TIDMPTV
RNS Number : 5040N
PeerTV PLC
28 September 2012
28 September 2012
PeerTV PLC
("PeerTV" or "the Company")
Interim Results, trading update and Directorate Change
PeerTV (AIM:PTV), a provider of technology solutions for the OTT
(TV over the internet) market, and PCB (printed circuit board)
production solutions, today announces its unaudited results for the
six months ending 30 June 2012.
Key Developments
-- Successful launch and first order for Android based set top
box. The launch at the IPTV show in London in March has resulted in
discussion with multiple telecom and TV operators. In Q2
discussions were begun with Orange (France, Israel and Ivory
Coast), Swisscom, Bouygues Telecom (France), Rostelecom (Russia),
GMDS (E. Europe) and "R Cable" (Spain).
-- Integration of management of Digitek and PeerTV Ltd. on track.
-- Combination of Digitek and PeerTV Ltd business impacts the
comparison with the results for H1 2011.
-- Revenue of $382,000 at PeerTV Ltd. reflects slower sales of
current set top box in anticipation of Android switch as well as
intermittent sales to its ethnic TV operator customers.
-- Revenues of $856,000 at Digitek reflect the refinancing
issues at the beginning of the year and a switch to almost
exclusively labour only contracts, reducing revenues but increasing
margin.
-- Investment in R&D at PeerTV Ltd. of $393,000 (2011:
$638,000), S&M and G&A of $74,000 and $706,000 respectively
now include Digitek and PeerTV Ltd.
-- Board focused on cash management and funding until expected
return to positive cash flow at both subsidiaries in Q1 2013. In
order to achieve this, the Company will require a further placing
prior to year end.
Post Period Highlights
-- Successful funding of GBP750,000 (before expenses) to
strengthen working capital. The financing included certain
conditions that will limit the use of the funds received to pay for
long outstanding creditors of PeerTV Ltd. In particular, PeerTV
Ltd. is in the process of renegotiating the terms of its long
outstanding liabilities to ensure that the criteria are met.
-- Beginning of production of first Android boxes imminent. The
current boxes will be delivered with the Android Set Top Box
release 1.0. The PeerTV team is continuing to develop the Android
software and releases 1.1 and 1.2 are expected by the end of Q4
2012 and end of Q1 2013, respectively. In order to achieve this
schedule, additional software engineers will be required and that
can only be achieved if the necessary funds are available.
-- Return of Digitek to normal operating mode after financial squeeze at beginning of the year.
-- Appointment of Avi Vermus, CEO of Digitek, to the board of
PeerTV plc with immediate effect. Avi became CEO of Digitek in
February 2012.
Chairman Leon Nahon Commented:
"At the same time we would like to welcome Avi to the board of
the PeerTV. Avi has been central to the successful turn around and
restructuring of the finances at Digitek. We look forward to having
his operational insights and experience at the board level."
Additional Disclosures
In accordance with the AIM Rules, the following information
required to be disclosed is set out below. Save for the information
disclosed in this announcement there is no other information that
would need to be disclosed under Schedule 2, paragraph (g) of the
AIM Rules.
Full Name and age: Avi Vermus (51)
Current Directorships Directorships held in
past 5 years
none Teliran Ltd.
Magnetico Ltd.
Compwise Ltd.
Further enquiries:
PeerTV Plc
Leon Nahon, Chairman +972 974 07315
Libertas Capital Corporate Finance Limited
Thilo Hoffmann/Andrew McLennan +44 (0) 20 7569 9650
Peterhouse Corporate Finance
Jon Levinson/Eran Zucker +44 (0) 20 7469 0932
Bishopsgate Communications
Nick Rome/Sam Allen +44 (0) 20 7562 3350
peertv@bishopsgatecommunications.com
Appendix
Chairman's Statement
Our interim results for the six months ended 30 June 2012 show
consolidated turnover of $1,238,000 and total consolidated loss of
$1,604,000.
Both of our businesses were in a rebuilding mode in the first
half of the year.
Peer TV Ltdhas successfully reengineered it's Set Top Box (STB)
software solution around the Android operating system and is about
to commence manufacturing of its first order for the new
Android-based product.
PeerTV is now seeing market interest from telecom operators who
were in the past indifferent to its solutions. At the recent IBC in
Amsterdam, the industry's largest trade show, the company
experienced significant interest from large Pay TV operators as
well as from smaller operators. The trade show generated more than
seventy sales leads.
Over the past six months the company's product and market
strategy has been refined and marketing efforts are focusing on the
telecom operator market where PeerTV is leveraging it's pioneering
Android based product line, while continuing to support its
traditional ethnic market customer base.
Growing interest from telecoms operators in the PeerTV solution
is a reassuring sign for the company and management believes that
it will win a first operator deal within the next six months.
The Digitek Grouphas undergone a successful internal
reconstruction and partial refinancing and we are experiencing
satisfactory level of new orders and enquiries from new customers.
The business now has over 50 active accounts. Sales are 80% labour
only and 20% turnkey. The working capital for turnkey sales is
provided by a third party to reduce the capital intensity for the
company. Significant operating cost reductions have been
achieved.
The company is in the process of qualifying for AS9100 (Military
and aerospace standards), in addition to its present industrial and
medical approvals, which will enable the company to participate in
larger longer term contracts.
Digitek is currently in negotiation with several strategic local
and international companies with a view to transferring their
entire production lines to the company.
Digitek expects to be cash positive from operations by the end
of the year. However, repayment of non-current creditors will delay
positive overall monthly cash flow until Q1 2013. The prospects for
Q4 2012 and 2013 are looking solid.
The Peer TV Plc Group
We are satisfied with the progress of our subsidiaries during
the first half of the year. The cash flow of the Group remains
tight but we expect both subsidiaries to move to cash self
sufficiency by Q1 2013. Until that time the parent company
continues to provide financing to its subsidiaries raised from
equity placings. The Company recently completed a placing of
9,090,909 Ordinary Shares at 8.25 pence per share and a similar
number of three year warrants exercisable at 9.25 pence per share
generating a total of GBP750,000 gross of expenses. The Company has
effected closings in respect of GBP584,000 to date and the balance
is expected to complete by the end of October 2012.
The Company anticipates that it will require a further placing
very shortly.
Appendix: Condensed Group Financial Statements
PEERTV PLC
CONDENSED GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2012
Six months Six months Year to
to to
30 June 30 June 31 December
2012 2011 2011
Note $'000 $'000 $'000
TURNOVER 3 1,238 993 5,065
Cost of sales (1,200) (889) (6,365)
--------------- ------------- ----------------
GROSS PROFIT / (LOSS) 38 104 (1,300)
Research and development (397) (686) (1,356)
Sales and marketing (74) (100) (150)
General and administrative (715) (473) (1,790)
Other expenditure (127) (97) (716)
Exceptional item -
impairment of intangibles - - (4,013)
--------------- ------------- ----------------
OPERATING LOSS (1,275) (1,252) (9,325)
Finance costs (665) (640) (2,726)
--------------- ------------- ----------------
LOSS BEFORE TAXATION (1,940) (1,892) (12,051)
Taxation - - (215)
Minority interest 326 - 638
--------------- ------------- ----------------
TOTAL COMPREHENSIVE
LOSS (1,614) (1,892) (11,628)
======== ======== ========
Loss per share
4 $(0.03) $(0.12) $(0.53)
Basic ======== ======== ========
Diluted $(0.03) $(0.11) $(0.50)
======== ======== ========
PEERTV PLC
CONDENSED GROUP BALANCE SHEET
FOR THE SIX MONTHS ENDED 30 JUNE 2012
As at As at As at
30 June 30 June 31 December
2012 2011 2011
$'000 $'000 $'000
Unaudited Unaudited Audited
ASSETS
Non-current assets
Intangible assets 4,808 1,198 4,955
Property, plant and equipment 1,614 44 1,771
------------- ------------ ------------
6,422 1,242 6,726
Current assets
Inventories 265 126 389
Trade and other receivables 553 538 1,688
Cash and cash equivalents 146 11 261
------------- ------------ ------------
964 675 2,388
------------- ------------ ------------
Total assets 7,386 1,917 9,064
====== ====== ======
LIABILITIES
Non-current liabilities
8% convertible preference - 1,294 -
shares
Other payables 81 - 52
2014 loan notes 1,489 - 1,315
Other loans and loan notes 1,014 - 1,050
------------- ------------ ------------
2,584 1,294 2,417
Current liabilities
Bank overdraft 1,117 - 81
Trade and other payables 3,735 2,039 4,615
Bank and other borrowing 1,664 937 2,401
Warranty provisions 5 92 170
------------- ------------ ------------
6,521 3,068 7,267
------------- ------------ ------------
Total liabilities 9,105 4,362 9,684
------------- ------------ ------------
Net liabilities (1,719) (2,445) (620)
======= ======= ======
EQUITY
Capital and reserves attributable
to the Company's equity
shareholders
Called up share capital 324 115 296
Share premium account 20,778 8,289 20,283
Share options and deferred
shares 1,363 1,382 1,363
Minority interest (1,175) - (849)
Foreign exchange rate
reserves 480 - 254
Other reserves - on consolidation
under predecessor accounting (1,817) (1,817) (1,817)
Other reserves - equity
component of preference
shares 490 490 490
Other reserves- equity 92 - -
component of loan notes
Retained earnings (22,254) (10,904) (20,640)
------------- ------------ ------------
Total equity (1,719) (2,445) (620)
======= ======= ======
PEERTV PLC
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2012
Share Other Other Other
options Foreign reserves reserves reserves
- - -
Share Share and deferred Minority Exchange equity equity on Retained
capital premium shares rights reserve component component consolidation earnings Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1
January
2011 110 7,635 1,341 - - 490 - (1,817) (9,012) (1,253)
Share issues 5 654 - - - - - - - 659
Share based
payments - - 41 - - - - - - 41
Net loss - - - - - - - - (1,892) (1,892)
------------ ---------------- ----------------- ---------- ------------- ------------- ------------ ----------------- --------------------- -------------------
At 30 June
2011 115 8,289 1,382 - - 490 - (1,817) (10,904) (2,445)
Share issues 131 9,556 - - - - - - - 9,687
Share issue
costs (566) - - - - - - - (566)
Conversion of
preference
shares
into
ordinary
shares 50 3,004 - - - - - - - 3,054
Total
comprehensive
loss for the
year - - - - - - - - (9,736) (9,736)
Movements in
the year - - - - 254 - - - - 254
Minority
rights
on
acquisition - - - (211) - - - - - (211)
Minority
interest
for year - - - (638) - - - - - (638)
Share based
payments - - (19) - - - - - - (19)
------------ ---------------- ---------------- ----------------- ------------- ------------- ------------ ----------------- --------------------- -------------------
At 31 December
2011 296 20,283 1,363 (849) 254 490 - (1,817) (20,640) (620)
Share issues 28 693 - - - - - - - 721
Share issue
costs - (198) - - - - - - - (198)
Total
comprehensive
loss for the
period - - - - - - - - (1,614) (1,614)
Warrants
issued
to loan note
holders - - - - - - 92 - - 92
Movements in
the period - - - - 226 - - - - 226
Minority
interest
for the
period - - - (326) - - - - - (326)
------------ ---------------- ---------------- -------------- ------------- ------------- ------------- ----------------- --------------------- ------------------
At 30 June
2012 324 20,778 1,363 (1,175) 480 490 92 (1,817) (22,254) (1,719)
====== ======== ======== ======= ======= ======= ====== ======= ========= ========
PEERTV PLC
CONDENSED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2012
Six months Six months Year to
to to 31
30 June 30 June December
2012 2011 2010
$'000 $'000 $'000
Unaudited Unaudited Audited
Cash flows from operating
activities
Loss before taxation (1,940) (1,892) (12,051)
Adjustments for:
Net finance expense 665 640 2,726
Foreign exchange loss 6 - 35
Depreciation and amortisation 368 503 1,441
Movement in trade and other
receivables 1,135 217 896
Movement in inventories 124 7 617
Movement in trade and other
payables (1,318) (44) 507
Share options changes - - 22
Impairment of intangible - - 4,013
------------ ------------ --------------
Net cash outflow from operating
activities (960) (569) (1,794)
Cash flow from investing
activities
Purchase of fixed assets (40) (3) -
Intangible assets additions (70) (361) (569)
Withdrawal/(investment) in
restricted bank deposit (2) 55 42
------------ ------------ --------------
Net cash outflow from investing
activities (112) (309) (527)
Cash flows from financing
activities
Proceeds from borrowings 81 688 2,191
Repayment of borrowings (1,875) (243) (1,603)
Proceeds from loan notes 887 - -
Issue of shares 826 122 1,579
------------ ------------ --------------
Cash (outflow) / inflow from
financing activities (81) 567 2,167
Net cash (outflow) / inflow
from all activities (1,153) (311) (154)
Cash and cash equivalents
at beginning of period 162 316 316
------------ ------------ --------------
Cash and cash equivalents
at end of period (991) 5 162
====== ====== ======
Cash and cash equivalents
are made up as follows:
Cash at bank and hand 126 5 243
Bank overdraft (1,117) - (81)
------------ ------------ --------------
(991) 5 162
====== ====== ======
PEERTV PLC
NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2012
1. BASIS OF PREPARATION
The condensed group financial statements have been prepared
using accounting policies consistent with International Financial
Reporting Standards (IFRS) as endorsed for use by Companies listed
on an EU regulated market and in accordance with IAS34 - "Interim
Financial Reporting". The same accounting policies, presentation
and methods of computation have been followed in the preparation of
these results as were applied in the Group's latest annual audited
financial statements. It is not expected that there will be any
changes or additions to these in the 2012 annual financial
statements.
This statement does not comprise statutory accounts as defined
in Section 434 of the Companies Act 2006 and the results for the
six months ended 30 June 2012 and for the six months ended 30 June
2011 are unaudited.
The financial information for the year ended 31 December 2011 is
an extract from the latest group accounts. Statutory financial
statements for the year ended 31 December 2011, prepared in
accordance with IFRS, on which the auditors gave an unqualified
opinion but did include reference to matters to which the auditors
drew attention by way of emphasis without qualifying their
report.
The condensed group financial statements are presented in US
Dollars and all values are rounded to the nearest thousand dollars
($'000) except when otherwise indicated.
During the six month period ended 30 June 2012 the group
incurred a loss of $1,614,000 and had net liabilities of $1,719,000
as at that date. The directors are in the process of raising
additional funds to provide working capital as set out in the
Chairman's Statement.
During the period the directors have created Digitek SMT
Assemblies Ltd which serves as a marketing and financing company.
The group has been reducing its liability to its principal bank and
has replaced the bank with an investor financing facility. The
directors believe they will fully repay the bank in Q4 2012. The
group has also been successful in soliciting new customers and the
directors believe they have a re-established entity.
The directors believe that due to the aforementioned
restructuring and funds raised through private placing that took
place in July 2012 and issue of loan notes in Digitek SMT
Assemblies since the period end the group is a going concern.
However, the future of the group is dependent on the directors
being successful in their bid to secure finance and the group
achieving its trading projections.
Subject to the group's ability to raise required funds, the
directors consider that it is appropriate to prepare the financial
statements on the going concern basis. If additional financing by
whatever means is not secured in the next twelve months, then it is
unlikely that the group be able to continue in its present
form.
2. RAISING OF CAPITAL
During the period the company issued shares as follows
- 1,333,333 0.5p Ordinary shares at GBP0.15 each in February
2012
- 469,949 0.5p Ordinary shares at GBP0.12 each in March 2012 in
lieu of fees due
- 570,828 0.5p Ordinary shares at GBP0.12 each in April 2012
- 626,267 0.5p Ordinary shares at GBP0.075 each and 970,528 0.5p
Ordinary shares at GBP0.13 each in May 2012
PEERTV PLC
NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS
(continued)
FOR THE SIX MONTHS ENDED 30 JUNE 2012
3. BUSINESS SEGMENT ANALYSIS
Class of business
The turnover, loss on ordinary activities before taxation and
net liabilities of the group are attributable to two classes of
business.
PeerTV Ltd is engaged in developing and providing hardware and
software to enable the delivery of live broadcasts and video on
demand over the internet to the television. The company develops,
manufactures and supplies end-to-end technology systems for a new
breed of TV operator that seeks to deliver rich, personalized and
highly cost-effective internet TV services.
Through its wholly owned subsidiary SM Digitek (1993) Ltd,
Digitek Holdings Ltd's principal activities are the assembly of
electronic products and components and the associated sourcing and
logistics for companies principally engaged in the hi-tech and
telecommunications industries in Israel. It uses electronic and
computerized equipment, which operates robotically and is geared to
the accurate assembly of the electronic components on the circuit
board in the least possible time.
Geographical areas Turnover by location of
customer
Six months Six months Year to
to to
30 June 30 June 31 December
2012 2011 2010
% % %
Unaudited Unaudited Audited
Europe 10 70 71
Israel 86 30 1
Canada - - 25
Other 4 - 3
----------- ---------- ----------
100 100 100
===== ====== =====
4. LOSS PER SHARE
Basic loss per share is calculated by reference to the loss on
ordinary activities after taxation of $1,614,000 (30 June 2011-
loss of $1,892,000 and 31 December 2011 - loss of $11,628,000) and
on the weighted average of 45,844,122 (30 June 2011 - 15,527,163
and 31 December 2011 - 21,833,624) shares in issue. The calculation
of diluted earnings per share is based on the loss on ordinary
activities after taxation and the diluted weighted average of
47,377,947 (30 June 2011 - 17,074,575 and 31 December 2011 -
23,367,449) shares calculated as follows:
Number of shares
30 June2012 30 June 31 December
2011 2011
Number Number Number
Basic weighted average
number of shares 45,844,122 15,527,163 21,833,624
Dilutive potential ordinary
shares: Share options 1,533,825 1,547,412 1,533,825
--------------- ----------------------- --------------------------
Diluted weighted average
number of shares 47,377,947 17,074,575 23,367,449
======== =========== ============
5. POST BALANCE SHEET EVENTS
Since 30 June 2012 the Company has completed a placing of
9,090,909 0.5p Ordinary shares at 8.25 pence per share and a
similar number of three year warrants exercisable at 9.25 pence per
share generating a total of GBP750,000 gross of expenses. The
Company has effected closings in respect of GBP584,000 to date and
the balance is expected to complete by the end of October 2012.
INDEPENDENT REVIEW REPORT TO PEERTV PLC
Introduction
We have been engaged by the company to review the condensed set
of group financial statements in the interim report for the six
months ended 30 June 2012 which comprises the Group Income
Statement, the Group Balance Sheet, the Group Cash Flow Statement,
the Group Statement of Changes in Equity and related explanatory
notes 1 to 5.
We have read the other information contained in the interim
report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The interim report is the responsibility of and has been
approved by the directors. The directors are responsible for
preparing the interim report in accordance with the rules of the
AIM rules. As disclosed in note 1, the annual financial statements
of PeerTV Plc are prepared in accordance with IFRSs as adopted by
the European Union. The condensed set of financial statements
included in this interim report has been prepared in accordance
with International Accounting Standard 34, "Interim Financial
Reporting", as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Group a conclusion on
the condensed set of group financial statements in the interim
report based on our review.
Our report has been prepared in accordance with the terms of our
engagement to assist the company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities
on the Alternative Investment Market and for no other purpose. No
person is entitled to rely on this report unless such a person is a
person entitled to rely upon this report by virtue of and for the
purpose of our terms of engagement or has been expressly authorised
to do so by our prior written consent. Save as above, we do not
accept responsibility for this report to any other person or for
any other purpose and we hereby expressly disclaim any and all such
liability.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Emphasis of matter - going concern
In forming our opinion, which is not qualified, we have
considered the adequacy of the disclosures made within the
accounting policies concerning the group's ability to continue as a
going concern. The group incurred a net loss of $1,614,000 during
the six months ended 30 June 2012. This, along with other matters
explained within the accounting policies indicates the existence of
a material uncertainty which may cast significant doubt about the
group's ability to continue as a going concern. The financial
statements do not include the adjustments that would result of the
group was unable to continue as a going concern.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of group financial
statements in the interim report for the six months ended 30 June
2012 is not prepared, in all material respects, in accordance with
International Accounting Standard 34, as adopted by the European
Union.
haysmacintyre Fairfax House
Chartered Accountants 15 Fulwood Place
Registered Auditors London
WC1V 6AY
28 September 2012
This information is provided by RNS
The company news service from the London Stock Exchange
END
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