Half Yearly Report

RNS Number : 8088I

UniVision Engineering Ltd

11 December 2015

 

11 December 2015

  UniVision Engineering Limited

("UniVision" or the "Group")

  Interim Results

For the Six Months Ended 30 September 2015

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 2015. 

Highlights:

·    Profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m);

·    Revenue decreased by 16% to HK$34m (H1 2014 HK$41m).

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

"Our Company has a good track record and high market recognition in the surveillance business. Though the revenue decreased in this period mainly due to increasing competition and the delay of major government infrastructure projects, the anticipated extension of MTR railway lines will provide the business opportunity for growth in the coming years."

For further information visit www.uvel.com or contact:

UniVision Engineering Limited            Tel: [phone]

Stephen Koo, Executive Chairman           www.uvel.com      

Chun Pan Wong, Chief Executive Officer

Danny Kwok Fai Yip, Finance Director

Nicholas Lyth, Non-Executive Director       Tel: [phone] 

ZAI Corporate Finance Limited

(Nominated Adviser and Broker)           Tel: [phone]  

Richard Morrison /Ivy Wang                www.zaicf.com           

Chairman's Statement

Introduction

The Group's turnover has decreased by 16% and gross margin percentage has decreased to 28% (H1 2014: 32%) in the six months' reporting period due to increasing competition and the delay of major government infrastructure projects. Nevertheless, the Board expects that the business will improve as several proposed major infrastructure projects are expected in the coming years.

The Directors remain confident of the future of UniVision and are cautiously optimistic about the Group's prospects.

The Company has paid a final dividend to the shareholders for the last three financial years. The Board intends to maintain the dividend policy in the coming years.

Financial Review

In the six month period revenues for the Group decreased by 16% to HK$34m (H1 2014: HK$41m). The decrease of HK$7m in the revenue was mainly due to a drop of 27% in the Group's maintenance construction business. Changes to the scope in the service provided in the new maintenance contract to MTR Corporation Limited and lower sub-contract income received for its coming major CCTV replacement project contributed to the fall in revenues. The reduction of expenditure budget by local customers for improving and replacement of their surveillance systems also led to the decrease in job orders in the Taiwan subsidiary.

The Group's construction business is comparatively stable recording a 3% drop in revenue. The Hong Kong business recorded 8.5% growth mainly due to projects relating to the MTR railway lines and depot. Project delays of the Hong Kong-Zhuhai-Macao Bridge lead to the deferred contract income and increased construction costs. Nevertheless, the Group expects to receive compensation for the delay from the customer. The Group's Taiwan subsidiary recorded 15% fall in revenue in its construction business.

Group gross profit margin has decreased to 28% (2014: 32%). Gross profit margin in the Hong Kong construction business slightly improved from 34% to 36%, partly compensating for a lower gross profit margin of 12% in Group's maintenance business for the period due to keen market competition, initial purchase cost for installation of equipment and increased cost for changing parts for systems. The gross profit margin in product sales remains stable at 29%.

Loss before interest and tax during the period at HK$0.58m (H1 2014: profit HK$2.4m), whilst the Group recorded a profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m). The Group's Hong Kong subsidiary was profitable even in the competitive environment. The Group's Taiwanese subsidiary which UniVision owns a 52.25% interest, recorded an operating loss during the six months ended 30 September 2015. It was required to pay one-off liquidated damages TWD4.8m (approx. HKD1.2m) to a local customer during the period. The Group is implementing various effective measures to deal with the effect of decrease in revenue.

The Taiwan subsidiary declared a dividend of TWD1.76m (HK$0.43m) during the period. The dividend will be paid to the holding company after deducting the withholding tax.

The Comparative figures in the Financial Statements in 2014 included the Leader Smart Group which has been spun off in 31 March, 2015.

During the period under review, the relative weak in HK$ against GBP has led to 2.26% depreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. All figures in GBP in the Statement need to be adjusted for comparative purposes. The financial data is also presented in HK$ to provide a comparison with the comparative figures in 2014 that were unaffected by exchange rate fluctuations.

Business Review

Market

Univision will commit resources to accessing and developing new technologies and solutions to cope with the future opportunities in High Definition CCTV System technology

The increase in concern over security and safety, and also the demand for high-quality images are two contributing factors for the growth of the CCTV market. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will increase in coming years.

Business

During the period, the Hong Kong Company has participated in the Pre-Qualification process for the CCTV Replacement project for Hong Kong MTR.  The project is expected to replace about 6,500 CCTV camera from analogue-based to IP-based.  Since we are the CCTV System maintainer for MTR, we are in a good position to bid for this project.

To support the Pre-Qualification, the Company is negotiating partnership arrangements with certain PRC real estate groups. In order to facilitate any relationship with PRC companies and due to the volume of work which would result if the Company won the tender, UniVision is undertaking a strategic review of its interest in T-Com, its Taiwan subsidiary, and may look to dispose or distribute its shares in T-Com to its shareholders.

On the other hand, the Company observed that new players are coming to bid for the projects which we have been in good position to obtain. Increased competition leads to reduced income and so the Company is explore other market segments to compensate for this loss and strengthen the business growth.

Prospects

The Company will actively tender for new construction contracts while maintains its stake in the maintenance sector of Security & Surveillance market. As the subsequent completion of some major infrastructure projects and extension of railway lines, the Board is optimistic on the business growth in the coming years.

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

11 December 2015

UniVision Engineering Limited Consolidated Statements of Comprehensive Income (Unaudited)
For the six months ended 30 September 2015
						For the six months ended 30 September
						2015	2014	2015				2014
						HK$000	HK$000	￡'000				￡'000
Revenue						34,444	40,811	2,895				3,148
Cost of sales						(24,721)	(27,907)	(2,078)				(2,152)
Gross profit						9,723	12,904	817				996
Other income						247	20	21				1
Other gains and (loss)						(12)	12	(1)				1
Selling and distribution expenses						(777)	(816)	(65)				(63)
Administrative expenses						(9,552)	(9,517)	(803)				(734)
Finance costs						(212)	(154)	(18)				(12)
(Loss)/Profit before income tax						(583)	2,449	(49)				189
Income tax expense						(0)	(0)	(0)				(0)
(Loss)/Profit for the period						(583)	2,449	(49)				189
Other comprehensive (loss) /income:
Exchange differences arising on translation of foreign operations						(482)	1,215	(166)				367
Total comprehensive (loss) /income  for the period						(1,065)	3,664	(215)				556
Profit/ (loss) attributable to:
Equity holders of the company						449	3,029	38				233
Non-controlling interests						(1,032)	(580)	(87)				(44)
						(583)	2,449	(49)				189
Total comprehensive income / (loss) attributable to:
Equity holders of the company						162	4,235	(102)				594
Non-controlling interests						(1,227)	(571)	(113)				(38)
						(1,065)	3,664	(215)				556
Profit per share						HK Cents	HK Cents	Pence				Pence
Basic						0.1173	0.7895	0.0099				0.0609
Diluted						N/A	N/A	N/A				N/A

All revenues are from continuing operations.

Consolidated Statement of Financial Position (Unaudited)
As at 30 September 2015
	As at 30 September
	2015			2014	2015	2014
	HK$000			HK$000	￡'000	￡'000
ASSETS
Non-current assets
Plant and equipment	708			469	60	37
Goodwill	399			399	26	26
Amount due from customers for contract-in-progress	34,152			17,285	2,908	1,371
Total non-current assets	35,259			18,153	2,994	1,434
Current assets
Inventories	12,770			13,092	1,088	1,039
Trade receivables	9,517			15,126	810	1,200
Amount due from customers for contract-in-progress	21,697			168,239	1,847	13,347
Deposits, prepayments and other receivables	17,825			17,483	1,517	1,388
Cash and bank balances		10,129		4,168	862	330
Total current assets		71,938		218,108	6,124	17,304
Total assets		107,197		236,261	9,118	18,738
Consolidated Statement of Financial Position (Unaudited) (Continued)
As at 30 September 2015
			As at 30 September
			2015	2014	2015	2014
			HK$000	HK$000	￡'000	￡'000
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		19,587		53,125	1,667	4,215
Amounts due to customers for contract-in-progress		11,773		8,068	1,003	640
Current tax liability		373		15,706	32	1,246
Interest-bearing borrowings			13,288	9,394	1,131	745
Financial guarantee liabilities			-	3,950	-	313
Obligation under finance lease			52	88	4	7
Total current liabilities			45,073	90,331	3,837	7,166
Non-current liabilities
Obligation under finance lease			-	52	-	4
Total liabilities			45,073	90,383	3,837	7,170
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			221	93	18	8
Retained earnings			(278)	69,835	(22)	5,069
Translation reserve			(115)	13,344	833	2,033
			59,050	142,494	5,019	11,300
Non-controlling interest			3,074	3,384	262	268
Total equity			62,124	145,878	5,281	11,568
Total liabilities and equity			107,197	236,261	9,118	18,738

Consolidated Statement of Changes in Equity

(Unaudited) in ￡'000

							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 2014		1,698	2,193		4,928		156		143		1,670			8			10,796		333	11,130
Profit for the year		-	-		60		-		-		-			-			60		52	112
Exchange difference arising on translation of foreign operations											18						18		33	51
Transfer to statuary surplus reserves					(7)									7
Total comprehensive income		-	-		53		-		-		18			7			78		85	163
Dividend paid					(104)												(104)			(104)
Demerger by Dividend in specie					(791)												(791)			(791)
Effect on deconsolidation					(4,015)						(722)			7			(4,731)			(4,731)
Dividend distributed to non-controlling interest by a subsidiary																			(26)	(26)
Balance at 31 March 2015		1,698	2,193		71		156		143		966			22			5,248		392	5,641
Profit/(loss) for the six months ended 30 September 2015			-		38		-		-		-			-			38		(87)	(49)
Transfer to statutory surplus  Reserves					(4)									4
Exchange difference arising on translation of foreign operations			-		-		-		-		(140)						(140)		(26)	(167)
Total comprehensive income					34						(140)			4			(102)		(113)	(216)
Dividend declared					(127)												(127)		-	(127)
Reversal of translated effect on demerger											7			(7)						-
Dividend distributed to non-controlling interest by a subsidiary																			(17)	(17)
Balance at 30 September 2015		1,698	2,193		(22)		156		143		833			19			5,019		262	5,281

Consolidated Statement of Changes in Equity

(Unaudited) in HK$'000

					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 2014		23,980	31,054	67,995	2,117	2,071	12,137	93	139,448	4,302	143,750
Profit for the year		-	-	749	-	-	-	-	749	657	1,407
Transfer to statutory surplus reserves		-	-	(80)	-	-	-	80	-	-	-
Exchange difference arising on translation of foreign operations		-	-	-	-	-	229	-	229	(110)	119
Total comprehensive income		-	-	669	-	-	229	80	978	546	1,526
Dividend paid				(1,189)					(1,189)		(1,189)
Demerger by Dividend in specie			-	(9,089)		-	-		(9,089)	-	(9,089)
Effect on demerger			-	(57,569)		-	(12,272)	78	(69,764)	-	(69,764)
Dividend distributed to non-controlling			-			-	-			(342)	(342)
Balance at 31 March 2015		23,980	31,054	817	2,117	2,071	94	251	60,384	4,507	64,892
Profit/(loss) for the six months ended 30 September 2015		-	-	449	-	-	-	-	449	(1,032)	(583)
Transfer to statutory surplus reserves		-	-	(48)		-	-	48		-	-
Exchange difference arising on translation of foreign operations		-	-	-	-	-	(287)	-	(287)	(194)	(482)
Total comprehensive income		-	-	401	-	-	(287)	48	162	(1,227)	(1,065)
Dividend declared		-	-	(1,496)	-	-	-		(1,496)	-	(1,496)
Reversal of translated effect on demerger		-	-	-	-	-	78	(78)		-	-
Dividend distributed to non-controlling interest by a subsidiary		-	-	-	-	-	-		-	(207)	(207)
Balance at 30 September 2015		23,980	31,054	(278)	2,1177	2,071	(115)	221	59,050	3,074	62,124

Consolidated Statement of Cash Flows (Unaudited)
For the six months ended 30 September 2015 For the six months ended 30 September 2015 2014 2015 2014  CASH FLOW FROM OPERATING ACTIVITIES HK$000 HK$000 £'000 £'000 (Loss)/Profit before income tax for the period (582) 2,449 (49) 189 Adjustments for: Depreciation of plant and equipment 152 602 13 46 Interest income (2) (2) - - Finance costs paid 212 154 18 12 (220) 3,203 (18) 247 Changes in operating assets and liabilities: Decrease in inventories 1,075 580 90 45 (Increase)/decrease in trade receivables 1,558 (2,925) 130 (225) (Increase)/decrease in amounts due from customers for contract-in-progress 3,624 (4,442) 304 (342) (Increase) / decrease in deposits, prepayments and other receivables 316 (6,170) 28 (476) Increase / (decrease) in amounts due to customers for contract-in-progress (1,599) 1,740 (134) 134 Increase / (decrease) in trade and other payables Decrease in tax payable        (5,986)       (22) 3,495 -          (503)          (2) 269 - Cash generated (used) in /from operations (1,254) (4,519) (105) (348) Income tax paid -　 -　 -　 -　 Net cash generated (used) in / from operating activities (1,254) (4,519) (105) (348) Consolidated Statement of Cash Flows (Unaudited) (Continued) For the six months ended 30 September 2015 For the six months ended 30 September ) 2015 2014 2015 2014 HK$000 HK$000 £'000 £'000 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment (322) (154) (27) (12) Interest received 2 2 - - Increase in pledged deposits (2,000) - (168) - Net cash used in investing activities (2,320) (152) (195) (12) CASH FLOWS FROM FINANCING ACTIVITIES Finance costs paid (212) (154) (18) (12) Proceed from / (repayment of) interest-bearing borrowings 401 3,706 34 286 Repayment of obligation under finance lease (44) (44) (4) (3) Net cash generated from financing activities 145 3,508 12 271 NET DECREASE IN CASH AND CASH EQUIVALENTS (3,429) (1,163) (288) (89) EFFECT OF CHANGE IN EXCHANGE RATES (473) 427 (71) 40 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 14,031 4,904 1,221 379 CASH AND CASH EQUIVALENTS AT END OF PERIOD 10,129 4,168 862 330						GBP Rate :14.51

Notes to the Interim financial statements for the six months ended 30 September 2015

1.     Basis of preparation

The unaudited interim financial statements for the six months ended 30 September 2015 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 2015. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2014, does not constitute the statutory accounts of 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 2015 of HK$0.4m (H1 2014: HK$3m), and the weighted average of 383,677,323 (H1 2014: 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, Unit 01A, 2/F., Sunbeam Centre, 27 Shing 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

 

 

IR BFLFFELFEFBZ