(Extracted from Annual Report 2013)

Dear Shareholders,

I am pleased to present the annual repor t for Global Invacom Group Limited ("Global Invacom") for the financial year ended 31 December 2013 ("FY2013"). This year we report a strong financial per formance matched by signi f icant st rategic ini t iat ives to enhance our value proposition as a leading global Satellite Communicat ions ("Sat Comms") player.

With this set of results, the directors have proposed a dividend of 0.5 Singapore cent per share, representing 11.4% of our net profit for the year. If approved, it would mark the first dividend payout since the completion of our reverse takeover ("RTO") on 5 July 2012.

Financial Performance

Our financial performance was significantly better than the prior year and was achieved by improvements in quality, contributions from post-RTO acquisitions and the absence of the goodwill write-off following the RTO.

The Group recorded a net profit of US$8.0 million in FY2013, reversing sharply from a net loss of US$17.7 million in FY2012, with net profit margin increasing to 6.9% from a net loss margin of 23.8% in the comparative period.

Total revenue increased by 55.0% or US$41.1 million to US$115.8 million in FY2013 from US$74.7 million in FY2012. This was boosted by the inclusion of US$25.4 million contribution from The Waveguide Solution Limited ( "TWS" ) , Global Invacom Manufacturing (UK) Limited ("GIML") (both based in the United Kingdom("UK")) and Global Invacom Sdn. Bhd. ("GISB") (based in Malaysia), together with a full-year inclusion of US$22.9 million revenue from the Contract Manufacturing ("CM") segment (based in China) following the completion of the RTO.

Revenue from our two business segments improved. Sat Comms revenue increased to US$92.9 million in FY2013 from US$62.0 million in FY2012, while CM revenue increased 80.3% to US$22.9 million from US$12.7 million.

Since the RTO, revenue for each half year reporting period has increased on a sequential basis, rising 26.3% from US$43.8 million in 2H FY2012 to US$55.3 million in 1H FY2013 and by a fur ther 9.3% to US$60.4 million in 2H FY2013.

Geographically, revenue from all regions increased significantly in FY2013. The American market, a major revenue driver, contributing 50.1% of the total sales, grew 24.6% to US$58.0 million. Despite a generally slow recovery in Europe, the Company saw an increase in this market of 39.0% to US$26.6 million, contributing 22.9% of total revenue. Asia and Rest of the World reported the highest revenue growth of 244.9%, rising to US$31.2 million from US$9.0 million, mainly due to a significant order from a major Asian broadcaster. The increase in revenue from other markets has reduced the Company's dependency on America and is part of our strategy to spread global risk.

Gross profit margin increased to 25.2% in FY2013 from 18.8% in FY2012, achieved through quality improvement , purchasing improvements and investment in automation. These resulted in Sat Comms and CM segments registering operating prof i ts of US$8.0 million and US$1.2 million respectively, following losses in FY2012.

Our financial position continues to remain strong with net cash position of US$14.7 million or 6.27 US cents per share as at 31 December 2013 despite the first tranche payment of US$7.5 million to the RTO share vendors during FY2013.

Overall, the net asset value of the Group strengthened by US$8.8 million to US$44.8 million or 19.32 US cents per share as at 31 December 2013 from US$36.0 million or 15.64 US cents per share as at 31 December 2012. This was mainly due to the consolidation of the new subsidiaries, as well as the profit generated in FY2013.

Corporate Developments

At the end of FY2013, the Company had secured a US$16.0 million repeat order from a major Asian broadcaster. This allowed our Malaysian subsidiary GISB to begin scaling up its operations from subassembly to manufacturing, thus improving efficiency, economies of scale and capacity flexibility over the period under review.

In November 2013, we acquired a UK satellite manufacturer, Raven Manufacturing Limited now renamed GIML. The acquisition complements our suite of competencies, further cementing our position as an integrated Sat Comms player in Europe.

TWS, which was acquired in FY2012, contributed its first full year revenue in FY2013. We continue to leverage on TWS to offer diversified products by providing microwave waveguide components and applications for the military, medical, aerospace and marine industries.

On 4 February 2014, we announced our intention to explore a potential secondar y listing on the Alternative Investment Market (“AIM”) of the London Stock Exchange. The proposed listing will help raise additional capital for future expansion and will improve stock liquidity. It will also raise our business profile in Europe as we expand our capabilities and market reach to become the leading global Sat Comms player.

To enhance shareholder value, Global Invacom began buying back its own shares in October 2013. As at 31 December 2013, it held 6.0 million treasury shares, representing 2.6% of the total issued share capital.

Outlook & Strategy

More than a year since the completion of the RTO, we have clearly delivered on the promises outlined to shareholders. We have improved our financial performance significantly and announced our first post-RTO dividend. We have enlarged our customer base, acquired two companies to date to strengthen our suite of capabilities, and increased our manufacturing footprint in Asia. Clearly, investors have since recognised our progress, with our current market capitalisation having risen signif icantly compared to a year ago.

But for all the progress, we are still in the early stages of our growth potential. The Sat Comms industry is entering an era of major change, one which offers substantial opportunities for a company such as Global Invacom which has its own research capabilities, proprietary intellectual property and customer and manufacturing footprints which are truly global. Global Invacom will continue to strengthen its value proposition via organic growth, acquisitions and widening market reach as it strives to improve internal efficiencies to enhance shareholder value.


On behalf of the Board, I would like to extend my thanks and gratitude to our shareholders, customers, suppliers and business associates for their unwavering support this year. I would also like to express my appreciation to the management team and staff for their dedication and hard work during this challenging but rewarding period.

Anthony Brian Taylor
Executive Chairman