Replacement Half-year Report

Unigel Group PLC

01 September 2023

 

The 'Interim Results' announcement released on 31 August 2023 at 7:00 AM under RNS No 8648K has been reformatted.

All material details remain unchanged.

The full text is shown below.

Unigel Group plc

(the "Group" or the "Company")

Interim Results

Unigel Group plc (AQSE: UNX), the manufacturer and supplier of materials used in the manufacture of telecommunication fibre optic cables announces its unaudited half-year results for the period ended 30 June 2023. Comparative data is for the post-acquisition six month period ended 31 December 2022.

Operational highlights

The Group continues to make progress in operational improvements:

·      New customer acquisitions in both our steel tape and thixotropic gel businesses

·      De-risking and diversifying our raw material sourcing base

·      Cost improvement in our logistics and material handling activities

·      Operating cost improvement through optimisation of production staff and administrative resources

Financial highlights

Key figures for the six months to 30 June 2023 with comparatives for the six months to 31 December 2022 were as follows:

·      Revenue of £17.95m (£18.83m)

·      Gross profit of £2.39m with a gross profit margin of 13.3% (£2.23m and 11.8%)

·      Administrative expenses of £1.47m (£1.73m)

·      Profit after tax of £0.63m (£0.32m)

·      Final dividend of 2.5p per share distributed post period end in July 2023

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

Enquiries:  

Unigel Group plc
Eric Chhoa	[phone]
Gary Revel-Chion	[phone]
Cairn Financial Advisers LLP (AQSE Corporate Adviser)
Jo Turner	[phone]
Ludovico Lazzaretti

Notes to Editors

Unigel Group plc is the holding company whose operating subsidiaries, Unigel (UK) Limited ("Unigel") and Unitape Limited ("Unitape") manufacture and distribute materials used in the manufacture of telecommunication fibre optic cables.

Unigel, in which the Group has a 60.0% holding, formulates, manufactures, and markets thixotropic gels primarily to the fibre optic cable industry. In addition, it also makes specialty gel products for the construction, green energy, and high voltage transmission apparatus markets.

Unitape, a wholly owned subsidiary of the Group, is one of the largest domestic manufacturers and suppliers of laminated steel tapes to the fibre optic cable industry in North America.

Chief Executive Officer's review

Despite a less favourable operating environment across most key markets, Unigel Group plc registered good overall results in all key performance indicators except revenue growth. The global fibre optic cable industry, which is a key market for the Group, registered negative industry growth of 3.4% in the first half of 2023.  Globally, there has been a slowdown in telecommunications network deployment including 5G networks as telcos postponed their network investment due to weaker business sentiment caused by macroeconomic concerns such as inflation, high interest rates and anaemic economic recovery in some major markets. 

However, there is a general industry consensus that network investment is expected to improve in 2024. The Group had implemented new initiatives to improve overall engagement with our customer base post Covid, and we are starting to see some tangible results from our business development initiatives of the past 2 years.  We continue to improve our cost structure and execute more efficiently across all business domains.

The Group is cautiously optimistic about our business performance in the second half of 2023.

Business review

Although turnover for the six months to 30 June 2023 reduced by just under 5% compared to the previous six months, gross margin improved as raw material prices and logistics costs became more stable. Administrative overheads fell by 15% compared to the previous six months with the major savings coming from more efficient staffing levels in production and an improved foreign exchange environment. Profit after tax rose by 94% to £0.63m in the six months to 30 June 2023. The Group balance sheet showed net assets of £2.88m as at 30 June 2023 compared to £2.32m on 31 December 2022.

Outlook

The global economy continues to be challenged by macroeconomic uncertainties including inflation, high interest rates, weaker investment sentiments and a docile economic recovery in China. Barring unforeseen circumstances, the Group continues to be cautiously optimistic about the outlook of our business performance for the second half of 2023.

Chairman

Sven Janne Sjoden

UNIGEL GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
PERIOD ENDED 30 JUNE 2023
			6 months to					6 months to
			30 June 2023					31 December 2022
			£					£
TURNOVER			17,950,547					18,828,803
Cost of sales			(15,561,317)					(16,602,974)
Gross profit			2,389,230					2,225,829
Administrative expenses			(1,471,418)					(1,731,478)
OPERATING PROFIT			917,812					494,351
Other income
Interest receivable and similar income			9,710					11,412
Interest payable and similar charges			(75,573)					(63,612)
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION			851,949					442,151
Tax on profit on ordinary activities			(223,249)					(118,604)
PROFIT FOR THE FINANCIAL PERIOD
FOR THE GROUP			628,700					323,547
Other comprehensive income for the period
(Loss)/gain on foreign exchange			(71,051)					14,465
Negative goodwill on acquisition			-					666,205
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD			557,649					1,004,217
Minority interest			(128,306)					22,712
TOTAL COMPREHENSIVE INCOME FOR THE GROUP			429,343					1,026,929
CONTINUING OPERATIONS
All of the group's activities were acquired during the previous period
UNIGEL GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
30 JUNE 2023
		30 June					31 December
		2023					2022
	Notes	£					£
FIXED ASSETS
Intangible assets		508,113					537,346
Tangible assets		1,313,853					1,379,072
		1,821,966					1,916,418
CURRENT ASSETS
Stocks		6,635,740					8,757,545
Debtors		4,665,990					5,672,432
Cash at bank and in hand		758,946					730,860
		12,060,676					15,160,837
CREDITORS
Amounts falling due within one year		10,676,068					14,440,267
NET CURRENT ASSETS		1,384,608					720,570
TOTAL ASSETS LESS CURRENT
LIABILITIES		3,206,574					2,636,988
CREDITORS
Amounts falling due after more than one year		35,987					12,539
PROVISION FOR LIABILITIES
Deferred tax		289,008					300,519
NET ASSETS		2,881,579					2,323,930
CAPITAL AND RESERVES
Called up share capital	3	56,425					56,425
Share premium		469,011					469,011
Profit & loss account		1,236,272					806,929
EQUITY ATTRIBUTABLE TO THE
OWNERS OF THE PARENT COMPANY		1,761,708					1,332,365
Minority interest		1,119,871					991,565
SHAREHOLDERS' FUNDS		2,881,579					2,323,930

UNIGEL GROUP PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
30 JUNE 2023
Group	Share	Share	Retained	Minority	Total
	capital	premium	earnings	interest	equity
	£	£	£	£	£
Upon incorporation	100				100
Upon issue of shares net of costs	56,325	469,011			525,336
Upon acquisitions			666,205	1,014,277	1,680,482
Comprehensive income for the
period
Profit for the period			323,547		323,547
Minority interest in profit/(loss) for
the period			22,712	(22,712)	-
Other comprehensive income for
the period			14,465		14,465
Dividends paid			(220,000)		(220,000)
Total comprehensive income for
the period at 31 December 2022	56,425	469,011	806,929	991,565	2,323,930
Comprehensive income for the
period
Profit for the period			628,700		628,700
Minority interest in profit/(loss) for
the period			(128,306)	128,306	-
Other comprehensive income for
the period			(71,051)		(71,051)
Dividends paid			-		-
Total comprehensive income for
the period at 30 June 2023	56,425	469,011	1,236,272	1,119,871	2,881,579

UNIGEL GROUP PLC
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
PERIOD ENDED 30 JUNE 2023
		30 June		31 December
		2023		2022
		£		£
Net cash inflow/(outflow) from
operating activities		243,614		(569,222)
Return on investments and
servicing of finance		(65,863)		(62,872)
Taxation		(49,611)		(114,927)
Capital expenditure		(61,894)		(129,043)
		66,246		(876,064)
Financing		(38,160)		953,839
Increase in cash in the period		28,086		77,775
Reconciliation of net cash flow
to movement in net debt
Increase in cash in the period		28,086		77,775
Cash inflow/(outflow) from movement in debt		38,160		(428,403)
Change in net debt resulting from
cash flows		66,246		(350,628)
Opening net cash balances		(528,426)		(177,798)
Closing net cash balances		(462,180)		(528,426)

UNIGEL GROUP PLC
NOTES TO THE UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
PERIOD ENDED 30 JUNE 2023
1.	RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FRON OPERATING ACTIVITIES
		30 June		31 December
		2023		2022
		£		£
	Operating profit	917,812		494,351
	Depreciation and amortisation charges	103,969		114,412
	(Profit)/loss on fixed asset disposals	-		24,442
	Decrease/(increase) in stocks	2,121,805		(3,382,187)
	Decrease in debtors	1,006,442		1,088,864
	(Decrease)/increase in creditors	(3,906,414)		1,090,896
	Net cash inflow/(outflow) from operating activities	243,614		(569,222)
2.	ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
		30 June		31 December
		2023		2022
		£		£
	Returns on investments and servicing of finance
	Proceeds on sale of fixed assets	-		29,328
	Interest paid less interest received and similar income	(65,863)		(52,200)
	Dividends paid	-		(40,000)
	Net cash outflow for returns on investments and
	servicing of finance	(65,863)		(62,872)
	Capital expenditure
	Purchase of intangible fixed assets	(10,269)		(7,012)
	Purchase of tangible fixed assets	(51,625)		(122,031)
	Net cash outflow for capital expenditure	(61,894)		(129,043)
	Financing
	Proceeds from issue of shares	-		525,436
	(Loan repaid)/new loan received	(38,160)		428,403
	Net cash inflow from financing	(38,160)		953,839
3.	ANALYSIS OF CHANGES IN NET DEBT
		At 01/01/23	Cash flow	At 30/06/23
		£	£	£
	Net cash: Cash at bank and in hand	730,860	28,086	758,946
	Debt: Loan	(1,259,286)	38,160	(1,221,126)
	Cash at bank and in hand	(528,426)	66,246	(462,180)

UNIGEL GROUP PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PERIOD ENDED 30 JUNE 2023

1.  ACCOUNTING POLICIES

     Company information

     The company is a public limited company incorporated in England and Wales (registered number 13934232) and its registered office is Unigel House, 7 Park View, Alder Close, Eastbourne, BN23 6QE.

     The principal activity of the group is the manufacture and sale of cable filling and flooding compounds, associated pumping and delivery equipment, and tapes.

     Accounting convention and basis of preparation

     The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.

     The preparation of the consolidated financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the group's accounting policies. Information is given in the accounting policies noted below. 

2.  EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of ordinary shares in issue during the period.

			30 June		31 December
			2023			2022
			£			£
	Profit after tax		628,700			323,547
	Weighted average ordinary shares in issue		11,285,000			11,285,000
	Earnings per share		5.57p			2.87p

3.   CALLED UP SHARE CAPITAL

	Allotted, issued and fully paid:			30 June	31 December
	Number	Class:	Nominal	2023	2022
			value:	£	£
	11,285,000	Ordinary	£0.005	56,425	56,425

4.   FORWARD-LOOKING STATEMENTS

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Group's current expectations, estimates and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Group's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. The Group cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Group only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Group will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.

 

END