Interim Results

RNS Number : 2989A

UniVision Engineering Ltd

19 December 2014

 



UniVision Engineering Limited ("UniVision" or the "Group")   Interim Results For the Six Months Ended 30 September 2014 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 2014.  Highlights: ·     Profit attributable to the equity holders of HK$3m (H1 2013: HK$3.3m); ·     Revenue decreased by 22% to HK$41m (H1 2013 HK$52m). Mr. Stephen Sin Mo KOO, Executive Chairman, added: "Our CCTV business has a high market recognition which provides a competitive advantage. We are pleased to have been successful in winning the MTRC maintenance contract for the 2015-2017 period. Local government infrastructure projects and the extension of MTR railway lines will support growth of the Group's income in future years though the revenue decreased in this period." 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                                       www.zaicf.com            Chairman's Statement Introduction As announced on 2 December 2014, the Company proposed to demerge its Electrical and Mechanical ("E&M") and property division (the "Proposed Demerger") through an "in-specie" distribution of shares to UniVision's shareholders. The Board believes that the Proposed Demerger is in the best interests of the Company and Univision's shareholders. It will allow Univision to focus on its core Security and Surveillance business whilst the Leader Smart Group focuses on properties which are not related to Univision's core security and surveillance systems business. In fact, the two segments operate independently of each other and have different growth rates, business strategies and risk profiles. The procedure of Proposed Demerger is being carried out. Should all regulatory and tax clearances be obtained further details of the management, strategy and off-market dealing facilities in Leader Smart shares will be announced to the market. The Board will explore the possible trading platform for the listing of Leader Smart after the proposed distribution of shares. The Company is still waiting for the judgment from the Guangzhou Arbitration Commission and will update the market about the Arbitration Process relating to Zhongshan Shopping Mall.   The core CCTV business continues to produce stable revenues and cash flows to the Group in facing of keen market competition. Our Gross Margin percentage has improved to 32% (H1 2013: 27%) though turnover decreased by 22% in the six month period. The Board expects that the business will improve following the announcement of several major proposed infrastructure projects in the coming years. The Directors remain confident of the future of Univision and are optimistic about the Group's prospects. Recognising the patience and confidence in Univision by its investors, the Company has paid a final dividend to the shareholders for the last two financial years. Financial Review In the six month period revenues for the Group decreased by 22% to HK$41m (H1 2013: HK$52m). The decrease of HK$11m in the revenue was mainly due to a significant drop in revenue in the Group's Taiwan construction business, which was caused by the decrease in job orders and delay of projects. These were caused by the reduction of expenditure budget by a local major customer. Further, last year's comparable figures included construction contract income of HK$7m from the Kai Tak Cruise Terminal project in Hong Kong. These factors led to revenue from the construction contracts division, including the E&M business, falling by 45%. The maintenance business in Hong Kong is stable and continues to provide a steady profit margin. The Group's major customers are public organisations and sizeable private enterprises. As announced on 18 December 2014, the Group was awarded a new maintenance contract with MTR Corporation Limited for three years commencing on 1 January 2015. It demonstrates the ability of the Group to successfully win high profile projects against keen market competition. The main maintenance contract and its sub-contracts will provide regular cash flow for the Group's operations. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will increase in coming years. On the other hand, the Group's Taiwan maintenance business has improved and recorded a growth of HK$4.1m which partly offsets the significant fall in revenue in its construction business. Group gross profit margin improved to 32% (2013: 27%). Gross profit margin in the Hong Kong construction business improved from 23% to 34%, compensating for a lower gross profit margin of 18% in Taiwan's construction business for the period due to increased cost for changing parts for systems. Profit before interest and tax during the period at HK$2.6m (H1 2013: HK$3.6m), whilst the Group recorded a profit attributable to the equity holders of HK$3m (H1 2013: HK$3.3m). The Taiwan subsidiary declared a dividend of TWD2.8m (HK$0.73m) during the period. The dividend has been paid to the holding company in December 2014 after deducting the withholding tax. During the period under review, the relative weak in HK$ against GBP has led to 8.3% depreciation in the GBP reporting amount in the Consolidated Statement of Comprehensive Income. 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 2013 that were unaffected by exchange rate fluctuations. Business Review Market 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. The increase in concern over security and safety, and also the demand for high-quality images to replace the older surveillance systems are two contributing factors for the growth of the CCTV market. New Contract The Company was awarded two maintenance contracts from MTR Corporation Limited for CCTV and Public Address Systems in Hong Kong. The period of contracts are over three years commencing from 1 January 2015 to 31 December 2017. Along with these two maintenance contracts, more derived jobs are expected to follow. 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 and extension of railway lines, the Board are optimistic on the business growth in the coming years. The Proposed Demerger will allow the management of Univision to have a more defined business focus on their core Security and Surveillance Systems business and enhance their responsiveness to market changes. 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 19 December 2014 UniVision Engineering Limited Consolidated Statements of Comprehensive Income (Unaudited)
For the six months ended 30 September 2014
			For the six months ended 30 September
			2014	2013	2014		2013
			HK$000	HK$000	￡'000		￡'000
Revenue			40,811	52,103	3,148		4,353
Cost of sales			(27,907)	(38,066)	(2,152)		(3,180)
Gross profit			12,904	14,037	996		1,173
Other income			20	64	1		5
Other gains and (loss)			12	(585)	1		(49)
Selling and distribution expenses			(816)	(793)	(63)		(66)
Administrative expenses			(9,517)	(9,132)	(734)		(763)
Finance costs			(154)	(164)	(12)		(14)
Profit before income tax			2,449	3,427	189		286
Income tax expense			(0)	(0)	(0)		(0)
Profit for the period			2,449	3,427	189		286
Other comprehensive income / (loss):
Exchange differences arising on translation of foreign operations			1,215	1,692	367		(462)
Total comprehensive income / (loss) for the period			3,664	5,119	556		(176)
Profit/ (loss) attributable to:
Equity holders of the company			3,029	3,332	233		278
Non-controlling interests			(580)	95	(44)		8
			2,449	3,427	189		286
Total comprehensive income / (loss) attributable to:
Equity holders of the company			4,235	4,978	594		(169)
Non-controlling interests			(571)	141	(38)		(7)
			3,664	5,119	556		(176)
Profit /(loss) per share			HK Cents	HK Cents	Pence		Pence
Basic			0.7895	0.8683	0.0609		0.0726
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 2014
	As at 30 September
	2014			2013	2014	2013
	HK$000			HK$000	￡'000	￡'000
ASSETS
Non-current assets
Plant and equipment	469			890	37	71
Goodwill	399			399	26	26
Amount due from customers for contract-in-progress	17,285			17,115	1,371	1,364
Total non-current assets	18,153			18,404	1,434	1,461
Current assets
Inventories	13,092			14,678	1,039	1,169
Trade receivables	15,126			12,922	1,200	1,131
Amount due from customers for contract-in-progress	168,239			166,918	13,347	13,307
Deposits, prepayments and other receivables	17,483			14,697	1,388	1,174
Cash and bank balances		4,168		6,093	330	485
Total current assets		218,108		215,308	17,304	17,166
Total assets		236,261		233,712	18,738	18,627
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		53,125		58,037	4,215	4,627
Amounts due to customers for contract-in-progress		8,068		4,568	640	364
Current tax liability		15,706		16,019	1,246	1,277
Interest-bearing borrowings			9,394	6,824	745	545
Loan from the former shareholder			-	30,800	-	2,455
Financial guarantee liabilities			3,950	3,963	313	316
Obligation under finance lease			88	88	7	7
Total current liabilities			90,331	120,299	7,166	9,591
Non-current liabilities
Obligation under finance lease			52	140	4	11
Total liabilities			90,383	120,439	7,170	9,602
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	8
Retained earnings			69,835	36,527	5,069	2,378
Translation reserve			13,344	13,948	2,033	2,171
			142,494	109,790	11,300	8,747
Non-controlling interest			3,384	3,483	268	278
Total equity			145,878	113,273	11,568	9,025
Total liabilities and equity			236,261	233,712	18,738	18,627

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 2013					1,698	2,193			2,349			156			143	2,620	8	9,167	285	8,684
Profit for the year					-	-			2,820			-			-	-	-	2,820	84	184
Exchange difference arising on translation of foreign operations																(949)		(949)	(35)
Total comprehensive income					-	-			2,820			-			-	(949)	-	1,871	49	616
Dividend paid									(242)									(242)		768
Balance at 31 March 2014					1,698	2,193			4,927			156			143	1,671	8	10,796	334	9,452
Profit for the six months ended 30 September 2014						-			233			-			-	-	-	233	(44)	286
Exchange difference arising on translation of foreign operations						-			-			-			-	362		362	5	(464)
Total comprehensive income									233							362		594	(39)	(178)
Dividend declared									(91)									(91)	-	(249)
Dividend distributed to non-controlling interest by a subsidiary																			(27)
Balance at 30 September 2014					1,698	2,193			5,069			156			143	2,033	8	11,300	268	9,025

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 2013					23,980		31,054			36,188		2,117			2,071		12,303			93		107,805	3,342	108,033
Profit for the year					-		-			34,800		-			-		-			-		34,800	1,038	2,261
Exchange difference arising on translation of foreign operations					-		-			-		-			-		(166)			-		(166)	(76)	-
Total comprehensive income					-		-			34,800		-			-		(166)			-		(166)	962	1,253
Dividend paid										(2,992)							-			-		(2,992)	-	3,114
Balance at 31 March 2014					23,980		31,054			67,996		2,117			2,071		12,137			93		139,447	4,304	111,147
Profit for the six months ended 30 September 2014					-		-			3,029		-			-		-			-		3,029	(582)	3,427
Exchange difference arising on translation of foreign operations					-		-			-		-			-		1,207			-		1,207	9	1,692
Total comprehensive income										3,029							1,207					4,236	(573)	5,119
Dividend declared										(1,190)												(1,190)		(2,993)
Dividend distributed to non-controlling interest by a subsidiary																							(347)
Balance at 30 September 2014					23,980		31,054			69,835		2,117			2,071		13,344			93		142,493	3,384	113,273

Consolidated Statement of Cash Flows (Unaudited)
For the six months ended 30 September 2014 For the six months ended 30 September 2014 2013 2014 2013  CASH FLOW FROM OPERATING ACTIVITIES HK$000 HK$000 £'000 £'000 Profit before income tax for the period 2,449 3,427 189 286 Adjustments for: Depreciation of plant and equipment 602 287 46 25 Loss on disposal of plant and equipment - 16 - 1 Interest income (2) (2) - - Finance costs paid 154 164 12 14 3,203 3,892 247 326 Changes in operating assets and liabilities: Decrease / (Increase) in inventories 580 (1,348) 45 (107) Increase in trade receivables (2,925) (5,678) (225) (454) Increase in amounts due from customers for contract-in-progress (4,442) (2,283) (342) (182) (Increase) / decrease in deposits, prepayments and other receivables (6,170) 593 (476) 47 Increase / (decrease) in amounts due to customers for contract-in-progress 1,740 (226) 134 (18) Increase in trade and other payables Decrease in tax payable         3,495       - 6,562 (57)           269          - 523 (4) Cash generated (used) in /from operations (4,519) 1,455 (348) 131 Income tax paid -　 -　 -　 -　 Net cash generated (used) in / from operating activities (4,519) 1,455 (348) 131 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment (154) (152) (12) (12) Interest received 2 2 - - Net cash used in investing activities (152) (150) (12) (12) CASH FLOWS FROM FINANCING ACTIVITIES Finance costs paid (154) (164) (12) (14) Proceed from / (repayment of) interest-bearing borrowings 3,706 (3,825) 286 (305) Repayment of obligation under finance lease (44) (43) (3) (3) Net cash generated from financing activities 3,508 (4,032) 271 (322) NET DECREASE IN CASH AND CASH EQUIVALENTS (1,163) (2,727) (89) (203) EFFECT OF CHANGE IN EXCHANGE RATES 427 1,947 40 103 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 4,904 6,873 379 585 CASH AND CASH EQUIVALENTS AT END OF PERIOD 4,168 6,093 330 485						GBP Rate :14.51

Notes to the Interim financial statements for the six months ended 30 September 2014

1.     Basis of preparation

The unaudited interim financial statements for the six months ended 30 September 2014 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 2014. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2013, 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 2014 of HK$3m (H1 2013: HK$3.3m), and the weighted average of 383,677,323 (H1 2013: 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.

 

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