25th Jul 2005 07:00
Amino Technologies PLC25 July 2005 FOR IMMEDIATE RELEASE 25 July 2005 AMINO TECHNOLOGIES PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MAY 2005 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 2005. Key points: • Shipments of AmiNET products increased by 32% to 102,000 units • Turnover increased to £7.78m from £6.14m in the first half of 2004 • Loss before tax was £ 0.88m (1H 2004: loss of £0.1m; full year 2004: profit of £0.2m) • Following a successful share placing in May 2005, net cash balances stood at £17.5 million at the end of the period (November 2004: £6.4 million) • Record order intake: backlog currently stands at 328,000 units, valued at £23.5m for the second half of the year and beyond • Continued strong increase in customer adoption metrics: - 11 customers now with over 10,000 units installed (November 2004:5) - field trials and roll-outs increased to a total of 144 worldwide (November 2004: 68) • Eastern Europe and the Far East show largest volume near term potential. • Hospitality applications showing promise in initial deployments • Board strengthened: Paul Fellows, chief technology officer, appointed a director Regarding the outlook, Grant Masom, Chairman stated: "Amino has successfully consolidated its early advantage and is widelyrecognised as a leader in the burgeoning IPTV market. We are developing enduringrelationships with key partners and suppliers. We also have strengthened thebalance sheet to enable Amino to maintain its market leadership. The benefits ofthe stronger balance sheet are already reflected in improved terms of trade. Order intake is strong and new product launches have been well received, all ofwhich makes us confident of Amino's prospects in the second half of the year andbeyond." About AminoAmino (www.aminocom.com) is a designer and supplier of electronic systems andconsultancy, specialising in products for digital broadcast and on-demand TV,IPTV (telco triple-play applications) and in-home multimedia distribution. Its range of small, low cost, high functionality set-top boxes and gatewayproducts is designed for consumer applications in telecom, satellite and digitalterrestrial broadcast markets, as well as on-demand systems for hotels andhospitality markets, healthcare, retail and education. Amino also providessystems consultancy and partners with world-leading companies in contentaggregation, middleware, conditional access and head-end systems. Contacts Amino Technologies: 01954-234100Grant Masom, Chairman www.aminocom.comBob Giddy, Chief ExecutiveStuart Darling, Finance Director Bankside: 020-7367-8888Steve Liebmann or Susan Scott CHAIRMAN'S STATEMENT Introduction During the past year, Amino has established itself as a market leader in thefield of internet protocol TV ("IPTV") technologies for customer premisesequipment, usually described as a set-top-box ("STB"). The Group has developed aglobal reach with customers and industry partners around the world. Themarketplace for IPTV is growing explosively but, as with any market growing soquickly, the rate of development is neither linear nor entirely predictable.Amino recognises this as a fact of life at this early stage in the developmentof the IPTV market and the half year results now reported reflect these factors. The Board has taken the firm view that the interests of both shareholders andthe Group will be served best by ensuring that investment in Amino'stechnologies, products and markets should be sustained at the level required toconsolidate its positioning and market leadership. As previously flagged, the full year results will be heavily weightedtowards the second half. As the Group's operating costs are largely fixed,significant profitability will be linked to expected revenue growth - a viewsupported by the record level of order intake and backlog. Following the change in year-end, effected in November 2004, comparative halfyear figures are for the six months to 31 May 2004. Results and finance Shipments in the first half-year to 31 May 2005 increased by 32% to 102,000units (2004: 77,000). The backlog of unshipped orders increased substantiallydue to continued delays in deliveries of MPEG-2 (High Definition) and MPEG-4silicon and software drivers. Recent availability of these key components willallow the start of the delayed customer trials and volume orders which have beendeferred. Gross margins were lower than the comparable period due to a higherlevel of customer support required for one large customer project and the needto provide for additional import duties following an unexpected reversal of aprevious ruling by HM revenue and Customs. As a result, the loss before tax was£882,000 (2004: loss of £105,000). The loss after tax was £161,000 (2004: profitof £414,000). The increase in trade debtors to £5.51 m (2H'04: £3.60 m) reflects the balanceof sales towards the end of the period and deferred payment terms on twocustomer contracts. Following the successful share placing in May, which raised £15.3 million (netof expenses), net cash at 31 May 2005 was £17.5 m (£6.4 m at 30 November 2004).As indicated at the time of the placing, the rapid growth in the business hasrequired additional working capital. Tangible benefits of the strengthenedbalance sheet have already been seen in increased confidence and improved termsof trade with key customers and suppliers. As a result, completion of theproposed increase in banking facilities has not been taken up at this time, butremains an option for the future. Markets and operations In the short term, the speed of development of the IPTV market varies accordingto the territory and the size of the telecoms operator (telco). To date, Aminoproducts have been adopted for field trials by 144 operators across allterritories worldwide. However, tier 2 and tier 3 telcos (defined here as havingless than 10 million phone subscribers) are currently more advanced in movingfrom trials to commercial introduction of IPTV services, mostly using ourexisting MPEG-2 technologies. The large tier 1 telcos (with more than 10 millionphone subscribers), particularly in the Americas and EMEA, have been taking amore measured approach - reflecting both the scale of investment required andthe desire to move straight to the new MPEG-4 technologies which are only justbecoming available. 45% of total shipments were destined for Eastern Europe andthe Far East, with the balance split between Western Europe and the USA. Webelieve the earliest significant volume opportunities will be in Eastern Europe,the Far East and South America. Against this background, Amino has made excellent progress in all its keycustomer metrics - evaluations, laboratory and field trials, and serviceroll-outs. In particular, the number of customers currently rolling out withorders placed with Amino for more than 10,000 units has grown to 11 at the endof May - up from five at the last year end and just two a year ago. Theseroll-out orders are for Amino's established MPEG-2 products for which volumeshipments are expected for the foreseeable future. Amino has sustained its product development programme, with recent productlaunches including the AmiNET 124 (a standard definition MPEG-4/H264set-top-box), the AmiNET 120 (a high definition TV MPEG-2 set-top-box), and theAmiNET 110H (an MPEG-2 product for the hospitality industry). Lead time for keycomponents is the major dependency for the volume shipment of the nextgeneration of products. This affected shipments in the first half, but we areconfident that this situation is resolving to our satisfaction. Future plannedproducts are expected to include further MPEG-4 derivatives and a combinedMPEG-4/MSTV set-top-box, ensuring that Amino continues to be able to supplycustomer premises equipment for all significant system software solutions. In addition to the delivery of IPTV over public networks through telcos, thereis a substantial new market developing for private network delivery of IPTV,into hotels, hospitals, education and apartment complexes. This "hospitality"business, although again at an early stage, is progressing well and provides theopportunity to supply a full range of system and support services. Newdeployments are taking place with On Command (USA), San Jose State University(USA) and Communications Hospitaliaire (France). The development of significant licensing revenues is likely to track theprogress of larger tier 1 telcos in their IPTV deployments. We believe there isa growing appreciation of the difficulties involved in implementing complex,multi-vendor client-end solutions, and the part that Amino's software can playin simplifying the implementation process for operators, integrators, and otherIPTV product vendors. We have sold a number of software developer kits to thirdparty application developers and licensed Philips Semiconductors to manufacture'Amino enabled' IPTV silicon chips. We anticipate being able to announce furtherprogress with licensing in due course. The development of Amino's partnership programme has continued with new globalsupply agreements signed with the major tier 1 telco suppliers. Board I am delighted to announce that Paul Fellows, our highly respected chieftechnology officer, was appointed to the Board on 22 July. We welcome his inputand counsel. Outlook Since Q2 order intake has been particularly strong, leading to our highest everorder book. At present, the total of shipped and unshipped orders for the secondhalf year and beyond stands at 328,000 units with a total value of £23.5m. Ofthese, 150,000 units are firmly scheduled for shipment in the second half, andwe expect to schedule a significant proportion of the balance for shipment inH2. In addition, we anticipate closing a number of significant opportunities forvolume shipment in Q4 and beyond in Asia Pacific and South America. In support of the continued strong increase in customer adoption metrics, wehave orders for the recently launched products (i.e. AmiNET124, AmiNET120 andAmiNET110H). The AmiNET124 is the first implementation of a single chip H.264(MPEG-$) set-top box to be made available in the market. Amino has successfully consolidated its early advantage and is widely recognisedas a leader in the burgeoning IPTV market. We are developing enduringrelationships with key partners and suppliers. Whilst this growth poseschallenge, it creates many opportunities which Amino is well placed to exploit.The Board is confident about the outlook for the remainder of this year andbeyond. Grant Masom 22 July 2005Chairman Consolidated profit and loss accountFor the six months ended 31 May 2005 Notes Six months Six months 11 months to ended ended 30 November 31 May 2005 31 May 2004 2004 Unaudited Unaudited Audited £ £ £Turnover 3 7,784,383 6,139,970 13,247,054Cost of sales (5,179,457) (3,602,626) (7,779,916) __________ __________ __________Gross profit 2,604,926 2,537,344 5,467,138 Selling,general andadministrative(non-exceptional expenses) (2,420,514) (1,785,589) (3,739,718) Selling,general andadministrative(exceptionalexpenses) - (217,019) (331,254) Selling,general andadministrativeexpenses (2,420,514) (2,002,608) (4,070,972)Research anddevelopmentexpenses (1,151,616) (723,601) (1,444,513)Otheroperatingincome - 45,000 94,873 __________ __________ __________ Groupoperating(loss)/profit (967,204) (143,865) 46,526 Interestreceivable andsimilar income 95,448 54,384 185,625 Interestpayable andsimilarcharges (10,129) (15,488) (35,117) __________ __________ __________Group(loss)/profiton ordinaryactivitiesbeforetaxation (881,885) (104,969) 197,034 Tax on(loss)/profiton ordinaryactivities 721,000 519,000 1,130,829 __________ __________ __________Group (loss)/profiton ordinaryactivitiesafter taxationbeing(loss)/profitfor thefinancialperiod (160,885) 414,031 1,327,863 __________ __________ __________ Basic(loss)/earningsper 1pordinary share 4 (0.33)p 1.0p 3.0 p Diluted(loss)/earningsper 1pordinaryshares 4 (0.33)p 0.9p 2.8p Statement of Group total recognised gains and lossesfor the six months ended 31 May 2005 Notes Six months Six months 11 months to ended 31 May ended 31 May 30 November 2005 2004 2004 Unaudited Unaudited Audited £ £ £(Loss)/profitfor thefinancialperiod (160,885) 414,031 1,327,863 Exchangetranslationdifference onconsolidation 8 89,911 - (36,185) __________ __________ __________Totalrecognisedgains andlosses for theperiod (70,974) 414,031 1,291,678 __________ __________ __________ All amounts relate to continuing activities.The accompanying notes are an integral part of these interim financialstatements. Consolidated balance sheetAs at 31 May 2005 Notes Six months Six months 11 months to ended 31 May ended 31 May 30 November 2005 2004 2004 Unaudited Unaudited Audited £ £ £Fixed assetsIntangible assets 206,967 49,855 186,759Tangible assets 984,733 453,572 833,884 _________ _________ _________ 1,191,700 503,427 1,020,643 _________ _________ _________ Current assets Stocks 2,210,216 500,273 1,361,339Debtors: amounts falling dueafter one year 161,563 82,250 161,563 Debtors: amounts falling duewithin one year 5 8,624,120 2,164,555 6,127,561 Trade debtorssubject to financingstated net of non-returnableamounts received 5 - 1,421,999 - Short-term investments 430,000 1,930,000 430,000Cash at bank and in hand 17,088,485 1,111,199 5,999,752 _________ _________ _________ 28,514,384 7,210,276 14,080,215Creditors:Amounts falling duewithin one year 6 (1,590,936) (2,383,237) (2,305,485) _________ _________ _________Net currentassets 26,923,448 4,827,039 11,774,730 Total assets less currentliabilities 28,115,148 5,330,466 12,795,373 Creditors:Amounts falling dueafter more than one year (93,088) (135,382) (117,281) _________ _________ _________Net assets 28,022,060 5,195,084 12,678,092 _________ _________ _________ Capital and reservesCalled-upshare capital 7 582,630 452,047 510,380Share premiumaccount 21,807,240 - 6,571,027Merger reserve 16,388,755 16,388,755 16,388,755Profit andloss account (10,756,565) (11,645,718) (10,792,070) _________ _________ _________Equityshareholders'funds 8 28,022,060 5,195,084 12,678,092 _________ _________ _________ Consolidated cash flow statementFor the six months ended 31 May 2005 Notes Six months Six months 11 months to ended 31 May ended 31 May 30 November 2005 2004 2004 Unaudited Unaudited Audited £ £ £Net cash outflow fromoperating activities 9 (4,087,680) (2,525,790) (3,836,286) Returns on investmentsand servicing offinance Interest received 58,380 54,384 185,625Interest paid (10,129) (15,488) (35,117) __________ __________ __________Net cash inflow fromreturns on investments 48,251 38,896 150,508 __________ __________ __________ Capital expenditure andfinancial investment Purchase of tangible fixedassets (283,863) (198,374) (603,340)Purchase of intangiblefixed assets (64,417) (34,998) (184,810) __________ __________ __________Net cash outflow forcapital expenditureand financial investment (348,280) (233,372) (788,150) __________ __________ __________ Net cash outflow beforeuse of liquid resources andfinancing (4,387,709) (2,720,266) (4,473,928) __________ __________ __________ Management of liquidresources(Decrease)/increase inshort-termdeposits withbanks - (1,930,000) 3,300,000 __________ __________ __________ FinancingIssue of ordinary sharecapital 15,843,100 - 6,999,999 Expenses of share issuededucted from share premium (534,637) - (370,639) Cash received from exerciseof share options 106,479 26,000 354,824 (Decrease)/increase in otherborrowings (18,619) 5,382 (23,907)Increase/(decrease) in bankborrowings 80,119 500,247 (1,001,523) __________ __________ __________ Net cash inflow fromfinancing 15,476,442 531,629 5,958,754 __________ __________ __________Increase/(decr ease) in netcash 11,088,733 (4,118,637) 4,784,826 __________ __________ __________Reconciliation of net cash flow to movement innet funds Opening net funds 6,423,608 5,229,815 3,937,259Increase in net cash 11,088,733 (4,118,637) 4,784,826Decrease in deposits - 1,930,000 (3,300,000)(Increase)/decrease inborrowings (80,119) (500,247) 1,001,523 __________ __________ __________Closing net funds 17,432,222 2,540,931 6,423,608 Notes to the interim financial statementsSix months ended 31 May 2005 1. Basis of preparationThe consolidated financial statements of Amino Technologies plc have beenpresented under merger accounting rules. This means that the financialstatements of Amino Technologies plc and those of its wholly owned subsidiary,Amino Holdings Limited have been aggregated and presented as if the twocompanies have always been together. The figures for the six-month periods ended 31 May 2005 and 31 May 2004 have notbeen audited. The figures for the year ended 30 November 2004 have beenextracted from but do not constitute the consolidated financial statements ofAmino Technologies plc for that year. Those financial statements have beendelivered to the Registrar of Companies and included an auditors' report, whichwas unqualified and did not contain a statement under Section 237 Companies Act1985. 2. Accounting policiesThese interim financial statements for the six months ended 31 May 2005, whichhave been prepared in accordance with the accounting policies set out in theconsolidated financial statements of Amino Technologies plc for the year ended30 November 2004, do not constitute statutory accounts for the purpose ofsection 240 of the Companies Act 1985. 3. TurnoverTurnover is wholly attributable to the Group's principal activities ofdeveloping enabling technologies and providing price competitive, flexible andrapidly deployable designs to manufacturers and vendors of set top boxes, homegateways and other communications devices. The analysis of turnover bydestination is set out below. Six months Six months 11 months to ended ended 30 November 31 May 2005 31 May 2004 2004 Unaudited Unaudited Audited £ £ £United Kingdomand Europe 3,706,678 2,100,566 5,001,383North America 2,750,687 2,702,371 6,467,504Asia Pacificand Africa 1,327,018 1,337,033 1,778,167 _________ __________ __________ 7,784,383 6,139,970 13,247,054 __________ __________ __________ 4. Earnings/(loss) per share Six months Six months 11 months to ended ended 30 November 31 May 2005 31 May 2004 2004 Unaudited Unaudited Audited £ £ £ (Loss)/earningsattributableto shareholders (160,885) 414,031 1,327,863 __________ _________ __________ Weightedaverage numberof shares(Basic) 48,471,852 39,712,533 43,662,984 __________ __________ __________ Weightedaverage numberof shares(Diluted) 44,823,151 48,174,055 __________ __________ The calculation of basic earnings/(loss) per share is based on profit/(loss)after taxation and the weighted average of ordinary shares of 1p each in issueduring the period. For diluted earnings per share, the weighted average numberof ordinary shares in issue is adjusted to assume conversion of all dilutivepotential ordinary shares. The group has only one category of dilutive potentialordinary share options: those share options where the exercise price is lessthan the average market price of the company's ordinary shares during theperiod. There is no dilutive effect in respect of the six months to 31 May 2005since the Group made a loss. 5. Debtors Six months Six months 11 months to ended ended 30 November 31 May 2005 31 May 2004 2004 Unaudited Unaudited Audited £ £ £Amounts falling due within one year: Trade debtors(not subjectto financing) 5,510,069 877,355 3,602,001VAT - 84,451 56,232Deferred tax 2,440,000 1,059,000 1,719,000Other debtors - 3,317 23,196Prepaymentsand accruedincome 674,051 140,432 727,132 _________ _________ _________ 8,624,120 2,164,555 6,127,561 ___________ __________ __________ Amounts falling due within one year: Trade debtorssubject to financing - 1,922,268 -Less:Non-returnable amountsreceived - (500,269) - _________ _________ _________ - 1,421,999 - __________ __________ _________ 6. Creditors: Amounts falling due within one year Six months Six months 11 months to ended 31 May ended 31 May 30 November 2005 2004 2004 Unaudited Unaudited Audited £ £ £ Bank loans and overdrafts 86,263 - 6,144Other loans 40,656 35,082 35,082Trade creditors 537,682 623,730 1,377,088Taxation and social security 215,932 131,569 163,342Corporation tax 48,171 - 48,171VAT 36,025 - -Other creditors - - 644Accruals and deferred income 626,207 1,592,856 675,014 _________ _________ _________ 1,590,936 2,383,237 2,305,485 __________ __________ __________ Bank loans and overdrafts are secured by a fixed and floating charge over theassets of Amino Communications Limited. 7. Called-up share capital Ordinary shares of 1p each Six months Six months 11 months ended ended to November 31 May 2005 31 May 2004 2004 Unudited Unaudited Audited £ £ £AuthorisedNominal 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-paidNominal value 582,630 452,047 510,380 _________ _________ _________Number 58,263,052 45,204,719 51,038,000 __________ __________ __________ Share issuesOn 14 December 2004 Amino Technologies plc allotted 10,000 ordinary shares of 1peach at par and on 3 February 2005 issued 15,000 ordinary shares at 1p each at20p per share. Both share issues related to the exercising of salesrepresentatives' (non-employee) share options. On 17 May 2005 Amino Technologies plc allotted 7,200,000 ordinary shares of 1peach at 220p per share for cash consideration of £15,840,000 in order toincrease the working capital base of the Group and enable it to take advantageof the increased opportunities for growth. The net proceeds of the privateplacement amounted to £15,305,363 after costs of £534,637. 8. Reconciliation of movements in shareholders' funds Six months Six months 11 months to 30 ended 31 May ended 31 May November 2004 2005 Unaudited 2004 Unaudited Audited £ £ £Openingshareholders'funds 12,678,092 4,755,053 4,402,230(Loss)/Profitfor the period (160,885) 414,031 1,327,863Exchangedifferences on consolidation 89,911 - (36,185)Issue ofordinary sharecapital -capital 72,250 9,375 67,708Issue ofordinary sharecapital -share premium 15,770,850 - 6,941,666Issue ofordinary sharecapital toEmployeeBenefit Trust - (300,000) (300,000)Expenses ofshare issue (534,637) - (370,639)Exercise ofemployee shareoptions 106,479 26,000 354,824Movement onmerger reserve - 290,625 290,625 _________ _________ _________ 28,020,060 5,195,084 12,678,092 _________ _________ _________ 9. Reconciliation of operating loss/profit to net cash outflow fromoperating activities Six months Six months 11 months to 30 ended 31 May ended 31 May November 2004 2005 Unaudited 2004 Unaudited Audited £ £ £Operating(loss)/profit (967,204) (143,865) 46,526 Depreciationandamortisationcharge(includingloss on disposals) 177,223 69,221 154,834Increase instocks (848,877) (373,454) (1,129,292)Increase indebtors (1,738,491) (2,041,248) (3,085,128)(Decrease)/increase increditors (800,242) (36,444) 212,959Exchangedifferences onconsolidation 89,911 - (36,185) _________ _________ _________Net cash outflow fromcontinuingoperatingactivities (4,087,680) (2,525,790) (3,836,286) _________ _________ _________ 10. Interim ReportThe Interim Report will be posted to shareholders shortly and copies will beavailable from Amino Technologies plc's Registered Office: Prospect House,Buckingway Business Park, Anderson Road, Swavesey, Cambridge, CB4 5UQ. INDEPENDENT REVIEW REPORT TO AMINO TECHNOLOGIES PLC Introduction We have been instructed by the company to review the financial information whichcomprises the consolidated profit and loss account, the consolidated balancesheet, the consolidated cash flow statement, the statement of Group totalrecognised gains and losses and the related notes. We have read the otherinformation contained in the interim report and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report and the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand, based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do not expressan audit opinion on the financial information. This report, including theconclusion, has been prepared for and only for the company and for no otherpurpose. We do not, in producing this report, accept or assume responsibilityfor any other purpose or to any other person to whom this report is shown orinto whose hands it may come save where expressly agreed by our prior consent inwriting. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 May 2005. PricewaterhouseCoopers LLPChartered AccountantsCambridge22 July 2005 ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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