PTV Peertv

TIDMPTV

RNS Number : 2472A

PeerTV PLC

19 December 2014

19(th) December 2014

PeerTV PLC

("PeerTV" or "the Company")

Year End Trading Statement

PeerTV (AIM:PTV), a provider of technology solutions for the OTT (TV over the internet) market and PCB (printed circuit board) production solutions, announces an update on current trading.

PeerTV

During the year the Company continued to work closely with its legacy customer Kartina and acquired a new customer Polsky TV which addresses the Polish speaking population both in Europe and North America.

Our Android set top boxes, supplied during 2013, were launched successfully with Kartina in January and all 7,500 units were sold. Unfortunately repeat orders were delayed by the customer's decision to deploy new infrastructure which would enable a more economic and higher quality service to their subscribers. As announced on 17 September, the PeerTV development team was successful in completing the design and development of a new box conforming to these higher standards which resulted in an order worth approximately $1.2 million which was conditional on final technical approval by Kartina to occur within two months of the date of the order. In December written confirmation was received from Kartina that the PeerTV product was found to be suitable for their needs. We are currently waiting for this order itself to be re-confirmed.

An initial order was delivered to Polsky of 1,000 units was delivered in August. We anticipate further orders in 2015.

Unfortunately, shortages of working capital prevented the Company from actively pursuing opportunities in the wider OTT market due to the level of customization required. This meant the Company was dependent upon these two customers. Negotiations with distributors for the US and Irish markets have been placed on hold for the time being whilst the Company reviews its marketing and financing plans.

Digitek

Significant improvements during the latter part of 2013 indicated that a satisfactory recovery could be achieved in 2014. Unfortunately during the year the business was impacted by the following factors:

a) In March, the sudden, unexpected death of the CEO of our largest component supplier resulted in the withdrawal of credit facilities which had enabled Digitek to undertake full turnkey projects. Consequently, the Company was unable to continue supplying certain major customers who had been expected to contribute a large proportion of sales. Thereafter Digitek has worked on assembly only projects.

b) In May, Digitek received an order of $6.3 million to supply smart electric meters for export. An initial quantity worth $100,000 was supplied. The order had involved much management time and expense. Due to disputes between other parties in the supply chain, it now seems unlikely that this order will be realized, despite satisfaction with the Digitek product and service.

c) Continuing technical difficulties were encountered with the production line. The age and condition of some of the machinery has led to reduced production capacity and the decision by a number of customers to place their assembly work with other suppliers. In September, the Company announced the purchase of a new assembly line which is currently expected to become operational in January 2015. The new assembly line will increase Digitek's manufacturing and assembly capacity and support a more competitive price. Following the commissioning of the new assembly line, the Company will be able to dispose of some older items of equipment, allowing it reduce the space it occupies by about 40% with a corresponding cost saving. Management believes that this will lead to Digitek winning orders from new customers that the Group is already engaged in discussions with.

Financial Position

Sales in the 9 months to September 2014 were $1.22 million with an operating loss of $2.38 million. These results reflect the drop in Digitek sales and the delays experienced by PeerTV as discussed earlier. The net liabilities of the Group were $6.6 million. The Company is working with its creditors to ensure the ongoing viability of the Group and believes that there is an opportunity to turn the business around in 2015 with the continued support of Charles Street Securities and the Yorkville Standby Equity Distribution Agreement facility.

During 2014, the group strengthened its balance sheet by the conversion of over $3 million of current liabilities and other debt into equity. The board believes that this debt conversion will make it easier to raise further investment to grow both businesses in 2015.

Further enquiries:

PeerTV Plc

Eitan Yanuv, Chairman

Tel: +972 974 07315

ZAI Corporate Finance Limited

Ray Zimmerman

Tel: +44 20 7060 2220

This information is provided by RNS

The company news service from the London Stock Exchange

END

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