TIDMQXT
RNS Number : 3396Y
Quixant PLC
06 September 2022
6 September 2022
Quixant plc
("Quixant" or the "Group")
Interim Results
First half triple-digit profit growth supports recent full year
upgrade
Quixant (AIM: QXT), a leading provider of innovative, highly
engineered technology products principally for the global gaming
and broadcast industries, is pleased to announce its unaudited
interim results for the six months ended 30 June 2022.
Six months Six months Change
to 30 June to 30 June
2022 2021
($m) ($m)
Group revenue 53.3 36.5 46%
Gaming revenue 31.4 18.4 71%
Densitron revenue 21.9 18.1 21%
Group gross profit 16.8 11.1 52%
Adjusted Group profit before
tax(1) 3.5 1.3 163%
Group profit before tax 2.8 0.8 251%
Adjusted diluted earnings per
share(1) $0.0405 $0.0167 142%
Diluted earnings per share $0.0331 $0.0106 214%
Net cash from operating activities (3.6) 1.1 nm
Net cash 12.0 15.0 (20%)
(1) For details on adjusted measures refer to note 1 and note 4
of the condensed consolidated financial statements
FINANCIAL HIGHLIGHTS:
-- Significant growth in Gaming and Densitron revenues driven
by buoyant customer demand, enhanced customer penetration and
proactive management of supply chains.
-- Densitron achieved highest revenue since acquisition including
double-digit growth from the Broadcast sector.
-- Recovery in gross margins driven by a levelling off in component
prices allowing the sale price increases to benefit the P&L
combined with the higher production volumes driving operational
leverage.
-- Triple-digit profit growth and improved profit margins despite
increased operating expenses due to inflationary pressures
and strategic investment in people to support future growth.
-- Net cash of $12.0m, decreased from 2021 year-end balance of
$17.6m, reflecting strategic working capital investment to
secure key components.
-- Balance sheet remains strong, positioning the group for future
organic and acquisitive growth.
OPERATIONAL HIGHLIGHTS
-- Ongoing strong demand with order intake ahead of first half
revenues and prior year order bookings, providing good visibility
of H2 2022 and into H1 2023.
-- First production orders received from a new customer in Q3
2022 for turnkey Gaming cabinet solutions which are expected
to be delivered during the fourth quarter of 2022 and into
2023.
-- Supply chain risks mitigated through robust management and
strategic stock purchase programme, ensuring customer retention
and reduced impact of price inflation.
-- Progression of long-term strategic objective to diversify revenue
across sectors and customers.
-- Demand remains buoyant underpinning our confidence in achieving
full year market expectations(1) which were upgraded in July.
Jon Jayal, CEO of Quixant commented:
"I am delighted to report on continued excellent trading
momentum across all business units, reflecting the widespread
demand for our products, the depth and resilience of our customer
relationships and our success in navigating the challenging supply
environment. The strength of trading in the first half, combined
with ongoing healthy order intake gave us confidence to upgrade our
full year expectations for 2022 in July.
These trading results support the decision to commit capital to
the strategic stock purchase programme in January 2021, which we
believe continues to give us a competitive advantage, despite
resulting in a cash outflow during the first half.
A strong start to the second half combined with our strength of
order coverage gives us a high degree of confidence in meeting the
upgraded full year market expectations and we continue to see
compelling opportunities for long-term growth in the business
through disciplined execution of our strategy."
Investor Presentation
Quixant is hosting an online presentation open to all investors
tomorrow, 7 September, at 4.30pm BST. Anyone wishing to connect
should register here:
https://www.investormeetcompany.com/quixant-plc/register-investor
.
(1) The current range of forecasts for the year ended 31
December 2022 is revenue of between $109.0m and $110.0m with a
consensus of $109.5m and adjusted profit before tax of $8.8m.
Quixant plc Tel: +44 (0)1223 892 696
Jon Jayal, Chief Executive Officer
Johan Olivier, Chief Financial Officer
Nominated Adviser and Broker: Tel: +44 (0)20 7220 0500
finnCap Ltd
Matt Goode / Simon Hicks (Corporate
Finance)
Alice Lane (ECM)
Joint Broker: Tel: +44 (0)20 7523 8000
Canaccord Genuity Limited
Simon Bridges / Andrew Potts
Financial PR: Tel: +44 (0)20 3405 0205
Alma PR
John Coles / Hilary Buchanan / Kieran
Breheny
About Quixant
Quixant, founded in 2005, designs and manufactures highly
optimised computing solutions and monitors principally for the
global gaming and broadcast industries. The Company is
headquartered in Cambridge in the UK, with offices throughout
Europe, North America and Asia. Quixant has its own manufacturing
and engineering operation based in Taiwan and software engineering
and customer support teams based in Italy and Slovenia. All the
specialised products software and manufacturing are produced
in-house and Quixant owns all its own IP, some of which is
protected by patents and design rights.
In November 2015 Quixant acquired Densitron Technologies plc.
Densitron has a strong heritage in the sale of electronic display
solutions to global industrial markets. Through Densitron's
experienced sales team, Quixant has a robust platform to build its
business into wider industrial markets. In-depth information on the
Company's products, markets, activities and history can be found on
the corporate website at www.quixant.com.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
Chief Executive's Report
The Group has made excellent progress in the first half of 2022.
Alongside the exceptional growth in revenues and profits during the
period, we have continued to drive new business conversion and
diversification across customers and sectors, underpinning future
growth with high-quality revenue. This is a key focus for the Board
as the Group evolves into a multi-sector specialist technology
business.
Order intake has continued to be healthy across both divisions
through the first half of the year. Demand from our Gaming
customers continued to grow from the strong 2021 base, with order
intake significantly ahead of H1 2021 and above H1 2022 revenues.
Densitron continued to build on the record performance achieved in
2021, enjoying robust demand across all its subsectors. The
strategically important Broadcast sector within Densitron has
continued to deliver double-digit growth building on the
performance in 2021 with enhanced gross margin performance.
The electronic component market shortages which have been
experienced by all businesses globally over the last 18 months, are
now expected to persist until at least the end of the first half of
2023. However, we have demonstrated the business' resilience
against these through the expertise of our Far Eastern procurement
operation, coupled with the proactive strategic stock purchase
programme and close collaboration with our customers. Our working
capital investment during the first half of the year was essential
in underpinning supply chain security to ensure we meet customer
demand and has given us a competitive advantage as we continue to
manage through the challenging supply environment.
Steps taken to manage the volatility in component prices are
also delivering a positive impact. We effected multiple price
increases to customers through 2021, passing on the impact of
increased cost prices from our suppliers. As component cost prices
have started to level off, the impact of these price increases on
the income statement is driving improved margins. We are also
benefitting from operational leverage through increased production
volumes. We expect to see the gross margin recovery trend
continuing over the coming months and remain confident that
structurally the business' long-term gross margins are intact.
We have made investments into Gaming Cabinets and Broadcast,
particularly around product development to drive growth in these
new revenue segments. We are also seeing cost inflation in
operating expenses, particularly in wage costs. We are balancing
the need to retain talent with elevated wage costs by increasing
the use of variable pay structures and long-term share-based
incentive schemes.
Group Strategy
The Board's growth strategy focuses on identifying and investing
in vertical markets which are undergoing a technology change which
brings about a requirement for new, optimised solutions which are
not met by standard technology. Having identified these markets we
develop bespoke products, using our global engineering teams, which
provide an outsource option for our customers. We continually
enhance this offering to increase the value proposition and become
more closely integrated into the value-chain. From time to time we
may complement organic growth with acquisitions to accelerate
progress.
The Casino Gaming market is the Group's largest source of
revenues, however it is a strategic focus for the Board to
diversify the business into more sectors, which it achieves through
the Densitron business. Densitron is exposed to a wide variety of
industrial sectors through the display components it supplies and
through this business we have identified Broadcast as our second
focus market.
Gaming Business Review
Quixant's Gaming products offer electronic gaming machine
manufacturers an outsource option for their computer platforms,
enabling them to focus their efforts on all aspects of the player
experience, most importantly the game software. Many gaming machine
manufacturers have selected Quixant to supply their computer
platforms and we have seen this trend accelerating over the last
year. Increased scrutiny by manufacturers on improving their
operational efficiency, necessitated by the rebuilding of their
businesses after the casino closures during the pandemic and more
recent inflationary pressures, has driven enhanced opportunities
for Quixant. In addition, the severe electronic component market
shortages have made reliable supply of hardware products ever more
difficult to achieve.
The Gaming division saw the highest six-month revenue
performance since H2 2019 and matched the revenue in H1 2018.
Gaming order intake during the first half was significantly ahead
of H1 2021 and higher than H1 2022 revenues. The experience gained
in dealing with supply chain challenges over the last two years has
led to a more resilient Gaming division and positions us well to
achieve a strong second half trading performance.
Customers in the US gaming market represent the greatest
contribution to Gaming business revenue. This market saw a V-shaped
recovery after a pandemic inflicted low in Q2 2020 and has since
continued to report positive trading momentum. After 2021 saw
record gross gaming revenues in the US commercial casino market,
2022 has seen a continuation of this trend with Q2 2022 being a
record quarter for land-based slot and table games in US commercial
casinos. European markets, which lagged the recovery of the US in
2021, have seen building demand during 2022 with Asia, and in
particular, the Macau market, remaining weak due to ongoing COVID
restrictions.
We are building on our reputation as a trusted outsource partner
for gaming computer platforms by offering complete gaming cabinet
solutions which are designed to meet the requirements of regulated
gaming markets. These incorporate our computer platforms and gaming
monitors into a turnkey gaming cabinet product, enabling customers
to outsource their entire hardware development and supply to
Quixant.
In Q3 2022 we secured our first production orders for our gaming
cabinets from a new customer, valued at $4m, driving new category
revenue for the Gaming business and progressing the Group's
strategic objective to increase our share of the customer wallet.
We expect the first production units, which our customers will be
installing in the North American market, to ship during the fourth
quarter of 2022 and into 2023.
Densitron Business Review
Densitron is a global specialist in Human Machine Interaction,
bringing innovative displays, control surfaces and control systems
to a wide range of global industrial markets, with the Broadcast
sector being a particular market of focus. Densitron revolutionises
the control of electronic equipment with tactile touchscreen
displays and user-friendly graphical interfaces driven by flexible
embedded computer options.
Since acquiring Densitron in 2015, we have been implementing a
transformation programme leading to restructure and rejuvenation
across this business. The overall aim of these changes has been as
follows:
-- Bolster and protect our core display component business,
while driving operational efficiency to enhance profitability
; and
-- Identify and invest into specific market sectors where we
can develop intellectual property and specialised product
offerings to find new high-margin growth streams .
After achieving record post-acquisition six-month revenues in H2
2021, the Densitron business exceeded this figure during the first
half of 2022. Based on the strength of order book, we expect the
second half of 2022 to be another strong trading period and this
trend to continue into 2023.
Display Components Business
Densitron's Display Component products, which have been the
bedrock of Densitron's business since it was founded in 1970, are
sold globally to a broad range of sectors. This diverse customer
base creates exceptional business resilience, as proven most
recently during the pandemic, where in 2020 revenues declined by
only 7%.
The Display Components business delivered robust trading
performance in the first half of 2022, which was enabled by four
key elements:
-- Centralisation of the business' supply chain management and
procurement in Taiwan and streamlining operations. This allowed
us to manage supply chain very closely through the pandemic,
while allowing our local market teams to focus on delivering
excellent customer service and growing sales ;
-- Re-organisation of our regional teams to focus on sales growth.
A simplified operating structure with three regions replacing
a country-based structure has been implemented, which we
reinvigorated further with a rejuvenated leadership and sales
team all incentivised on growth-focused commission and bonus
schemes ;
-- Termination of non-performing business units and product
offerings ; and
-- Implementing improved, simplified KPIs and supporting systems
to enable better management through consistent data globally
.
Our ability to manage the supply chain and ensure availability
of product has given us a competitive advantage in the crowded
display components marketplace and, together with the operational
improvements above, is driving ongoing broad sector growth in this
business.
Broadcast Business
We identified the Broadcast sector as the Group's second focus
market after Gaming. Broadcast equipment manufacturers have been
increasingly adopting more modern Human Machine Interaction
solutions (HMIs) to control their devices, which are used in
broadcast studios, outside broadcast trucks, theatres, auditoriums
and houses of worship amongst a myriad of other venues. These new
HMI solutions, which we call Control Surfaces, are based on touch
screen technology and graphical user interfaces (GUIs) instead of
the mechanical buttons, rotary elements and faders historically
used to control the devices. To drive these new HMI solutions, it
is essential to have a low-powered computer and software stack
which was not required with the mechanical controls they replace.
Densitron has launched a bespoke range of Control Surfaces which
also introduce patent pending tactile technology so users can not
only see the GUI elements on screen but also feel them. We also
acquired a product range called IDS in 2019, which is Control
System software widely used in high profile broadcast corporations
such as the BBC, CNN and Al Jazeera. We see significant
opportunities to convert new Broadcast customers and upsell
existing Broadcast Display Component customers to these newer
higher value products.
Densitron's Broadcast sector business has delivered two
consecutive years of double-digit growth in 2020 and 2021 and we
have seen revenues in the first half of 2022 growing 43% year on
year to $3.1m (H1 2021: $2.1m). Margins within Broadcast are
enhanced compared to the other parts of the Densitron division. We
have therefore made further investments into this business unit
which we believe long-term will be a significant component of
Densitron and Group revenues.
Group Financial Review
Group revenues were up 46% year on year to $53.3m (H1 2021:
$36.5m), with Quixant Gaming growing 71% to $31.4m (H1 2021:
$18.4m) and Densitron growing 21% to $21.9m (H1 2021: $18.1m). The
top 10 customers represented 53% of revenue in the first half of
2022 (H1 2021: 50%), with the increased concentration driven by
significant Gaming revenue growth, although still at lower than
pre-pandemic levels.
The increase in Gaming revenues was due to elevated demand from
our customer base, with 22,500 Gaming platforms shipped in the
first half, an increase of 45% on H1 2021. Increased sales prices
to address cost price inflation have also driven higher revenues
and we estimate this represented around 10% of overall revenue
growth. Densitron saw continued strong demand for its products
across all sectors and achieved the highest six-month revenue
performance since acquisition in 2015. The Broadcast sector
continued its impressive performance, with growth ahead of the
Densitron overall average.
Gross margin in H1 2022 was 31.6%, up from the 30.3% achieved in
H1 2021. The increase is in part driven by the higher proportion of
Gaming revenues in overall Group revenues, operational leverage
gained from higher production volumes and initial signs that
customer price rises effected during 2021 and 2022 are taking
effect on mitigating component price inflation.
Operating expenses increased by $3.8m or 38% to $13.9m (H1 2021:
$10.1m). The increase in operating expenses is primarily driven by
increased headcount costs, as the Group has invested in its people
to support the growth of the business. The Group has also seen an
increase in travel and marketing costs as trade shows recommence
and global travel is again possible following the pandemic.
Adjusted Profit before tax in the first half was $3.5m, a
significant improvement on the $1.3m reported in H1 2021. Statutory
profit before tax was $2.8m (H1 2021: $0.8m). The adjustments to
statutory profit before tax of $0.7m (H1 2021: $0.5m) comprised a
share-based payments expense of $0.2m (H1 2021: $0.1m) and
amortisation of acquired intangibles of $0.5m (H1 2021: $0.5m).
Finance expense decreased to $0.1m (H1 2021: $0.2m) due to lower
borrowing levels.
The tax charge on adjusted profit before tax was $0.8m (H1 2021:
$0.2m), an effective tax rate of 23% (H1 2021: 16%), driven by the
mix of profit across our regions in the first half. We expect the
full year tax rate to be within a range of 21-24%. The tax charge
on reported profit was $0.6m (H1 2021: $0.1m).
Adjusted diluted earnings per share was $0.0405, an increase of
142% on H1 2021 ($0.0167 per share). Diluted earnings per share was
$0.0331, an increase of 214% on H1 2021 ($0.0106 per share).
Net cash was $12.0m at 30 June 2022, compared with $17.6m at 31
December 2021. The decrease in net cash is largely due to the cash
outflow from operations of $3.6m, primarily due to increased
working capital. Through the first half of the year the Group
continued its investment in raw materials to secure critical
components, which has supported the revenue shipments in the first
half. The Group also continued to invest in the development of new
products, and capitalised development costs of $1.2m (H1 2021:
$1.0m) in the first half.
Current Trading and Outlook
The resilience in our business model has been tested over the
last three years and despite challenging trading periods, we have
seen a strong recovery in demand and new business opportunities
which have only been tempered by the market-wide supply challenges.
We believe the strength of our product offering and brand continues
to be highly respected and is the key driver behind increased
customer momentum.
As we approach the fourth quarter of the year, despite
macro-economic uncertainty leading to volatility in margins and
component availability, we are confident in growing demand across
the business. Trading over the first few months of the second half
has been robust and, supported by a strong order book, we are very
confident in achieving the recently upgraded 2022 market
expectations for revenue and profit.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2022 AND 30 JUNE 2021
Unaudited 30 June 2022 Unaudited 30 June 2021
Note
$000 $000
Revenue 3 53,288 36,543
Cost of sales (36,446) (25,466)
------------------------------------------------ ------- ----------------------- -----------------------
Gross profit 16,842 11,077
Operating expenses (13,940) (10,075)
------------------------------------------------ ------- ----------------------- -----------------------
Operating profit 2,902 1,002
Finance expense (61) (192)
------------------------------------------------ ------- ----------------------- -----------------------
Profit before tax 1 2,841 810
Taxation (625) (108)
------------------------------------------------ ------- ----------------------- -----------------------
Profit for the period 2,216 702
------------------------------------------------ ------- ----------------------- -----------------------
Other comprehensive (expense)/income for the period
Foreign currency translation differences (1,860) 208
------------------------------------------------ ------- ----------------------- -----------------------
Total comprehensive income for the period 356 910
------------------------------------------------ ------- ----------------------- -----------------------
Basic earnings per share 4 $0.0334 $0.0106
Diluted earnings per share 4 $0.0331 $0.0106
The above condensed consolidated statement of profit and loss
and other comprehensive income should be read in conjunction with
the accompanying notes.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2022 AND AT 31 DECEMBER 2021
Unaudited 30 June 2022 31 December 2021
$000 $000
Non-current assets
Property, plant and equipment 5,657 5,874
Right-of-use assets 1,491 1,924
Intangible assets 15,975 16,027
Investment property - -
Deferred tax assets 192 116
Trade and other receivables 1,121 336
-------------------------------------------------------- ----------------------- -----------------
24,436 24,277
----------------------------------------------------- ----------------------- -----------------
Current assets
Inventories 34,331 29,085
Trade and other receivables 23,557 22,960
Cash and cash equivalents 12,607 18,347
-------------------------------------------------------- ----------------------- -----------------
70,495 70,392
----------------------------------------------------- ----------------------- -----------------
Total assets 94,931 94,669
-------------------------------------------------------- ----------------------- -----------------
Current liabilities
Loans and borrowings (92) (99)
Trade and other payables (26,230) (25,510)
Current income tax liabilities (1,366) (1,756)
Lease liabilities (420) (609)
-------------------------------------------------------- ----------------------- -----------------
(28,108) (27,974)
----------------------------------------------------- ----------------------- -----------------
Non-current liabilities
Loans and borrowings (534) (621)
Provisions (326) (335)
Deferred tax liabilities (243) (302)
Lease liabilities (1,085) (1,360)
-------------------------------------------------------- ----------------------- -----------------
(2,188) (2,618)
----------------------------------------------------- ----------------------- -----------------
Total liabilities (30,296) (30,592)
-------------------------------------------------------- ----------------------- -----------------
Net assets 64,635 64,077
-------------------------------------------------------- ----------------------- -----------------
Equity attributable to equity holders of the parent
Share capital 106 106
Share premium 6,708 6,708
Share based payments reserve 414 212
Retained earnings 59,156 56,940
Translation reserve (1,749) 111
-------------------------------------------------------- ----------------------- -----------------
Total equity 64,635 64,077
-------------------------------------------------------- ----------------------- -----------------
The above condensed consolidated balance sheet should be read in
conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS'
EQUITY
FOR THE SIX MONTHSED 30 JUNE 2022, 31 DECEMBER 2021 AND 30 JUNE
2021
Share capital Share premium Translation Share based Retained Total equity
reserve payments earnings
$000 $000 $000 $000 $000 $000
Balance at 1
January 2021 106 6,708 882 1,571 54,086 63,353
Total
comprehensive
income for the
period
Profit for the
period - - - - 702 702
Other
comprehensive
income - - 208 - - 208
-------------- --------------
Total
comprehensive
income for the
period - - 208 - 702 910
-------------- -------------- ---------------- ---------------- ---------------- -------------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - 60 - 60
Dividend paid - - - - (1,848) (1,848)
Total
contributions
by and
distributions
to owners - - - 60 (1,848) (1,788)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Unaudited
balance at 30
June 2021 106 6,708 1,090 1,631 52,940 62,475
-------------- -------------- ---------------- ---------------- ---------------- -------------
Unaudited
balance at 1
July 2021 106 6,708 1,090 1,631 52,940 62,475
Total
comprehensive
income for the
period
Profit for the
period - - - - 2,862 2,862
Other
comprehensive
expense - - (979) - - (979)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
period - - (979) - 2,862 1,883
-------------- -------------- ---------------- ---------------- ---------------- -------------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - (281) - (281)
Reserve transfer - - - (1,138) 1,138 -
Total
contributions
by and
distributions
to owners - - - (1,419) 1,138 (281)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 31
December 2021 106 6,708 111 212 56,940 64,077
-------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 1
January 2022 106 6,708 111 212 56,940 64,077
Total
comprehensive
income for the
period
Profit for the
period - - - - 2,216 2,216
Other
comprehensive
expense - - (1,860) - - (1,860)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
period - - (1,860) - 2,216 356
-------------- -------------- ---------------- ---------------- ---------------- -------------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - 202 - 202
Total
contributions
by and
distributions
to owners - - - 202 - 202
-------------- -------------- ---------------- ---------------- ---------------- -------------
Unaudited
balance at 30
June 2022 106 6,708 (1,749) 414 59,156 64,635
-------------- -------------- ---------------- ---------------- ---------------- -------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2022 AND 30 JUNE 2021
Unaudited 30 June 2022 Unaudited 30 June 2021
$000 $000
Cash flows from operating activities
Profit for the period 2,216 702
Adjustments for:
Depreciation and amortisation 1,322 1,332
Impairment losses on intangible assets 267 -
Depreciation of leased assets 318 628
Movement in provisions 28 17
Taxation expense 625 108
Finance expense 61 192
Exchange rate losses 700 -
Share-based payment expense 202 60
Loan forgiven from prior year - (117)
----------------------- -----------------------
5,739 2,922
Increase in trade and other receivables (1,716) (1,848)
Increase in inventories (6,806) (3,003)
Increase in trade and other payables 408 3,470
----------------------- -----------------------
(2,375) 1,541
Interest paid (15) (54)
Lease liability interest paid (46) (138)
Income tax paid (1,167) (288)
----------------------- -----------------------
Net cash (used in)/provided by operating activities (3,603) 1,061
----------------------- -----------------------
Cash flows from investing activities
Additions to development costs (1,246) (953)
Additions to property, plant and equipment (236) (99)
Additions to computer software (89) (31)
----------------------- -----------------------
Net cash used in investing activities (1,571) (1,083)
----------------------- -----------------------
Cash flows from financing activities
Proceeds from borrowings 1,619 672
Repayment of borrowings (1,667) (813)
Principal payment of lease liabilities (349) (612)
Dividends paid - (1,848)
Net cash used in financing activities (397) (2,601)
----------------------- -----------------------
Net decrease in cash and cash equivalents (5,571) (2,623)
Cash and cash equivalents at 1 January 18,347 18,804
Foreign exchange rate movements (169) (61)
----------------------- -----------------------
Cash and cash equivalents at period end 12,607 16,120
----------------------- -----------------------
The above condensed consolidated cash flow statement should be
read in conjunction with the accompanying notes.
1. Basis of preparation and accounting policies
As is permitted by the AIM rules for Companies, the Directors
have not adopted the requirements of IAS34 'Interim Financial
Reporting' in preparing the interim financial statements. The
financial information shown for the year ended 31 December 2021 in
the interim financial information does not constitute full
statutory financial statements as defined in Section 434 of the
Companies Act 2006 and has been extracted from the Company's annual
report and accounts. Accordingly, this report is to be read in
conjunction with the annual report for the year ended 31 December
2021 and any public announcements made by Quixant Plc during the
interim reporting period. The annual financial statements of the
Group were prepared in accordance with UK adopted international
accounting standards and the Auditor's Report on the annual report
and accounts was unqualified.
The accounting policies applied by the Group in this condensed
consolidated interim financial report are the same as those applied
by the Group in its consolidated financial statements as at and for
the year ended 31 December 2021. The reporting currency adopted by
the Group is the US Dollar as this is the trading currency of the
Group.
The condensed consolidated interim financial information is
neither audited nor reviewed and the results of operations for the
six months ended 30 June 2022 are not necessarily indicative of the
operating results for future operating periods.
After making enquiries, the Directors have a reasonable
expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future.
Accordingly, they continue to adopt the going concern basis in
preparing the condensed consolidated interim financial report.
This condensed consolidated interim financial report was
approved by the Board of Directors on 5 September 2022.
Reconciliation of adjusted measures
The Group presents adjusted profit before tax by adjusting for
costs and profits, which management believes to be significant by
virtue of their size, nature or incidence or which have a
distortive effect on current year earnings. Such items may include
but are not limited to share-based payments expense, restructuring
charges, acquisition related costs and amortisation of intangible
assets arising from business combinations.
In addition, the Group presents an adjusted profit after tax
measure by adjusting for certain tax charges and credits, which
management believes to be significant by virtue of their size,
nature or incidence or which have a distortive effect.
The Group uses these adjusted measures to evaluate performance
and as a method to provide shareholders with clear and consistent
reporting. See below for a reconciliation of profit before tax to
adjusted profit before tax and a reconciliation of profit after tax
to adjusted profit after tax.
Six months Six months
ended 30 ended 30
June 2022 June 2021
$000 $000
--------------------------------------------------- ----------- ----------
Profit before tax 2,841 810
--------------------------------------------------- ----------- ----------
Adjustments:
Amortisation of customer relationships, technology
and order backlog(1) 460 460
Share-based payments expense(2) 202 60
Adjusted Profit before tax 3,503 1,330
--------------------------------------------------- ----------- ----------
(1) The amortisation of customer relationships, technology and
order backlog has been excluded as it is not a cash expense to the
Group.
(2) Share-based payments expense has been excluded as they are
not a cash-based expense.
Profit after tax 2,216 702
--------------------------------------------------- ----- -----
Adjustments:
Amortisation of customer relationships, technology
and order backlog 460 460
Share-based payments expense 202 60
Non-recurring tax expense(1) (166) (108)
--------------------------------------------------- ----- -----
Adjusted Profit after tax 2,712 1,114
--------------------------------------------------- ----- -----
(1) Tax on adjusted items relating to amortisation of customer
relationships, technology and order backlog of $0.5m (H1 2021:
$0.5m) and share-based payments expense of $0.2m (H1 2021:
$0.1m)
2. Business and geographical segments
The Chief Operating Decision Maker (CODM) in the organisation is
an executive management committee comprising the Board of
Directors. The segmental information is presented in a consistent
format with management information. The Group assesses the
performance of the segments based on a measure of revenue and
profit before tax. The segmental split of the balance sheet is not
reviewed by the CODM, and they do not look at assets/liabilities of
each division separately but combined as a group. Therefore, this
split for assets has not been included.
The operating segments applicable to the Group are as
follows:
-- Gaming - Design, development and manufacturing of gaming
platforms and display solutions for the casino gaming and slot
machine industry.
-- Densitron - Sale of electronic display products to global
industrial markets. IDS is included in the Densitron reporting
segment, due to the nature of IDS business, the products that are
sold and the market that the business operates in are all
consistent with that segment.
Reconciliation of segment results to profit after tax:
Six months Six months
ended ended
30 June 30 June 2021
2022
------------------- ----------- --------------
$000 $000
------------------- ----------- --------------
Gaming 7,673 3,683
Densitron 2,030 2,363
----------- --------------
Segment results 9,703 6,046
Corporate cost (6,801) (5,044)
------------------- ----------- --------------
Operating profit 2,902 1,002
Finance expense (61) (192)
Profit before tax 2,841 810
Taxation (625) (108)
------------------- ----------- --------------
Profit after tax 2,216 702
------------------- ----------- --------------
Six months ended 30 June 2022 Six months ended 30 June 2021
$000 $000 $000 $000 $000 $000
---------------------------------- --------- ------------- ------- --------- ------------- -------
Gaming Densitron Total Gaming Densitron Total
---------------------------------- --------- ------------- ------- --------- ------------- -------
Other information
Depreciation of owned assets 48 3 51 50 2 52
Amortisation of intangible assets 382 145 527 359 92 451
430 148 578 409 94 503
---------------------------------- --------- ------------- ------- --------- ------------- -------
3. Analysis of turnover
Six months ended 30 June 2022 Six months ended 30 June 2021
$000 $000 $000 $000 $000 $000
------------------------------- --------- ------------ -------- --------- ------------ --------
Gaming Densitron Total Gaming Densitron Total
------------------------------- --------- ------------ -------- --------- ------------ --------
By primary geographical market
Asia 1,772 4,667 6,439 934 3,582 4,516
Australia 2,003 34 2,037 3,050 31 3,081
UK 1,797 1,443 3,240 301 1,230 1,531
Europe excl. UK 6,464 6,182 12,646 2,942 6,569 9,511
North America 19,186 7,269 26,818 11,147 6,237 17,384
Other 159 1,949 2,108 25 495 520
31,381 21,907 53,288 18,399 18,144 36,543
------------------------------- --------- ------------ -------- --------- ------------ --------
4. Earnings per share
Six months ended Six months ended
30 June 2022 30 June 2021
$000 $000
Earnings
Earnings for the purposes of basic and diluted EPS being net profit
attributable to equity
shareholders 2,216 702
----------------- -----------------
Number of shares
Weighted average number of ordinary shares for the purposes of basic EPS 66,450,060 66,450,060
Effect of dilutive potential ordinary shares:
Share options 486,962 89,971
----------------- -----------------
Weighted number of ordinary shares for the purposes of diluted EPS 66,937,022 66,540,031
----------------- -----------------
Basic earnings per share $0.0334 $0.0106
----------------- -----------------
Diluted earnings per share $0.0331 $0.0106
----------------- -----------------
Six months ended Six months ended
30 June 2022 30 June 2021
Calculation of adjusted diluted earnings per share: $000 $000
Earnings
Earnings for the purposes of basic and diluted EPS being net profit
attributable to equity
shareholders 2,216 702
----------------- -----------------
Adjustments:
Amortisation of customer relationships, technology and order backlog 460 460
Share based payments expense 202 60
Tax effect of adjustments (166) (108)
----------------- -----------------
Adjusted earnings 2,712 1,114
----------------- -----------------
Adjusted diluted earnings per share $0.0405 $0.0167
----------------- -----------------
5. Related party transactions
During the period, the Group paid EUR15,600 (H1 2021: EUR15,600)
for administrative services to Francesca Marzilli, the wife of
Nicholas Jarmany. There were no other related party transactions,
other than transactions with key management personnel, who are the
Directors of the Company.
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END
IR BLGDCUUGDGDU
(END) Dow Jones Newswires
September 06, 2022 02:00 ET (06:00 GMT)
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