Final Results

RNS Number : 1432A

Quixant PLC

22 March 2017

 



22 March 2017

Quixant plc

("Quixant" or the "Company")

Final Results

Quixant (AIM: QXT), a leading provider of specialised computing platforms and monitors for gaming and slot machine applications, is pleased to announce its Final Results for the year ended 31 December 2016.

 

Highlights:

·     Revenue growth of 116% to $90.4 million (2015: $41.8 million)

o  Gaming division: $53.0 million (2015: $36.6 million)

o  Densitron division: $37.4 million (2015 part year: $5.2 million)

·     Adjusted EBITDA¹ increased 54% to $15.6 million (2015: $10.1 million)

o  Gaming division: $12.7 million (2015: $9.8 million )

o  Densitron division: $2.9 million (2015 part year: $0.3 million)

·     Adjusted profit before tax² increased 50% to $13.8 million (2015: $9.2 million)

o  Gaming division: $11.1 million (2015: $9.0 million)

o  Densitron division: $2.7 million (2015 part year: $0.2 million)

·     Adjusted fully diluted EPS³ of $0.166 per share (2015: $0.113 per share)

·     Proposed full year dividend of 2.0p per share (2015: 1.5p)

·     Net cash from operating activities of $10.1 million (2015: $6.3 million)

1.     Adjusted by adding back share based payments and one off non-recurring items of income and expense totalling $0.9 million (2015: share based payments and non-recurring costs of $1.4 million).

2.     Adjusted by adding back amortisation of intangibles arising from acquisitions, share based payments and one off non-recurring items of income and expense. In 2016 these amounted to $2.2 million (2015: share based payments and non-recurring costs $1.4 million).

3.     Adjusted by adding back amortisation of intangibles arising from acquisitions, share based payments, one off non-recurring items of income and expense and subtracting the associated tax effect. In 2016 these amounted to $1.7 million (2015: share based payments and non-recurring costs $1.4 million).

Operational Highlights:

·     Strong demand from major gaming customers across both gaming board and monitor solutions

·     Increased diversification of revenue base and reduced customer concentration

·     Completed gaming platform design-in for a project with a new Tier 1 customer and received first volume orders in 2017

·     Densitron division performed ahead of expectation

·     Strengthened management team and invested in people and infrastructure to support future growth

Nick Jarmany, CEO of Quixant, commented: "I am delighted with the financial and operational performance of the Group in 2016. Our core business continued to grow impressively and, along with strong growth in gaming monitors and the Densitron division performing ahead of expectations, the Group has delivered excellent results for the year.

We have had a good start to 2017 and I am confident that we are well placed to build on this and continue to deliver strong growth for the full year and beyond."

For further information please contact:

Quixant plc	Tel: [phone]
Nick Jarmany, Chief Executive
Jon Jayal, Chief Operating Officer
Nominated Adviser and Broker:
finnCap Ltd	Tel: [phone]
Matt Goode / Henrik Persson / Simon Hicks (Corporate Finance) Simon Johnson / Alice Lane (Corporate Broking)
Financial PR:	Tel: [phone]
Alma PR
John Coles
Hilary Buchanan

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

Chairman's Statement

I am pleased to report that Quixant has had another successful year with the Group delivering strong growth in both revenue and profit. This has been the first full year contribution from the acquisitions made in 2015 and it is pleasing to see these businesses performing ahead of expectations, augmenting strong organic growth from Quixant's core gaming platform business.

The Gaming Division performed well as Quixant continues to consolidate its position as the premier supplier of computer platforms to the gaming industry. We continued to broaden our customer base in 2016, winning several new projects with customers across a spectrum of sizes. We expect volume shipments under several of these to commence in 2017. In addition to the growth in new customers, it is pleasing to see robust performance from Quixant's well-established customers.

In 2015 we took the decision to invest in our gaming monitor business and enhanced our product offering and sales resource in this product line. This decision has proved successful with good growth in 2016 and a strong pipeline of orders for delivery in 2017 giving us confidence in our ability to deliver substantial growth in the future. Our belief that gaming platform customers would value the ability to purchase monitors from Quixant as a trusted vendor has proven to be correct.

The Densitron Division has performed ahead of expectations during the year. After a period of assessment of the division following our acquisition in November 2015, several initiatives have been implemented aimed at rationalising and enhancing the business' product and market strategy. We are also injecting a higher degree of intellectual property into the product range and improving operational efficiency which will improve future profitability. We would expect to start to see the benefit of these initiatives resulting in improvements in sales and margins towards the end of 2017.

The decision for the UK to leave the European Union resulted in a significant volatility in exchange rates and uncertainty in the way future business will be conducted between the UK and countries within the European Union. The highly global nature of Quixant's business and operations, combined with the fact that both reporting and the majority of transactions are conducted in US Dollars mitigates the impact that Brexit will have on Quixant. However, the Board will continue to monitor the potential impact as developments unfold.

A dividend of 1.5p per share was paid in May 2016 representing a growth of 25% on the prior period. The Board is pleased to propose a 2017 full year dividend of 2.0p per share, representing an increase of 33% over the previous year. This remains consistent with our progressive dividend policy and the continued strength of the Company's balance sheet and financial performance.

The Group has significant opportunities to continue to grow in all areas of its business. The market for the core gaming platform business remains robust and together with potential new geographical market opportunities provides us with confidence for continued future growth. The introduction of gaming monitors to our product portfolio has successfully uncovered significant opportunity for selling multiple products into each gaming machine and we are confident that the Group's share of this business will continue to grow. We consider that the opportunities for the Densitron division are promising and we expect to see the benefits from the initiatives implemented as 2017 progresses. The Group has had a strong start to 2017 and is well positioned to achieve its growth targets for the year.

Chief Executives Report

I am delighted to report that the Group has delivered excellent financial and operational performance over the year. Both the Gaming and Densitron business divisions performed ahead of expectations, delivering record Group revenue and adjusted profit before tax of $90.4 million (2015: $41.8 million) and $13.8 million (2015: $9.2 million) respectively. The unadjusted profit before tax was $11.7 million (2015: $7.8 million).

The table below shows the growth in revenue from the different elements of the business over the last three years. The growth in the core gaming platform business has underpinned the growth in the organisation as a whole and enabled the introduction of the gaming monitor business in 2014 and the acquisition of Densitron in November 2015.

Product Group	2014 ($m)	2015 ($m)	2016 ($m)
Gaming Platforms	32	34	44
Gaming Monitors	0	3	9
Densitron	0	5*	37

* Reflects revenue contribution from Densitron post acquisition in November 2015

Gaming Division

The Gaming Division revenue grew by 45%, from $36.6 million in 2015 to $53.0 million in 2016 principally as a result of a growth in sales to several existing customers, commencement of volume shipments to a number of new accounts and substantial growth in the gaming monitor business.

The cornerstone of our gaming proposition is Quixant's Gaming Ecosystem®, which encompasses several aspects of the hardware, software and support of our gaming platforms and monitors. Quixant has developed a library of intellectual property aimed at providing customers with a platform which combines compliance with the strict requirements imposed by global gaming regulators with an off-the-shelf solution which accelerates their time to market with new games, provides portability across different markets and supports a simple upgrade path for their next generation of machines. This Gaming Ecosystem® is a central part of Quixant's value proposition and differentiates us from the multitude of industrial PC manufacturers operating principally in Asia. It is gratifying to find that even the largest customers in the gaming industry recognise and embrace the value of Quixant's Gaming Ecosystem® and are willing to adapt their games to be compatible with it.

We continue to see new market opportunities evolving as governments globally vote to legalise gaming in a regulated environment. Whilst we adopt a cautious stance to the timing or potential value of such market openings, we believe this represents a major opportunity for our customers to supply new machines which in turn provides Quixant with the potential for new business. Brazil is the most recent of such new market opportunities. Quixant has several customers who are well- positioned to address this market with machines and games which have been developed around Quixant gaming platforms.

Gaming Platforms

We shipped over 43,000 gaming platforms in 2016, up from 34,000 shipped in 2015. We continue to occupy a small market share of around 9% of the estimated 475,000 unit annual new/replacement machines deployed globally (based on the 2015 industry survey conducted by G3 Magazine). We continue to have good confidence that we have the ability to considerably increase our market share over time as more customers look to outsource the design and manufacture of their computer gaming platforms and focus their R&D effort on their core competencies.

Our highest volumes continue to be dominated by our higher performance range of products, and in particular the QX-40. We have several customers now transitioning from this onto the next generation QX-50 and newer platforms but we expect to continue to see strong sales of the QX-40 in 2017.

Gaming Monitors

We commenced our business in gaming monitors in 2014 as a means of providing customers with a gaming-optimised product that complements our gaming platforms. The strict regulatory requirement of maintaining a consistent bill-of-materials, something which has been a key criteria in the design of our gaming platforms, is also a requirement for gaming monitors. Quixant has built up years of credibility as a supplier that understands these strict requirements and this has enabled us to be successful in cross-selling monitor products to a number of our existing computer platform customers. In 2016 we shipped over 25,000 gaming monitors, a marked increase on the previous year. Several existing well-established customers have moved to Quixant for their monitor requirements. Touchscreen button decks have also proven to be a strong product line as manufacturers seek to replace traditional mechanical buttons with more interactive input methods on their latest machines. Whilst gaming monitors operate on a structurally lower margin compared to gaming platforms, the design-in period is typically considerably shorter and the intensity of R&D required is lower.

Densitron Division

Following our acquisition of the Densitron in November 2015 our expectation was that the performance during 2016 would be relatively flat compared to its performance for the full year 2015. However, the business has performed ahead of expectations, delivering increased revenues at marginally better gross margin.

During the year we implemented a range of initiatives designed to strengthen the business, making it more streamlined and increasing its product and market focus. We have also invested during the year in headcount, products and marketing. We have recruited additional people in Taiwan to enable better management of quality, improvements in the procurement process and standardising the operational process across divisions. This is expected to continue into 2017.

We have embarked on a rationalisation of the product portfolio which we believe was previously unwieldy and lacked a globally unified strategy. As a result, several product lines were discontinued towards the end of the year and a new team of Global Product Managers has been established. We believe that increasing the intellectual property contained within Densitron's products will improve competitiveness and provide greater opportunity for Densitron into the future. For this reason, in 2017 we have introduced a new team which is responsible for developing Densitron's own low power embedded ARM computing solutions which will be marketed in combination and integrated with its display products.

In the past, Densitron has sold into a large number of different markets, each having their own specific requirements. Leveraging on the experience gained in Quixant, we are in the process of identifying markets in which Densitron's range of products and capabilities offer particular competitive advantages.

Due to product development timescales we do not expect to see an immediate impact resulting from these initiatives but we would anticipate to see progress towards the end of 2017.

Group Infrastructure Enhancements

Given the Group's rapid rate of growth, we believe it is essential that the infrastructure is put in place to not only manage this growth but also to enhance it. During 2016 we have continued to invest in people, by strengthening management resource, and products but also recognised the need to restructure the way in which the Group is managed overall. To do this we have created a divisional structure with several shared service areas which are leveraged across divisions.

We also believe that common systems and processes across the Group are vital to be able to support the business into the future. As such, the Board approved a project at the end of 2016 to implement a common enterprise resource planning (ERP) system across the whole Group which will involve a harmonisation of business and operational processes and creation of a global financial and business analysis infrastructure. This is a substantial project that will involve input from all parts of the business but is essential to ensure efficient management reporting and enable us to leverage our resources as we grow.

The Group has also strengthened the business' management resources, promoting Jon Jayal to Chief Operating Officer of the Group, stepping up responsibilities for several other members of senior management and making a number of senior hires in Taiwan.

Outlook

The outlook for the Group remains extremely positive. The Gaming division continues to offer considerable growth opportunities both from the expansion of its market share in the core gaming platform business and through the new opportunity created in the gaming monitor market. The Densitron division is healthy and profitable and offers potential for growth in several important vertical markets through a more focused and co-ordinated global approach. I am therefore confident in the Group's ability to continue to deliver strong growth in 2017 and beyond.

Financial Review

Revenue

The Quixant Group achieved revenues of $90.4 million in the year, an increase of 116% on 2015 ($41.8 million). The results for 2016 include a full year of the Densitron division while the results for 2015 include the six week period following completion of the acquisition in November 2015. However, excluding the Densitron division, the Gaming division achieved revenue of $53.0 million in the year, an increase of 45% on 2015 ($36.6 million).

The growth in the Gaming division has been driven primarily by continued development of relationships with existing customers, and substantial growth in the gaming monitor sales. We have continued to broaden the customer base and now have 180 customers (2015: 126). The Densitron division has performed ahead of expectations in the year, achieving revenues of $37.4 million.

Profit

Our gross profit for the year was $32.1 million, representing a gross margin of 36%. This compares to a gross profit achieved in 2015 of $17.3 million at a gross margin of 41%. The decrease in gross margin percentage reflects the lower margins achieved in both gaming monitors and the Densitron division.

Adjusted EDITDA on continuing operations increased 54% to $15.6 million (2015: $10.1 million) and adjusted profit before tax increased 50% to $13.8 million (2015: $9.2 million). EBITDA on continuing operations increased 69% to $14.7 million (2015: $8.7 million) and profit before tax increased 50% to $11.7 million (2015: $7.8 million). Adjustments to EBITDA are to add back share based payments and one off non-recurring items of income and expense, in 2016 these totalled $0.9 million (2015: share based payments and non-recurring costs of $1.4 million). Adjustments to profit before tax are to add back amortisation of intangibles arising from acquisitions, share based payments and one off non-recurring items of income and expense. In 2016 these amounted to $2.2 million (2015: share based payments and non-recurring costs $1.4 million).

The share based payment charge has been added back because it was not a cash expense to the Company. It is a benefit to our employees which we are required to expense through the profit and loss account in accordance with IFRS 2.

In order to maintain our market leading position, it is vital that the business continues to invest in product development. During the year, the Group expenditure on research and development was $3.5 million (2015: $2.3 million), representing 11% of gross profit (2015: 14%). These costs relate to investment activities principally undertaken in Taiwan and Italy. $0.7 million of these costs were capitalised (2015: $1.1 million) with amortisation for the year on total capitalised development costs of $0.9 million (2015: $0.4 million).

Managing overheads while ensuring sufficient investment is made to support the business is key, and as such we have strengthened the business across all areas in the year, increasing our headcount to 160 people (2015: 138). Staff costs being the largest contributor to overheads resulted in an overall spend in the year of $11.3 million (2015: $4.6 million).

Taxation

The tax charge in the year amounted to $2.4 million (2015: $1.4 million). This constitutes a corporation tax charge of approximately 20.3% on pre-tax profits (2015: 17.6%). The Group continues to benefit from enhanced tax reliefs available in respect of qualifying research and development expenditure.

Earnings per share

•      Basic earnings per share increased 44% to $0.1430 (2015: $0.0993).

•      Fully diluted earnings per share increased 44% to $0.1395 (2015: $0.0967).

•      Adjusted fully diluted earnings per share increased 47% to $0.166 (2015: $0.113).

•      The calculations of earnings per share are included in Note 3.

Balance Sheet

The Group maintains a strong Balance Sheet with net assets totalling $34.3 million (2015: $25.7 million).

Non-current assets have reduced in the year to $20.9 million (2015: $22.8 million). This is primarily due to the amortisation of intangible assets relating to customer relationships and order backlog following the acquisition of Densitron in 2015.

Current assets principally comprise inventory and trade receivables. Inventory increased to $12.9 million (2015: $9.3 million). This is a significant increase but is in line with the Group's inventory strategy of ensuring that it has sufficient inventory to meet near term production, and a buffer stock of key product lines is maintained. This enables Quixant to react quickly to customer requirements and gives the Group a competitive advantage. Trade and other receivables and trade and other creditors reflect the increase in business in the year, and in the case of trade and other creditors, the growth in inventory. Trade and other receivables are $21.0 million (2015: $19.5 million) and trade and other payables are $17.2 million (2015: $15.3 million).

Cash Flow

The Group continued to generate high levels of cash during the year. The cash generated from operating activities in the year amounted to $10.1 million (2015: $6.3 million).

The Group continued to invest in the business, spending $1.4 million (2015: $12.8 million) on investing activities including $0.7 million (2015: $1.1 million) on capitalised product development. In 2015 $10.6 million was spent on acquisitions, this expenditure has not recurred in 2016.

In the year $2.8 million has been used to repay borrowings including the elimination of more expensive lines of financing. We continue to review banking facilities and treasury arrangements around the Group to ensure that the level and cost of finance is appropriate to the business.

Dividend

The Board intends to maintain its progressive dividend policy whilst continuing to invest in and to develop the Group's businesses. As such, the Board proposes a dividend in respect of the year of 2.00p per share (2015: 1.5p per share) payable on 18 May 2017 to all shareholders on the register at the close of business on 12 May 2017. The corresponding ex-dividend date is 13 May 2017.

Outlook

During 2017 we will continue to invest in the business by strengthening those areas that need it to enable future growth. We shall also be embarking on a project to enhance the structure of the Group going forward by introducing a common enterprise resource planning (ERP) system. This will be a major project which will have an impact on all areas of the business but will ultimately be vital in putting the Group in the position of having a harmonised accounting, reporting and procurement platform which can scale efficiently with the organisation.

The 2017 financial year has started well, giving us confidence that the year will be one of strong growth.

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED 31 DECEMBER 2016 AND 2015

		2016	2015
		Total	Total
		$000	$000
Revenue		90,365	41,829
Cost of sales		(58,267)	(24,503)
		_________	_________
Gross profit		32,098	17,326
Administrative expenses		(6,853)	(3,995)
Other operating expenses		(13,211)	(5,469)
		_________	_________
Operating profit		12,034	7,862
Financial expenses		(371)	(74)
		_________	_________
Profit before tax		11,663	7,788
Taxation		(2,370)	(1,368)
		_________	_________
Profit for the year		9,293	6,420
		_________	_________
Other comprehensive income for the year, net of income tax
Items that are or may be reclassified subsequently to profit and loss
Minority interests		1	-
Foreign currency translation differences		(47)	(268)
		_________	_________
Total comprehensive income for the year		9,247	6,152
		_________	_________

Basic earnings per share		$0.1430	$0.0993
		_________	_________
Fully diluted earnings per share		$0.1395	$0.0967
		_________	_________

BALANCE SHEETS

AS AT 31 DECEMBER 2016

		Group		Company
		2016	2015	2016	2015
		$000	$000	$000	$000
Non-current assets
Property, plant and equipment		5,977	5,996	3,570	3,580
Intangible assets		14,045	15,395	2,383	2,905
Investment property		617	740	-	-
Investments in group companies and associated undertakings		-	-	11,948	11,875
Deferred tax assets		257	620	100	70
		_________	_________	_________	_________
		20,896	22,751	18,001	18,430
		_________	_________	_________	_________
Current assets
Inventories		12,900	9,285	7,455	5,495
Tax receivable		-	-	-	325
Trade and other receivables		21,003	19,484	12,034	10,002
Cash and cash equivalents		8,853	3,861	1,375	1,401
		_________	_________	_________	_________
		42,756	32,630	20,864	17,223
		_________	_________	_________	_________
Total assets		63,652	55,381	38,865	35,653
		_________	_________	_________	_________
Current liabilities
Other interest-bearing loans and borrowings		(2,774)	(2,994)	(911)	(605)
Trade and other payables		(17,199)	(15,274)	(13,190)	(10,881)
Tax payable		(1,033)	(301)	(794)	(-)
		_________	_________	_________	_________
		(21,006)	(18,569)	(14,895)	(11,486)
		_________	_________	_________	_________
Non-current liabilities
Other interest-bearing loans and borrowings		(6,148)	(8,744)	(6,251)	(8,448)
Provisions		(750)	(750)	(-)	(-)
Deferred tax liabilities		(1,442)	(1,667)	(450)	(671)
		_________	_________	_________	_________
		(8,340)	(11,161)	(6,701)	(9,119)
		_________	_________	_________	_________
Total liabilities		(29,346)	(29,730)	21,596	(20,605)
		_________	_________	_________	_________
Net assets		34,306	25,651	17,269	15,048
		_________	_________	_________	_________
Equity attributable to equity holders of the parent
Share capital		105	104	105	104
Share premium		5,676	5,181	5,676	5,181
Share based payments reserve		782	470	782	470
Retained earnings		28,192	20,299	10,893	9,613
Translation reserve		(455)	(408)	(187)	(320)
		_________	_________	_________	_________
		34,300	25,646	17,269	15,048
Non-controlling interest		6	5	-	-
		_________	_________	_________	_________
Total equity		34,306	25,651	17,269	15,048
		_________	_________	_________	_________

STATEMENT OF CHANGES IN EQUITY

GROUP

	Share Capital	Share Premium	Translation Reserve	Share Based Payments	Retained Earnings	Total Parent Equity	Non-controlling Interest	Total Equity
	$000	$000	$000	$000	$000	$000	$000	$000
Balance at 1 January 2015	104	5,181	(140)	273	15,061	20,479	-	20,479
Total comprehensive income for the period
Profit	-	-	-	-	6,420	6,420	-	6,420
Other comprehensive loss	-	-	(268)	-	-	(268)	-	(268)
	_________	_________	_________	_________	_________	_________	_________	_________
Total comprehensive income for the period	-	-	(268)	-	6,420	6,152	-	6,152
	_________	_________	_________	_________	_________	_________	_________	_________
Transactions with owners, recorded directly in equity
Share based payments	-	-	-	197	-	197	-	197
Dividend paid	-	-	-	-	(1,182)	(1,182)	-	(1,182)
	_________	_________	_________	_________	_________	_________	_________	_________
Total contributions by and distributions to owners	-	-	-	197	(1,182)	(985)	-	(985)
	_______	_______	_______	_______	_______	_______	_______	_______
Transactions with owners
Acquisition of subsidiary with a non-controlling interest	-	-	-	-	-	-	5	5
	_________	_________	_________	_________	_________	_________	_________	_________
Total transactions with owners	-	-	-	-	-	-	5	5
	_________	_________	_________	_________	_________	_________	_________	_________
Balance at 31 December 2015	104	5,181	(408)	470	20,299	25,646	5	25,651
	_________	_________	_________	_________	_________	_________	_________	_________

	Share Capital	Share Premium	Translation Reserve	Share Based Payments	Retained Earnings	Total Parent Equity	Non-controlling Interest	Total Equity
	$000	$000	$000	$000	$000	$000	$000	$000
Balance at 1 January 2016	104	5,181	(408)	470	20,299	25,646	5	25,651
Total comprehensive income for the period
Profit	-	-	-	-	9,293	9,293	1	9,294
Other comprehensive loss	-	-	(47)	-	-	(47)	-	(47)
	_________	_________	_________	_________	_________	_________	_________	_________
Total comprehensive income for the period	-	-	(47)	-	9,293	9,246	1	9,247
	_________	_________	_________	_________	_________	_________	_________	_________
Transactions with owners, recorded directly in equity
Share based payments	-	-	-	312	-	312	-	312
Dividend paid	-	-	-	-	(1,400)	(1,400)	-	(1,400)
Exercise of options	1	495	-	-	-	496	-	496
	_________	_________	_________	_________	_________	_________	_________	_________
Total contributions by and distributions to owners	1	495	-	312	(1,400)	(592)	-	(592)
	_________	_________	_________	_________	_________	_________	_________	_________
Balance at 31 December 2016	105	5,676	(455)	782	28,192	34,300	6	34,306
	_________	_________	_________	_________	_________	_________	_________	_________

COMPANY

	Share Capital	Share Premium	Translation Reserve	Share based Payments	Retained Earnings	Total Parent Equity
	$000	$000	$000	$000	$000	$000
Balance at 1 January 2015	104	5,181	(137)	273	8,431	13,852
Total comprehensive income for the period
Profit	-	-	-	-	2,364	2,364
Other comprehensive loss	-	-	(183)	-	-	(183)
	_________	_________	_________	_________	_________	_________
Total comprehensive income for the period	-	-	(183)	-	2,364	2,181
	_________	_________	_________	_________	_________	_________
Transactions with owners, recorded directly in equity
Share based payments	-	-	-	197	-	197
Dividend paid	-	-	-	-	(1,182)	(1,182)
	_________	_________	_________	_________	_________	_________
Total contributions by and distributions to owners	-	-	-	197	(1,182)	(985)
	_________	_________	_________	_________	_________	_________
Balance at 31 December 2015	104	5,181	(320)	470	9,613	15,048
	_________	_________	_________	_________	_________	_________

	Share Capital	Share Premium	Translation Reserve	Share based Payments	Retained Earnings	Total Parent Equity
	$000	$000	$000	$000	$000	$000
Balance at 1 January 2016	104	5,181	(320)	470	9,613	15,048
Total comprehensive income for the period
Profit	-	-	-	-	2,680	2,680
Other comprehensive profit	-	-	133	-	-	133
	_________	_________	_________	_________	_________	_________
Total comprehensive income for the period	-	-	133	-	2,680	2,813
	_________	_________	_________	_________	_________	_________
Transactions with owners, recorded directly in equity
Share based payments	-	-	-	312	-	312
Dividend paid	-	-	-	-	(1,400)	(1,400)
Exercise of share options	1	495	-	-	-	496
	_________	_________	_________	_________	_________	_________
Total contributions by and distributions to owners	1	495	-	312	(1,400)	(592)
	_________	_________	_________	_________	_________	_________
Balance at 31 December 2016	105	5,676	(187)	782	10,893	17,269
	_________	_________	_________	_________	_________	_________

CASH FLOW STATEMENTS

FOR THE YEARS ENDED 31 DECEMBER 2016 and 2015

		Group		Company
		2016	2015	2016	2015
		$000	$000	$000	$000
Cash flows from operating activities
Profit for the year		9,293	6,420	2,680	2,363
Adjustments for:
Depreciation, amortisation and impairment		2,694	871	1,107	684
Taxation expense		2,370	1,368	454	412
Financial expense		371	74	276	53
Equity settled share based payment expenses		312	197	239	118
		_________	_________	_________	_________
		15,040	8,930	4,756	3,630
(Increase) in trade and other receivables		(1,292)	(2,140)	(2,032)	(1,406)
(Increase) in inventories		(3,436)	(1,490)	(1,960)	(1,487)
Increase in trade and other payables		1,644	2,166	2,373	6,202
		_________	_________	_________	_________
		11,956	7,466	3,137	6,939
Interest paid		(371)	(74)	(276)	(53)
Tax paid/received		(1,489)	(1,112)	414	(155)
		_________	_________	_________	_________
Net cash from operating activities		10,096	6,280	3,275	6,731
		_________	_________	_________	_________
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired		58	(10,593)	-	(11,600)
Acquisition of property, plant and equipment		(425)	(1,101)	(185)	(230)
Acquisition of intangible assets		(1,017)	(1,151)	(321)	(1,142)
		_________	_________	_________	_________
Net cash from investing activities		(1,384)	(12,845)	(506)	(12,972)
		_________	_________	_________	_________
Cash flows from financing activities
Proceeds from new loan		-	7,754	-	7,754
Repayment of borrowings		(2,816)	(868)	(1,891)	-
Dividends paid		(1,400)	(1,182)	(1,400)	(1,182)
Proceeds from issue of shares		496	-	496	-
		_________	_________	_________	_________
Net cash from financing activities		(3,720)	5,704	(2,795)	6,572
		_________	_________	_________	_________
Net (decrease)/increase in cash and cash equivalents		4,992	(861)	(26)	331
Cash and cash equivalents at 1 January		3,861	4,722	1,401	1,070
		_________	_________	_________	_________
Cash and cash equivalents at 31 December		8,853	3,861	1,375	1,401
		_________	_________	_________	_________

NOTES

(forming part of the financial statements)

1.    General information

Whilst the information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRSs") as adopted by the European Union and as issued by the International Accounting Standards Board, this announcement does not itself contain sufficient information to comply with IFRSs. The accounting policies adopted in this preliminary announcement are consistent with the Annual Report for the year ended 31 December 2016.

The financial information set out in this document, which was approved by the Board on 21 March 2017, is derived from the full Group accounts for the year ended 31 December 2016 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006.  The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2016, will be delivered to the Registrar of Companies in due course.

The Board of Quixant PLC approved the release of this preliminary announcement on 21 March 2017.

The Annual Report for the year ended 31 December 2016 will be posted to shareholders in due course and will be delivered to the Registrar of Companies following the Annual General Meeting of the Company.  The report will also be available on the investor relations page of the Group's website.

Further copies will be available on request and free of charge from the Company Secretary.

2.    Analysis of turnover

	2016	2015
	$000	$000
By geographical market
Asia	12,719	3,958
Australia	11,400	14,479
Europe	27,536	7,274
North America	37,581	15,976
Other	1,129	142
	_________	_________
	90,365	41,829
	_________	_________
The above analysis includes sales to individual countries in excess of 10% of total turnover:
Australia	11,400	14,479
USA	36,453	15,976
	_________	_________

3.    Earnings per ordinary share (EPS)

	2016	2015
	$000	$000
Earnings
Earnings for the purposes of basic and diluted EPS being
net profit attributable to equity shareholders	9,293	6,420
	_________	_________
Number of shares
	Number	Number
Weighted average number of ordinary shares for the purpose of basic EPS	65,004,414	64,634,782
Effect of dilutive potential ordinary shares:
Share options	1,614,766	1,810,578
	_________	_________
Weighted number of ordinary shares for the purpose of diluted EPS	66,619,180	66,445,360
	_________	_________
Basic earnings per share	$0.1430	$0.0993
	_________	_________
Fully diluted earnings per share	$0.1395	$0.0967
	_________	_________

4.    Capital and reserves

Share capital     

Fully paid ordinary shares of 0.1p per share

	Ordinary shares	Share Capital	Share premium
	Number	$000	$000
Balance at 1 January 2015 and 31 December 2015	64,634,782	104	5,181
	_________	_________	_________
Balance at 1 January 2016	64,634,782	104	5,181
Issued for cash	-	-	-
Exercise of share options (see note 21)	730,000	1	495
	_________	_________	_________
Balance at 31 December 2016	65,364,782	105	5,676
	_________	_________	_________

The holders of fully paid ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company.

730,000 ordinary shares were issued following the exercise of vested options arising from issue 1 in 2013 (2015: nil) (see note 21). Options were exercised at an average price of £0.49 per share.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.

Dividends

The following dividends were recognised during the period:

	2016	2015
	$000	$000
1.5p (2015: 1.2p) per qualifying ordinary share	1,400	1,182
	_________	_________
Total dividends recognised in the year	1,400	1,182
	_________	_________

After the Balance Sheet date dividends of 2.0p per qualifying ordinary share (2015: 1.5p) were proposed by the Directors. This dividend has not been provided for.

 

END

 

 

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