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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Global Invacom Group Limited | LSE:GINV | London | Ordinary Share | SG2E91982768 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.00 | 2.50 | 3.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMGINV
RNS Number : 9937I
Global Invacom Group Limited
11 August 2023
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law.
Global Invacom Group Limited
("Global Invacom", the "Company" or the "Group")
Half year results for the six months ended 30 June 2023
Singapore/London, 11 August 2023 - Global Invacom (SGX: QS9) (AIM: GINV), the global provider of satellite communications equipment and electronics , announces its financial results for the six months ended 30 June 2023 ("1H FY2023").
The Group continues to see some lag in demand for certain legacy products as a result of delays to launch schedules which are being seen across the industry. This, alongside continued supply chain issues, has resulted in the Group recording a net loss after tax for the year. However due to increased business focus on product mix, gross profit improved.
Key financial highlights:
-- Revenue for 1H FY2023 decreased 16.3% to US$31.3 million (1H FY2022: US$37.4 million) -- Gross profit increased 12.7% to US$8.3 million (1H FY2022: US$7.4 million) -- Gross profit margin increased to 26.5% (1H FY2022: 19.7%) -- Net loss after tax of US$2.1 million (1H FY2022: US$3.3 million)
-- Cash and cash equivalents of US$5.5 million at 30 June 2023 (30 December 2022: US$9.2 million)
Key operational highlights:
-- Sustained focus on development and launch of market-leading products to respond to client and sector demands
-- Management is pleased to report that we have started to ship our new XRJ Ka Band transceiver product to customers. Whilst the completion of the manufacturing process has taken longer than initially planned, which has impacted 1H sales levels, we continue to see encouraging levels of market interest for the product
-- Development of two new non-geostationary gateway antenna ("NGSO") products in the period:
o Titan, the Group's latest multi-constellation and multi-band gateway antenna platform for permanent or temporary deployment
o Obliquiti, a new Low Earth Orbit ("LEO") and Medium Earth Orbit ("MEO") platform for broadband and narrowband use, equipped with AI-based software for satellite acquisition, tracking and switching
-- Delays to launches across the satellite industry have resulted in customers postponing orders for certain legacy products, which has had an impact on trading in the first half of the year
-- Whilst pressures on global supply chains have started to ease, there remains pressure on the semiconductors supply chain, which has impacted on the Company's revenue generation capabilities
-- We are starting to see the benefits of the strategic review, which was announced in Q3 FY2022, with progress made in stabilising our operations and streamlining core functions
-- The Board strategic review remains ongoing, as it continues to assess the Group's existing corporate and operational structure, the Company's cost base, and to streamline certain core functions in order to maximise stakeholder returns in the medium term
There has been continued supply chain disruption experienced in the satellite communications sector. As a designer, manufacturer, and provider of technologically advanced satellite communication products to an international customer base, this disruption has inevitably resulted in sustained challenging trading conditions for the Group. Despite customers continuing to delay the purchase of some products and with postponements to launch schedules, the Group moved quickly to optimise efficiencies at our US manufacturing facilities, which has resulted in an improvement in our net loss compared to 1H FY2022. We envisage these challenging macro-economic dynamics will be present for some time to come, and remain focused on mitigating these pressures while ensuring the Group is well poised to respond to customer demands and requirements for new products.
Despite the continued headwinds, the Group has made progress in 1H FY2023 with gross profit increasing 12.7% to US$8.3 million, and delivering a 6.8 percentage points improvement in gross profit margin to 26.5%, driven by increased business focus on product mix.
Our research and development ("R&D") team continue to bring new products to market in response to customer demands and on the assessment of the broader marketplace. The Group's latest multi-constellation and multi-band gateway antenna, Titan, was developed in the first half of the year. Titan is a NGSO which uses an ultra-robust lightweight carbon fibre composite and provides operators with deployment flexibility and uncompromised performance. During the period the Group also continued to develop the Obliquiti NGSO, a novel platform for broadband and narrowband use. Obliquiti is suitable for fixed, nomadic and mobile applications, and is equipped with SatSenz, the Group's AI-based software for satellite acquisition, tracking and switching.
We continue to see increasing demand for satellite communication systems, driven by growth in the demand for data and connectivity globally. A recent report shows that the number of global Internet of Things ("IoT") connections grew by 18% in 2022 to 14.3 billion active IoT endpoints, with a further 16% growth expected in 2023[1]. Furthermore, there is increasing awareness of the need for mission critical communications systems which are able to maintain communications when land-based infrastructure is disrupted or unable to cope with challenging geographical terrain.
The Company remains focused on enhancing its R&D team to ensure the Group is well-placed to deliver cutting-edge, market-leading products, and thereby maintaining its position as a technological pioneer, supporting the ever-growing satellite industry. We are building the right team to continue to deliver best-in-class solutions, and to work alongside customers to respond to specific demands and requirements, cementing our role as an integral equipment provider and partner in the satellite communications ecosystem.
Outlook
Due to the continued pressures in the broader trading environment, the current financial year is expected to continue to be challenging for the Group.
The Board strategic review remains ongoing, as it continues to assess the Group's existing corporate and operational structure, and to streamline certain core functions, whilst seeking to secure new markets and customers and maximise stakeholder returns in the medium term.
Gordon Blaikie, Interim Chief Executive Officer of Global Invacom, commented:
"We continue to make steady progress, as we have focused our attentions on situations under our control, which - alongside our ongoing strategic review - has resulted in delivering an improved gross profit for the first half of the year.
"We are cognisant of market demands, and the need to develop and launch new products and have seen our R&D team develop exciting new NGSO products for the market.
"Whilst the market continues to experience delays to satellite launches, we are now seeing signs of renewed customer activity and an acceleration of timetables. We remain committed to our technology and working with our partners to ensure we are an integral part of the supply chain process.
"The Board and management would like to thank the entire team at Global Invacom for their continued efforts and dedication to the business, without whom we would not be able to deliver the quality of products required for such a demanding environment."
For further information, please contact:
Global Invacom Group Limited www.globalinvacom.com Gordon Blaikie, Interim Chief Executive via Vigo Consulting Officer Strand Hanson Limited (Nominated Adviser www.strandhanson.co.uk and Broker) James Harris / Richard Johnson / David Tel: +44 20 7409 Asquith 3494 Vigo Consulting (UK Media & Investor www.vigoconsulting.com Relations) Jeremy Garcia / Fiona Hetherington / Tel: +44 20 7390 Kendall Hill 0238 ginv@vigoconsulting.com
About Global Invacom Group Limited
Global Invacom Group comprises a number of companies specialising in innovative technology, products and solutions for the satellite ground equipment sector. Uniquely, the Group provides fully integrated manufacturing for most of its product lines providing additional quality and supply chain assurance to a global blue-chip customer base in the satellite communications, satellite TV and satellite navigation markets.
The Group has an established global presence with sales offices, research and development centres and manufacturing facilities across the world, including Singapore, China, Indonesia, the Philippines, Malaysia, Israel, the UK, and the USA.
Global Invacom is listed on the Mainboard of the Singapore Exchange Securities Trading Limited and its shares are admitted to trading on the AIM Market of the London Stock Exchange.
For more information, please refer to www.globalinvacom.com
UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS
For The Six Months Ended 30 June 2023
A. Condensed Interim Consolidated Statement of Comprehensive Income Group ------------------------------------------------------------------------------------ 1H 1H Increase/ FY2023 FY2022 (Decrease) US$'000 US$'000 % Revenue 31,338 37,420 (16.3) Cost of sales (23,031) (30,051) (23.4) Gross profit 8,307 7,369 12.7 Other income 432 37 N.M. Distribution costs (113) (156) (27.6) Administrative expenses (8,518) (8,106) 5.1 Research and development expenses (1,847) (1,969) (6.2) Other operating expenses (194) (257) (24.5) Finance costs (174) (171) 1.8 Loss before income tax (2,107) (3,253) (35.2) Income tax expense (29) (39) (25.6) --------------------------- --------------------------- -------------------------- Loss for the period (2,136) (3,292) (35.1) --------------------------- --------------------------- -------------------------- Other comprehensive income/(loss): Items that may be reclassified subsequently to profit or loss * Exchange differences on translation of foreign subsidiaries 917 (19) N.M. Other comprehensive income/(loss) for the period, net of tax 917 (19) N.M. --------------------------- --------------------------- -------------------------- Total comprehensive loss for the period (1,219) (3,311) (63.2) --------------------------- --------------------------- -------------------------- Loss for the period attributable to: Equity holders of the Company (2,136) (3,289) (35.1) Non-controlling interests - (3) (100.0) (2,136) (3,292) (35.1) ------------------ ------------------- --------------- Total comprehensive loss for the period attributable to: Equity holders of the Company (1,219) (3,308) (63.1) Non-controlling interests - (3) (100.0) (1,219) (3,311) (63.2) ------------------ ------------------- ---------------
N.M.: Not Meaningful
B. Condensed Interim Statements of Financial Position Group Company ------------------------------------------- ----------------------------------------- 30 Jun 31 Dec 30 Jun 31 Dec 2023 2022 2023 2022 US$'000 US$'000 US$'000 US$'000 ASSETS Non-current Assets Property, plant and equipment 6,343 6,641 6 - Right-of-use assets 2,314 3,095 - 41 Investments in subsidiaries - - 17,877 17,824 Goodwill 893 893 - - Intangible assets 1,280 1,417 - - Deferred tax assets 235 585 - - Other receivables and prepayments 54 54 - - 11,119 12,685 17,883 17,865 -------------------- --------------------- -------------------- ------------------- Current Assets Due from subsidiaries - - 2,009 2,499 Inventories 22,894 22,869 - - Trade receivables 12,384 10,011 - - Other receivables and prepayments 2,371 1,274 14,274 13,786 Tax receivables 190 167 - - Cash and cash equivalents 5,502 9,244 182 168 -------------------- --------------------- -------------------- ------------------- 43,341 43,565 16,465 16,453 -------------------- --------------------- -------------------- ------------------- Total assets 54,460 56,250 34,348 34,318 -------------------- --------------------- -------------------- ------------------- EQUITY AND LIABILITIES Equity Share capital 60,423 60,423 74,240 74,240 Treasury shares (1,656) (1,656) (1,656) (1,656) Reserves (26,326) (25,160) (38,388) (38,472) -------------------- --------------------- -------------------- ------------------- Equity attributable to owners of the Company 32,441 33,607 34,196 34,112 Non-controlling interests (24) (24) - - -------------------- --------------------- -------------------- ------------------- Total equity 32,417 33,583 34,196 34,112 -------------------- --------------------- -------------------- ------------------- Non-current Liabilities Other payables 172 172 - - Lease liabilities 1,446 1,599 - - Deferred tax liabilities 211 684 - - 1,829 2,455 - - -------------------- --------------------- -------------------- ------------------- Current Liabilities Trade payables 11,672 10,006 - - Other payables 3,385 3,109 152 168 Borrowings 4,200 5,488 - - Lease liabilities 957 1,607 - 38 Provision for income tax - 2 - - 20,214 20,212 152 206 -------------------- --------------------- -------------------- ------------------- Total liabilities 22,043 22,667 152 206
-------------------- --------------------- -------------------- ------------------- Total equity and liabilities 54,460 56,250 34,348 34,318 -------------------- --------------------- -------------------- ------------------- C. Condensed Interim Statements of Changes in Equity Attributable to Group equity Foreign holders Capital Share currency of Share Treasury Merger redemption options Capital translation Retained the Non-controlling capital shares reserves reserves reserve reserve reserve profits Company interests Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Balance as at 1 January 2023 60,423 (1,656) (10,150) 6 761 (7,836) 581 (8,522) 33,607 (24) 33,583 Share-based payments - - - - 4 - 49 - 53 - 53 Transfer to capital reserve in accordance with statutory requirements - - - - - 14 - (14) - - - Loss for the period - - - - - - - (2,136) (2,136) - (2,136) Other comprehensive income: Exchange differences on translating foreign operations - - - - - - 917 - 917 - 917 --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- Total other comprehensive income/(loss) for the period - - - - - - 917 (2,136) (1,219) - (1,219) --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- Balance as at 30 June 2023 60,423 (1,656) (10,150) 6 765 (7,822) 1,547 (10,672) 32,441 (24) 32,417 --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- Balance as at 1 January 2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,084) 4,229 47,384 (19) 47,365 Loss for the period - - - - - - - (3,289) (3,289) (3) (3,292) Other comprehensive loss: Exchange differences on translating foreign operations - - - - - - (19) - (19) - (19) --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- Total other comprehensive loss for the period - - - - - - (19) (3,289) (3,308) (3) (3,311) --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- Balance as at 30 June 2022 60,423 (1,656) (10,150) 6 725 (5,109) (1,103) 940 44,076 (22) 44,054 --------------------- --------------------- --------------------- ----------------------- --------------------- ------------------------ ----------------------- ------------------------- ------------------------ ----------------------- --------------------- C. Condensed Interim Statements of Changes in Equity (cont'd) Foreign Share currency Share Treasury options Capital translation Accumulated Company capital shares reserve reserve reserve losses Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Balance as at 1 January 2023 74,240 (1,656) 713 (4,481) (2,506) (32,198) 34,112 Share-based payments - - 53 - - - 53 Profit for the period - - - - - 31 31 Other comprehensive income: Exchange differences - - - - - - - on translating foreign operations ---------- ----------- ---------- ---------- ------------- -------------- -------- Total other comprehensive income for the period - - - - - 31 31 ---------- ----------- ---------- ---------- ------------- -------------- -------- Balance as at 30 June 2023 74,240 (1,656) 766 (4,481) (2,506) (32,167) 34,196 ---------- ----------- ---------- ---------- ------------- -------------- -------- Balance as at 1 January 2022 74,240 (1,656) 725 (4,481) (2,506) (24,200) 42,122 Loss for the period - - - - - (244) (244) Other comprehensive loss:
Exchange differences - - - - - - - on translating foreign operations ---------- ----------- ---------- ---------- ------------- -------------- -------- Total other comprehensive loss for the period - - - - - (244) (244) ---------- ----------- ---------- ---------- ------------- -------------- -------- Balance as at 30 June 2022 74,240 (1,656) 725 (4,481) (2,506) (24,444) 41,878 ---------- ----------- ---------- ---------- ------------- -------------- -------- D. Condensed Interim Consolidated Statement of Cash Flows Group ----------------------------------------- 1H 1H FY2023 FY2022 US$'000 US$'000 Cash Flows from Operating Activities Loss before income tax (2,107) (3,253) Adjustments for: Depreciation of property, plant and equipment 788 895 Amortisation of intangible assets 140 141 Depreciation of right-of-use assets 777 847 Gain on disposal of property, plant and equipment - (5) Allowance for inventory obsolescence 258 255 Impairment loss of trade receivables - 175 Bad debts written back (2) - Unrealised exchange loss/(gain) 906 (67) Interest expense 174 171 Share-based payments 4 - Operating cash flow before working capital changes 938 (841) Changes in working capital: Inventories (283) 337 Trade receivables (2,367) 3,944 Other receivables and prepayments (1,123) (340) Trade and other payables 1,622 (2,016) -------------------- ------------------- Cash (used in)/generated from operating activities (1,213) 1,084 Interest paid (174) (196) Income tax paid (8) (122) Net cash (used in)/generated from operating activities (1,395) 766 -------------------- ------------------- Cash Flows from Investing Activities Purchase of property, plant and equipment (205) (251) Proceeds from disposal of property, plant and equipment - 5 Net cash used in investing activities (205) (246) -------------------- ------------------- Cash Flows from Financing Activities Proceeds from borrowings 13,338 17,177 Repayment of borrowings (14,626) (17,583) Principal payment of lease liabilities (837) (877) Net cash used in financing activities (2,125) (1,283) -------------------- ------------------- Net decrease in cash and cash equivalents (3,725) (763) Cash and cash equivalents at the beginning of the period 9,244 10,771 Effect of foreign exchange rate changes on the balance of cash held in foreign currencies (17) (8) -------------------- ------------------- Cash and cash equivalents at the end of the period 5,502 10,000 -------------------- ------------------- E. Notes to the Condensed Interim Consolidated Financial Statements 1. General Information
Global Invacom Group Limited (the "Company") is a public limited company incorporated and domiciled in Singapore and is listed on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST"). The Company is also listed on the AIM Market of the London Stock Exchange ("AIM") in the United Kingdom (UK). These condensed interim consolidated financial statements as at and for the six months ended 30 June 2023 comprise the Company and its subsidiaries (the "Group"). The principal activity of the Company is that of an investment holding company.
The principal activities of the Group are design, manufacture and supply of a full range of satellite ground equipment, including antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components.
2. Basis of Preparation
The condensed interim financial statements for the six months ended 30 June 2023 have been prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)") 1-34 Interim Financial Reporting issued by the Accounting Standards Council Singapore. The condensed interim financial statements do not include all the information required for a complete set of financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance of the Group since the last annual financial statements for the year ended 31 December 2022.
The accounting policies adopted are consistent with those of the previous financial year which were prepared in accordance with SFRS(I)s and International Financial Reporting Standards ("IFRSs"), except for the adoption of new and amended standards as set out in Note 2.1.
The condensed interim financial statements are presented in United States dollar which is the Company's functional currency.
2.1 New and amended standards adopted by the Group
There has been no change in the accounting policies and methods of computation adopted by the Group for the current reporting period compared with the audited financial statements for the year ended 31 December 2022, except for the adoption of new or revised SFRS(I) and interpretations of SFRS(I) ("INT SFRS(I)") that are mandatory for the financial year beginning on or after 1 January 2023. The adoption of these SFRS(I) and INT SFRS(I) has no significant impact on the Group.
2.2 Use of judgements and estimates
In preparing the condensed interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2022.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:
-- Note 9 - capitalised development costs -- Note 11 - impairment test on property, plant and equipment E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 2. Basis of Preparation (cont'd) 2.2 Use of judgements and estimates (cont'd)
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next interim period are included in the following notes:
-- Note 10 - impairment test of goodwill: key assumptions underlying recoverable amounts -- Note 11 - useful lives of property, plant and equipment 3. Seasonal Operations
The Group's businesses are not affected significantly by seasonal or cyclical factors during the six months ended 30 June 2023.
4. Segment and Revenue Information
Prior to FY2023, the business of the Group was organised into Satellite Communications and Contract Manufacturing segments.
With the completion of the deregistration of its wholly-owned subsidiary, Global Invacom Manufacturing (Shanghai) Co Ltd, the Group is re-organised into the following main business segments:
-- Very Small Aperture Terminal ("VSAT"); and -- Non-VSAT
These operating segments are reported in a manner consistent with internal reporting provided to the executive directors who are responsible for allocating resources and assessing performance of the operating segments.
4.1 Reportable segments VSAT Non-VSAT Group US$'000 US$'000 US$'000 1H FY2023 Revenue 19,084 12,254 31,338 ======== ========= ======== Operating loss (1,282) (651) (1,933) ======== ========= Finance costs (174) Income tax expense (29) -------- Loss for the period (2,136) ======== Amortisation of intangible assets 113 27 140 Depreciation of property, plant and equipment 391 397 788 Depreciation of right-of-use assets 574 203 777 Addition to property, plant and equipment 68 137 205 Bad debts written back - (2) (2) Allowance for inventory obsolescence, net 251 7 258 E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 4. Segment and Revenue Information (cont'd) 4.1 Reportable segments (cont'd) VSAT Non-VSAT Group US$'000 US$'000 US$'000 Assets and liabilities Segment assets 28,596 25,190 53,786 Unallocated assets - Non-current assets 6 - Other receivables 61 - Deferred tax assets 235 - Cash and cash equivalents 182 - Tax receivables 190 Total assets 54,460 ======== Segment liabilities 9,053 8,427 17,480 Unallocated liabilities - Other payables 152 - Deferred tax liabilities 211 - Borrowings 4,200 Total liabilities 22,043 ======== 1H FY2022 Revenue 22,334 15,086 37,420 ======== ======== ======== Operating loss (1,644) (1,438) (3,082) ======== ======== Finance costs (171) Income tax expense (39) -------- Loss for the period (3,292) ======== Amortisation of intangible assets 113 28 141 Depreciation of property, plant and equipment 479 416 895 Depreciation of right-of-use assets 607 240 847 Addition to property, plant and equipment 106 145 251 Impairment loss on trade receivables - 175 175 Write-back of inventory obsolescence, net 228 27 255 -------- -------- -------- Assets and liabilities Segment assets 41,179 27,523 68,702 Unallocated assets * Non-current assets 104 * Other receivables 57 * Deferred tax assets 1,780 * Cash and cash equivalents 325 * Tax receivables 218 Total assets 71,186 ======= Segment liabilities 13,200 7,050 20,250 Unallocated liabilities * Other payables 422 * Deferred tax liabilities 646 * Borrowings 5,714 * Lease liabilities 100 ------- Total liabilities 27,132 ======= E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 4. Segment and Revenue Information (cont'd) 4.2 Disaggregation of revenue
The Group's revenue is disaggregated by principal geographical areas, major product lines and timing of revenue recognition.
Group 1H 1H FY2023 FY2022 US$'000 US$'000 Principal geographical market America - Sale of goods 18,754 17,395 -------- -------- Europe - Sale of goods 7,950 11,488 -------- -------- Asia - Sale of goods 1,523 1,219 -------- -------- Rest of the World - Sale of goods 3,111 7,318 -------- -------- Total 31,338 37,420 ======== ======== Major product lines Sale of goods 31,338 37,420 ======== ========
The Group recognises revenue from sale of goods at a point in time, when the Group satisfies a performance obligation and the customers obtain control of the goods.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 5. Financial Assets and Financial Liabilities (cont'd) 5.1 Significant items Group 1H 1H FY2023 FY2022 US$'000 US$'000 Interest expense (174) (171) Gain on disposal of property, plant and equipment - 5 (Loss)/Gain on foreign exchange (194) 30 Impairment loss on trade receivables - (175) Bad debts written back 2 - Allowance for inventory obsolescence (258) (255) Depreciation of property, plant and equipment (788) (895) Depreciation of right-of-use assets (777) (847) Amortisation of intangible assets (140) (141) 5.2 Related party transactions
There are no material related party transactions apart from those disclosed elsewhere in the condensed interim financial statements.
6. Taxation
The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.
7. Earnings Per Share Earnings per ordinary share of the Group, after deducting any provision for Group preference dividends 1H 1H FY2023 FY2022 US$ US$ -------------- -------------- (a) Based on weighted average number of ordinary shares on issue; and (0.79) cents (1.21) cents (b) On a fully diluted basis (0.79) cents* (1.21) cents* Weighted average number of ordinary shares used in computation of basic earnings per
share 271,662,227 271,662,227 Weighted average number of ordinary shares used in computation of diluted earnings per share 271,662,227 271,662,227 -------------- --------------
* Diluted earnings per share are the same as the basic earnings per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the share conversion would be to increase the earnings per share.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 8. Net Asset Value Group Company 30 Jun 2023 31 Dec 2022 30 Jun 2023 31 Dec 2022 US$ US$ US$ US$ ------------ ------------ ------------ ------------ Net asset value per ordinary share based on issued share 11.94 cents 12.37 cents 12.59 cents 12.56 cents capital Total number of issued shares 271,662,227 271,662,227 271,662,227 271,662,227 ------------ ------------ ------------ ------------ 9. Intangible Assets Intellectual Capitalised Trading property development name rights costs Total US$'000 US$'000 US$'000 US$'000 Group 2023 Cost Balance at 1 January 16 2,674 4,834 7,524 Currency realignment - 14 - 14 -------- ------------- ------------- -------- Balance at 30 June 16 2,688 4,834 7,538 -------- ------------- ------------- -------- Amortisation and impairment Balance at 1 January 16 1,257 4,834 6,107 Amortisation charge - 143 - 143 Currency realignment - 8 - 8 -------- ------------- ------------- -------- Balance at 30 June 16 1,408 4,834 6,258 -------- ------------- ------------- -------- Net book value Balance at 30 June - 1,280 - 1,280 ======== ============= ============= ======== 2022 Cost Balance at 1 January and 31 December 16 2,674 4,834 7,524 Amortisation and impairment Balance at 1 January 16 1,043 4,767 5,826 Amortisation charge - 211 67 278 Currency realignment - 3 - 3 -------- ------------- ------------- -------- Balance at 31 December 16 1,257 4,834 6,107 -------- ------------- ------------- -------- Net book value Balance at 31 December - 1,417 - 1,417 ======== ============= ============= ======== 10. Goodwill Group 30 June 2023 31 December 2022 US$'000 US$'000 Cost Balance at the beginning and end of the period 9,352 9,352 ============= ============ Allowance for impairment loss Balance at the beginning 8,459 3,260 Impairment loss recognised during the period - 5,199 ------------- ------------ Balance at the end of the period 8,459 8,459 ------------- ------------ Net carrying amount 893 893 ============= ============ E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 10. Goodwill (cont'd)
10.1 Allocation of goodwill
Goodwill has been allocated to the Group's cash generating unit ("CGU") identified according to the business segment as follows:
Group 30 June 2023 31 December 2022 US$'000 US$'000 Satellite Communications - OnePath Networks Limited ("OPN") - Israel 893 893 11. Property, Plant and Equipment Furniture, Machinery fittings Freehold & & Motor property equipment equipment vehicles Renovations Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Group 2023 Cost Balance at 1 January 2,871 17,968 7,826 40 1,457 30,162 Currency realignment - 244 1 - 154 399 Additions - 110 95 - - 205 Write-off - - (14) - - (14) Disposals - - (36) - (80) (116) Balance at 30 June 2,871 18,322 7,872 40 1,531 30,636 --------- ---------- ----------- --------- ------------ -------- Accumulated Depreciation Balance at 1 January 970 13,793 7,385 40 1,333 23,521 Currency realignment 6 6 3 (1) 100 114 Depreciation charge 15 615 104 - 54 788 Write-off - - (14) - - (14) Disposals - - (36) - (80) (116) Balance at 30 June 991 14,414 7,442 39 1,407 24,293 --------- ---------- ----------- --------- ------------ -------- Net book value Balance at 30 June 1,880 3,908 430 1 124 6,343 ========= ========== =========== ========= ============ ======== 2022 Cost Balance at 1 January 2,871 17,907 7,813 40 1,438 30,069 Currency realignment - 96 (3) - 8 101 Additions - 429 19 - 22 470 Write-off - (183) (2) - - (185) Disposals - (281) (1) - (11) (293) Balance at 31 December 2,871 17,968 7,826 40 1,457 30,162 --------- ---------- ----------- --------- ------------ -------- Accumulated Depreciation Balance at 1 January 960 12,523 7,244 40 1,176 21,943 Currency realignment (6) 15 8 - 9 26 Depreciation charge 16 1,438 136 - 159 1,749 Write-off - (183) (2) - - (185) Disposals - - (1) - (11) (12) Balance at 31 December 970 13,793 7,385 40 1,333 23,521 --------- ---------- ----------- --------- ------------ -------- Net book value Balance at 31 December 1,901 4,175 441 - 124 6,641 ========= ========== =========== ========= ============ ======== E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 11. Property, Plant and Equipment (cont'd) Furniture, fittings & equipment Renovations Total US$'000 US$'000 US$'000 Company 2023 Cost Balance at 1 January and 30 June 211 80 291 Additions 6 - 6 Disposals (36) (80) (116) ----------- ------------ -------- Balance at 1 January and 30 June 181 - 181
----------- ------------ -------- Accumulated depreciation Balance at 1 January 211 80 291 Depreciation charge - - - Disposals (36) (80) (116) ----------- ------------ -------- Balance at 30 June 175 - 175 ----------- ------------ -------- Net book value Balance at 30 June 6 - 6 =========== ============ ======== 2022 Cost Balance at 1 January and 31 December 211 80 291 ----------- ------------ -------- Accumulated depreciation Balance at 1 January 192 79 271 Depreciation charge 19 1 20 Balance at 31 December 211 80 291 ----------- ------------ -------- Net book value Balance at 31 December - - - =========== ============ ======== 12. Investment in Subsidiaries Company 30 Jun 31 Dec 2023 2022 US$'000 US$'000 Unquoted equity shares, at cost 40,533 40,533 Accounting for employee share options 766 713 Currency realignment 130 130 Less: Allowance for impairment loss (23,552) (23,552) 17,877 17,824 ========= ========= Movement in the allowance for impairment loss are as follows: At the beginning of the period 23,552 16,014 Impairment loss recognised during the period - 7,538 --------- --------- At the end of the period 23,552 23,552 ========= ========= E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 12. Investment in Subsidiaries (cont'd)
Allowance for impairment loss
(i) Global Invacom Manufacturing Pte Ltd ("GIMPL")
As at 30 June 2023 and 31 December 2022, an allowance for impairment loss of US$8,648,000 was made on the cost of investment in GIMPL, as the allocated CGU, to which the investment relates to, was incurring losses from operations due to the restructuring costs incurred. The recoverable amount was based on management's estimate of the fair value less costs to sell, with reference to the fair value of the net assets of GIMPL, which is considered to be Level 3 in the fair value hierarchy.
(ii) Global Invacom Holdings Limited and its subsidiaries ("GIHL Group")
As at 30 June 2023 and 31 December 2022, an allowance for impairment loss of US$14,904,000 was made on the cost of investment in GIHL Group, as the allocated CGU, to which the investment relates to, was incurring losses from operations. The recoverable amount was based on management's estimate of the fair value less costs to sell, with reference to the fair value of the net assets of GIHL Group, which is considered to be Level 3 in the fair value hierarchy.
13. Borrowings
Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 30 Jun 2023 As at 31 Dec 2022 Secured Unsecured Secured Unsecured --------- -------- --------- US$'000 US$'000 US$'000 US$'000 --------- -------- --------- 4,200 - 5,488 - --------- -------- ---------
Amount repayable after one year
As at 30 Jun 2023 As at 31 Dec 2022 Secured Unsecured Secured Unsecured --------- -------- --------- US$'000 US$'000 US$'000 US$'000 --------- -------- --------- - - - - --------- -------- ---------
The revolving credit loans of US$4,200,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.
14. Share Capital 1H FY2023 No. of shares US$'000 Balance as at 1 Jan 2023 and 30 Jun 2023 271,662,227 72,584 ----------------------- ------------- 1H FY2022 No. of shares US$'000 Balance as at 1 Jan 2022 and 30 Jun 2022 271,662,227 72,584 ----------------------- -------------
There were 10,740,072 treasury shares held by the Company as at 30 June 2023 and 30 June 2022 and there was no subsidiary holdings.
E. Notes to the Condensed Interim Consolidated Financial Statements (cont'd) 14. Share Capital (cont'd)
Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year:
30 Jun 2023 31 Dec 2022 Total number of issued shares excluding treasury shares 271,662,227 271,662,227 ------------ ------------
Total number of treasury shares as at the end of the current financial period reported on:
1H FY2023 No. of shares US$'000 Balance as at 1 Jan 2023 and 30 Jun 2023 10,740,072 1,656 -------------- -------- 15. Subsequent events
There are no known subsequent events which have led to adjustments to this set of interim financial statements.
F. Other Information Required by Listing Rule Appendix 7.2 1. Review
The condensed consolidated statement of financial position of Global Invacom Group Limited and its subsidiaries as at 30 June 2023 and the related condensed interim consolidated statement of comprehensive income, condensed interim statements of financial position, condensed interim consolidated statement of changes in equity and condensed interim consolidated statement of cash flows for the six-month period then ended and certain explanatory notes have not been audited or reviewed by the auditors.
2. Review of Performance of the Group 2.1 Review of Financial Performance
Revenue
T he Group's revenue for the six months ended 30 June 2023 ("1H FY2023") decreased by 16.3% to US$31.3 million from US$37.4 million in the prior year ("1H FY2022"). The market requirement for our products has been impacted by the ongoing delays to the launch of satellites, resulting in a delay to demand for some of our legacy products, and in bringing new products to market.
Geographically, the Group's revenue for 1H FY2023 increased in America and Asia by US$1.3 million (+7.8%) and US$0.3 million (+24.9%), respectively, offset by a decrease in Europe and Rest of the World by US$3.5 million (-30.8%) and US$4.2 million (-57.5%), respectively.
Gross Profit
Despite the decrease in revenue, gross profit has increased by 12.7% to US$8.3 million in 1H FY2023 from US$7.4 million in 1H FY2022. Gross profit margin has increased by 6 .8 percentage points from 19.7% to 26 .5 %, due to increased business focus on product mix.
Other Income
Other income in 1H FY2023 was primarily from the sale of the Group's 49% investment in Fibre TV to Home Limited, for a total consideration, including repayment of loan, of US$372,000.
Administrative and Research and Development Expenses
Administrative expenses, together with research and development expenses, for 1H FY2023 increased 2.9% to US$10.4 million compared to US$10.1 million in 1H FY2022, representing 33.1% and 26.9% of revenue, respectively. In Q3 FY2022, the Group commenced a comprehensive review of its operations, with the help of external professionals, to assess the Group's assets and cost base to streamline certain core functions. This has resulted in an increase in professional fees and other related costs.
Other Operating Expenses
Other operating expenses in 1H FY2023 and 1H FY2022 were attributed mainly to foreign exchange losses.
Profit Before Tax & Net Profit
The Group posted a loss and net loss before tax of US$2.1 million in 1H FY2023, compared to a loss and net loss before tax of US$3.3 million in 1H FY2022.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd) 2. Review of Performance of the Group (cont'd) 2.2 Review of Financial Position
Non-current assets decreased by US$1.6 million to US$11.1 million as at 30 June 2023, due to the depreciation of plant and equipment, the right-of-use assets, the amortisation of intangible assets and the reduction of deferred tax assets.
Net current assets decreased by US$0.2 million to US$23.1 million as at 30 June 2023 compared to US$23.3 million as at 31 December 2022. Trade and other receivables increased by US$3.5 million due to slower collections, whilst trade and other payables increased by US$2.0 million with controlled payments to suppliers. Tax receivables were steady at US$0.2 million as at 30 June 2023.
Cash and cash equivalents decreased by US$3.7 million to US$5.5 million as at 30 June 2023 from US$9.2 million at 31 December 2022, and borrowings decreased by US$1.3 million to US$4.2 million as at 30 June 2023 from US$5.5 million as at 31 December 2022. The repayment of leases has resulted in a decrease of US$0.7 million in the current portion of lease liabilities.
Non-current liabilities decreased by US$0.6 million to US$1.8 million as at 30 June 2023, resulting from the repayment of non-current portion of the lease liabilities and the reduction of deferred tax liabilities.
The Group's net asset value stood at US$32.4 million as at 30 June 2023, compared to US$33.6 million as at 31 December 2022.
2.3 Review of Cash Flows
In 1H FY2023, net cash used in operating activities amounted to US$1.4 million, comprising US$0.9 million cash inflow from operating activities (before working capital changes), US$2.1 million net working capital outflow and US$0.2 million payment of interest and income tax.
Net cash used in investing activities in 1H FY2023 amounted to US$0.2 million, mainly due to the purchase of machinery and equipment .
Net cash used in financing activities amounted to US$2.1 million in 1H FY2023, attributable to the repayment of borrowings and lease liabilities.
Overall, the Group recorded a net decrease in cash and cash equivalents amounting to US$3.7 million in 1H FY2023, bringing cash and cash equivalents per the consolidated statement of cash flows to US$5.5 million as at 30 June 2023.
3. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.
No prospect statement was made.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd)
4. A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.
As we articulated in 2022, there has been continued supply chain disruption experienced in the satellite communications sector as we entered 2023. As a designer, manufacturer, and provider of technologically advanced satellite communication products to an international customer base, this disruption has inevitably resulted in challenging trading conditions for the Group. Despite customers continuing to delay the purchase of some products with delays to launch schedules, the Group moved quickly to optimise efficiencies at our US manufacturing facilities, which has resulted in a slight improvement in our net loss from FY2022.
Nevertheless, the Group continued to develop innovative products to further expand its diverse portfolio of satellite communications devices. Recognising the growing need for Non-Geostationary Orbit ("NGSO") antenna platforms, Global Invacom announced the development of Titan in 1H FY2023, its latest multi-constellation and multi-band gateway antenna platform, which uses an ultra-robust lightweight carbon fibre composite and provides operators with deployment flexibility and uncompromised performance. The Group also continues to develop the Obliquiti NGSO, a new Low Earth Orbit ("LEO") and Medium Earth Orbit ("MEO") platform for broadband and narrowband use. It is suitable for fixed, nomadic and mobile applications, and equipped with SatSenz, the Group's AI-based software for satellite acquisition, tracking and switching.
In Q3 FY2022, the Group announced a strategic review to assess the Group's existing corporate and operational structure, streamline core functions and reduce the cost base of the business. Having now implemented certain parts of our strategic plan, we have seen the immediate benefits of this long-term strategy. T he Board's strategic review remains ongoing.
Looking more broadly at the market, we continue to see increasing demand for satellite communication systems, driven by demand for data and connectivity globally. A recent report shows that the number of global Internet of Things ("IoT") connections grew by 18% in 2022 to 14.3 billion active IoT endpoints, with a further 16% growth expected in 2023 [2] . Furthermore, there is increasing awareness of the need for mission critical communications systems which are able to maintain communications when land-based infrastructure is disrupted or unable to cope with challenging geographical terrain.
The Company remains focused on supporting its research and development team to ensure the Group is well-placed to continue to deliver cutting-edge, market-leading products, thereby maintaining its position as a technological pioneer, supporting the ever-growing satellite industry. We are building the right team to continue to deliver best-in-class solutions, and to work alongside customers to respond to specific demands and requirements, cementing our role as an integral equipment provider and partner in the satellite communications ecosystem.
F. Other Information Required by Listing Rule Appendix 7.2 (cont'd) 5. Dividend (a) Current Financial Period Reported On
Any dividend declared for the current financial period reported on?
None.
(b) Corresponding Period of the Immediately Preceding Financial Year
Any dividend declared for the corresponding period of the immediately preceding financial year?
None.
(c) Date payable
Not applicable.
(d) Books closure date
Not applicable.
6. If no dividend has been declared/recommended, a statement to that effect and the reason(s) for the decision.
Due to the operating conditions faced by the Group, no dividend has been declared or recommended for the six months ended 30 June 2023.
7. If the Group has obtained a general mandate from shareholders for Interested Person Transactions ("IPTs"), the aggregate value of such transactions as required under Rule 920(1)(a)(ii). If no IPTs mandate has been obtained, a statement to that effect.
The Company does not have a shareholders' mandate for IPTs for the six months ended 30 June 2023.
CONFIRMATION PURSUANT TO RULE 705(5) OF THE LISTING MANUAL
We do hereby confirm, for and on behalf of the Board of Global Invacom Group Limited (the "Company"), that to the best of our knowledge, nothing has come to the attention of the Board of the Company which may render the financial results for the six months ended 30 June 2023 to be false or misleading in any material aspect.
CONFIRMATION PURSUANT TO RULE 720(1) OF THE LISTING MANUAL
Global Invacom Group Limited confirms that undertakings under Rule 720(1) have been obtained from all its directors and executive officers in the format set out in Appendix 7.7.
On behalf of the Board
Wayne Robert Porritt Gordon Blaikie
Independent Non-Executive Chairman Executive Director
BY ORDER OF THE BOARD
Wayne Robert Porritt
Independent Non-Executive Chairman
11 August 2023
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
[1] https://iot-analytics.com/number-connected-iot-devices/#::text=The%20latest%20IoT%20Analytics%20%E2%80%9CState, to%2016.7%20billion%20active%20endpoints .
[2] https://iot-analytics.com/number-connected-iot-devices/#::text=The%20latest%20IoT%20Analytics%20%E2%80%9CState, to%2016.7%20billion%20active%20endpoints .
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(END) Dow Jones Newswires
August 11, 2023 02:30 ET (06:30 GMT)
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