TIDMFXI
RNS Number : 4848Z
Fusionex International PLC
15 March 2017
For immediate release 15 March 2017
Fusionex International plc
("Fusionex" or the "Company" or the "Group")
Preliminary results for the year ended 30 September 2016
Fusionex (AIM: FXI), a multi-award winning international
software solutions provider specialising in Big Data Analytics,
Artificial Intelligence ("AI") and the Internet of Things ("IoT"),
is pleased to announce its preliminary results for the year ended
30 September 2016 after a period of continued strong progress.
Financial highlights
-- Increasing GIANT sales resulting in a 23% increase in revenue to RM94.6m (RM77.0m: 2015)
-- Gross profit increased 26% to RM74.0m (RM58.9m: 2015),
presenting a gross profit margin of 78%
-- EBITDA* significantly ahead of expectations, with RM15.4m
achieved (RM35.0m: 2015), despite significant planned investments
in marketing, product development and geographical expansion
-- Cash and cash equivalents of RM94.2m, up from RM57.7m in 2015
-- Cash conversion was RM17.5m representing 114% of EBITDA
-- Debtor collection in 2016 decreased to 78 days from more than
100 days in 2015. Out of the RM20.1m of outstanding trade
receivables at the financial year end, circa 85% has been collected
to date
*EBITDA (RM million) is derived from PBT (RM4.6m: 2016; RM28.4m:
2015), plus amortisation of intangible assets (RM7.7m: 2016;
RM4.6m: 2015), plus depreciation of property, plant and equipment
(RM2.7m: 2016; RM2.2m: 2015), plus impairment loss on trade
receivables (RM0.7m: 2016; nil: 2015), minus net interest income
(RM0.3m: 2016; RM0.2m: 2015).
Operational highlights
-- More than three-fold increase in Big Data Analytics product
(GIANT) customers to 115 (36: 2015), underpinning strong execution
in sales and delivery
o Recent customer wins / new partners include the following:
-- Significant win with the Malaysian Stock Exchange
-- Multi-million dollar win with an Asian resort
-- Million dollar contract with a global media conglomerate
-- Strategic partnership signed with US-based Hadoop industry
leader Cloudera
-- Million dollar win with an Asian bank
o Planned increased investment in marketing and brand awareness
underpinning increases in direct and indirect sales
o Continuing sales momentum with additional 48 customers in
first four months of the financial year to 31 January 2017 (163
total cumulative GIANT customers as at 31 January 2017)
o Customers expanding across multiple sectors including retail,
manufacturing, travel & hospitality, financial services and
healthcare
-- Successful transitioning from a predominantly licence-based
sales model, to subscription-based model ongoing (FY2016: 37% of
sales, RM35.0m; FY2015: 22% of sales, RM16.2m), up by more than
100% in subscription revenue. Coupled with Maintenance &
Services revenue, the recurring revenue for FY2016 stood at more
than 60% of total revenue. This:
o Demonstrates a rapidly expanding subscription customer
base
o Underpins strong growth over the coming financial periods with
a very strong recurring revenue model
-- Client retention remains high at more than 90%
-- Investments in geographical expansion
o Expanded to the Philippines, a bustling market with 120
million people
-- Continued investments in Research & Development ("R&D") of GIANT:
o Capitalisation amounted to RM26.4m in 2016, representing 28%
of total sales for the year (in line with our budget of 25% - 30%).
Investments in R&D is expected to continue for the near term,
as there is significant advancement in this fast growing space of
Big Data, the Internet of Things, Machine Learning and Artificial
Intelligence. Amortisation recorded in 2016 amounted to RM7.7m.
This is circa 30% of the capitalised amount for 2016
o On track to launch Fusionex GIANT 2017 with major enhanced
features to provide Big Data solutions for SME and large
enterprises. GIANT 2017 will also address different price points
and budgets, equipped with the ability to support any industry and
any data
-- Continued expansion of selected, quality channels to market:
o Blue-chip companies within our partner channel network
providing international sales opportunities (Dell, Cloudera,
Microsoft, Avnet)
o Channel partners contributing over 30% of revenue
Ivan Teh, Chief Executive of Fusionex, commented:
"We are delighted by the progress made in 2016. Fusionex has
made excellent strategic progress following the major enhancements
to GIANT in 2016, which has enabled the Company to expand to new
market segments and increase our customers worldwide.
This progress has underpinned our strengthening financial and
market position, as well as demonstrated that our focused
investment in research & development and marketing is enabling
Fusionex to accelerate growth and leverage the Big Data
opportunity.
With the impressive momentum continuing in the first four months
of the year, a solid pipeline of new customers and the launch of
our market-leading GIANT 2017 product on the horizon, the Company
is excited and confident in its ability to realise its significant
growth opportunity."
- Ends -
For further details:
Fusionex
Ivan Teh, Chief Executive Officer Through Buchanan
Yuen Choong Lai, Chief Financial
Officer
Darren Hopkins, Director of Investor
Relations & Corporate Development
Stifel Nicolaus
Fred Walsh, Neil Shah, Ben Maddison,
Rajpal Padam 0207 710 7600
Peel Hunt 0207 418 8900
Richard Kauffer, Euan Brown
Buchanan
Giles Sanderson, Steph Watson,
Patrick Hanrahan 020 7466 5000
Chairman's Statement
I am delighted to report on another very successful year for the
Company during which, in spite of many global instabilities, we
have seen significant traction with customers for our Data
Analytics solutions whilst continuing to make substantial
investments in our technologies to ensure we maintain our
competitive edge.
During the year, our revenues grew by 23% to RM94.6 million,
driven by new customer wins for our flagship end-to-end Data
Analytics software GIANT. It is very encouraging to note also that
our customer base continues to expand across multiple sectors,
including retail, travel, media, hospitality as well as the
financial services and healthcare sectors, all of which offer
tremendous opportunities and demonstrate the extensive market reach
for our product offerings.
As anticipated, 2016 was a year of significant investment for
the Company as we put in place the building blocks for accelerating
growth and positioning the Company to be able to take full
advantage of the fast emerging opportunities for Big Data
solutions, of which Fusionex remains one of the leading providers.
The investments made, utilising the 2015 funds raised, were in
anticipation that the Company would be willing to trade-off short
term profitability during this investment period to pursue mid to
long term sustainable growth. In the event EBITDA achieved was
RM15.4 million which was well ahead of expectations, demonstrating
the quality of our team and their ability to carefully manage
resources.
Our balance sheet remains very strong with cash and cash
equivalents of RM94.2 million aided by a significant improvement in
debtor days in trade receivables during the year. Unfortunately,
however, the unexpected fall in the value of the Pound Sterling
during the year did have an adverse impact on our bottom line,
whereas in previous years the impact of currency fluctuations has
been positive.
Once again, the Company has been recognised by many trade bodies
and associations as a leader in its sector. Fusionex was awarded
the highly coveted Asian-Oceanic Computing Industry Organisation
(ASOCIO) Award for Outstanding ICT Company for the second year in a
row. Additionally, Fusionex was awarded the PIKOM Leadership
Excellence Award by the National ICT Association of Malaysia, as
well as the Award for Outstanding Excellence by the Malaysian
Retail Chain Association (MRCA). Fusionex also received special
mention in Gartner's 2016 Magic Quadrant Report, where we are
listed as a "vendor of interest" in Real-Time Process and
Operational Intelligence.
We are constantly looking at ways to improve our technologies,
particularly their ease of use and intuitiveness so that they
become even more productive tools for users. This year we are
launching our next generation Big Data Analytics software solution,
Fusionex GIANT 2017, which we are confident will address the
ever-growing demand for data analytics in real business
applications, as well as for AI components in a world of increasing
prevalence of robotics, voice command-activated technologies and
even driverless cars.
2016 was a year of continued growth, technological innovation
and investment in our people and infrastructure. I am very pleased
to report that the sales momentum we experienced in 2016 has
continued strongly in 2017, and I am confident that this will be
reflected in an ever-improving set of results as the year
progresses.
I would like to take this opportunity to thank all of our staff
for their outstanding achievements and hard work over the past
year. I would also like to thank you, our shareholders, for your
continued support.
Chief Executive's Review
Overview
In 2016 Fusionex worked towards and laid a very strong
foundation for the future. We continued to invest in our core
operations, i.e. our award winning Big Data Analytics, IoT and AI
offerings; we invested in geographical expansion to new locations;
we strengthened our partner channel network; we also increased our
brand awareness and marketing reach. All this and more has
propelled the Company towards a new level of international growth
and opportunities.
Winning a raft of awards and continuing our strong momentum, the
Fusionex team worked in unison to exceed expectations. We also
welcomed new clients on board while maintaining a high client
retention rate of more than 90%, thanks to the increasing adoption
of our flagship Big Data Analytics product (GIANT). Despite
economic concerns emanating from Europe and leadership changes in
the United States, Fusionex has maintained its resilience,
consistency and focus.
Humanising Technology
Fusionex has been making waves in industries beyond the typical
reach of our counterparts. We believe technology has the ability to
provide solutions in virtually every sector, ranging from the
physical realm of manufacturing and city planning, the
psychological realm of retail customer behaviour, or even the
digital realm of financial risk management.
From an industry outlook perspective, IT spend is forecasted to
maintain a stable trajectory this year. Global Research house
Gartner has forecasted worldwide IT spend to reach $3.5 trillion in
2017. Software and IT services spend is projected to grow to $357
billion and $943 billion respectively in 2017.
Our upcoming, new and vastly improved Big Data Analytics
software, Fusionex GIANT 2017 (previewed in Community Technology
Preview (CTP) mode in the fourth quarter of 2016), is a
game-changing solution. It features major upgrades and enhancements
compared to its predecessor, which includes AI components that
customers need increasingly in this data-driven era.
According to International Data Corporation (IDC), worldwide
adoption of AI across a range of industries would result in AI
solutions expanding by a compound annual growth rate (CAGR) of
55.1% over the period of 2016 - 2020. Such solutions are expected
to drive worldwide revenues from $8 billion in 2016 to more than
$47 billion in 2020.
Major use cases for AI and Big Data initiatives, which attract
the most investment and attention, include but are not limited to
automated customer service agents, diagnosis and treatment systems,
fintech, smart healthcare, smart manufacturing, smart cities and
nations, marketing analytics and fraud analysis, just to name a
few.
To ride this next wave of the 4th industrial revolution,
Fusionex continues to strive to make it easier for users at all
levels to carry out data analysis, cognitive computing and AI via
an intuitive interface, where users are able to derive insights
from their data by just asking pertinent questions - effectively
talking and interacting with the software like one would via a
personal consultant or data officer.
Throughout 2016, Fusionex GIANT has been very well received,
particularly from the retail, travel and hospitality,
manufacturing, smart buildings, smart cities as well as financial
services industries. In 2017, we target to release an exciting
next-generation version of GIANT.
Fusionex continues to make strategic investments in our R&D
to derive better ways to humanise technology, creating a
data-driven culture for any individual or organisation that it
comes across. Staying ahead of market trends, our R&D team
constantly looks at ways to make our technology smarter and more
user-friendly for everyone.
Our achievements to date
We never rest on our laurels. Clinching awards and receiving
valued recognition has spurred our team to strive for even greater
achievements. We do not settle for being second best.
From a global front, Fusionex was cited as a vendor of interest
in Gartner's 2016 Magic Quadrant report, particularly in "Real-Time
Process and Operational Intelligence". The numerous awards won by
Fusionex in 2016 include winning the Outstanding ICT Company award
from the Asian-Oceanian Computing Industry Organization (ASOCIO)
for the second consecutive year.
2016 also saw the expansion and strengthening of the Fusionex
Partner Network. Cloudera joined forces with Fusionex via a
strategic partnership that allows both companies to extend their
reach across the global marketplace.
These milestones form but a few of the many achievements that
Fusionex has attained in the last financial year.
Growth strategy
It is noteworthy that we expect the upcoming release of GIANT
2017 to be a game changer and a catalyst for further growth, as the
new platform will cater to users and customers of all shapes and
sizes, be it Enterprise customers, SME customers or even smaller
firms. GIANT 2017 will be made simple and will come in different
editions. There are already customers trialing GIANT 2017 and we
expect them to convert to full users shortly after we officially
launch this exciting platform.
Our enterprise sales continues to grow consistently, whereas a
newer SME segment is showing tremendous potential and growth
trajectory (FY2016 recorded more than 300% growth in the number of
SME customers). This is set to be the impetus of our growth as the
SME market not only contributed in terms of customer count, but
also strong revenue.
Future outlook
Amidst economic concerns and cautious market sentiments,
Fusionex more than delivered on its promises, grew steadily in 2016
and was again ahead of expectations.
The Group's strong recurring revenue and solid customer base is
poised to increase even further with the many new customer wins and
our planned transition to a primarily SaaS based company. We
maintain our focus in constantly investing in innovation to keep
our offerings exciting, fresh, and ahead of the market.
We see 2017 as a very promising year. If we capitalise on the
opportunities appropriately; if we stay true to our course of
investing towards ingenuity, quality and innovation; and if we
maintain our principles of being a forerunner and leader in our
space, we are very confident that we will accomplish much more in
the upcoming year and the years to come.
Financial Review
For the year under review, Fusionex has grown the Group's
revenue with a double-digit growth rate while maintaining its
positive contribution in terms of the Group's profitability.
Revenue
Group revenue has continued to grow and has increased by 23% to
RM94.6 million. Revenue contribution from products amounted to
88.6% of the total annual revenue, with the balance from
professional services.
The Group has continued to expand its market presence in the
Asia Pacific region. Asia Pacific remains the Group's market
stronghold and the contribution from this region amounted to 81% of
the total revenue. This positive growth of the Group's revenue and
market share has been attributed to its strong customer wins,
coupled with the rich functionalities and features of the Group's
Big Data Analytics offering. Contributions from its partner channel
networks that have been implemented by the Group as another channel
to reach targeted markets, have also had a positive impact on the
growth of its revenue base.
The Group's gross profit has increased by 26% to RM74.0 million,
from RM58.9 million in 2015. For the financial period, the Group
has continued to invest in research and development to develop a
new version of GIANT as well as to continuously enhance and expand
the features and functionalities of the Group's core products and
offerings. A total amount of RM26.4 million has been expended and
capitalised by the Group into its research and development
expenditure for the year.
EBITDA and profitability
Contrary to initial estimates for the relevant financial year,
the Group has maintained positive EBITDA for the financial year
under review, where its EBITDA stands at RM15.4 million (2015:
RM35.0 million). In achieving the Group's plan to develop newer and
better functionalities for its core products alongside expansion
into other market regions in Asia Pacific. The reduction in
profitability arose as a result of the Group increasing its
expenditure towards marketing programmes and events, procuring of
equipment, infrastructure, and cloud and other IT services,
geographical and office expansion as well as into the development
of its core products all in accordance with its initial plans. The
Group still maintains a positive net profit for the year of RM1.4
million despite the significant increase in investments in the
business for FY2016.
Cash flow
The Group has generated positive cash flows from its operations.
The well-managed operations of the Group during the financial year
have resulted in the Group being able to maintain strong cash and
cash equivalents of RM94.2 million at 30 September 2016 (2015:
RM57.7 million).
Key performance indicators
(RM'million) 30 September 30 September
2016 2015
--------------------- ------------- -------------
Revenue 94.6 77.0
--------------------- ------------- -------------
By Type
--------------------- ------------- -------------
Products 83.8 68.0
--------------------- ------------- -------------
Services 10.8 9.0
--------------------- ------------- -------------
By Region
--------------------- ------------- -------------
Asia Pacific 95.1 77.0
--------------------- ------------- -------------
UK & Europe 13.5 14.8
--------------------- ------------- -------------
USA 8.3 5.6
--------------------- ------------- -------------
Consol. elimination (22.2) (20.4)
--------------------- ------------- -------------
Gross Profit 74.0 58.9
--------------------- ------------- -------------
EBITDA 15.4 35.0
--------------------- ------------- -------------
Profit before
tax 4.6 28.4
--------------------- ------------- -------------
Profit after
tax 1.4 24.9
--------------------- ------------- -------------
EPS (RM) 0.03 0.58
--------------------- ------------- -------------
The principal movements in the net cash were as follows:-
(RM'million) 30 September 30 September
2016 2015
------------------------------ ------------- -------------
Cash flows from operations 17.5 11.6
------------------------------ ------------- -------------
Acquisition of property,
plant, equipment & software (18.1) (5.0)
------------------------------ ------------- -------------
Development costs incurred
on intangible assets (26.4) (16.5)
------------------------------ ------------- -------------
Net proceeds from new 77.1 -
placing
------------------------------ ------------- -------------
Dividend paid (5.9) (5.0)
------------------------------ ------------- -------------
Change in net cash and
cash equivalent in the
financial year 43.3 (12.7)
------------------------------ ------------- -------------
Cash and cash equivalent
at the beginning of the
financial year 57.7 64.0
------------------------------ ------------- -------------
Effects of foreign exchange
rate changes, net (6.9) 6.4
------------------------------ ------------- -------------
Cash and cash equivalent
at the end of the financial
year 94.2 57.7
------------------------------ ------------- -------------
Taxation
Income of the Group continues to be exempted from tax in certain
countries of operations and for other non-tax exempted countries
higher tax allowances were granted.
Borrowings and bank facilities
Total borrowings of the Group have decreased for the financial
year to RM19.4 million. The decrease in the borrowings was mainly
from the repayment of the term loan facilities for the Group's head
office.
Equity
The total equity of the Group stands at RM194.2 million (2015:
RM128.7 million). Earnings per share (EPS) of the Group continue to
be positive at RM0.03.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 SEPTEMBER 2016
Note 2016 2015
RM RM
------------------------------ ------ ------------ -------------------
Assets
Non-current assets
Property, plant and equipment 2 53,313,309 38,031,429
Goodwill on consolidation 3 549,572 549,572
Intangible assets 4 52,813,633 34,192,186
Deferred tax assets 740,826 831,440
------------------------------ ------ ------------ -------------------
107,417,340 73,604,627
------------------------------ ------ ------------ -------------------
Current assets
Trade receivables 20,122,668 28,522,560
Other receivables, deposits
and prepayments 8,180,990 4,950,692
Amounts owing by contract
customers 1,368,614 2,706,372
Tax recoverable 1,140,261 232,244
Cash and cash equivalents 94,183,616 57,727,636
------------------------------ ------ ------------ -------------------
124,996,149 94,139,504
------------------------------ ------ ------------ -------------------
Total assets 232,413,489 167,744,131
------------------------------ ------ ------------ -------------------
Equity and liabilities
Stated capital 5 159,494,595 71,457,058
Merger reserves (17,668,186) (17,668,186)
Foreign exchange translation
reserve (9,776,995) 8,194,821
Retained profits 62,154,158 66,688,490
------------------------------ ------ ------------ -------------------
Total equity attributable
to owners 194,203,572 128,672,183
------------------------------ ------ ------------ -------------------
Non-current liabilities
Long term borrowings 18,584,739 19,445,684
Deferred tax liabilities 8,732,128 6,218,400
------------------------------ ------ ------------ -------------------
27,316,867 25,664,084
------------------------------ ------ ------------ -------------------
Current liabilities
Other payables and accruals 9,828,114 12,017,157
Amounts owing to contract
customers 39,556 -
Short term borrowings 864,848 819,454
Provision for taxation 160,532 571,253
------------------------------ ------ ------------ -------------------
10,893,050 13,407,864
------------------------------ ------ ------------ -------------------
Total liabilities 38,209,917 39,071,948
------------------------------ ------ ------------ -------------------
Total equity and liabilities 232,413,489 167,744,131
------------------------------ ------ ------------ -------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 30 SEPTEMBER 2016
2016 2015
Note RM RM
---------------------------------------- ------ ------------ -----------------
Revenue 94,623,781 77,044,316
Cost of sales (20,580,053) (18,191,260)
---------------------------------------- ------ ------------ -----------------
Gross profit 74,043,728 58,853,056
Other income 3,010,747 4,893,271
---------------------------------------- ------ ------------ -----------------
77,054,475 63,746,327
Administrative and other operating
expenses (72,439,992) (35,333,864)
Finance costs (62,989) (41,372)
---------------------------------------- ------ ------------ -----------------
Profit before taxation 4,551,494 28,371,091
Income tax expense 6 (3,142,872) (3,423,964)
---------------------------------------- ------ ------------ -----------------
Profit after taxation 1,408,622 24,947,127
Other comprehensive (expense)/income
(item that may or will be reclassified
to profit or loss):
Exchange (losses)/gains arising
on translation of foreign operations (17,971,816) 7,292,670
---------------------------------------- ------ ------------ -----------------
Total comprehensive (expense)/income
for the financial year (16,563,194) 32,239,797
---------------------------------------- ------ ------------ -----------------
Profit after tax attributable to:
Owners of the Group 1,408,622 24,947,127
---------------------------------------- ------ ------------ -----------------
1,408,622 24,947,127
---------------------------------------- ------ ------------ -----------------
Total comprehensive (expense)/income
attributable to:
Owners of the Group (16,563,194) 32,239,797
---------------------------------------- ------ ------------ -----------------
(16,563,194) 32,239,797
---------------------------------------- ------ ------------ -----------------
Earnings per share attributable
to owners of the Group
Basic, sen 7 2.99 58.02
Diluted, sen 7 2.99 58.02
---------------------------------------- ------ ------------ -----------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEARED 30 SEPTEMBER 2016
Foreign
exchange Attributable
Stated Merger translation Retained to owners of
capital reserve reserve profits the Group Total equity
Note RM RM RM RM RM RM
-------------- ---- ----------- ------------ ------------ ----------- ------------ ------------
Balance at 1
October 2014 71,457,058 (17,668,186) 902,151 46,701,994 101,393,017 101,393,017
----------- ------------ ------------ ----------- ------------ ------------
Profit after
taxation - - - 24,947,127 24,947,127 24,947,127
Other
comprehensive
income, net of
tax
- Foreign
currency
translation
differences
for foreign
operations - - 7,292,670 - 7,292,670 7,292,670
----------- ------------ ------------ ----------- ------------ ------------
Total
comprehensive
income for
the financial
year - - 7,292,670 24,947,127 32,239,797 32,239,797
Dividend 8 - - - (4,960,631) (4,960,631) (4,960,631)
-------------- ---- ----------- ------------ ------------ ----------- ------------ ------------
Balance at 30
September
2015 71,457,058 (17,668,186) 8,194,821 66,688,490 128,672,183 128,672,183
-------------- ---- ----------- ------------ ------------ ----------- ------------ ------------
Foreign
exchange Attributable
Stated Merger translation Retained to owners of
capital reserve reserve profits the Group Total equity
Note RM RM RM RM RM RM
-------------- ---- ----------- ------------ ------------ ------------ ------------ ------------
Balance at 1
October 2015 71,457,058 (17,668,186) 8,194,821 66,688,490 128,672,183 128,672,183
----------- ------------ ------------ ------------ ------------ ------------
Profit after
taxation - - - 1,408,622 1,408,622 1,408,622
Other
comprehensive
expense, net
of tax
- Foreign
currency
translation
differences
for foreign
operations - - (17,971,816) - (17,971,816) (17,971,816)
----------- ------------ ------------ ------------ ------------ ------------
Total
comprehensive
expense for
the financial
year - - (17,971,816) 1,408,622 (16,563,194) (16,563,194)
Issuance of
shares 88,037,537 - - - 88,037,537 88,037,537
Dividend 8 - - - (5,942,954) (5,942,954) (5,942,954)
-------------- ---- ----------- ------------ ------------ ------------ ------------ ------------
Balance at 30
September
2016 159,494,595 (17,668,186) (9,776,995) 62,154,158 194,203,572 194,203,572
-------------- ---- ----------- ------------ ------------ ------------ ------------ ------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARED 30 SEPTEMBER 2016
2016 2015
RM RM
---------------------------------------- --- ------------ ------------------
Cash flows from operating activities
Profit before taxation 4,551,494 28,371,091
Adjustments for:
- amortisation of intangible
assets 7,716,485 4,574,604
- depreciation of property,
plant and equipment 2,732,285 2,245,115
- impairment loss on trade receivables 656,596 -
- interest expenses 62,989 41,372
- interest income (356,927) (268,283)
- property, plant and equipment
written off 22,505 3,307
- gain on disposal of fixed
assets (574) (2,036,717)
---------------------------------------- --- ------------ ------------------
Operating profit before working
capital changes 15,384,853 32,930,489
Decrease/(increase) in trade
and other receivables 4,512,998 (24,264,042)
(Decrease)/increase in other
payables and accruals (2,189,043) 4,394,001
Decrease in amount owing from
contract customers 1,377,314 10,757
---------------------------------------- --- ------------ ------------------
Cash flows from operating activities 19,086,122 13,071,205
Interest paid (62,989) (41,372)
Interest received 356,927 268,283
Income tax paid (1,880,605) (1,651,465)
---------------------------------------- --- ------------ ------------------
Net cash generated from operating
activities 17,499,455 11,646,651
---------------------------------------- --- ------------ ------------------
Cash flows from investing activities
Purchase of property, plant
and equipment (18,093,638) (5,032,700)
Proceeds from disposal of property,
plant and equipment 48,634 5,427,597
Development costs on intangible
assets (26,448,903) (16,499,763)
---------------------------------------- --- ------------ ------------------
Net cash used in investing activities (44,493,907) (16,104,866)
---------------------------------------- --- ------------ ------------------
Cash flows from financing activities
Dividends paid (5,942,954) (4,960,631)
Repayment of hire purchase payables (82,427) (78,792)
Repayment of term loans (733,124) (3,214,210)
Proceeds from issuance of share
capital 88,037,537 -
---------------------------------------- --- ------------ ------------------
Net cash generated from/(used
in) financing activities 81,279,032 (8,253,633)
---------------------------------------- --- ------------ ------------------
Net increase/(decrease) in cash
and cash equivalents 54,284,580 (12,711,848)
Cash and cash equivalents at
beginning of the financial year 57,727,636 64,021,296
Effects of foreign exchange
rate changes, net (17,828,600) 6,418,188
---------------------------------------- --- ------------ ------------------
Cash and cash equivalents at
end of the financial year 94,183,616 57,727,636
-------------------------------------------- ------------- ----------------
Notes to the financial information
For the year ended 30 September 2016
1. Basis of preparation
The financial information set out in this preliminary
announcement is abridged and does not constitute the Company's
statutory financial statements for the year ended 30 September
2016. The financial information has been extracted from the
financial statements for the year ended 30 September 2016, which
were approved by the Board on 13 March 2017 and on which the
auditors have reported without qualification. The 2016 Annual
Report will be distributed to shareholders and made available on
the Company's website at http://www.fusionex-international.com. It
will also be filed with the Companies Registered Office.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB) as
adopted by the European Union (EU), including related
interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC).
The accounting policies adopted by the Group are consistent with
those of the previous financial year except in the current
financial year, the Group has adopted all the new and revised
standards and Interpretations of IFRS that are effective for annual
periods beginning on or after 1 October 2015. The adoption of these
standards and interpretations did not have any effect on the
financial performance or position of the Group and the Company.
The directors proposed a single payment of an interim dividend
and do not propose a final dividend in respect of the year ended 30
September 2016 (2015: nil).
2. Property, plant and equipment
During the year ended 30 September 2016, the Group acquired
assets amounting to RM18,093,638 (2015: RM5,032,700).
3. Goodwill on consolidation
2016 2015
RM RM
------------------------ ------- -------
At cost 558,887 558,887
Less: impairment losses (9,315) (9,315)
------------------------- ------- -------
Carrying value 549,572 549,572
------------------------- ------- -------
During the financial year, the Group assessed the recoverable
amount of the goodwill and determined that no additional impairment
is required. This goodwill assessment compares the gross profit to
the value of goodwill for the entity whose acquisition gave rise to
the goodwill.
4. Intangible assets
2016 2015
RM RM
--------------------------------- ------------ -----------
Development expenditure
At cost:
At 1 October - brought forward 43,667,152 26,237,745
Addition 26,448,903 16,499,763
Translation differences (138,342) 929,644
--------------------------------- ------------ -----------
69,977,713 43,667,152
--------------------------------- ------------ -----------
Accumulated amortisation
At 1 October - brought forward (9,474,966) (4,662,078)
Amortisation charge (7,716,485) (4,574,604)
Translation differences 27,371 (238,284)
--------------------------------- ------------ -----------
(17,164,080) (9,474,966)
--------------------------------- ------------ -----------
At 30 September - net book value 52,813,633 34,192,186
--------------------------------- ------------ -----------
5. Stated capital
No. of shares RM
------------------------ ------------- -----------
As at 1 October 2015 43,000,000 71,457,058
Additions 4,300,000 88,037,537
------------------------ ------------- -----------
As at 30 September 2016 47,300,000 159,494,595
------------------------ ------------- -----------
The Company has an unlimited authorised share capital of
ordinary shares of no par value.
On 15 October 2015, the Company announced a placing of 4,300,000
new ordinary shares at 325 pence per share to raise a total of
GBP13.975million. The new ordinary shares represent 10% of the
existing share capital of the Company.
6. Income tax expense
2016 2015
RM RM
------------------------------------------------------- --------- ---------
Current tax expense
- for the financial year 782,571 1,223,378
- overprovision in the previous financial year (220,702) (336,788)
------------------------------------------------------- --------- ---------
561,869 886,590
------------------------------------------------------- --------- ---------
Deferred tax assets:
--------- ---------
- over/(under)provision in the previous financial year 67,275 (259,936)
--------- ---------
Deferred tax liabilities:
- for the financial year 2,513,728 3,004,165
- overprovision in the previous financial year - (206,855)
------------------------------------------------------- --------- ---------
2,513,728 2,797,310
------------------------------------------------------- --------- ---------
3,142,872 3,423,964
------------------------------------------------------- --------- ---------
A reconciliation of income tax expense applicable to the profit
before taxation at the statutory tax rate to the income tax expense
at the effective tax rate of the Group is as follows:
2016 2015
RM RM
--------------------------------------------------------------------- ----------- -----------
Profit before taxation 4,551,494 28,371,091
---------------------------------------------------------------------- ----------- -----------
Tax at the applicable statutory tax rate of 0% - -
Tax effects of:
- differences in tax rates 1,685,730 7,440,943
- non-deductible expenses 2,740,256 2,199,083
- income not subject to tax/tax relief (1,062,412) (5,412,483)
- deferred tax assets recognised on software development expenditure - (259,936)
Overprovision in the previous financial year:
- current tax (220,702) (336,788)
- deferred tax - (206,855)
---------------------------------------------------------------------- ----------- -----------
Income tax expense for the financial year 3,142,872 3,423,964
---------------------------------------------------------------------- ----------- -----------
7. Earnings per share
The calculation for earnings per share, based on the weighted
average number of shares, is shown in the table below:
Year ended 30 September
-------------------------
2016 2015
RM RM
----------------------------------------------------- ------------ -----------
Profit after tax attributable to owners of the Group 1,408,622 24,947,127
Weighted average number of shares:
Basic 47,076,776 43,000,000
Diluted 47,076,776 43,000,000
Earnings per share:
Basic, sen 2.99 58.02
Diluted, sen 2.99 58.02
------------------------------------------------------ ------------ -----------
8. Dividends
2016 2015
RM RM
------------------------------------------------------------------- --------- ---------
Interim dividend for 30 September 2016: RM0.138 per ordinary share 5,942,954 -
Interim dividend for 30 September 2015: RM0.115 per ordinary share - 4,960,631
-------------------------------------------------------------------- --------- ---------
5,942,954 4,960,631
------------------------------------------------------------------- --------- ---------
9. Capital commitment
Authorised capital expenditure contracted but not provided for
in the consolidated financial statements is for leasehold
improvement and totals RM1,060,079 (2015: RM419,268).
10. Segment analysis
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker, as
defined in IFRS 8, in order to allocate resources to the segment
and to assess its performance.
Interest income and interest expense are not allocated to
segments, as this type of activity is driven by the central
treasury function which manages the cash position of the Group.
Accordingly, this information is not separately reported to the
Board for each reportable segment.
Operating segments are prepared in a manner consistent with the
information provided to the chief operating decision maker (the
Executive Directors) in order to allocate resources to segments and
to assess their performance. For management purposes, the Group is
organised into business units based on geographical locations.
Geographical location
Asia Pacific Europe Americas Elimination(4) Total
RM RM RM RM RM
---------------------------------------------- ------------ ----------- --------- -------------- -------------
At 30 September 2016
Revenue 95,099,004 13,459,573 8,298,607 (22,233,403) 94,623,781
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Result
Segment result before financing costs and tax 5,531,836 6,681,750 1,148,760 (8,747,863) 4,614,483
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Finance costs (62,989)
Income tax (3,142,872)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Profit for the year 1,408,622
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Assets
Segmental assets(1) 305,880,435 158,013,076 - - 463,893,511
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Non-allocated assets(2) 549,572
Consolidation adjustments (232,029,594)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Total assets 232,413,489
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Liabilities
Segmental liabilities(3) 188,789,111 17,784,412 - - 206,573,523
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Non-allocated liabilities(2) 63,665,988
Consolidation adjustments (232,029,594)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Total liabilities 38,209,917
---------------------------------------------- ------------ ----------- --------- -------------- -------------
(1) Segment assets comprise total current and non-current assets
less unallocated assets.
(2) Mainly related to central administrative functions and
central treasury function's assets/liabilities.
(3) Segment liabilities comprise total current liabilities and
non-current liabilities less unallocated liabilities.
(4) Mainly related to Asia Pacific intercompany sales.
Other segmental reporting
Asia Pacific Europe Americas Total
RM RM RM RM
---------------------------------- ------------ ------ -------- ----------
At 30 September 2016
Capital expenditure:
- tangible assets 18,093,638 - - 18,093,638
- intangible assets 26,448,903 - - 26,448,903
Depreciation 2,732,285 - - 2,732,285
---------------------------------- ------------ ------ -------- ----------
Other non-cash expenses
Amortisation of intangible assets 7,716,485 - - 7,716,485
---------------------------------- ------------ ------ -------- ----------
7,716,485 - - 7,716,485
---------------------------------- ------------ ------ -------- ----------
Asia Pacific Europe Americas Elimination(4) Total
RM RM RM RM RM
---------------------------------------------- ------------ ----------- --------- -------------- -------------
At 30 September 2015
Revenue 77,006,862 14,827,489 5,620,290 (20,410,325) 77,044,316
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Result
Segment result before financing costs and tax 27,117,058 7,483,057 2,116,230 (8,303,882) 28,412,463
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Finance costs (41,372)
Income tax (3,423,964)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Profit for the year 24,947,127
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Assets
Segmental assets(1) 222,754,037 105,932,380 - - 328,686,417
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Non-allocated assets(2) 437,360
Consolidation adjustments (161,379,646)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Total assets 167,744,131
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Liabilities
Segmental liabilities(3) 124,103,894 21,255,905 - - 145,359,799
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Non-allocated liabilities(2) 55,091,795
Consolidation adjustments (161,379,646)
---------------------------------------------- ------------ ----------- --------- -------------- -------------
Total liabilities 39,071,948
---------------------------------------------- ------------ ----------- --------- -------------- -------------
(1) Segment assets comprise total current and non-current assets
less unallocated assets.
(2) Mainly related to central administrative functions and
central treasury function's assets/liabilities.
(3) Segment liabilities comprise total current liabilities and
non-current liabilities less unallocated liabilities.
(4) Mainly related to Asia Pacific intercompany sales.
Other segmental reporting
Asia Pacific Europe Americas Total
RM RM RM RM
---------------------------------- ------------ ------ -------- ----------
At 30 September 2015
Capital expenditure:
- tangible assets 5,032,700 - - 5,032,700
- intangible assets 16,499,763 - - 16,499,763
Depreciation 2,245,115 - - 2,245,115
---------------------------------- ------------ ------ -------- ----------
Other non-cash expenses
Amortisation of intangible assets 4,574,604 - - 4,574,604
---------------------------------- ------------ ------ -------- ----------
4,574,604 - - 4,574,604
---------------------------------- ------------ ------ -------- ----------
Business segments
Products Services Total
RM RM RM
--------------------- ---------- ---------- ----------
At 30 September 2016
Revenue 83,849,773 10,774,008 94,623,781
--------------------- ---------- ---------- ----------
At 30 September 2015
Revenue 68,025,654 9,018,662 77,044,316
--------------------- ---------- ---------- ----------
Revenue for products relates to the sale of the Fusionex Data
Management Platform and revenue derived from services relates to
services provided by the Group to its clientele in association with
the Group's Data Platform.
Major customers and partners
The following table outlines the number of customers and
partners ("entities") in each year who individually represent in
excess of 10% of the Group's revenue for that year:
2016 2015
-------------------------------------------------------- ---- ----
Number of entities exceeding 10% of the Group's revenue 1 2
--------------------------------------------------------- ---- ----
2016 2015
RM'000 RM'000
-------------------------------------------------------------------- ------- -------
Entity A 9,788 -*
-------------------------------------------------------------------- ------- -------
Entity B - 11,249
--------------------------------------------------------------------- ------- -------
Entity C - 11,017
--------------------------------------------------------------------- ------- -------
Aggregate revenue for entities exceeding 10% of the Group's revenue 9,788 22,266
--------------------------------------------------------------------- ------- -------
* Entity A did not contribute in excess of 10% of the Group's
revenue in 2015.
11. Subsequent events
On 22 December 2016, the Company announced that an employee
benefit trust, the Fusionex Employee Benefit Trust (EBT), had been
set up to incentivise employees of the Company and its subsidiaries
through the award of a specified number of ordinary shares in the
capital of the Company ("Awards").
The Awards shall not be granted to contractors or the Directors
of the Company, and shall be subject to vesting and performance
conditions.
The EBT subscribed for 7,095,000 new ordinary shares in the
capital of the Company ("New Ordinary Shares").
Application was made for the New Ordinary Shares to be admitted
to trading on AIM, and admission became effective in December 2016.
Following admission, the Company's issued share capital consists of
54,395,000 ordinary shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DDGDXDGBBGRS
(END) Dow Jones Newswires
March 15, 2017 03:01 ET (07:01 GMT)
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