TIDMSEV
RNS Number : 7651A
SerVision plc
30 September 2015
30 September 2015
SerVision PLC
("SerVision" or the "Company")
Interim Results
For the Six Months Ended 30 June 2015
The Board of SerVision (AIM: SEV), the AIM quoted leading
developer and manufacturer of digital security systems, announces
its unaudited results for the six months ended 30 June 2015.
For further information:
SerVision plc +972 2535 0000
Gidon Tahan, Chairman and CEO
Allenby Capital Limited (Nominated Adviser
and Joint Broker) +44 (0)20 3328 5656
Nick Athanas / James Reeve
Beaufort Securities Limited (Joint Broker)
Jon Levinson / Elliot Hance +44 (0)20 7382 8300
Cadogan Leander (Financial PR)
Christian Taylor-Wilkinson +44 (0)7795 168 157
Notes to Editors
SerVision is a pioneer in the field
of security communications technology
and a leading developer and manufacturer
of fully integrated video recording
and transmission systems for homeland
security and transportation applications.
The Company's core technology is
proprietary video compression which
is optimised for streaming real-time
video over any type of cellular
or narrowband network.
REPORT AND FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE
2015
CHAIRMAN'S STATEMENT
The Board today announces SerVision's consolidated group interim
results for the six months ended 30 June 2015. Revenue during this
period amounted to a modest $1,242,000 and our net loss was
$1,445,000. While on the surface these numbers appear low (relative
to last year's revenue of $1,842,000 and net loss of $892,000 for
the same period), I can assure investors that the current results
are an inevitable outcome of our transition to a new recurring
revenue business model. With this new commercial framework in place
we are generating less revenue initially, but the Directors
anticipate these will lead to more significant revenues of a
recurring nature of a recurring nature in the long term. In
addition, a number of significant opportunities, particularly in
China, were put on hold in H1 as customers have been reluctant to
issue further purchase orders until our new IP-based IVG400-N is
ready for market. I am pleased to say that we have a healthy
pipeline for H2 and I expect better results going forward, as our
new IVG is slated for release in the coming weeks and we are poised
to start collecting recurring monthly revenue from a number of
existing projects and customers.
Sales and Marketing
SerVision's most significant accomplishment over the course of
2015 has been the opening of a UK office in Manchester that is now
making direct sales to customers and offering full turn-key
solutions for customers, including services and technical support.
We have already secured our first project with Gatwick Airport and
has been approved as a supplier by the airport. During H1, two
major fleet and driver management companies, Matrix and GreenRoad,
integrated SerVision's video streaming protocol into their
platform, and they initiated a number of UK-based pilots which we
believe have strong sales potential. For all of these opportunities
and contract wins, SerVision's UK office will be providing
stand-alone and integrated systems, installation service, technical
support, and cellular data packages that will be paid in monthly
installments over a 24 or 36 month period. The UK office has just
hired a new support engineer and is currently operating with a
staff of five.
During H1, SerVision supplied over seven hundred and fifty
MVG400 units, aggregately valued at $915,000, for bus projects in
Brazil and Kazakhstan, and it received new orders from
cash-in-transit companies in South Africa as well as from Israel's
largest bus operator, Egged. Also, during this period, we began
pilots for a range of new bus and cash-in-transit fleet projects in
Nigeria, Tanzania, and Mexico. We also recently completed the
homologation process for SerVision's mobile DVRs in Peru, paving
the way for new market penetration in that country. In the United
States we have been invited to participate in a pilot for Manhattan
City School Buses (where the fleet size is 7,000), and we've
recently submitted bids with four local police counties to supply a
wearable CCTV solution based on the CVG-M. Earlier this month,
after an extensive testing period, the Company learned that it has
been short-listed for a project to supply up to 1,000 HVGs for
deployment at select US traffic junctions nationwide. We also have
a significant opportunity on the horizon for a bus project in the
Chinese Municipality of ChongQuing (an existing SerVision customer)
but, as mentioned above, the customer has delayed plans to begin
this project until the new IVG400-N is available. I anticipate
further progress to be made in the Chinese marketplace once the new
product has been launched.
Research and Development
Our R&D team's primary focus during H1 (and subsequently)
has been to get the new IVG400-N ready for market. The Directors
believe that the system's support for IP cameras and High
Definition (HD) recording give it a considerable advantage over the
current range of mobile DVR solutions on the market (which only
support analog cameras and standard definition recording). The IVG
has a built-in 3G/4G modem and it supports advanced
streaming/transcoding capabilities that are optimised for live
transmission over low bit-rate networks. In addition, like the MVG
series, it has built-in support for WiFi, GPS, Audio and G-Force,
as well as a range of virtual sensors to detect motion, ignition
status, geo-fencing violations, speed thresholds and more. A small
quantity of IVGs have already been reserved for select customers
with high sales potential, and we expect to be able to showcase the
IVG400-N during the SEECAT Anti-Terrorism exhibition in Tokyo,
Japan in October 2015. The Directors expect that the product will
be in mass production shortly thereafter.
While our server team has been busy developing the IVG platform,
our software team has been focused on developing a new client
software application which will support HD streams and our new
optimized H.264 streaming codec. The new client is named
"SVCentral," and it will be compatible with the IVG400 as well as
the existing range of SerVision products. It will be launched
together with the IVG400-N. Another high priority R&D
initiative we undertook during H1 entailed adding support for a
video streaming platform that enables customers to view live video
streams from SerVision DVRs in any web-browser. Prior to this, our
SDK was only compatible with Internet Explorer so web client
applications developed by third-parties could only access our
systems from within this particular browser. With newly added
support for the NGNIX platform, video streaming web clients for
SerVision products are now possible in Google's Chrome, Mozilla's
Firefox and Apple's Safari.
Financials
-- Revenues for this period were $1,242,000 compared to $1,842,000 for the same period in 2014.
-- Operating loss for the period was $1,436,000 compared to an
operating loss of $814,000 for the same period in 2014.
-- Net loss for the period was $1,445,000 compared to a loss of
$892,000 for the same period in 2014.
In May 2015, the Company announced a subscription to raise
GBP911,927 through a subscription for new ordinary shares with
existing shareholders and new investors. The net proceeds of the
subscription are being utilised to satisfy the Company's existing
order book and for general working capital purposes.
Since the period end the Company announced, on 25 September
2015, a placing to raise a further GBP800,000 at a price of 3.5 per
share with existing shareholders and new investors. The Placing was
arranged by Beaufort Securities as the Company's joint broker.
Conclusion
Although we achieved modest results for H1 2015, I believe that
our new recurring revenue business model is the correct long-term
strategy for SerVision, and I am currently exploring this
commercial model for South Africa where we already have a strong
reputation and solid market presence. I am very excited about our
new product release and look forward to sharing better results in
the future as we grow our market share in the UK, and begin
introducing the IVG400-N into global markets.
As always, I am grateful to our shareholders for their
confidence and support, and also to the SerVision team for their
dedication, commitment and outstanding work.
Gideon Tahan
Chairman and CEO
30 September 2015
SERVISION PLC
CONDENSED GROUP COMPREHENSIVE INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Six months Six months Year to 31
to to
30 June 30 June December
2015 2014 2014
Note $'000 $'000 $'000
Unaudited Unaudited Audited
REVENUE 3 1,242 1,842 4,236
Cost of sales (752) (806) (1,843)
GROSS PROFIT 490 1,036 2,393
Administrative expenses (1,926) (1,850) (3,058)
OPERATING LOSS (1,436) (814) (665)
Net finance expense (22) (77) (129)
LOSS ON ORDINARY
ACTIVITIES BEFORE TAXATION (1,458) (891) (794)
Tax on loss on ordinary
activities 4 13 (1) (1)
NET LOSS FOR THE PERIOD (1,445) (892) (795)
Translation difference arising
from
translating into presentation
currency (99) (18) 66
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 08:42 ET (12:42 GMT)
TOTAL COMPREHENSIVE
LOSS FOR THE PERIOD (1,544) (910) ( 729)
Loss per share
BASIC 5 (1.75)c (1.61)c (1.16)c
DILUTED (1.75)c (1.61)c (1.16)c
CONDENSED GROUP BALANCE SHEET
AT 30 JUNE 2015
As at 30 As at 30 As at 31
June June
2015 2014 December
2014
$'000 $'000 $'000
Unaudited Unaudited Audited
ASSETS
Non-current assets
Intangible assets 4,749 4,605 4,691
Deferred tax asset 96 83 82
Property, plant and equipment 63 77 70
4,908 4,765 4,843
Current assets
Inventories 670 585 597
Trade and other receivables 1,341 1,613 1,853
Cash and cash equivalents 24 173 101
2,035 2,371 2,551
Total assets 6,943 7,136 7,394
EQUITY
Capital and reserves attributable
to the Company's equity shareholders
Called up share capital 1,498 984 1,224
Share premium account 14,671 12,639 13,588
Merger reserve 1,979 1,979 1,979
Advance subscription - 1,036 -
Other reserve 66 64 66
Retained earnings and translation
reserves (14,672) (13,309) (13,128)
Total equity 3,542 3,393 3,729
LIABILITIES
Current liabilities
Short term credit from banking
institutions 873 1,144 1,042
Overdrafts -- 63 --
Loan from the office of the
chief scientist 161 161 161
Trade and other payables 1,635 1,292 1,721
2,669 2,660 2,924
Non-current liabilities
Long term loan from bank
institution
without current maturity 434 656 443
Loan from Office of the Chief
Scientist 11 11 11
Post employment benefits 287 416 287
732 1,083 741
Total liabilities 3,401 3,743 3,665
Total equity and liabilities 6,943 7,136 7,394
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Share Share Merger Other Retained Translation
Capital Premium Reserve Reserve Earnings Reserve Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Advance
subscription
$'000
As at 1 January
2014 984 12,639 1,979 62 (12,495) 96 - 3,265
Total recognised
expense - - - - (892) (18) - (910)
Advance
subscription - - - - - - 1,036 1,036
Share option
charge - - - 2 - - - 2
At 30 June 2014 984 12,639 1,979 64 (13,387) 78 1,036 3,393
Total recognised
expense - - - - 259 84 - 181
Issue of shares 240 949 - - - - (1,036) 153
Share option
charge - -- -- 2 - - - 2
As at 31 December
2014 1,224 13,588 1,979 66 (13,290) 162 - 3,729
Issue of shares 274 1,083 - - - - - 1,357
Total recognised
expense - - - - (1,445) (99) - (1,544)
Share option - - - - - - - -
charge
At 30 June 2015 1,498 14,671 1,979 66 (14,735) 63 - 3,542
CONDENSED GROUP CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Six months Six months Year to
to to 31
30 June 30 June December
2015 2014 2014
$'000 $'000 $'000
Unaudited Unaudited Audited
Cash flows from operating activities
Loss before taxation (1,458) (891) (794)
Adjustments for:
Net finance expense 22 77 129
Doubtful debts 462 578 604
Depreciation and amortisation 333 387 1,088
Movement in trade and other receivables 73 (456) (1,402)
Movement in tax assets (13) - 1
Movement in inventories (74) (21) (33)
Movement in post retirement benefits (1) 4 (125)
Movement in trade and other payables (86) (245) 138
Net cash outflow from operating activities (742) (567) (394)
Cash flow from investing activities
Purchase of property, plant and equipment
and intangibles (384) (329) (626)
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 08:42 ET (12:42 GMT)
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