Amino shares slump on profit warning, board reshuffle
IPTV set top box maker Amino Technologies plc (AMO.L) said slower than expected sales would likely lead to a loss before tax in the region of £1.5m in the year to end November compared to a profit of £0.06m in 2005.
The Cambridge-based company also said that Chairman Grant Masom and non-executive directors Nick Kuenssberg and David Gammon would quit its Board “towards the end of January 2007 or earlier, allowing time for an orderly transition”.
Amino is also investigating obtaining legal and regulatory approvals to undertake a share buy-back programme.
The stock market savaged the share price on the news, pushing it down by 33.3% to 55p, valuing the company at about £32m.
The company said it had expected results for the year to 30 November to be biased strongly towards the second half year when volume shipments of its new MPEG-4 SD (standard definition) and MPEG-4 HD (high definition) products were scheduled to begin.
Demand for and shipments of the Group's MPEG-2 IPTV set-top boxes were above expectations. But, industry-wide issues already reported by other participants in the IPTV market relating to the MPEG-4 technologies have delayed the uptake of these products and, in turn, have delayed Amino's ability to sell and deliver these new products during the latter part of the current financial year. As a result MPEG-4 product shipments to date have been restricted to 'trial' volumes.
Orders
Amino has received orders for and expects to deliver 410,000 units this year, 30% more than in the previous year and close to the total number of units shipped in the previous three years. But as the sales mix now excludes the higher priced MPEG-4 products, the overall average selling price and gross profit per unit will be lower than expected.
So the company now expects revenues of about £25m in 2006 (FY2005: £23.5m) and a loss before tax in the region of £1.5m (FY2005: profit of £0.06m).
The Group said it has established a market leading position, evidenced by having shipped more than 900,000 IPTV set-top boxes by the end of the current year since its first volume shipments began in December 2003.
It said that the introduction and volume deployment of MPEG-4 set-top boxes is dependent upon the availability, affordability and integration of a completely new set of technologies including semiconductor chips, conditional access, middleware and internet browser software. Whilst the Group has launched three new MPEG-4 products in the year, delays in the availability of semiconductor chips and the associated chip manufacturer's driver software has had a 'knock-on' effect on the integration of key IPTV software technologies.
Amino is confident it will maintain its market leading position as the market transitions from MPEG-2 to MPEG-4. Independent market forecasts continue to point to substantial growth for IPTV, albeit generally later than previously expected, reflecting in part the need for convergence between the internet capacity required and bandwidth availability for the delivery of HD IPTV.
The directors believe the MPEG-2 market will continue to be significant for the foreseeable future.
Amino announced the appointment of Olivier Hopkes as a non-executive Director. Mr Hopkes, aged 34, has broad experience as a corporate financier and as an investment professional. He is Head of Investments at CLS Holdings Plc. He also serves as a non-executive board member for a number of media and technology companies in which CLS has invested. Prior to joining CLS, he was with JPMorgan Investment Banking in London and MeesPierson Corporate Finance & Capital Markets in Amsterdam.
25th October 2006
