8 Feb 2010 07:00
8 February 2010
AMINO TECHNOLOGIES PLC
FINAL RESULTS
FOR THE YEAR ENDED 30 NOVEMBER 2009
Amino Technologies plc ("Amino"; stock code: AMO), the Cambridge-based leader in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, announces its audited final results for the year ended 30 November 2009.
Overview:
·; As previously announced, challenging market conditions resulted in disappointing results due to order slippage and component shortages. The financial results for the year were:
- Revenues £25.29m (2008: £31.90m)
- Gross profit down to £8.37m (2008: £13.37m)
- Gross margins 33.1% (2008: 41.9%)
- Operating loss before exceptional items of £5.94m (2008: Profit £1.44m)
- Year end cash £9.05m (2008: £14.44m) and net assets £21.94m (2008: £30.66m)
·; Operational performance improved in the second half due to actions taken to improve sales performance and reduce the cost base:
- Increased contribution from MPEG-4 products: revenues accounted for 70% of overall products in H2
- Encouraging order book provides solid platform for current year
- Significant contract wins during the year include European operator Tele2, Telecom Serbia, ICE and Pioneer Telecom Company
- Major contract win with Western Europe tier one operator for hybrid "OTT" media centre announced today
Commenting on the results, Keith Todd, Non Executive Chairman stated:
"2009 was a challenging year for Amino resulting in a disappointing financial outcome. We have worked hard during the year to build a strong base for 2010, improving our product, sales and marketing and cutting cost, against a backdrop of the global market downturn and industry-wide component shortages. These improvements are already yielding results with more of a robust demand in H2 and into the start of this year, as evidenced by improvements in our sales booking performance.
"The IPTV market remains attractive and we are demonstrating our ability to provide best-in-class products once more. Furthermore, we are very excited by the prospects in the adjacent OTT market where we have invested in a new hybrid media centre offering. Encouragingly, we are able to announce today a significant contract in this market with Amino's first Western European tier one operator win."
CONTACTS
| Amino Technologies | +44 (0)1954 234100 |
| Keith Todd, Non Executive Chairman | www.aminocom.com |
| Andrew Burke, Chief Executive Officer |
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| Stuart Darling, Chief Financial Officer |
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| Financial Dynamics: | +44 (0)20 7831 3113 |
| James Melville-Ross / Matt Dixon / Nicola Biles |
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| KBC Peel Hunt Ltd | +44 (0)20 7418 8900 |
| Jonathan Marren / Dan Webster |
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About Amino
Amino specialises in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution. Amino's range of software and set-top box systems can be tailored for telecom, broadcast and hospitality firms to offer highly scalable and targeted services. The award-winning AmiNET™ and Mood range is used by leading service operators in over 80 countries.
Amino's 'Asset House' technology enables content producers, telecoms companies, broadcasters and web TV firms to maximise opportunities through better services, targeted content and greater choice.
Listed on the London Stock Exchange AIM, symbol AMO. Amino's HQ is based near Cambridge, UK, with offices in the US, China and Sweden.
For more information, please visit www.aminocom.com
Chairman's Statement
2009 was a challenging year for Amino. The combination of the global market downturn and its effect on the pace of IPTV deployments and industry-wide component shortages, particularly in semi-conductors, made for a difficult and disappointing 12 months. We ended the year with a reduction in revenues and gross profits - revenue declining to £25.29m (2008: £31.90m) and margins down to 33.1%.
We stated last year that we would carefully monitor our markets and react quickly and decisively to ensure Amino was well-positioned when conditions improved. Before the half year stage, we accelerated our cost reduction programme, reducing our annualised cost base to £14m in 2009 versus £19m immediately following the acquisition of Tilgin IPTV on 1 December 2008. Going forward into 2010, our cost base will reduce to £11m. We also made changes in our sales, marketing and customer support activities to further differentiate our offering, improve our sales channels and sharpen still further our customer focus.
The second half of the year improved as we saw some benefit from these actions start to come through. Most encouragingly, the company achieved a strong order intake - over 277,000 units were ordered in the second half - with a number of important contract wins, notably with major European operator Tele2. The market transition to MPEG-4 is almost complete and Amino derived almost 70% of its revenues from this high growth higher value market in H2 09.
Outlook:
Despite the difficulties experienced last year, the company is well placed to grow and improve its financial position during the current year as a result of the strategic progress made over the past 12 months.
Chief Executive's Statement
Operations:
Streamlining our business processes has been a key feature of 2009. The acceleration in our cost reduction programme - which will take our annualised cost base down to £11m in the coming year from £14m in 2009 (2008: £12m) - has created a more focused and nimble company. The executive management team is now smaller. Any duplication of roles across the merged Amino and Tilgin has been removed to create a single engineering facility.
New senior sales and marketing roles have helped drive more robust and focused campaigns - specifically targeted at the North American market - where the Amino brand has been re-established and channel partners re-invigorated. Improvements in our customer support have also been made.
While component shortages were an issue for many companies in 2009, we have now taken steps to simplify and de-risk our supply chain, giving greater visibility of future bottlenecks and broadening our supply sources.
The board was also strengthened with the appointment in November 2009 of Michael Bennett as a non-executive director. As Managing Partner of fund management company Azini Capital Partners LLP, he brings a wealth of experience of working with private and public technology companies.
Strategy:
The strategy that we have pursued - and continue to drive - includes:
- Driving scale: enabling us to sell more products to a broader range of customers
- Extending our product line: ensuring that we have the most complete product offering to sell to our customers
- Extending across the value chain: further increasing the loyalty and longevity of our customers.
This strategy remains intact for 2010 - with a specific focus on improving our product offering into our traditional market and delivering a new kind of device to address growing demand for high performance hybrid media centres from the tier one network operator market.
Market:
The pure IPTV market globally continues to grow, with industry analysts predicting a 12% compound annual growth rate (CAGR) between 2009 and 2012. This market will remain a clear focus for Amino with improved ST7105 set-top boxes (STBs) to be launched in H1 2010.
Amino's traditional markets in Eastern Europe, North America and enterprise and hospitality are seeing improvements at a macro-economic level which is starting to feed through in increased sales volumes. Encouragingly, we are seeing traction in emerging markets, such as Latin America, where we secured a substantial STB order with Costa Rican state network operator ICE after our year end.
New business wins in the year included Pioneer Telephone Company and Alaska-based Matanuska Telephone Association in North America, Telecom Serbia in Eastern Europe and Tele2 in Western Europe. This major contract win was testimony to the smooth launch of new set-top box products and our increasing ability to deliver substantial volume of orders to meet a demanding deployment schedule.
Consumer demand for high definition (HD) programming and services continues to shape our markets - with initial signs of a growing appetite for "Over the Top" (OTT) Internet-delivered television now apparent in the more highly-developed markets. Amino anticipated this changing dynamic by investing in new "hybrid" product development over the last six months.
After the year end, and as announced this morning, we secured an important breakthrough in this area with a contract win with a Western European tier 1 operator. This contract will see us provide them with our new Amino Freedom media centre to support the deployment of its new hybrid/ OTT service. This is the first ever Amino contract with a tier one Western European operator and underlines our leading position in the emerging hybrid/ OTT market.
The demand for more of a PC-based media player type product is also developing in the enterprise and hospitality market, where we continue to win high margin business.
The global economic downturn strongly affected Amino's ability to close a number of potential Asset House customer opportunities in FY09. These opportunities still remain active and a number of new prospects have been stimulated through our Amino Freedom market activity.
Asset House complements a service provider's OTT aspirations by strongly managing their content metadata and tracking a customer's media consumption habits to deliver personalised TV. However, we are ensuring that the operating costs of Asset House are being tightly managed and are striving to ensure that the business unit as a whole is marginal profitable in FY10.
Industry partnerships:
Amino's extensive industry eco-system remains a key differentiator and an important factor in our ability to meet customer requirements and win new business.
In October, we announced a further strengthening of our relationship with Intel®, who we have worked closely with on the development of our hybrid media centre.
This followed an agreement, signed in September, with Sun Microsystems to offer their JavaFX™ TV platform in our new generation devices.
The acquisition of Tilgin's IPTV set-top box division in December 2008 has strengthened our relationship with Ericsson and we continue to jointly pursue sales opportunities primarily in Europe.
Market Prospects:
While the macro-economic climate remains fragile we are now seeing evidence that customer orders, previously scheduled for earlier in the year are starting to come through. Order backlog into 2010 of 115,000 units provides a solid platform to build on over the course of the year and demonstrates how order slippage has been a feature of our performance this year. In addition, we are encouraged by a number of new contract wins in the first months of the year. The component shortages are easing as manufacturers gear up to meet growing consumer demand globally and we have taken steps to ensure continuity of supply.
Amino will continue to build on changes put in place during the second half of 2009. While the focus has necessarily been on recovering our market position after the first half of the year, the group continues to innovate and develop new solutions for our rapidly changing markets. The availability of the Amino Intel®-based DVB hybrid media centre, after the year end, strengthens our offering and gives us access to new markets. The early success of this product, in securing Amino's first ever tier one operator win, is an encouraging sign of our market leading position in the hybrid/OTT market.
Chief Financial Officer's report
Basis of preparation:
The Group's financial statements incorporate full year results of Amino Communications AB (formerly Tilgin IPTV), which was acquired on 1 December 2008, and for the first time, full year of results of Asset House Technology Ltd which was acquired on 9 June 2008.
Results for the year:
As a consequence of the global economic downturn, shipments of devices decreased by 29.5% to 341,000 (2008: 484,000). However, shipments of higher priced MPEG-HD devices increased by 50.6% to 134,000 (2008: 89,000) and order intake in the second half increased to 277,000 devices (2008:233,000) of which 115,000 devices were in backlog at the year end.
Revenue reduced by 20.7% to £25.29m (2008: £31.90m) of which £0.12m was generated by Asset House and £4.63m by Amino Communications AB. Licence fees reduced by £1.42m to £0.37m (2008: £1.79m). Revenue from customer support and expert services increased by £0.35m to £0.74m (2008: £0.39m).
Gross margin on device sales of 32.3% were 7.1 percentage points down on the exceptionally high margin achieved in FY2008 of 39.4%. Overall gross margin reduced to 33.1% (2008: 41.9%).
Gross profit reduced by £5.00m to £8.37m (2008: £13.37m) reflecting the reduction in shipments, licence revenues and gross margin on device sales.
Operating expenses (excluding restructuring and impairment costs) increased by £2.38m to £14.31m (2008: £11.93m) of which £1.45m is attributable to the acquisition of Tilgin IPTV and £0.65m is attributable to a full year of operating costs of Asset House. Research and development expenses (excluding restructuring and impairment costs) increased by £1.68m to £5.53m (2008: £3.85m). Sales, general and administrative expenses (excluding restructuring and impairment costs) increased by £0.69m to £8.78m (2008: £8.09m). At the year-end, headcount was 138 (2008: 133). The average number of employees during the year was 154 (2008: 119).
The reduction in gross profit of £5.00m combined with increased operating costs of £2.37m resulted in the Group generating an operating loss before restructuring and impairment costs of £5.93m (2008: operating profit of £1.44m) of which £1.14m was attributable to Asset House and £0.95m to Amino Communications AB.
Restructuring costs of £1.16m (2008: £nil) were incurred to realise cost synergies following the acquisition of Asset House and Tilgin IPTV. At 30 November 2009, the Group's operating cost base stood at c. £11.00m per annum.
Following a review of their future prospects, the Group has fully impaired the net book value of goodwill arising on the acquisitions of Asset House Technology Limited and SJ Consulting Limited giving rise to an impairment charge of £1.69m (2008: £0.14m).
Loss before tax is £8.73m (2008: profit before tax of £2.16m). Net interest received reduced by £0.80m to £0.06m (2008: £0.86m) reflecting reduced interest rates and net cash balances.
Corporation tax receivable of 0.01m (2008: £0.04m) is made up of a credit for research and development tax credits payable of £0.91m and a charge of £0.90m arising on the reduction in deferred tax asset recognised.
Loss after tax is £8.72m (2008: profit after tax of £2.20m) and basic loss per share is 15.97p (2008: profit per share of 3.98p)
Balance Sheet:
The Group continues to have a strong balance sheet; total equity of £21.94m (2008: £30.66m) is equivalent to 38p per share (2008: 53p per share) of which £9.05m (2008: 14.44m) or 16p per share (2008: 25p per share) is represented by net cash balances.
On 1 December 2008, Amino acquired Tilgin IPTV AB for £2.77m (including £0.24m acquisition costs) on a debt-free basis payable in cash on completion. The purchase consideration was attributed to goodwill of £2.20m software of £0.29m and other assets of £0.28m)
Net current assets of £14.95m (2008: £24.32m) provide the Group with a strong working capital base. The primary components of net current assets are net cash balances of £9.05m (2008: £14.44m), trade receivables of £8.28m (2008: £12.23m), stock of £3.69m (2008: £5.06m) and trade and other payables of £7.69m (2008: £8.73m). 68% of trade receivables at 30 November are insured. Trade receivables over 60 days at 30 November but not provided for amounted to £1.75m (2008: £1.50m) of which, as at 5 February, all but £0.4m had been collected.
Net cash balances reduced by £5.40m in the year to £9.05m (2008: £14.44m) which reflects the acquisition of Tilgin IPTV AB for £2.8m and the loss incurred during the year.
£1.98m (2008: £7.25m) of net current assets are denominated in US$ and £2.45m (2008: £1.15m) are denominated in Euro. Also at the balance sheet date, the Group had unsettled forward foreign exchange contracts of $17.0m at an average rate of $1.65.
As at 30 November 2009, the Group had approximately £34.11m of tax losses available to carry forward to set against future taxable profits, of which losses of £2.16m are recognised by the deferred tax asset of £0.60m and £31.95m of tax losses remain unrecognised. At the current rate of corporation tax, the unrecognised deferred tax asset is £8.94m.
Equity:
The issued share capital 57.89m (2008: 57.84m shares) ordinary shares of which 6% (2008: 6%) were held by the Employee Benefits Trust. The number of subsisting options at the year end, granted primarily to current and former employees, was 5.87m (2008: 6.62m) at an average exercise price of 56p per share.
Stuart Darling
Chief Financial Officer
Amino Technologies plc
Consolidated income statement
for the year ended 30 November 2009
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Notes | Year to 30 November 2009 £ | Year to 30 November 2008 £ |
| Revenue |
| 25,290,903 | 31,902,075 |
| Cost of sales |
| (16,917,248) | (18,529,562) |
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| __________ | __________ |
| Gross profit |
| 8,373,655 | 13,372,513 |
| Selling, general and administrative expenses |
| (11,243,179) | (8,226,302) |
| Research and development expenses |
| (5,917,883) | (3,847,324) |
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| __________ | __________ |
| Operating (loss)/profit |
| (8,787,407) | 1,298,887 |
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| Analysed as: |
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| Operating (loss)/profit before restructuring and impairment |
| (5,932,326) | 1,438,887 |
| Restructuring costs |
| (1,160,573) | - |
| Impairment costs |
| (1,694,508) | (140,000) |
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| __________ | __________ |
| Operating (loss)/profit |
| (8,787,407) | 1,298,887 |
| Financial income |
| 56,849 | 870,016 |
| Financial expense |
| - | (6,857) |
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| __________ | __________ |
| Net financial income |
| 56,849 | 863,159 |
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| __________ | __________ |
| (Loss)/profit before corporation tax |
| (8,730,558) | 2,162,046 |
| Corporation tax credit |
| 11,939 | 41,092 |
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| __________ | __________ |
| (Loss)/profit for the year attributable to equity holders |
| (8,718,619) | 2,203,138 |
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| __________ | __________ |
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| Basic (loss)/earnings per 1p ordinary share | 2 | (15.97p) | 3.98p |
| Diluted (loss)/earnings per 1p ordinary share | 2 | (15.97p) | 3.77p |
Consolidated statement of recognised income and expense
For the year ended 30 November 2009
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| Year to 30 November 2009 £ | Year to 30 November 2008 £ |
| Foreign exchange difference arising on consolidation |
| (97,120) | 591,223 |
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| __________ | __________ |
| Net income recognised directly in equity |
| (97,120) | 591,223 |
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| __________ | __________ |
| (Loss)/profit for the year |
| (8,718,619) | 2,203,138 |
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| __________ | __________ |
| Total recognised (expense)/income for the financial year |
| (8,815,739) | 2,794,361 |
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| __________ | __________ |
Amino Technologies plc
Consolidated balance sheet
as at 30 November 2009
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Notes | 30 November 2009 £ | 30 November 2008 £ |
| Assets |
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| Non-current assets |
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| Property, plant and equipment |
| 1,192,639 | 982,964 |
| Intangible assets |
| 4,952,320 | 3,431,236 |
| Deferred income tax assets |
| 671,149 | 1,719,000 |
| Trade and other receivables |
| 172,696 | 203,101 |
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| _________ | _________ |
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| 6,988,804 | 6,336,301 |
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| _________ | _________ |
| Current assets |
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| Inventories |
| 3,691,257 | 5,059,627 |
| Trade and other receivables | 3 | 10,245,842 | 13,576,759 |
| Derivative financial instruments |
| 48,155 | - |
| Cash and cash equivalents |
| 9,047,378 | 14,443,582 |
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| _________ | _________ |
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| 23,032,630 | 33,079,968 |
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| _________ | _________ |
| Total assets |
| 30,021,436 | 39,416,269 |
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| _________ | _________ |
| Capital and reserves attributable to equity holders of the business |
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| Called-up share capital Shares to be issued |
| 578,930 - | 578,430 27,751 |
| Share premium |
| 126,376 | 104,249 |
| Capital redemption reserve |
| 6,200 | 6,200 |
| Other reserves |
| 16,388,755 | 16,388,755 |
| Retained earnings |
| 4,842,103 | 13,555,105 |
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| _________ | _________ |
| Total equity |
| 21,942,364 | 30,660,490 |
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| _________ | _________ |
| Liabilities |
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| Current liabilities |
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| Borrowings |
| 12,502 | 12,502 |
| Trade and other payables | 4 | 7,694,407 | 8,732,415 |
| Derivative financial instruments |
| - | 10,862 |
| Provisions for other liabilities and charges |
| 372,163 | - |
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| _________ | _________ |
| Total liabilities |
| 8,079,072 | 8,755,779 |
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| _________ | _________ |
| Total equity and liabilities |
| 30,021,436 | 39,416,269 |
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| _________ | _________ |
Amino Technologies plc
Consolidated cash flow statement
For the year ended 30 November 2009
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Notes | Year to 30 November 2009 | Year to 30 November 2008 |
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| £ | £ |
| Cash flows from operating activities |
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| Cash (used in)/generated from operations | 5 | (200,300) | 155,859 |
| Corporation tax received/(paid) |
| 32,416 | (277) |
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| _________ | _________ |
| Net cash (used in)/generated from operating activities |
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(167,884) |
155,582 |
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| _________ | _________ |
| Cash flows from investing activities |
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| Acquisition of subsidiary - net of cash acquired |
| (2,761,361) | (881,908) |
| Purchases of intangible fixed assets |
| (1,845,681) | (1,597,919) |
| Purchases of property, plant and equipment |
| (595,625) | (228,416) |
| Interest received |
| 56,139 | 854,865 |
| Interest paid |
| - | (6,857) |
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| _________ | _________ |
| Net cash used in investing activities |
| (5,146,528) | (1,860,235) |
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| _________ | _________ |
| Cash flows from financing activities |
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| Repurchase of own shares |
| - | (322,400) |
| Proceeds from exercise of employee share options |
| 1,919 | 253,297 |
| Loan made to employee benefit trust for purchase of shares |
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- |
(1,137,302) |
| Repayments of borrowings |
| - | (24,727) |
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| _________ | _________ |
| Net cash generated from/(used) in financing activities |
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1,919 |
`(1,231,132) |
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| _________ | _________ |
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Net decrease in cash and cash equivalents |
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(5,312,493) |
(2,935,785) |
| Cash and cash equivalents at beginning of year |
| 14,443,582 | 17,065,867 |
| Effects of exchange rate fluctuations on cash held |
| (83,711) | 313,500 |
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| _________ | _________ |
| Cash and cash equivalents at end of year |
| 9,047,378 | 14,443,582 |
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| _________ | _________ |
1 Basis of preparation
The preliminary announcement for the year ended 30 November 2009 is audited have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the EU, IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial information in this preliminary announcement does not constitute the Group's statutory accounts for the year ended 30 November 2009 or the year ended 30 November 2008, but is derived from those accounts. 2 (Loss)/earnings per share
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| Year to 30 November 2009 | Year to 30 November 2008 |
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| (Loss)/earnings attributable to ordinary shareholders | (8,718,619) | 2,203,138 |
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| _________ | _________ |
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| Weighted average number of shares (Basic) | 54,588,041 | 55,373,030 |
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| _________ | _________ |
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Weighted average number of shares (Diluted) |
54,588,041 |
58,512,459 |
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| _________ | _________ |
| (Loss)/earnings per share basic | (15.97p) | 3.98p |
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| _________ | _________ |
| (Loss)/earnings per share diluted | (15.97p) | 3.77p |
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| _________ | _________ |
The calculation of basic earnings per share is based on (loss)/profit after taxation and the weighted average 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 two categories of dilutive potential ordinary shares; those share options where the exercise price is less than the average market price of the Company's ordinary shares during the year and deferred ordinary shares in respect of the acquisition of SJ Consulting Limited (see note 24). There is no dilutive effect in respect of the year ended 30 November 2009 as the Group was loss making.
3 Trade and other receivables
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| As at 30 November 2009 £ | As at 30 November 2008 £ |
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| Current assets: |
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| Trade receivables | 8,353,234 | 12,232,520 |
| Less: provision for impairment of receivables | (73,215) | - |
|
| _________ | _________ |
| Trade receivables (net) | 8,280,019 | 12,232,520 |
| Other receivables | 90,981 | 176,649 |
| Corporation tax receivable | 951,170 | 41,369 |
| Prepayments | 923,672 | 1,126,221 |
|
| _________ | _________ |
|
| 10,245,842 | 13,576,759 |
|
| _________ | _________ |
4 Trade and other payables
|
| As at 30 November 2009 £ | As at 30 November 2008 £ |
| Trade payables | 5,001,020 | 4,307,050 |
| Social security and other taxes | 225,129 | 215,729 |
| Other payables | 267,082 | 6,838 |
| Accruals | 2,094,829 | 3,579,174 |
| Deferred income | 106,347 | 623,624 |
|
| _________ | _________ |
|
| 7,694,407 | 8,732,415 |
|
| _________ | _________ |
5 Cash generated from operations
|
| Year to 30 November 2009 £ | Year to 30 November 2008 £ |
| (Loss)/profit before corporation tax | (8,730,558) | 2,162,046 |
| Adjustments for: |
|
|
| Amortisation charge | 939,846 | 385,874 |
| Depreciation charge | 485,344 | 379,322 |
| Impairment charge | 1,867,959 | 140,000 |
| Loss on disposal of property, plant and equipment | - | 1,597 |
| Loss on disposal of software intangibles | 9,052 | - |
| Share-based payment charge | 100,818 | 104,486 |
| (Gain)/loss on derivative financial instruments | (59,017) | 10,862 |
| Financial income - net | (56,849) | (863,159) |
| Exchange differences | (38,481) | 262,149 |
| Decrease/(increase) in inventories | 2,172,923 | (2,399,968) |
| Decrease/(increase) in trade and other receivables | 4,578,968 | (2,741,446) |
| (Decrease)increase in trade and other payables | (1,842,468) | 2,714,096 |
| Increase in provisions | 372,163 | - |
|
| _________ | _________ |
| Cash (used in)/generated from operations | (200,300) | 155,859 |
|
| _________ | _________ |
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|
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6 Business combinations
On 1 December 2008, the Group acquired 100% of the share capital of Tilgin IPTV AB, a company specialising in IPTV software technologies and hardware platforms, for a cash consideration of £2.77m.
The acquisition has been accounted for using the purchase method as required by IFRS 3.
The acquisition contributed revenues of £4,656,925 and net loss of £786,788 for the period 1 December 2008 to 30 November 2009.
Details of net assets acquired and goodwill are as follows:
|
| £ |
| Purchase consideration: |
|
| -Cash paid | 2,527,444 |
| -Direct cost relating to the acquisition | 238,247 |
|
| __________ |
| Total purchase consideration | 2,765,691 |
|
|
|
| Fair value of net assets acquired (see below) | (559,147) |
|
| __________ |
| Goodwill | 2,206,544 |
|
| __________ |
The assets and liabilities arising from the acquisition are as follows:
|
|
Book value £ |
Fair value adjustment £ | Accounting Policy Adjustment £ |
Fair value £ |
| Cash and cash equivalents | 4,330 | - | - | 4,330 |
| Intangible fixed assets | 2,009,360 | - | (1,718,618) | 290,742 |
| Tangible fixed assets | 21,263 | 78,850 | - | 100,113 |
| Inventories | 917,440 | (112,887) | - | 804,553 |
| Trade and other receivables | 307,843 | - | - | 307,843 |
| Trade and other payables | (788,383) | (16,078) | - | (804,461) |
| Deferred tax | - | (143,973) | - | (143,973) |
|
| ________ | __________ | ________ | __________ |
|
| 2,471,853 | (194,088) | (1,718,618) | 559,147 |
|
| __________ | __________ | __________ | __________ |
The fair value adjustments include an adjustment to capitalised development costs to align accounting policies and a write down of inventories.
The intangible fixed asset balance relates to acquired technology.
The goodwill arising on the acquisition of Tilgin IPTV AB is attributable to the technical skills of the acquired business workforce and anticipated future operating synergies from the combination.