Trading Update

RNS Number : 0730S

Ubisense Group PLC

03 July 2015

 

3 July 2015

Ubisense Group PLC (the "Company")

Trading Update

Ubisense ("Ubisense" or the "Company") (LON:UBI), a market leader in enterprise location intelligence solutions, announces an update on current trading following the close of the Company's first half ended 30 June 2015.

The Company's seasonality profile has typically seen it sign the majority of its higher margin Solutions revenues in the second and fourth quarters. In addition to the anticipated reduction in lower margin Services revenues and the previously announced slippage of two major contracts into H2, we have now seen further delays in signature of certain contracts, with the result that Solutions revenue for the first half will now be some way short of that achieved in the first half of 2014.

Although the majority of the contracts which have slipped are expected to be closed during the second half, the Board believes it is prudent to plan on the basis that the H1 revenue shortfall is unlikely to be recovered in full in the second half of 2015. The Company's gross margin is however expected to be significantly higher in the second half of the year than the first half driven by the anticipated conversion of our Solutions opportunities increasing the mix of higher margin licence sales. Additionally, a review of the Ubisense business and its costs has led the Board to conclude that a restructuring of its operations is required to drive operational profitability.

As previously announced, Peter Harverson has been acting as Vice Chairman to provide senior oversight and leadership to the sales team on an interim basis. Under his guidance, the restructuring activity, addressing both overhead costs and sales effectiveness in certain smaller markets, will incur one-off charges and is expected to deliver significant ongoing savings and mitigate the impact of the revenue shortfall on the full year operating result. Much of this restructuring is already underway and expected to be substantially completed by the time we announce our half-year results.

Enquiries:

Ubisense Group plc [phone]

Richard Green, Chief Executive

Numis Securities Limited [phone]

Rupert Krefting (Corporate Broking)

Simon Willis, James Lillywhite (Corporate Finance)

About Ubisense

Ubisense (AIM: UBI), a global leader in Enterprise Location Intelligence solutions, helps manufacturing, communications and utility companies improve operational efficiency and boost profitability. Ubisense location intelligence systems bring clarity to complexity, enabling customers to revolutionise their operational effectiveness in a measurable way. Founded in 2002, Ubisense is headquartered in Cambridge, England, with offices in North America, France, Germany, Japan, Korea and Singapore. For more information visit: www.ubisense.net.

 

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