Interim Results
Amino Technologies PLC
16 July 2007
FOR IMMEDIATE RELEASE 16 July 2007
AMINO TECHNOLOGIES PLC
RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2007
Amino Technologies plc ('Amino'; stock code: AMO), the Cambridge based broadband
network software and systems company, presents its unaudited consolidated
results for the six-month period ended 31 May 2007.
Key points:
• Turnover grew by 13% to £13.6m over the preceding six months (H2 2006:
£12.0m; H1 2006: £13.5m).
• Gross profit grew by 22% to £4.84m over the preceding six months (H2
2006: £3.97m; H1 2006: £5.28m) and gross margins improved by 2.6 percentage
points to 35.7% (H2 2006: 33.1%; H1 2006: 39.2%).
• Loss before tax reduced to £0.39m in the period from £1.63m in H2 2006
(H1 2006: break-even), despite a 7.7% weakening in the US dollar since 30
November 2006. On a constant currency basis, the results would have been
approximately break-even.
• Positive cash flow increased net funds to £14.6m (30 November 2006:
£14.0m; 31 May 2006: £16.8m).
• Shipments of AmiNET products increased compared to H2 2006 by 11.5% to
240,000 units.
• A total of 1,150,000 AmiNet set-top boxes have shipped since deliveries
started in December 2003.
• New MPEG-4 HD set-top boxes were shipped in the period.
On outlook, Keith Todd, Chairman, stated:
'The Board believes that the Group is well placed in the growing IPTV market and
to take advantage of adjacent markets such as the emerging Internet TV market.
The Board expects to build on the solid performance over the last six months and
further improve the financial performance in the second half of the year and
beyond.'
CONTACTS
Amino Technologies: Today: 020-7367-8888
Keith Todd, Chairman Thereafter: 01954-234100
Bob Giddy, Chief Executive www.aminocom.com
Stuart Darling, Finance Director
Bankside: 020-7367-8888
Steve Liebmann or Simon Bloomfield
KBC Peel Hunt Ltd.: 020-7418-8900
David Anderson
About Amino
Amino Technologies plc (www.aminocom.com) designs and supplies electronic
systems, software and consultancy for IPTV (telco triple-play applications: TV,
data and voice communications over broadband internet), on-demand video and
in-home multimedia distribution. Its award-winning set-top boxes are marketed
under the AmiNET(TM) branding.
Amino is partnered with world-leading companies in systems integration,
middleware, conditional access, semi- conductor, head-end systems and browser
technologies.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to announce a solid set of results for the six months to 31 May
2007. It has been a period of focus on operational delivery and assessing the
key strategic opportunities. The results show recovery compared to the second
half of last year and net funds have increased by £0.60m to £14.57m during the
period.
When I presented the results for the year to 30 November 2006 after my first 30
days in office, I said that Amino appeared to me to have six core strengths: a
good market opportunity, a leading position in the IPTV market for tier 2 and 3
telcos, a strong brand, a broad product portfolio, a strong distribution network
and an effective low cost manufacturing and supply chain. I am pleased to say
that Amino has continued to deliver on its strengths over the past six months.
Results and finance
As the IPTV market is still at a relatively early stage in its evolution, market
conditions have tended to differ significantly from one half-year reporting
period to the next. Accordingly, we consider it appropriate to view each period
sequentially with appropriate comparisons. The results for H1 2007 show a trend
of significant recovery when compared with H2 2006.
+----------------------+-----------------+------------------+------------------+
| | Six months ended| Six months ended| Six months ended|
| | | | |
| | 31 May 2007| 30 November 2006| 31 May 2006|
+----------------------+-----------------+------------------+------------------+
| | £m| £m| £m|
+----------------------+-----------------+------------------+------------------+
|Turnover | 13.56| 11.97| 13.48|
+----------------------+-----------------+------------------+------------------+
|Gross profit | 4.84| 3.97| 5.28|
+----------------------+-----------------+------------------+------------------+
|Operating costs | (5.48)| (5.87)| (5.55)|
+----------------------+-----------------+------------------+------------------+
|Operating loss | (0.64)| (1.90)| (0.27)|
+----------------------+-----------------+------------------+------------------+
|Net interest | 0.25| 0.26| 0.27|
|receivable | | | |
+----------------------+-----------------+------------------+------------------+
|Profit/(loss) before | (0.39)| (1.64)| 0.00|
|tax | | | |
+----------------------+-----------------+------------------+------------------+
|Profit/(loss) after | (0.39)| (1.62)| 0.03|
|tax | | | |
+----------------------+-----------------+------------------+------------------+
At £13.56m, turnover grew 13.4% over H2 2006 and was slightly ahead of H1 2006,
reversing the decline seen during the second half of last year. The loss before
tax of £0.39m was significantly reduced from the loss of £1.64m in H2 2006. When
adjusted for the 11.3% reduction in the value of the US$, profitability for the
period was broadly unchanged from break-even in H1 2006.
Unit shipments increased by 11.5% to 240,000 compared to the previous six-month
period and were higher than the 200,000 for H1 2006; a total of 1,150,000
set-top boxes have been delivered since shipments began in December 2003. MPEG-2
products continued to represent the core (81%) of shipments although the first
volume shipments were made of the new MPEG-4 HD (high definition) products.
Licensing revenue from the Group's Asian channel strategy was in line with plan
at £0.52m.
Gross margin increased 2.6 percentage points in the period to 35.7% over H2
2006. This has been achieved through the continued effective management of our
component and manufacturing costs which have more than offset the limited price
pressure we have seen. Further benefits of the cost reduction program should be
seen in the second half. Gross margins in H1 2006 (39.2%) were higher than in
the current period due to a combination of change in channel mix (direct vs.
distribution), market mix (hospitality vs. telco) and volume price breaks within
key accounts.
Operating costs were £0.39m lower than H2 2006 and £0.07m lower than H1 2006,
reflecting tight cost control and focused activity on key accounts and software
eco-systems. This was despite continued investment in the new MPEG-4 HD product
range (representing approximately 40% of research and development activity
during the period), the emerging market for Internet TV and continued long-term
business development within the tier 1 telco market .
The Group has a strong balance sheet with assets primarily made up of cash,
short-term investments, trade debtors and stock. Working capital has improved
since November 2006. Trade debtors reduced by £2.29m, net funds increased by
£0.6m and trade creditors reduced by £1.3m. In total, inventories have increased
by £0.34m due to investment in MPEG-4 products which began shipping towards the
end of the period, whilst inventories of MPEG-2 products decreased during the
period.
Strategy and competitive market position
Although the overall IPTV market continues to grow strongly, much of the growth
is within tier 2/3 telcos deploying established technologies. It is evident that
many market surveys in recent months have not read market development as
accurately as may be wished; as a result, we are taking a cautious view on the
latest growth predictions for MPEG-4 demand. We believe this over-estimation has
been due to the delays the industry has seen in the adoption by customers of the
total eco-system integration. It is also clear that MPEG-4 HD shipments will be
constrained to those network operators that already have sufficient network
capacity or until they have installed it.
While there are more potential competitors addressing the MPEG-4 market
opportunity, the recent announcement of the Surewest MPEG-4 HD deployment was
confirmation of Amino's ability to benefit from the MPEG-4 HD market
opportunity. Amino already has an extensive and expanding product range,
knowledge and experience of integrating the component parts of the total IPTV
eco-system and a substantial global customer base. In addition, our established
low cost manufacturing base has enabled us to prove our ability to drive costs
down to compensate for recent pricing pressure. As a result of all these
factors, Amino is well placed to grow whether the market growth is driven by
continued deployment of MPEG-2 products or the MPEG-4 SD/HD market place takes
off.
The Board is excited by the opportunity of the emerging Internet TV market which
should enable the Group to leverage its existing products and expertise in a
consumer-centric market with a different distribution channel which will require
further investment by the Group in the consumer proposition which could have a
positive impact in FY2008 and beyond.
Outlook
The Board believes that the Group is well placed in the growing IPTV market and
to take advantage of adjacent markets such as the emerging Internet TV market.
The Board expects to build on the solid performance over the last six months and
to further improve the financial performance in the second half of the year and
beyond.
Keith Todd 13 July 2007
Chairman
Consolidated profit and loss account
For the six months ended 31 May 2007
Six months Six months Year to 30
ended 31 ended 31 November
May May
2007 2006 2006
Notes
Restated* Restated*
Unaudited Unaudited Unaudited
£ £ £
Turnover 3 13,564,520 13,480,815 25,447,255
Cost of sales (8,724,712) (8,196,634) (16,197,987)
__________ __________ __________
Gross profit 4,839,808 5,284,181 9,249,268
Selling, general and administrative (3,813,275) (3,868,455) (8,002,600)
expenses
Research and development expenses (1,665,314) (1,688,515) (3,423,107)
__________ __________ __________
Group operating loss (638,781) (272,789) (2,176,439)
Interest receivable and similar income 492,733 282,743 623,525
Interest payable and similar charges (247,150) (5,864) (83,506)
__________ __________ __________
Group (loss)/profit on ordinary (393,198) 4,090 (1,636,420)
activities before taxation
Tax on (loss)/profit on ordinary - 29,571 48,171
activities
__________ __________ __________
Group (loss)/profit on ordinary
activities after taxation being (loss)/
profit for the financial period (393,198) 33,661 (1,588,249)
__________ __________ __________
Basic (loss)/earnings per 1p ordinary 4 (0.70p) 0.06p (2.84p)
share
Diluted (loss)/earnings per 1p ordinary 4 (0.70p) 0.06p (2.84p)
share
Statement of group total recognised gains and losses for the six months ended 31
May 2007
Six months Six months Year to 30
ended 31 ended 31 November
May May
2007 2006 2006
Restated* Restated*
Unaudited Unaudited Unaudited
£ £ £
(Loss)/profit for the financial period (393,198) 33,661 (1,588,249)
Exchange translation difference on (67,961) (35,911) (185,080)
consolidation
__________ __________ __________
Total recognised gains and losses for the (461,159) (2,250) (1,773,329)
period
__________ __________ __________
All amounts relate to continuing activities.
The accompanying notes are an integral part of these interim financial
statements.
* See note 2 for details of restatement.
Consolidated balance sheet
As at 31 May 2007
Notes As at As at 30 November
31 May 2007 31 May 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Fixed assets
Intangible assets 884,947 1,105,359 818,408
Tangible assets 1,252,694 1,330,166 1,413,734
_________ _________ _________
2,137,641 2,435,525 2,232,142
_________ _________ _________
Current assets
Stocks 4,143,394 2,653,022 3,808,362
Debtors: amounts falling due after one 5 1,910,482 195,406 1,914,406
year
Debtors: amounts falling due within 5 6,594,600 9,951,348 8,586,781
one year
Short-term investments 15,000,000 470,000 9,000,000
Cash at bank and in hand 5,128,157 16,308,118 12,658,769
_________ _________ _________
32,776,633 29,577,894 35,968,318
Creditors: Amounts falling due within 6 (8,461,136) (3,176,303) (11,323,294)
one year
_________ _________ _________
Net current assets 24,315,497 26,401,591 24,645,024
Total assets less current liabilities 26,453,138 28,837,116 26,877,166
Creditors: Amounts falling due after - (48,498) (36,299)
more than one year
_________ _________ _________
Net assets 26,453,138 28,788,618 26,840,867
_________ _________ _________
Capital and reserves
Called-up share capital 7 584,130 582,630 582,630
Shares to be issued 71,334 471,000 171,000
Share premium account 21,886,989 21,807,240 21,807,240
Other reserve 16,388,755 16,388,755 16,388,755
Profit and loss account (12,478,070) (10,461,007) (12,108,758)
_________ _________ _________
Shareholders' funds 8 26,453,138 28,788,618 26,840,867
_________ _________ _________
The accompanying notes are an integral part of these interim financial
statements.
Consolidated cash flow statement
For the six months ended 31 May 2007
Notes Six months Six months Year to 30
ended 31 ended 31 November
May May
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Net cash inflow from operating 9 728,013 3,166,675 459,334
activities
Returns on investments and servicing of
finance
Interest received 237,936 282,743 551,491
Interest paid (130,752) (5,864) (9,506)
__________ __________ __________
Net cash inflow from returns on 107,184 276,879 541,985
investments
__________ __________ __________
Taxation (18,000) 48,171 -
__________ __________ __________
Capital expenditure and financial
investment
Purchase of tangible fixed assets (120,430) (448,537) (723,894)
Purchase of intangible fixed assets (160,255) (82,319) (173,652)
__________ __________ __________
Net cash outflow for capital
expenditure and financial investment
(280,685) (530,856) (897,546)
__________ __________ __________
Acquisitions net of cash acquired - (617,702) (617,702)
__________ __________ __________
Net cash inflow/(outflow) before use of
liquid resources and financing
536,512 2,343,167 (513,929)
__________ __________ __________
Management of liquid resources
Increase in short-term deposits with (6,000,000) (40,000) (8,570,000)
banks
__________ __________ __________
Financing
Issue of ordinary share capital 16,000 - -
Expenses of share issue deducted from - - -
share premium
Cash received from exercise of share 2,040 - 53,024
options
Decrease in other borrowings (35,286) (33,320) (30,124)
(Decrease)/increase in bank borrowings (2,016,983) - 8,064,516
__________ __________ __________
Net cash inflow from financing (2,034,229) (33,320) 8,087,416
__________ __________ __________
(Decrease)/increase in net cash (7,497,717) 2,269,847 (996,513)
__________ __________ __________
Reconciliation of net cash flow to
movement in net funds
Opening net funds 13,968,354 14,468,271 14,468,271
(Decrease)/increase in net cash (7,497,717) 2,269,847 (996,513)
Increase in deposits 6,000,000 40,000 8,570,000
Decrease/(increase) in borrowings 2,016,983 - (8,064,516)
Exchange adjustment 79,477 - (8,888)
__________ __________ __________
Closing net funds 14,567,097 16,778,118 13,968,354
__________ __________ __________
Notes to the interim financial statements
For the six months ended 31 May 2007
1 Basis of preparation
The consolidated financial statements of Amino Technologies plc have been
presented under merger accounting rules. This means that the financial
statements of Amino Technologies plc and those of its wholly owned subsidiary,
Amino Holdings Limited have been aggregated and presented as if the two
companies have always been together.
The figures for the six-month periods ended 31 May 2007 and 31 May 2006 have not
been audited. The figures for the year ended 30 November 2006 have been
extracted from but do not constitute the consolidated financial statements of
Amino Technologies plc for that year and have been adjusted for the restatement
explained in note 2 below. The financial statements have been delivered to the
Registrar of Companies and included an auditors' report, which was unqualified
and did not contain a statement under Section 237 Companies Act 1985.
2 Accounting policies
These interim financial statements for the six months ended 31 May 2007, which
have been prepared in accordance with the accounting policies set out in the
consolidated financial statements of Amino Technologies plc for the year ended
30 November 2006 other than as explained below, do not constitute statutory
accounts for the purpose of section 240 of the Companies Act 1985.
Employee share option schemes - restatement for adoption of FRS 20 'Share-based
payments'
The Group issues options over shares in Amino Technologies plc to its employees.
From 1 December 2006 the group has accounted for these instruments using FRS 20
'Share-based payment', in accordance with which they are measured at fair value
at the date of grant. The group has chosen to take advantage of the transitional
provision of FRS 20 which permits options granted prior to the issue of Exposure
Draft 2 (i.e. 7 November 2002), or which had vested by the implementation date
of FRS 20 for the company (i.e. 1 December 2006), to be omitted.
The fair value of share options is calculated using an option pricing model,
such as Black Scholes. The fair value determined at the grant date of options is
expensed on a straight-line basis over the vesting period, based on the estimate
of the number of shares that will ultimately vest.
The adoption of FRS 20 represents a change in accounting policy and the
comparative figures have been restated accordingly.
In the six month period ended 31 May 2007 the effect of this change in
accounting policy was to increase staff costs by £89,807 (£48,680 in selling,
general and administrative expenses and £41,127 in research and development
expenses).
For the six month period ended 31 May 2006 the effect was £70,303 (year ended 30
November 2006: £140,607), with £37,908 in selling, general and administrative
expenses (year ended 30 November 2006: £73,716) and £32,395 in research and
development expenses (year ended 30 November 2006: £66,891).
The effect on the result for the period was equal to the increase in staff costs
in all periods, but there was no impact on net assets as an equal and opposite
entry is recognised in reserves under FRS 20 for equity-settled share-based
payments.
3 Turnover
Turnover is wholly attributable to the Group's principal activities of
developing enabling technologies and providing price competitive, flexible and
rapidly deployable designs to manufacturers and vendors of set top boxes, home
gateways and other communications devices. The analysis of turnover by
destination is set out below.
Six months Six months Year to
ended 31 May ended 31 30 November
May
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
United Kingdom, Europe and Africa 5,689,313 6,771,683 13,244,131
North America 6,687,288 6,704,958 11,892,181
Asia Pacific 1,187,919 4,174 310,943
__________ __________ __________
13,564,520 13,480,815 25,447,255
__________ __________ __________
4 (Loss)/earnings per share
Six months Six months Year to
ended 31 May ended 31 30 November
May
2007 2006 2006
Restated Restated
Unaudited Unaudited Unaudited
£ £ £
(Loss)/earnings attributable to (393,198) 33,661 (1,588,249)
shareholders
_________ _________ _________
Weighted average number of shares 55,912,904 55,796,444 55,832,244
(Basic)
_________ _________ _________
Weighted average number of shares 55,912,904 57,415,012 55,832,244
(Diluted)
_________ _________ _________
The calculation of basic (loss)/earnings per share is based on (loss)/profit
after taxation and the weighted average number of ordinary shares of 1p each in
issue during the period. 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 share options: those share options where the exercise price
is less than the average market price of the company's ordinary shares during
the period. There is no dilutive effect in respect of the six months to 31 May
2007 since the Group made a loss.
5 Debtors
Amounts falling due within one year
As at As at As at
31 May 31 May 30 November
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Trade debtors 5,317,575 7,332,765 7,610,249
VAT recoverable 50,093 333,138 103,044
Deferred tax - 1,719,000 -
Other debtors 6,236 6,480 6,471
Prepayments and accrued income 1,220,696 559,965 867,017
_________ _________ _________
6,594,600 9,951,348 8,586,781
_________ _________ _________
Amounts falling due after more than one year
As at As at As at
31 May 31 May 30 November
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Other debtors 191,482 195,406 195,406
Deferred tax 1,719,000 - 1,719,000
_________ _________ _________
1,910,482 195,406 1,914,406
_________ _________ _________
6 Creditors: Amounts falling due within one year
As at As at As at
31 May 31 May 30 November
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Bank loans and overdrafts 5,561,060 - 7,690,415
Other loans 48,498 32,090 47,485
Trade creditors 1,253,825 2,317,515 2,558,223
Taxation and social security 152,807 225,804 202,740
Corporation tax 707 18,600 18,707
Other creditors 3,966 - -
Accruals and deferred income 1,440,273 582,294 805,724
_________ _________ _________
8,461,136 3,176,303 11,323,294
_________ _________ _________
7 Called-up share capital
Ordinary shares of 1p each As at As at As at
31 May 31 May 30 November
2007 2006 2006
Unaudited Unaudited Unaudited
£ £ £
Authorised
Nominal value 1,000,000 1,000,000 1,000,000
_________ _________ _________
Number 100,000,000 100,000,000 100,000,000
_________ _________ _________
Allotted, called-up and fully-paid
Nominal value 584,130 582,630 582,630
_________ _________ _________
Number 58,413,052 58,263,052 58,263,052
_________ _________ _________
In respect of the acquisition of SJ Consulting Limited the Company has the
contingent obligation to issue 133,334 ordinary shares of 1p each.
On 20 January 2007 the Company allotted 99,999 ordinary shares of 1p each at
£0.65 per share in partial consideration of the transfer of all the entire
issued share capital of SJ Consulting Limited.
On 21 February 2007 the Company allotted 50,000 ordinary shares of 1p each at
£0.32 per share.
After the end of the six month period, on 6 June 2007, Amino Technologies plc
cancelled £21,886,989 of the share premium created from previous subscriptions,
reducing the accumulated deficit on its profit and loss account and bringing
forward the time when it may be in a position to pay dividends to shareholders.
8 Reconciliation of movements in shareholders' funds
Six months Six months Year to
ended 31 May ended 31 30 November
May
2007 2006 2006
Restated Restated
Unaudited Unaudited Unaudited
£ £ £
Opening shareholders' funds 26,840,867 28,249,565 28,249,565
(Loss)/profit for the period (393,198) 33,661 (1,588,249)
Exchange differences on consolidation (67,961) (35,911) (185,080)
Issue of ordinary share capital - 1,499 - -
capital
Issue of ordinary share capital - 79,750 - -
share premium
Shares to be issued (99,666) 471,000 171,000
Share-based payment charge 89,807 70,303 140,607
Exercise of employee share options 2,040 - 53,024
_________ _________ _________
26,453,138 28,788,618 26,840,867
_________ _________ _________
9 Reconciliation of operating loss to net cash inflow from operating activities
Six months Six months Year to
ended 31 May ended 31 30 November
May
2007 2006 2006
Restated Restated
Unaudited Unaudited Unaudited
£ £ £
Operating loss (638,781) (272,789) (2,176,439)
Depreciation and amortisation charge 341,921 282,613 563,915
Loss on disposal of tangible fixed - - 760
assets
Share-based payment charge 89,807 70,303 140,607
Increase in stocks (335,032) (1,192,266) (2,347,606)
Decrease in debtors 2,250,902 3,111,808 2,836,057
(Decrease)/increase in creditors (832,214) 1,202,917 1,618,232
Exchange differences on consolidation (148,590) (35,911) (176,192)
_________ _________ _________
Net cash inflow from continuing
operating activities
728,013 3,166,675 459,334
_________ _________ _________
Independent review report to Amino Technologies plc
Introduction
We have been instructed by the company to review the financial information for
the six months ended 31 May 2007 which comprises the consolidated profit and
loss account, the statement of group total gains and losses, the consolidated
balance sheet as at 31 May 2007, the consolidated cash flow statement, and
associated notes. We have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the AIM Rules of
the London Stock Exchange which require that the financial information must be
presented and prepared in a form consistent with that which will be adopted in
the company's annual financial statements.
This interim report has been prepared in accordance with the basis set out in
notes 1 and 2.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the disclosed accounting policies have
been applied. A review excludes audit procedures such as tests of controls and
verification of assets, liabilities and transactions. It is substantially less
in scope than an audit and therefore provides a lower level of assurance.
Accordingly we do not express an audit opinion on the financial information.
This report, including the conclusion, has been prepared for and only for the
company and for no other purpose. We do not, in producing this report, accept or
assume responsibility for any other purpose or to any other person to whom this
report is shown or into whose hands it may come save where expressly agreed by
our prior consent in writing.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 May 2007.
PricewaterhouseCoopers LLP
Chartered Accountants
Cambridge
13 July 2007
Notes:
(a) The maintenance and integrity of the Amino Technologies plc
website is the responsibility of the directors; the work carried out by the
auditors does not involve consideration of these matters and, accordingly, the
auditors accept no responsibility for any changes that may have occurred to the
interim report since it was initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation
and dissemination of financial information may differ from legislation in other
jurisdictions.
This information is provided by RNS
The company news service from the London Stock Exchange