Amino Provides Trading Update
CAMBRIDGE, U.K. -- Amino Technologies plc ("Amino"; stock code : AMO), the Cambridge based broadband network software and systems company, presents an update on trading for the year ending 30 November 2005.
The Board is pleased with the strong progress being made. At the time of the half year results announcement in July 2005, we stated clearly that the results for the current year would be biased heavily towards the end of the year and noted the relative immaturity of the IPTV market with the associated challenges in terms of forecasting.
Revenues for the year to 30 November 2005 are expected to be around £24m (£13.8m for the period ended 30 November 2004), with unit shipments of around 315,000 units (174,000 for the year to 30 November 2004). Accordingly, revenue in H2, 2005 is expected to be double that for H1, 2005 and more than the total revenue for the previous year. Profit before tax for the year is expected to be in a range of £1.0m to £1.5m, having reported a loss of £0.9m for H1, 2005 and a pre-tax profit of £0.3m for 2004. During H2, new order intake has been running at an annualised rate of £38m, enabling Amino to start the new financial year with a healthy backlog. Unit pricing and margins continue to be robust and in line with our expectations. Net cash at the year end is expected to be £14m.
Our licensing business model is beginning to gain traction. In a separate statement today, we have announced a major licensing contract with AS Intercom Ltd. for the manufacture and distribution of Amino IPTV set top boxes within the Russian Federation, Kazakhstan and the Ukraine. The contract for this licensing deal has been signed and, on the current assumptions for revenue recognition for 2005 and 2006, will contribute significantly to the expected results for 2005. Other potential licensing negotiations are progressing well.
Amino's key business metrics are maintaining a strong upwards momentum. As at 31 October 2005, 55 customers have taken over 1,000 units (35 at the half year), of which 14 have taken over 10,000 units (11 at the half year); and a further 124 customers are in system trials or small-scale roll-out phase (98 at the half year). These and other customer adoption metrics show a three-fold improvement over the past 12 months. The customer base is spread across all geographies, ranging in size from regional operators ("Tier 2 and 3") to large national telcos ("Tier 1"). In the short term, and as previously indicated, the costs of supporting this broader customer base has had a downward effect on near-term profits. The Board believes that this investment will be fully validated both by the growth potential represented by our many and geographically diverse sales opportunities and by the risk-diversification that this spread provides.
We note that many well known market participants have reported delays in their IPTV developments. While highlighting these effects on our own business in previous announcements, the benefits of Amino's IntAct(tm) software technology and our commitment to customer support have helped our many customers to negotiate these challenges successfully. Against this background, we are pleased to be able to report strong growth at such an early stage in market evolution.
Over the past 3 years, Amino has established itself as a market leader in the growing IPTV market. In H2, 2005, Amino has:
- been named top worldwide supplier of IP set-top boxes by US technology analyst organisation, ABI research;
- begun shipments of the AmiNET 124, the world's first single chip MPEG-4 (H.264) IPTV set-top box;
- been selected for the first High Definition IPTV deployment in the US; and
- expanded our key supplier agreements by adding a further 3 major tier 1 Systems Integrators: Lucent, Nortel and Unisys.
We note an increased level of M&A activity within the IPTV sector and are encouraged by the support this gives to predictions of substantial market growth and opportunity. Given our market positioning, and strong customer and partner relationships, we see such developments as representing positive opportunities for Amino.
Looking forward, the market continues to show strong growth throughout the world - but with the unpredictability which is characteristic of an early stage market. We continue to be confident of sustaining the growth in revenue and shipments seen in our business over the past three years. Amino believes that the interests of both shareholders and the Group will be served best by ensuring that investment in new products, technologies, commercial partner relationships and customer trials should be sustained at the level required to consolidate its positioning and market leadership. Whilst this investment may reduce near-term profitability, Amino is well placed to benefit from the many opportunities as the market matures.
Amino Technologies plc