Global Invacom Group Limited, formerly known as Radiance Group Limited, incurred a loss of US$960,000 in financial year 2012 (FY2012).
The company attributes the reason for this loss to quality issues during contract manufacturing and assembly of the products at Radiance Electronics (Shanghai) Co. Ltd. (RESH).
RESH is Global Invacom Group's wholly owned facility in Shanghai, China, which provides electronics manufacturing services. Other reasons for operating loss are rising costs of wages and raw materials and the delayed shipments.
In FY2012, the Group also received a one-off US$15.15 million goodwill write-off as well as a decline in revenue caused by delays in shipments for the Satellite Communications.
The quality issues to contract manufacturing at RESH affected three products ordered by a customer based in the US.
Attempt to rectify manufacturing-related issues
The Group has taken certain steps to rectify manufacturing-related issues and has assigned an internal quality manager from the UK to RESH on a permanent basis. One external quality consultant has also been appointed to oversee the product rectification and to restructure and improve work processes.
Workers have been re-trained and educated in the correct use of the recalibrated equipment and emphasis has been increased on quality. The RESH quality department has been mandated to report directly to the quality manager permanently stationed in Shanghai since August 2012.
Management control of the RESH facility is now assigned to the UK operations director.
The majority of the quality issues and processes have been addressed by taking these measures, according to the Group.
On a positive note
The Group's Satellite Communications business has remained relatively stable, and all order backlogs will be fulfilled by the end of the first quarter of financial year 2013.
A new contract has been secured to make dishes for BSkyB, a major customer in the UK and all efforts are being made to diversify customer base.
The Group secured a significant contract to supply Satellite Communications equipment to a major player in the Asian satellite pay TV market during the fourth quarter of FY2012.
The Group acquired The Waveguide Solution Limited (TWS), a UK-based microwave waveguide transmission specialist last year. TWS designs and manufactures microwave waveguide components and applications for the military, medical, aerospace and marine industries.
It also recognised five months of revenue from TWS amounting to about US$2.41 million equivalent in FY2012.
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