Half-year Report

RNS Number : 9535R
UniVision Engineering Ltd
15 December 2016
 

                                                  15 December 2016

 

UniVision Engineering Limited

("UniVision" or the "Company" or the "Group")

 Interim Results

For the Six Months Ended 30 September 2016

 

 

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 2016. 

 

Highlights:

·    Profit attributable to the equity holders of HK$0.9m (H1 2015: HK$0.45m);

·    Revenue increased by 7% to HK$21.4m for continuing operations (H1 2015 HK$20m).

 

 

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

 

"The Company continues to grow despite facing market competition, low economic growth and the delay of major government infrastructure projects. The proposed large government projects and the new extension of MTR railway lines will provide the business opportunity to expand in the coming years."

 

 

 

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

 

UniVision Engineering Limited            Tel: +852 2389 3256

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: +44 (0) 7769 906686 

 

ZAI Corporate Finance Limited

(Nominated Adviser and Broker)           Tel: +44 (0)20 7060 2220  

Dugald J. Carlean /Tim Cofman/ Luis Brine             www.zaicf.com           

 

 

 

 

 

Chairman's Statement

 

INTRODUCTION

 

The Group's turnover for continuing operations has increased by 7% and gross margin percentage remained constant at 34% (H1 2015: 34%) for the reporting period despite market competition and the delay of major government infrastructure projects. The business is expected to continue to grow by the proposed infrastructure projects and line of extension in MTR in the coming years.

 

The Directors remain confident of the future of UniVision and is optimistic on the Group's prospects.

 

 

FINANCIAL REVIEW

 

'Continuing operations' represent the Group's Security and Surveillance Systems business undertaken by the Hong Kong subsidiary. The business undertaken by T-Com, the Group's Taiwan Subsidiary is classified as discontinued operations following its sale in June this year. The loss from these discontinued operations during the period was HK$415K (2015: HK$2.2m).

 

As announced on 28 June 2016, the Group entered into an agreement to sell its entire interest in its Taiwan subsidiary- T-Com Technology Company Limited ("the Subsidiary" or "T-Com") to Mr. Stephen Koo, the Executive Chairman of the Group. As announced on 19 October 2016, this sale completed on 18 October 2016.

 

The value of the assets and liabilities of T-Com, were HK$28.3m and HK$24m respectively which is included in the financial statements below as Assets/Liabilities of Disposal Group classified as held for sale. The net asset value was HK$4.3m as at 30 September 2016.

 

In the six month period revenues for the Group's continuing operations increased by 7% to HK$21.4m (H1 2015: HK$20m). This increase was mainly due to a 9% growth in construction contracts and a 8% growth in maintenance contracts, The growth of construction revenue in Hong Kong was derived from the Hong Kong-Zhuhai-Macao Bridge Project which generated income of HK$2.2m, The increased income from maintenance contracts was contributed mainly by the maintenance income from the Kai Tak Cruise Terminal Project. 

 

Gross profit margin for the Group's continuing operations remained constant at 34% (2015: 34%). Gross profit margin in the Hong Kong maintenance business improved slightly from 33% to 36%, compensating for a decrease in gross profit margin of 3% to 33% (2015: 36%) in the Group's construction business for the period. The effective and efficient control of human resources, material costs, logistics and sub-contracting charges has assisted in maintaining this level of gross margin in facing increased operating costs and a keen competitive environment. The gross profit margin in product sales was 30%.

 

The profit from the continuing operations attributable to the equity holders of the Company is HK$1.1m (2015: 1.6m). Profit before interest and income tax from the continuing operations during the period at HK$1.1m (H1 2015: HK$1.6m) whilst the Group recorded a profit attributable to the equity holders of HK$0.9m (H1 2015: HK$0.45m). 

 

The Group's Hong Kong operation was profitable despite a highly competitive environment and low economic growth. The Group's Taiwanese subsidiary which UniVision formerly had a  52.25% interest in  recorded an operating loss during the six months ended 30 September 2016. The Group shared a loss of HK$217K for the period (H1 2015: HK$1.1m).

 

During the period under review, the relative strengthening of the HK$ against GBP has led to 10% appreciation in the GBP reporting amount in the Consolidated Statement of Comprehensive Income and Financial Position. It also the reason for the significant gain of £592K on exchange differences arising on the translation (H1 2015: loss £287K). All figures in GBP in the Financial Statements therefore needed to be adjusted for comparative purposes. The financial data is also presented in HK$ to provide a comparison with the comparative figures in 2015 that were unaffected by exchange rate fluctuations.

 

 

 

BUSINESS REVIEW

 

 

Markets

 

The increasing demand for wireless network infrastructure, the increase in concerns over security and the demand to replace analogue systems with Internet protocol based systems are the key growth drivers for the Security and Surveillance market.

 

Both construction contracts and maintenance contracts grew in this financial period. The Hong Kong-Zhuhai-Macao Bridge Project was the largest contributor of revenue in construction contracts. The maintenance income from the Kai Tak Cruise Terminal Project contributed to the growth in maintenance contracts. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will continue to increase in coming years. The Board will continue its efforts to maintain sustainable operations in Hong Kong.  

 

UniVision will continue to commit resources to accessing and developing new technologies and solutions so as to undertake opportunities in Internet Protocol and High Definition CCTV System technology.

 

Currently, the Company faces competition from both large surveillance systems providers and challenges from other similar sized companies. Facing increased competition, the Company will explore other market segments besides its core surveillance business, such as rolling stock business in railway, to strengthen the business.

 

 

Business

 

During the period under review, the outcome of the UK's Referendum to leave the European Union ("Brexit) led to uncertainty in the global economy and a sharp decline in the value of Sterling. As the functional currency for the continuing operation is Hong Kong Dollars, the effect from the decline in British pound to the operations is not material. On the other hand, the Company paid less in professional fees which settled in GBP.

 

During the period, the Company participated in a Pre-Qualification process for the CCTV Replacement project for Hong Kong MTR. The project is replacing the CCTV cameras from analogue-based equipment with IP-based units. The Company currently is the CCTV System maintainer for MTR Corporation Limited ("MTRC") therefore the board believes that the Company is well positioned for this process. We are actively tendering for this project but the board cannot be certain that the outcome will be favourable for the Company.

 

The disposal of UniVision's interest in T-Com, has enabled UniVision's Management to focus attention and resources on its local security and surveillance business in Hong Kong and optimise the Group's operational efficiency.

 

The Company's major customers are public organisations and sizeable private enterprises, such as the Electrical and Mechanical Services Department ("EMSD") of the Hong Kong Government and MTRC. The latter was the Company's largest customer in this financial period. The Company expects that a significant portion of its future revenue will depend on new orders and the renewal of service contracts with the major customers. To minimize the risk of over-reliance on a limited number of major customers, the Company is making every effort to diversify its customer base.       

 

PROSPECTS

 

The growing demand for its network and high definition security and surveillance products will assist the Group in continuing to prosper in these markets.

 

The Group will continue to enhance the management of its existing projects and to actively tender for new construction contract to facilitate growth while maintaining its stake in the maintenance sector of Security & Surveillance market.

 

Finally, on behalf of the Board, I would like to take this opportunity to thank the Group's shareholders, customers, suppliers and business partners for their continued support of UniVision. I would also like to express my gratitude to the management team and all staff members for their support, loyalty, hard work and dedication to the Group.

 

 

 

 

 

 

MR. STEPHEN SIN MO KOO

EXECUTIVE CHAIRMAN

 

15 December 2016

 

 

 

UniVision Engineering Limited

Consolidated Statements of Comprehensive Income (Un-audited)

For the six months ended 30 September 2016

 


For the six months ended 30 September







   2016

    2015

   2016

    2015


  HK$'000

    HK$'000

  '000

    '000






Continuing operations





Revenue

21,440

20,027

2,008

1,683

Cost of Sales

(14,118)

(13,268)

(1,322)

(1,115)

Gross profit

7,322

6,759

686

568

Other income

6

245

0

21

Other loss

(48)

(14)

(4)

(1)

Selling and distribution expenses

(712)

(777)

(67)

(65)

Administrative expenses

(5,443)

(4,627)

(510)

(389)

Finance costs

(1)

(7)

-

(1)






Profit for the period from continuing operations

1,124

1,579

105

133






Discontinued operations





Loss for the period from discontinued operations

(415)

(2,162)

(39)

(182)






Profit/(loss) for the period

709

(583)

66

(49)











Other comprehensive income / (loss) :





Exchange differences arising on translation of foreign

121

(482)

592

(287)

Total comprehensive income / (loss) for the period

830

(1,065)

658

(336)






Profit / (loss) attributable to:





  Equity shareholders of the Company





    Profit from continuing operations

1,124

1,579

105

133

    Loss from discontinuing operations

(217)

(1,130)

(20)

(95)

  Equity shareholders of the Company

907

449

85

38

  Non-controlling interests

(198)

(1,032)

(19)

(87)


709

(583)

66

(49)






Total comprehensive income / (loss) attributable





  Equity shareholders of the Company

986

162

657

(223)

  Non-controlling interests

(156)

(1,227)

1

(113)


830

(1,065)

658

(336)











Earnings per share - Basic and Diluted

  HK Cents

  HK Cents

  Pence

  Pence

  Continuing and discontinued operations

  0.2365

  0.1173

  0.0222

  0.0099

  Continuing operations

  0.2931

  0.4117

  0.0274

  0.0346












UniVision Engineering Limited

Consolidated Statements of Financial Position (Un-audited)

As at 30 September 2016


As at 30 September







    2016

    2015

   2016

   2015


    HK$'000

    HK$'000

   '000

   '000

ASSETS





Non-current assets





Plant and equipment

492

708

49

60

Goodwill

-

399

-

26

Trade and other receivables

34,172

34,152

3,402

2,908

Total non-current assets

34,664

35,259

3,451

2,994






Current assets





Inventories

8,323

12,770

829

1,088

Trade receivables

8,979

9,517

894

810

Amount due from customers for contract-in-progress

11,741

21,697

1,169

1,847

Deposits, prepayments and other receivables

11,342

17,825

1,128

1,517

Cash and bank balances

9,398

10,129

936

862

Total current assets

49,783

71,938

4,956

6,124





 

Assets of disposal group classified as held for sale

28,278

-

2,815

-






Total assets

112,725

107,197

11,222

9,118






LIABILITIES AND EQUITY





Current liabilities





Trade and other payables

14,349

19,587

1,429

1,667

Amounts due to customers for contract-in-progress

15,853

11,773

1,578

1,003

Current tax liability

-

373

-

32

Interest-bearing borrowings

-

13,288

-

1,131

Obligation under finance lease

-

52

-

4

Total current liabilities

30,202

45,073

3,007

3,837






Liabilities of disposal group classified as held for sale

24,012

-

2,390

-






Total liabilities

54,214

45,073

5,397

3,837






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

219

221

19

18

(Accumulated losses) /retained earnings

(2,698)

(278)

(236)

159

Translation reserve

206

(115)

1,697

652


56,949

59,050

5,670

5,019

Non-controlling interest

1,562

3,074

155

262

Total equity

58,511

62,124

5,825

5,281

Total liabilities and equity

112,725

107,197

11,222

9,118


UniVision Engineering Limited

Consolidated Statements of Changes in Equity (Un-audited)

in '000

 

 


Share capital

Share premium

Retained earnings

Special capital Reserve "A"

Special capital Reserve "B"

Translation

 reserve

Statutory Surplus reserve

Sub

-total

Non-

controlling interest

Total equity


'000

'000

'000

'000

'000

'000

'000

'000

'000

'000












Balance at 1 April 2015

1,698

2,193

71

156

143

966

22

5,249

392

5,641

Profit for the period



(112)





(112)

(228)

(340)

Transfer to statutory surplus reserves



(4)




4




Exchange difference arising on translation of foreign operations

 

 

 

 

 

152

 

152

(10)

142

Total comprehensive income



(116)



152

4

40

(238)

(198)

Dividend paid



(129)





  (129)


(129)

Reversal of translation effect on demerger

 

 

 

 

 

7

(7)

 

 

 

Balance at 31 Mar 2016

1,698

2,193

(174)

156

143

1,125

19

5,160

154

5,314












Profit/(loss) for the six months ended 30 Sep 2016



85





85

(19)

66

Exchange difference arising on translation of foreign operations

 

 

 

 

 

572

 

572

20

592

Total comprehensive income



85



572


657

1

658

Dividend declared

 

 

(147)

 

 

 

 

(147)

 

(147)

Balance at 30 Sep 2016

1,698

2,193

(236)

156

143

1,697

19

5,670

155

5,825


UniVision Engineering Limited

Consolidated Statements of Changes in Equity (Un-audited)

in HK$'000

 


Share capital

Share premium

Retained earnings

Special capital Reserve "A"

Special capital Reserve "B"

Translation

 reserve

Statutory Surplus reserve

Sub

-total

Non-

controlling 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 2015

23,980

31,054

817

2,117

2,071

94

251

60,384

4,507

64,891

Profit for the year



(1,307)





(1,307)

(2,659)

(3,966)

Transfer to statutory surplus reserves



(47)




47




Exchange difference arising on translation of foreign operations

 

 

 

 

 

(46)

 

(46)

(130)

(176)

Total comprehensive income



(1,354)



(46)

47

(1,353)

(2,789)

(4,142)

Dividend paid



(1,496)





(1,496)


(1,496)

Reversal of translation effect on demerger

 

 

 

 

 

78

(78)

 

 

 

Balance at 31 Mar 2016

23,980

31,054

(2,033)

2,117

2,071

126

220

57,535

1,718

59,253












Profit/(loss) for the six months ended 30 Sep 2016



907





907

(198)

709

Exchange difference arising on translation of foreign operations

 

 

 

 

 

80

     (1)

79

42

121

Total comprehensive income



907



80

      (1)

986

(156)

830

Dividend declared

 

 

(1,572)

 

 

 

 

 (1,572)

 

(1,572)

Balance at 30 Sep 2016

23,980

31,054

(2,698)

2,117

2,071

206

219

56,949

1,562

58,511


UniVision Engineering Limited

Consolidated Statements of Cash Flows (Un-audited)

For the six months ended 30 September 2016

 



For the six months ended 30 September









2016

2015

2016

2015



HK$'000

HK$'000

'000

'000







CASH FLOW FROM OPERATING ACTIVITIES






Profit before income tax for the period

1,124

1,579

105

133


Adjustments for:






Depreciation of plant and equipment

109

89

10

7


Interest income

(5)

-

(1)

-


Finance costs paid

233

212

22

18



1,461

1,880

136

158


Changes in operating assets and liabilities:






Decrease in inventories

28

652

3

55


Decrease/(Increase) in trade receivables

1,256

(165)

118

(14)


Increase in amounts due from customers for contract-in-progress

(541)

(1,739)

(51)

(146)


Increase in deposits, prepayments and other receivables

(360)

(60)

(33)

(5)


Increase/(decrease) in amounts due to customers for contract-in-progress

1,733

(1,404)

162

(118)


Decrease in trade and other payables

(1,045)

(2,139)

(97)

(180)














Cash generated from (used in) operations

2,532

(2,975)

238

(250)








Net cash (used in) generated from disposal group

(3,255)

1,556

(305)

130


Net cash used in operating activities

(723)

(1,419)

(67)

(120)







CASH FLOWS FROM INVESTING ACTIVITIES






Purchase of plant and equipment

(126)

(287)

(12)

(24)


Interest received

5

-

1

-


Decrease/(increase) in pledged deposits

18

(2,000)

2

(168)


Net cash used in disposal group

(18)

(36)

(2)

(3)


Net cash used in investing activities

(121)

(2,323)

(11)

(195)







CASH FLOWS FROM FINANCING ACTIVITIES






Finance costs paid

(233)

(212)

(22)

(18)


Repayment of obligation under finance lease

(7)

(44)

(1)

(4)


Net cash generated from disposal group

2,790

402

261

34


Net cash generated from financing activities

2,550

146

238

12







NET DECREASE IN CASH AND CASH EQUIVALENTS

1,706

(3,596)

160

(303)







Less: cash and cash equivalents from disposal group

(2,954)

-

(265)

-

EFFECT OF CHANGE IN EXCHANGES RATES

-

(306)

86

(56)







CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

10,646

14,031

955

1,221







CASH AND CASH EQUIVALENTS AT END OF PERIOD

9,398

10,129

936

862

 

  

 

Notes to the Interim financial statements for the six months ended 30 September 2016

 

1.     Basis of preparation

 

The unaudited interim financial statements for the six months ended 30 September 2016 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 2016. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2015, 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 2016 of HK$0.9m (H1 2015: HK$0.45m), and the weighted average of 383,677,323 (H1 2015: 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.

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR FFISUIFMSEIE
UK 100

Latest directors dealings