Amino Technologies Final Results For The Year Ended 30 November 2009

Amino Technologies plc (“Amino”; stock code: AMO), the Cambridge-based leader in digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, announces its audited final results for the year ended 30 November 2009.

Chairman’s Statement

2009 was a challenging year for Amino. The combination of the global market downturn and its effect on the pace of IPTV deployments and industry-wide component shortages, particularly in semi-conductors, made for a difficult and disappointing 12 months. We ended the year with a reduction in revenues and gross profits – revenue declining to £25.29m (2008: £31.90m) and margins down to 33.1%.

We stated last year that we would carefully monitor our markets and react quickly and decisively to ensure Amino was well-positioned when conditions improved. Before the half year stage, we accelerated our cost reduction programme, reducing our annualised cost base to £14m in 2009 versus £19m immediately following the acquisition of Tilgin IPTV on 1 December 2008. Going forward into 2010, our cost base will reduce to £11m. We also made changes in our sales, marketing and customer support activities to further differentiate our offering, improve our sales channels and sharpen still further our customer focus.

The second half of the year improved as we saw some benefit from these actions start to come through. Most encouragingly, the company achieved a strong order intake – over 277,000 units were ordered in the second half – with a number of important contract wins, notably with major European operator Tele2. The market transition to MPEG-4 is almost complete and Amino derived almost 70% of its revenues from this high growth higher value market in H2 09.

Market

The pure IPTV market globally continues to grow, with industry analysts predicting a 12% compound annual growth rate (CAGR) between 2009 and 2012. This market will remain a clear focus for Amino with improved ST7105 set-top boxes (STBs) to be launched in H1 2010.

Amino’s traditional markets in Eastern Europe, North America and enterprise and hospitality are seeing improvements at a macro-economic level which is starting to feed through in increased sales volumes. Encouragingly, we are seeing traction in emerging markets, such as Latin America, where we secured a substantial STB order with Costa Rican state network operator ICE after our year end.

New business wins in the year included Pioneer Telephone Company and Alaska-based Matanuska Telephone Association in North America, Telecom Serbia in Eastern Europe and Tele2 in Western Europe. This major contract win was testimony to the smooth launch of new set-top box products and our increasing ability to deliver substantial volume of orders to meet a demanding deployment schedule.

Consumer demand for high definition (HD) programming and services continues to shape our markets – with initial signs of a growing appetite for “Over the Top” (OTT) Internet-delivered television now apparent in the more highly-developed markets. Amino anticipated this changing dynamic by investing in new “hybrid” product development over the last six months.

After the year end, and as announced this morning, we secured an important breakthrough in this area with a contract win with a Western European tier 1 operator. This contract will see us provide them with our new Amino Freedom media centre to support the deployment of its new hybrid/ OTT service. This is the first ever Amino contract with a tier one Western European operator and underlines our leading position in the emerging hybrid/ OTT market.

The demand for more of a PC-based media player type product is also developing in the enterprise and hospitality market, where we continue to win high margin business.

The global economic downturn strongly affected Amino’s ability to close a number of potential Asset House customer opportunities in FY09. These opportunities still remain active and a number of new prospects have been stimulated through our Amino Freedom market activity.

Asset House complements a service provider’s OTT aspirations by strongly managing their content metadata and tracking a customer’s media consumption habits to deliver personalised TV. However, we are ensuring that the operating costs of Asset House are being tightly managed and are striving to ensure that the business unit as a whole is marginal profitable in FY10.

Results for the year

As a consequence of the global economic downturn, shipments of devices decreased by 29.5% to 341,000 (2008: 484,000). However, shipments of higher priced MPEG-HD devices increased by 50.6% to 134,000 (2008: 89,000) and order intake in the second half increased to 277,000 devices (2008:233,000) of which 115,000 devices were in backlog at the year end.

Revenue reduced by 20.7% to £25.29m (2008: £31.90m) of which £0.12m was generated by Asset House and £4.63m by Amino Communications AB. Licence fees reduced by £1.42m to £0.37m (2008: £1.79m). Revenue from customer support and expert services increased by £0.35m to £0.74m (2008: £0.39m).

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