Final Results
UniVision Engineering Ltd
26 July 2006
For immediate release 26 July 2006
UniVision Engineering Limited
('UniVision' or the 'Company')
Preliminary Results for the year ended 31 March 2006
UniVision Engineering Limited, the Hong Kong based designer and installer of
digital surveillance and integrated security systems, today announces its
preliminary results for the year ended 31 March 2006.
Commenting on the results, Mr. Stephen Koo, Chairman, said: 'The year under
review was another exciting and successful year for the Company and its
shareholders with growth substantially ahead of budget.'
HIGHLIGHTS
* Profit before tax (excluding listing expenses) up 79% to £902,387 (2005:
£502,993)
* Turnover up 47% to £3.89m (2005: £2.65m)
* Acquisition of a majority shareholding in T-Com Tech. Co. Ltd since the year
end - expected to be earnings enhancing in current year
* Order book for the first quarter of financial year 2007 significantly ahead
of the same period last year
On current trading and prospects, Mr. Stephen Koo added: 'I am pleased to
present our first annual results since our Company's Admission to trading on AIM
in December 2005. UniVision has continued to strengthen its position in the Asia
Pacific region closed circuit television ('CCTV') market.'
'We are satisfied with the results achieved for the year and we are confident in
the Company's long-term growth potential, especially given the launch of the
Company's new products in the third quarter of financial year 2007. Our
objectives are to further develop our expertise in producing high quality,
reliable and innovative digital video solutions and to consolidate our sales
network throughout the Greater China region in order to respond to the growing
demand in the surveillance industry domestically and internationally. The Board
is confident of making further significant progress in the current year.'
-Ends-
For further information visit www.uvel.com or contact:
UniVision Engineering Limited +852 2389 3256
Stephen Koo, Chairman
Johnny Tang, Finance Director
Tavistock Communications 020 7920 3150
Christian Taylor - Wilkinson
Matt Ridsdale
About UniVision Engineering Limited:
UniVision Engineering Limited, incorporated in Hong Kong in 1979, is well
established in Hong Kong, Macau and China. The Company designs, sources and
sells its own brand-name products and OEM products, including Microprocessor
CCTV Control Systems, Video Distribution Amplifiers, Fibre Optic Transmission
Systems and Smart Card Access Systems.
26 July 2006
UniVision Engineering Limited
('UniVision' or the 'Company')
Preliminary Results for the year ended 31 March 2006
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report on the results of the Company for the financial year
ended 31 March 2006, our first year as a public company, which has proved to be
an exciting and successful period for Univision.
The Company's Admission to the AIM of the London Stock Exchange in December 2005
has given us the opportunity to access international capital markets and enhance
our growing reputation in the commercial marketplace, particularly in Europe,
where we see significant growth opportunities to develop as an international
company and create greater value for our shareholders.
We have been providing our customers with digital surveillance and integrated
security systems - 'total surveillance video solutions' - in the Pacific region
for a number of years and, as our product range and skills base have grown, we
are increasingly able to deliver to clients on a global basis. The recent
acquisition of a majority shareholding in T-Com Tech. Co. Ltd has added momentum
to our continued growth.
We are confident in the Company's long-term growth potential, especially given
the launch of our new products in the third quarter of financial year 2007. Our
objectives are to further develop our expertise in producing high quality,
reliable and innovative digital video solutions and to consolidate our sales
network throughout the Greater China region in order to respond to growing
demand in the surveillance industry both domestic and international.
FINANCIAL REVIEW
During the period under review, turnover increased by 47% to £3.89m (2005:
£2.65m). This growth is attributable to additional sales to existing clients,
the improvement in market conditions and heightened awareness in the areas on
which we focus. The development of new applications has generated additional
revenue streams both from existing and new clients, which is particularly
pleasing. I am delighted that turnover for the period was significantly higher
than our internal forecasts.
Gross profit margin remains the same at 33% (2005: 33%). Distribution costs
increased by 23% to £94,133 (2005: £76,570). Administration expenses, other
operating expenses and non-operating expenses were in line with the Company's
increase in capital investment, marketing and office expansion rising by 124% to
£927,412 (2005: £414,332). The increase is principally due to the cost of
Admission of UniVision's shares to AIM in December 2005.
Net growth in profit before tax after excluding all one-off expenses relating to
the Company's flotation increased by 79% to £0.9 million.
Basic earnings per share have fallen slightly to 0.18p from 0.20p reflecting a
greater number of shares in issue following the flotation together with related
expenses of the float of £392,380, charged to the income statement, which kept
net profits to £510,007 compared to £502,993 in the previous period.
MARKET REVIEW
It is forecast that by 2008 total global revenues for digital surveillance video
equipment will amount to approximately US$ 1.2 billion. Industrial and economic
growth in Hong Kong, China and Macau together with global events such as the
Beijing Olympics 2008, Shanghai Expo 2010, all lead to increased construction of
facilities, such as hotels, shopping centres, and convention and exhibition
centres. The continuing demand for digital video products such as Digital Video
Recorders (DVRs), Network Video Recorders (NVRs) and Internet Protocol (IP)
cameras shows no signs of slowing.
BUSINESS REVIEW
Markets
Hybrid solutions which connect IP and analogue cameras with CCTV Matrix
Controllers and DVRs became mainstream in 2006. Hybrid solutions provide large
installed base analogue cameras with a gateway to transmit video streams from
networks and the Internet. The Company is looking into many different solutions,
including:
* Video compression technology MPEG-4 and H.264 enables real-time transmission
of high quality video over a low bandwidth network. We believe that MPEG-4
is a leading compression standard which will gradually be replaced by H.264
in the next two years.
* Intelligent video analysis software that enables the tracking of suspicious
objects and checks for rule violation by those objects. This is an
additional feature to the present video management system for bombs,
unattended objects and people flow monitoring.
* Digital Encoder and Decoder (CoDec) with built-in video analysis algorithms
in the Homeland Security field such as intruder detection, loitering
detection, left behind objects and trip wire will be the new area of
interest. We believe this is the transformation of analogue to Digital Video
Systems. Hong Kong Automatic Traffic Control is the first contract for
UniVision to deploy its digital CoDec for video transmission over fibre
network using TCP/IP technology. This technology and project reference helps
to increase our contract hit rate and increases our turnover and margins for
new projects of a similar nature.
The Board believes that an open platform to integrate various systems, such as
cameras, Matrix, DVRs, Card Access Systems and Fire Alarm Systems, to provide a
total integrated security solution will be the next major development within the
digital security market. We also believe that UniVision will be among the
pioneers of this movement and we hope to expand our sphere of business
accordingly.
Technologies, Solutions and Products
On the solutions side, an ongoing IT development programme is in place to cater
for the needs of the Company's growing client base in the Asia Pacific region.
The Company is currently developing a new digital server series with PC and
embedded base solutions using our own designed integrated circuit microchips
(with video control, video overlay and multiplexer functions), together with an
open platform central monitoring system which is capable of integrating with
various bands of DVRs, Access Control, Matrix and Fire Alarm Systems with high
level integration. These products will be launched in the third quarter of 2007.
We are currently working on H.264 CoDec with built in video analysis algorithms
which we expect to launch in early financial year 2008.
Acquisitions and Investments
The success of our investment in T-Com Tech. Co. Ltd in the first quarter of
financial year 2007 has reinforced the Company's strategy of acquiring interests
in companies with synergistic and/or strategic value. To this end, the Company
is currently assessing a number of companies in related fields with a view to
making further strategic investments.
Contract Wins
During the reporting period, I am pleased to report that the Company was awarded
a number of high profile projects including the CCTV System for the World Trade
Organization Convention, Hong Kong Airport Skyplaza Car Park CCTV System, Museum
of Coastal Defence CCTV System and the Taipo Sewage Plant CCTV System.
Macau Casinos
As well as growing our business by winning public sector mandates our reputation
has grown in the entertainment and leisure industry and several significant
projects were undertaken in Macau. The key projects took place at the Grand View
Casino, Jai-A-Lai Casino, Emperor Casino, Diamente Casino, and the Louvre
Casino. The Board sees the leisure industry becoming an area of substantial
opportunity over the coming years and the strategy put in place to capitalise on
these developments is bearing fruit.
MTR & Maintenance
Our maintenance contracts are particularly important to the business by
providing strong visibility in our revenue and I am delighted that we have
continued to develop this side of the business. In particular our relationship
with the Mass Transit Railway has proved to be significant with a further 3-year
maintenance contract for the CCTV, Public Address and Passenger Information
Display System (PIDS). This was also extended during the period to include the
important Disneyland Line. In August 2005 UniVision entered into a 5-year
maintenance contract with the Tai Po and North District Traffic Control and two
separate 3-year maintenance contracts were entered into with the Hong Kong
Police for Border Control and Stanley Prison's Correctional Service Department
in December 2005 and March 2006 respectively.
PROSPECTS
The Company's performance domestically has been strong with new revenue streams
from both the public and private sector. Our London office is expected to be
operational in the fourth quarter of financial year 2007 and will spearhead our
expansion into the UK and European markets whilst our product and application
development programmes continue to enhance and expand well.
The first few months of the current financial year have been very encouraging.
In view of the strong demand for our camera, DVRs, Optical Transceiver and
Matrix products from our existing customers, and the positive sentiment and
exposure towards the digital surveillance products in general, the Board is
confident of making further significant progress in the current year.
Finally, 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 Company.
MR. STEPHEN KOO
EXECUTIVE CHAIRMAN
26 July 2006
INCOME STATEMENT
For the year ended 31 March 2006
Note 2006 2005
£ £
Turnover 3,886,780 2,645,742
Cost of sales (2,607,317) (1,767,709)
------------ ------------
Gross profit 1,279,463 878,033
Other revenue 257,611 132,741
Distribution costs (94,133) (76,570)
Administrative expenses (475,948) (414,332)
Other operating expenses (59,084) -
------------ ------------
Profit from operations 3 907,909 519,872
Non-operating expenses 4 (392,380) -
Finance costs 5 (5,522) (16,879)
------------ ------------
Profit before taxation 510,007 502,993
Taxation 6 - -
------------ ------------
Profit for the year 510,007 502,993
============ ============
--------------------------------------------------------------------------------
Earnings per share
Basic 7 0.18p 0.20p
============ ============
Diluted 7 0.18p 0.20p
============ ============
--------------------------------------------------------------------------------
BALANCE SHEET
At 31 March 2006
2006 2005
£ £
ASSETS
Non-current assets
Plant and equipment 13,665 9,445
------------ ------------
Current assets
Inventories 192,213 616,704
Due from construction contract customers 934,195 371,300
Trade receivables 1,303,736 737,831
Other receivables 898,869 329,085
Cash and cash equivalents 1,414,313 381,815
------------ ------------
4,743,326 2,436,735
------------ ------------
Total assets 4,756,991 2,446,180
============ ============
EQUITY
Capital and reserves
Share capital 1,451,085 1,167,981
Share premium 1,278,981 -
Special capital reserve 143,439 143,439
Retained earnings 644,611 134,604
Exchange differences 95,023 (18,449)
------------ ------------
Total equity 3,613,139 1,427,575
============ ============
LIABILITIES
Current liabilities
Due to construction contract customers 452,536 252,569
Trade payables and accruals 691,316 766,036
------------ ------------
1,143,852 1,018,605
------------ ------------
Total liabilities 1,143,852 1,018,605
============ ============
Total equity and liabilities 4,756,991 2,446,180
============ ============
STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2006
Special
Share Share Retained capital Exchange
capital premium earnings reserve differences Total
------------- ------------- ------------- ------------- ------------- -------------
£ £ £ £ £ £
Balance at 1 April 2004(1) 12,742,506 - (12,618,834) - 7,223 130,895
Issue of share capital 986,721 - - - - 986,721
Capital reduction (12,845,324) - 12,659,055 143,439 42,830 -
Interim dividend paid - - (161,411) - - (161,411)
Net profit for the year - - 502,993 - - 502,993
Effect of translation - - - - (31,623) (31,623)
------------- ------------- ------------- ------------- ------------- -------------
Balance at 31 March 2005(1) 883,903 - 381,803 143,439 18,430 1,427,575
Presentational currency
adjustment(2) 284,078 - (247,199) - (36,879) -
------------- ------------- ------------- ------------- ------------- -------------
Balance at 31 March 2005 -
restated 1,167,981 - 134,604 143,439 (18,449) 1,427,575
Issue of shares upon
listing 235,015 1,279,985 - - - 1,515,000
Issue of shares upon
placing 48,089 261,911 - - - 310,000
Share issue costs - (262,915) - - - (262,915)
Net profit for the year - - 510,007 - - 510,007
Effect of translation - - - - 113,472 113,472
------------- ------------- ------------- ------------- ------------- -------------
Balance at 31 March 2006 1,451,085 1,278,981 644,611 143,439 95,023 3,613,139
============= ============= ============= ============= ============= =============
(1) As previously reported in the Admission Document dated 9 December 2005
(2) Adjustment to better reflect the impact of currency translation on the
capital reduction on 20 November 2004
The currency translation from Hong Kong dollars to the presentational currency
of £ Sterling used in these financial statements has no impact on the available
distributable reserves of the Company which at 31 March 2006 were HK$9,520,984
(31 March 2005: HK$2,445,954).
CASH FLOW STATEMENT
For the year ended 31 March 2006
2006 2005
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 510,007 502,993
Adjustments for:
Depreciation 5,833 5,265
Admission to AIM costs 392,380 -
Reversal of provision for bad debts (13,124) -
Provision for obsolete inventories 59,084 -
Written back on trade payables and accruals (77,136) -
Interest income (15,929) (18,930)
Interest expenses - 11,294
------------ ------------
Operating profit before working capital changes 861,115 500,622
Decrease in inventories 404,631 16,225
Increase in trade receivables (481,284) (101,742)
Increase in amounts due from construction contract customers (520,553) (72,339)
Decrease in retention receivables 24,578 11,878
(Increase)/Decrease in deposits, prepayments and other receivables (248,595) 67,123
Decrease in amount due from a related company - 122,339
Increase in amounts due to construction contract customers 175,351 82,361
(Decrease)/Increase in trade payables and accruals (56,660) 240,243
Decrease in amount due to a related company - (185,240)
Effect of changes in foreign exchange (36,890) (4,032)
------------ ------------
Net cash from operations 121,693 677,438
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment (9,207) (7,152)
Receipts from settlement of short term loan 176,465 -
Advance of short term loan receivable (360,428) -
Increase in pledged deposits (122,655) (33,931)
Interest received 15,929 189
------------ ------------
Net cash used in investing activities (299,896) (40,894)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid - (11,294)
Dividend paid - (161,411)
Proceeds from issue of shares 1,810,000 986,721
Payment for issue of shares and admission to AIM (653,220) -
Payment of finance lease liabilities - (2,107)
Payment of bank loan - (1,028,385)
Repayment of amount due to immediate holding company - (129,865)
Payment of amount due to ultimate holding company - (31,268)
------------ ------------
Net cash (used in)/from financing activities 1,156,780 (377,609)
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 978,577 258,935
EFFECT OF CHANGES IN FOREIGN EXCHANGE 53,921 (8,387)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 381,815 131,267
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR 1,414,313 381,815
============ ============
ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS
Cash and cash equivalents 1,414,313 381,815
============ ============
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 March 2006
1. GENERAL INFORMATION
The Company is incorporated in Hong Kong as a limited company. The address of
its registered office is 8/F Lever Tech Centre, 69-71 King Yip Street, Kwun
Tong, Kowloon, Hong Kong.
The Company has its primary listing on the Alternative Investment Market of the
London Stock Exchange ('AIM').
The Company is engaged in the supply, design, installation and maintenance of
closed circuit television and surveillance systems and the sale of security
system related products.
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention. In the current year, the Company has applied all International
Financial Reporting Standards ('IFRSs') (which also include the International
Accounting Standards ('IASs') and Interpretations) issued by the International
Accounting Standards Board and International Financial Reporting Interpretations
Committee relevant to its operations and effective for periods beginning on 1
January 2005. The transition from accounting principles generally accepted in
Hong Kong (HKGAAP) to IFRS has not resulted in material impact on the Company's
accounting policies and has no effect on the amounts reported in the income
statement, balance sheet, cash flow statement and statement of changes in equity
for the current or prior years.
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 26 July, 2006. It is not the Company's statutory
accounts. The statutory accounts for the year ended 31 March 2005 received an
audit report which was unqualified. The statutory accounts for the year ended 31
March 2006 have not yet been approved, audited or filed.
The preparation of financial statements in conformity with IFRSs requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Company's accounting
policies.
The Company has not applied the new IFRSs in issue at the date of authorisation
of the financial statements but are not yet effective. In addition, the Hong
Kong Companies (Amendment) Ordinance 2005 came into effect on 1 December 2005
and would be first applicable to the Company's financial statements for the
period beginning 1 January 2006. The application of these IFRSs and amendments
are not expected to have material impact on the financial statements of the
Company.
3. PROFIT FROM OPERATIONS
Profit from operations is stated after charging / (crediting) the following:
2006 2005
£ £
Cost of inventories recognised as expenses 1,457,844 1,056,173
Provision for obsolete inventories 59,084 -
Auditors' remuneration 28,834 10,423
Depreciation
Leased plant and equipment - 1,232
Owned plant and equipment 5,833 4,033
5,833 5,265
Directors' remuneration 89,494 32,450
Net exchange (gains)/losses (26,189) 1,088
Reversal of bad debt provisions (13,124) -
Research and development costs 25,585 -
Operating leases - land and buildings 28,079 33,618
Staff costs (excluding directors' remuneration) 522,289 464,547
Written back on trade payables and accruals (77,136) -
============ ============
4. NON-OPERATING EXPENSES
2006 2005
£ £
Total share issue and admission to AIM costs 668,220 -
============ ============
Charged to equity:
Share placing costs 15,500 -
Share issue costs upon admission to AIM 247,415 -
------------ ------------
262,915 -
Charged to income statement
Admission to AIM costs 392,380 -
Exchange differences 12,925 -
------------ ------------
Total share issue and admission to AIM costs 668,220 -
============ ============
A total of 50,500,000 and 10,333,333 new ordinary shares were issued and have
raised £1,500,000 and £310,000 during the admission to AIM and placing process
respectively.
The total share issue and listing costs amounted to £668,220, in which £15,000
was settled by issuance of new ordinary shares to Insinger de Beaufort in part
satisfaction of their fee for the admission to AIM process. A portion of these
share issue costs that relates to stock market listing have been recognised as
an expense in the year and a portion of these share issue costs that relates to
issuing new shares have been charged to equity.
5. FINANCE COSTS
2006 2005
£ £
Bank charges 5,522 5,427
Bank loan interest - 11,294
Finance leases charges - 158
------------ ------------
5,522 16,879
============ ============
6. TAXATION
No provision for Hong Kong profits tax has been made in the financial statements
since the Company has sufficient tax losses brought forward to set off against
current year's assessable profit.
The taxation on the Company's profit before taxation differs from the
theoretical amount that would arise using Hong Kong profits tax rate as follows:
2006 2005
£ £
Profit before taxation 510,007 502,993
------------ ------------
Tax at Hong Kong profits tax rate of 17.5% 89,251 88,024
Tax effect of income that is not taxable
in determining taxable profit (2,297) -
Tax effect of expenses that are not
deductible in determining taxable profit 82,685 185
Tax effect of temporary differences not recognised (1,126) (1,303)
Tax effect of utilisation of tax losses not
previously recognised (168,513) (86,906)
------------ ------------
Taxation charge - -
============ ============
At the balance sheet date, the Company has unused tax losses of £6,274,096
(2005: £6,799,368) that are available for offset against future taxable profits
of the Company. No deferred tax asset has been recognised due to the
unpredictability of the future profit streams. Tax losses may be carried forward
indefinitely.
No provision for deferred tax liabilities has been made in the financial
statements as the tax effect of temporary differences is immaterial to the
Company.
7. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the net
profit attributable to shareholders for the year of £510,007 (2005: £502,993),
and the weighted average of 279,155,799 (2005: 257,931,950) ordinary shares in
issue during the year.
There were no potential dilutive ordinary shares outstanding during the year
(2005: Nil).
8. EVENTS AFTER THE BALANCE SHEET DATE
Subsequent to the balance sheet date, in a press announcement of the Company
dated 17 May 2006, the directors of the Company stated that the Company had
successfully completed the acquisition of 52.25% equity interests in T-Com Tech.
Co. Ltd at a cash consideration of approximately £514,000.
T-Com Tech. Co. Ltd., established in 1998, is a security system integrator and a
turn-key provider of technology-based security solutions for medium and large
commercial enterprises and government agencies in Taiwan. It is also engaged in
the sale of closed circuit television systems, access control systems,
integrated security systems and intelligent transport systems in Taiwan and to
Taiwan's manufacturer in PRC.
This information is provided by RNS
The company news service from the London Stock Exchange
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