Amino Provides Pre-Close Trading Update

Tuesday, November 3rd, 2009
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Amino Technologies plc (LSE: AMO), the IPTV specialist, provides the following update on trading ahead of the close of its financial year on 30 November. Whilst operational progress during the second half of the year has been solid, due to order slippage and component shortages the Board now expects that its financial performance for FY 2009 will be significantly below market expectations and anticipates posting a material loss in H2.

In our results announcement of 18 August, the Board of Amino (the “Board”) explained that it had continued to make good progress during the first half of the year in certain key areas, namely managing the transition from MPEG-2 to MPEG-4; in continuing to streamline and better manage its cost base; and in improving sales performance in the important North American market.

The Board can now confirm that sales in the half are now predominantly MPEG-4 and that the transition is all but complete. This means that H2 2009 will be one of the best periods for order intake since the Company’s inception. This was supported by a number of important competitive wins of which Tele2 in Europe and Pioneer in North America have already been announced. Positive sales traction in North America confirms that the macro-economic climate and demand for our products in that region are also improving.

However, a number of factors have combined during the half to mean that we now expect our financial performance to be below expectations. First, orders that we had expected to close in the period have not closed and we are now looking to close them in FY 2010. Secondly, fulfilling booked orders has proved challenging due to component shortages at our suppliers which is likely to prevent us completing those orders and recognising the revenue in this financial year.

The Company has substantially reduced its cost base during the half and, now that the MPEG-4 heavy investment period is over, plans to reduce the FY 2010 cash operating cost base by over £3m compared to the current year and £2m compared to our H2 run-rate.

The foundations for a better performance in FY 2010 are in place. The combined impact of this leaner cost base, improved order intake and healthy backlog into FY 2010 will, the Board believes, provide a solid platform for growth. The Company retains a strong balance sheet with net cash balances of £8.0m at 31 October 2009.

Commenting on the announcement, Keith Todd, Amino Non-Executive Chairman, said:

“2009 has been a disappointing year financially, against a backdrop of turbulent and difficult trading conditions for our customers. However, we exit the year in better shape than at the half year as a leaner and more focused company that is better positioned to capitalise on the transition to IP-connected devices in the home. Our strong order intake proves the continuing attractiveness of our products and we are particularly encouraged by the progress we have made in transitioning from MPEG-2 to higher specification MPEG-4 and HD product lines. We are confident as a Board that we have in place a solid platform for growth in 2010 and beyond.”