Final Results

RNS Number : 9810D

Amino Technologies PLC

06 February 2018

 

AMINO TECHNOLOGIES PLC

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

FULL YEAR RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2017

Continued progress - strong margin progression and cashflow

Amino Technologies plc (LSE AIM: AMO), the global provider of digital TV video solutions to network operators, announces audited consolidated results for the year ended 30 November 2017.

Growing traction for software and new products

Financial highlights

	Adjusted				Unadjusted
	2017 £m	2016 £m	Change		2017 £m	2016 £m	Change
Revenue	75.3	75.2	0%		75.3	75.2	0%
Gross profit(1)	33.5	32.3	+4%		35.3	32.3	+9%
Gross profit margin(1)	44.5%	42.9%	+160bps		46.9%	42.9%	+400bps
EBITDA(2)	15.4	13.5	+14%		16.0	8.3	+93%
Operating profit (3)	11.1	10.2	+9%		9.5	2.9	+228%
Profit before tax(3)	11.2	10.2	+10%		9.6	2.9	+231%
Basic earnings per share(3)	15.27p	13.64p	+12%		15.49p	3.81p	+307%
Cashflow from operations(4)	16.9	15.8	+7%		15.8	12.6	+26%
Net cash	13.0	6.2	+110%		13.0	6.2	+110%
Dividend per share	6.655p	6.05p	+10%		6.655p	6.05p	+10%

Financial highlights

·      Results in line with market expectations

·      Revenue in line with prior year

-  Organic constant currency revenue down 7%, reflecting shift in product mix

·      Increased gross margins, reflecting supply chain management capability and product mix

·      Profit growth, in spite of industry component pricing headwinds

·      Continued solid cash generation

·      Recommended dividend up 10%

-  Sixth consecutive year of dividend increases

Operational and strategic progress

·      Continued growth in North America

·      Traction with software and new product lines

-  Customer demand growing for service assurance and legacy transition software

-  Multi-year contract with tier one European operator signed

-  First Amino "end-to-end" service delivery deployment launched

-  Market-leading product and solutions for key Android TV operator trend

·      New board appointments add technical and market expertise, and strength in depth

Current trading

·      Two new contract wins post period end

·      Strong 2018 sales pipeline

Keith Todd CBE, Non-Executive Chairman, said:

"2017 was another year of progress for Amino with strong profit growth and cash generation. We have continued to innovate and steer through the changing customer landscape whilst building a broad product portfolio and customer proposition.

We have large addressable markets and our recent investment in software, services and the emerging Android TV opportunity, coupled with a strong backlog and pipeline, supports our confidence in 2018 and beyond."

The information communicated in this announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

Amino Technologies PLC	[phone]
Donald McGarva, Chief Executive Officer
Mark Carlisle, Chief Financial Officer
finnCap Ltd (NOMAD and Joint Broker)	[phone]
Matt Goode / Carl Holmes / Simon Hicks (Corporate Finance) Simon Johnson / Tim Redfern (Corporate Broking)
Canaccord Genuity Limited (Joint Broker and Financial Adviser)	[phone]
Simon Bridges / Emma Gabriel
FTI Consulting LLP (Financial PR)	[phone]
Jamie Ricketts / Alex Le May / Darius Alexander

About Amino Technologies plc

Amino Technologies plc (LSE AIM: AMO) specialises in the development and delivery of IPTV/OTT solutions. With over nine million devices sold to 1,000 customers in 100 countries, Amino's award-winning solutions are deployed by major network operators and service providers worldwide. Amino Technologies plc is headquartered near Cambridge, in the UK, and is listed on the AIM market of the London Stock Exchange. www.aminocom.com 

Notes

⁽¹⁾    Adjusted Gross Profit is a non-GAAP measure and is defined as gross profit before exceptional items

⁽²⁾    Adjusted EBITDA is a non-GAAP measure and is defined as earnings before interest, taxation, depreciation, amortisation, other operating income, exceptional items and share-based payment charges

⁽³⁾    Adjusted profit before tax, adjusted operating profit and adjusted earnings per share are non-GAAP measures and exclude amortisation of acquired intangibles, other operating income, exceptional items and share-based payment charges

⁽⁴⁾    Adjusted cash generated from operations excludes cash from exceptional items

Chairman's statement:

The Company has delivered a typically solid performance during 2017. As previously announced, first half performance was excellent with lower revenues in the second half as expected. The Company finished the year with strong momentum and important new contract wins and a strong pipeline to take into 2018.

Revenue for the year at £75.3m was broadly the same as the previous year (FY 2016: £75.2m). Profitability was in line with market expectations, with adjusted operating profit⁽¹⁾ of £11.1m representing a 9% increase over the prior year (FY 2016: £10.2m). Operating profit was 228% higher at £9.5m (FY 2016: £2.9m) as there were minimal acquisition related costs in the year. The Company's ability to generate cash remains strong with the year-end cash position ahead of market expectations at £13.0m (30 November 2016: £6.2m).

At its core, Amino develops software. This is integrated with our device hardware and an extensive partner ecosystem to enable operators to deliver high quality and secure IP-based pay-TV services. Our strategic aim is to capitalise on this core expertise and, via our 150-strong development team, create a wider portfolio of software solutions to both existing and new markets. The objective is to create new recurring revenue streams while deepening customer relationships in conjunction with device sales. We see good opportunities for growth in the medium term as market disruption requires incumbent operators to innovate and as cable operators migrate to IP based services.

This year, we have seen further evidence that this strategy is the right one for our business. Though device sales have driven the bulk of our revenues, we now see increasing traction for other key elements of our offering - including our MOVE video delivery platform, Engage service assurance solution and Enable virtual set-top box software. The roll out of our Android TV solution - a rapidly emerging key industry trend during the year - will strengthen our position in this growing market into 2018.

During the year, our core operational management strength has again proved invaluable in largely mitigating industry-wide component cost increases. This clear focus on cost control within the supply chain - and the strong relationships we have with key component providers - are critical in maintaining our competitiveness and margin position.

The progress we have made this year is testimony to our teams around the world who continue to innovate and deliver high quality solutions to our global customer base. On behalf of the Board, I would like to thank them for their hard work and commitment.

There have also been a number of changes to the Board structure during the year and post-period end. In October 2017, long-serving non-executive director Michael Bennett stepped down from the Board, on whose behalf I would like to thank for his immense contribution during his tenure of almost eight years. Most recently, in February 2018, two new non-executives were appointed, both of whom will bring highly relevant technology expertise and insight to the Board. Steve McKay, formerly Amino's global sales director and CEO of Entone Inc., joins the Board to take on a strategic project role. We also welcome Michael Clegg, who has a wealth of senior executive experience in our market and the wider technology space, and who has previously worked with Amino in both a management and a consulting role.

Dividend

The Board is pleased to recommend the continuation of its progressive dividend policy with a full year dividend of 6.66 pence per share, an increase of 10% on 2016. This is the sixth successive year of dividend increase since 2011 and underlines the Board's commitment to shareholder value. The Board also intends to increase the dividend by no less than 10% in 2018.

Notes

(1)   Adjusted operating profit is a non-GAAP measure and is defined in the Chief Financial Officer's review below

Reporting currency

The Board is currently undertaking a review of the Group's reporting currency and the currency in which dividends are paid. Since the revenues, profits and cash flows of the business are primarily generated in US dollars, changing the reporting currency and dividend to US dollars may allow for greater transparency of the underlying performance of the Group and reduce the impact of movements in foreign exchange rates. This review will be completed during H1 2018 and the Board will update shareholders in due course.

Outlook

Amino has made a promising start to 2018 and has a solid order book and sales pipeline visibility to the end of the year, with a return to our normal seasonality in terms of a stronger second half financial performance. With this positive momentum and clear portfolio and positioning, the Board expects the Company to deliver sustainable profitable growth in the coming year.

Keith Todd

Chairman

5 February 2018

Chief Executive's Review

Growing the Amino proposition in line with evolving customer needs

We operate in an industry undergoing constantly evolving change as pay-TV operators face critical technology and strategic choices in shaping their future direction. Disruptive market entrants have rapidly re-shaped the market, challenging incumbent operators to respond with enhanced and competitive multiscreen offerings.

Amino has aligned itself closely with this dynamic market with a clear go-to-market strategy built around our MOVE video delivery platform, our View IPTV devices, our Transform software capabilities and our Engage service assurance solution.

Strengthening our MOVE video delivery platform

Built on the Booxmedia platform acquired in 2015, we continue to strengthen the capabilities of our MOVE video delivery platform to support multiscreen, both inside and out of the home. Early in 2017 we transitioned a major Finnish operator from our mobile only service to our multiscreen Android-based TV service. The project was the first of its kind globally and exemplifies the complex nature of software-based projects we are now undertaking for customers.

In the second half of the year we completed another project to enable Dutch operator DELTA to deliver a similar service which was launched post period end in early 2018. This marked our first ever "end-to-end" service deployment with our MOVE platform managing the entire process from content ingestion through to delivery to multiple mobile devices including Amino 4K UHD devices in the home.

Further developing our range of our View IPTV devices

We have continued to develop our range of devices to provide advanced functionality - including 4K UHD capabilities. During the year we successfully launched our Kamai and Aria 7 range of 4K UHD devices. Two significant contracts for these devices were secured during the second half of the year - in Europe and North America - highlighting continued strong demand from operators for these advanced TV devices. These contracts delivered revenue in 2017 and added to our backlog for 2018.

Traditionally Amino TV devices have been developed on a Linux operating system. However, there is also now growing traction for Android TV based devices. We have taken a leadership position with our Kamai and Amigo 7 dual mode devices that allow operators to move between the traditional Linux and new Android operating systems as they launch new services. We also launched a new standalone Android TV device during the year and have developed our own "operator class" Android TV solution which includes all of the features required by operators to deliver a fully managed IPTV service in today's TV 2.0 world.

Building our "transformation" software capabilities

We have continued to build on our core software capabilities, not only to support our device development roadmap but also as a standalone solution under the Enable brand. Marketed as a standalone solution during the year, Enable has attracted strong industry interest and won multiple industry awards at IBC, a major industry event held in Amsterdam in September 2017. At its core Enable allows operators to upcycle legacy devices to deliver advanced pay-TV user experiences, thereby saving the significant cost of replacing them.

During 2017, we secured a major contract with leading Chilean operator GTD to transform and upgrade an installed base of devices using Enable. This is the third contract of this kind we have delivered and builds on our previous Enable contracts delivered to PCCW in Hong Kong and Cincinnati Bell in North America.

Providing operators with the tools to manage their IPTV service efficiently

Developed in-house, our Engage service assurance solution provides operators with a range of software tools to manage devices installed in customers' homes. We have seen growing traction for this solution in the year with 9 new contracts secured - increasingly as a value-added sale alongside devices. We initially sold to operators in North America but have recently added two new major European and Latin American operators in the second half of the year. Although modest in revenues at this stage in its development, this demonstrates our abilities to translate software innovation into a recurring revenue model and aids customer retention.

We now have a portfolio fully aligned with market dynamics to take into 2018 with the transformational capabilities of our Enable software offering in addressing operators' legacy operations at its core. Our limited exposure to the Internet of Things ("IoT") market, via the Fusion home monitoring solution, has been reviewed and further development paused in what has proved to be a challenging marketplace for network operators.

Current customers and markets

In 2017 Amino continued to grow in its largest market, North America where revenue grew by 22%.  Sales through distributors to smaller tier two and three operators were strong with a good uptake of our new 4K UHD devices. There has also been consistently solid demand for more traditional HD devices, largely due to their excellent performance and reliability.

Growing consumer demand for 4K TVs - and the availability of ultra-high definition content - is driving operator demand for our IPTV devices. The growing sophistication of major tier one operator offerings is also re-shaping demand with consumers now expecting a mix of linear and on demand content delivery.

In addition, the migration of cable TV networks to IP-based TV services, often over new fibre infrastructure, has opened up a new market where we have a highly relevant product offering and capabilities. During the year, we secured a contract from US regional operator, Muscatine Power and Water, as a direct result of this migration.

Latin America remains a significant market opportunity with new operators coming to market selecting IPTV. During the year we secured a contract with Chilean operator GTD, for a mix of devices and Enable software for legacy device transformation. Post period end, we secured a significant new contract from Bolivian state-owned operator Entel for devices in conjunction with the Engage service assurance solution that was deployed in the year. This again highlighted our ability to bring together our hardware and software offerings into a compelling package.

Market conditions in Europe were challenging in the first half of the year, with market consolidation and a change in ownership of a key customer impacting timing of orders. It is pleasing to report that orders have now restarted and we have signed a long-term multi-year contract with this customer in the Netherlands to include 4K UHD devices. In addition, we secured an important initial order of devices with Deutsche Glasfaser, the largest provider of fibre-to-the-home (FTTH) networks in Germany, which is rolling out its own IPTV service and providing a "white label" service to other operators.

While contributions from our sales activities in the Middle East and Asia Pacific remain small at this stage, we are stepping up our marketing to target a number of opportunities in both operator and enterprise markets.

Operational structure

As highlighted in the Chairman's review, there have been a number of changes to the Board and also the executive team. With our former Global Sales Director stepping up to the Board, David Perez takes over the sales leadership role. David has a proven track record in managing and driving global sales teams in the telecoms industry with Reliance Globalcom (now Global Cloud Xchange), where he served as Senior Vice President for North America. Most recently, he was CEO at Intamac Systems, a leading IoT SaaS provider. Joachim Bergman also joined Amino in September 2017 as Senior Vice President of Cloud Services, taking responsibility for Amino's MOVE platform. Joachim has more than 20 years' experience in the telecoms and media sector, principally at Ericsson where he held a variety of senior roles in video service delivery for major operators.

Future growth opportunities

We see three clear growth opportunities for Amino in the medium to long term.

First, "upcycling" - leveraging an operator's existing assets, including their installed base of TV devices, to deliver new content and consumer experiences to the home.  New market entrants, such as Netflix and Amazon, are re-shaping the way TV is consumed and experienced and operators need to deliver competing services if they are to retain and attract customers. In Amino MOVE, Enable and Android TV we already have in place the software tools and skillset to help them do this and a proven track record of successful project delivery with sizable pay TV operators.

Second, the emergence of Android TV as a credible service delivery choice for pay-TV operators has been a key trend in 2017. The ability to provide a rich user experience - with value added content - and new features like personalisation, content recommendation and voice control is a compelling proposition with industry analysts predicting strong operator take up in the year ahead. We are at the forefront of Android TV developments, with the launch of both standalone devices and dual mode Android/Linux devices during the year. In addition, we have developed our "operator class" Android TV solution which includes key features required to deliver a fully managed IPTV service.

Third, the substantial global cable TV market is moving to IP-based service delivery to ensure they have the capacity and capability to provide the latest TV experiences. Major operators are already making the transition, but we see a sizeable opportunity amongst tier-2 and 3 service providers where we believe our skills are highly relevant. Initial traction in North America with local and regional operators has been achieved and we will be actively marketing our capabilities in this key sector in the coming months.

The Board continues to review opportunities to further strengthen Amino's offering and geographical coverage through new product development and value adding acquisitions. The Group is well positioned to make further progress in 2018 and continues to trade in line with expectations with good cash generation.

Donald McGarva

Chief Executive Officer

5 February 2018

Chief Financial Officer's review

Revenue for the year was £75.3m (FY 2016: £75.2m). Adjusted operating profit (as defined below) was £11.1m (FY 2016: £10.2m), representing a 9% increase from the previous year. Operating profit was 228% higher at £9.5m (FY 2016: £2.9m) as there were minimal acquisition related costs in the year. In line with its progressive dividend policy the Board has recommended a full year dividend 6.655 pence per share, a 10% increase over the prior year. The Group has a strong balance sheet with net cash of £13.0m (30 November 2016: £6.2m) and is debt free.

Revenue

We have set out below revenue by type on an 'as reported' and 'constant currency' basis (with 2017 revenue translated using 2016 average exchange rates). In 2017 approximately 95% (FY 2016: 95%) of the Group's revenue and cost of sales were transacted in US Dollars. Excluding the impact of foreign exchange revenue decreased by 7% as a result of a change in product mix.

	As reported				Constant currency
	2017 £m	2016 £m	Growth		2017 £m	2016 £m	Growth
Recurring	3.3	2.4	38%		3.1	2.4	29%
One-off	2.8	5.7	(51)%		2.6	5.7	(54)%
Software and services	6.1	8.1	(25)%		5.7	8.1	(30)%
Devices including software	69.2	67.1	3%		64.2	67.1	(4)%
Revenue	75.3	75.2	-%		69.9	75.2	(7)%

The Group sells its software integrated with its devices as well as on a standalone basis. In 2017 and 2016 the Group sold all its View devices pre-installed with the Group's Enable or Aminet software. Software and services sold on a standalone basis in 2017 and 2016 comprised the Group's proprietary:

·      Enable virtual STB software installed on third party devices;

·      Engage service assurance software platform;

·      Support and maintenance ("Entourage"); and

·      MOVE multiscreen video service delivery platform.

As expected, revenue from software and services decreased by 30% as one-off revenue from a large contract delivered in the prior year did not repeat. However, in 2017 software and services revenue from recurring software and support contracts increased by 38% to £3.3m (2016 £2.4m). On a constant currency basis this represents annual growth of 29%.

The Group's revenues are globally distributed as follows:

	As reported
	2017 £m	2016 £m	Growth
North America	47.4	38.9	22%
Latin America	8.4	12.9	(35)%
Europe	18.1	22.5	(20)%
Rest of World	1.4	0.9	67%
Revenue	75.3	75.2	-%

In North America, revenue growth of 22% over 2016 was driven by a strong performance by our distribution channel to tier 3 and 4 telecoms operators. In Latin America, sales to our largest customer in the region decreased significantly as they continued to use up inventory purchased in the previous financial year. In Europe, the year on year decrease primarily resulted from the change of ownership of a key customer impacting the timing of orders. However, this was partially offset by significant growth from a key customer in southern Europe.

Amino continues to sell its products directly to tier 2 customers and to tier 3 and 4 customers via distributors. The Group has three customers each having more than 10% of total Group revenue, of which two are distributors.

Gross profit

Excluding the impact of a one off £1.8m credit in respect of royalty costs recognised in prior years which have subsequently been renegotiated, adjusted gross profit increased by 4% to £33.5m (FY 2016: £32.3m). Adjusted gross margin increased to 44.5% (FY 2016: 42.9%) despite increases in memory prices, which we expect to continue into H1 2018, due to a good operational performance and product mix.

Including the impact of the one off £1.8m credit described above gross profit increased by 9% to £35.3m (FY2016: £32.3m).

Operating expenses

	As reported
	2017 £m	2016 £m	Growth
R&D	5.6	5.8	(3)%
SG&A	12.5	13.0	(4)%
Share-based payment charge	0.8	0.3	167%
Exceptional items	0.3	4.8	(94)%
Depreciation and amortisation	6.5	5.5	18%
Operating expenses	25.7	29.4	(13)%

The Group continues to invest in research and in the development of new products and spent £10.0m on R&D activities (FY 2016: £9.5m) of which £4.4m was capitalised (FY 2016: £3.7m).

Similar to the prior year, the Group's R&D and SG&A costs were denominated 44% in US and HK Dollars, 45% in British Pounds and 11% in Euros.

Exceptional items

Exceptional items within cost of sales comprised a one off £1.8m credit in respect of royalty costs recognised in prior years which have subsequently been renegotiated.

Exceptional items included within operating expenses in 2017 comprised:

·      £0.8m contingent post-acquisition remuneration in respect of the Entone acquisition; and

·      £0.5m net credit of deferred contingent consideration in respect of the Booxmedia acquisition not becoming payable.

Depreciation and amortisation

Excluding amortisation of intangibles recognised on acquisition, depreciation and amortisation increased to £4.3m (FY 2016: £3.3m). Amortisation of intangibles recognised on acquisition was £2.2m (FY 2016: £2.2m).

Operating profit

Adjusted operating profit excluding share-based payment charges, exceptional items and amortisation of intangibles recognised on acquisition was £11.1m (FY 2016: £10.2m). Operating profit increased by 228% to £9.5m (FY 2016: £2.9m) as there were minimal acquisition related costs in the year.

Adjusted operating profit is a non-GAAP company specific measure which is considered to be a key performance indicator for the financial performance of the Group. A reconciliation of adjusted operating profit to operating profit is set out as follows:

	2017 £m	2016 £m
Adjusted operating profit	11.1	10.2
Share-based payment charge	(0.8)	(0.3)
Exceptional items	1.4	(4.8)
Amortisation of acquired intangibles	(2.2)	(2.2)
Operating profit	9.5	2.9

Taxation

The tax credit of £1.5m comprises:

·      a £0.3m current tax charge relating to current year profits;

·      a £1.3m exceptional current tax credit relating to the partial release of a tax provision held to cover prior year exposures identified on the acquisition of Entone Inc.; and

·      a £0.5m credit relating to the unwind of the deferred tax liability recognised in respect of the amortisation of intangible assets recognised on acquisition.

Profit after tax was £11.1m (FY 2016: £2.7m).

Earnings per share

After adjusting for exceptional items, share-based payment charges and amortisation of intangibles recognised on acquisition, basic earnings per share increased by 12% to 15.27 pence (FY 2016: 13.64 pence). Basic earnings per share was 15.49 pence (FY 2016: 3.81 pence).

Cash flow

Adjusted cash flow from operations was £16.9m (FY 2016: £15.8m) and represented 110% of adjusted EBITDA (FY 2016: 117%). Exceptional cash flows in 2017 totalled £1.2m in respect of Entone deferred consideration treated as remuneration. Including these exceptional cash out-flows cash generated from operations was £15.8m (FY 2016: £12.5m).

During the year the Group spent £0.2m (FY 2016: £0.7m) on capital expenditure in respect of fixed assets, and capitalised £4.5m of research and development costs and software licenses. The Group paid £0.4m deferred consideration in respect of the Booxmedia acquisition and paid dividends of £4.4m in the year.

Financial position

The cash balance at 30 November 2017 was £13.0m (30 November 2016: £6.2m). The Group also has a £15.0m multicurrency working capital loan facility which runs to August 2020 and was undrawn at the year end.

At 30 November 2017 the Group had equity of £54.6m (30 November 2016: £45.9m) and net current assets of £10.7m (30 November 2016: £1.9m). 70% of trade receivables were insured (30 November 2016: 39%) and debtor days were 26 days (30 November 2016: 42 days).

Dividend

The Board has recommended a full year dividend of 6.655 pence per share, a 10% increase over the prior year. The Board also intends to continue the Company's dividend policy of no less than 10% growth per annum for the year ending 30 November 2018. Subject to shareholder approval at the annual general meeting to be held on 27 March 2018, the dividend will be payable on 27 April 2018, to shareholders on the register at 6 April 2018, with a corresponding ex-dividend date of 5 April 2018.

Mark Carlisle

Chief Financial Officer

5 February 2018

Consolidated income statement For the year ended 30 November 2017
		Year to 30 November 2017	Year to 30 November 2016
		£000s	£000s
	Notes
Revenue	2	75,303	75,178
Cost of sales		(40,024)	(42,890)
		__________	__________
Gross profit		35,279	32,288
Operating expenses		(25,735)	(29,433)
		_________	_________
Operating profit		9,544	2,855
Adjusted operating profit		11,101	10,226
Share-based payment charge		(780)	(297)
Exceptional items	3	1,472	(4,825)
Amortisation of acquired intangibles  assets		(2,249)	(2,249)
		__________	__________
Operating profit		9,544	2,855
Finance expense		(3)	(10)
Finance income		76	6
		__________	__________
Net finance income/(expense)		73	(4)
		__________	__________
Profit before corporation tax		9,617	2,851
Tax credit/(charge)		1,513	(170)
		__________	__________
Profit for the period from continuing operations attributable to equity holders		11,130	2,681
		__________	__________
Basic earnings per 1p ordinary share	4	15.49p	3.81p
Diluted earnings per 1p ordinary share	4	15.17p	3.77p

All amounts relate to continuing activities.

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

Consolidated statement of comprehensive income For the year ended 30 November 2017
		Year to 30 November 2017 £000s	Year to 30 November 2016 £000s
Profit for the year		11,130	2,681
		__________	__________
Items that may be reclassified subsequently to profit or loss:
Foreign exchange difference arising on consolidation		173	(327)
		__________	__________
Other comprehensive income/(expense)		173	(327)
		__________	__________
Total comprehensive income for the financial year attributable to equity holders		11,303	2,354
		__________	__________

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

Consolidated statement of financial position as at 30 November 2017
Assets			Notes	As at 30 November 2017 £000s	As at 30 November 2016 £000s
Non-current assets
Property, plant and equipment				592	757
Intangible assets				45,286	46,950
Deferred income tax assets				560	560
Trade and other receivables			5	305	384
				_________	_________
				46,743	48,651
				_________	_________
Current assets
Inventories				3,198	5,569
Trade and other receivables			5	11,205	14,301
Corporation tax receivable			5	165	-
Cash and cash equivalents				12,977	6,218
				_________	_________
				27,545	26,088
				_________	_________
Total assets				74,288	74,739
				_________	_________
Capital and reserves attributable to equity holders of the business
Called-up share capital				749	747
Share premium				20,854	20,510
Capital redemption reserve				6	6
Foreign exchange reserves				664	491
Merger reserve				16,389	16,389
Retained earnings				15,896	7,712
				_________	_________
Total equity				54,558	45,855
				_________	_________
Liabilities
Current liabilities
Trade and other payables			6	16,793	23,665
Corporation tax payable				19	524
				_________	_________
				16,812	24,189
				_________	_________
Non-current liabilities
Trade and other payables			6	-	628
Provisions				1,534	2,233
Deferred tax liabilities				1,384	1,834
				_________	_________
				2,918	4,695
				_________	_________
Total liabilities				19,730	28,884
				_________	_________
Total equity and liabilities				74,288	74,739
				_________	_________

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

Consolidated statement of cash flows For the year ended 30 November 2017
		Notes	Year to 30 November 2017	Year to 30 November 2016
			£000s	£000s
Cash flows from operating activities
Cash generated from operations		7	15,758	12,481
Corporation tax (paid)/received			(540)	97
			_________	_________
Net cash generated from operating activities			15,218	12,578
			_________	_________
Cash flows from investing activities
Purchases of intangible assets			(4,509)	(3,715)
Purchases of property, plant and equipment			(203)	(681)
Proceeds on disposal of property, plant and equipment			-	-
Net interest received/(paid)			73	(4)
Acquisition of subsidiaries			(396)	(360)
			_________	_________
Net cash used in investing activities			(5,035)	(4,760)
			_________	_________
Cash flows from financing activities
Proceeds from exercise of employee share options			346	225
Dividends paid			(4,438)	(3,964)
Repayment of borrowings			-	(1,000)
New bank loans raised			-	1,000
			_________	_________
Net cash used in financing activities			(4,092)	(3,739)
			_________	_________
Net increase in cash and cash equivalents			6,091	4,079
Cash and cash equivalents at beginning of year			6,218	2,094
Effects of exchange rate fluctuations on cash held			668	45
			_________	_________
Cash and cash equivalents at end of year			12,977	6,218
			_________	_________

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

Consolidated statement of changes in equity For the year ended 30 November 2017
	Share capital £000s	Share premium £000s	Merger reserve £000s	Equity reserve £000s	Foreign exchange reserve £000s	Capital redemption reserve £000s	Profit and loss £000s	Total £000s
Shareholders' equity at 30 November 2015	744	20,193	16,389	665	818	6	6,235	45,050
	_______	________	_________	____  ___	_________	______  ___	____  ___	____  _
Profit for the year	-	-	-	-	-	-	2,681	2,681
Other comprehensive expense	-	-	-	-	(327)	-	-	(327)
	_______	________	________	________	_________	________	________	_______
Total comprehensive income for the year attributable to equity holders	-	-	-	-	(327)	-	2,681	2,354
	_______	________	________	________	_________	__________	________	_______
Share based payment charge	-	-	-	-	-	-	297	297
Exercise of employee share options	-	-	-	-	-	-	225	225
Issue of share capital	3	317	-	-	-	-	-	320
Equity to be issued	-	-	-	(665)	-	-	-	(665)
Treasury shares used	-	-	-	-	-	-	2,238	2,238
Dividends paid	-	-	-	-	-	-	(3,964)	(3,964)
	________	________	________	________	_________	________	________	_______
Total transactions with owners	3	317	-	(665)	-	-	(1,204)	(1,549)
	_______	________	________	________	_________	__________	________	_______
Total movement in shareholders' equity	3	317	-	(665)	(327)	-	1,477	805
	_______	________	________	________	_________	__________	________	_______
Shareholders' equity at 30 November 2016	747	20,510	16,389	-	491	6	7,712	45,855
	_______	________	_________	____  ___	____  ___	______  ___	____  ___	____  _
Profit for the year	-	-	-	-	-	-	11,130	11,130
Other comprehensive income	-	-	-	-	173	-	-	173
	_______	________	________	________	_________	________	________	_______
Total comprehensive income for the year attributable to equity holders	-	-	-	-	173	-	11,130	11,303
	_______	________	________	________	_________	__________	________	_______
Share based payment charge	-	-	-	-	-	-	780	780
Exercise of employee share options	-	-	-	-	-	-	346	346
Issue of share capital	2	344	-	-	-	-	-	346
Treasury shares used	-	-	-	-	-	-	366	366
Dividends paid	-	-	-	-	-	-	(4,438)	(4,438)
	_______	________	________	________	_________	________	________	_______
Total transactions with owners	2	344	-	-	-	-	(2,946)	(2,600)
	_______	________	________	________	_________	__________	________	_______
Total movement in shareholders' equity	2	344	-	-	173	-	8,184	8,703
	_______	________	________	________	_________	__________	________	_______
Shareholders' equity at 30 November 2017	749	20,854	16,389	-	664	6	15,896	54,558
	_______	________	_________	________	_________	__________	________	_______

Notes

For the year ended 30 November 2017

 

1   Basis of preparation

The financial information set out in this preliminary announcement for the year ended 30 November 2017 has been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and interpretations (collectively IFRS) as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the financial statements for the year ended 30 November 2017. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 30 November 2016. New standards, amendments and interpretations to existing standards, which have been adopted by the Group, have not been listed since they have no material impact on the financial statements.

The financial information set out in this document does not constitute the Group's statutory financial statements for the year ended 30 November 2017 or 30 November 2016. The annual report and financial statements for the year ended 30 November 2017 were approved by the board of directors on 5 February 2018 along with this preliminary announcement. The financial statements for the year ended 30 November 2017 have been reported on by the Independent Auditor. The Independent Auditor's report on the financial statements for 2017 was unqualified and did not draw attention to any matters by way of emphasis.

2   Geographical external customer revenue analysis

	Year to 30 November 2017 £000s	Year to 30 November 2016 £000s
USA	46,043	38,252
Canada	1,342	697
	_________	_________
Subtotal North America	47,385	38,949
Costa Rica	772	4,429
Chile	3,639	2,809
Rest of LATAM	3,949	5,645
	_________	_________
Latin America	8,360	12,883
Netherlands	6,475	13,641
Rest of Europe	11,631	8,858
	_________	_________
Subtotal Europe	18,106	22,499
Rest of the World	1,452	847
	_________	_________
	75,303	75,178
	_________	_________

For this disclosure revenue is determined by the location of the customer.

3   Exceptional Items

Exceptional items within cost of sales and operating costs comprise:

			Year to 30 November 2017 £000s	Year to 30 November 2016 £000s
Credit in respect of royalty costs recognised in prior years and subsequently renegotiated			(1,800)	-
			_________	_________
Subtotal cost of sales			(1,800)	-
Expensed contingent post-acquisition remuneration in respect of the acquisition of Entone Inc.			828	3,600
General post acquisition integration costs			-	443
Release of deferred contingent consideration (conditions not met)			(628)	-
Redundancy and associated costs			128	782
			_________	_________
Subtotal operating expenses			328	782
			_________	_________
Total exceptional items			(1,472)	4,825
			_________	_________

In addition, an exceptional tax credit of £1,263,000 has been recognised in the year relating to the partial release of a tax provision held to cover prior year exposures identified on the acquisition of Entone, Inc. (2016: £nil).

4   Profit per share

		Year to 30 November 2017	Year to 30 November 2016
Profit attributable to ordinary shareholders		£11,129,817	£2,680,941
Profit attributable to ordinary shareholders excluding other operating income exceptional items, share-based payments and amortisation of acquired intangibles and associated taxation		£10,973,816	£9,602,524
		_________	_________
Weighted average number of shares (Basic)		71,851,262	70,401,918
		_________	_________
Weighted average number of shares (Diluted)		73,352,663	71,131,763
		_________	_________
Basic earnings per share		15.49p	3.81p
		________	________
Diluted earnings per share		15.17p	3.77p
		_________	_________
Adjusted basic earnings per share		15.27p	13.64p
		________	________
Adjusted diluted earnings per share		14.96p	13.50p
		________	________

The calculation of basic earnings per share is based on profit after taxation and the weighted average of ordinary shares of 1p each in issue during the year. The Company holds 2,253,123 (2016: 3,090,418) of its own shares in treasury and these are excluded from the weighted average above. The basic weighted average number of shares also excludes 140,433 (2016: 380,673) being the weighted average shares held by the EBT in the year.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  The Group has only one category of dilutive potential ordinary shares; those share options where the exercise price is less than the average market price of the Company's ordinary shares during the year.

The profit attributable to ordinary shareholders excluding exceptional items is derived by adding back exceptional items, share-based payment charges and amortisation of acquired intangibles of £293,828 (2016: £7,371,412) and subtracting the tax effect thereon £449,829 (2016: £449,829).

5   Trade and other receivables

			As at 30 November 2017 £000s	As at 30 November 2016 £000s
Current assets:
Trade receivables			10,114	12,959
Less: provision for impairment of receivables			(173)	(223)
			_________	_________
Trade receivables (net)			9,941	12,736
Other receivables			199	68
Corporation tax receivable			165	-
Prepayments and accrued income			1,065	1,497
			_________	_________
			11,370	14,301
			_________	_________
Non-current assets:
Other receivables			305	384
			_________	_________

 

6   Trade and other payables

			As at 30 November 2017 £000s	As at 30 November 2016 £000s
Current liabilities
Trade payables			6,005	7,549
Social security and other taxes			576	605
Other payables			104	121
Accruals			9,754	12,823
Deferred income			354	1,244
Deferred and contingent consideration			-	1,323
			________	________
Subtotal			16,793	23,665
Corporation tax payable			19	524
			_________	_________
			16,812	24,189
			_________	_________
Non-current liabilities:
Contingent consideration			-	628
			_________	_________
			-	628
			_________	_________

Contingent cash consideration in respect of the acquisition of Booxmedia Oy, of £396,000 was paid during the year; the remaining balance of £628,000 was credited to profit and loss (presented within exceptional items in the income statement) as conditions were not met.

The final deferred consideration cash payment in respect of the acquisition of Entone Inc. (accounted for as remuneration) of £1,115,000 (US$1,500,000) was paid on 11 August 2017.

7   Cash generated from operations

		Year to 30 November 2017 £000s	Year to 30 November 2016 £000s
Profit before tax		9,617	2,851
Interest (received)/paid		(73) 3)	4
Amortisation charge		6,172	5,000
Depreciation charge		330	495
Loss on disposal of property, plant and equipment		-	14
Share-based payment charge		780	297
Exchange differences		(367)	31
Decrease/(increase) in inventories		2,371	(1,919)
Decrease/(increase) in trade and other receivables		3,174	(2,849)
(Decrease)/increase in trade and other payables		(6,246)	8,557
		_________	_________
Cash generated from operations		15,758	12,481
		_________	_________

Adjusted operating cash flow before exceptional cash outflows was £16.9m (2016: £15.8m).

		Year to 30 November 2016 £000s	Year to 30 November 2016 £000s
Adjusted operating cashflow		16,913	15,795
Redundancy and associated costs		-	(1,150)
Integration costs		-	(443)
Contingent post-acquisition remuneration (see note 6)		(1,155)	(1,721)
		_________	_________
Cash generated from operations		15,758	12,481
		_________	_________

 

8   AGM / Annual Report

Pursuant to AIM Rule 20, the Annual Report and Accounts for the financial year ended 30 November 2017 ("Annual Report") is available to view on the Group's website: www.aminocom.com and will be posted to shareholders shortly. Amino will hold its AGM on 27th March 2018.

 

END

 

 

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