ALARIS HOLDINGS LTD FINANCIAL YEAR END RESULTS 12 months ended 30 - - PowerPoint PPT Presentation

ALARIS HOLDINGS LTD

FINANCIAL YEAR END RESULTS 12 months ended 30 June 2018 10 YEARS ON THE JSE

Slide# Financial Highlights 3 Operational Highlights 4 - 5 Reflection on 2018 6 Group Overview 7 - 16 Financial information 17 - 24 Growth Plan 25 - 27 Q&A

AGENDA

2

FINANCIAL HIGHLIGHTS

• Revenue from continuing operations increased by 17% from

R159.4 million to R187.1 million.

• Profit after tax from continuing operations increased by 43% from

R23.0 million to R32.9 million.

• Normalised earnings per share from continuing operations increased

by 100% from 15.2 cents to 30.5 cents.

• Net cash flow from operating activities increased by 229% from

R13.3 million to R43.8 million.

Photo by: Johan Fuhri ( Senior Electronic Engineer)

3

OPERATIONAL HIGHLIGHTS

• The Group’s focused strategy is bearing results through 3 core

strategic objectives:

• Sustainable organic growth over the past 10 years
• Project Management Office implemented
• Increase in synergies between Alaris Antennas and COJOT
• Environmental Stress Screening equipment: installed to improve

quality and customer service

4

US ACQUISITION

• Target company is resident in the US
• US defence market

– 60% of global market – approved defence budget totaling $716 billion

• Purchase consideration for the Acquisition - US$2,750,000

– an amount of US$2,062,500 - paid in cash – balance of US$687,500 - settled by issuing Alaris shares

• Maximum consideration shares is capped at 5,000,000
• Cash to be financed through excess cash and a loan of approximately

R15 million.

• Waiting for CFIUS (Committee on Foreign Investment in the US) approval
• Other conditions precedent to be finalized subsequently

5

REFLECTION ON 2018

POSITIVE DEVELOPMENTS:

• Implementation of Project

Management Office to improve project lifecycle

• US defense spending is

increasing

• Increasing opportunities for

smart antennas with customers

• Large orders in Europe & Asia

resulted in a strong financial year

• Stronger interaction between

global teams

• Implementation of ESS

equipment

• Sales and support function

established in the US CHALLENGES / ANOMALIES:

• Precision engineering

resulting in longer delivery time

• Fluctuations on foreign

exchange managed through hedging

• Mitigation of risks in project

cycle

6

GROUP OVERVIEW

GROUP OVERVIEW

Technology holding company listed on the JSE AltX since July 2008 Alaris Holdings Alaris Antennas (RSA) COJOT (Finland)

New Entity in USA (pending)

8

ALARIS ANTENNAS

• Designs, develops, manufactures and sells specialised broadband

antennas and other Radio Frequency products

• About 90% of revenue received from exports

– mainly Americas, Europe & Asia

• Holds patents for several antenna designs
• Own IP is a key strength
• Customers are system integrators, frequency spectrum regulators,

test & measurement companies and players in the homeland security space

WHAT DOES ALARIS ANTENNAS DO?

10

ALARIS ANTENNAS MARKET & TERRITORIES

No Presence

856 Products 10 Product categories

Presence

11

Jamming Direction finding Masts Counter - RCIED RF Electronics LPDA Monitoring

ALARIS ANTENNAS OFFERINGS

Test & Meas. Communication Services

DF-A0201 – Man portable DF antenna 20 to 6000 MHz

• Designed for optimal direction finding performance while

minimising size and weight

• Base design was completed in 2012. It has attracted a great

amount of interest from existing and new customers for portable DF applications

• We add value to the customer by including with the antenna an

integrated RF electronic switch with compass and GPS

DF-A0201

12

COJOT

• Designs, develops and manufactures innovative antenna

products, serving public safety and military markets globally

• Develops innovative broadband antennas to improve

connectivity, coverage, and competitiveness of radio equipment deployed to save lives and protect property

• Own brand and IP
• Supplying antenna

technology in some of the most demanding global environments

Vehicle Antennas Manpack/Man Portable Antennas Antenna Accessories Services

WHAT DOES COJOT DO?

Mobile Antennas 20 to 6000 MHz

14

COJOT MARKET AND TERRITORIES

112 Products 5 Product categories 15

COJOT OFFERINGS

ECM (Electronic

Countermeasure)

Communications

Smart antennas

Services

Monitoring

WIDEBAND ANTENNAS FOR MILITARY APPLICATIONS

Switched Beam Antenna – SBA4450B

Advanced beam switching technology for improved performance in tactical point-to-point and multipoint communication systems.

• Significant coverage extension and more secure.
• Serves various clients or moving objects
• Lower installation costs and less complexity
• Simple and field proven communication protocol for fast transceiver

interaction SBA4450B

16

FINANCIALS

ALARIS GROUP REVENUE

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SEGMENT – ALARIS ANTENNAS

Audited year ended Audited year ended R’000 Jun 2018 Jun 2017 Revenue 121 968 123 044 Revenue growth (1%) 5% PAT 32 541 34 946 PAT growth (7%) 3% PAT margin 27% 28%

• More precision engineering

projects in the mix, resulting in fewer deliveries and invoicing delays.

• Profit margin impacted by

lower revenue and investment in highly skilled staff and project management office 19

SEGMENT – COJOT

• Pleased with 79% revenue

growth

• Several larger orders
• Benefits of scaling revenue

to cover fixed overhead costs

• Accumulated PAT – 68% of

purchase price (net of cash) Audited year ended Audited year ended R’000 Jun 2018 Jun 2017 Revenue 65 107 36 306 Revenue growth 79% 145% PAT 14 945 3 854 PAT growth 288%

• 26%

PAT margin 23% 11% 20

SEGMENT – CORPORATE & CONSOLIDATION

Main costs before tax: 1. Net foreign exchange gains of R0.9 million (2017: R3.8 million losses). 2. The repayment of the PSG Alpha preference shares on 3 July 2017 resulted in minimal interest being paid compared to the R5.0 million in the comparative period. 3. Employee costs, cost of the share incentive option scheme, including ad-hoc equity settled bonus, incentive bonusses for Group executives and board fees totaling R12 million (2017: R6.8 million). 4. Legal and consulting fees including the costs to be listed on the JSE, advisory fees and group audit fees totaling R4 million (2017: R2.0 million). This includes advisory cost associated with the US acquisition. Audited year ended Audited year Ended R’000 Jun 2018 Jun 2017 Loss after tax (14 567) (15 798) 21

STATEMENT OF PROFIT AND LOSS – CONTINUING OPERATIONS

• Satisfactory

performance with revenue increasing by 17%

• Operating profit

increased by 14%, helped by reduced net foreign exchange losses

• Discontinuation of

preference share interest

• Lower average tax rate
• wing to COJOT

contributing approx. 35% of profits at a 20% tax rate and R3.2m S11D tax benefit

• Shares in issue reduced

Audited year ended Audited year ended R’000 June 2018 June 2017 Continuing Operations Revenue 187 075 159 350 Cost of sales (53 589) (44 042) Gross profit 133 486 115 308 Other income 738 212 Operating expenses (91 502) (78 204) Trading operating profit 42 722 37 316 Finance income 380 740 Finance costs (392) (4 907) Profit before taxation 42 710 33 149 Taxation (9 791) (10 147) Profit from continuing operations 32 919 23 002 Weighted average number of

• rdinary shares in issue

116 116 771 153 985 264 HEPS: Continuing operations 28,35 14.94

22

STATEMENT OF FINANCIAL POSITION

• Inventory increased

mainly from more

• pen engineering

projects, these will be invoiced in the new year.

• High invoicing in the

last month of the period.

• R51m PSG preference

shares repaid 3 July 2017

Audited year ended

Audited year ended R’000 June 2018 June 2017 Assets Non-Current Assets Plant and equipment 6 619 5 793 Goodwill 26 582 24 902 Intangible assets 12 782 12 381 Deferred tax assets 2 539 3 252 48 522 46 328 Current Assets Inventories 19 080 13 592 Current tax receivable 1 194 2 967 Trade and other receivables 35 151 27 782 Cash and cash equivalents 51 679 65 083 107 104 109 424 Total Assets 155 626 155 752 Total equity 116 328 77 830 Total Liabilities 39 298 77 922 Total Equity and Liabilities 155 626 155 752 Net Asset Value per ordinary share 100.18 67.03

23

CASH FLOW

• Net cash from
• perating activities

increased by 229%

• Non-cash items

consist mainly of depr, amort, share-based payments and foreign exchange movements on consolidation

• R51m PSG preference

shares repaid 3 July 2017 and discontinuation of preference share interest

Audited year ended Audited year ended R’000 June 2018 June 2017 Profit before taxation 42 710 41 644 Adjusted for non-cash items 10 909 (2 560) Working capital changes (1 621) (6 703) Cash generated from operations 51 998 32 381 Net finance cost (83) (3 825) Taxation paid (8 140) (15 265) Net cash from operating activities 43 775 13 291 Net cash used in investing activities (5 957) (22 962) Net cash used in from financing activities (49 778) (19 695) Cash and cash equivalents at the beginning of the year 65 083 94 481 Effect of exchange rate movement on cash balances (1 444) (32) Total cash and cash equivalents at end

• f the year

51 679 65 083

24

GROWTH PLAN

FOCUS AREAS FOR GROWTH

• Integration of the new US acquisition into the Group
• Organic growth through specialised engineering solutions and

joint projects between Alaris and COJOT

• Providing cutting-edge technology and solutions to partners
• Deriving benefits from the implementation of the Project Office

26

ALARIS INVESTMENT ATTRIBUTES

• Alaris and COJOT hold their own IP and registered patents
• Acquisitive growth and increased global footprint
• Majority of customers are international with more than 90% export

based revenue in hard currency

• Local manufacturing
• Stable and proven track record of 17 years in the industry
• 10 years listed on the JSE AltX

27

THANK YOU Q & A