TIDMQXT
RNS Number : 5215M
Quixant PLC
22 September 2021
22 September 2021
Quixant plc
("Quixant" or the "Group")
Interim Results
Double-digit revenue growth driven by strong recovery from
impact of the pandemic
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 2021.
Six months Six months Change
to 30 June to 30 June
2021 2020
($m) ($m)
Group Revenue 36.5 27.9 31%
Gaming Division Revenue 18.4 11.9 55%
Densitron Revenue 18.1 16.0 13%
Group Gross profit 11.1 8.9 25%
Adjusted profit / (loss) before
tax(1) 1.3 -1.2 nm
Group profit / (loss) before
tax 0.8 -3.0 nm
Adjusted diluted earnings per
share(1) $0.0199 -$0.0184 nm
Net cash from operating activities 1.1 -0.3 nm
Net cash 15.0 14.2 6%
(1) For details on adjusted measures refer to note 1 and note 2
of the condensed consolidated financial statements
OPERATIONAL HIGHLIGHTS
-- Double-digit revenue growth across both divisions, demonstrating
strong recovery in gaming market and strategic positioning of Densitron
business for growth.
-- Five new customer wins in Gaming, underpinning our confidence in
future growth.
-- Ongoing new product development in Densitron driving new business
opportunities in Broadcast.
-- Continued supply chain component shortages and price inflation
requiring active management through strategic stock purchase programme.
-- Good cash conversion despite strategic stock purchases to support
demand.
CURRENT TRADING AND OUTLOOK
-- Strong order intake provides 115% order coverage of full year management
revenue expectations and visibility into 2022.
-- First lease agreement with Gaming customer commenced in the second
half of FY21.
-- Component shortages and price inflation expected to persist and
continue to cause temporary profit margin volatility; Board confident
that long-term structural Group margin is intact.
-- Long-term outlook is positive given mounting demand and the Group's
strategic market positioning.
Jon Jayal, CEO of Quixant commented:
"We are delighted to report overall revenue growth of over 30
per cent, fueled by a buoyant recovery in the global gaming market
and continued success through our strategic positioning of
Densitron. Our focus on pragmatically supporting customers through
the difficult period has yielded rewards through strong customer
retention and conversion of new business.
Decisive action taken by the Board early in the year to invest
in strategic inventory has mitigated the impact of the widespread
electronic component shortages and enabled Quixant's customers to
manage through the disruption with limited impact to their
business.
Component shortages and price inflation remain a challenge and
we do not anticipate significant improvement in the short term.
While our customers have been accepting of essential price rises,
nonetheless we expect a period of continued margin volatility.
However, our strong cash position and good relationship with
suppliers, built up over many years, help to mitigate the
impact.
"Our 115% order coverage of management revenue expectations of
c$70m gives us confidence in delivering adjusted profit before tax
for the full year in line with management expectations. We are well
positioned for further growth in 2022."
Investor Presentation
Quixant is hosting an online presentation open to all investors
tomorrow, 23 September, at 4.30pm BST. Anyone wishing to connect
should register here:
https://www.investormeetcompany.com/quixant-plc/register-investor
.
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.
Business Overview
Quixant is a critical outsource technology and supply chain
partner for major global industrial electronic equipment
manufacturers, with a focus on specific vertical markets. The Group
combines hardware, software, display and mechanical engineering
expertise with detailed industry knowledge and a Far Eastern
manufacturing base making it the ideal global strategic technology
provider.
Quixant has a well-established and highly respected brand in the
global casino gaming and slot machine market. The computer platform
solutions we supply to the casino machine manufacturers combine
optimised hardware and software elements which address the
specialist needs of this highly regulated market. By outsourcing
their computer platform to Quixant, manufacturers can focus their
R&D on the game design, which has the greatest impact on their
commercial success. They are also able to launch new products to
market quicker.
Through Densitron, the Board executes its strategy to diversify
into other focus vertical markets alongside gaming and migrate up
the value chain in those markets. Densitron supplies display
components to a wide range of industrial sectors, which makes it an
excellent platform to identify new focus markets for the Group. We
seek to understand each of these markets in depth and develop
tailor-made products which are different to those readily available
from broad-based technology corporations. In the broadcast market,
we have made progress in developing unique human machine interface
technology and control solutions which are already generating new
revenue.
From time to time, the Board may complement its organic growth
strategy with strategic acquisitions that enhance the Group's
technical capabilities within a focus sector.
Chairman's Statement
When I joined the Board in January this year, the Group had
successfully managed through an exceptionally difficult year. This
reflected the quality and tenacity of the team at Quixant to emerge
in a financially strong position with a loyal customer base and a
range of new commercial opportunities. With the global gaming
market continuing to recover and our presence in the broadcast
sector building momentum, I am excited about the growth
opportunities ahead for the Group.
While buoyant demand has returned to the Gaming Business and
Densitron has seen a growth in trading, the Group has faced
challenges due to the global shortage of electronic components.
Early recognition of the issues and judicious use of our strong
cash position has been essential to underpin supply to customers
since the end of Q1. The strength of the Group's excellent
Taiwanese procurement operation which has built strong supplier
relationships over many years has been of critical importance over
this challenging period. It is expected that the component
shortages and associated price inflation will persist well into
2022, although we continue to mitigate the impact of this issue as
far as possible.
Throughout the period, despite the allocation of cash to
strategic stock, the Group maintained a robust financial position
which provides a strong foundation and the flexibility to invest in
the Group's expected future growth through continued product
innovation.
During last year we focused on supporting our customers through
the difficulties they faced as their markets closed. To help manage
their capital outlay and elevate the value proposition of working
with Quixant we devised a leasing option for our Gaming products
under which shipments commenced during the third quarter. We will
evaluate the success of this over the next few months and offer it
to other manufacturers.
We are pleased to welcome Johan Olivier to the Board as Chief
Financial Officer from 31 August 2021. This high calibre
appointment will ensure we continue to have a robust finance
function as we return to growth.
Chief Executive's Report
The Group's recovery from the unprecedented challenges faced in
2020 is clear from the trading results achieved in the first half
of this year. We delivered double-digit revenue growth across both
operating divisions during the period and profits which are
comfortably in line with management expectations. A strong recovery
in demand from our end markets and conversion of new business
pipeline has driven this growth and led to exceptional order intake
during the first half of the year, providing us with confidence in
our second half performance. During this period, our book-to-bill
has been considerably more than one.
Gaming Business Review
The pandemic resulted in the closure of many global gaming
markets for some of 2020. The US market closure in March 2020 for
much of the second quarter had a profound impact on Quixant with
most of our customers stopping or severely reducing manufacturing
gaming machines. Once gaming markets started to reopen in the
middle of the year, activity in the market has rebounded,
particularly so in the USA. The data coming out of the US gaming
market, critical to Quixant's business, is remarkably positive. The
American Gaming Association's July 2021 Commercial Gaming Revenue
reports US commercial gaming revenues 17% higher over the year to
end July 2021 compared to 2019 and 103% higher than the same period
in 2020. The advent of widespread sports betting and online gaming
in the US market has fueled some of this growth, but land-based
slot gross gaming revenue is reported to be up 9% over the same
period compared to 2019 and 96% versus 2020. Other territories,
particularly Europe and Asia are seeing a less conclusive recovery
at this point but indicate positive momentum towards pre-pandemic
levels. While this growth in gaming revenues does not directly
correlate with increased sales of machines incorporating our
computer platforms, it certainly signals a buoyant market backdrop
for our customers to sell into.
Through 2020, we intensively collaborated with customers to
support them through an extremely difficult period. Our
demonstrable partnership has fostered even closer relationships
which have already delivered new business opportunities. Amid the
component shortages being faced in 2021, we have demonstrated the
importance of Quixant as a strong outsource technology partner with
entrenched Asian supply chain channels. Our prompt response in
January 2021 to the shortages was to undertake an ongoing programme
of strategic stock purchases, which has buffered our customers from
the impact and safeguarded product supply. Our collaborative
approach with customers has also facilitated a smoother
implementation of essential price rises in our products to mitigate
reduction in our profit margins.
Conversion of five targets/prospects to new customers in the
first half of 2021, increasing total new customer wins to 11 in the
last 15 months, is indicative that more and more manufacturers are
recognising the benefits of outsourcing. We commenced mass
production shipments for four of these in the second half of 2021,
underpinning our confidence in growth in 2022.
There can be no better demonstration of the regard we are held
by our customers than the following quotes from two recent new
business wins.
The first relates to a project we are working on to supply our
new turnkey self-service betting terminals (SSBTs) to BetConstruct
for their land-based betting offering. After delays in executing
our SSBT strategy after demonstrating it at ICE in February 2020
due to COVID, it is pleasing to be making progress during 2021 in
this regard.
"I am happy to say that I am most pleased with the Quixant
offerings. Your superior technology is known within the industry;
what is not always apparent is your commitment to customer service
which is paramount when contemplating a business relationship." -
Jeffrey Connor, CEO BetConstruct (North America).
It is a privilege to be recognised by the Chairman and Founder
of Ortiz Gaming, a large, long-standing and highly respected gaming
business predominantly operating in the video bingo market.
"Ortiz considers Quixant a key technology partner in our casino
games business, providing not only high-quality hardware but also
top of the line software and support in a very close relationship
with our own technical teams." - Alejandro Ortiz, CEO Ortiz
Gaming
We have previously announced our development of a lease offering
for our computer platform products which we commenced deliveries on
a pilot basis at the start of the second half of 2021. This
represents a new way of machine manufacturers accessing computer
platform technology in the industry.
Densitron Business Review
The Densitron business built from its resilient trading
performance in 2020 to deliver 13% year-on-year revenue growth and
very strong order intake. Amid the electronics component shortages,
our strong competence in operations and supply chain was also
evident in the fact that 98% of orders which were due to be shipped
in the first half were delivered to customers.
We continued to make progress in our broadcast focus market,
launching several strategic new product lines. One such product
line is Tactila(R), a patent pending technology which allows
physical rotary controls to be placed in the active area of the
display for mission-critical, precision control. Tactila(R) forms
part of the foundation for our next generation human machine
interface (HMI) solutions for broadcast equipment. The evaluation
kit has now been made available for customer trials. We have 61
broadcast customers in final approval stage in our new business
pipeline in broadcast, of which 36 are for Densitron Display
Components, 7 for Densitron Control Surfaces and 18 for Densitron
Control Systems.
The growing revenue and pipeline over the first half of 2021
positions us strongly for robust full year trading. The IDS
business continued to suffer for most of H1 2021 with the COVID
restrictions inhibiting installations in venues, but activity
picked up towards the end of the half with both existing orders
starting to be fulfilled and new business resuming.
Moderate investments into Densitron's core Display Components
offering have also led to new product launches. Particularly
relevant in the current climate are two technologies designed to
address human machine interaction without physical contact: hover
touch and antimicrobial cover glass. We believe these have
widespread application in areas such as the medical sector and
point-of-sale kiosks.
Group Financial Review
Group revenues were up 31% year on year to $36.5m (H1 2020:
$27.9m), with Quixant Gaming growing 55% to $18.4m (H1 2020:
$11.9m) and Densitron growing 13% to $18.1m (H1 2020: $16.0m).
Gross margin in H1 2021 was 30%, down from the 32% achieved in
H1 2020. The decline reflected the impact of component price
inflation due to the shortages experienced in obtaining key
components, which has affected many industries globally. While we
have successfully increased our prices across almost all customers
in the business through the first half of the year, the volatility
in component prices has increased our cost of sales ahead of these
price increases. We expect the margin pressure we are seeing to be
temporary and is due to the widespread current electronic component
shortages rather than a structural shift in our business. The
pass-through increases we have implemented will support our margin
position as they start to flow through our income statement in the
second half of 2021 and into 2022.
Operating expenses decreased by $1.8m or 15% to $10.1m (H1 2020:
$11.9m) due to cost saving measures the Group implemented in 2020,
despite the weakening of the US Dollar (the Group's reporting and
functional currency) versus most international currencies which has
led to inflation in our reported costs.
Adjusted pre-tax profit during the first half was $1.3m, a
significant improvement on the adjusted pre-tax loss of $1.2m
during the H1 2020. Reported pre-tax profit was $0.8m (H1 2020:
loss of $3.0m).
The Group generated cash from operations of $1.1m in the period,
an increase of $1.4m from the cash used of $0.3m in the first half
of 2020. This positive cash generation was despite the strategic
investment in inventory the Group made during the year to support
demand.
Net cash was $15.0m at 30 June 2021, compared with $17.4m at 31
December 2020. The Group returned $1.8m (H1 2020: nil) to
shareholders in the form of a full year dividend for the 2020
financial year in May 2021.
Outlook
As we enter the second half, 115% order coverage of management
revenue expectations together with a qualified pipeline of new
opportunities is encouraging. The Board is therefore confident in
growth in the second half, consistent with previous years, and
delivering strong full year trading and adjusted profit before tax
in line with management expectations. The Group continues to
actively manage through supply chain challenges because of
electronic component shortages and while these have placed some
temporary pressure on gross margin, we believe that our long-term
structural Group margin is intact. The long-term outlook is
positive given increasing demand and the Group's strategic market
positioning.
CONDENSED CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2021, 30 JUNE 2020 AND YEARED 31
DECEMBER 2020
Unaudited 30 June 2021 Unaudited 30 June 2020 31 December 2020
Note (Restated*)
$000 $000 $000
Revenue 36,543 27,901 63,794
Cost of sales (25,466) (19,051) (43,742)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Gross profit 11,077 8,850 20,052
Operating expenses (10,075) (11,858) (21,904)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Operating profit / (loss) 1,002 (3,008) (1,852)
Financial expenses (192) (40) (151)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Profit / (Loss) before tax 1 810 (3,048) (2,003)
Taxation (108) 20 (955)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Profit / (Loss) for the period 702 (3,028) (2,958)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Other comprehensive expense
Foreign currency translation differences 208 (59) 788
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Total comprehensive income for the
period 910 (3,087) (2,170)
----------------------------------------- ------ ----------------------- ----------------------- -----------------
Basic earnings per share 2 $0.0106 ($0.0456) ($0.0445)
Fully diluted earnings per share 2 $0.0105 ($0.0453) ($0.0445)
The above condensed consolidated statement of profit and loss
and other comprehensive income should be read in conjunction with
the accompanying notes.
* See note 4 - Prior year restatement
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2021, 30 JUNE 2020 AND AT 31 DECEMBER 2020
Unaudited 30 June 2021 Unaudited 30 June 2020 31 December 2020
Note
$000 $000 $000
Non-current assets
Property, plant and equipment 5,883 5,757 6,004
Right-of-use asset 1,224 251 1,276
Intangible assets 16,079 17,078 16,189
Investment property - - -
Deferred tax assets 1,958 426 1,267
--------------------------------------------- ----------------------- ----------------------- -----------------
Total non-current assets 25,144 23,512 24,736
--------------------------------------------- ----------------------- ----------------------- -----------------
Current assets
Inventories 24,773 22,857 21,601
Trade and other receivables 18,365 17,571 16,517
Cash and cash equivalents 16,120 15,842 18,804
--------------------------------------------- ----------------------- ----------------------- -----------------
Total current assets 59,258 56,270 56,922
--------------------------------------------- ----------------------- ----------------------- -----------------
Total assets 84,402 79,782 81,658
--------------------------------------------- ----------------------- ----------------------- -----------------
Current liabilities
Other interest-bearing loans and
borrowings (487) (953) (695)
Trade and other payables (16,297) (13,783) (12,913)
Tax payable (1,618) - (1,022)
IFRS 16 lease liability (456) (279) (386)
--------------------------------------------- ----------------------- ----------------------- -----------------
Total current liabilities (18,858) (15,015) (15,016)
--------------------------------------------- ----------------------- ----------------------- -----------------
Non-current liabilities
Other interest-bearing loans and
borrowings (667) (724) (712)
Provisions (371) (314) (354)
Deferred tax liabilities (1,237) (1,469) (1,322)
IFRS 16 lease liability (794) - (901)
--------------------------------------------- ----------------------- ----------------------- -----------------
Total non-current liabilities (3,069) (2,507) (3,289)
--------------------------------------------- ----------------------- ----------------------- -----------------
Total liabilities (21,927) (17,522) (18,305)
--------------------------------------------- ----------------------- ----------------------- -----------------
Net assets 62,475 62,260 63,353
--------------------------------------------- ----------------------- ----------------------- -----------------
Equity attributable to equity
holders of the parent
Share capital 106 106 106
Share premium 6,708 6,698 6,708
Share based payments reserve 1,631 1,405 1,571
Retained earnings 52,940 54,016 54,086
Translation reserve 1,090 35 882
--------------------------------------------- ----------------------- ----------------------- -----------------
Total equity 62,475 62,260 63,353
--------------------------------------------- ----------------------- ----------------------- -----------------
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 2021, 31 DECEMBER 2020 AND 30 JUNE
2020
Share capital Share premium Translation Share based Retained Total equity
reserve payments earnings
$000 $000 $000 $000 $000 $000
Balance at 1
January 2020 106 6,698 94 1,345 57,044 65,287
Total
comprehensive
income for the
period
Loss - - - - (3,028) (3,028)
Other
comprehensive
expense - - (59) - - (59)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
period - - (59) - (3,028) (3,087)
-------------- -------------- ---------------- ---------------- ---------------- -------------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - 60 - 60
Total
contributions
by and
distributions
to owners - - - 60 - 60
-------------- -------------- ---------------- ---------------- ---------------- -------------
Unaudited
balance at 30
June 2020 106 6,698 35 1,405 54,016 62,260
-------------- -------------- ---------------- ---------------- ---------------- -------------
Unaudited
balance at 1
July 2020 106 6,698 35 1,405 54,016 62,260
Total
comprehensive
income for the
period
Profit - - - - 70 70
Other
comprehensive
expense - - 847 - - 847
-------------- -------------- ---------------- ---------------- ---------------- -------------
Total
comprehensive
income for the
period - - 847 - 70 917
-------------- -------------- ---------------- ---------------- ---------------- -------------
Transactions
with owners,
recorded
directly in
equity
Share based
payments - - - 166 - 166
Exercise of
options - 10 - - - 10
-------------- -------------- ---------------- ---------------- ---------------- -------------
Total
contributions
by and
distributions
to owners - 10 - 166 - 176
-------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 31
December 2020 106 6,708 882 1,571 54,086 63,353
-------------- -------------- ---------------- ---------------- ---------------- -------------
Balance at 1
January 2021 106 6,708 882 1,571 54,086 63,353
Total
comprehensive
income for the
period
Profit - - - - 702 702
Other
comprehensive
expense - - 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
-------------- -------------- ---------------- ---------------- ---------------- -------------
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHSED 30 JUNE 2021, 30 JUNE 2020 AND YEARED 31
DECEMBER 2020
Unaudited 30 June 2021 Unaudited 30 June 2020 31 December 2020
$000 $000 $000
Cash flows from operating activities
Profit / (Loss) for the period 702 (3,028) (2,958)
Adjustments for:
Depreciation, amortisation and impairment 1,332 2,869 3,084
Impairment losses on intangible assets - - 1,503
Depreciation of leased assets 628 229 473
Movement in provisions 17 (25) (1,061)
Taxation (income) / expense 108 (20) 955
Lease liability interest expense 138 32 55
Financial expense 54 8 96
Equity settled share-based payments 60 60 226
Loan forgiven from prior year (117) - -
----------------------- ----------------------- -----------------
2,922 125 2,373
(Increase) / decrease in trade and other
receivables (1,848) 6,294 7,026
(Increase) / decrease in inventories (3,003) (2,489) 14
Increase / (decrease) in trade and other
payables 3,470 (4,180) (4,625)
----------------------- ----------------------- -----------------
1,541 (250) 4,788
Interest paid (54) (8) (96)
Lease liability interest expense (138) (32) (55)
Tax (paid) / received (288) 37 (663)
----------------------- ----------------------- -----------------
Net cash from operating activities 1,061 (253) 3,974
----------------------- ----------------------- -----------------
Cash flows from investing activities
Acquisition of property, plant and
equipment (99) (41) (431)
Acquisition of intangible assets (984) (1,359) (1,809)
----------------------- ----------------------- -----------------
Net cash used in investing activities (1,083) (1,400) (2,240)
----------------------- ----------------------- -----------------
Cash flows from financing activities
Proceeds from new loan 672 862 606
Repayment of borrowings (813) (44) (19)
Lease liability paid (612) (277) (526)
Dividends paid (1,848) - -
Exercise of options - - 10
----------------------- ----------------------- -----------------
Net cash used in financing activities (2,601) 541 71
----------------------- ----------------------- -----------------
Net (decrease) / increase in cash and
cash equivalents (2,623) (1,112) 1,805
Cash and cash equivalents at 1 January 18,804 16,954 16,954
Foreign exchange rate movements (61) - 45
----------------------- ----------------------- -----------------
Cash and cash equivalents at period end 16,120 15,842 18,804
----------------------- ----------------------- -----------------
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.
Accordingly, the interim financial statements are not in full
compliance with IFRS. The reporting currency adopted by the Quixant
Group is US Dollar as this is the trading currency of the Group.
The financial information shown for the year ended 31 December 2020
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. The Auditor's Report on the annual report and
accounts was unqualified. The condensed consolidated interim
financial information is neither audited nor reviewed and the
results of operations for the six months ended 30 June 2021 are not
necessarily indicative of the operating results for future
operating periods. The condensed consolidated interim financial
information has not been reviewed under IRSE 2410. This condensed
consolidated interim financial report was approved by the Board of
Directors on 21 September 2021.
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 2020.
Reconciliation of profit before tax
The Directors consider that disclosing alternative performance
measures enhances shareholders' ability to
evaluate and analyse the underlying financial performance of the
Group. They have identified Adjusted Profit
before tax as a measure that enables the assessment of the
performance of the Group and assists in financial, operational and
commercial decision-making.
In adjusting for this measure the Directors have sought to
eliminate those items of income and expenditure
that do not specifically relate to the normal operational
performance of the Group in a specific year. The table below
reconciles Profit / (Loss) before tax to Adjusted Profit / (Loss)
before tax identifying those reconciling items of income and
expense.
Profit / (Loss) before tax and Adjusted Profit / (Loss) before
tax for the current and prior periods has been derived as
follows:
Six months ended 30 June 2021 Six months ended Year
30 June ended
2020 31 December 2020
$000 $000 $000
Profit / (Loss) for the period 702 (3,028) (2,958)
Adding back:
Taxation expense / (income) 108 (20) 955
------------------------------ ----------------- ------------------
Profit / (Loss) before tax 810 (3,048) (2,003)
Research & development derecognised(1) - 1,307 1,503
Amortisation of customer relationships and
order backlog(2) 460 449 920
Share based payments expense(3) 60 60 226
Restructuring costs(4) - - 674
------------------------------ ----------------- ------------------
Adjusted Profit / (Loss) before tax 1,330 (1,232) 1,320
------------------------------ ----------------- ------------------
1. To derecognise capitalised research & development due to
one-off notifications by key suppliers to end-of-life key
components utilised in our gaming products; citing changing market
demands and supply chain issues brought about by the COVID-19
pandemic.
2. The amortisation of customer relationships and order backlog
has been excluded as it is not a cash expense of the Group.
3. Share based payments expense has been excluded as they are not a cash expense of the Group.
4. Other items of income and expense - where other items of
income and expense occur in a particular period and their inclusion
in PBT meant that a period-on-period comparison of operational
results is not a consistent basis the directors will exclude them
from the adjusted numbers. During the periods under review the
directors have excluded restructuring costs in respect of employee
departures.
2. Earnings per share
Six months ended Six months ended Year
30 June 2021 30 June 2020 ended
31 December 2020
$000 $000 $000
Earnings
Earnings for the purposes of basic and diluted EPS
being net profit / (loss) attributable
to equity shareholders 702 (3,028) (2,958)
----------------- ----------------- ------------------
Number of shares
Weighted average number of ordinary shares for the
purposes of basic EPS 66,450,060 66,435,060 66,437,683
Effect of dilutive potential ordinary shares:
Share options 415,500 460,290 154,375
----------------- ----------------- ------------------
Weighted number of ordinary shares for the purposes
of diluted EPS 66,865,560 66,895,350 66,592,058
----------------- ----------------- ------------------
Basic earnings per share $0.0106 ($0.0456) ($0.0445)
----------------- ----------------- ------------------
Diluted earnings per share $0.0105 ($0.0453) ($0.0445)
----------------- ----------------- ------------------
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders
by the weighted average number of shares outstanding during the period.
Six months ended Six months ended Year
30 June 2021 30 June 2020 ended
31 December 2020
Calculation of adjusted diluted earnings per share: $000 $000 $000
Earnings
Earnings for the purposes of basic and diluted EPS
being net profit / (loss) attributable
to equity shareholders 702 (3,028) (2,958)
----------------- ----------------- ------------------
Adjustments
Research & development derecognised - 1,307 1,503
Amortisation of customer relationships and order
backlog 460 449 920
Share based payments expense 60 60 226
Restructuring costs - - 674
----------------- ----------------- ------------------
1,222 (1,212) 365
Tax effect of adjustments 108 (20) (631)
----------------- ----------------- ------------------
Adjusted earnings 1,330 (1,232) (266)
----------------- ----------------- ------------------
Adjusted diluted earnings per share $0.0199 ($0.0184) ($0.0040)
----------------- ----------------- ------------------
3. Related party transactions
During the period the Group paid EUR15,600 (H1 2020: 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.
4. Prior year restatement
During the prior year, Quixant plc identified that a
consolidation journal between operating expenses and cost of sales
in respect of overheads absorbed in the production of finished
goods, was omitted from the 2020 interim results.
As a result, the cost of sales previously recognised in H1 2020
of $17.9m has now increased by $1.1m whilst the operating expenses
recognised in H1 2020 of $13.0m has now decreased by $1.1m. This
adjustment has no effect on the profit before tax and profit for
the year for H1 2020.
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END
IR BRGDCDDDDGBB
(END) Dow Jones Newswires
September 22, 2021 02:00 ET (06:00 GMT)
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