Final Results

RNS Number : 0063P

Amino Technologies PLC

15 February 2016

 

AMINO TECHNOLOGIES PLC

FINAL RESULTS

FOR THE YEAR ENDED 30 NOVEMBER 2015

Transformative year: increasing scale and broadening product offer to widen addressable markets and align to industry growth dynamics

Amino Technologies plc (LSE AIM: AMO), the Cambridge-based leader in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, announces audited consolidated results for the year ended 30 November 2015.

Financial highlights:

·      Revenue increased 15%, in line with revised expectations at £41.7m (2014: £36.2m)

·      Gross profit up 11% to £18.6m (2014: £16.8m)

·      Gross margin remains strong at 44.8% (2014: 46.3%), reflecting a blended margin from acquisitions in the year

·      EBITDA before exceptional items⁽¹⁾ increased by 10% to £7.4m (2014: £6.7m)

·      Adjusted profit before tax⁽²⁾  up £0.8m to £5.0m  (2014: £4.2m)

·      Statutory profit before tax down £3.7m to £0.3m after exceptional items (2014: £4.0m) 

·      Adjusted basic earnings per share⁽³⁾ of 8.6p (2014: 8.0p), following the successful share issue in July 2015.  Basic earnings per share after exceptional items was 0.61p (2014: 7.7p)

·      Cash generated from operations of £7.7m (2014: £6.4m) before £1.9m of acquisition-related cash outflows (£5.8m of cash generated after these outflows)

·      Net cash of £2.1m at 30 November 2015 (2014: £20.8m) after net payments of £38.8m in cash for acquisitions⁽⁴⁾, net share issue proceeds of £19.9m and record payments of £2.9m in dividends

·      Proposed increase in full year dividend to 5.5p per share (2014: 5.0p), up by 10% year on year in line with the previously stated progressive dividend policy

Operational highlights:

·      Acquisition of Entone Inc. ("Entone") completed in August 2015 and Booxmedia Oy ("Booxmedia") completed in May 2015

o   Broadens Amino's product offering and addressable markets

o   Integration substantially completed

o   As announced in October, cost synergies continue to track ahead of previously stated expectations with the full benefit being reflected in FY 2016

·      Management team strengthened and sales team restructured to drive growth across both the traditional business and new Cloud based services

·      First new product from the converged team developed and launched, with initial contracts signed in Q1 2016

·      The broader Hybrid solutions portfolio is well position to support the market transition to IP

·      Organisation realigned to create two drivers of growth and shareholder value, these being Hybrid TV and Cloud Services business units

·      Traditional customer base broadened through the Booxmedia suite to now include mobile

·      New brand and product offering now defined for the next phase of growth

⁽¹⁾ Stated after adding back exceptional items of £2.6m.  Full details of the exceptional items are contained within note 3 to this announcement.  EBITDA after these exceptional items was £4.7m (2014: £6.6m).

⁽²⁾ Stated after adding back £3.9m of exceptional items arising in the period and £0.8m of amortisation of intangible assets on the acquisition of Booxmedia Oy and Entone Inc.  Full details of the exceptional items are contained within note 3 to this announcement.

⁽³⁾ As per ⁽²⁾ above, net of the tax effect of these adjustments (which were zero for the respective periods)

⁽⁴⁾ Net cash outflows for acquisitions made were £4.5m for Booxmedia Oy and £34.3m for Entone Inc.

Commenting on the results, Keith Todd CBE, Non-Executive Chairman, said:

"2015 has been a transformative year for Amino.  We have completed and substantially integrated two key acquisitions which broaden our addressable market and widen our product offering in Hybrid devices, as well as secure new solutions for current and future customers to migrate their services to IP and the Cloud.  We have aligned the organisation behind the two key drivers of growth and profitability, Hybrid TV and Cloud services.

"Looking ahead to 2016, we believe that Amino is well positioned thanks to our IP pedigree, enhanced product offering, geographical reach and refocussed sales teams.  The market dynamics for "anytime anywhere" entertainment and home services continues to move towards our core competence of IP delivery.  This will benefit us now and in the longer term."

For further information, please contact:

Amino Technologies PLC	[phone]
Donald McGarva, Chief Executive Officer
Julian Sanders, Interim Chief Financial Officer
finnCap Ltd (NOMAD and Joint Broker)	[phone]
Stuart Andrews / Matt Goode / Carl Holmes (Corporate Finance) Simon Johnson (Corporate Broking)
Canaccord Genuity Limited (Joint Broker and Financial Adviser)	[phone]
Simon Bridges / James Craven / Emma Gabriel
FTI Consulting LLP (Financial PR)	[phone]
Chris Lane / Alex Le May / Darius Alexander

About Amino Technologies plc

Amino Technologies plc specialises in the development and delivery of IPTV/OTT solutions. With over seven 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 (AIM: symbol AMO).

Chairman's statement:

2015 has been a transformative year for Amino. We have completed and substantially integrated two key strategic acquisitions to broaden our addressable market, both in terms of product offering and geographic reach, positioning Amino for success in 2016 and beyond.

The Booxmedia and Entone acquisitions, completed in May and August 2015 respectively, provide Amino with significantly increased scale and broaden our addressable market.  Both acquisitions have been well received by existing and potential clients. The integration of Entone has been substantially completed with key technical, operational and marketing decisions taken and as announced in October, cost synergies continuing to track ahead of previously stated expectations (of £1 million) with the full benefit being reflected in FY 2016.  The customer reaction to the acquisition of Entone has been excellent across the board, with our increased scale and breadth of offer recognised by both current and potential customers.

We have realigned the organisation to create two drivers of growth and shareholder value, being Hybrid TV and Cloud Services business units. These units operate in the same market and are complementary but have different drivers and financial metrics.  Booxmedia has provided the basis for the Cloud Services business, but it will also include Fusion Home and other Cloud offerings. While this is a small part of our financial make-up today, the growth and value creation opportunity is significant. This approach, and other changes to the sales focus, will address the issues we experienced in the second half. 

The continued transition to all-IP entertainment, continued growth in video, especially in the mobile market, and the increasing interconnectivity of IP devices mean that Amino's expertise and comprehensive product range is fully aligned with the key industry growth drivers.

Amino now begins 2016 with an industry-leading portfolio of Hybrid TV and Cloud Service solutions and is well-placed to capitalise on the growth in the industry. Through the acquisition of Entone we have strengthened and broadened our core IPTV and Hybrid TV device portfolio with increased operational scale to address new markets and customers. With Booxmedia's Cloud TV solution, we can address growth opportunities in mobile OTT video and the growing needs of customers to migrate their services to the Cloud.

Dividend

The Board is pleased to recommend a full year dividend to 5.5p, up 10% on 2014, and we are pleased to reaffirm the Company's progressive dividend policy of no less than 10% growth per annum up to and including the year ending November 2016.

Subject to shareholder approval at the annual general meeting to be held on 23 March 2016, the dividend will be payable on 29 April 2016, to shareholders on the register at 8 April 2016, with a corresponding ex-dividend date of 7 April 2016.

Outlook

Amino has had a year of significant transformation and now has a comprehensive product range aligned with customer and prospect needs. The Board is pleased to report a positive outlook for the current financial year.

Keith Todd, CBE

Non-Executive Chairman

Chief Executive Officer's review:

Broadening Amino's addressable market

Amino has taken important steps in 2015 to ensure that our product range is aligned with mature and emerging market trends. As previously guided, Amino has sought acquisitions that add significant value to the portfolio and accelerate its strategic aims, and the acquisitions of Booxmedia and Entone have ensured that Amino, combined with its existing product range, is at the forefront of industry developments and ready to capitalise on these opportunities.

The acquisition of Cloud TV platform provider Booxmedia, announced in May 2015, is a prime example of this. It is a clear signal of the Company's intention to extend and enhance its offering and ensure that the Company is fully aligned with market changes. This acquisition significantly strengthens Amino's capabilities in the delivery of "TV everywhere" entertainment to both existing customers and adjacent markets in mobile, broadcast and content delivery. 

Booxmedia sales and marketing plans have progressed well with two major customer wins secured in the second half of 2015.  Dutch utilities and digital services company DELTA selected Booxmedia's white-label platform and products to provide, install and maintain a new end-to-end multiscreen Cloud TV solution.  Belgian broadcaster RTL selected Booxmedia to provide, install and maintain a full end-to-end Cloud video-on-demand (VOD) platform.

In July 2015, we announced the acquisition of Entone, a provider of broadcast Hybrid TV and connected home solutions for a total consideration of £46.7m ($73.0m), which includes £5.6m ($8.1m) of contingent post-acquisition remuneration, completed in August 2015. The acquisition has enhanced Amino's global footprint and will enable Amino to expand its capabilities and market reach globally across IPTV, Hybrid broadcast and a range of connected home solutions. It also aligns closely with the acquisition of Booxmedia and enables Amino to meet the evolving needs of customers across a range of markets. The acquisition is expected to drive cost synergies (of at least £1 million) which will be realised in the current financial year FY2016, being the first full year of ownership. 

Following the acquisition of Entone, the Company has engaged in a number of new Hybrid TV opportunities based on Entone's portfolio.  Post period end, the Group and Cincinnati Bell Telephone have started the migration of legacy IPTV devices to Amino's Enable TV software platform, instantly enabling Cincinnati Bell Telephone's entire Fioptics TV installed base to be upgraded with a rich media interface and advanced applications.

We continue to expect both Booxmedia and Entone to be significantly earnings enhancing in the current financial year, to strengthen our position with existing customers and open the door to new customers who can benefit from the breadth of Amino's product offering.

With both acquisitions largely integrated and rebranding under way, Amino has a clear product roadmap for 2016. The Group has already launched the new 6 Series, a comprehensive 4K Ultra HD and HEVC Hybrid TV device ranges, to take advantage of the strong growth in demand for these services in the coming years.

We have created two dedicated business units, Hybrid TV and Cloud Services, to take full advantage of the opportunities that are available to the Group. The Cloud Services business will be headed up by Michael Clegg.

Current customers and markets:

As with 2014, 2015 has been a year which has seen the markets within which Amino operates evolve rapidly. Strong demand remains for simple, reliable IPTV devices, particularly within emerging markets. More and more however, customers are looking to operators for higher performance devices that can blend traditional IPTV with OTT content delivered over the open internet. The transition to all-IP entertainment delivery has continued as has the growth in OTT video consumption, especially on mobile devices, and the increasing importance of interconnectivity between devices around the "TV everywhere" concept. At the same time, the timeframe within which new 4K Ultra-HD services are expected to be deployed by service providers has also shortened.

The developments seen within the industry in 2015 mean that Amino's comprehensive product range is even more aligned with our customers' needs and with key industry growth trends the continued transition to all-IP entertainment, rapid growth in OTT video and the increasing use of mobile devices to view entertainment content.

According to industry analysts IHS Technology, the IP-connected pay TV STB market is forecast to grow from 107 million unit shipments in 2014 to over 175 million by 2019. In addition, consumption of video on multiple devices in and out of the home continues to grow. A recent study by Cisco forecast that by 2019 IP video will represent 80% of all internet traffic. Mobile video consumption also continues to grow, with Ericsson forecasting 70% of all mobile network traffic will be from video consumption by 2021.

The acquisitions of Entone and Booxmedia have increased the Group's scale in all key geographies and significantly increased the number of direct Tier 2 operator customers whilst complementing existing distribution partners serving Tier 3 operators.

Operational structure:

Following the acquisitions of Booxmedia and Entone, we have focussed on organisational change to ensure that the Group is well positioned to take full advantage of the opportunities ahead.  One of the main changes is a new integrated sales organisation across the Amino and Entone businesses, directed by Steve McKay, who led Entone's international expansion and successfully secured a number of Tier 2 customers, including Cincinnati Bell, in his former role as CEO of Entone Inc. The Company now has a targeted sales focus in all key regions, with dedicated teams for Latin America and Europe and a new combined sales team for North America.

Through the acquisition of both Entone and Booxmedia, we have also established a global research and development team with operations in the UK, Hong Kong and Finland, improving our scale and capability to drive innovation and met the needs of a wider set of customers.

Future growth:

Amino has made considerable progress in 2015 and enters 2016 with increased scale and a broader product set. Our focus is on taking this newfound capability and leveraging that with both existing and potential customers. Our products can address the immediate needs of our customers through the existing Amino offering and now also through our Hybrid and Cloud TV offerings as well, and feedback so far has been very positive. The Board remains confident that Amino is well placed to deliver continued growth in 2016.

Donald McGarva

Chief Executive Officer

Interim Chief Financial Officer's report

Results for the year

Revenue for the full year was £41.7m which was £5.5m ahead of the previous year (2014: £36.2m) following the acquisitions of Booxmedia Oy in May 2015 and Entone Inc. in August 2015. 

North America remained a very strong market for the Group and sales for the combined Group increased by 19% to £20.9m (2014: £17.5m), with the acquisition of Entone bringing some direct Tier 2 operator customers to complement existing distribution partners serving Tier 3 operators.

The enlarged Group has increased its penetration in Western Europe, with a wider base of Tier 2 operator customers which saw Dutch sales increasing by 46% to £8.0m (2014: £5.5m) including revenues generated by Booxmedia.

Some parts of Eastern Europe remained challenging and Serbia saw the potential consolidation of a major South Eastern European customer impacting further roll out of their IPTV solution resulting in a sharp drop in sales in the year. 

Rest of Europe sales increased by 58% to £6.7m (2014: £4.3m), however, with additional sales to France, Switzerland and Malta and continuing demand in Albania.

Consistent demand was also seen in Chile with sales of £2.1m in the year (2014: £2.4m), whilst Rest of World revenue increased by 31% to £3.8m (2014: £2.9m) with on-going demand in Argentina and with the enlarged Group bringing sales in some new territories including Trinidad and Moldova. 

Margins remained strong at 44.8% overall, which decreased by 1.5 percentage points over last year (2014: 46.3%), largely as a reflection of a blended margin from the acquisitions of Entone and Booxmedia.  Achievement of this margin on higher revenues for the enlarged Group generated an increase of £1.8m in gross profit to £18.6m (2014: £16.8m).

Total operating expenses before exceptional items were £14.5m (2014: £12.7m), an increase of £1.8m reflecting the increased scale of the Group following the acquisitions made during the year.  Total operating expenses after total exceptional costs incurred of £4.7m were £19.1m (2014: £12.8m).  The exceptional costs incurred are described in more detail below and also in the notes to the accounts.  

Operating expenses before exceptional items, amortisation and depreciation increased by £1.2m to £11.3m (2014: £10.1m), again reflecting the enlarged Group following the acquisitions offset by continued tight cost control during the year.  Total operating expenses before amortisation and depreciation was £13.9m (2014: £10.2m) after related net exceptional items of £2.6m.  These exceptional items included £1.4m of acquisition costs and £1.3m of contingent post acquisition remuneration payable relating to the acquisition of Entone.

Significant investment in research and development continued to be made within the enlarged Group with total spend including capitalised amounts of £7.7m before exceptional items during the year (2014: £7.0m).  Total research and development after exceptional items in the Group was £9.0m (2014: £7.0m).

Cable-Hybrid was one focus for development in the year which will continue in 2016.  During the year the Group also introduced further x5x products with the A550 and H150 which are further variants of the mainstream A150 IPTV device, leading to more resource being involved in the enhancement and support of products. 

The Group continues to develop its technology roadmap to align with wider market trends and opportunities and has started to consolidate its product ranges.  Integration activity is substantially complete and is expected to be finished in 2016.

Year-end headcount was 233 (2014: 107) and the average number of employees during the year totalled 150 (2014: 100) as a result of the acquisitions of Booxmedia and Entone.

EBITDA before exceptional items at £7.4m was 10% higher than the prior year (2014: £6.7m).  EBITDA after exceptional items was £4.7m (2014: £6.6m).

Amortisation and depreciation before exceptional items totalled £3.2m (2014: £2.6m).  This included a charge of £0.8m in the period for the amortisation of intangible assets arising on the acquisitions of Booxmedia and Entone and excluding this charge was £2.4m, which was in line with prior year (2014: £2.6m). 

Exceptional items include a charge of £1.3m for accelerated amortisation resulting from the rationalisation of the enlarged Group's product roadmap following the acquisitions made during the year. Amortisation and depreciation after this exceptional charge was £4.5m.

Operating profit after net exceptional items of £3.9m was £0.3m (2014: £4.0m).  Operating profit before these exceptional items was up £0.1m to £4.2m (2014: £4.1m) and excluding £0.8m of acquisition-related intangible asset amortisation arising in the year after the acquisitions was up 22% to £5.0m.

Profit before the amortisation of intangible assets arising on the acquisitions of £0.8m, net exceptional items of £3.9m and tax increased by £0.9m to £5.1m (2014: £4.2m), an improvement of 21% on the prior year reflecting the higher revenue year-on- year.  Statutory profit before tax after the net exceptional was £0.3m (2014: £4.0m). 

As referred to above, total net exceptional items of £3.9m were incurred during the year (2014: £0.2m).  These items included acquisition costs of £0.3m and £1.1m relating to the acquisitions of Booxmedia and Entone respectively; contingent post acquisition remuneration of £1.3m relating to the acquisition of Entone; accelerated development project amortisation of £1.3m and project costs of £0.1m resulting from the rationalisation of the enlarged Group's product roadmaps; general integration costs of £0.3m and redundancy and associated costs of £0.3m.  Also included was the final rebate of £0.7m in respect of duties paid on previously recognised international product sales.

Balance sheet

Total equity was £45.1m at the year-end (2014: £25.8m), which is equivalent to 65p per share (2014: 50p) following the acquisitions of Booxmedia and Entone made during the year.

Non-current assets increased by £42.7m to £47.6m (2014: £4.9m) reflecting the separately identifiable intangible assets and goodwill added as a result of the acquisitions made.

Net current assets at the year-end were £3.4m (2014: £20.9m), the principal components of which were net cash balances of £2.1m (2014: £20.8m), trade and other receivables of £11.7m (2014: £6.9m), stock of £3.7m (2014: £2.3m) and trade and other payables of £14.3m (2014: £9.0m). 

-           36% of trade receivables at 30 November 2015 were insured (2014: 96%), lower than last year following the acquisitions of Booxmedia and Entone.

-           The increase in trade and other payables at the year-end also reflects the larger balance sheet with the acquisitions.

Non-current liabilities of £5.9m were also added during the year as a result of the acquisitions made.

Cash flow

Operating cash flow before acquisition-related cash outflows of £1.9m was strong at £7.7m (2014: £6.4m) (£5.8m after these outflows) reflecting continued strong profitability and working capital management the £1.9m of acquisition-related cash outflows included payments of £1.4m for acquisition costs, £0.3m for integration costs, £0.1m of redundancy and associated costs and £0.1m of development project costs before the year-end.

Net cash invested in the acquisitions amounted to £38.8m, with net cash outflows of £4.5m for Booxmedia and £34.3m for Entone.  These investments were financed in part by net share proceeds raised from the new ordinary shares issued pursuant to the placing announced in July 2015 of £19.9m. 

The Company put in place an external £15.0m loan facility during the year as an additional source of capital.  This was used briefly to facilitate the financing of the Entone acquisition by drawing down £5.1m which was immediately repaid following the acquisition.

Dividend payments of £2.9m were also made in the year, an increase of £1.0m (53%) over the previous year (2014: £1.9m), and the Group received £0.7m following the favourable ruling with respect to duties' rebate at a tax tribunal.

Despite the acquisition investments made in the year and record dividends paid, the Group ended the period with net cash balances of £2.1m as at 30 November 2015 (2014: £20.8m).

Equity

The issued share capital of the Group is 74.4m (2014: 57.9m) ordinary shares of 1 pence each, of which 0.6m (2014: 1.8m) are held by the Employee Benefits Trust and 4.1m (2014: 4.2m) are held in treasury by the Company, leaving 69.6m (2014: 51.8m) shares held external to the Group.

The Board is pleased to recommend a full year dividend of 5.5 pence per share, a 10% increase year-on-year. In line with previous guidance, the Board expects the dividend for the year to November 2016 to grow by no less than 10% per annum.

Subject to shareholder approval at the Company's AGM on 23 March 2016, the final dividend of 4.235p will be payable on 29 April 2016 to shareholders on the register on 8 April 2016.  The ex-dividend date is 7 April 2016.  

Julian Sanders

Interim Chief Financial Officer

Consolidated Income Statement
For the year ended 30 November 2015

		Year to 30 November 2015			Year to 30 November 2014
	Notes	Recurring items £000s	Exceptional items £000s	Total £000s	Recurring items £000s	Exceptional items £000s	Total £000s
Revenue	2	41,660	-	41,660	36,190	-	36,190
Cost of sales		(23,016)	-	(23,016)	(19,417)	-	(19,417)
		__________	__________	__________	__________	__________	__________
Gross profit		18,644	-	18,644	16,773	-	16,773
Other income Operating expenses		- (14,453)	744 (4,678)	744 (19,131)	- (12,663)	- (152)	- (12,815)
		__________	__________	_________	__________	__________	_________
Operating profit		4,191	(3,934)	257	4,110	(152)	3,958
Analysed as:
Gross profit		18,644	-	18,644	16,773	-	16,773
Selling, general and administrative expenses	3	(6,681)	(2,073)	(8,754)	(5,365)	(127)	(5,492)
Research and development expenses	3	(4,604)	(1,313)	(5,917)	(4,689)	(25)	(4,714)
Duties refund	3	-	744	744	-	-	-
		__________	__________	__________	__________	__________	__________
EBITDA		7,359	(2,642)	4,717	6,719	(152)	6,567
Depreciation		(198)	-	(198)	(141)	-	(141)
Amortisation		(2,970)	(1,292)	(4,262)	(2,468)	-	(2,468)
		__________	__________	__________	__________	__________	__________
Operating profit		4,191	(3,934)	257	4,110	(152)	3,958
Finance expense		(3)	-	(3)	-	-	-
Finance income		68	-	68	87	-	87
		__________	__________	__________	__________	__________	__________
Net finance income		65	-	65	87	-	87
		__________	__________	__________	__________	__________	__________
Profit before corporation tax		4,256	(3,934)	322	4,197	(152)	4,045
Corporation tax credit		34	-	34	29	-	29
		__________	__________	__________	__________	__________	__________
Profit for the period from continuing operations attributable to equity holders		4,290	(3,934)	356	4,226	(152)	4,074
		__________	__________	__________	__________	__________	__________
Basic earnings per 1p ordinary share	4			0.61p			7.68p
Diluted earnings per 1p ordinary share	4			0.60p			7.57p

All amounts relate to continuing activities.

Consolidated Statement of Comprehensive Income

For the year ended 30 November 2015

		Year to 30 November 2015 £000s	Year to 30 November 2014 £000s
Profit for the year		356	4,074
		__________	__________
Items that may be reclassified subsequently to profit or loss:
Foreign exchange difference arising on consolidation		234	(14)
		__________	__________
Other comprehensive income/(expense)		234	(14)
		__________	__________
Total comprehensive income for the financial year attributable to equity holders		590	4,060
		__________	__________

Consolidated Balance sheet

As at 30 November 2015

Assets			Notes	As at 30 November 2015 £000s	As at 30 November 2014 £000s
Non-current assets
Property, plant and equipment				553	439
Intangible assets				46,342	3,717
Deferred income tax assets				560	560
Trade and other receivables				162	162
				_________	_________
				47,617	4,878
				_________	_________
Current assets
Inventories				3,651	2,262
Trade and other receivables			5	11,673	6,893
Corporation tax receivable				601	10
Cash and cash equivalents				2,094	20,758
				_________	_________
				18,019	29,923
				_________	_________
Total assets				65,636	34,801
				_________	_________
Capital and reserves attributable to equity holders of the business
Called-up share capital				744	579
Share premium				20,193	126
Capital redemption reserve				6	6
Foreign exchange reserves				818	584
Merger reserve				16,389	16,389
Equity reserve				665	-
Retained earnings				6,235	8,113
				_________	_________
Total equity				45,050	25,797
				_________	_________
Liabilities
Current liabilities
Trade and other payables			6	14,338	9,000
Corporation tax payable				321	-
Forward foreign currency contracts				-	4
				_________	_________
				14,659	9,004
				_________	_________
Non-current liabilities
Trade and other payables			6	1,775	-
Provisions				1,869	-
Deferred tax liabilities				2,283	-
				_________	_________
				5,927	-
				_________	_________
Total liabilities				20,586	9,004
				_________	_________
Total equity and liabilities				65,636	34,801
				_________	_________

Consolidated Statement of Cash Flows

For the year ended 30 November 2015

		Notes	Year to 30 November 2015	Year to 30 November 2014
			£000s	£000s
Cash flows from operating activities
Cash generated from operations		7	5,836	6,447
Corporation tax received			1	35
			_________	_________
Net cash generated from operating activities			5,837	6,482
			_________	_________
Cash flows from investing activities
Purchases of intangible assets			(3,201)	(2,373)
Purchases of property, plant and equipment			(118)	(114)
Proceeds on disposal of property, plant and equipment			9	2
Net interest received			65	87
Acquisition of subsidiaries			(38,776)	-
			_________	_________
Net cash used in investing activities			(42,021)	(2,398)
			_________	_________
Cash flows from financing activities
Proceeds from exercise of employee share options			574	96
Proceeds from issue of new shares			19,858	-
Share repurchase			-	(1,429)
Dividends paid			(2,924)	(1,914)
Repayment of borrowings			(5,101)	-
New bank loans raised			5,166	-
			_________	_________
Net cash generated from/ (used in) financing activities			17,574	(3,247)
			_________	_________
Net (decrease)/increase in cash and cash equivalents			(18,610)	837
Cash and cash equivalents at beginning of year			20,758	19,521
Effects of exchange rate fluctuations on cash held			(54)	400
			_________	_________
Cash and cash equivalents at end of year			2,094	20,758
			_________	_________

Consolidated Statement of Changes in Shareholders' Equity

For the year ended 30 November 2015

	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 2013	579	126	16,389	-	598	6	7,224	24,922
	________	________	____  ___	____  ___	_________	______  ___	____  ___	____  ___
Profit for the year	-	-	-	-	-	-	4,074	4,074
Other comprehensive income	-	-	-	-	(14)	-	-	(14)
	________	________	________	________	_________	________	________	________
Total comprehensive expense for the period attributable to equity holders	-	-	-	-	(14)	-	4,074	4,060
	________	________	________	________	_________	__________	________	________
Share option compensation charge	-	-	-	-	-	-	62	62
Exercise of employee share options	-	-	-	-	-	-	96	96
Purchase of own shares	-	-	-	-	-	-	(1,429)	(1,429)
Dividends paid	-	-	-	-	-	-	(1,914)	(1,914)
	________	________	________	________	_________	________	________	________
Total transactions with owners	-	-	-	-	-	-	(3,185)	(3,185)
	________	________	________	________	_________	__________	________	________
Total movement in shareholders' equity	-	-	-	-	(14)	-	889	875
	________	________	________	________	_________	__________	________	________
Shareholders' equity at 30 November 2014	579	126	16,389	-	584	6	8,113	25,797
	________	________	____  ___	____  ___	____  ___	______  ___	____  ___	____  ___
Profit for the year	-	-	-	-	-	-	356	356
Other comprehensive expense	-	-	-	-	234	-	-	234
	________	________	________	________	_________	________	________	________
Total comprehensive income for the period attributable to equity holders	-	-	-	-	234	-	356	590
	________	________	________	________	_________	__________	________	________
Share option compensation charge	-	-	-	-	-	-	116	116
Exercise of employee share options	-	-	-	-	-	-	574	574
Issue of share capital	165	21,318	-	-	-	-	-	21,483
Transaction costs on issue of share capital	-	(1,251)	-	-	-	-	-	(1,251)
Equity to be issued	-	-	-	665	-	-	-	665
Dividends paid	-	-	-	-	-	-	(2,924)	(2,924)
	________	________	________	________	_________	________	________	________
Total transactions with owners	165	20,067	-	665	-	-	(2,234)	18,663
	________	________	________	________	_________	__________	________	________
Total movement in shareholders' equity	165	20,067	-	665	234	-	(1,878)	19,253
	________	________	________	________	_________	__________	________	________
Shareholders' equity at 30 November 2015	744	20,193	16,389	665	818	6	6,235	45,050
	________	________	________	________	_________	__________	________	________

1       Basis of preparation

The preliminary announcement for the year ended 30 November 2015 has been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The financial information set out above, which was approved by the Board on 12 February 2016, is derived from the full Group accounts for the year ended 30 November 2015 and does not constitute the statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group accounts on which the auditors have given an unqualified report, which does not contain a statement under section 498(2) or (3) of the Companies Act 2006 in respect of the accounts for 2015, will be delivered to the Registrar of Companies and posted to shareholders in due course.

2      Geographical external customer revenue analysis

	Year to 30 November 2015 £000s	Year to 30 November 2014 £000s
USA	19,402	16,176
Canada	1,546	1,369
	_________	_________
	20,948	17,545
Netherlands	7,959	5,459
Serbia	82	3,585
Rest of Europe	6,733	4,265
Chile	2,122	2,388
Rest of World	3,816	2,948
	_________	_________
	41,660	36,190
	_________	_________

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

3     Exceptional Items

The Group incurred exceptional items of £3,934k during the year (2014: £152k).  Included in these were exceptional costs of £4,678k which can be attributed to five categories:

·     Acquisition costs of £1,359k, of which £295k related to the acquisition of Booxmedia Oy in May 2015 and £1,064k related to the acquisition of Entone Inc. in August 2015

·     Contingent post acquisition remuneration payable relating to the acquisition of Entone Inc. of £1,310k

·     General integration costs of £272k which includes additional travel and contractor costs resulting from activities to integrate the new enlarged Group

·     Development project costs expensed of £103k and amortisation costs of £1,292k resulting from the rationalisation of the new Group's product roadmaps

·     Redundancy and associated costs of £342k.

In 2014, the costs largely related to the closure of the Group's Chinese office which was announced in September 2014. 

A final rebate of £744k in respect of duties paid on previously recognised international product sales was received following the favourable ruling with respect to a further duties' rebate at a tax tribunal in January 2015.

4     Profit per share

		Year to 30 November 2015	Year to 30 November 2014
Profit attributable to ordinary shareholders		£356,206	£4,073,896
Profit attributable to ordinary shareholders excluding exceptional items		£4,290,114	£4,225,592
		_________	_________
Weighted average number of shares (Basic)		58,799,386	53,032,963
		_________	_________
Weighted average number of shares (Diluted)		59,128,979	53,824,026
		_________	_________
Basic earnings per share		0.61p	7.68p
		________	________
Diluted earnings per share		0.60p	7.57p
		_________	_________
Basic earnings per share excluding exceptional items		7.30p	7.97p
		________	________
Diluted earnings per share excluding exceptional items		7.26p	7.85p
		________	________

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 period. The Company holds 4,139,898 (2014 - 4,219,857) of its own shares in treasury and these are excluded from the weighted average above. The basic weighted average number of shares also excludes 962,816 (2014 - 1,896,516) 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 the exceptional items of £3,933,909 (2014 - £151,696) disclosed on the face of the income statement.

5   Trade and other receivables

			As at 30 November 2015 £000s	As at 30 November 2014 £000s
Current assets:
Trade receivables			10,124	6,220
Less: provision for impairment of receivables			(111)	(283)
			_________	_________
Trade receivables (net)			10,013	5,937
Other receivables			88	101
Corporation tax receivable			601	10
Prepayments and accrued income			1,572	855
			_________	_________
			12,274	6,903
			_________	_________
Non-current assets:
Other receivables			162	162
			_________	_________

Other receivables comprise rent deposits.

6   Trade and other payables

Current liabilities						As at 30 November 2015 £000s		As at 30 November 2014 £000s
Trade payables						4,187		2,012
Social security and other taxes						941		-
Other payables						1		55
Accruals						7,053		6,212
Deferred income						922		721
Deferred consideration						1,234		-
Corporation tax payable						321		-
						_________		_________
						14,659		9,000
						_________		_________
Non-current liabilities:
Accruals							36		-
Deferred income							335		-
Deferred consideration							1,404		-
						_________		_________
						1,775		-
						_________		_________

7   Cash generated from operations

		Year to 30 November 2015 £000s	Year to 30 November 2014 £000s
Operating profit before exceptional items		4,191	4,110
Adjustments for:
Exceptional costs (note 3)		(4,678)	(152)
Duties rebate (note 3)		744	-
		_________	_________
Operating profit		257	3,958
Amortisation charge		4,262	2,468
Depreciation charge		190	141
Loss on disposal of property, plant and equipment		8	17
Share-based payment charge		116	62
Exchange differences		163	(411)
Decrease in inventories		3,044	275
(Increase) in trade and other receivables		(1,264)	(1,660)
(Decrease)/increase in trade and other payables		(940)	1,597
		_________	_________
Cash generated from operations		5,836	6,447
		_________	_________

Cash generated from operations was after £1,845k of acquisition-related cash outflows, which included payments of £1,359k for acquisition costs, £272k for integration costs, £111k of redundancy and associated costs and £103k of development project costs before the year-end.

Operating cash flow before these acquisition-related cash outflows was £7.7m (2014: £6.4m).

8   Acquisition of subsidiaries

Booxmedia Oy

On 19 May 2015, the Group acquired 99.9% of the issued share capital of Booxmedia Oy, obtaining control of Booxmedia Oy.  Booxmedia Oy is a Software-as-a-Service Cloud TV platform provider.  Booxmedia Oy was acquired to enhance Amino's offering by adding a field-proven and scalable Cloud-based platform which can enable the delivery of "TV everywhere" entertainment to a full range of IP connected devices to align the Company with the industry shift towards "TV everywhere" viewing.

The remaining 0.1% share capital was acquired on 1 July 2015.

The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:

	Book value	Fair value adjustment	Fair value
	£000s	£000s	£000s
Identifiable intangible assets	-	2,680	2,680
Financial assets
Current trade and other receivables	448	-	448
Cash and cash equivalents	481	-	481
Financial liabilities
Current trade and other payables	(248)	-	(248)
Deferred tax liability	-	(536)	(536)
Total identifiable assets	681	2,144	2,825
Goodwill			4,720
Total consideration			7,545
Satisfied by:
Cash			4,993
Equity instruments (360,845 ordinary shares of Amino Technologies plc)			483
Contingent and deferred consideration arrangements			2,069
Total consideration transferred			7,545
Net cash outflow arising on acquisition:
Cash consideration			4,993
Less: cash and cash equivalent balances acquired			(481)
			4,512

The fair value of the financial assets includes trade receivables with a fair value of £181k and a gross contractual value of £181k.  The best estimate at acquisition date of the contract cash flows not to be collected is £nil.

The goodwill of £4,720k arising from the acquisition consists of expected growth in the sale of "TV everywhere" services as the industry shifts away from the current connected home focus.  The acquisition of Booxmedia will expand Amino's addressable market to include mobile operators, OTT providers, media companies and broadcasters.  None of the goodwill is expected to be deductible for income tax purposes.

The fair value of the 360,845 ordinary shares issued as part of the consideration paid for Booxmedia Oy (£483k) was determined on by reference to the average of the middle market share price on each of the five business days preceding the second business day before completion.

The contingent consideration arrangement requires Booxmedia Oy to achieve certain revenue targets in each of the three years to 31 December 2015, 2016 and 2017.  If the targets are achieved, payments are expected to be made in February 2016, 2017 and 2018.  If Booxmedia Oy achieves 85-99% of the target, 50% of the maximum payment will be payable.  The potential undiscounted amount of all future payments that Amino Technologies plc could be required to make under the contingent consideration arrangement is £1,883k.

The fair value of the contingent consideration arrangement of £1,883k was estimated by applying the exchange rate at completion to the gross expected payments and has not been discounted because the effect is considered immaterial.

Booxmedia Oy contributed £1,353k revenue and £66k to the Group's profit for the period between the date of acquisition and the balance sheet date.  If the acquisition of Booxmedia Oy had been completed on the first day of the financial year, group revenues for the period would have been £42,997k and group profit after tax would have been £420k.

Entone Inc.

On 11 August 2015, the Group acquired 100% of the issued share capital of Entone Inc., obtaining control of Entone Inc.  Entone Inc. is a provider of broadcast Hybrid TV and connected home solutions.  Entone Inc. was acquired to increase Amino's global footprint and scale and to consolidate a director competitor. The amounts recognised in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below:

	Book value	Fair value adjustment	Fair value
	£000s	£000s	£000s
Property, plant and equipment	198	-	198
Identifiable intangible assets	-	10,805	10,805
Inventory	4,432	-	4,432
Current financial assets
Trade and other receivables	2,992	-	2,992
Cash and cash equivalents	6,867	-	6,867
Non-current trade and other receivables	77	-	77
Current financial liabilities
Trade and other payables	(4,835)	(1,280)	(6,115)
Non-current trade and other payables	(360)	-	(360)
Non-current provision	(1,419)	-	(1,419)
Deferred tax liability	-	(1,905)	(1,905)
Total identifiable assets	7,952	7,620	15,572
Goodwill			25,559
Total consideration			41,131
Satisfied by:
Cash			41,131
Total consideration transferred			41,131
Net cash outflow arising on acquisition
Cash consideration			41,131
Less: cash and cash equivalent balances acquired			(6,867)
			34,264

The fair value of the financial assets includes trade receivables with a fair value of £2,250k and a gross contractual value of £2,336k.  The best estimate at acquisition date of the contract cash flows not to be collected is £nil.

The goodwill of £25,559k arising from the acquisition consists of expected growth related to new customers, which will assist Amino to further penetrate the US market in particular, new technology including broadcast Hybrid and a hosted field service software suite and expected synergies from combining the operations of Entone Inc. with Amino Communications Limited.  None of the goodwill is expected to be deductible for income tax purposes.

Entone Inc. contributed £15,228k revenue and £2,434k to the Group's profit for the period between the date of acquisition and the balance sheet date.

If the acquisition of Entone Inc. had been completed on the first day of the financial year, group revenues for the period would have been £61,061k and group profit after tax would have been £53k.

Ends

 

END

 

 

FR USVARNSAUAUR