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Financial overview
· 36.2% increase in revenue to £24.7m (H1 2010: £18.1m)
o Third consecutive H1 revenue growth
· 33.5% increase in gross profit to £6.0m (H1 2010: £4.5m)
· Adjusted* gross margin increased by 6.0 percentage points to 35.7%
(H1 2010: 29.7%)
· Net cash balance has improved substantially to £11.6m (30 Nov
2010: £3.6m)
· Operating loss reduced to £0.4m, down by £0.6m (H1 2010: loss of
£1.0m)
* Adjusted gross margin excludes Telecom Italia sales, Forex impact
and provision for legacy stock
Operational overview
· Total shipments up 23% to 298,000 (H1 2010: 243,000)
· Order book of 153k units (H1 2010: 250k units) underpins revenue
visibility into H2 2011
· Improved supply chain management and component simplification
programme feeding through to improved margins
· OTT market developments offer significant opportunities for growth
· Third order from Telecom Italia for hybrid/OTT technology
underlines growing market traction and revenue contribution
· Amino positioned as world leader in price/performance ratio,
roadmap and innovation according to independent industry analysts
Infonetics Research
Commenting on the results Keith Todd, Non-Executive Chairman, said:
"These encouraging results underline the continued progress Amino
has made over the past 18 months. Across key performance metrics,
the business has performed strongly and delivered record sales for
the third consecutive half year period, improved margins, increased
gross profits, generated a healthy H2 order backlog and
significantly improved the cash position.
"The strength of our core IPTV product range - with over 200
operators deploying or trialling our new set-top boxes in the key
North American market - is increasingly being complemented by
traction we are seeing in the emerging OTT market. As evidence of
this traction, I am pleased to announce today a third order from
Telecom Italia to support its on-going Cubovision service rollout.
"The substantial improvement in our cash position and continued
sharp focus on cost management and our supply chain, allied with our
healthy new business pipeline, provides the Board with confidence
for the full year."
For further information please contact:
Amino Technologies:
+44 (0)1954 234100
Keith Todd, Non-Executive Chairman
Andrew Burke, Chief Executive Officer
Julia Hornby, Chief Financial Officer
Financial Dynamics:
+44 (0)20 7831 3113
James Melville-Ross / Matt Dixon / Clare Thomas
finnCap Limited:
+44 (0) 207 600 1658
Marc Young/Charlotte Stranner - Corporate Finance
Brian Patient/Tom Jenkins - Corporate Broking
About Amino Technologies plc
Amino Technologies plc specialises in the development and delivery
of IPTV and hybrid/OTT solutions. With over three million devices
sold to 850 customers in 85 countries, Amino's award-winning
solutions are deployed by major network operators and service
providers worldwide. Amino Technologies plc is listed on the London
Stock Exchange Alternative Investment Market (AIM: symbol AMO). It
is headquartered near Cambridge, in the UK, with offices in the US,
China and Sweden. For more information, please visit
www.aminocom.com
Chairman's statement
The Company continues to make considerable progress against its
strategic goals, combining growing traction in its core and emerging
target markets, good financial improvement and a healthy order
backlog to take it into the second half of the year. The benefits of
a rigorous focus on supply chain management are now feeding through
in terms of improved margins, less component complexity and security
of supply. Furthermore, the traction the OTT offering is gaining
gives the Board confidence that the Company is well positioned to
benefit from further growth and development in the OTT market.
Financial progress
Revenues at £24.7m increased 36.2% year on year (H1 2010: £18.1m) -
the third consecutive first half period of record revenue growth.
This growth was at a greater rate than the increase in unit
shipments - which grew 22.7% from 243k to 298k during the period -
largely due to a more favourable product mix benefiting the average
selling price. Revenue also benefited as expected from the delivery
of the Telecom Italia OTT units which were contracted during 2010
but delivered during the current financial year. Excluding these OTT
sales, revenue was in line with last year's first half.
The focus on margin improvement, underpinned by new supply chain
management and the transition to a higher margin product mix, is now
making a positive impact on performance, particularly in the IPTV
sector. Gross margins at 24.3% were in line with the same period
last year (H1 2010: 24.8%) and reflect the impact of a) OTT sales of
£6.4m at nil margin - impact 8.4% (H1 2010: Nil), b) Foreign
exchange impact - impact 0.8% (H1 2010: 4.9%) and c) £400k provision
for legacy stock - impact 2.2% (H1 2010: Nil). Adjusting for all
three of these items increases gross margin 6 percentage points from
29.7% to 35.7%.
Gross profit in the period increased 33.5% to £6.0m compared with
£4.5m in H1 2010.Operating costs increased by £0.9m to £6.4m (H1
2010: £5.5m) largely due to higher amortisation during the period
following the launch of the 7105 IPTV product range into the market,
and further investment in OTT and operational headcount investment.
As outlined in the period end trading update, the Company made a
small operating loss after exceptional items of £0.4m (H1 2010: loss
of £1.0m). Net loss after tax is £0.4m (H1 2010: loss of £0.9m) with
a loss per share of 0.7p (H1 2010: loss per share of 1.70p). The
Company's cash position has recovered strongly with a substantially
improved cash balance at £11.6m (30 Nov 2010: £3.6m), due to receipt
of Telecom Italia payments and robust cash management.
Product and market momentum
The encouraging momentum in sales performance has been driven by
continued demand for the Company's traditional IPTV market and
growing traction for OTT products.
Launched last year, the 7105 IPTV product range continues to be very
well received by customers. The focus on developing and delivering
simpler, higher margin and more powerful devices has proved
successful and a campaign to transition customers to these new
products is yielding positive results. In competitive pitches, the
devices have proved to be highly compelling securing both new and
returning customers. Contract wins during the period include Serbia
Telecom , Nex-Tech in North America and Telsur in Chile.
In North America, over 200 customers are now deploying or trialling
this IPTV product range and there is growing demand in other key
markets. This strong positioning is underlined by recent independent
research on the global IPTV set-top box market which highlighted
Amino's world-leading performance in key areas such as
price-to-performance ratio, pricing and product roadmap. The report,
by Infonetics Research, analysed Amino's performance against other
leading set-top box providers and also highlighted the Company's
innovation and customer support offering.
Underpinning this progress are significant improvements in supply
chain management. This was best exemplified during the industry-wide
disruption following the Japanese earthquake, where the strong
industry partnerships the Company developed over the last 12 months
helped to secure continued component supply despite some short-term
challenges.
The benefits of this strategic focus are now feeding through the
entire supply chain. The reduction in component complexity - and the
range and variety of key elements in product build - is driving down
costs and improving margin performance. Improved forecasting has
also eliminated component "spot buying" during the period. This
combined effort has impacted positively on lead times for product
delivery to customers and will help accelerate new products to
market.
The IPTV product range will be further enhanced with OTT capability
with a launch scheduled for the major IBC event in September. This
will - strengthen both the Company's market leadership and further
drive the transition programme amongst new and existing customers.
The process of continuous improvement is supporting the Company's
responsiveness to opportunities in the OTT market. The award of a
third order from Telecom Italia underlines the growing traction for
OTT products, both on the part of consumers and operators, as well
as further proving Amino's ability to deliver products to the tier
one market.
The Freedom "Jump" companion OTT device is now in trials with tier
one operators and continues to excite positive market reaction as a
low cost means of deploying OTT functionality without the costly
change-out of existing pay-TV devices. Further investment in product
development has been made to strengthen the Company's overall OTT
proposition and build on the solid progress made during the period
in this exciting emerging market. While this has impacted on the
cost base, the Board believes that it remains a critical strategic
imperative and a future driver of growth over the long term.
Outlook
Going forward, the Company remains focused on its strategy of
enhancing its product line in both IPTV and OTT sectors, driving
scale and extending across the value chain. The combination of a
strong and enhanced product portfolio, underpinned by solid supply
chain management, and growing market traction provides an
encouraging outlook for the second half of the year. The substantial
improvement in our cash position, allied to a healthy new business
pipeline, provides the Board with confidence for the full year.
Consolidated income statement
For the six months ended 31 May 2011
Notes
Six months
ended 31 May
2011
Unaudited
Six months
ended 31 May
2010
Unaudited
Year to
30 November 2010
Audited
£
£
£
Revenue
3
24,702,610
18,141,321
43,975,603
Cost of sales
(18,770,492)
(12,755,973)
(31,377,280)
Unrealised and unrealised foreign exchange
gains / (losses)
62,669
_________
(894,792)
_________
(71,504)
________
Gross profit
5,994,787
4,490,556
12,526,819
Selling, general and administrative expenses
(3,394,634)
(2,888,505)
(8,220,290)
Research and development expenses
(3,015,799)
(2,567,302)
(5,201,972)
__________
__________
__________
Operating loss
(415,646)
(965,251)
(895,443)
__________
__________
__________
Analysed as:
Operating (loss)/profit before restructuring, realised foreign
exchange gains/(losses), impairment and onerous contracts
(271,491)
(70,459)
1,776,849
Restructuring costs
-
-
(101,667)
Loss on first OTT contract
Realised and unrealised foreign exchange
losses
-
(144,155)
-
(894,792)
(1,675,993)
(894,632)
__________
__________
__________
Operating loss
(415,646)
(965,251)
(895,443)
Finance income
27
21,050
13,182
__________
__________
__________
Loss before taxation
(415,619)
(944,201)
(882,261)
Corporation tax credit
19,929
15,881
536,392
__________
__________
__________
Loss for the period attributable to equity holders
(395,690)
(928,320)
(345,869)
====-----
Basic and diluted loss per 1p ordinary share
(0.70p)
(1.70p)
(0.61p)
All amounts relate to continuing activities.
Consolidated statement of comprehensive income
For the six months ended 31 May 2011
Six months to ended 31 May 2011
Unaudited
Six months to ended 31 May 2010
Unaudited
Year to
30 November
2010
Audited
£
£
£
Foreign exchange difference arising on consolidation
(208,633)
264,836
85,998
__________
__________
__________
Net comprehensive income/(expense) recognised directly in equity
(208,633)
264,836
85,998
__________
__________
__________
Loss for the period
(395,690)
(928,320)
(345,869)
__________
__________
__________
Total comprehensive expense for the period
(604,323)
(663,484)
(259,871)
__________
__________
__________
The accompanying notes are an integral part of these interim
financial statements.
Consolidated Balance Sheet
As at 31 May 2011
Notes
As at
31 May
2011
Unaudited
As at
31 May
2010
Unaudited
As at
30 November 2010
Audited
Assets
£
£
£
Non-current assets
Intangible assets
5
6,878,803
5,630,462
6,442,979
Property, plant and equipment
879,376
1,202,487
1,094,020
Deferred income tax assets
671,149
695,634
671,149
Trade and other receivables
172,704
173,345
172,964
_________
_________
_________
8,602,032
7,701,928
8,381,112
_________
_________
_________
Current assets
Inventories
4,470,384
5,475,194
11,962,412
Trade and other receivables
7,648,066
8,182,578
12,528,263
Derivative financial instruments
40,850
-
-
Cash at bank and in hand
11,573,596
13,132,850
3,587,687
_________
_________
_________
23,732,896
26,790,622
28,078,362
_________
_________
_________
Total assets
32,334,928
34,492,550
36,459,474
_________
_________
_________
Capital and reserves attributable to equity holders of the business
Called-up share capital
578,930
578,930
578,930
Share premium
126,376
126,376
126,376
Capital redemption reserve
Foreign exchange reserves
6,200
371,468
6,200
758,939
6,200
580,101
Other reserves
16,388,755
16,388,755
16,388,755
Retained earnings
3,817,490
3,464,573
4,163,382
_________
_________
_________
Total equity
21,289,219
21,323,773
21,843,744
_________
_________
_________
Current liabilities
Trade and other payables
11,045,709
12,622,140
14,592,381
Derivative financial instruments
-
546,637
23,349
_________
_________
_________
Total liabilities
11,045,709
13,168,777
14,615,730
_________
_________
_________
_________
_________
_________
Total equity and liabilities
32,334,928
34,492,550
36,459,474
_________
_________
_________
The interim financial statements on pages 4 to 11 were approved by
the Board of directors on 25th July 2011 and were
Signed on its behalf by:
Andrew Burke
Julia Hornby
Director
Director
The accompanying notes are an integral part of these interim
financial statements
Consolidated Cash Flow Statement
As at 31 May 2011
Notes
Six months
ended 31 May 2011
Unaudited
Six months
ended 31 May 2010
Unaudited
Year to 30 November
2010
Audited
£
£
£
Cash flows from operating activities
Cash generated from/(used in) operations
6
8,824,247
4,530,868
(3,567,180)
Corporation tax received
566,037
950,818
944,743
__________
__________
__________
Net cash generated from/(used in) operating activities
9,390,284
5,481,686
(2,622,437)
__________
__________
__________
Cash flows from investing activities
Purchase of intangible assets
(1,272,399)
(1,257,490)
(2,518,914)
Purchase of property, plant and equipment (PPE)
(11,271)
(232,026)
(358,024)
Interest received
27
18,550
11,192
__________
__________
__________
Net cash used in investing activities
(1,283,643)
(1,470,966)
(2,865,746)
__________
__________
__________
Cash flows from financing activities
Proceeds from exercise of employee share options
-
-
4,000
__________
__________
__________
Net cash from financing activities
-
-
4,000
__________
__________
__________
Net increase/(decrease) in cash and cash equivalents
8,106,641
4,010,720
(5,484,183)
Cash and cash equivalents at start of the period
3,587,687
9,047,378
9,047,378
Effects of exchange rate fluctuations on cash held
(120,732)
74,752
24,492
__________
Cash and cash equivalents at end of period
11,573,596
13,132,850
3,587,687
__________
Consolidated Statement of changes in equity
Share Capital
Share premium
Other reserves
Foreign Exchange reserve
Capital redemption reserve
Profit and loss account
Total
£
£
£
£
£
£
£
Shareholders' equity at 1 December 2009 (audited)
578,930
126,376
16,388,755
494,103
6,200
4,348,000
21,942,364
Comprehensive income
Loss for the period
-
-
-
-
-
(928,320)
(928,320)
Foreign exchange on consolidation
-
-
-
264,836
-
-
264,836
Total comprehensive income for the period attributable to equity
holders
-
-
-
264,836
-
(928,320)
(663,484)
Share option compensation charge
-
-
-
-
-
44,893
44,893
Total Transactions with owners
-
-
-
-
-
44,893
44,893
Total movement in shareholders' equity
-
-
-
264,836
-
(883,427)
(618,591)
At 31 May 2010 (Unaudited)
578,930
126,376
16,388,755
758,939
6,200
3,464,573
21,323,773
Comprehensive income
Profit for the period
-
-
-
-
-
582,451
582,451
Foreign exchange on consolidation
-
-
-
(178,838)
-
-
(178,838)
Total comprehensive income for the period attributable to equity
holders
-
-
-
(178,838)
-
582,451
403,613
Share option compensation charge
-
-
-
-
-
112,358
112,358
Exercise of employee share options
-
-
-
-
-
4,000
4,000
Total Transactions with owners
-
-
-
-
-
116,358
116,358
Total movement in shareholders' equity
-
-
-
(178,838)
-
698,809
519,971
Shareholders' equity at 30 November 2010 (audited)
578,930
126,376
16,388,755
580,101
6,200
4,163,382
21,843,744
Comprehensive income
Loss for the period
-
-
-
-
-
(395,690)
(395,690)
Foreign exchange on consolidation
-
-
-
(208,633)
-
-
(208,633)
Total comprehensive income for the period attributable to equity
holders
-
-
-
(208,633)
-
(395,690)
(604,323)
Share option compensation charge
-
-
-
-
-
49,798
49,798
Total Transactions with owners
-
-
-
-
-
49,798
49,798
Total movement in shareholders' equity
-
-
-
(208,633)
-
(345,892)
(554,525)
At 31 May 2011 (Unaudited)
578,930
126,376
16,388,755
371,468
6,200
3,817,490
21,289,219
Notes to the interim financial statements
Six months ended 31 May 2011
1 General information
Amino Technologies plc ('the Company') and its subsidiaries
(together 'the Group') specialises in IPTV software technologies and
hardware platforms that enable delivery of digital programming and
interactivity over IP networks, including the internet.
The Company is a public limited company which is listed on the
Alternative Investment Market (AIM) of the London Stock Exchange and
is incorporated and domiciled in the UK.
2 Basis of preparation
The financial information has been prepared in accordance with all
International Financial Reporting Standards ("IFRS") and
International Financial Reporting Interpretations Committee
("IFRIC") interpretations that had been published by 31 May 2011 as
endorsed by the European Union (EU). The accounting policies adopted
are consistent with those of the financial statements for the year
ended 30 November 2010, as described in those financial statements.
Exceptional items are disclosed and described separately in the
financial statements where it is necessary to do so to provide
further understanding of the financial performance of the Group.
They are material items of income or expense that have been shown
separately due to the significance of their nature or amount.
In preparing these interim financial statements the Board has not
sought to adopt IAS 34 "Interim financial reporting".
The figures for the six-month periods ended 31 May 2011 and 31 May
2010 have not been audited. The figures for the year ended 30
November 2010 have been extracted from, but do not constitute, the
consolidated financial statements of Amino Technologies plc for that
year. Those 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 498(2) or
Section 498(3) Companies Act 2006.
The Group has only one operating segment, being the development and
sale of broadband network software and systems (which has been
analysed into four revenue streams as shown in the second table
below). All revenues, costs, assets and liabilities relate to this
segment.
The geographical analysis of revenue is as follows:
Six months
ended 31 May 2011
Unaudited
Six months
ended 31 May 2010
Unaudited
Year to
30 November
2010
Audited
£
£
£
United Kingdom
Italy
Netherlands
Russia
Serbia
488,743
6,753,680
3,908,217
1,578,351
3,570
951,650
-
3,463,635
1,965,946
2,161,467
1,830,656
27,205
8,187,093
8,935,091
3,739,820
North America
6,007,934
3,158,557
7,460,799
South America
1,159,319
1,425,431
2,202,733
Rest of the World
4,802,796
5,014,635
11,592,206
__________
__________
__________
24,702,610
18,141,321
43,975,603
__________
__________
__________
Further analysis of revenue by stream is given below.
Six months
ended 31 May 2011
Unaudited
£
Six months
ended 31 May 2010
Unaudited
£
Year to
30 November
2010
Audited
£
Product
23,422,934
17,710,519
42,860,805
License
471,115
46,205
162,770
Support
483,126
348,248
770,888
Expert services
325,435
36,349
181,140
__________
__________
__________
24,702,610
18,141,321
43,975,603
__________
__________
__________
Six months
ended 31 May 2011
Unaudited
Six months
ended 31 May
2010
Unaudited
Year to
30 November
2010
Audited
£
£
£
Loss attributable to shareholders
(395,690)
(928,320)
(345,869)
_________
_________
_________
Weighted average number of shares (Basic)
56,486,007
54,617,961
56,420,652
-_________
-_________
-_________
The calculation of basic 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, as adjusted
for shares held by an Employee Benefit Trust.
For diluted loss per share, the weighted average number of ordinary
shares in issue is adjusted to assume conversion of all dilutive
potential ordinary share options. 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 period ended 31 May 2011 as the Group was
loss making.
Net book value
As at
31 May
2011
Unaudited
£
As at
31 May
2010
Unaudited
£
As at
30 November
2010
Audited
£
Goodwill relating to Tilgin IPTV AB
2,206,544
2,206,544
2,206,544
Software licences
188,801
445,702
300,349
Development costs
4,374,396
2,796,448
3,790,671
Acquired intellectual property
109,062
181,768
145,415
_________
_________
_________
6,878,803
5,630,462
6,442,979
_________
_________
_________
6 Cash (used in)/generated from operations
Six months
ended 31 May 2011
Unaudited
Six months
ended 31 May 2010
Unaudited
Year to 30 November
2010
Audited
£
£
£
Loss before corporation tax
(415,619)
(944,201)
(882,261)
Adjustments for:
Amortisation charge
725,029
579,281
1,028,255
Depreciation charge
345,940
222,205
457,508
Loss on disposal of intangible fixed assets
-
-
3,382
Share-based payment charge
49,798
44,893
157,251
Fair value (gain)/ loss on derivative financial instruments
(64,199)
594,792
71,504
Financial income - net
(27)
(18,550)
(11,192)
Exchange differences
(96,387)
169,373
44,757
Decrease/(increase) in inventories
7,492,022
(1,783,937)
(8,271,155)
Decrease / (increase) in trade and other receivables
4,337,657
1,111,443
(2,691,040)
Decrease in provisions
-
(372,163)
(372,163)
(Decrease)/increase in trade and other payables
(3,549,967)
4,927,732
6,897,974
________
Cash generated / (used in) from operations
8,824,247
4,530,868
(3,567,180)
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