Half Yearly Report

RNS Number : 7831V

UniVision Engineering Ltd

18 December 2013

 

18 December 2013

 UniVision Engineering Limited

("UniVision" or the "Group")

  Interim Results

For the Six Months Ended 30 September 2013

UniVision, the Hong Kong based Group whose principal activities are the supply, design, installation and maintenance of closed circuit television and surveillance systems, and the sale of security related products, is pleased to announce its unaudited interim results for the six months ended 30 September 2013. 

Highlights:

·     Revenue increased by 28% to HK$52m (H1 2012 HK$41m);

·     Profit before interest and tax HK$3.6m (H1 2012: HK$0.4m).

Mr. Stephen Sin Mo KOO, Executive Chairman, added:

"Our CCTV business provides stable income and cash flow for the Group. The new contracts, particularly the Hong Kong Kai Tak Cruise Terminal, contribute to the growth in revenue during the period. We expect increase in demand for Security and Surveillance Systems business from the proposed government infrastructure projects will support the further growth of the Group's turnover over the coming financial years."

Enquiries:

UniVision Engineering Limited	[phone]
Stephen Koo, Chairman
Chun Hung Wong, CEO
Nicholas Lyth, Non-Executive Director	[phone]
Zeus Capital Limited (Nominated Adviser and Broker)
Tim Metcalfe	[phone]
John Depasquale	[phone]

Chairman's Statement

Business Review

As has been previously announced, Univision's 51% stake in the Zhongshan shopping mall has been sold to Guangzhou Hua Xin Trading Company Ltd ("Hua Xin"). Their affiliated Company, Hong Yi Real Estate Company Ltd is purchasing the remaining 49% of the mall. Whilst the terms for the sale of Univision's share in the mall have been agreed, the purchase of the 49% is in dispute. The reason for this is that the two parties do not agree on some of the commercial terms of the agreement.

The purchase of the 49% is in arbitration and has been for some months. The current situation is that the judge overseeing the arbitration has decided that it is necessary to appoint another surveyor to give an independent assessment. Despite this further delay, Univision is still of the opinion that this process must be followed and is the best way for the disposal of the shopping mall to be transacted.

As announced on 23 August 2013 UniVision, Hua Xin and Jun Heng entered into an agreement which commits Hua Xin and Jun Heng to complete the purchase of UniVision's interest in the Mall by a date not later than 28 February, 2014. ("Backstop date") There remains uncertainty as to both the decision of the Arbitration Commission and the timing of this decision. In event that either the decision is still pending on 28 February, 2014 or a decision has been handed down which is not in Hong Yi's favour, UniVision's Board would have the option of either enforcing this agreement or renegotiating the Backstop date.

We remain committed to expanding our Electrical and Mechanical ("E&M") business but it is subject to the availability of additional funding and we are exploring various methods to obtain extra funding. We are also exploring ways that the consideration for our share of the Zhongshan shopping mall can be paid so as to give Univision an expanded E&M business.

The core CCTV business continues to produce stable revenues and cash flows to the Group in the face of keen market competition. Our Gross Margin percentage remains stable and turnover increased in the six month period. This was mainly due to the Kai Tak Cruise Terminal project in Hong Kong. The Board expects that the full year performance will be favourable following the stage completion of several major infrastructure contracts.

High Definition CCTV System technology is maturing and more solutions are available in the market. In the coming year Univision will commit resources to accessing and developing new technologies and solutions to cope with the future opportunities in this area.

Recognising the patience and confidence in Univision by its investors, the Board decided to commit to the payment of Univision's first dividend since listing on AIM. The final dividend was 0.78 HK cents (gross) per share.

Financial Review

In the six month period revenues for the Group increased by 28% to HK$52m (H1 2012: HK$41m). The increase of HK$11m in the revenue was mainly due to thenew construction contract income of HK$9.8m from the Kai Tak Cruise Terminal project. This project was awarded, by the Hong Kong Government in August 2012, and has a total contract value of HK$10.96m.

Revenue from the construction contracts division, including the E&M business, recorded a growth of 41%. This was due primarily to the 121% growth in the Hong Kong business, compensating for a 41% fall in revenue in the Group's Taiwan maintenance business, which was caused by the reduction of expenditure budget by a local major customer.

The performance of Hong Kong maintenance business continues to be robust. It recorded a 39% growth in revenue and improved its profit margin. The main maintenance contract and sub-contracts with MTR Corporation Limited provided regular positive cash flow for the Group's operations.

Gross profit margin remained stable at 26% (2012: 26%). Gross Profit in the Hong Kong maintenance business improved from 35% to 43%, compensating for a reduced Gross Profit 17% in Taiwan's maintenance contracts for the period due to keen competition.

The outstanding principal of interest-free loan due to Mayne Management Limited, the group's former major shareholder, remained HK$30.8m (US$3.95m) and will be repayable on 31 March, 2014.

Profit before interest and tax during the period at HK$3.6m (H1 2012: HK$0.4m), whilst the Group recorded a profit attributable to the equity holders of HK$3.3m (H1 2012: HK$0.002m).

During the period under review, the relative strengthening in the HK$ against GBP has led to a 2.8% appreciation in the GBP reporting amount in the consolidated income statement, while a relative weak closing rate at the period ended in the HK$ against GBP led to a 0.2% depreciation in the consolidated balance sheet. All figures in GBP in the financial statements need to be adjusted for comparative purposes. The financial data is also presented in HK$ to provide a comparison with the comparative figures in 2012 that were unaffected by exchange rate fluctuations

Prospects

As the Company has stable income from the maintenance sector of our Security & Surveillance business and the subsequent completion of some major infrastructure projects, the Board are confident in being able to generate significant value to the shareholders over the coming years.

Whilst the disposal of our share in the Zhongshan shopping mall is further delayed by arbitration the Board remain of the opinion that this is the best way to generate shareholder value from the asset as it allows for more time for the Company to improve its negotiating position over the precise composition of the consideration.

The E&M business in the PRC is our growth target market. We continue to assess potential opportunities of obtaining funding to allow the Group to expand in the E&M marketplace in the PRC.

On behalf of the Board, I would like to thank our customers, suppliers and shareholders for their continued support of UniVision. I would also like to acknowledge the hard work of the management and all the staff for their contribution and dedication to the Group.

MR. STEPHEN SIN MO KOO

EXECUTIVE CHAIRMAN

18 December 2013

Consolidated Statements of Comprehensive Income (Unaudited)
For the six months ended 30 September 2013
			For the six months ended 30 September
			2013	2012	2013		2012
			HK$000	HK$000	￡'000		￡'000
Revenue			52,103	40,650	4,353		3,302
Cost of sales			(38,652)	(29,980)	(3,229)		(2,435)
Gross profit			13,451	10,670	1,124		867
Other income			65	73	5		6
Selling and distribution expenses			(793)	(597)	(66)		(49)
Administrative expenses			(9,132)	(9,741)	(763)		(791)
Finance costs			(164)	(225)	(14)		(18)
Profit before income tax			3,427	180	286		15
Income tax expense			(0)	(0)	(0)		(0)
Profit for the period			3,427	180	286		15
Other comprehensive income / (loss):
Exchange differences arising on translation of foreign operations			1,692	88	(462)		(51)
Total comprehensive income / (loss) for the period			5,119	268	(176)		(36)
Profit/ (loss) attributable to:
Equity holders of the company			3,332	2	278		1
Non-controlling interests			95	178	8		14
			3,427	180	286		15
Total comprehensive income / (loss) attributable to:
Equity holders of the company			4,978	78	(169)		(51)
Non-controlling interests			141	190	(7)		15
			5,119	268	(176)		(36)
Profit /(loss) per share			HK Cents	HK Cents	Pence		Pence
Basic			0.8683	0.0006	0.0726		(0.0000)
Diluted			N/A	N/A	N/A		N/A

All revenues are from continuing operations.

Consolidated Balance Sheet (Unaudited)
As at 30 September 2013
	As at 30 September
	2013			2012	2013	2012
	HK$000			HK$000	￡'000	￡'000
ASSETS
Non-current assets
Plant and equipment	890			1,509	71	121
Goodwill	399			399	26	26
Amount due from customers for contract-in-progress	17,115			16,672	1,364	1,332
Total non-current assets	18,404			18,580	1,461	1,479
Current assets
Inventories	14,678			12,779	1,169	1,021
Trade receivables	12,922			13,069	1,131	1,044
Amount due from customers for contract-in-progress	166,918			163,623	13,307	13,074
Deposits, prepayments and other receivables	14,697			16,539	1,174	1,322
Cash and bank balances		6,093		4,798	485	383
Total current assets		215,308		210,808	17,166	16,844
Total assets		233,712		229,388	18,627	18,323
Consolidated Balance Sheet (Unaudited) (Continued)
As at 30 September 2013
			As at 30 September
			2013	2012	2013	2012
			HK$000	HK$000	￡'000	￡'000
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		58,037		49,885	4,627	3,986
Amounts due to customers for contract-in-progress		4,568		8,936	364	714
Current tax liability		16,019		15,129	1,277	1,209
Interest-bearing borrowings			6,824	12,359	545	988
Loan from the former shareholder			30,800	31,000	2,455	2,477
Financial guarantee liabilities			3,963	3,861	316	308
Obligation under finance lease			88	100	7	8
Total current liabilities			120,299	121,270	9,591	9,690
Non-current liabilities
Obligation under finance lease			140	216	11	18
Total liabilities			120,439	121,486	9,602	9,708
Equity
Share capital			23,980	23,980	1,698	1,698
Share premium			31,054	31,054	2,193	2,193
Special capital reserve			4,188	4,188	299	299
Statutory surplus reserve			93	93	8	7
Retained earnings			36,527	35,061	2,378	2,258
Translation reserve			13,948	11,073	2,171	1,964
			109,790	105,449	8,747	8,419
Non-controlling interest			3,483	2,453	278	196
Total equity			113,273	107,902	9,025	8,615
Total liabilities and equity			233,712	229,388	18,627	18,323

Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2013
						Special capital		Special capital				Statutory					Non- controlling
			Share capital	Share premium	Retained earnings	reserve "A"		reserve "B"		Translation reserve		Surplus reserve		Sub-total			interest			Total equity
			￡'000	￡'000	￡'000	￡'000		￡'000		￡'000		￡'000		￡'000			￡'000			￡'000
Balance at 1 April 2012			1,698	2,193	2,265	156		143		2,015		-		8,470			214			8,684
Profit for the year			-	-	92	-		-		-		-		92			92			184
Dividend distributed by a subsidiary																	(32)			(32)
Transfer to statutory surplus reserve					(8)							8		-
Exchange difference arising on translation of foreign operations			-	-	-	-		-		605		-		605			11			616
Total comprehensive income					84					605		8		697			71			768
Balance at 31 March 2013			1,698	2,193	2,349	156		143		2,620		8		9,167			285			9,452
Profit for the six months ended 30 September 2013				-	278	--		-		-		-		278			8			286
Exchange difference arising on translation of foreign operations				-	-	-		-		(449)				(449)			(15)			(464)
Total comprehensive income					278					(449)				(171)			(7)			(178)
Dividend declared					(249)									(249)			-			(249)
Balance at 30 September 2013			1,698	2,193	2,378	156		143		2,171		8		8,747			278			9,025

Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2013
						Special capital		Special capital				Statutory					Non- controlling
			Share capital	Share premium	Retained earnings	reserve "A"		reserve "B"		Translation reserve		Surplus reserve		Sub-total			interest			Total equity
			HK$'000	HK$'000	HK$'000	HK$'000		HK$'000		HK$'000		HK$'000		HK$'000			HK$'000			HK$'000
Balance at 1 April 2012			23,980	31,054	35,152	2,117		2,071		10,997		-		105,371			2,662			108,033
Profit for the year			-	-	1,129	-		-		-		-		1,129			1,132			2,261
Dividend distributed by a subsidiary														-			(400)			(400)
Transfer to statutory surplus reserves					(93)							93		-			-			-
Exchange difference arising on translation of foreign operations			-	-	-	-		-		1,305		-		1,305			(52)			1,253
Total comprehensive income					1,036					1,305		93		2,434			680			3,114
Balance at 31 March 2013			23,980	31,054	36,188	2,117		2,071		12,302		93		107,805			3,342			111,147
Profit for the six months ended 30 September 2013			-	-	3,332	-		-		-		-		3,332			95			3,427
Exchange difference arising on translation of foreign operations			-	-	-	-		-		1,646		-		1,646			46			1,692
Total comprehensive income					3,332					1,646				4,978			141			5,119
Dividend declared					(2,993)									(2,993)			-			(2,993)
Balance at 30 September 2013			23,980	31,054	36,527	2,117		2,071		13,948		93		109,790			3,483			113,273

Consolidated Statement of Cash Flows (Unaudited)
For the six months ended 30 September 2013 For the six months ended 30 September 2013 2012 2013 2012  CASH FLOW FROM OPERATING ACTIVITIES HK$000 HK$000 £'000 £'000 Profit before income tax for the period 3,427 180 286 15 Adjustments for: Depreciation of plant and equipment 287 269 25 22 Loss on disposal of plant and equipment 16 - 1 - Interest income (2) (2) - - Finance costs paid 164 226 14 18 3,892 673 326 55 Changes in operating assets and liabilities: (Increase) / Decrease in inventories (1,348) 786 (107) 63 Increase in trade receivables (5,678) (4,678) (454) (373) Increase in amounts due from customers for contract-in-progress (2,283) (5,124) (182) (409) Decrease / (increase) in deposits, prepayments and other receivables 593 (1,296) 47 (104) (Decrease) / increase in amounts due to customers for contract-in-progress (226) 3,712 (18) 296 Increase in trade and other payables Decrease in tax payable         6,562        (57)   2,642 (212)          523           (4) 211 (17) Cash generated from / (used) in operations 1,455 (3,497) 131 (278) Income tax paid -　 (127)　 -　 (10)　 Net cash generated from / (used) in operating activities 1,455 (3,624) 131 (288) Consolidated Statement of Cash Flows (Unaudited) (Continued) For the six months ended 30 September 2013 For the six months ended 30 September ) 2013 2012 2013 2012 HK$000 HK$000 £'000 £'000 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment (152) (411) (12) (32) Interest received 2 2 - - Net cash used in investing activities (150) (409) (12) (32) CASH FLOWS FROM FINANCING ACTIVITIES Finance costs paid (164) (226) (14) (18) (Repayment of) / proceed from interest-bearing borrowings (3,825) 3,147 (305) 251 Repayment of obligation under finance lease (43) (56) (3) (5) Net cash generated from financing activities (4,032) 2,865 (322) 228 NET DECREASE IN CASH AND CASH EQUIVALENTS (2,727) (1,168) (203) (92) EFFECT OF CHANGE IN EXCHANGE RATES 1,947 (302) 103 (29) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,873 6,268 585 504 CASH AND CASH EQUIVALENTS AT END OF PERIOD 6,093 4,798 485 383

Notes to the Interim financial statements for the six months ended 30 September 2013

1.     Basis of preparation

The unaudited interim financial statements for the six months ended 30 September 2013 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") using the policies consistent with those applied to the annual financial statements for the year ended 31 March 2013. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2012, does not constitute the statutory accountsof the Company. 

2.     Profit per share

The calculation of basic profit per ordinary share is based on the profit attributable to equity holders of the Group for the six months ended 30 September 2013 of HK$3.3m (H1 2012: HK$0.002m), and the weighted average of 383,677,323 (H1 2012: 383,677,323) ordinary shares in issue during the period.

There were no potential dilutive instruments at either financial period end.

3.     Interim report

Copies of the interim report will be available for inspection at the registered office of the Company, 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun Tong, Hong Kong and available on the Company's website (www.uvel.com) in accordance with rule 26 of the AIM Rules for Companies.

 

END

 

 

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