GINV.L Regulatory News (GINV)

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:

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

N.M.: Not Meaningful

B. Condensed Interim Statements of Financial Position

C. Condensed Interim Statements of Changes in Equity

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

D. Condensed Interim Consolidated Statement of Cash Flows

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

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

4. Segment and Revenue Information (cont'd)

4.1 Reportable segments (cont'd)

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.

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

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

* 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

9. Intangible Assets

10. Goodwill

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:

12. Property, Plant and Equipment