AFERIAN PLC

Earnings Release • Feb 5, 2019

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RNS Number : 0840P

Amino Technologies PLC

05 February 2019

AMINO TECHNOLOGIES PLC

("Amino", the "Company" or the "Group")

FULL YEAR RESULTS FOR THE YEAR ENDED 30 NOVEMBER 2018

Transformation programme to drive higher quality of earnings

Amino, the global provider of media and entertainment technology solutions to network operators, announces audited consolidated results for the year ended 30 November 2018.

Financial highlights

US$m unless otherwise stated		2018		2017	Change
Revenue Adjusted gross profit		88.9	96.1		-7%
36.5	42.9		-15%
Adjusted EBITDA		16.8	20.4		-18%
Adjusted profit before tax (1)		11.2	15.2		-26%
Adjusted operating cash flow		14.1	23.7		-41%
Adjusted basic earnings per share (US cents)(1)		14.49	20.75		-30%
Statutory gross profit		38.0	45.2		-16%
Statutory profit before tax		8.2	13.3		-38%
Statutory operating cash flow		14.3	22.2		-36%
Statutory basic earnings per share (US cents)		11.25	21.27		-47%
Net cash		20.3	17.4		17%
Dividend per share (GBP pence)		7.32	6.66		10%

Financial highlights

·      2018 results in line with revised consensus market expectations (2)

·      Resilient performance in challenging market conditions

-  As previously announced, H2 performance impacted by significant macro-economic headwinds, particularly in OTT TV vendor hardware

·      Cost saving programme delivered annualised proforma overhead savings of $4.4m

·      Continued strong cash generation and increased year end cash balance of $20.3m

-  Debt-free balance sheet and strong net cash position support dividend policy

·      Recommended dividend up 10%, in line with our previous commitment

-  Seventh consecutive year of dividend increases

-  Ongoing commitment to maintain dividend at current levels until at least FY20

Transformation programme to drive higher quality of earnings  

·      Acceleration of strategy to focus on software and services and value-add hardware, to support a more resilient business model with improved operating margins and recurring revenue

·      Exit from low margin, commoditised hardware activities expected to reduce anticipated revenues by c20%, and anticipated adjusted operating profit by 10%, in FY19

·      Further management action to deliver cost savings - additional $5.0m annualised reduction in cost base identified

·      Intention to accelerate software and services growth through organic growth and a focused M&A strategy

·      Simplification of product portfolio to deliver more cost-effective products to customers

·      Programme expected to complete by April 2019

Operational and strategic progress

·      Strong growth in software and services, up 19%

·      The Group's three long-term growth drivers continue to make progress: IP / Cloud TV Everywhere; Operator Ready Android TV; and Upcycling legacy devices to next generation TV experiences

·      Traction for SaaS Engage platform - annual recurring run-rate revenues up 36%

·      Launch of innovative ODM programme to licence AminoOS software

Current trading and outlook

·      Challenging macro-economic headwinds continuing into 2019

·      Multi-Layer Ceramic Capacitor ("MLCC") cost increases are showing early signs of slowing

·      Memory prices expected to decline slowly from Q2 2019

·      Operators seeing continued pressure from rising content costs and cord cutting and trimming

·      2019 expectations reduced to reflect exit from low margin, commoditised hardware activities and refocused strategy

Keith Todd CBE, Non-Executive Chairman, said:

"The Board remains confident in the strength and strategic direction of the Company and has committed to continue its dividend policy for this financial year and maintain this dividend level for at least two years thereafter. The diversity and depth of change in our industry this year has created difficult trading conditions in the short term, however the Company remains well positioned to take advantage of the all IP future, and remains profitable and cash generative.

2018 presented Amino with unprecedented macro-economic headwinds which, together with continued industry transformation, impacted our performance.  Amino delivered a resilient performance in this context, with excellent cash generation supporting a net cash position and strong balance sheet.  Swift and decisive management action on cost protected group margins.  Amino continues to make good progress with its three long-term growth priorities: IP / Cloud TV Everywhere, Operator Ready Android TV and Upcycling legacy devices to next generation TV experiences.

To support a higher quality of earnings and de-risk the business, we are accelerating our strategy to improve growth in recurring revenues from software and services, reinforce our focus on value-add hardware, and remove our exposure to low margin hardware activities.  This will increase the quality of our earnings and our resilience going forward."

The information communicated in this announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.

For further information please contact:

Amino Technologies PLC	+44 (0)1954 234100
Donald McGarva, Chief Executive Officer
Mark Carlisle, Chief Financial Officer
finnCap Ltd (NOMAD and Broker)	+44 (0)20 7220 0500
Matt Goode / Carl Holmes / Simon Hicks (Corporate Finance) Tim Redfern / Richard Chambers (ECM)
FTI Consulting LLP (Financial PR)	+44 (0)20 3727 1000
Jamie Ricketts / Alex Le May / Chris Birt

About Amino Technologies plc

Amino is a global leader in media and entertainment technology solutions and an IPTV pioneer, working with over 250 operators in 100-plus countries. Drawing on more than 20 years' experience delivering IP/cloud innovation, Amino enables operators to meet the challenges they face as broadcast TV and online video moves to an all-IP future with managed over-the-top (OTT) offerings. We are expert in software, hardware and cloud implementation - able to deploy our own leading-edge technologies and integrate these with third-party and 'upcycled' legacy systems. At the forefront of the evolution of TV Everywhere, Amino helps operators to provide the features and functionality modern consumers are looking for in a multiscreen, multi-device entertainment world.

Having deployed over 10 million customer premise devices and the software necessary to link the back end to the user interface, we understand the issues operators face. We partner with operators to deliver end-to-end, operator-ready solutions that enable next-generation customer experiences. We 'upcycle' existing infrastructure to support more advanced services and integrate seamlessly with new technologies to form a unified ecosystem. The result is a fresh consumer offering based on a consistent user experience across all screens, building brand reputation, stemming churn, growing subscribers and increasing average revenue per user (ARPU).

Amino Technologies PLC is listed on the London Stock Exchange AIM (symbol AMO), with headquarters in Cambridge, United Kingdom, and global offices in California, Finland and Hong Kong. For more details, visit www.aminocom.com

Notes

(1) Adjusted operating profit, adjusted profit before tax and adjusted earnings per share are non-GAAP measures and exclude amortisation of acquired intangibles, other operating income, exceptional items and share-based payment charges.

(2) The Board believes market forecasts for adjusted profit before tax to be in the range of £10.9m to £11.5m with a consensus of £11.3m.

Chairman's statement:

Amino has been at the forefront of the transition of TV from traditional broadcast technologies such as one-way cable and satellite to IP / Cloud TV Everywhere since it was established 21 years ago.

In 2018, significant macro-economic headwinds and pressure on operators from rising content costs and cord cutters and trimmers resulted in a 7% decrease in revenue and 26% fall in adjusted profit before tax.   We expect these to continue in 2019.

In 2018, management maintained gross margin through rigorous focus on product and logistics costs, despite worldwide increases in memory and other components.  Swift and decisive management action has delivered annualised proforma overhead savings of $4.4m to offset the challenging trading environment.

To accelerate the transformation to higher margin, recurring software revenues to drive greater future shareholder returns, Amino has decided to implement a far-reaching transformational programme which we believe will fundamentally improve the quality and resilience of our business.  The Board firmly believes that the strategic decision to accelerate the focus on software and services and move away from low margin hardware revenue is the correct one for Amino.  This will de-risk Amino, and enable a greater focus on transforming the Group, both organically and through the opportunities to act as a consolidator in our market. 

The Board believes this strategy will enable Amino to achieve higher gross margin and net profit returns using a reduced cost base, albeit on a smaller revenue base.  Whilst absolute profit will decline in 2019, the dividend will be maintained and management can focus on software growth.

The Company's cash generation and balance sheet remain strong with the year-end cash position ahead of market expectations at $20.3m (30 November 2017: $17.4m).

Amino's three long-term growth drivers - IP / Cloud TV Everywhere, Operator Ready Android TV and Upcycling legacy devices to next generation TV experiences - remain compelling and continue to create opportunities as Amino's marketplace undergoes fundamental structural changes.

Throughout 2018 the management team have continued to focus on the market opportunity presented by this transition. In 2019 they will continue this focus, whilst also streamlining the business to ensure that it delivers higher quality margin, profits and cash generation.

In 2015, the Board took the strategic decision to acquire a Cloud TV Everywhere company to complement the Group's device platforms and to invest further in the Company's core software capabilities. I am therefore pleased to report 19% software and services revenue growth in 2018 as our software solutions gained further traction during the year, evidencing the strategic direction and focus of the Group.

The OTT TV market is fragmented and presents Amino with opportunities to pursue selective acquisitions at the right price to enhance recurring revenues from software and services.

Strategic priorities

Amino remains committed to delivering a sustainable cash generative business and its strategic priorities are:

·      to focus on a streamlined, cost effective, set of products and services to support our three core offerings outlined above through continued investment in R&D; and

·      to grow higher margin software and services revenue through selling services that are complementary to our devices and which will improve the visibility and recurring nature of Amino's revenues.

Board changes

In February 2018, Steve McKay and Michael Clegg were appointed to the Board and brought with them a wealth of industry experience and technology expertise. In April 2018, Peter Murphy stepped down from the Board after a ten-year tenure. On behalf of the Board I would like to thank him for his valuable contribution and support during that time. Following Peter's departure, Karen Bach was appointed chair of the Audit and Remuneration Committees and designated as the senior independent non-executive director. The Board is also currently undertaking a search for another independent non-executive.

Dividend

The Board is pleased to recommend the continuation of its progressive dividend policy with a full year dividend of 7.32 GBP pence per share, an increase of 10% on 2017. This is the seventh successive year of dividend increase since 2011 and underlines the Board's commitment to shareholder value. The Board also intends to maintain this dividend for at least two years.

Keith Todd

Chairman

4 February 2019

Notes

(1)   Adjusted profit before tax is a non-GAAP measure and is defined in the Financial Highlights section above

Chief Executive's Review

Strategy aligned with market and industry direction to all-IP service delivery

Emerging technologies and an increasing focus on consumer needs are forcing the pay-TV industry and the operators who deliver TV content to fundamentally change the way they operate.

Improved networking technology allows consumers to watch entertainment, news or sports content on any device available to them, whenever they want, on demand. This shift from "appointment TV" to streamed programming is driving the ongoing transformation of the pay-TV industry - with operators facing declining subscriptions and rising content licensing fees.

As a result, operators have been forced to consider alternative options for delivering video content to their subscriber base. Amino has strategically aligned to meet this fundamental shift in the pay-TV industry, to deliver smart and cost-effective solutions to our operator clients, increasingly utilising our in house software.

The industry has also been experiencing additional challenges related to macro-economic factors. These factors include rising component costs, market uncertainty related to US tariffs and delayed purchasing decisions.

Although the backdrop to our results seems complex, we remain confident in our core value-added set top box ("STB") market. Amino believes the STB is the cornerstone of a modern TV experience (where TV is watched on any device, anytime and anywhere) and this is backed up with industry trends and our customer feedback. Our approach is also to add further value to this marketplace by leveraging Amino software to create solutions for Operators to tackle these 'real world' challenges.

Strategic progress

Software and services revenue grew by 19% in 2018 which reflected progress made in our three long-term growth opportunities:

·      IP/Cloud TV Everywhere; which provides telco and cable operators with the capabilities to provide the latest 'TV everywhere' experiences. Amino also enables cable operators to transition cost-effectively from Cable to IP.

·      'Operator Ready' Android TV; which has emerged as a credible service delivery choice for pay-TV operators with its ability to provide a rich user experience - with value added content - and new features like personalisation, content recommendation and voice control.

·      Upcycling; where we employ our core software to fully leverage an operator's existing investment in STB assets, create a STB marketplace and an industry leading service assurance capability.  

Our AminoTV IP / Cloud TV Everywhere solution was rolled out at Delta in the first half of the year and Kabelnoord in the second half. In October 2018, we commenced an upcycling programme at T-Mobile Netherlands using our AminoOS software which will be fully deployed, along with our Engage service assurance software, in 2019. In Operator Ready Android TV, we secured initial orders for devices in North America in the first half of the year and delivered them in the second half of 2018.

In addition, the annual recurring run rate ("ARRR") of our SaaS Engage service assurance platform grew 36% in 2018 and was deployed at 8 additional operators during the year.

Dealing with market head winds

During the second half of 2018 we saw lower orders than originally expected due to instability in the economies of certain emerging markets and planned trade tariffs in the US.  In addition, component prices continued to increase and, to ensure the supply of key components such as Multi-Layer Ceramic Capacitors ("MLCCs"), we had no option but to accept these.

In North America (56% of group revenue) approximately two thirds of sales are made via distribution to smaller Tier 3 and 4 operators. Sales to these operators, fulfilled via our distribution channel, were broadly flat in 2018 compared to 2017. However, overall our revenue into North America declined by 18% as our distributors reduced stocking levels compared to the previous year. This reflects the impact of planned trade tariffs in the US, which have not impacted Amino's products directly, but have created confusion and concern among our customers, which has translated into delayed buying decisions.

In EMEA (32% of group revenue) sales increased by 25% after a period of decline. Highlights include: a long-standing customer re-commencing orders in the second half of last year; an upcycling contract win at T-Mobile Netherlands; new customer wins for T-2 in Slovenia, Kabelnoord in the Netherlands and Cablevision in Lebanon.

In Latin America (10% of group revenue) revenues declined by 15%. Economic instability in the region impacted the ability of our customers to pay in the second half of the year, thereby halting shipments to certain customers in the region.

Restructuring in 2018

We keep the operational structure of our business under continuous review. This year we completed two restructuring programmes: one in March 2018 to complete the planned reduction in the number of our development centres from three to two, and the second in November 2018 to reduce the cost base and further improve operational efficiency. These restructuring programmes have been completed and will deliver annualised proforma cost savings of $4.4m.

Transformation programme

The Board of Amino has reviewed the Group's strategy with a view to de-risking the strategy and business model.  The changes are designed to support a higher quality of earnings, greater resilience and an increase in recurring revenues.

Amino's core market remains Tier 2-4 Telco operators to whom the Group provides tailored solutions designed to give them the advantage in a competitive and dynamic marketplace. Amino's credentials in serving this marketplace are strong, particularly in the quality of software and services that we offer, as evidenced by our continued growth in software in 2018 and recent upcycling wins such as with T-Mobile Netherlands.

Moving into 2019 we plan to further focus on monetising our higher margin core software capabilities and increasing the quality and recurring nature of our revenues. Whilst we will continue to offer value-add hardware and related services to our customers, we will no longer compete for low margin hardware where customers are looking for a commodity product.

Our software will continue to power our own and other vendors' hardware and to give operators a competitive advantage. Our innovative ODM program, for example, licenses our AminoOS software to high volume, low margin device vendors to provide them with competitive edge and differentiation. We will also be significantly simplifying our product portfolio to ensure that we provide customers with the most cost-effective solutions.

As a result, we will be implementing a company-wide transformation programme designed to improve our ability to deliver effectively our strategic vision. The programme focuses on harnessing people talent and moving to a cost and investment structure that will help us be 'fit for purpose'.

The result of this plan will be to reduce our operating cost base by a further $5.0m on an annualised basis. However, we also expect revenues to therefore decline by approximately 21% compared to FY18 (all of which from low margin hardware sales) resulting in lower than expected profits in the short term, albeit that these profits are expected to be achieved at higher margins and be underpinned by a higher proportion of software and recurring revenue.

Medium term growth opportunities 

Although our revenues are expected to decline in the short term, we see good opportunities from the disruption of the pay-TV market.  Our strategy is to focus on positioning Amino into key growth market segments.

We have several key sales propositions that meet the requirements for these markets, which are as follows:

·      Multiscreen deployments - Operators have a pressing requirement to cost-effectively modernise in ensuring they remain competitive in attracting and retaining customers. Amino fully integrates and deploys Operator Tier Android TV to take advantage of advanced functionality like voice control, federated search and access to premium OTT apps.

·      Cable to Android migrations - Significant demand exists for operators to extend their cable infrastructure to improve profitability in leveraging Android TV. Our solution gives smaller operators the ability to deliver a world class, premium tier service without major upfront investments or lengthy integrations.

·      North America Device demand - In our key North American market we are seeing continued demand for 4K devices that help support an all-IP delivery model. Amino has a complete range of Linux, Android and Cable devices that ship with our award winning AminoOS.

·      Upcycling projects - A unique capability is our ability to upcycle deployed devices in the field without a costly home visit by an engineer. We license AminoOS to power third party devices to improve portability and performance in deploying modern TV experiences.

Current trading and outlook

The macro-economic headwinds that constrained trading in the second half of 2018 have continued into the early part of 2019.  Memory prices are showing early signs of decreasing and the rate of price increases of MLCCs is slowing.  A healthy pipeline of sales opportunities in our core markets underpins our confidence in our long-term strategy and focus.  Whilst our transformation programme means a focus on higher quality, recurring revenues from software and services, in the near term the exit from low margin hardware revenues is expected to reduce revenues by 21% in 2019. We therefore expect profits to be approximately 10% lower than 2018 levels, albeit at better margins.  With a robust balance sheet, strong cash generation and a compelling opportunity in the pay-TV market, we remain confident in the long-term strategic direction and future of the Company.

Donald McGarva

Chief Executive Officer

4 February 2019

Chief Financial Officer's review

On 6 June 2018 the Group announced that from the beginning of the current financial year it would be changing the currency in which it presents its financial results from UK pound sterling ("sterling") to US dollars ("dollars"), denoted by the symbol $. Accordingly, the previously reported results for the year ended 30 November 2017 have been translated from sterling to dollars using the exchange rates set out in note 9.

Revenue for the year was $88.9m (FY 2017: $96.1m). Adjusted operating profit (as defined below) was $11.2m (FY 2017: $15.0m), representing a 26% decrease from the previous year. Operating profit was 38% lower at $8.2m (FY 2017: $13.1m). In line with its progressive dividend policy the Board has recommended a full year dividend of 7.32 GBP pence per share, a 10% increase over the prior year. The Group has a strong balance sheet with net cash of $20.3m (30 November 2017: $17.4m) and is debt free.

Revenue

	2018 $m	2017 $m	Change
Recurring	4.7 4.6	4.2 3.7	12%
One-off	24%
Software and services	9.3 79.6	7.9 88.2	19%
Devices including integrated software	-10%
Revenue	88.9	96.1	-7%

Software and services revenues represent revenues from our AminoTV TV Everywhere platform, our AminoOS software (sold independently from devices), as well as support for our AminoVU devices. Software and services revenues increased by 19% in the year as a result of growth across all these revenue streams and are now 11% of total revenues for the period (FY 2017: 8%). At 30 November 2018 annual run rate recurring revenues increased to $5.1m (30 November 2017: $4.6m).

The Group's revenues are globally distributed as follows:

	2018 $m	2017 $m	Change
North America	49.6 9.0 28.9 1.4	60.5	-18%
Latin America	10.6	-15%
Europe	23.2	25%
Rest of World	1.8	-22%
Revenue	88.9	96.1	-7%

In North America, the revenue decline of 18% over 2018 was primarily driven by distributors reducing stocking levels compared to the previous year. In Europe, sales growth was primarily driven by a long-standing customer re-commencing orders in the second half of last year, as well as growth in software and services.

Amino continues to sell its products directly to tier 2 customers and to tier 3 and 4 customers via distributors. The Group has three customers which each have more than 10% of total Group revenue, of which two are distributors.

Gross profit

Excluding the impact of a one off $1.5m credit in respect of royalty costs recognised in prior years which have subsequently been renegotiated, adjusted gross profit decreased by 15% to $36.5m (FY 2017: $42.9m). Adjusted gross margin decreased to 41.0% (FY 2017: 44.5%) as increases in silicon and memory prices were not fully offset by higher margin software revenue. The Group expects modest decreases in memory pricing and expects the rate of price increases in silicon and MLCCs to soften into 2019. Including the impact of the one off $1.5m credit (described above), gross profit decreased by 16% to $38.0m (FY 2017: $45.2m).

Operating expenses

	As reported
	2018 $m	2017 $m	Change
R&D	6.5 13.2 1.4 2.8 8.6	7.1 15.4 1.0 0.4 8.3	-8% -14% 40% 600% 4%
SG&A
Share-based payment charge
Exceptional items
Depreciation and amortisation
Operating expenses	32.5	32.2	1%

The Group continues to invest in research and in the development of new products and spent $11.0m on R&D activities (FY 2017: $13.2m) of which $4.7m was capitalised (FY 2017: $6.0m).

Similar to the prior year, the Group's R&D and SG&A costs were denominated 45% in US and HK Dollars, 39% in British Pounds and 16% in Euros.

Exceptional items

Exceptional items within cost of sales comprised a one off $1.5m credit in respect of royalty costs recognised in prior years which have subsequently been renegotiated.

Exceptional items included within operating expenses in 2018 comprised:

·      $1.6m restructuring costs incurred in the first half of the year as a result of the final rationalisation of R&D centres;

·      $0.8m restructuring costs incurred during a further rationalisation of the cost base following a business review performed in November 2018;

·      $0.4m costs incurred in respect of more than one potential, material acquisition.  These were aborted following the completion of phase one of due diligence.

Exceptional items included within other operating income comprised $2.7m income following the release of funds from the escrow held in respect of the Entone, Inc. acquisition in August 2015. The funds were released as settlement for liabilities, identified post acquisition, that were not recorded on the Entone, Inc. closing balance sheet.

Depreciation and amortisation

Excluding amortisation of intangibles recognised on acquisition, depreciation and amortisation increased to $5.6m (FY 2017: $5.4m). Amortisation of intangibles recognised on acquisition was $3.0m (FY 2017: $2.9m).

Operating profit

Adjusted operating profit excluding share-based payment charges of $1.4m, exceptional items of net $0.1m and amortisation of intangibles recognised on acquisition of $3.0m was $11.2m (FY 2017: $15.0m). Statutory operating profit was $8.2m (FY 2017: $13.2m).

Taxation

The tax charge of $0.1m comprises:

·      a $0.7m current tax charge relating to current year profits; and

·      a $0.6m credit relating to the unwind of the deferred tax liability recognised in respect of the amortisation of intangible assets recognised on acquisition.

Profit after tax was $8.2m (FY 2017: $15.3m).

Earnings per share

After adjusting for the after-tax impact of exceptional items, share-based payment charges and amortisation of intangibles recognised on acquisition, adjusted basic earnings per share decreased by 30% to 14.49 US cents (FY 2017: 20.75 US cents) and adjusted diluted earnings per share decreased by 29% to 14.46 US cents (FY 2017: 20.33 US cents). Basic earnings per share was 11.25 US cents (FY 2017: 21.27 US cents) and diluted earnings per share was 11.23 US cents (FY 2017: 20.84 US cents).

Cash flow

Adjusted cash flow from operations was $14.1m (FY 2017: $23.8m) and represented 84% of adjusted EBITDA (FY 2017: 116%). Exceptional cash flows in 2018 totalled $0.1m in respect of funds released from escrow, net of payments for pre-acquisition Entone royalty liabilities, payment of restructuring costs and payment of aborted acquisition costs. Including these exceptional cash out-flows cash generated from operations was $14.3m (FY 2017: $22.2m).

During the year the Group spent $0.2m (FY 2017: $0.2m) on capital expenditure in respect of tangible fixed assets, and capitalised $4.6m of research and development costs and software licenses. The Group paid dividends of $6.8m in the year.

Financial position

The cash balance at 30 November 2018 was $20.3m (30 November 2017: $17.4m). The Group also has a £12.5m sterling multicurrency working capital loan facility which reduces to £10.0m sterling in July 2019. It expires in July 2020 and was undrawn at the period end.

At 30 November 2018 the Group had equity of $73.5m (30 November 2017: $73.1m) and net current assets of $19.6m (30 November 2017: $14.4m). 75% of trade receivables were insured (30 November 2017: 70%) and debtor days were 59 days (30 November 2017: 26 days) which is in line with the payment terms given to a large customer who made up the majority of trade receivables at the year end.

Dividend

The Board has recommended a full year dividend of 7.32 GBP pence per share, a 10% increase over the prior year. The Board also intends to continue this level of dividend for at least two years. Subject to shareholder approval at the annual general meeting to be held on 27 March 2019, the dividend will be payable on 26 April 2019, to shareholders on the register on 5 April 2019, with a corresponding ex-dividend date of 4 April 2019.

Mark Carlisle

Chief Financial Officer

4 February 2019

	Notes	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Revenue Cost of sales	2 3	88,934 (50,973)	96,136 (50,890)
Gross profit		37,961	45,246
Operating expenses Other operating income Operating profit	3	(32,458) 2,700 8,203	(32,164) - 13,082
Adjusted operating profit Share-based payment charge Exceptional items Amortisation of acquired intangible assets	3	11,158 (1,378) 1,436 (3,013)	14,955 (995) 2,003 (2,881)
Operating profit		8,203	13,082
Finance expense Finance income		(53) 90	(4) 206
Net finance income		37	202
Profit before tax Tax (charge)/credit		8,240 (61)	13,284 2,001
Profit for the year from continuing operations attributable to equity holders		8,179	15,285
Basic earnings per 1p ordinary share	4	11.25c	21.27c
Diluted earnings per 1p ordinary share	4	11.23c	20.84c

All amounts relate to continuing activities.

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Profit for the financial year	8,179	15,285
Items that may be reclassified subsequently to profit or loss: Net foreign exchange (loss)/gain arising on consolidation	(2,594)	4,041
Other comprehensive (expense)/income	(2,594)	4,041
Total comprehensive income for the financial year attributable to equity holders	5,585	19,326

The accompanying notes are an integral part of these condensed consolidated financial statements.

Assets	Notes	As at 30 November 2018 $000s	As at 30 November 2017 $000s
Non-current assets Property, plant and equipment Intangible assets Deferred income tax assets Trade and other receivables	5	534 54,734 716 402	793 60,672 751 408
		56,386	62,624
Current assets Inventories Trade and other receivables Corporation tax receivable Cash and cash equivalents	5 5	3,633 20,290 - 20,310	4,285 15,012 221 17,386
		44,233	36,904
Total assets		100,619	99,528
Capital and reserves attributable to equity holders of the Company Called-up share capital Share premium Capital redemption reserve Foreign exchange reserve Merger reserve Retained earnings		1,327 32,300 12 (14,420) 30,122 24,146	1,327 32,300 12 (11,826) 30,122 21,158
Total equity		73,487	73,093
Liabilities Current liabilities Trade and other payables Corporation tax payable	6 6	24,226 393	22,499 26
		24,619	22,525
Non-current liabilities Provisions Deferred tax liabilities		1,318 1,195	2,056 1,854
		2,513	3,910
Total liabilities		27,132	26,435
Total equity and liabilities		100,619	99,528

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Notes	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Cash flows from operating activities Cash generated from operations Corporation tax paid	7	14,310 (73)	22,191 (717)
Net cash generated from operating activities		14,237	21,474
Cash flows from investing activities Purchases of intangible assets Purchases of property, plant and equipment Net interest received Acquisition of subsidiaries		(4,589) (177) 37 -	(6,041) (272) 106 (494)
Net cash used in investing activities		(4,729)	(6,701)
Cash flows from financing activities Proceeds from exercise of employee share options Dividends paid		225 (6,794)	444 (5,623)
Net cash used in financing activities		(6,569)	(5,179)
Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Effects of exchange rate fluctuations on cash held		2,939 17,386 (15)	9,594 7,737 55
Cash and cash equivalents at end of year		20,310	17,386

The accompanying notes are an integral part of these condensed consolidated financial statements.

	Share capital $000s	Share premium $000s	Merger reserve $000s	Foreign exchange reserve $000s	Capital redemption reserve $000s	Profit and loss $000s	Total $000s
Shareholders' equity at 30 November 2016	1,325	31,871	30,122	(15,867)	12	9,597	57,060
Profit for the year Other comprehensive income	- -	- -	- -	- 4,041	- -	15,285 -	15,285 4,041
Total comprehensive income for the year attributable to equity holders	-	-	-	4,041	-	15,285	19,326
Share based payment charge Exercise of employee share options Issue of share capital Treasury shares used Dividends paid	- - 2 - -	- - 429 - -	- -   - - -	- -   - - -	- - - - -	995 444   - 459 (5,623)	995 444 431 459 (5,623)
Total transactions with owners	2	429	-	-	-	(3,724)	(3,293)
Total movement in shareholders' equity	2	429	-	4,041	-	11,561	16,033
Shareholders' equity at 30 November 2017	1,327	32,300	30,122	(11,826)	12	21,158	73,093
Profit for the year Other comprehensive expense	- -	- -	- -	- (2,594)	- -	8,179 -	8,179 (2,594)
Total comprehensive income for the year attributable to equity holders	-	-	-	(2,594)	-	8,179	5,585
Share based payment charge Exercise of employee share options Dividends paid	- - -	- - -	- - -	- - -	- - -	1,378 225 (6,794)	1,378 225 (6,794)
Total transactions with owners	-	-	-	-	-	(5,191)	(5,191)
Total movement in shareholders' equity	-	-	-	(2,594)	-	2,988	394
Shareholders' equity at 30 November 2018	1,327	32,300	30,122	(14,420)	12	24,146	73,487

The accompanying notes are an integral part of these condensed consolidated financial statements.

1   Basis of preparation

The financial information set out in this preliminary announcement for the year ended 30 November 2018 has been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and interpretations (collectively IFRS) as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The accounting policies adopted in these preliminary results have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the financial statements for the year ended 30 November 2018. The principal accounting policies adopted are unchanged from those used in the preparation of the statutory accounts for the period ended 30 November 2017, except for the change in presentation currency, described below. New standards, amendments and interpretations to existing standards, which have been adopted by the Group, have not been listed since they have no material impact on the financial statements.

The financial information set out in this document does not constitute the Group's statutory financial statements for the year ended 30 November 2018 or 30 November 2017. The annual report and financial statements for the year ended 30 November 2018 were approved by the board of directors on 4 February 2018 along with this preliminary announcement. The financial statements for the year ended 30 November 2018 have been reported on by the Independent Auditor. The Independent Auditor's report on the financial statements for 2018 was unqualified and did not draw attention to any matters by way of emphasis.

Change in presentation currency

On 6 June 2018 the Group announced that from the beginning of the current financial year it would be changing the currency in which it presents its financial results from UK pounds sterling ("sterling") to US dollars ("dollars").  Accordingly, the reported results for the year ended 30 November 2017 have been translated from sterling to dollars.

The trading results of subsidiaries where the functional currency was other than dollars were translated into dollars at the relevant average rates of exchange while the assets and liabilities of these operations were translated into dollars at the relevant closing rates of exchange.  A change in presentation currency is accounted for retrospectively.

2   Geographical external customer revenue analysis

Geographical external customer revenue analysis	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
USA Canada	49,125 488	58,783 1,679
North America	49,613	60,462
Bolivia Chile Rest of LATAM	3,204 2,043 3,792	2,158 4,672 3,797
Latin America	9,039	10,627
Netherlands Rest of EMEA	11,509 17,356	8,246 14,946
EMEA	28,865	23,192
Rest of the World	1,417	1,855
	88,934	96,136

For this disclosure revenue is determined by the location of the customer.

3   Exceptional Items

Exceptional items within cost of sales and operating costs comprise the following charges/(credits):

	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Credit relating to royalty costs recognised in prior years and subsequently renegotiated	(1,490)	(2,387)
Subtotal cost of sales Expensed contingent post-acquisition remuneration in respect of the acquisition of Entone, Inc. Release of deferred contingent consideration (conditions not met) Redundancy and associated costs Aborted acquisition costs	(1,490) - - 2,372 382	(2,387) 1,046 (831) 169 -
Subtotal operating expenses	2,754	384
Other operating income	(2,700)	-
Total exceptional items (credit)	(1,436)	(2,003)

Other operating income is comprised of proceeds of a claim settled against former Entone, Inc. shareholders in respect of previously unrecorded liabilities identified post the acquisition of Entone, Inc.

3   Exceptional Items (continued)

In addition, in the prior year an exceptional tax credit of $1,672,000 was recognised relating to the partial release of a tax provision held to cover prior year uncertain tax positions identified on the acquisition of Entone, Inc. due to a reassessment undertaken by management.

4   Earnings per share

	Year to 30 November 2018 $000	Year to 30 November 2017 $000
Profit attributable to ordinary shareholders	8,179	15,285
Profit attributable to ordinary shareholders excluding exceptional items,share-based payments and amortisation of acquired intangibles and associated taxation	10,531	14,910
Weighted average number of shares (Basic)	72,700,215	71,851,262
Weighted average number of shares (Diluted)	72,829,635	73,350,612
Basic earnings per share	11.25c	21.27c
Diluted earnings per share	11.23c	20.84c
Adjusted basic earnings per share	14.49c	20.75c
Adjusted diluted earnings per share	14.46c	20.33c

The calculation of basic earnings per share is based on profit after taxation and the weighted average of ordinary shares of 1p each in issue during the year. The Company holds 2,039,647 (2017: 2,253,123) of its own shares in treasury and these are excluded from the weighted average above. The basic weighted average number of shares also excludes 22,586 (2017: 140,433) being the weighted average shares held by the EBT in the year.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  The Group has only one category of dilutive potential ordinary shares; those share options where the exercise price is less than the average market price of the Company's ordinary shares during the year.

The profit attributable to ordinary shareholders excluding exceptional items is derived by adding back exceptional items (including exceptional tax credit), share-based payment charges and amortisation of acquired intangibles of $2,955,000 (2017: $201,000) and subtracting the tax effect thereon $603,000 (2017: $576,000) disclosed on the face of the consolidated income statement.

5   Trade and other receivables

	As at 30 November 2018 $000s	As at 30 November 2017 $000s
Current assets: Trade receivables Less: provision for impairment of trade receivables	18,907 (108)	13,549 (231)
Trade receivables (net) Other receivables Prepayments and accrued income	18,799 368 1,123	13,318 266 1,428
Sub-total	20,290	15,012
Corporation tax receivable	-	221
	20,290	15,233
Non-current assets: Other receivables	402	408

Other receivables comprise rent deposits.

6   Trade and other payables

	As at 30 November 2018 $000s	As at 30 November 2017 $000s
Current liabilities Trade payables Social security and other taxes Other payables Accruals Deferred income	14,165 500 - 9,332 229	8,045 772 140 13,068 474
Subtotal Tax payable	24,226 393	22,499 26
	24,619	22,525

7   Cash generated from operations

	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Profit before tax Net interest received Amortisation charge Depreciation charge Loss on disposal of property, plant and equipment Share based payment charge Exchange differences Decrease in inventories Increase/decrease in trade and other receivables Decrease in provisions Increase/(decrease) in trade and other payables	8,240 (37) 8,176 430 7 1,378 (253) 652 (5,278) (738) 1,733	13,284 (106) 7,925 423 1 995 427 2,646 3,065 - (6,469)
Cash generated from operations	14,310	22,191

Adjusted operating cash flow before exceptional cash outflows was $14.1m (2017: $23.7m).

	Year to 30 November 2018 $000s	Year to 30 November 2017 $000s
Adjusted operating cashflow Redundancy and associated costs Aborted acquisition costs Proceeds of a claim settled against former Entone, Inc. shareholders in respect of previously unrecorded liabilities identified post the acquisition of Entone, Inc. Receipt of Escrow funds payable to current and former employees of the Group Royalty settlements Contingent post-acquisition remuneration (please see note 18 and note 24)	14,115 (1,268) (382) 2,700 486 (1,341) -	23,691 - - - - - (1,500)
Cash generated from operations	14,310	22,191

8   AGM / Annual Report

Pursuant to AIM Rule 20, the Annual Report and Accounts for the financial year ended 30 November 2018 ("Annual Report") is available to view on the Group's website: www.aminocom.com and will be posted to shareholders shortly. Amino will hold its AGM on 27 March 2019.

9   Five year US dollar comparative information

	Year ended 30 November
Income statement	2017 Unaudited $m	2016 Unaudited $m	2015 Unaudited $m	2014 Unaudited $m	2013 Unaudited $m
Revenue	96.1	101.6	63.9	59.8	55.9
Adjusted EBITDA	20.5	17.4	11.4	11.2	9.5
Adjusted operating profit	15.0	13.0	7.8	6.9	5.3
Exceptional and other items	(1.9)	(10.4)	(7.5)	(0.3)	1.2
Interest (net)	0.2	0.0	0.1	0.1	0.1
Profit before tax	13.3	2.6	0.4	6.7	6.6
Tax credit/(charge)	2.0	(0.2)	0.1	0.0	(0.1)
Profit attributable to equity holders	15.3	2.4	0.5	6.7	6.5
Average number of employees	197	209	150	100	103

	Year ended 30 November
Earnings per share	2017 Unaudited $ cents	2016 Unaudited $ cents	2015 Unaudited $ cents	2014 Unaudited $ cents	2013 Unaudited $ cents
Adjusted basic	23.08	18.78	13.13	13.36	10.10
Adjusted diluted	22.61	18.59	13.06	13.25	10.02
Basic	21.27	3.68	0.93	12.69	12.31
Diluted	20.84	3.65	0.92	12.51	12.22
Dividends
Dividend per ordinary share GBP pence	6.65	6.05	5.50	5.00	3.45
Dividend per ordinary share USD cents	8.52	8.33	8.43	8.26	5.38

	As at 30 November
Balance sheet	2017 Unaudited $m	2016 Unaudited $m	2015 Unaudited $m	2014 Unaudited $m	2013 Unaudited $m
Non-current assets	62.6	60.5	71.6	7.6	8.2
Net current assets	14.4	2.4	5.0	32.7	32.5
Total assets less current liabilities	77.0	62.9	76.6	40.3	40.7
Non-current liabilities	-	(0.8)	(2.7)	-	-
Provisions for liabilities and charges	(3.9)	(5.1)	(6.2)	-	-
Net assets	73.1	57.0	67.7	40.3	40.7
Called up share capital	1.3	1.3	1.1	0.9	0.9
Reserves	71.8	55.7	66.6	39.4	39.8
Shareholders' funds	73.1	57.0	67.7	40.3	40.7

9   Five year US dollar comparative information (continued)

Exchange rates used USD:GBP	2017	2016	2015	2014	2013
Average rate	1.28061	1.37702	1.53254	1.65267	1.56034
Year end rate	1.33975	1.24440	1.50311	1.56386	1.63477

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