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Amino Technologies (AMO)

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Tuesday 17 July, 2018

Amino Technologies

Half-Year Results

RNS Number : 8477U
Amino Technologies PLC
17 July 2018
 

17 July 2018

 

AMINO TECHNOLOGIES PLC

 

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

 

HALF YEAR RESULTS

 

 Strong revenue visibility and pipeline coverage - full year expectations confirmed

 

Amino Technologies plc (LSE AIM: AMO), the global provider of media and entertainment technology solutions to network operators, announces unaudited results for the six months ended 31 May 2018.

 

Financial highlights:





$m unless otherwise stated


2018

2017

Change


Revenue


41.2

49.8

(17%)


Adjusted gross profit


17.1

22.1

(23%)


 

Adjusted profit before tax (1)


3.8

9.0

(58%)


 

Adjusted basic earnings per share (US cents)(1)


5.19c

12.00c

(57%)


 







 

Statutory gross profit


17.3

22.1

(22%)


 

Statutory (loss)/profit before tax


(0.1)

6.3

(102%)


 

Statutory basic earnings per share (US cents)


0.21c

8.62c

(98%)


 







 

Net cash


15.0

16.8

(11%)


 

Interim dividend per share (GBP pence)


1.683p

1.530p

10%


 

 

Financial highlights

·      Expectations for full year confirmed:

More than 75% of full year revenues secured

Orders up 40% year on year

Good sales pipeline coverage for the remainder of the year

·      In line with previous guidance, H1 revenues lower than last year due to order phasing by one major customer, and greater second-half weighting as normal seasonality returns

·      Successfully mitigating pricing pressure on components

·      Strong cash generation and balance sheet

93% adjusted operating cash conversion

$15m net cash

·      Reporting currency changed to US Dollars to provide transparency of underlying performance

·      Interim dividend up 10%

 

Strategic and operational highlights

·      Good progress on our three strategic objectives: IP/Cloud TV Everywhere, Operator Ready Android TV and Upcycling legacy devices to next-generation TV experiences

·      Strategy to enable IP delivery 24/7 on any device gaining momentum

Delivering operator class end-to-end video delivery platforms

Standalone software and services account for 11% of revenues (up 400 bps)

Annual run rate recurring revenues up 27% to $4.7m (H1 2017: $3.7 million)

·      Disciplined approach to M&A



 

Keith Todd CBE, Non-Executive Chairman, said:

 

"It is encouraging to report material progress in delivering our three long-term strategic growth drivers - IP/Cloud TV Everywhere, Operator Ready Android TV and Upcycling Legacy devices to next generation TV experiences.  With more than 75% of expected full year revenues secured, and good visibility provided by our order backlog and pipeline, the Board remains confident in full year expectations.  We are pleased to recommend a 10% increase in the half year dividend, in line with our progressive dividend policy."

 

This announcement is released by Amino Technologies plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation (EU) 2016/1055, this announcement is being made on behalf of the Company by Mark Carlisle, Chief Financial Officer.

 

For further information please contact:

 

Amino Technologies plc

+44 (0)1954 234100

Donald McGarva, Chief Executive Officer


Mark Carlisle, Chief Financial Officer




finnCap Limited (NOMAD and Joint Broker)

+44 (0)20 7220 0500

Matt Goode / Carl Holmes / Simon Hicks - (Corporate Finance)


Tim Redfern / Richard Chambers - (ECM)




 

Liberum Capital Limited (Joint Broker)

 

+44 (0)20 3100 2000

Cameron Duncan / Bidhi Bhoma




FTI Consulting LLP (Financial communications)

+44 (0)20 3727 1000

Jamie Ricketts / Alex Le May / Darius Alexander


 

About Amino Technologies plc

Amino is a global leader in IP/cloud media and entertainment technology solutions and an IPTV pioneer, working with over 250 operators in 100-plus countries. Drawing on more than 20 years' experience delivering innovation, Amino enables operators to meet the challenges they face as broadcast TV and online video moves to an all-IP future with managed over-the-top (OTT) offerings. We are expert in software, hardware and cloud implementation - able to deploy our own leading-edge technologies and integrate these with third-party and 'upcycled' legacy systems. At the forefront of the evolution of TV Everywhere, Amino helps operators to provide the features and functionality modern consumers are looking for in a multiscreen, multi-device entertainment world. Amino Technologies plc is headquartered near Cambridge, in the UK, and is listed on the AIM market of the London Stock Exchange (AIM: symbol AMO). www.aminocom.com

 

Notes

(1) Adjusted operating profit, adjusted profit before tax and adjusted earnings per share are non-GAAP measures and exclude amortisation of acquired intangibles, exceptional items and share-based payment charges. Further details of these adjustments are set out in note 5.

 



 

Chief Executive Officer's review

 

Strategic progress

 

As a technology business helping operators provide smarter, more cost-effective ways of delivering modern TV experiences, Amino benefits from long-term structural industry growth drivers.  Consumers want flexible access to media, with 24/7 access to content on any device.  Operators are therefore innovating to meet these heightened customer expectations.  In turn, Amino is addressing operators' changing needs, by enabling an all-IP service, delivered via the Cloud, on a 24/7, multi-device basis.  We are seeing this demand translate into three clear market opportunities for Amino - the transition in the cable and satellite TV industry to IP/Cloud TV Everywhere, the emergence of Android TV as a credible service delivery choice for pay-TV operators and the upcycling of operator legacy devices to deliver new TV experiences.

 

Amino delivered a first half performance in line with our expectations and enters the second half with continued momentum in our key strategic areas. As previously announced, a change in the phasing of the delivery orders (for which purchase orders have already been received) by one of our major customers means that we are now returning to our normal seasonality with revenues weighted to the second half of the year. Given more than 75% of full year revenues are already secured, and with good pipeline coverage for the remainder of the year, the Board is confident of delivering a full year performance in line with its previous expectations.

 

The period saw encouraging growth in software sales and recurring revenues with important contract wins underlining our capabilities in delivering operator class end-to-end video delivery platforms. Software and services revenues sold on a standalone basis grew at 24% year on year and are now 11% of total revenue in the period (H1 2017: 7%), with annual run rate recurring revenues increasing to $4.7m million (H1 2017: $3.7 million).

 

We entered the year with a strong order backlog and have seen growing demand for our solutions with 40% more orders during the first half than in the corresponding period last year. As a result, we entered July with over 75% of our forecast revenue for the full year secured (i.e. revenue recognised plus orders received), in line with the same point last year.

 

As previously communicated, revenue was lower year-on-year at $41.2 million (H1 2017: $49.8 million) reflecting phasing of orders. Net cash at 31 May 2018 was $15.0m (31 May 2017: $16.8 million).

 

Strategic objectives

 

We have made material progress during the period against our three strategic objectives:

 

1.   IP/Cloud TV Everywhere; which provides telco and cable operators with the capabilities to provide the latest 'TV everywhere' experiences. Amino also enables cable operators to transition cost-effectively from Cable to IP. At the start of the year, Netherlands-based operator DELTA deployed our Amino TV video delivery platform as part of a major project to transition its existing cable TV subscriber base to an all IP-based multiscreen service model. As well as delivering significant bandwidth savings, the operator also deployed our service assurance platform to provide a range of further cost efficiencies including customer self-installation.

 

2.   Operator Ready Android TV; which has emerged as a credible service delivery choice for pay-TV operators with its ability to provide a rich user experience - with value added content - and new features like personalisation, content recommendation and voice control. Initial orders for devices have been secured in North America as demand is driven by our differentiated 'Operator ready' solution - which adds our own unique software capabilities to the underlying Android platform. During the period, we updated our platform to the latest 'Android O' version and have also carried out a series of well attended marketing workshops at industry events with Google and partners in Europe, North America and, most recently, Asia.

 

3.   Upcycle legacy STB to next-generation; where we utilise our core software to leverage an operator's existing assets, including their installed base of TV devices, to deliver new content and consumer experiences to the home. Our track record of delivering this transformational change for leading operators positions us strongly in our markets and we now have a solid pipeline of opportunities albeit with relatively long sales cycles.

 

Streamlining our portfolio

 

In addressing these market opportunities, we have simplified and streamlined our portfolio to better focus our capabilities:

 

·      AminoTV: this is our end-to-end platform - formerly MOVE - and offers customers a complete video service delivery solution from content ingest through to a consumer 'TV everywhere' experience.

·      AminoOS: this combines our core Enable and Android TV software stacks with the Engage service assurance platform in line with customer take-up of bundled offerings.

·      AminoView: this remains our device offering and includes IPTV, cable-hybrid TV and dual and single mode Android TV products.

 

We believe these changes will provide additional clarity to our propositions and align them more closely with both our customers and market trends.

 

Operational review

 

Our performance in the North American market was impacted by the phasing of orders received from a major customer, more of which will be recognised in the second half of the year than the first half. We continue to see sustained growth for our software-based service assurance platform which is becoming a key element in operators' efforts to drive down operational costs through improved remote troubleshooting and device self-installation which significantly reduces the requirement for an engineer to visit the customer.

 

Latin America was broadly flat year-on-year in terms of revenues; however, we have continued to make good progress with follow-on orders from key customers and secured a significant new contract with a major regional operator.

 

European sales recovered after a period of decline with a long-standing customer re-commencing orders in the second half of last year. Following on from the DELTA launch of multiscreen services, Dutch regional service provider Kabelnoord will also deploy the AminoTV platform to support a new service rollout in the second half of 2018. A contract win with T-2 in Slovenia to support their deployment of 4K UHD services was also announced during the period.

 

Operationally, we have been successfully mitigating ongoing industry-wide pricing pressure on key device components such as silicon, memory and multi-layer ceramic capacitors (MLCC).  Our relentless focus on supply chain management continues to mitigate, where possible, price increases for customers and hence this pricing pressure does not alter our confidence in meeting our previous expectations for the full year.  In line with many technology companies, we anticipate further pressure on component pricing and availability for the remainder of this year.

 

We continue to seek complementary acquisition opportunities to improve our product portfolio, whilst maintaining a disciplined approach to ensure such opportunities meet clearly defined strategic and financial objectives and therefore drive long-term shareholder value.  To that end, we evaluated more than one material acquisition opportunity during the period, incurring a modest amount of due diligence expenses before electing not to continue discussions.

 

Outlook

We have entered the second half of the year with a strong order book, backlog and pipeline coverage alongside a clear set of propositions for the markets we serve. Furthermore, over 75% of our forecast revenue for the full year is secured. Operationally, we will continue to focus on managing the supply chain to mitigate component price increases. As such, the Board is confident on delivering a full year performance in line with its previous expectations.

 

Donald McGarva

Chief Executive Officer

16 July 2018

Chief Financial Officer's review

On 6 June 2018 the Group announced that from the beginning of the current financial year it would be changing the currency in which it presents its financial results from UK pounds sterling ("sterling") to US dollars ("dollars"), denoted by the symbol $. Accordingly, the previously reported results for the six months ended 31 May 2017 and for the year ended 30 November 2017 have been translated from sterling to dollars using the exchange rates set out in note 7.

 

Revenue for the period decreased by 17% to $41.2m (H1 2017: $49.8m) primarily as a result of the previously communicated change in phasing of orders by one of our major customers. Adjusted operating profit was $3.8m (H1 2017: $9.0m), predominantly as a result of the reduction in revenue and therefore gross profit. Operating loss was $0.1m (H1 2017: $6.3m profit). In line with its progressive dividend policy, the Board has recommended an interim dividend of 1.683 sterling pence per share, a 10% increase over the prior year. The Group has a strong balance sheet with net cash at 31 May 2018 of $15.0m (FY 2017: $17.4m, H1 2017: $16.8m) and is debt free.

 

Revenue

 


H1

2018

$m

H1 2017

$m

Change



 

Recurring

2.3

1.9

21%



One-off

2.3

1.8

28%



Software and services

4.6

3.7

24%



Devices including integrated software

36.6

46.1

(21%)



Revenue

41.2

(17%)



 

Software and service revenues represent revenues from our AminoTV TV Everywhere platform, our AminoOS software sold independently from devices as well as support for our AminoView devices. Software and service revenues increased by 24% in H1 2018 as a result of growth across all these revenue streams and are now 11% of total revenues for the period (H1 2017: 7%). Annual run rate recurring revenues increased to $4.7m million (H1 2017: $3.7 million). Device revenue declined as a result of the change in phasing of orders by one of our major customers in North America and we expect this trend to reverse in the second half of the year.

 

The Group's revenues are globally distributed as follows:


As reported




H1

2018

$m

H1

2017

$m

Change


North America

20.4

(34%)


Latin America

6.9

7.4

(7%)


Europe

13.4

10.7

25%


Rest of World

0.5

0.6

(17%)


Revenue

41.2

(17%)


 

In North America, revenue declined as a result of the change in phasing of orders by one of our major customers. In Europe, sales growth was driven by a long-standing customer re-commencing orders in the second half of last year, as well as growth in software and services.

 

Gross profit

Excluding the impact of a one off $0.2m credit in respect of royalty costs recognised in prior years which have subsequently been renegotiated, adjusted gross profit decreased by 23% to $17.1m (H1 2017: $22.1m). Adjusted gross margin decreased slightly to 42% (H1 2017: 44%) as increases in silicon and memory prices were not fully offset by higher margin software revenue. We expect continued component pricing pressure of silicon, memory and MLCC to continue into H2 2018, consistent with our full year expectations. Including the impact of the one off $0.2m credit (described above), gross profit decreased by 22% to $17.3m (H1 2017: $22.1m).

 

Operating expenses


As reported




H1

2018

$m

H1

2017

$m

Change


R&D

3.5

-%


SG&A

6.8

7.2

(6)%


Share-based payment charge

0.7

0.6

17%


Exceptional costs

1.9

0.7

171%


Depreciation and amortisation

4.6

3.8

21%


Operating expenses

17.5

11%


 

In H1 2018, the Group's R&D and SG&A costs were denominated 45% in US and HK Dollars (H1 2017: 51%), 40% in sterling (H1 2017: 40%) and 15% in Euros (H1 2017: 9%). In March, we completed the final stage of rationalising our three R&D centres into two which resulted in $1.4m annualised cost reductions.

 

The Group continues to invest in research and the development of new products and spent $5.8m on R&D activities (H1 2017: $6.2m) of which $2.2m was capitalised (H1 2017: $2.7m). Share based payment charges totalled $0.7m (H1 2017: $0.6m).

 

Exceptional items

Exceptional items included within operating expenses in H1 2018 comprised $1.6m restructuring costs incurred as a result of the final rationalisation of our R&D centres. $0.3m costs were also incurred in respect of more than one potential, material acquisition.  These were aborted following the completion of phase one of due diligence.

 

Depreciation and amortisation

Excluding amortisation of intangibles recognised on acquisition, depreciation and amortisation was $3.0m (H1 2017: $2.4m). Amortisation of intangibles recognised on acquisition was $1.5m (H1 2017: $1.4m).

 

Operating profit

Adjusted operating profit excluding share-based payment charges of $0.7m, exceptional items of $1.7m and amortisation of intangibles recognised on acquisition of $1.5m was $3.8m (H1 2017: $9.0m). Statutory operating loss was $0.1m (H1 2017: $6.3m profit).

 

Taxation

The tax charge comprises a $0.3m credit relating to the unwinding of the deferred tax liability recognised in respect of the amortisation of intangible assets recognised on acquisition.

 

Profit after tax

Profit after tax was $0.2m (H1 2017: $6.2m).

 

Earnings per share

After adjusting for the after-tax impact of exceptional items, share-based payment charges and amortisation of intangibles recognised on acquisition, adjusted basic earnings per share decreased by 57% to 5.19 US cents (H1 2017: 12.00 US cents) and adjusted diluted earnings per share decreased by 56% to 5.14 US cents (H1 2017: 11.7 US cents). Basic earnings per share was 0.21 US cents (H1 2017: 8.62 US cents) and diluted earnings per share was 0.21 US cents (H1 2017: 8.40 US cents).

 

Cash flow

Adjusted cash flow from operations was $6.3m (H1 2017: $16.4m) and represented 93% of adjusted EBITDA (H1 2017: 148%). In H1 2017, adjusted cash flow from operations benefitted from a $5m working capital inflow which resulted from larger orders being completed well in advance of the period end. The timing of order completion in H1 2018 meant that this was not repeated. Exceptional cash costs as a result of the R&D centre rationalisation were $1.2m. Cash generated from operations was $5.1m (H1 2017: $16.4m).

 

During the period the Group spent $0.1m (H1 2017: $0.1m) on capital expenditure and capitalised $2.2m of research and development costs (H1 2017 $2.7m). The Group also paid dividends of $5.2m.

 

Financial position

The Group had net cash balances at 31 May 2018 of $15.0m (FY 2017: $17.4m, H1 2017: $16.8m). The Group also has a £15.0m sterling multicurrency working capital loan facility which amortises to £12.5m sterling in July 2018 and to £10m sterling in July 2019. It expires in July 2020 and was undrawn at the period end.

 

At 31 May 2018 the Group had total equity of $68.4m (FY 2017: $73.1m, H1 2017: $62.2m) and net current assets of $11.7m (FY 2017: $14.4m, H1 2017: $6.5m). 76% of trade receivables were insured (FY 2017: 70%, H1 2017: 61%) and debtor days were 27 days (FY 2017: 26 days, H1 2017: 25 days).

 

Dividend

The Board is pleased to confirm that it intends to recommend an interim dividend of 1.68 pence sterling per share (H1 2017: 1.53 pence sterling per share), representing a 10% year-on-year increase, in line with Amino's previously stated progressive dividend policy. This will be payable on 3rd September 2018. The record date for the interim dividend is 10th August 2018 and the corresponding ex-dividend date is 9th August 2018. 

 

Mark Carlisle

Chief Financial Officer

16 July 2018


Consolidated Income Statement

For the six months ended 31 May 2018



Six months ended 31 May 2018 Unaudited

Six months ended 31 May 2017 Unaudited

Year ended
30 November 2017 Unaudited


Notes

Total

$000s

Total

$000s

Total

$000s

Revenue

3

41,178

49,839

96,136

Cost of sales


(23,830)

(27,706)

(50,890)



__________

__________

__________

Gross profit


17,348

22,133

45,246





(

Operating expenses


(17,472)

(15,817)

(32,068)



_________

_________

_________

Operating (loss)/profit


(124)

6,316

13,178











Analysed as:










Adjusted operating profit


3,801

9,017

15,051






Share based payment charge


(652)

(543)

(996)

Exceptional items

4

(1,726)

(750)

2,003

Amortisation of acquired intangible assets


(1,547)

(1,408)

(2,880)



__________

__________

__________

Operating (loss)/profit


(124)

6,316

13,178
















Finance expense


(86)

(3)

(5)

Finance income


54

-

111



__________

__________

__________

Net finance (expense)/income


(32)

(3)

106



__________

__________

__________

(Loss)/profit before tax


(156)

6,313

13,284

Tax credit/(charge)


309

(148)

2,001



__________

__________

__________

Profit/(loss) for the period from continuing operations attributable to equity holders

153

6,165

15,285



__________

__________

__________






Basic earnings per 1p ordinary share

5

0.21c

8.62c

21.27c

Diluted earnings per 1p ordinary share

5

0.21c

8.40c

20.84c

 

 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

 

 



 

Consolidated Statement of Comprehensive Income

For the six months ended 31 May 2018


 

 

 

 

Six months

 ended 31 May 2018

Unaudited

Six months

 ended 31 May 2017

Unaudited

Year ended

30 November

2017

Unaudited



$000s

$000s

$000s

Profit for the period


153

6,165

15,285






Foreign exchange difference arising on consolidation


(415)

1,630

4,041

Other comprehensive (expense)/ income


(415)

1,630

4,041

Total comprehensive (loss)/income for the period

 

 

(262)

7,795

19,326

 

 

 



 

Consolidated Balance Sheet

As at 31 May 2018


 

 

 

 

Notes

As at

31 May 2018

Unaudited


As at

31 May 2017

Unaudited


As at

30 November 2017

Unaudited

Assets


$000s


$000s


$000s

Non-current assets







Property, plant and equipment


684


838


793

Intangible assets


58,147


59,295


60,672

Deferred tax assets


744


719


751

Other receivables


409


398


408



59,984


61,250


62,624

Current assets







Inventories


4,315


7,078


4,285

Trade and other receivables


17,388


6,305


15,233

Cash and cash equivalents


15,049


16,837


17,386



36,752


30,220


36,904

Total assets


96,736


91,470


99,528








Capital and reserves attributable to equity holders of the business







Called-up share capital


1,327


1,327


1,327

Share premium


32,300


32,300


32,300

Capital redemption reserve

Foreign exchange reserves


12

(12,241)


12

(14,237)


12

(11,826)

Other reserves


30,122


30,122


30,122

Retained earnings


16,836


12,632


21,158

Total equity


68,356


62,156


73,093

 

Liabilities







Current liabilities







Trade and other payables


25,062


23,008


22,499

Corporation tax payable


12


688


26



25,074


23,696


22,525

Non-current liabilities







Provisions


1,768


3,552


2,056

Deferred tax liability


1,538


2,066


1,854



3,306


5,618


3,910








Total liabilities


28,380


29,314


26,435








Total equity and liabilities


96,736


91,470


99,528

 

 

The interim condensed consolidated financial statements on pages 8 to 18 were approved by the Board of directors on 16 July 2018 and were signed on its behalf by Donald McGarva, Director.

 



 

Consolidated Cash Flow Statement

For the six months ended 31 May 2018


 

 

 

 

Notes

Six months

ended 31 May

 2018

Unaudited


Six months

ended 31 May 2017

Unaudited


Year to 30 November

2017

Unaudited



$000s


$000s


$000s

Cash flows from operating activities







Cash generated from operations

6

5,087


16,412


22,246

Net corporation tax paid


-


(11)


(717)

Net cash generated from operating activities


5,087


16,401


21,529








Cash flows from investing activities







Expenditure on intangible assets


(2,239)


(2,654)


(6,041)

Purchase of property, plant and equipment


(112)


(102)


(272)

Interest received/(paid)


54


(3)


106

Acquisition of subsidiary


-


(494)


(494)

Net cash used in investing activities


(2,297)


(3,253)


(6,701)








Cash flows from financing activities







Proceeds from exercise of employee share options


93


146


444

Dividends paid


(5,220)


(4,194)


(5,623)

Net cash used in financing activities


(5,127)


(4,048)


(5,179)

 

Net (decrease)/increase in cash and cash equivalents


 

(2,337)


 

9,100


 

9,649

Cash and cash equivalents at start of the period


17,386


7,737


7,737

Effects of exchange rate fluctuations on cash held







Cash and cash equivalents at end of period


15,049


16,837


17,386

 

 

 

The accompanying notes are an integral part of these interim condensed consolidated financial statements.

Consolidated Statement of Changes in Equity


Share

capital

Share premium

 

Merger reserve

Foreign exchange reserve

Capital redemption reserve

Profit and loss account

Total


$000s

$000s

$000s

$000s

$000s

$000s

$000s









Shareholders' equity at 1 December 2016 (unaudited)

1,325

31,871

30,122

(15,867)

12

9,597

57,060









Profit for the period

-

-

-

-

-

6,165

6,165

Other comprehensive income

-

-

-

1,630

-

-

1,630

Total comprehensive income for the period attributable to equity holders

-

-

-

1,630

-

6,165

7,795

Share based payment charge

-

-

-

-

-

543

543

Exercise of employee share options

-

-

-

-

-

146

146

Issue of new shares

2

429

-

-

-

-

431

Treasury shares used

-

-

-

-

-

375

375

Dividends paid

-

-

-

-

-

(4,194)

(4,194)

Total transactions with owners

2

429

-

-

-

(3,130)

(2,699)









Total movement in shareholders' equity

2

429

-

1,630

-

3,035

5,096









At 31 May 2017 (unaudited)

1,327

32,300

30,122

(14,237)

12

12,632

62,156

 

 

 

 








Shareholders' equity at 1 December 2017 (unaudited)

1,327

32,300

30,122

(11,826)

12

21,158

73,093









Profit for the period

-

-

-

-

-

153

153

Other comprehensive expense

-

-

-

(415)

-

-

(415)

Total comprehensive loss for the period attributable to equity holders

-

-

-

(415)

-

153

(262)









Share based payment charge

-

-

-

-

-

652

652

Exercise of employee share options

-

-

-

-

-

93

93

Dividends paid

-

-

-

-

-

(5,220)

(5,220)

Total transactions with owners

-

-

-

-

-

(4,475)

(4,475)









Total movement in shareholders' equity

-

-

-

(415)

-

(4,322)

(4,737)









At 31 May 2018 (unaudited)

1,327

32,300

30,122

(12,241)

12

16,836

68,356

 


Notes to the interim condensed consolidated financial statements

Six months ended 31 May 2018

 

 

1          General information

 

Amino Technologies plc ('the Company') and its subsidiaries (together 'the Group') specialises in IPTV software technologies and hardware platforms that enable delivery of digital programming and interactivity over IP networks, including the internet. 

 

The Company is a public limited company which is listed on the AIM market of the London Stock Exchange and is incorporated and domiciled in England and Wales.

 

2          Basis of preparation

 

These interim condensed consolidated financial statements have been prepared using accounting policies based on International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations published by 31 May 2018 as endorsed by the European Union (EU). The accounting policies, presentation and methods of computation followed in the preparation of these interim consolidated financial statements are consistent with those applied in the Group's audited financial statements for the year ended 30 November 2017, except for the change in presentational currency. These interim condensed consolidated financial statements are not required to and do not comply with IAS 34 "Interim financial reporting".

 

The financial information presented for the six-month periods ended 31 May 2018 and 31 May 2017 has not been audited. The comparative financial information presented for the year ended 30 November 2017 does not constitute, the full statutory Annual Report of Amino Technologies plc for that year and is not audited due to the change in presentation currency (the audited statutory annual report of Amino Technologies plc for the year ended 30 November 2017 was presented in sterling). The statutory Annual Report and Financial statements for 2017 have been delivered to the Registrar of Companies. The independent Auditors' Report on that Annual Report and Financial Statements for the year ended 30 November 2017 was unqualified and did not contain a statement under Section 498(2) or Section 498(3) Companies Act 2006.

 

After making enquiries, the Directors have concluded that the Group has adequate resources to continue operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing these interim condensed consolidated financial statements.

 

Change in presentation currency

 

On 6 June 2018 the Group announced that from the beginning of the current financial year it would be changing the currency in which it presents its financial results from UK pounds sterling ("sterling") to US dollars ("dollars").  Accordingly, the reported results for the six months ended 31 May 2017 and for the year ended 30 November 2017 have been translated from sterling to dollars.

 

The trading results of subsidiaries where the functional currency was other than dollars were translated into dollars at the relevant average rates of exchange while the assets and liabilities of these operations were translated into dollars at the relevant closing rates of exchange.  A change in presentation currency represents a change in accounting policy which is accounted for retrospectively.



 

3          Revenue

 

Based on the management reporting system, the Group has only one operating segment, being the development and sale of broadband network software and systems, including licensing and support services. All revenues, costs, assets and liabilities relate to this segment. The information provided to the Amino Technologies plc chief operating decision maker is measured in a manner consistent with the measures within the financial statements. The chief operating decision maker is the executive board.  

 

The geographical analysis of revenue from external customers generated by the identified operating segment is:

 


Six months

 ended

31 May 2018

Unaudited


Six months

 ended

 31 May 2017

Unaudited


Year to

30 November

2017

Unaudited


$000s


$000s


$000s







North America

20,382


31,081


60,513

Latin America

6,900


7,418


10,635

Europe

13,368


10,700


23,212

Rest of the World

528


640


1,776


41,178


49,839


96,136

 

4          Exceptional items

 

Exceptional items included within cost of sales and operating expenses comprised: 


Six months

 ended

31 May 2018

Unaudited


Six months

 ended

 31 May 2017

Unaudited


Year to

30 November

2017

Unaudited

$000s


$000s


$000s






(224)


-


(2,387)

(224)


-


(2,387)






Contingent post acquisition remuneration

-


750


1,046

Release of deferred contingent consideration (conditions not met)

-


-


(831)

Redundancy and associated costs

1,612


-


169

Aborted acquisition costs

338


-


-

Subtotal operating expenses

1,950


750


384

Total exceptional items

1,726


750


(2,003)

 

The Group identifies and reports material, non-recurring and incremental costs and income as exceptional items separately from underlying operating expenses and income.  Exceptional and other costs may include: restructuring costs (as defined in IAS 37 Provisions, Contingent Liabilities and Contingent Assets), legal and professional advisors fees in respect of acquisition costs, including aborted acquisitions, and contingent post-acquisition remuneration payable relating to the acquisition of Entone, Inc.



 

5          Earnings per share

 


Six months

ended 31 May

2018

Unaudited


Six months

ended 31 May

2017

Unaudited


Year to

30 November

2017

Unaudited


$000s


$000s


$000s







Profit attributable to shareholders

153


6,165


15,285

Adjustments:






Employee share based payment charge

652


543


996

Exceptional items

1,726


750


(2,003)

Amortisation on acquired intangible assets

1,547


1,408


2,880

Tax associated with above items

(309)


(282)


(576)

Adjusted profit for the period

3,769


8,584


16,582








Number


Number


Number

Weighted average number of shares (Basic)

72,624,967


71,507,847


71,851,262

Weighted average number of shares (Diluted)

73,396,708


73,373,264


73,350,612













Basic earnings per share (cents)

0.21


8.62


21.27

Diluted earnings per share (cents)

0.21


8.40


20.84







Adjusted basic earnings per share (cents)

5.19


12.00


23.08

Adjusted diluted earnings per share (cents)

5.14


11.70


22.61







 

 

The calculation of basic earnings per share is based on profit after taxation and the weighted average number of ordinary shares of 1p each in issue during the period, as adjusted for shares held by an Employee Benefit Trust and held by the Company in treasury.

 

Adjusted earnings per share is a non-GAAP measure and therefore the approach may differ between companies.

 

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary share options and shares to be issued in respect of the contingent post acquisition remuneration relating to the acquisition of Entone, Inc.  The Group has only one category of dilutive potential ordinary share options: those share options where the vesting conditions have not yet been met.


6          Cash generated from operations


Six months ended

31 May 2018

Unaudited

Six months ended

31 May 2017

Unaudited

Year ended
30 November 2017

Unaudited


$000s

$000s

$000s





(Loss)/profit before tax

(156)

6,313

13,284

Net finance charges/(income)

32

3

(106)

Amortisation charge

4,352

3,553

7,925

Depreciation charge

216

207

423

Loss on disposal of property, plant & equipment

-

-

1

Share based payment charge

652

543

996

Exchange differences

126

511

481

(Increase)/decrease in inventories

(30)

(146)

2,646

(Increase)/decrease in trade and other receivables

(2,155)

11,508

3,065

Increase/(decrease) in trade and other payables

2,050

(6,080)

(6,469)

Cash generated from operations

5,087

16,412

22,246

 

Adjusted operating cash flow before exceptional cash outflows was $6,345k (H1 2017 $16,411k) and is reconciled to cash generated from operations as follows:


Six months ended

31 May 2018

Unaudited

Six months ended

31 May 2017

Unaudited

Year ended

30 November 2017

Unaudited


$000s

$000s

$000s





Adjusted operating cashflow

6,350

16,412

23,746



-

-

Redundancy and associated costs

(1,214)

-

-

Contingent post-acquisition remuneration

-

-

(1,500)

Acquisition costs

(49)

-

-





Cash generated from operations

5,087

16,412

22,246

 

Adjusted cash generated from operations is a non-GAAP measure and excludes cash from exceptional items.


Six months ended

31 May 2018

Unaudited

Six months ended

31 May 2017

Unaudited

Year ended

30 November 2017

Unaudited


$000s

$000s

$000s





Adjusted EBITDA

6,822

11,369

20,520

Adjusted operating cashflow conversion %

93%

144%

116%



-

-

Exceptional items

(1,726)

(750)

2,003

Share based payment charge

(652)

(543)

(996)





EBITDA

4,444

10,076

21,527

Operating cashflow conversion %

114%

163%

103%

 

Adjusted EBITDA is a non-GAAP measure and is defined as earnings before interest, taxation, depreciation, loss on disposal of property, plant and equipment, amortisation, exceptional items and share based payment charges.

7          Five year US dollar comparative information

 


Year ended 30 November

Income statement

2017

Unaudited

2016

Unaudited

2015

Unaudited

2014

Unaudited

2013

Unaudited


$m

$m

$m

$m

$m







Revenue

96.1

101.6

63.9

59.8

55.9

Adjusted EBITDA

20.5

17.4

11.4

11.2

9.5

Adjusted operating profit

15.1

13.0

7.8

6.9

5.3

Exceptional and other items

(1.9)

(10.4)

(7.5)

(0.3)

1.2

Interest (net)

0.1

0.0

0.1

0.1

0.1

Profit before tax

13.3

2.6

0.4

6.7

6.6

Tax credit/(charge)

2.0

(0.2)

0.1

0.0

(0.1)

Profit attributable to equity holders

15.3

2.4

0.5

6.7

6.5







Average number of employees

197

209

150

100

103

 

 


Year ended 30 November

Earnings per share

2017

Unaudited

2016

Unaudited

2015

Unaudited

2014

Unaudited

2013

Unaudited


$ cents

$ cents

$ cents

$ cents

$ cents







Adjusted basic

23.08

18.78

13.13

13.36

10.10

Adjusted diluted

22.61

18.59

13.06

13.25

10.02







Basic

21.27

3.68

0.93

12.69

12.31

Diluted

20.84

3.65

0.92

12.51

12.22













Dividends












Dividend per ordinary share GBP pence

6.65

6.05

5.50

5.00

3.45

Dividend per ordinary share USD cents

8.52

8.33

8.43

8.26

5.38

 

 


As at 30 November

Balance sheet

2017

Unaudited

2016

Unaudited

2015

Unaudited

2014

Unaudited

2013

Unaudited


$m

$m

$m

$m

$m







Non-current assets

62.6

60.5

71.6

7.6

8.2

Net current assets

14.4

2.4

5.0

32.7

32.5

Total assets less current liabilities

77.0

62.9

76.6

40.3

40.7

Non-current liabilities

-

(0.8)

(2.7)

-

-

Provisions for liabilities and charges

(3.9)

(5.1)

(6.2)

-

-

Net assets

73.1

57.0

67.7

40.3

40.7







Called up share capital

1.3

1.3

1.1

0.9

0.9

Reserves

71.8

55.7

66.6

39.4

39.8

Shareholders' funds

73.1

57.0

67.7

40.3

40.7

 



Exchange rates used USD:GBP

2017

2016

2015

2014

2013







Average rate

1.28061

1.37702

1.53254

1.65267

1.56034

Year end rate

1.33975

1.24440

1.50311

1.56386

1.63477







 

8          Cautionary statement

 

This document contains certain forward-looking statements relating to the Group. The Group considers any statements that are not historical facts as "forward-looking statements". They relate to events and trends that are subject to risk and uncertainty that may cause actual results and the financial performance of the Group to differ materially from those contained in any forward-looking statement. These statements are made by the Directors in good faith based on information available to them and such statements should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying any such forward-looking information


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