has smoothed this disruption and enabled the delivery of a trading performance that we consider would be very satisfactory in a normal market environment. The Board believes that the business is financially strong and well placed to continue to grow, with three divisions utilising RF and wireless technology addressing separate markets where there are substantial natural drivers of future growth in addition to potential acquisition opportunities.

 

 

 

 

 

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

COMPREHENSIVE INCOME

 


Six month period ended

 June 30,


Year ended December 31,


2021


2020


2020


U.S. $ in thousands


Unaudited









Revenues

21,344


19,605


40,893

Cost of sales

14,658


13,426


27, 816







Gross profit

6,686


6,179


13,077

Research and development expenses

503


403


1,029

Distribution expenses

1,821


1,771


3,579

General and administrative expenses

2,203


2,087


4,379

Loss (profit) from sale of property, plant and equipment

(16)


8


14







Profit from operations

2,175


1,910


4,076

Finance expenses

140


168


275

Finance income

(14)


(91)


(255)







Profit before income tax

2,049


1,833


4,056

Tax expenses

315


293


564







Profit

1,734


1,540


3,492

Other comprehensive income (loss) net of tax:






Items that will not be reclassified to profit or loss:






Re-measurement of defined benefit plans

-


-


42







Items that may be reclassified to profit or loss:






Adjustment arising from translation of financial statements of foreign operations

(61)


(124)


253







Total other comprehensive income (loss)

(61)


(124)


295







Total comprehensive income

1,673


1,416


3,787







Profit attributable to:






Owners of the parent

1,671


1,452


3,373

Non-controlling interests

63


88


119








1,734


1,540


3,492

Total comprehensive income attributable to:






Owners of the parent

1,610


1,328


3,668

Non-controlling interests

63


88


119


1,673


1,416


3,787







Earnings per share (dollars)






Basic

0.0189


0.0165


0.0383

Diluted

0.0189


0.0165


0.0383







Weighted average number of shares outstanding






Basic

88,53 1 , 2 24


87,881,376


88,093,025

Diluted

88,53 1 , 2 24


88,047,659


88,093,025







 

The accompanying notes form an integral part of the financial statements.

 

 

 

MTI WIRELESS EDGE LTD.

 (An Israeli Corporation)

 

INTERIM CONSOLIDATED   STATEMENTS OF

CHANGES IN EQUITY

 

For the six month period ended June 30 , 2021 (Unaudited) :

 


Attributed to owners of the parent




Share capital

Additional paid-in capital

Capital reserve

for share-based

payment

transactions

Translation differences

Retained earnings

Total attributable to owners of the  parent

Non-controlling interest

Total equity


U.S. $ in thousands










Balance at January 1, 2021

209

23,167

-

191

999

24,566

987

25,553






 

 


 

Changes during the three month period

  ended March 31, 2021:









Comprehensive income






 


 

Profit for the period

-

-

-

-

1,671

1,671

63

1,734

Other comprehensive loss








 

Translation differences

-

-

-

(61)

-

(61)

-

(61)







 


 

Total comprehensive income (loss) for the period

-

-

-

(61)

1,671

1,610

63

1,673

Profit from acquisition of treasury shares (note 5B)

-

5

-

-

-

5

-

5

Dividend

-

-

-

-

(2,213)

(2,213)

-

(2,213)

 

 

 

 

 

 

 

 

 

Balance at June 30, 2021

209

23,172

-

130

457

23,968

1,050

25,018

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

 

INTERIM CONSOLIDATED   STATEMENTS OF

CHANGES IN EQUITY (CONT.)

 

For the six month period ended June 30 , 2020 (Unaudited) :

 


Attributed to owners of the parent




Share capital

Additional paid-in capital

Capital reserve

for share-based

payment

transactions

Translation differences

Accumulated losses

Total attributable to owners of the  parent

Non-controlling interest

Total equity


U.S. $ in thousands










Balance at January 1, 2020

207

22,868

52

(62)

(658)

22,407

883

23,290






 

 


 

Changes during the six month period

  ended June 30, 2020:









Comprehensive income






 


 

Profit for the period

-

-

-

-

1,452

1,452

88

1,540

Other comprehensive loss




 




 

Translation differences

-

-

-

(124)

-

(124)

-

(124)







 


 

Total comprehensive income (loss) for the period

-

-

-

( 124 )

1,452

1,328

88

1,416

Dividend

-

-

-

-

(1,758)

(1,758)

-

(1,758)

Exercise of options to share capital

1

24

(4)

-

-

21

-

21

Profit from acquisition and disposal of treasury shares

-

8

-

-

-

8

-

8

Acquisition of the non-controlling interest in subsidiary

-

(15)

-

-

-

(15)

(15)

(30)

Share based payment

-

-

2

-

-

  2

-

  2

 

 

 

 

 

 

 

 

 

Balance at June 30, 2020

20 8

22,885

50

(186)

( 964)

  21,993

956

22,949

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes form an integral part of the financial statements.

 

 

 

INTERIM CONSOLIDATED   STATEMENTS OF CHANGES IN EQUITY (CONT.)

 

For the year ended December 31, 2020 :

 


Attributable to owners of the parent



Share capital

Additional paid-in capital

Capital Reserve from share-based payment transactions

Translation differences

Accumulated losses

Total attributable to owners of the  parent

Non-controlling interests

Total equity


U.S. $ in thousands










Balance as at January 1, 2020

207

22,868

52

(62)

(658)

22,407

883

23,290










Changes during 2020: 









Comprehensive income









Profit for the year

-

-

-

-

3,373

3,373

119

3,492

Other comprehensive income









Re measurements on defined benefit plans

-

-

-

-

42

42

-

42

Translation differences

-

-

-

253

-

253

-

253









Total comprehensive income for the year

-

-

-

253

3,415

3,668

119

3,787

Dividend

-

-

-

-

(1,758)

(1,758)

-

(1,758)

Exercise of options to share capital

2

306

(54)

-

-

254

-

254

Acquisition of the non-controlling interest in subsidiary

-

(15)

-

-

-

  (15)

(15)

  (30)

Profit from acquisition and disposal of treasury shares

-

8

-

-

-

8

-

8

Share based payment

-

-

2

-

-

2

-

2










Balance as at December 31, 2020

209

23,167

-

191

999

24,566

987

25,553










 

The accompanying notes form an integral part of the financial statements.

 

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

F INANCIAL P OSITION

 


30.06.2021


30.06.2020


31.12.2020


U.S. $ in thousands


Unaudited



ASSETS






CURRENT ASSETS:






Cash and cash equivalents

9,717


7,860


9,577 

Trade and other receivables

11,634


10,019


10,653

Unbilled revenue

2,488


3,158


2,318

Current tax receivables

454


559


557

Inventories

5,972

 

4,998


6,399








30,265

 

26,594


29,509













NON-CURRENT ASSETS:






Long term prepaid expenses

37


44


44

Property, plant and equipment

5,612


4,976


4,818

Deferred tax assets

715


639


696

Intangible assets

1,040

 

1,090


1,065








7,404

 

6,749


6,623








 

 

 


 







Total assets

37,669

 

33,343


36,132







 

 

The accompanying notes form an integral part of the financial statements.

 

 

 

INTERIM CONSOLIDATED STATEMENTS OF

F INANCIAL P OSITION


30.06.2021


30.06.2020


31.12.2020


U.S. $ In thousands


Unaudited



LIABILITIES AND EQUITY






CURRENT LIABILITIES:






Current maturities and short term bank credit and loans

20


229


105

Trade payables

6,075


4,082


5,098

Other accounts payable

4,906


4,657


4,094

Current tax payables

224


245


213








11,225


9,213


9,510







NON- CURRENT LIABILITIES:






Contingent consideration

66


69


51

Lease liabilities

495


239


155

Loans from banks , net of current maturities

27


53


37

Employee benefits, net

838


820


826








1,426


1,181


1,069







Total liabilities

12,651


10,394


10,579







EQUITY






Equity attributable to owners of the parent






Share capital

209


208


209

Additional paid-in capital

23,172


22,885


23,167

Capital reserve from share-based payment transactions

-


50


-

Translation differences

130


( 186 )


191

Retained earnings

4 57


(964)


999








23,968


2 1 , 993


24,566







Non-controlling interest

1,050


956


987







Total equity

25,018


22,949


25,553







Total equity and liabilities

37,669


33,343


36,132







 

August 15, 2021

 

 

 

Date of approval of financial statements

Moshe Borovitz

Chief Executive Officer

Elhanan Zeira

Controller

Zvi Borovitz

Non-executive Chairman of the Board

 

 

The accompanying notes form an integral part of the financial statements.

 

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

 

INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS

 


Six month period ended

 June 30,


Year ended December 31,



2021


2020


2020



U.S. $ in thousands



Unaudited



Cash Flows from Operating Activities:







Profit for the period


1,73 4


1,5 40


3,492

Adjustments for:







Depreciation and amortization


454


519


1,009

Loss (Gain) from sale of property, plant and equipment


(16)


8


13

Equity settled share-based payment expense


-


2


2

Finance (income) expenses, net


(14)


(27)


69

Tax expenses 


315


293


564

Changes in operating assets and  liabilities:







Decrease (increase) in inventories


412


643


(557)

Decrease (increase) in trade receivables


(709)


(455)


(1,053)

Decrease (increase) Increase in unbilled revenues


(170)


(292)


548

Decrease (increase) in other accounts receivables


(301)


207


255

Increase (decrease) in trade and other accounts payables


1,645


(242)


140

Increase (decrease) in employee benefits, net


12


(23)


25








Cash from operations


3,362


2,173


4,507















Interest received


2


27


28

Interest paid


(19)


(8)


(43)

Income tax paid


(220)


(143)


(494)








Net cash provided by operating activities


3,125


2,049


3,998








 

 

The accompanying notes form an integral part of the financial statements.

 

 

 

  INTERIM CONSOLIDATED STATEMENTS OF

CASH FLOWS (cont.)

 



Six month period ended

 June 30,


Year ended December 31,

 



2021


2020


2020

 



U.S. $ in thousands

 



Unaudited



 

Cash Flows From Investing Activities:







 

Proceeds from sale of property, plant and equipment


28


21


28

 

changes in contingent consideration regarding business acquisition


12


-


(21)

 

Purchase of property, plant and equipment


(488)


(172)


(454)

 








 

Net cash used in investing activities


(448)


(151)


(447)

 








 








 

Cash Flows From Financing Activities:







 

Dividend


(2,213)


(1,758)


(1,758)

 

Payments of lease liabilities


(214)


(305)


(493)

 

Treasury shares acquired


5


(155)


(155)

 

Treasury shares sold


-


163


163

 

Exercise of share options


-


21


254

 

Acquisition of the non-controlling interest in subsidiary


-


(30)


(30)

 

Repayment of long-term loans from banks


(82)


(65)


(308)

 








 

Net cash used in financing activities


(2,504)


(2,129)


(2,327)

 








 








 

Increase in cash and

cash equivalents during the period 


173


(231)


1,224

 

Cash and cash equivalents

 at the beginning of the period


9,577


8,140


8,140

 

Exchange differences on balances of cash and cash equivalents


(33)


(49)


213

 








 

Cash and cash equivalents

 at the end of the period


9,717


7,860


9,577

 








 

 








 

The accompanying notes form an integral part of the financial statements.

 

 

 

MTI WIRELESS EDGE LTD.

(An Israeli Corporation)

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

 

Note 1 - General :

Corporate information:

M.T.I Wireless Edge Ltd. (hereafter - the "Company" , or collectively with its subsidiaries, the "Group" ) is an Israeli corporation. The Company was incorporated under the Companies Act in Israel on December 30, 1998, and commenced operations on July 1, 2000.   Since March 2006, the Company's shares have been traded on the AIM market of the London Stock Exchange.

The formal address of the Company is 11 Hamelacha Street, Afek industrial Park, Rosh-Ha'Ayin, Israel.

The Company and its subsidiaries are engaged in the following areas:

-  Development, design, manufacture and marketing of antennas for the military and civilian sectors.

A leading provider of remote control solutions for water and irrigation applications based on Motorola's IRRInet state of the art control, monitoring and communication technologies.

-  Providing consulting, representation and marketing services to foreign companies in the field of RF and Microwave, including engineering services in the field of aerostat systems and system engineering services.

In these financial statements, the Company included the results of its aerostat system division in its representation and consulting services division, as it deems this appropriate given the nature of the consulting services provided in both segments and the respective size of these segments.

Note 2 - Significant Accounting Policies :

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in International Accounting Standard No. 34 ("Interim Financial Reporting").

The interim consolidated financial information set out above does not constitute full year-end accounts within the meaning of Israeli Companies Law. It has been prepared on the going concern basis in accordance with the recognition and measurement criteria of the International Financial Reporting Standards (IFRS). Statutory financial information for the financial year ended December 31, 2020 was approved by the board on February 28, 2021. The report of the auditors on those financial statements was unqualified.

The interim consolidated financial statements as of June 30, 2021 have not been audited.

The interim consolidated financial information should be read in conjunction with the annual financial statements as of December 31, 2020 and for the year then ended and with the notes thereto. The significant accounting policies applied in the annual financial statements of the Company as of December 31, 2020 are applied consistently in these interim consolidated financial statements.

 

Note 3 - REVENUES:



Six month period  ended 

  June 30,


Year ended December 31,

 



2021


2020


2020



U.S. $ in thousands



Unaudited



Revenues arise from:







Sale of goods *


17,238


16,275


3 3 , 788

Rendering of services**


2,876


2,029


4, 863

Projects**


1,230


1,301


2 , 242



21,34 4


19,605


40, 89 3








(*) at the point of time

(**) over time

 

Note 4 - operating SEGMENTS:

The following tables present revenue and profit information regarding the Group's operating segments for the six month period ended June 30, 202 1 and 20 20 respectively and for the year ended December 31, 2020 .

Six month period   ended June 30, 2021 (Unaudited)


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


U.S. $ in thousands

Revenues






External

5,772

8,601

6,971

-

21,344

Internal

-

-

59

(59)

-







Total

5,772

8,601

7,030

(59)

21,344













Segment profit

246

866

913

150

2,175







Finance expense, net





126

Tax expenses





315







Profit





1,734







As of June 30, 2021


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


U.S. $ in thousands







Segment assets

14,866

10,890

9,068

-

34,824







Unallocated assets





2,845







Segment liabilities

3,226

4,411

4,089

-

11,726







Unallocated liabilities





925

 

 

Note 4- operating SEGMENTS (CONT.):

Six month period   ended June 30, 2020 (Unaudited)


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


U.S. $ in thousands

Revenues






External

5,916

7,942

5,747

-

19,605

Internal

-

-

81

( 81 )

-







Total

5,916

7,942

5,828

( 81 )

19,605













Segment profit

56

945

789

1 20

1,9 1 0







Finance expense, net





77

Tax expenses





29 3







Profit





1,5 40







 

As of June 30, 2020


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


U.S. $ in thousands







Segment assets

13,976

9,256

7,518

-

30,750







Unallocated assets





2,593







Segment liabilities

3,287

2,425

3,845

-

9,557







Unallocated liabilities





837

 

Year ended December 31, 2020


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


Revenues






External

11,187

16,121

13,585

-

40,893

Inter-segment

-

-

144

(144)

-







Total

11,187

16,121

13,729

(144)

40,893













Segment profit

158

1,928

1,614

376

4,076







Finance expense, net





20

Tax expenses





564







Profit





3,492

 

 

Note 4- operating SEGMENTS (CONT.):

Year ended December 31, 2020


Antennas

Water Solutions

Distribution & Consultation

Adjustment & Elimination

Total


  U.S. $ in thousands







Segment assets

14,531

11,194

8,429

-

34,154







Unallocated assets





1,978







Segment liabilities

3,511

3,133

3,621

-

10,265







Unallocated liabilities





314

 

Note 5 - SIGNIFICANT EVENTS:

A.  On 28 February 2021, the Board of directors declared a cash dividend of 2.5 US cents per share, representing approximately $2,213,000, in total. This dividend was paid on 31 March 2021 to shareholders on the register at the close of trading on 19 March 2021.

B.  On 24 January 2019, the Company announced a share repurchase program to conduct market purchases of ordinary shares of par value 0.01 Israeli Shekels each ("Ordinary Shares") in the Company up to a maximum value of £150,000 (the "Programme"). On 1 5 August 2021, the Company's board of directors and the board of directors of MTI Engineering had decided to continue with the Programme until end of August 2022. As at 30 June 2021, 50,000 Ordinary Shares were held in treasury under the Programme.

C.  On 4 February 2021, the Company's subsidiary Mottech Water Solutions Ltd registered and opened a wholly-owned subsidiary in Canada and is working on establishing its activities in Canada.

D.  The effects of the COVID-19 outbreak on the Company and Business Continuity in 2020 was disclosed in the 2020 annual report in note 26c. Since the beginning of 2021 and until the date of this report the Company was able to maintain good levels of operation using remote work procedures and a sufficient level of production in its production facilities while assuring the health of its employees.

All aspects of the Group's supply chain are working slower, and the Company's industry has been affected on the operational level, along with the rest of the world economy as it faces the risk of a global recession where the ability to predict the timing of a recovery is uncertain.

The introduction of vaccines, and their fast adoption in Israel and consequences, does provide hope that a worldwide recovery will start in the near term, but there is still uncertainty regarding the duration for which vaccines will be efficacious and the level of protection they provide against new variants of COVID-19. This, together with the uncertainty of the level of the global economic slowdown, its duration and its medium to long term effects creates challenges, but the Company believes that if there is no further deterioration in the situation, its financial strength and business stability will allow it to navigate through this.

E.  On 19 April 2021 at an extraordinary shareholders meeting, Mrs. Lihi Elimelech Bechor was re-elected as an external director for another three year term.

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