21 Jan 2016 07:00
| 21 January 2016 |
Fusionex International plc
("Fusionex" or "the Company" or "the Group")
Preliminary results for the year ended 30 September 2015
Fusionex, an award-winning and market leading international software provider specialising in Analytics, Big Data and the Internet of Things ("IoT"), is pleased to announce its full year results for the year ended 30 September 2015.
Financial highlights:
· Results ahead of expectations underpinned by strong sales of Fusionex's Big Data product GIANT
· YoY revenue growth of +35% (RM77.0 million)
· YoY gross profit growth of +33% (RM58.9 million)
· EBITDA* growth of +29% (RM35.0 million)
· Net profit** growth of +28% (RM24.9 million)
· EPS growth of +28% (RM0.58)
· Cash and cash equivalents of RM57.7 million before post-period fund raise of £14.0 million (RM86.8 million)
· The Board intends to recommend a dividend
*EBITDA of RM35.0 million is derived from PBT (RM28.4 million) + amortisation of intangible assets (RM4.6 million) + depreciation of property, plant and equipment (RM2.2 million) - net interest income (RM0.2 million). This includes the gain on disposal of fixed assets amounting to RM2.0 million.(2014: RM1.4million)
**Net Profit of RM24.9 million includes the gain from the disposal of an office unit amounting to RM2 million.
Operational highlights:
· Sales of GIANT ahead of expectations, bringing the total cumulative number of GIANT clients (new and recurring customers) to 36 (2014: 12)
o Revenue growth across Asia Pacific, Europe and America
o Continued investment in R&D, including enriched functionality for GIANT, underpinning sales momentum
· Excellent progress in building channels to market
o New channel partnership with Mesiniaga Berhad, a leading ICT solutions provider and systems integrator in Malaysia, signed in H2 of FY2015.
o Significant strategic partnership secured with Dell to provide GIANT to customers in Asia post-period end in November 2015
o Over 30% of revenue came through our channel partners
· Continued sales momentum maintained into new financial year
o New GIANT wins with Asian hospital bringing Fusionex its first win for the Healthcare Analytics market.
o New GIANT win for Open Data post-period end in January 2016
· Significantly over-subscribed placing of 4,300,000 new Ordinary Shares completed post-period end
o Funds are being used to dramatically accelerate revenue growth and increase market share
· Positive and exciting outlook for Fusionex for 2016 and beyond
Ivan Teh, Chief Executive of Fusionex, commented:
"2015 saw Fusionex starting to leverage the foundations laid to deliver better than expected growth and we anticipate this trend accelerating in 2016. We remain focused on developing our business and product offerings to ensure that we are in pole position this year to drive Big Data innovation and adoption amongst our clients. We continue to invest in research and development as well as the Fusionex culture, brand and its people, building both our direct and indirect channels to market, in order to maximise the significant potential for our business.
The new financial year has started on a very strong note with good new wins already secured for GIANT, as announced, coupled with a very strong pipeline, and therefore the outlook for 2016 and beyond is very positive and exciting for Fusionex."
For further details:
Fusionex Ivan Teh, Chief Executive Officer Yuen Choong Lai, Chief Financial Officer Darren Hopkins, Director for Investor Relations & Corporate Development
| Through Buchanan
|
Panmure Gordon Fred Walsh, Alina Vaskina (Investment Banking) Erik Anderson, Tom Nicholson, Charles Leigh-Pemberton (Corporate Broking)
| 020 7886 2500 |
|
|
RBC Capital Markets Pierre Schreuder, Ema Jakasovic
| 020 7653 4000 |
|
|
Buchanan Sophie McNulty, Gabriella Clinkard, Stephanie Watson www.buchanan.uk.com | 020 7466 5000 |
Chairman's Statement
I am delighted to report on another very successful year for our Company, during which we have once again delivered positive results ahead of market expectations. With Asia Pacific accounting for the bulk of our sales, revenues have grown 35% to RM77.0 million with EBITDA increasing by 29% to RM35.0 million. We have also maintained a strong balance sheet with a healthy operating cash flow, despite the substantial investments that we have made in our technology, infrastructure and people over the past year to support our forecast growth levels in the years ahead. Our results have been driven by sales of our flagship Big Data product, GIANT, which has seen a very strong take-up from customers, with 36 cumulative clients during the year against an original objective of 30. It is also very pleasing to note the calibre of these clients, many of them blue-chip, global organisations, which once again demonstrates the quality and the unique characteristics of our GIANT product.
During the year we continued to make significant investments across divisions including sales, marketing and, in particular, R&D to ensure we maintain and improve the competitive positioning of our core products. The benefits of this have been evidenced by the quality and quantity of the new business wins which we have been able to achieve during the year. Additionally, I am very pleased to report that our major initiative to develop the indirect sales partner channel has seen very positive results. Development in this aspect of our business is critical to driving sales growth, and I am, therefore, particularly pleased to note that the second half of the year showed strong momentum in this area. Since the year end we have also announced a strategic partnership with Dell, about which we are very excited, and we are confident that it will generate significant new business opportunities by combining the skills from both companies and creating a powerful, scalable and efficient Big Data Analytics platform.
Fusionex's achievements in the IT industry have once again been recognised this year. Fusionex has won the Microsoft Global Partnership award for an unprecedented fourth consecutive year. We were also the winner of the highly coveted Asian-Oceania Computing ICT Organisation ("ASOCIO") award for Outstanding ICT Company. Additionally, Fusionex was a finalist in the AIM International Company of the Year 2015 award, demonstrating the high regard in which the Company is held amongst the investment community and our success in completing our stated goals since our London IPO. This was also underpinned by the heavily oversubscribed share placement in October 2015 to support the Company's plan to accelerate sales growth in the years ahead.
With regard to the market in which we operate, leading technology research groups such as Gartner, Forrester and IDC all predict that data analytics will continue to be a key focus globally. More and more companies are realising the importance of data analytics and "data-driven decision making" as being the key to success and survival of companies in this modern era. The emergence of the phenomenon of the Internet of Things ("IoT") will also propel Big Data Analytics to even greater heights, with the number of connected devices predicted to grow from 3 billion to 25 billion in three years' time. This dynamic environment will provide the impetus and catalyst which will continue to drive the need for Big Data Analytics where demand is growing exponentially and where Fusionex remains a key driving force in the industry.
Overall 2015 was another year of very positive progress for your Company, with strong momentum in the second half of the year as GIANT became fully deployed and built substantial momentum and industry recognition. We are excited by the opportunities facing the Company in many different customer sectors and through both direct and indirect sales channels. Our Board plans to continue to invest in all areas of the business to ensure we are well placed to take full advantage of these.
I am confident that we will be able to deliver another successful outcome this year and I would like to take this opportunity to thank all of our staff for their outstanding achievements and hard work over the past year. I would also like to thank you, our shareholders, for your continued support.
Chief Executive's Review
Overview
The 2015 financial year showed significant progress for Fusionex, building on the foundations put in place in 2014. Our Big Data Analytics product, Fusionex Insights (GIANT), continued to go from strength to strength, driven by the accelerating interest in Big Data Analytics across a wide range of sectors and underpinned by our growing number of channel partnerships. We ended the year with a record number of enterprise client wins for GIANT, a total of 36 cumulative clients, which was well ahead of our target of 30 GIANT clients by the end of FY2015. This also led to our FY2015 results being ahead of market expectations.
Our Product Offerings
Having achieved considerable success in 2014 for the then new GIANT product, we started the year under review (FY2015) with a bang to accelerate the adoption of our GIANT Big Data Analytics product. It is particularly pleasing, therefore, to see that we exceeded our targets by every measure. Key highlights include marquee contract wins such as those from clients of varied verticals including: Brother Industries, Intel, AEON, as well as the announced Smart Government initiative, just to name a few.
We also benefited from quality channel partnerships in FY2015 with the likes of Avnet, EMC, Microsoft/Revolution Analytics, etc. In FY2015, over 30% of revenue has come through our channel partners, demonstrating the effectiveness of the channel partner programme that we have developed, a marked increase from the previous year. This has led to a change in profile of our receivables due to the strategic development of our sales model, the success of which has been demonstrated by our new and exciting partner channels, which are fundamental to the next stage of our growth. It is noteworthy that we have continued to build our channels to market, with a new partnership during the year announced with Mesiniaga Berhad, a leading ICT solutions provider and systems integrator in Malaysia, listed on the Main Market of Bursa Malaysia, and a new strategic partnership post-period with Dell, a global leading technology business, to provide its customers in Asia with GIANT.
Our GIANT contracts are typically multi-year deals; clients are attracted by the ability of GIANT to deliver Big Data initiatives easily and flexibly in any environment, whether on premises, in the Cloud or via a hybrid of the two. A key driver for our clients is the need for their employees to be able to access virtually any data source, and translate such data into actionable insights delivering business value. We have again invested in GIANT during the year to enhance its functionality, usability and reach further in line with our vision and market demands.
The Company continues to invest significantly in R&D as we build out new features for GIANT. GIANT is all about discovering and actioning on data. At the forefront, the GIANT user experience is elegant, simple and self-service oriented. Behind the scenes, Fusionex's engineering masks the underlying technology complexity, allowing GIANT to effectively address the core challenges of Big Data. Masking the complexity allows Fusionex to address the frustrations that Big Data Generation 1 customers have with the complexities of generating return on investments. GIANT provides the full spectrum of analytics ranging from descriptive analytics (i.e. what happened?), advanced visualisation and diagnostic analytics (i.e. why did it happen?), predictive analytics (sharing what could happen) as well as prescriptive analytics (suggested courses of action based on analytics). This allows for a speedy, simple, seamless transition that masks the complexity of the Apache Hadoop environment, amplifying the user-friendly nature of the product. We believe that these differentiators will continue to drive growth and an even greater adoption rate moving forward.
As the Company moves into the new financial year, trading is strong and rapidly accelerating. The Company has recorded a number of notable enterprise wins post-period which have been recently announced.
The Big Data Market Backdrop and the Internet of Things
The blue-chip nature of our client base and our channel partners, mentioned above, reflects a marked and growing demand for effective, differentiated Big Data Analytics products. Strong growth in demand is expected to continue, with the Big Data technology and services market forecasted to achieve a compound annual growth rate ("CAGR") of 23.1% to 2019, where annual spending is predicted to reach $48.6 billion in 2019 (source: IDC).
This demonstrates the scale of the market opportunity for Fusionex and we anticipate that as the Big Data market matures, we will see demand underpinned by business leaders seeking actionable insights and tangible returns on investment. Indeed, Gartner has noted the trend of a shift in the role of initiators of Big Data projects within an organisation in 2015. Gartner found that business unit heads were almost as likely to initiate Big Data projects as Chief Information Officers in 2015, with 31% of projects initiated by business unit heads and 32% by Chief Information Officers, compared to 25% and 37% respectively in 2014. GIANT is well placed to benefit from this trend, providing an easy-to-use interface which enables users to derive actionable insight and foresight from huge amounts of data analysed and processed in a fast and efficient manner.
Also supporting the substantial growth in demand is the impact of the IoT. IDC has forecasted that IoT analytics will be hot, with a five-year CAGR of 30%, and that the IoT will be the next critical focus for data analytics services. The International Institute of Analytics has in turn commented that while the IoT trend has focused on the data generation and production (sensors) side of the equation, the "Analytics of Things" is a particular form of Big Data Analytics that often involves anomaly detection and "bringing analytics to life".
The number of connected devices is predicted to grow from 3 billion to 25 billion in three years' time. In tandem with that, worldwide spending on IoT is forecasted to grow from $698.6 billion in 2015 to nearly $1.3 trillion in 2019 (source: IDC). Notably, IDC highlights Asia Pacific as the region that's leading the way with IoT, accounting for more than 40% of the total spend on IoT in 2015. With the proliferation of devices, organisations increasingly need to leverage the vast quantities of data created to create business value and this will continue to boost spending on Big Data Analytics. In short, data growth is outpacing data analytics, thus creating a great opportunity ahead for Fusionex in this growing space.
Growth Strategy
Utilising our unique Analytics and Big Data products, Fusionex is poised to ride the Big Data wave to provide high business value software solutions to existing and new customers in this fast growing market space. The Company will continue to focus on growth by leveraging on our existing customer/install base to cross-sell innovative and newer versions of our products as well as growth from new customer acquisitions through our proven track record, strong offerings and solid value proposition. At the same time, through continual establishment of our partner channel network, we will leverage this ecosystem and indirect sales channel to reach out to a wider audience. Finally, we also look towards accelerating growth by addressing new geographies.
Outlook
Looking ahead, we see exciting opportunities for our business, especially from our upcoming releases of GIANT, as well as exciting new market segments and geographies. Demand for Big Data products continues to accelerate across a diverse range of sectors and geographies, reinforced by the growth of connected devices (IoT) and the need for organisations to convert data into business value.
We are now investing in all aspects of our business to dramatically accelerate revenue growth and thereby take advantage of the current market opportunities.
The year has started strongly with new wins already secured for GIANT, as announced, coupled with a very strong pipeline and therefore the outlook for 2016 and beyond is positive and exciting for Fusionex.
Financial Review
The financial year ended 30 September 2015 has seen Fusionex deliver another strong financial performance ahead of market expectations.
Revenue
Revenue for the financial year totaled RM77.0 million, an increase of 35% on last year's performance (2014: RM57.1 million), with product sales accounting for 88% (2014: 84%) of the Group's total revenue.
A significant portion of this revenue growth is attributable to the expansion of the Group's partner channel network, with revenues from the Group's partner channel network accounting for more than 30% of the total revenue for the financial year. The growth of the Group's partner channel network continues to be a core part of the Group's growth strategy and, as with some of the Company's select customers, extended credit terms have been agreed with key channel partners. This, along with the closure of a number of sales towards the financial year end, has contributed to the increase in trade receivables as at 30 September 2015. Nonetheless, cash collections post the balance sheet date have been significant.
Gross profit
Gross profit increased from RM44.3 million in 2014 to RM58.9 million in 2015 generating a gross profit margin of circa 76.4% (2014: 77.6%). In line with its ongoing strategy, Fusionex has again invested considerably in research and development to maintain its position as a market leader in Analytics and Big Data, capitalising RM16.5 million of development costs in the financial year.
Profitability and EBITDA
The Group's profit before tax increased to RM28.4 million (2014: RM22.8 million), with net profit (profit after tax) increasing to a RM24.9 million (2014: RM19.5 million).
EBITDA for the period totaled RM35.0 million (2014: RM27.2 million) calculated as profit before tax adjusted for: amortisation of intangible assets of RM4.6 million, depreciation of property, plant and equipment of RM2.2 million and net interest income totalling RM0.2 million. Profit before tax includes a gain on disposal of fixed assets of RM2.0 million (2014: RM1.4 million).
Taxation
The Group continues to benefit from operating in certain geographies in which the income generated has been exempted from taxation or subject to tax allowances. The effective tax rate for the Group was 12.1% (2014: 14.6%).
Table - Key Performance Indicators
(RM'million) | 30 September 2015 | 30 September 2014 |
Revenue | 77.0 | 57.1 |
|
|
|
By: Type |
|
|
Products | 68.0 | 47.9 |
Services | 9.0 | 9.2 |
|
|
|
By: Region |
|
|
Asia Pacific | 77.0 | 50.8 |
UK & Europe | 14.8 | 12.3 |
USA | 5.6 | 3.7 |
Consolidation elimination | (20.4) | (9.7) |
|
|
|
Gross Profit | 58.9 | 44.3 |
EBITDA | 35.0 | 27.0 |
Profit before tax | 28.4 | 22.8 |
Profit after tax | 24.9 | 19.5 |
EPS (RM) | 0.58 | 0.45 |
Cash flow
Profit before tax grew c.25% in the financial year under review, while cash generated from operations was impacted by the increase in trade and other receivables amounting to RM28.5 million, which primarily arose due to the expansion of the Group's partner channel network and extended credit terms offered to channel partners as well as significant sales being secured in the latter part of the financial year under review. Cash collections post the balance sheet date have been significant and despite the increase in trade and other receivables, the cash position of the Group remains strong.
The principal movements in the net cash were as follows:-
(RM'million) | 30 September 2015 | 30 September 2014 |
Cash flows from operating activities | 11.6 | 24.5 |
|
|
|
Acquisition of property, plant and, equipment & software | (5.0) | (7.9) |
Proceeds from sale of property, plant and, equipment & software | 5.4 | 4.9 |
Development costs incurred on intangible assets | (16.5) | (11.1) |
Repayment of term loans | (3.2) | (4.1) |
Dividend paid | (5.0) | (4.8) |
|
|
|
Change in net cash and cash equivalent in the financial year | (12.7) | 1.4 |
Cash and cash equivalent at the beginning of the financial year | 64.0 | 62.4 |
Effects of foreign exchange rate changes, net | 6.4 | 0.2 |
Cash and cash equivalent at the end of the financial year | 57.7 | 64.0 |
Borrowings and bank facilities
Total borrowings of the Group have decreased slightly to RM20.3 million (2014: RM21.0 million). This is principally attributable to the repayment of the term loan facilities for the acquisition of the Group's head office.
Equity
The Group's equity remains strong totalling RM128.7 million (2014: RM101.4 million).
Earnings per share
The Group's earnings per share increased to RM0.58 (2014: RM0.45).
Post-period placing
Following the year end, in October 2015, the Group successfully concluded a significantly oversubscribed placing of 4,300,000 new Ordinary Shares at 325 pence per share to raise a total of £13.975 million (the "Placing").
Consolidated Statement of Financial Position
as at 30 September 2015
| Note | 2015 RM |
2014 RM |
Assets |
|
|
|
Non‑current assets |
|
|
|
Property, plant and equipment | 2 | 38,031,429 | 35,193,579 |
Goodwill on consolidation | 3 | 549,572 | 549,572 |
Intangible assets | 4 | 34,192,186 | 21,575,667 |
Deferred tax assets |
| 831,440 | 441,954 |
|
| 73,604,627 | 57,760,772 |
|
|
|
|
Current assets |
|
|
|
Trade receivables |
| 28,522,560 | 7,547,911 |
Other receivables, deposits and prepayments |
| 4,950,692 | 1,918,347 |
Amounts owing by contract customers |
| 2,706,372 | 2,845,754 |
Tax recoverable |
| 232,244 | - |
Cash and cash equivalents |
| 57,727,636 | 64,021,296 |
|
| 94,139,504 | 76,333,308 |
Asset classified as held for sale | 5 | - | 3,133,832 |
Total assets |
| 167,744,131 | 137,227,912 |
Equity and liabilities |
|
|
|
Stated capital | 6 | 71,457,058 | 71,457,058 |
Merger reserve |
| (17,668,186) | (17,668,186) |
Foreign exchange translation reserve |
| 8,194,821 | 902,151 |
Retained profits |
| 66,688,490 | 46,701,994 |
Total equity attributable to owners |
| 128,672,183 | 101,393,017 |
Non‑current liabilities |
|
|
|
Long term borrowings |
| 19,445,684 | 20,224,294 |
Deferred tax liabilities |
| 6,218,400 | 3,421,090 |
|
| 25,664,084 | 23,645,384 |
|
|
|
|
Current liabilities |
|
|
|
Other payables and accruals |
| 12,017,157 | 7,623,156 |
Amount owing to contract customers |
| - | 128,625 |
Short term borrowings |
| 819,454 | 800,794 |
Provision for taxation |
| 571,253 | 1,103,884 |
|
| 13,407,864 | 9,656,459 |
Liabilities directly associated with asset classified as held for sale | 5 | - | 2,533,052 |
Total liabilities |
| 39,071,948 | 35,834,895 |
Total equity and liabilities |
| 167,744,131 | 137,227,912 |
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2015
| Note | 2015 RM | 2014 RM |
Revenue |
| 77,044,316 | 57,105,535 |
Cost of sales |
| (18,191,260) | (12,793,229) |
Gross profit |
| 58,853,056 | 44,312,306 |
Other income |
| 4,893,271 | 1,577,537 |
|
| 63,746,327 | 45,889,843 |
Administrative and other operating expenses |
| (35,333,864) | (22,728,101) |
Finance costs |
| (41,372) | (381,442) |
Profit before taxation |
| 28,371,091 | 22,780,300 |
Income tax expense | 7 | (3,423,964) | (3,320,432) |
Profit after taxation |
| 24,947,127 | 19,459,868 |
Other comprehensive income (items that may or will be reclassified to profit and loss) Exchange gains arising on translation of foreign operations |
| 7,292,670 | 212,030 |
Total comprehensive income for the financial year |
| 32,239,797 | 19,671,898 |
Profit after tax attributable to: |
|
|
|
Owners of the Group |
| 24,947,127 | 19,459,868 |
|
| 24,947,127 | 19,459,868 |
Total comprehensive income attributable to: |
|
|
|
Owners of the Group |
| 32,239,797 | 19,671,898 |
|
| 32,239,797 | 19,671,898 |
Earnings per share attributable to owners of the Group |
|
|
|
Basic, sen | 8 | 58.02 | 45.26 |
Diluted, sen | 8 | 58.02 | 45.26 |
Consolidated Statement of Changes in Equity
as at 30 September 2015
|
| Non-distributable |
| Distributable |
|
|
| |||
| Note | Stated capital RM | Merger reserve RM | Foreign exchange translation reserve RM |
| Retained profits RM | Attributable to owners of the Group RM | Total equity RM |
| |
Balance at 1 October 2013 |
| 71,457,058 | (17,668,186) | 690,121 |
| 32,037,486 | 86,516,479 | 86,516,479 |
| |
Profit after taxation |
| - | - | - |
| 19,459,868 | 19,459,868 | 19,459,868 |
| |
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
| |
- Foreign currency translation differences for foreign operations |
| - | - | 212,030 |
| - | 212,030 | 212,030 |
| |
Total comprehensive income for the financial year |
| - | - | 212,030 |
| 19,459,868 | 19,671,898 | 19,671,898 |
| |
Dividend | 9 | - | - | - |
| (4,795,360) | (4,795,360) | (4,795,360) |
| |
Balance at 30 September 2014 |
| 71,457,058 | (17,668,186) | 902,151 |
| 46,701,994 | 101,393,017 | 101,393,017 |
| |
|
| Non-distributable |
| Distributable |
|
| ||||
| Note | Stated capital RM | Merger reserve RM | Foreign exchange translation reserve RM |
| Retained profits RM | Attributable to owners of the Group RM | Total equity RM | ||
Balance at 1 October 2014 |
| 71,457,058 | (17,668,186) | 902,151 |
| 46,701,994 | 101,393,017 | 101,393,017 | ||
Profit after taxation |
| - | - | - |
| 24,947,127 | 24,947,127 | 24,947,127 | ||
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
| ||
- Foreign currency translation differences for foreign operations |
| - | - | 7,292,670 |
| - | 7,292,670 | 7,292,670 | ||
Total comprehensive income for the financial year |
| - | - | 7,292,670 |
| 24,947,127 | 32,239,797 | 32,239,797 | ||
Dividend | 9 | - | - | - |
| (4,960,631) | (4,960,631) | (4,960,631) | ||
Balance at 30 September 2015 |
| 71,457,058 | (17,668,186) | 8,194,821 |
| 66,688,490 | 128,672,183 | 128,672,183 | ||
Consolidated Statement of Cash Flows
as at 30 September 2015
| Note | 2015 RM | 2014 RM |
Cash flows from operating activities |
|
|
|
Profit before taxation |
| 28,371,091 | 22,780,300 |
Adjustments for: |
|
|
|
- amortisation of intangible assets |
| 4,574,604 | 2,647,681 |
- depreciation of property, plant and equipment |
| 2,245,115 | 1,371,434 |
- interest expenses |
| 41,372 | 381,442 |
- interest income |
| (268,283) | (142,905) |
- property, plant and equipment written off |
| 3,307 | 83,646 |
- gain on disposal of fixed assets |
| (2,036,717) | (1,364,961) |
Operating profit before working capital changes |
| 32,930,489 | 25,756,637 |
Increase in trade and other receivables |
| (24,264,042) | (2,015,083) |
Increase in other payables and accruals |
| 4,394,001 | 2,101,774 |
Decrease in amount owing from contract customers |
| 10,757 | 25,265 |
Cash flows from operating activities |
| 13,071,205 | 25,868,593 |
Interest paid |
| (41,372) | (381,442) |
Interest received |
| 268,283 | 142,905 |
Income tax paid |
| (1,651,465) | (1,115,472) |
Net cash generated from operating activities |
| 11,646,651 | 24,514,584 |
Cash flows from investing activities |
|
|
|
Purchase of property, plant and equipment |
| (5,032,700) | (7,886,920) |
Proceeds from disposal of property, plant and equipment |
| 5,427,597 | 4,904,160 |
Development costs on intangible assets |
| (16,499,763) | (11,148,891) |
Net cash used in investing activities |
| (16,104,866) | (14,131,651) |
Cash flows from financing activities |
|
|
|
Dividends paid |
| (4,960,631) | (4,795,360) |
Repayment of hire purchase payables |
| (78,792) | (121,102) |
Repayment of term loans |
| (3,214,210) | (4,066,005) |
Net cash used in financing activities |
| (8,253,633) | (8,982,467) |
Net (decrease)/increase in cash and cash equivalents |
| (12,711,848) | 1,400,466 |
Cash and cash equivalents at beginning of the financial year | 64,021,296 | 62,391,526 | |
Effects of foreign exchange rate changes, net |
| 6,418,188 | 229,304 |
Cash and cash equivalents at end of the financial year |
| 57,727,636 | 64,021,296 |
Notes to the Financial Information
for the year ended 30 September 2015
1. Basis of preparation
The financial information set out in this preliminary announcement is abridged and does not constitute the Company's statutory financial statements for the year ended 30 September 2015. The financial information has been extracted from the financial statements for the year ended 30 September 2015, which were approved by the Board on 20 January 2015 and on which the auditors have reported without qualification. The 2015 Annual Report will be distributed to shareholders and made available on the Company's website at http://www.fusionex-international.com. It will also be filed with the Companies Registered Office.
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the European Union (EU), including related interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC).
The accounting policies adopted by the Group are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of IFRS that are effective for annual periods beginning on or after 1 October 2014. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.
The directors propose a single payment of an interim dividend and do not propose a final dividend in respect of the year ended 30 September 2015 (2014: nil).
The Board of Directors approved this announcement on 20 January 2016.
2. Property, plant and equipment
During the year ended 30 September 2015, the Group acquired assets amounting to RM5,032,700 (2014: RM7,886,920).
3. Goodwill on consolidation
|
| 2015 RM | 2014 RM |
At cost |
| 558,887 | 558,887 |
Less: impairment losses |
| (9,315) | (9,315) |
Carrying value |
| 549,572 | 549,572 |
During the financial year, the Group assessed the recoverable amount of the goodwill and determined that no additional impairment is required. This assessment of goodwill was done by comparing the gross profit to the value of goodwill for the entity whose acquisition gave rise to the goodwill.
4. Intangible assets
| 2015 RM | 2014 RM |
Development expenditure |
|
|
At cost: |
|
|
At 1 October - brought forward | 26,237,745 | 15,110,585 |
Additions | 16,499,763 | 11,148,891 |
Translation differences | 929,644 | (21,731) |
| 43,667,152 | 26,237,745 |
Accumulated amortisation |
|
|
At 1 October - brought forward | (4,662,078) | (2,017,929) |
Amortisation charge | (4,574,604) | (2,647,681) |
Translation differences | (238,284) | 3,532 |
| (9,474,966) | (4,662,078) |
At 30 September - net book value | 34,192,186 | 21,575,667 |
The intangible assets mainly consist of staff costs.
5. Asset classified as held for sale
At 30 September 2014, assets classified as held by sale included the property sold at RM3,133,832. The liabilities associated with the asset held for sale were RM2,533,052. This related principally to the Group's office premise in L19-03-08, PJX-HM Shah Tower, No. 16A, Persiaran Barat, 46050 Petaling Jaya, Selangor Darul Ehsan. No impairment of loss was recognised on reclassification of the office building as held for sale nor as at 30 September 2014 as the Directors expected that the fair value less costs to sell was higher than the carrying amount. The proceeds in respect of the disposal was received in cash consideration of RM5,427,597.
The sale was completed in March 2015.
6. Stated capital
Issued, called up and fully paid
|
| No. of shares |
RM |
As at 1 October 2014/ 30 September 2015 |
| 43,000,000 | 71,457,058 |
The Company has an unlimited authorised share capital of Ordinary Shares of no par value.
7. Income tax expense
|
| 2015 RM | 2014 RM |
Current tax expense |
|
|
|
- for the financial year |
| 1,223,378 | 1,689,691 |
- overprovision in the previous financial year |
| (336,788) | (230,314) |
|
| 886,590 | 1,459,377 |
Deferred tax assets: |
|
|
|
- for the financial year |
| - | (442,878) |
- underprovision in the previous financial year |
| (259,936) | - |
|
| (259,936) | (442,878) |
Deferred tax liabilities: |
|
|
|
- for the financial year |
| 3,004,165 | 2,303,933 |
- overprovision in the previous financial year |
| (206,855) | - |
|
| 3,423,964 | 3,320,432 |
Tax expense is recognised based on an annual tax rate for the full financial year applied to the pre-tax income of the year.
8. Earnings per share
The calculation for earnings per share, based on the weighted average number of shares, is shown in the table below:
|
| Year ended 30 September | |
|
| 2015 RM | 2014 RM |
Profit after tax attributable to owners of the Group |
| 24,947,127 | 19,459,868 |
Weighted average number of shares: |
|
|
|
Basic |
| 43,000,000 | 43,000,000 |
Diluted |
| 43,000,000 | 43,000,000 |
Earnings per share: |
|
|
|
Basic |
| 58.02 | 45.26 |
Diluted |
| 58.02 | 45.26 |
9. Dividends
|
| 2015 RM | 2014 RM |
Interim dividend for 30.9.2015: RM0.115 per ordinary share |
| 4,960,631 | - |
Interim dividend for 30.9.2014: RM0.112 per ordinary share |
| - | 4,795,360 |
|
| 4,960,631 | 4,795,360 |
10. Capital commitment
Authorised capital expenditure contracted but not provided for in the consolidated financial statements is analysed as follows:
|
| 2015 RM | 2014 RM |
Leasehold improvement |
| 419,268 | - |
11. Segment analysis
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker, as defined in IFRS 8, in order to allocate resources to the segment and to assess its performance.
Interest income and interest expense are not allocated to segments, as this type of activity is driven by the central treasury function which manages the cash position of the Group. Accordingly, this information is not separately reported to the Board for each reportable segment.
Operating segments are prepared in a manner consistent with the internal reporting provided to the Executive Directors as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on geographical locations.
Geographical location
| Asia Pacific RM | Europe RM | Americas RM | Elimination(4) RM | Total RM |
At 30 September 2015 |
|
|
|
|
|
Revenue | 77,006,862 | 14,827,489 | 5,620,290 | (20,410,325) | 77,044,316 |
Result |
|
|
|
|
|
Segment result before financing result and tax | 27,117,058 | 7,483,057 | 2,116,230 | (8,303,882) | 28,412,463 |
Finance costs |
|
|
|
| (41,372) |
Income tax |
|
|
|
| (3,423,964) |
Profit for the year |
|
|
|
| 24,947,127 |
Assets |
|
|
|
|
|
Segmental assets(1) | 222,754,037 | 105,932,380 | - | - | 328,686,417 |
Non‑allocated assets(2) |
|
|
|
| 437,360 |
Consolidation adjustments |
|
|
|
| (161,379,646) |
Total assets |
|
|
|
| 167,744,131 |
Liabilities |
|
|
|
|
|
Segmental liabilities(3) | 124,103,894 | 21,255,905 | - | - | 145,359,799 |
Non-allocated liabilities(2) |
|
|
|
| 55,091,795 |
Consolidation adjustments |
|
|
|
| (161,379,646) |
Total liabilities |
|
|
|
| 39,071,948 |
(1) Segment assets comprise total current and non‑current assets less unallocated assets.
(2) Mainly related to central administrative function's and central treasury function's assets / liabilities
(3) Segment liabilities comprise total current liabilities and non‑current liabilities less unallocated liabilities.
(4) Mainly related to Asia Pacific intercompany sales.
Other segmental reporting
| Asia Pacific RM | Europe RM | Americas RM | Total RM |
At 30 September 2015 |
|
|
|
|
Capital expenditure: |
|
|
|
|
- tangible assets | 5,032,700 | - | - | 5,032,700 |
- intangible assets | 16,499,763 | - | - | 16,499,763 |
Depreciation | 2,245,115 | - | - | 2,245,115 |
Other non‑cash expenses |
|
|
|
|
Unrealised foreign exchange gain | (1,969,073) | - | - | (1,969,073) |
Amortisation of intangible assets | 4,574,604 | - | - | 4,574,604 |
| 2,605,531 | - | - | 2,605,531 |
Geographical location
| Asia Pacific RM | Europe RM | Americas RM | Elimination(4) RM | Total RM |
At 30 September 2014 |
|
|
|
|
|
Revenue | 50,817,898 | 12,294,765 | 3,684,662 | (9,691,790) | 57,105,535 |
Result |
|
|
|
|
|
Segment result before financing result and tax | 21,039,684 | 7,217,837 | 1,621,534 | (6,717,313) | 23,161,742 |
Finance costs |
|
|
|
| (381,442) |
Income tax |
|
|
|
| (3,320,432) |
Profit for the year |
|
|
|
| 19,459,868 |
Assets |
|
|
|
|
|
Segmental assets(1) | 182,349,513 | 78,717,463 | - | - | 261,066,976 |
Non‑allocated assets(2) |
|
|
|
| 549,573 |
Consolidation adjustments |
|
|
|
| (124,388,637) |
Total assets |
|
|
|
| 137,227,912 |
Liabilities |
|
|
|
|
|
Segmental liabilities(3) | 105,624,472 | 11,037,046 | - | - | 116,661,518 |
Non‑allocated liabilities(2) |
|
|
|
| 43,562,014 |
Consolidation adjustments |
|
|
|
| (124,388,637) |
Total liabilities |
|
|
|
| 35,834,895 |
(1) Segment assets comprise total current and non‑current assets less unallocated assets.
(2) Mainly related to central administrative function's and central treasury function's assets / liabilities.
(3) Segment liabilities comprise total current liabilities and non‑current liabilities less unallocated liabilities.
(4) Mainly related to Asia Pacific intercompany sales.
Other segmental reporting
| Asia Pacific RM | Europe RM | Americas RM | Total RM |
At 30 September 2014 |
|
|
|
|
Capital expenditure: |
|
|
|
|
- tangible assets | 7,886,920 | - | - | 7,886,920 |
- intangible assets | 11,148,891 | - | - | 11,148,891 |
Depreciation | 1,371,434 | - | - | 1,371,434 |
Other non‑cash expenses |
|
|
|
|
Unrealised foreign exchange gain | (123,372) | - | - | (123,372) |
Amortisation of intangible assets | 2,647,681 | - | - | 2,647,681 |
| 2,524,309 | - | - | 2,524,309 |
Business segments
| Products RM | Services RM | Total RM |
At 30 September 2015 |
|
|
|
Revenue | 68,025,654 | 9,018,662 | 77,044,316 |
At 30 September 2014 |
|
|
|
Revenue | 47,882,316 | 9,223,219 | 57,105,535 |
12. Subsequent events
On 15 October 2015, the Company announced a placing of 4,300,000 new ordinary shares at 325 pence per share to raise a total of GBP13.975 million. The new ordinary shares represented approximately 10% of the existing share capital of the Company.