TIDMPTV
RNS Number : 3178A
PeerTV PLC
28 September 2015
PeerTV PLC
("PeerTV" or the "Company")
Half Yearly Report
PeerTV plc (AIM:PTV), a provider of technology solutions for the
OTT (TV over the internet) market, and PCB (printed circuit board)
production solutions is pleased to announce its interim report for
the six month period ended 30 June 2015.
Chairman's Statement
Key Developments
-- Consolidated turnover of $970,000 (H1 2014: $793,000) and
total comprehensive loss of $1,600,000 (H1 2014: $2,025,000).
-- Operating loss for the period was $1,353,000 (H1 2014:
$1,530,000). Financial charges for the period totalled $655,000 (H1
2014: $1,120,000).
-- Net Liabilities of $5,607,000 as at 30 June 2015 compared to
net liabilities of $6,624,000 as at 31 December 2014.
-- Group has adopted strategies aimed at bringing its two
business units to profitability. The main elements are in PeerTV to
bring on board a new management and marketing team with extensive
industry experience and in Digitek to acquire a new assembly line
facilitating increases in capacity and improved efficiencies.
-- To provide working capital, purchase the new assembly line
and meet loan repayment and other commitments, the Group has raised
GBP2,193,774 (about $3,345,000).
Peer TV
-- The appointments of Wes Wilcox as Chief Executive Officer and
Jim Lomax as Vice President Sales and Marketing are designed to
provide PeerTV with leadership with industry expertise. It is
expected to result in sales to both established OTT operators and
new entries to the market around the world.
-- We have been successful in recruiting two new European based
customers and although their initial orders were low we expect to
receive more substantial orders from them in the near future.
During the period we delivered an initial order to 2,500 units to
PolskyTV. This was the first half of an order received in December
2014 and we are currently awaiting instructions regarding the
remainder.
-- Unfortunately during the period there was no progress with
the conditional order for $1.2 million from Kartina GmbH and
consequently we have curtailed our R&D efforts in support of
that customer.
-- Attended the IBC Trade Show for television and related
technologies in Amsterdam in September 2015 as part of the
deployment of the new marketing strategy.
-- Cooperation agreements have been signed with Speech Modules
Holdings Ltd ("Speech") a leading provider of voice recognition
systems, quoted on the Tel Aviv Stock Exchange. We are developing
two exciting new products, incorporating the Speech technology,
which we believe will start contributing revenues in 2016. We hold
about 14% of the share capital of Speech. It is an ambitious
company with proprietary technologies for huge global markets.
Digitek
Sales in the first six months of 2015 were at a similar level to
the same period in 2014 with some improvement in the subsequent
three months. In the period the strategy was to:
-- Complete the deployment of the new assembly line and start to
exploit its technological advantages to attract additional
customers and to obtain increased business from existing
customers.
-- Maintain and expand Digitek's traditional core business of SMT production.
-- Exploit its expertise across a wide range of product
categories to offer major customers complete products designed to
meet their specific needs by way of full turnkey projects with the
aim of achieving higher margins.
All the trading activities during the period were undertaken by
Digitek SMT Assemblies ("Assemblies").
The new assembly line is providing access to customers requiring
high accuracy SMT and mass production, a major part of which were
previously beyond Digitek's technical capabilities. Of particular
importance is the new testing equipment including Automated Optical
Inspection (AOI) and XRAY machines which enable Digitek to identify
and eliminate failures, in a way far beyond the capabilities of the
pre-existing assembly lines. Raising awareness of this capability
is resulting in increased approaches from customers in the military
and medical sectors.
However, Digitek still faces the challenge of financing the full
turnkey projects, which are the preference for a major part of the
base of potential customers. Approval has been obtained from the
loan noteholders of Assemblies to enable Digitek to obtain purchase
order financing to enable it to finance full turnkey projects.
Discussions with potential sources of purchase order financing are
in progress and the outcome will determine whether full turnkey
production from an Israeli developer and producer of advanced fleet
management systems will be delivered by end of October as
previously announced.
Outlook
-- The global Over the Top ("OTT") Video market, in which PeerTV
operates is growing strongly, particularly in our target sectors.
Online distribution is cost-effective when targeting small
audiences, and the nature of the web means that small niches attain
a significant scale when applied to a global market. A recent study
by Horowitz Research claims that 88% of urban TV viewers now have
the ability to stream video and states that multicultural viewers
are more likely to have made OTT video a part of their
lifestyle.
-- As OTT video starts to mature, the market is increasingly
giving rise to players that cater for specific audiences. There is
a new wave of online players specialising in specific genres and
PeerTV's challenge is to access these players at a sufficiently
early stage to become their preferred supplier. Success is
dependent on having adequate financial and manpower resources to
market effectively and to support an increasing customer base from
a technical point of view.
-- On the Digitek side, following deployment of the new assembly
line we have the opportunity to attract higher volume, higher
margin customers. However, to a great extent the ability to exploit
this opportunity is dependent on obtaining the funding necessary to
finance the purchase of components for full turnkey projects and
the expected increase in customer receivables. As yet this issue
has not been resolved.
-- The Group has remained loss making since the period end. The
Group continues to need to raise funds to provide the working
capital necessary to support the development of both business
units, meet loan repayments and other commitments.
Further enquiries:
PeerTV Plc
Eitan Yanuv, Chairman
Tel: +972 974 07315
ZAI Corporate Finance Limited
Richard Morrison / Jamie Spotswood
Tel: +44 20 7060 2220
Daniel Stewart & Company plc
David Coffman
Tel: +44 207 7766550
CONDENSED GROUP INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months Six months Year to
to to
30 June 30 June 31 December
2015 2014 2014
Note $'000 $'000 $'000
TURNOVER 3 970 793 1,512
Cost of sales (1,024) (1,285) (2,330)
--------------- --------------- ----------------
GROSS PROFIT / (LOSS) (54) (492) (818)
Research and development (402) (375) (714)
Sales and marketing (34) (69) (103)
General and administrative (880) (539) (1,384)
Other expenditure 17 (55) (492)
Exceptional item -
impairment of intangibles - - (957)
--------------- --------------- ----------------
OPERATING LOSS (1,353) (1,530) (4,468)
Finance costs (655) (1,120) (2,065)
Other expense - - -
--------------- --------------- ----------------
LOSS BEFORE TAXATION (2,009) (2,650) (6,533)
Taxation - - -
Minority interest 408 625 1,342
--------------- --------------- ----------------
TOTAL COMPREHENSIVE
LOSS (1,600) (2,025) (5,191)
======= ======== ========
Loss per share
4 $(0.01) $(0.01) $(0.01)
Basic ======== ======== ========
Diluted $(0.01) $(0.01) $(0.01)
======== ======== ========
CONDENSED GROUP BALANCE SHEET
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FOR THE SIX MONTHS ENDED 30 JUNE 2015
As at As at As at
30 June 30 June 31 December
2015 2014 2014
$'000 $'000 $'000
Unaudited Unaudited Audited
ASSETS
Non-current assets
Intangible assets 1,603 2,978 1,877
Property, plant and equipment 1,224 1,194 839
------------- ------------- ------------
2,827 4,172 2,716
Current assets
Inventories - 116 -
Trade and other receivables 1,453 410 486
Cash and cash equivalents 25 103 201
------------- ------------- ------------
1,478 629 687
------------- ------------- ------------
Total assets 4,305 4,801 3,403
====== ====== ======
LIABILITIES
Non-current liabilities
Other payables 79 78 76
Loans and loan notes 1 545 148
------------- ------------- ------------
80 623 224
Current liabilities
Bank overdraft 1,355 1,080 1,681
Trade and other payables 3,546 3,417 3,095
Bank and other borrowing 4,515 6,297 4,727
Provisions 416 83 300
------------- ------------- ------------
9,832 10,877 9,803
------------- ------------- ------------
Total liabilities 9,912 11,500 10,027
------------- ------------- ------------
Net liabilities (5,607) (6,699) (6,624)
======= ======= ======
EQUITY
Called up share capital 6,162 2,116 4,834
Share premium account 26,341 24,356 24,354
Share options, warrants
and deferred shares 2,684 2,625 2,628
Minority interest (4,316) (3,191) (3,908)
Foreign exchange rate
reserves 498 (395) 844
Other reserves - on consolidation
under predecessor accounting (1,817) (1,817) (1,817)
Other reserves - equity
component of Preference
shares 490 490 490
Retained earnings (35,649) (30,883) (34,049)
------------- ------------- ------------
Total equity (5,607) (6,699) (6,624)
======= ======= ======
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Share Other Other
options Foreign reserves reserves
- -
Share Share and deferred Minority Exchange equity on Retained
capital premium shares rights reserve component consolidation earnings Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January
2014 838 23,759 2,112 (2,566) (297) 490 (1,817) (28,858) (6,339)
Share issues 1,278 783 - - - - - - 2,061
Share issue costs - (186) - - - - - - (186)
Net loss for
the period - - - - - - - (2,025) (2,025)
Warrants issued
to loan note
holders - - 513 - - - - - 513
Movement in the
period - - - - (98) - - - (98)
Minority interest
for the period - - (625) - - - - (625)
------------ ----------------- ----------------- -------------- ------------- -------------- ------------------ --------------------- -------------------
At 30 June 2014 2,116 24,356 2,625 (3,191) (395) 490 (1,817) (30,883) (6,699)
Share issues 2,718 68 - - - - - - 2,786
Share issue costs - (70) - - - - - - (70)
Total comprehensive
loss for the
period - - - - - - - (3,166) (3,166)
Movements in
the period - - - - 1,239 - - - 1,239
Minority interest
for the period - - - (717) - - - - (717)
Options to loan
note holders - - 3 - - - - - 3
------------- ---------------- ---------------- ----------------- -------------- ------------- ----------------- --------------------- -------------------
At 31 December
2014 4,834 24,354 2,628 (3,908) 844 490 (1,817) (34,049) (6,624)
Share issues 1,328 2,028 - - - - - - 3,356
Share issue costs - (41) - - - - - - (41)
Total comprehensive
loss for the
period - - - - - - - (1,600) (1,600)
Warrants issued
to loan note
holders - - 56 - - - - - 56
Movements in
the period - - - - (346) - - - (346)
Minority interest
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for the period - - - (408) - - - - (408)
------------ ---------------- ---------------- -------------- ------------- ------------- ----------------- --------------------- ------------------
At 30 June 2015 6,162 26,341 2,684 (4,316) 498 490 (1,817) (35,649) (5,607)
====== ======== ======== ======= ====== ======= ======== ========= ========
CONDENSED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months Six months Year to
to to 31
30 June 30 June December
2015 2014 2014
$'000 $'000 $'000
Unaudited Unaudited Audited
Cash flows from operating
activities
Loss before taxation (2,008) (2,650) (6,533)
Adjustments for:
Finance expense (493) 1,038 (1,051)
Foreign exchange loss (382) (14) 139
Depreciation and amortisation 576 473 984
Movement in provisions, trades
and other receivables (1,263) 509 433
Movement in inventories - 54 170
Movement in trade and other
payables 451 (580) (555)
Share options changes - - -
Impairment of intangible - - 957
------------ ------------ --------------
Net cash outflow from operating
activities (3,119) (1,170) (5,456)
Cash flow from investing
activities
Purchase of fixed assets (504) - -
Intangible assets additions (102) (124) (289)
Withdrawal/ (investment) - - -
in restricted bank deposit
------------ ------------ --------------
Net cash outflow from investing
activities (606) (124) (289)
Cash flows from financing
activities
Proceeds from borrowings 695 337 298
Repayment of borrowings (185) (223) (391)
Proceeds from loan notes - - -
Issue of shares 3,371 952 5,107
------------ ------------ --------------
Cash (outflow) / inflow from
financing activities 3,881 1,066 5,014
Net cash (outflow) / inflow
from all activities 156 (228) (731)
Cash and cash equivalents
at beginning of period (1,486) (749) (755)
------------ ------------ --------------
Cash and cash equivalents
at end of period (1,330) (977) (1,486)
====== ====== ======
Cash and cash equivalents
are made up as follows:
Cash at bank and hand 25 103 195
Bank overdraft (1,355) (1,080) (1,681)
------------ ------------ --------------
(1,330) (977) (1,486)
====== ====== ======
NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2015
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 2014 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 2015 and for the six months ended 30 June
2014 are unaudited.
The financial information for the year ended 31 December 2014 is
an extract from the latest group accounts. Statutory financial
statements for the year ended 31 December 2014, prepared in
accordance with IFRS, on which the auditors gave an unmodified
opinion but did include reference to matters to which the auditors
drew attention by way of emphasis without modifying 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 2015 the group
incurred a loss of $1,600,000 and had net liabilities of $5,607,000
as at that date.
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 statutory 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 402,387,164 New Ordinary
Shares of 0.01p each with an aggregate value of GBP2,193,774 (about
$3,345,000) in order to provide adequate working capital, repay
certain loans, accrued interest and fees, purchase equipment and to
meet obligations under cooperation agreements with Speech. These
shares were issued at an average price of 0.545 pence per
share.
During the period the company's subsidiary Digitek SMT
Assemblies Limited made payments totalling GBP20,000 to loan note
holders requesting redemption through the issue of Ordinary Shares
of PeerTV plc.
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 Digitek SMT Assemblies,
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
2015 2014 2014
% % %
Unaudited Unaudited Audited
Europe 30 7 5
Israel 70 93 95
Canada - - -
Other - - -
----------- ----------- ----------
100 100 100
===== ===== =====
4. LOSS PER SHARE
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