Global Invacom Group Limited

("Global Invacom", the "Company" or the "Group")

 

Results for the six months ended 30 June 2022

 

Singapore/London, 12 August 2022 - Global Invacom Group Limited (SGX: QS9) (AIM: GINV), the global provider of satellite communications equipment and electronics, is pleased to announce its financial results for the six months ended 30 June 2022 ("1H FY2022").

 

Key financial highlights:

 

·    Revenue for 1H FY2022 of US$37.4m (1H FY2021: US$40.4m)

·    Gross Profit for 1H FY2022 of US$7.4m (1H FY2021: US$8.8m)

·    Net loss for 1H FY2022 of US$3.3m (1H FY2021: US$1.2m net loss)

·    Cash and cash equivalents as at 30 June 2022 of US$10.0m (31 December 2021: US$10.8m)

 

Key operational highlights:

 

·    Shortage of semiconductors globally, alongside material availability, price increases and labour challenges, continues to impact the Company's ability to satisfy existing orders and has impacted revenue growth in the period

·    The Group has embarked on a business review exercise, to better manage our operations, and to improve the performance of the Group

·    The Group's partnership with Methera Global Communications Limited ("Methera") and its subcontractors, announced in October 2021, is progressing well

·    In the first half of 2022, launched latest Supervisory Control and Data Acquisition ("SCADA") products for hubs and remote locations

·    In May 2022, launched innovative Mini-Global Navigation Satellite System repeater kit, increasing the Group's footprint in the commercial, military and aviation markets

 

Global Invacom remains well positioned to capitalise on the expected growth opportunities in the Data Over Satellite ("DOS") market, as well as the normalisation of remote working, with individuals and workforces around the globe now increasingly dependent on reliable connectivity for their daily lives.

 

The Group delivered sales of US$37.4 million in the first half of the year, versus US$40.4 million in 1H FY2021. This decrease was due to the shortage of semiconductors globally which continues to impact the Company's ability to satisfy existing orders and generate associated additional revenue as well as the delay in the launch of Jupiter 3. Furthermore, the Group continues to be impacted by cost price increases, compounded by labour challenges as well as business challenges faced by our customers.

 

The Group continues to assess its cost base to streamline certain core functions and continues to reduce administrative costs, whilst not impacting its offering to customers.

Research and development continue to be an area of importance for management with ongoing focus on product development, underpinning Global Invacom's market-leading position in the satellite communications equipment and electronics sector.

 

DOS remains a key product category for Global Invacom, with the accelerated demand for dependable and affordable DOS devices across a wide range of industries, including the healthcare and defence sectors, showing no signs of abating. Consequently, the Group introduced new SCADA products for hubs and remote locations which continue Global Invacom's legacy of developing world-leading satellite communications ground equipment. New products launched include antennas and Very-small-aperture Terminal ("VSAT") transceivers, alongside advanced Radio Frequency ("RF") equipment designed and manufactured by Global Skyware.

 

These new equipment bundles create a straightforward set up to receive and transmit signals for a full private networking solution, capable of reaching any SCADA and Machine-to-machine ("M2M") Telemetry site. It is compatible with both Internet Protocol ("IP") and legacy serial devices, and operates independently from terrestrial communications systems, thus providing dedicated and secure data communications for mission-critical traffic. 

 

In addition to the development of new satellite communications ground equipment bundles, Global Invacom's subsidiary OnePath Networks Limited, trading as Global Foxcom, broadened its range of Satcom Repeater solutions with the launch of its innovative Mini-Global Navigation Satellite System ("GNSS") repeater kit, increasing its footprint in the commercial, military and aviation markets.

 

The Group's partnership with Methera and its subcontractors, announced in October 2021, is progressing well, and Global Invacom remains on track to deliver Ka-band user terminals to market in 2024 to help meet the fast-growing demand for connectivity to non-geostationary satellite orbit constellations, leveraging funding awarded by the European Space Agency.

 

 Given the market challenges that the Group has faced over the past two years and what may become "new normals", the Group has embarked on a business review exercise, to better manage our operations, and to improve the performance of the Group.

 

Tony Taylor, Executive Chairman of Global Invacom, commented:

 

"Trading across the first six months of the year has not been without its challenges, as we continue to adjust to the ongoing shortages for semiconductors globally, alongside inflationary pressures across our business. These factors are not unique to our business, and we continue to drive the Company forward, which for us means an unrivalled commitment to our customers to remain at the cutting edge of innovation and product development.

 

Whilst we are fully aware the broader macro picture will take time to improve, Global Invacom remains well placed to capitalise on the growing demand for satellite communications services globally."

 

 

For further information, please visit www.globalinvacom.com or contact:

 

Global Invacom Group Limited	www.globalinvacom.com
Tony Taylor, Executive Chairman	via Vigo Consulting
Strand Hanson Limited (Nominated Adviser and Broker)	www.strandhanson.co.uk
James Harris / Richard Johnson / David Asquith	Tel: +44 20 7409 3494
Vigo Consulting (UK Media & Investor Relations)	www.vigoconsulting.com
Jeremy Garcia / Kendall Hill	Tel: +44 20 7390 0238
	ginv@vigoconsulting.com

 

About Global Invacom Group Limited

 

Global Invacom is a fully integrated satellite equipment provider with sites across Singapore, China, Indonesia, Philippines, Malaysia, Israel, UK and the U.S. Its customers include satellite broadcasters such as Sky Group of the UK and Dish Network of the USA and Data over Satellite providers including Hughes Network Systems, Viasat and Gilat Satellite Networks.

 

Global Invacom provides a full range of satellite ground equipment including antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches, and video distribution components, as well as manufacturing services for the defence and healthcare sectors. The Group is the world's only full‐service outdoor unit supplier.

 

Global Invacom is listed on the Mainboard of the Singapore Exchange Securities Trading Limited and its shares are admitted to trading on the AIM Market of the London Stock Exchange.

 

For more information, please refer to www.globalinvacom.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GLOBAL INVACOM GROUP LIMITED

(Incorporated in Singapore)

(Company Registration Number 200202428H)

 

 

 

UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS

For the Six Months Ended 30 June 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A.      Condensed Interim Consolidated Statement of Comprehensive Income

 

 

		Group
		1H FY2022	1H FY2021	Increase/ (Decrease)
		US$'000	US$'000	%
Revenue		37,420	40,439	(7.5)
Cost of sales		(30,051)	(31,653)	(5.1)
Gross profit		7,369	8,786	(16.1)
Other income		37	1,478	(97.5)
Distribution costs		(156)	(137)	13.9
Administrative expenses		(8,106)	(8,460)	(4.2)
Research and development expenses		(1,969)	(2,417)	(18.5)
Other operating expenses		(257)	(52)	394.2
Finance income		-	30	(100.0)
Finance costs		(171)	(352)	(51.4)
Loss before income tax		(3,253)	(1,124)	189.4
Income tax expense		(39)	(54)	(27.8)
Loss for the period		(3,292)	(1,178)	179.5
Other comprehensive (loss)/income:
Items that may be reclassified subsequently to profit or loss
-  Exchange differences on translation of foreign subsidiaries		(19)	325	N.M.
Other comprehensive (loss)/income for the period, net of tax		(19)	325	N.M.
Total comprehensive loss for the period		(3,311)	(853)	97.1

 

Loss for the period attributable to:
Equity holders of the Company		(3,289)	(1,177)	179.4
Non-controlling interests		(3)	(1)	200.0
		(3,292)	(1,178)	179.5
Total comprehensive loss for the period attributable to:
Equity holders of the Company		(3,308)	(852)	288.2
Non-controlling interests		(3)	(1)	200.0
		(3,311)	(853)	97.1

 

N.M.:  Not Meaningful

 

 

 

B.     Condensed Interim Statements of Financial Position

 

 

		Group			Company
		30 Jun 2022	31 Dec 2021		30 Jun 2022	31 Dec 2021
		US$'000	US$'000		US$'000	US$'000
ASSETS
Non-current Assets
Property, plant and equipment		7,495	8,126		-	20
Right-of-use assets		3,608	4,396		104	39
Investments in subsidiaries		-	-		25,375	25,375
Goodwill		6,092	6,092		-	-
Intangible assets		1,553	1,698		-	-
Deferred tax assets		1,780	1,780		-	-
Other receivables and prepayments		54	54		11,297	11,032
		20,582	22,146		36,776	36,466
Current Assets
Due from subsidiaries		-	-		3,201	3,265
Inventories		25,172	25,764		-	-
Trade receivables		9,612	13,772		-	-
Other receivables and prepayments		5,602	5,302		2,098	2,588
Tax receivables		218	169		-	-
Cash and cash equivalents		10,000	10,771		325	155
		50,604	55,778		5,624	6,008
Total assets		71,186	77,924		42,400	42,474
EQUITY AND LIABILITIES
Equity
Share capital		60,423	60,423		74,240	74,240
Treasury shares		(1,656)	(1,656)		(1,656)	(1,656)
Reserves		(14,691)	(11,383)		(30,706)	(30,462)
Equity attributable to owners of the Company		44,076	47,384		41,878	42,122
Non-controlling interests		(22)	(19)		-	-
Total equity		44,054	47,365		41,878	42,122
Non-current Liabilities
Other payables		152	152		-	-
Lease liabilities		2,907	3,088		-	-
Deferred tax liabilities		646	646		-	-
		3,705	3,886		-	-
Current Liabilities
Due to subsidiaries		-	-		-	1
Trade payables		12,089	14,479		-	-
Other payables		4,555	4,447		422	313
Borrowings		5,714	6,120		-	-
Lease liabilities		1,069	1,627		100	38
		23,427	26,673		522	352
Total liabilities		27,132	30,559		522	352
Total equity and liabilities		71,186	77,924		42,400	42,474

 

C.     Condensed Interim Statements of Changes in Equity

 

 

Group	Share capital	Treasury shares	Merger reserves	Capital redemption reserves	Share options reserve	Capital reserve	Foreign currency translation reserve	Retained profits	Attributable to equity holders of the Company	Non-controlling interests	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance as at 1 January 2022	60,423	(1,656)	(10,150)	6	725	(5,109)	(1,084)	4,229	47,384	(19)	47,365
Loss for the period	-	-	-	-	-	-	-	(3,289)	(3,289)	(3)	(3,292)
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	-	-	(19)	-	(19)	-	(19)
Total other comprehensive loss for the period	-	-	-	-	-	-	(19)	(3,289)	(3,308)	(3)	(3,311)
Balance as at 30 June 2022	60,423	(1,656)	(10,150)	6	725	(5,109)	(1,103)	940	44,076	(22)	44,054
Balance as at 1 January 2021	60,423	(1,656)	(10,150)	6	725	(5,109)	(964)	3,668	46,943	(16)	46,927
Loss for the period	-	-	-	-	-	-	-	(1,177)	(1,177)	(1)	(1,178)
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	-	-	325	-	325	-	325
Total other comprehensive income/(loss) for the period	-	-	-	-	-	-	325	(1,177)	(852)	(1)	(853)
Balance as at 30 June 2021	60,423	(1,656)	(10,150)	6	725	(5,109)	(639)	2,491	46,091	(17)	46,074

 

C.     Condensed Interim Statements of Changes in Equity (cont'd)

 

 

Company	Share capital	Treasury shares	Share options reserve	Capital reserve	Foreign currency translation reserve	Accumulated losses	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Balance as at 1 January 2022	74,240	(1,656)	725	(4,481)	(2,506)	(24,200)	42,122
Loss for the period	-	-	-	-	-	(244)	(244)
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	-	-	-
Total other comprehensive loss for the period	-	-	-	-	-	(244)	(244)
Balance as at 30 June 2022	74,240	(1,656)	725	(4,481)	(2,506)	(24,444)	41,878
Balance as at 1 January 2021	74,240	(1,656)	725	(4,481)	(2,506)	(22,040)	44,282
Loss for the period	-	-	-	-	-	(139)	(139)
Other comprehensive loss:
Exchange differences on translating foreign operations	-	-	-	-	-	-	-
Total other comprehensive loss for the period	-	-	-	-	-	(139)	(139)
Balance as at 30 June 2021	74,240	(1,656)	725	(4,481)	(2,506)	(22,179)	44,143

 

 

D.     Condensed Interim Consolidated Statement of Cash Flows

 

 

		Group
		1H FY2022	1H FY2021
		US$'000	US$'000
Cash Flows from Operating Activities
Loss before income tax		(3,253)	(1,124)
Adjustments for:
Depreciation of property, plant and equipment		895	1,143
Amortisation of intangible assets		141	266
Depreciation of right-of-use assets		847	996
Gain on disposal of property, plant and equipment		(5)	(1,143)
Allowance/(Write-back) for inventory obsolescence		255	(2)
Impairment loss of trade receivables		175	-
Bad debts written off		-	17
Unrealised exchange (gain)/loss		(67)	124
Interest income		-	(30)
Interest expense		171	352
Gain on lease modifications		-	(207)
Operating cash flow before working capital changes		(841)	392
Changes in working capital:
Inventories		337	1,104
Trade receivables		3,944	(2,702)
Other receivables and prepayments		(340)	422
Trade and other payables		(2,016)	(2,424)
Cash generated from/(used in) operating activities		1,084	(3,208)
Interest paid		(196)	(116)
Income tax paid		(122)	(2)
Net cash generated from/(used in) operating activities		766	(3,326)
Cash Flows from Investing Activities
Purchase of property, plant and equipment		(251)	(679)
Proceeds from disposal of property, plant and equipment		5	581
Net cash used in investing activities		(246)	(98)
Cash Flows from Financing Activities
Proceeds from borrowings		17,177	17,026
Repayment of borrowings		(17,583)	(14,710)
Principal payment of lease liabilities		(877)	(740)
Net cash (used in)/generated from financing activities		(1,283)	1,576
Net decrease in cash and cash equivalents		(763)	(1,848)
Cash and cash equivalents at the beginning of the period		10,771	11,273
Effect of foreign exchange rate changes on the balance of cash held in foreign currencies		(8)	10
Cash and cash equivalents at the end of the period		10,000	9,435

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements

 

 

1.      General Information

 

Global Invacom Group Limited (the "Company") is a public limited company incorporated and domiciled in Singapore and is listed on the Mainboard of the Singapore Exchange Securities Trading Limited ("SGX-ST"). The Company is also listed on the AIM Market of the London Stock Exchange ("AIM") in the United Kingdom (UK). These condensed interim consolidated financial statements as at and for the six months ended 30 June 2022 comprise the Company and its subsidiaries (the "Group"). The principal activity of the Company is that of an investment holding company.

 

The principal activities of the Group are design, manufacture and supply of a full range of satellite ground equipment, including antennas, LNB receivers, transceivers, fibre distribution equipment, transmitters, switches and video distribution components.

 

 

2.      Basis of Preparation

 

The condensed interim financial statements for the six months ended 30 June 2022 have been prepared in accordance with Singapore Financial Reporting Standards (International) ("SFRS(I)") 1-34 Interim Financial Reporting issued by the Accounting Standards Council Singapore. The condensed interim financial statements do not include all the information required for a complete set of financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance of the Group since the last annual financial statements for the year ended 31 December 2021.

 

The accounting policies adopted are consistent with those of the previous financial year which were prepared in accordance with SFRS(I)s and International Financial Reporting Standards ("IFRSs"), except for the adoption of new and amended standards as set out in Note 2.1.

 

The condensed interim financial statements are presented in United States dollar which is the Company's functional currency.

 

2.1    New and amended standards adopted by the Group

 

There has been no change in the accounting policies and methods of computation adopted by the Group for the current reporting period compared with the audited financial statements for the year ended 31 December 2021, except for the adoption of new or revised SFRS(I) and interpretations of SFRS(I) ("INT SFRS(I)") that are mandatory for the financial year beginning on or after 1 January 2022. The adoption of these SFRS(I) and INT SFRS(I) has no significant impact on the Group.

 

2.2    Use of judgements and estimates

 

In preparing the condensed interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

 

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2021.

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

 

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes:

 

·      Note 9 - capitalised development costs

·      Note 11 - impairment test on property, plant and equipment

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

2.      Basis of Preparation (cont'd)

 

2.2    Use of judgements and estimates (cont'd)

 

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next interim period are included in the following notes:

 

·      Note 10 - impairment test of goodwill: key assumptions underlying recoverable amounts

·      Note 11 - useful lives of property, plant and equipment

 

 

3.      Seasonal Operations

 

The Group's businesses are not affected significantly by seasonal or cyclical factors during the six months ended 30 June 2022.

 

 

4.      Segment and Revenue Information

 

The Group is organised into the following main business segments:

 

·             Satellite Communications ("Sat Comms"); and

·             Contract Manufacturing ("CM")

 

These operating segments are reported in a manner consistent with internal reporting provided to the executive directors who are responsible for allocating resources and assessing performance of the operating segments.

 

4.1    Reportable segments

 

	Sat Comms	CM	Group
	US$'000	US$'000	US$'000
1H FY2022
Revenue	37,420	-	37,420
Operating loss	(2,999)	(83)	(3,082)
Finance costs			(171)
Income tax expense			(39)
Loss for the period			(3,292)
Amortisation of intangible assets	141	-
Depreciation of property, plant and equipment	895	-
Depreciation of right-of-use assets	847	-
Addition to property, plant and equipment	251	-
Impairment loss on trade receivables	175	-
Allowance for inventory obsolescence, net	255	-

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

4.      Segment and Revenue Information (cont'd)

 

4.1    Reportable segments (cont'd)

	Sat Comms	CM	Group
	US$'000	US$'000	US$'000
Assets and liabilities
Segment assets	67,324	1,262	68,586
Unallocated assets
- Other receivables			63
- Deferred tax assets			1,780
- Cash and cash equivalents			325
- Tax receivables			218
- Right-of-use assets			214
Total assets			71,186
Segment liabilities	20,179	-	20,179
Unallocated liabilities
- Other payables			493
- Deferred tax liabilities			646
- Borrowings			5,714
- Lease liabilities			100
Total liabilities			27,132

 

1H FY2021
Revenue	40,439	-	40,439
Operating loss	(785)	(17)	(802)
Finance income			30
Finance costs			(352)
Income tax expense			(54)
Loss for the period			(1,178)
Amortisation of intangible assets	266	-	266
Depreciation of property, plant and equipment	1,143	-	1,143
Depreciation of right-of-use assets	996	-	996
Addition to property, plant and equipment	679	-	679
Bad debts written off	-	17	17
Gain on lease modifications	(207)	-	(207)
Write-back of inventory obsolescence, net	(2)	-	(2)

 

Assets and liabilities
Segment assets	70,826	1,825	72,651
Unallocated assets
- Non-current assets			46
- Other receivables			85
- Deferred tax assets			1,363
- Cash and cash equivalents			500
- Tax receivables			1
- Right-of-use assets			105
Total assets			74,751
Segment liabilities	19,581	1,570	21,151
Unallocated liabilities
- Other payables			334
- Provision for income tax			255
- Deferred tax liabilities			634
- Borrowings			6,199
- Lease liabilities			104
Total liabilities			28,677

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

4.      Segment and Revenue Information (cont'd)

 

4.2    Disaggregation of revenue

 

The Group's revenue is disaggregated by principal geographical areas, major product lines and timing of revenue recognition.

 

	Group
	1H FY2022	1H FY2021
	US$'000	US$'000
Principal geographical market
America
- Sale of goods	17,395	23,165
Europe
- Sale of goods	11,488	10,997
Asia
- Sale of goods	1,219	1,209
Rest of the World
- Sale of goods	7,318	5,068
Total	37,420	40,439
Major product lines
Sale of goods	37,420	40,439

The Group recognises revenue from sale of goods at a point in time, when the Group satisfies a performance obligation and the customers obtain control of the goods.

 

 

 

 

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

5.      Financial Assets and Financial Liabilities (cont'd)

 

5.1    Significant items

 

	Group
	1H FY2022	1H FY2021
	US$'000	US$'000
Interest income	-	30
Interest expense	(171)	(352)
Gain on disposal of property, plant and equipment	5	1,143
Gain on lease modifications	-	207
Gain/(Loss) on foreign exchange	30	(34)
Impairment loss on trade receivables	(175)	-
Bad debts written off	-	(17)
(Allowance)/Write-back of inventory obsolescence	(255)	2
Depreciation of property, plant and equipment	(895)	(1,143)
Depreciation of right-of-use assets	(847)	(996)
Amortisation of intangible assets	(141)	(266)

5.2    Related party transactions

 

There are no material related party transactions apart from those disclosed elsewhere in the condensed interim financial statements.

 

 

6.      Taxation

 

The Group calculates the period income tax expense using the tax rate that would be applicable to the expected total annual earnings.

 

 

7.      Earnings Per Share

 

Earnings per ordinary share of the Group, after deducting any provision for preference dividends	Group
	1H FY2022 US$	1H FY2021 US$
(a)  Based on weighted average number of ordinary shares on issue; and	(1.21) cents	(0.43) cent
(b)  On a fully diluted basis	(1.21) cents*	(0.43) cent*
Weighted average number of ordinary shares used in computation of basic earnings per share	271,662,227	271,662,227
Weighted average number of ordinary shares used in computation of diluted earnings per share	271,662,227	271,662,227

 

* Diluted earnings per share are the same as the basic earnings per share because the potential ordinary shares to be converted are anti-dilutive as the effect of the share conversion would be to increase the earnings per share.

 

 

 

 

 

 

 

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

8.      Net Asset Value

 

	Group		Company
	30 Jun 2022 US$	31 Dec 2021 US$	30 Jun 2022 US$	31 Dec 2021 US$
Net asset value per ordinary share based on issued share capital	16.22 cents	17.44 cents	15.42 cents	15.51 cents
Total number of issued shares	271,662,227	271,662,227	271,662,227	271,662,227

 

 

9.      Intangible Assets

 

	Trading name	Intellectual property rights	Capitalised development costs	Total
	US$'000	US$'000	US$'000	US$'000
Group
2022
Cost
Balance at 1 January and 30 June	16	2,674	4,834	7,524
Amortisation and impairment
Balance at 1 January	16	1,043	4,767	5,826
Amortisation charge	-	74	67	141
Currency realignment	-	4	-	4
Balance at 30 June	16	1,121	4,834	5,971
Net book value
Balance at 30 June	-	1,553	-	1,553
2021
Cost
Balance at 1 January and 31 December	16	2,674	4,834	7,524
Amortisation and impairment
Balance at 1 January	16	757	4,460	5,233
Amortisation charge	-	284	307	591
Currency realignment	-	2	-	2
Balance at 31 December	16	1,043	4,767	5,826
Net book value
Balance at 31 December	-	1,631	67	1,698

 

10.    Goodwill

		Group
		30 June 2022	31 December 2021
		US$'000	US$'000
	Cost
	Balance at the beginning and end of the period	9,352	9,352
	Allowance for impairment loss
	Balance at the beginning and end of the period	3,260	3,260
	Net carrying amount	6,092	6,092

 

 

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

11.    Goodwill (cont'd)

 

11.1 Allocation of goodwill

 

Goodwill has been allocated to the Group's cash generating unit ("CGU") identified according to the business segment as follows:

 

		Group
		30 June 2022	31 December 2021
		US$'000	US$'000
	Satellite Communications
	-   OnePath Networks Limited ("OPN") - Israel	893	893
	-   Satellite Acquisition Corporation ("SAC") - United States of America	5,199	5,199
		6,092	6,092

 

 

12.    Property, Plant and Equipment

 

		Freehold	Machinery &	Furniture, fittings &	Motor
		property	equipment	equipment	vehicles	Renovations	Total
		US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
	Group
	2022
	Cost
	Balance at 1 January	2,871	17,907	7,813	40	1,438	30,069
	Currency realignment	-	3	(2)	-	(1)	-
	Additions	-	240	11	-	-	251
	Disposals	-	(159)	(2)	-	-	(161)
	Balance at 30 June	2,871	17,991	7,820	40	1,437	30,159
	Accumulated Depreciation
	Balance at 1 January	960	12,523	7,244	40	1,176	21,943
	Currency realignment	-	(10)	(2)	-	(1)	(13)
	Depreciation charge	-	873	21	-	1	895
	Disposals	-	(159)	(2)	-	-	(161)
	Balance at 30 June	960	13,227	7,261	40	1,176	22,664
	Net book value
	Balance at 30 June	1,911	4,764	559	-	261	7,495
	2021
	Cost
	Balance at 1 January	2,883	17,639	7,649	40	1,458	29,669
	Currency realignment	-	(19)	12	-	(1)	(8)
	Additions	-	814	152	-	97	1,063
	Disposals	(12)	(527)	-	-	(116)	(655)
	Balance at 31 December	2,871	17,907	7,813	40	1,438	30,069
	Accumulated Depreciation
	Balance at 1 January	928	11,187	6,969	40	1,135	20,259
	Currency realignment	44	322	-	-	70	436
	Depreciation charge	-	1,541	275	-	87	1,903
	Disposals	(12)	(527)	-	-	(116)	(655)
	Balance at 31 December	960	12,523	7,244	40	1,176	21,943
	Net book value
	Balance at 31 December	1,911	5,384	569	-	262	8,126

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

12.    Property, Plant and Equipment (cont'd)

 

		Furniture,
		fittings &
		equipment	Renovations	Total
		US$'000	US$'000	US$'000
	Company
	2022
	Cost
	Balance at 1 January and 30 June	211	80	291
	Accumulated depreciation
	Balance at 1 January	192	79	271
	Depreciation charge	19	1	20
	Balance at 30 June	211	80	291
	Net book value
	Balance at 30 June	-	-	-
	2021
	Cost
	Balance at 1 January and 31 December	211	80	291
	Accumulated depreciation
	Balance at 1 January	137	72	209
	Depreciation charge	55	7	62
	Balance at 31 December	192	79	271
	Net book value
	Balance at 31 December	19	1	20

 

 

13.    Investment in Subsidiaries

		Company
		30 Jun 2022	31 Dec 2021
		US$'000	US$'000
	Unquoted equity shares, at cost	40,533	40,533
	Accounting for employee share options	725	725
	Currency realignment	131	131
	Less: Allowance for impairment loss	(16,014)	(16,014)
		25,375	25,375
	Movement in the allowance for impairment loss are as follows:
	At the beginning of the period	16,014	14,287
	Impairment loss recognised during the period	-	1,727
	At the end of the period	16,014	16,014

 

 

 

 

 

 

 

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

13.    Investment in Subsidiaries (cont'd)

 

Allowance for impairment loss

 

(i)      Global Invacom Manufacturing Pte Ltd ("GIMPL")

 

As at 30 June 2022 and 31 December 2021, an allowance for impairment loss of US$8,648,000 was made on the cost of investment in GIMPL, as the allocated CGU, to which the investment relates to, was incurring losses from operations due to the restructuring costs incurred. The recoverable amount was based on management's estimate of the fair value less costs to sell, with reference to the fair value of the net assets of GIMPL, which is considered to be Level 3 in the fair value hierarchy.

 

(ii)     Global Invacom Holdings Limited and its subsidiaries ("GIHL Group")

 

As at 30 June 2022 and 31 December 2021, an allowance for impairment loss of US$7,366,000 was made on the cost of investment in GIHL Group, as the allocated CGU, to which the investment relates to, was incurring losses from operations. The recoverable amount was based on management's estimate of the fair value less costs to sell, with reference to the fair value of the net assets of GIHL Group, which is considered to be Level 3 in the fair value hierarchy.

 

 

14.    Borrowings

 

Aggregate amount of group's borrowings and debt securities.

                      

Amount repayable in one year or less, or on demand

 

As at 30 Jun 2022		As at 31 Dec 2021
Secured	Unsecured	Secured	Unsecured
US$'000	US$'000	US$'000	US$'000
5,714	-	6,120	-

 

Amount repayable after one year

 

As at 30 Jun 2022		As at 31 Dec 2021
Secured	Unsecured	Secured	Unsecured
US$'000	US$'000	US$'000	US$'000
-	-	-	-

 

The revolving credit loans of US$5,714,000 were secured over the assets of the subsidiaries and corporate guarantees provided by the Company and the subsidiaries.

 

 

15.    Share Capital

       

1H FY2022	No. of shares	US$'000
Balance as at 1 Jan 2022 and 30 Jun 2022	271,662,227	72,584
1H FY2021	No. of shares	US$'000
Balance as at 1 Jan 2021 and 30 Jun 2021	271,662,227	72,584

There were 10,740,072 treasury shares held by the Company as at 30 June 2022 and 30 June 2021 and there were no subsidiary holdings.

 

 

 

 

 

 

E.      Notes to the Condensed Interim Consolidated Financial Statements (cont'd)

 

 

15.    Share Capital (cont'd)

 

 

Total number of issued shares excluding treasury shares as at the end of the current financial period and as at the end of the immediately preceding year:

 

	30 Jun 2022	31 Dec 2021
Total number of issued shares excluding treasury shares	271,662,227	271,662,227

 

Total number of treasury shares as at the end of the current financial period reported on:

 

1H FY2022	No. of shares	US$'000
Balance as at 1 Jan 2022 and 30 Jun 2022	10,740,072	1,656

 

 

16.    Subsequent events

 

There are no known subsequent events which have led to adjustments to this set of interim financial statements.

 

 

 

F.      Other Information Required by Listing Rule Appendix 7.2

 

 

1.      Review

 

The condensed consolidated statement of financial position of Global Invacom Group Limited and its subsidiaries as at 30 June 2022 and the related condensed interim consolidated statement of comprehensive income, condensed interim statements of financial position, condensed interim consolidated statement of changes in equity and condensed interim consolidated statement of cash flows for the six-month period then ended and certain explanatory notes have not been audited or reviewed by the auditors.

 

 

2.      Review of Performance of the Group

 

2.1    Review of Financial Performance

 

Revenue

 

The Group's revenue for the six months ended 30 June 2022 ("1H FY2022") decreased by 7.5% to US$37.4 million from US$40.4 million in the prior year ("1H FY2021"). The ongoing shortage of semiconductors globally and the delay in the launch of Jupiter 3 continues to impact the Group's ability to satisfy existing orders and generate associated additional revenue.

 

Geographically, the Group's revenue for 1H FY2022 decreased in America by US$5.8 million (-24.9%), partially offset by an increase in Europe, Asia and Rest of the World by US$0.5 million (+4.5%), US$0.01 million (+0.8%) and US$2.3 million (+44.4%), respectively.

 

Gross Profit

 

The decrease in revenue has resulted in a 16.1% decrease in gross profit from US$8.8 million in 1H FY2021 to US$7.4 million in 1H FY2022. Gross profit margin has decreased marginally by 2.0 percentage points from 21.7% to 19.7%, impacted by cost price increases, compounded by labour shortages.

 

Other Income

 

Other income in 1H FY2022 were mainly from gains on the disposal of equipment and foreign exchange gains. Other income in 1H FY2021 were mainly from gains on the disposal of equipment of US$1.1 million, gain on lease modifications of US$0.2 million, with the remainder comprised subsidy support received from various government bodies across the Group due to the pandemic.

 

Administrative and Research and Development Expenses

 

Administrative expenses, together with research and development expenses, for 1H FY2022 decreased 7.4% to US$10.1 million compared to US$10.9 million in 1H FY2021, representing 26.9% of revenue in both periods. The ongoing cost control measures across the Group to streamline certain core functions, in line with the challenging market dynamics, have resulted in lower administrative expenses being incurred, whilst not impacting its offering to the customers.

  

Other Operating Expenses

 

Other operating expenses in 1H FY2022 were attributed mainly to impairment loss on trade receivables and final liquidation fees of a subsidiary in China.

 

Loss Before Tax & Net Loss

 

The Group posted a loss before tax of US$3.3 million in 1H FY2022, compared to a loss before tax of US$1.1 million in 1H FY2021.

 

Overall, the Group posted a net loss of US$3.3 million in 1H FY2022, compared to a net loss of US$1.2 million in 1H FY2021.

 

 

 

F.      Other Information Required by Listing Rule Appendix 7.2 (cont'd)

 

 

2.      Review of Performance of the Group (cont'd)

 

2.2    Review of Financial Position

 

Non-current assets decreased by US$1.6 million to US$20.6 million as at 30 June 2022, due to the depreciation of plant and equipment, the right-of-use assets and the amortisation of intangible assets. 

 

Net current assets decreased by US$1.9 million to US$27.2 million as at 30 June 2022 compared to US$29.1 million as at 31 December 2021. Inventories, trade and other receivables and trade and other payables decreased by US$0.6 million, US$3.9 million and US$2.3 million respectively, with the decrease in sales. Tax receivables increased by US$0.1 million to US$0.2 million.

 

Cash and cash equivalents decreased by US$0.8 million to US$10.0 million as at 30 June 2022 from US$10.8 million at 31 December 2021 and borrowings decreased by US$0.4 million to US$5.7 million as at 30 June 2022 from US$6.1 million as at 31 December 2021.

 

Repayment of leases has resulted in a decrease of US$0.6 million in the current portion of lease liabilities and US$0.2 million in the non-current portion of lease liabilities.

 

The Group's net asset value stood at US$44.1 million as at 30 June 2022, compared to US$47.4 million as at 31 December 2021.

 

2.3    Review of Cash Flows

 

In 1H FY2022, net cash generated from operating activities amounted to US$0.8 million, comprising US$0.8 million cash outflow from operating activities (before working capital changes), US$1.9 million net working capital inflow and US$0.3 million payment of interest and income tax.

 

Net cash used in investing activities in 1H FY2022 amounted to US$0.3 million, mainly due to the purchase of machinery and equipment, set off against the proceeds from the disposal of machinery and equipment.

 

Net cash used in financing activities amounted to US$1.3 million in 1H FY2022, attributable to the repayment of borrowings and lease liabilities.

 

Overall, the Group recorded a net decrease in cash and cash equivalents amounting to US$0.8 million in 1H FY2022, bringing cash and cash equivalents per the consolidated statement of cash flows to US$10.0 million as at 30 June 2022.

 

 

3.      Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

 

No prospect statement was made.

 

 

4.      A commentary at the date of the announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months.

 

The Group's financial and operational performance in the next reporting period and the next 12 months will continue to be influenced by the much-publicised shortage of semiconductors globally, which continues to impact the Company's ability to satisfy existing orders and generate associated additional revenue. Furthermore, the Group continues to be impacted by cost price increases, compounded by labour challenges as well as business challenges faced by our customers.

 

As a direct consequence of the above external factors, the Group continues to assess its cost base to streamline certain core functions and continues to reduce administrative costs, whilst not impacting its offering to customers.

 

Given the market challenges that the Group has faced over the past two years and what may become "new normals", the Group has embarked on a business review exercise, to better manage our operations, and to improve the performance of the Group.

 

 

 

5.      Dividend

 

(a)     Current Financial Period Reported On

 

Any dividend declared for the current financial period reported on? 

 

None.

 

(b)     Corresponding Period of the Immediately Preceding Financial Year

 

Any dividend declared for the corresponding period of the immediately preceding financial year?

 

None.

 

(c)     Date payable

 

Not applicable.

 

(d)     Books closure date

 

Not applicable.

 

 

6.      If no dividend has been declared/recommended, a statement to that effect and the reason(s) for the decision.

 

Due to the operating conditions faced by the Group, no dividend has been declared or recommended for the six months ended 30 June 2022.

 

 

 

F.      Other Information Required by Listing Rule Appendix 7.2 (cont'd)

 

 

7.      If the Group has obtained a general mandate from shareholders for Interested Person Transactions ("IPTs"), the aggregate value of such transactions as required under Rule 920(1)(a)(ii).  If no IPTs mandate has been obtained, a statement to that effect.

 

The Company does not have a shareholders' mandate for IPTs for the six months ended 30 June 2022.

 

 

 

CONFIRMATION PURSUANT TO RULE 705(5) OF THE LISTING MANUAL

 

We do hereby confirm, for and on behalf of the Board of Global Invacom Group Limited (the "Company"), that to the best of our knowledge, nothing has come to the attention of the Board of the Company which may render the financial results for the six months ended 30 June 2022 to be false or misleading in any material aspect.

 

 

CONFIRMATION PURSUANT TO RULE 720(1) OF THE LISTING MANUAL

 

Global Invacom Group Limited confirms that undertakings under Rule 720(1) have been obtained from all its directors and executive officers in the format set out in Appendix 7.7.

 

 

On behalf of the Board

 

 

 

 

Anthony Brian Taylor                                                                          Gordon Blaikie

Executive Director                                                                              Executive Director

 

 

BY ORDER OF THE BOARD                                                                             

Anthony Brian Taylor

Executive Chairman

 

 

12 August 2022

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.