Business
Annual Financial Report
Annual Financial Report.
About this update from Ethernity Networks Ltd.
[{"type":"text","content":"\n \nRNS Number : 7828R Ethernity Networks Ltd 19 June 2018 \n\n \nETHERNITY NETWORKS LTD\n(\"Ethernity\" or the \"Company\")\nPreliminary results for the year ended 31 December 2017\n \nIntroduction\n \nAlthough the Company successfully achieved its Admission at the mid-point in the year, the financial performance for 2017 did not meet expectations in relation to achieved revenue and operating profit for the whole year and therefore was disappointing, particularly as an established OEM customer stopped ordering unexpectedly due to the loss of their customer.\n \nFinancial Highlights\n \n• The results for the year ended 31 December 2017 did not meet expectations for a number of reasons, some of which will nonetheless result in long-term benefits to the Company. \n• Net income before tax was lower than expected and can be attributable amongst other things to;\n• A significant historic customer experienced contractual difficulty with their customer, resulting in a material decline in revenue and gross margin of $268,000 and $142,000 respectively\n• A significant historic customer changed their business relationship with the Company from component based business to royalty based business resulting in a gross revenue and gross margin decline of $630,000 and $334,000 respectively\n• the reversal of a contracted revenue originally recognised in 2017 of $225,000 that was unpaid inside of the contract terms\n• the provision for a doubtful debt of $38,685; and\n• the effects of charging Share Based Compensation costs of $69,178 to expenses during the year\n \nOperational Highlights\n \n• Company successfully achieved its Admission to AIM in June raising net cash of $17,826,371\n• The Company did not meet expectations in relation to achieved revenue and operating profit for the year\n• Commenced a managed growth and development programme in the second half of the year:\n• Recruiting an additional 23 personnel in engineering, and sales and marketing by year end with an additional 10 since the year end to date, including:\n• strategically expandin...