GINV.L Regulatory News (GINV)

Global Invacom Group Limited

(Global Invacom or "The Group")

Results for the six months ended June 30 2014

Global Invacom's 1H FY2014 Revenue Grows 26.3% To US$69.8 Million; GP Margin Increases

§ Group reports first set of results since admission of its shares to trading on AIM Market of the London Stock Exchange ("AIM")

§ Gross profit increases 38.2% to US$17.4 million

§ Profit before income tax increases 23.3% to US$4.3 million

§ Profit before income tax (excluding one-off professional fees) increases 58.6% to US$5.5 million

§ Net asset value per share increases 6.7% to 20.61 US cents

§ Successfully raised gross proceeds of US$15.0 million from new institutional shareholders through placing of new shares

* calculated based on 234,434,003 weighted average number of ordinary shares for the period ended 30 June 2014

** calculated based on 235,258,042 weighted average number of ordinary shares for the period ended 30 June 2013

# calculated based on 231,832,299 total number of issued shares as at 30 June 2014

## calculated based on 231,802,299 total number of issued shares as at 31 December 2013

+ percentage point change

DMG & Partners Securities Pte Ltd ("DMG") was the financial adviser to Global Invacom Group Limited in relation to the acquisition of Global Invacom Holdings Limited. DMG assumes no responsibility for the contents of this press release.

Global Invacom Group Limited, a Singapore Exchange Mainboard and AIM listed satellite communications ("Sat Comms") equipment specialist, said today that its revenue rose 26.3% to US$69.8 million for the six months ended 30 June 2014 ("1H FY2014") from US$55.3 million in 1H FY2013. Current trading remains in line with management's expectations.

In its first set of financial results released since its shares were admitted to trading on AIM, Global Invacom said it benefitted from increased orders from a U.S. Sat Comms customer, contribution from Global Invacom Manufacturing (UK) Limited ("GIML"), a Sat Comms equipment manufacturer acquired in November 2013, and higher contract manufacturing sales in China.

Most regions recorded higher revenue, with contributions from U.S.A. rising by US$14.7 million (59.5%), Europe by US$5.2 million (41.1%) and Rest of the World by US$5.5 million (227.3%) compared to a year ago. However, like-for-like revenue from Asia fell by US$10.9 million (70.9%). This was anticipated following high initial sales during 1H FY2013 to a major new customer who then had inventory cover at the end of 2013. The Group's sales, which were impacted in the first quarter of the year, recovered in the second quarter.

1H FY2014 gross profit rose 38.2% to US$17.4 million - outpacing revenue growth of 26.3% - compared to US$12.6 million a year ago. As a result, gross profit margin increased to 24.9% compared to 22.8% in 1H FY2013 which had included residual costs from the result in FY2012.

The Group's administrative expenses increased 36.1% to US$12.6 million. This is attributed to the US$1.2 million one-off professional fees in conjunction with the AIM listing and the manpower and expenses of US$1.1 million from newly acquired GIML. The Group incurred higher development costs for new products with two major customers, including hiring more RF design and production engineers. This will position the Group better with these customers for their next-generation of products.

Profit before tax increased by US$0.8 million, or 23.3%, to US$4.3 million in 1H FY2014 from US$3.5 million in 1H FY2013. Excluding the US$1.2 million one-off professional fees, the Group would have recorded a profit before tax of US$5.5 million in 1H FY2014 with a margin of 7.9%.

Net profit after tax was US$3.7 million in 1H FY2014 compared to US$3.4 million in 1H FY2013. Excluding the US$1.2 million one-off professional fees, the Group would have recorded a net profit of US$4.9 million in 1H FY2014 with a net margin of 7.0%.

Earnings per share on a fully diluted basis increased to 1.56 US cents in 1H FY2014 from 1.44 US cents in 1H FY2013. Net asset value per share as at 30 June 2014 rose to 20.61 US cents from 19.32 US cents as at 31 December 2013.

In July, the Group successfully completed its listing on AIM, where an oversubscribed placing raised gross proceeds of US$15.0 million. As announced at the time, the Group sees consolidation opportunities in the global Sat Comms industry and intends to use funds raised to make strategic acquisitions that complement its current operations and target markets.

"We have successfully concluded a high-profile admission to the AIM Market which was oversubscribed. We continue to evolve our product offering and have recently launched a new range of programmable fibre products including the SwitchBlade which distributes multiple satellite TV services," said Executive Chairman, Mr Tony Taylor.

"The ongoing consolidation of the global Sat Comms industry will increase demand for dedicated equipment players who can combine R&D with a worldwide manufacturing footprint. We have successfully acquired assets and capabilities and will continue to enhance our value proposition to satellite broadcasters," he added.

Barring any unforeseen circumstances, the Board of Directors expects the financial performance in FY2014 to remain profitable.

About Global Invacom Group Limited

Global Invacom Group Limited ("Global Invacom") is listed on the Singapore Exchange Securities Trading Limited Mainboard ("SGX-ST") and its shares are admitted to trading on the AIM Market of the London Stock Exchange in the U.K..

Global Invacom is a fully integrated satellite equipment provider with five manufacturing plants across China, Malaysia and U.K., providing a full range of LNB receivers, transmitters, switches and video distribution components and electronics manufacturing services in satellite communications, TV peripherals, computer peripherals, medical, and consumer electronics industries. Its customers include satellite broadcasters such as BSkyB of the U.K. and DISH Network of the U.S.A..

For media queries, please contact

Matthew Garner

Chief Financial Officer

Global Invacom Group Limited

8 Temasek Boulevard

#20-03 Suntec Tower Three

Singapore 038988

+65 6884 3423

On behalf of Global Invacom Group Limited:

finnCap Ltd (Nominated Adviser and Joint Broker)

Ed Frisby/Christopher Raggett (Corporate Finance)

Rhys Williams (Corporate Broking)

+44 207 220 0500

Mirabaud Securities LLP (Joint Broker)

Peter Krens (Equity Capital Markets)

+44 207 878 3362

Bell Pottinger LLP (UK Financial PR)

David Rydell/Charles Goodwin/David Bass

+44 207 861 3232

WeR1 Consultants Pte Ltd (Singapore Financial PR)

Sheryl Sim, sheryl@wer1.net

Ian Lau, ianlau@wer1.net

+65 6737 4844

HALF-YEAR FINANCIAL STATEMENT ANNOUNCEMENT FOR THE HALF-YEAR ENDED 30 JUNE 2014

DMG & Partners Securities Pte Ltd ("DMG") was the financial adviser to Global Invacom Group Limited in relation to the acquisition of Global Invacom Holdings Limited. DMG assumes no responsibility for the contents of this announcement.

PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS

1(a) A statement of comprehensive income (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

Consolidated Statement of Comprehensive Income for the 6 months ended 30 June 2014. These figures have not been audited.

N.M.: Not Meaningful

Note:

(i) Profit before income tax was determined after (charging)/crediting the following:

1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.

1(b)(ii) Aggregate amount of group's borrowings and debt securities.

Amount repayable in one year or less, or on demand

Amount repayable after one year

Details of any collateral

The secured loan of US$472,000 was secured over a subsidiary's bank deposits of US$400,000.

1(c) A statement of cash flows (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year.

Note:

(i) For the purpose of presentation in the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:

* Restricted cash includes fixed deposits amounted to US$400,000 pledged with the banks for facilities and loans granted to the Group. As at 30 June 2014, the Group had utilised US$472,000 of the facilities and loans granted.

1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year.

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on.

State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year.

There were 5,970,000 treasury shares held by the Company as at 30 June 2014 and none as at 30 June 2013.

1(d)(iii) To show the 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.

1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on.

2. Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.

These figures have not been audited or reviewed.

3. Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).

Not applicable.

4. Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied.

The accounting policies and methods of computation have been applied consistently for the current financial period ended 30 June 2014 as those used in the audited financial statements for the year ended 31 December 2013, except for the adoption of the new or revised International Financial Reporting Standards ("IFRS") applicable for the financial period beginning 1 January 2014.

5. If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change.

The adoption of the new or revised IFRS does not have any financial impact on the Group's financial position or results.

6. Earnings per ordinary share of the group for the current financial period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends.

7. Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the:

(a) current financial period reported on; and

(b) immediately preceding financial year.

8. A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussion of the following:

(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and

(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.

Review of Financial Performance

Revenue

The Group's revenue increased by US$14.5 million, or 26.3%, to US$69.8 million in 1H FY2014 from US$55.3 million in 1H FY2013. This improvement included increased orders from a major customer in the United States and the recognition of a US$7.4 million contribution from Global Invacom Manufacturing (UK) Limited ("GIML") whose revenue has increased since its acquisition in November 2013. The Group's Contract Manufacturing segment also achieved increased revenues of US$4.8 million after it received additional subcontract assembly work from an established customer.

Geographically, revenue from the America, Europe and the Rest of the World regions rose by US$14.7 million (59.5%), US$5.2 million (41.1%) and US$5.5 million (227.3%), respectively, but declined in the Asia market by US$10.9 million (70.9%). The like-for-like revenue fall in Asia was expected after completing a large delivery to a major new customer during 1H FY2013. The customer had inventory cover at the end of 2013 which affected sales in the first quarter of the year. The Group can report that it experienced a return of sales in the second quarter.

Gross Profit

Gross profit increased by US$4.8 million or 38.2% to US$17.4 million in 1H FY2014 from US$12.6 million in 1H FY2013, outpacing revenue growth. Gross profit margin improved to 24.9% in 1H FY2014 from 22.8% in 1H FY2013 due to the absence of residual costs in Q1 FY2013 following the results in FY2012.

Administrative Expenses

Administrative expenses increased by US$3.3 million or 36.1% to US$12.6 million in 1H FY2014 from US$9.3 million in 1H FY2013, representing 18.1% and 16.8% of revenue, respectively. This is attributed to the US$1.2 million one-off professional fees in conjunction with the AIM Market of the London Stock Exchange ("AIM") listing and the manpower and expenses of US$1.1 million from GIML, acquired in November 2013. The Group incurred higher development costs for new products with two major customers, including hiring more RF design and production engineers. This will position the Group better with these customers for their next-generation of products.

Other Operating Expenses

Other operating expenses increased on a like-for-like period basis, mainly attributable to foreign exchange loss due to the weakening of the Renminbi against the US Dollar and the translation loss on disposal of a subsidiary.

Profit before Tax

The Group's profit before tax increased by US$0.8 million, or 23.3%, to US$4.3 million in 1H FY2014 from US$3.5 million in 1H FY2013 giving a margin of 6.1% compared to 6.3% respectively.

Excluding the US$1.2 million one-off professional fees, the Group would have recorded a profit before tax of US$5.5 million in 1H FY2014 with a margin of 7.9%.

Taxation

Due to increased taxable profits from all subsidiaries and the absence of a 2013 deduction in FY2014, income tax expense increased to US$616,000 in 1H FY2014 from US$70,000 in 1H FY2013.

Net Profit

Overall, the Group's net profit improved to US$3.7 million in 1H FY2014 from US$3.4 million in 1H FY2013, while net profit margin decreased to 5.2% compared to 6.1%, respectively.

Excluding the US$1.2 million one-off professional fees, the Group would have recorded a net profit of US$4.9 million in 1H FY2014 with a net profit margin of 7.0%.

Review of Financial Position

Non-current assets increased by US$0.9 million to US$18.1 million as at 30 June 2014 from US$17.2 million as at 31 December 2013. The net increase was mainly attributable to the continued investment in new machinery and equipment to improve efficiency, reduce manufacturing costs and support the development of new products by its subsidiaries in China, Malaysia and United Kingdom, coupled with the increase in capitalised development cost in United Kingdom.

Net current assets increased by US$2.2 million to US$35.8 million as at 30 June 2014 from US$33.6 million as at 31 December 2013. Inventories increased by US$3.4 million to US$29.2 million, predominantly due to processes underway to improve customer support at the Group's US warehousing site. In addition, one of the Group's customers implemented structural changes to its operations during the period which affected its ordering process at the time. Trade and other receivables rose by US$2.6 million to US$24.2 million due to timing delays on payments and cash and cash equivalents rose by US$0.1 million to US$14.8 million. This was offset by the increase in trade and other payables by US$3.6 million to US$31.0 million and borrowings by US$0.3 million to US$0.5 million.

Non-current liabilities remained constant at US$6.1 million as at 30 June 2014.

Overall, the net asset value of the Group strengthened by US$3.0 million to US$47.8 million as at 30 June 2014 from US$44.8 million as at 31 December 2013, bringing the reserve balance to a positive of US$2.6 million.

Review of Cash Flows

Net cash generated from operating activities during the period was US$2.8 million, comprising cash flow from operating cash activities before working capital changes of US$5.9 million, net working capital outflow of US$2.9 million and payment of income tax expense of US$0.2 million.

Net cash used in investing activities was US$2.0 million, mainly attributable to the purchase of machinery and equipment and increase in capitalised development cost.

Net cash used in financing activities was US$0.3 million, arising from the payment of dividends, offset by the decrease in restricted cash and proceeds from borrowings.

Overall, the Group generated a net increase in cash and cash equivalents of US$0.6 million in 1H FY2014, bringing cash and cash equivalents per the consolidated statement of cash flows to US$14.2 million as at 30 June 2014.

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

In line with the earlier guidance on the last results announcement made by the Company on 27 February 2014 that "the Board of Directors expects the financial performance in FY2014 to remain profitable", the Group's 1H FY2014 results have shown profitability in both earnings and margins.

10. 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 Satellite Communications ("Sat Comms") industry continues to see healthy growth buoyed by the emergence of new technologies such as UltraHD and Digital Chanel Stacking (DCS). There is also significant impact from the increased demand for HD content globally leading to a rising number of content distribution channels, which is driving growth in the industry through a higher demand for ground equipment.

At the same time, the Sat Comms industry has experienced further consolidation activity in recent months as witnessed in the proposed acquisitions of two European pay TV providers. This is expected to lead to a preference for integrated Sat Comm equipment players with a value proposition that combines research and development and a global manufacturing footprint, which Global Invacom possesses.

To capitalise on these growth opportunities, the Group's shares were admitted to trading on AIM on 2 July 2014, with a concurrent placing raising gross proceeds of US$15.0 million (S$18.7 million). The proceeds will be used for business expansion and general corporate working capital purposes. The AIM listing will also raise the Group's international profile which will better position the Company for business prospects in Europe and elsewhere.

In line with its long term growth strategy, the Group continues to monitor the market for acquisition opportunities to further expand its suite of capabilities through new technologies, new territories, new broadcasters or a combination of all. Coupled with the increasing technology and customer-related barriers to entry in the Sat Comms market, the Group is confident of strengthening its position as a leading global Sat Comms player.

Barring any unforeseen circumstances, the Board of Directors expects the financial performance in FY2014 to remain profitable.

11. 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.

12. If no dividend has been declared/recommended, a statement to that effect.

No dividend has been declared or recommended for the 6 months ended 30 June 2014.

13. 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 and there were no IPTs for the 6 months ended 30 June 2014.

CONFIRMATION BY THE BOARD OF DIRECTORS (THE "BOARD") 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 2014 to be false or misleading in any material aspect.

On behalf of the Board

Anthony Brian Taylor Matthew Jonathan Garner

Director Director

BY ORDER OF THE BOARD

Anthony Brian Taylor

Chairman

14 August 2014