Half Yearly Report

RNS Number : 6177T

UniVision Engineering Ltd

17 December 2012

 



17 December 2012

UniVision Engineering Limited

("UniVision" or the "Group")

Half Year Report

For the Six Months Ended 30 September2012

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 today announce its unaudited half year results for the six months ended 30 September 2012. 

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

"Our stable CCTV business provides an excellent platform from which to add shareholder value. We are particularly pleased to have been successful in the engaging for the 2012-2014 period the MTRC maintenance contract and a new contract at Kai Tak Cruise Terminal in Hong Kong. We expect that electrical and maintenance will be a further driver in the growth in the mainland China market."

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

Univision Engineering Limited	[phone]
Stephen Koo, Chairman
Chun Hung Wong, Chief Executive Officer Nicholas Lyth, Non-Executive Director	[phone]
Zeus Capital Limited (Nominated Adviser and Broker)	[phone]
John Simpson Imran Ahmad

Chairman's Statement

Business Review

Following to our recent filing of the registration statement Form 20-F (the "20-F") with the United States Securities and Exchange Commission ("SEC") for the proposed listing on the US OTC Bulletin Board, we still have not yet resolved all issues raised by the SEC. Our lawyer is negotiating with the SEC to resolve these outstanding points. If no agreement can be reached within a reasonable period of time, we may consider withdrawing our filing. We will update the market with any progress.

The sale of the Group's interest in Zhongshan shopping mall project is ongoing. The Group, Guangzhou

Hua Xin Trading Company Limited ("Hua Xin") and Guangzhou Jun Heng Mechanical and Electrical Equipment Company Limited (the "Investor") entered into an agreement (the "Agreement") for the sale of the Group's entitlement to a 51% interest in the shopping mall project in Zhongshan, China (the "Zhongshan Project") for a total consideration of RMB110 million (equivalent to c. £10.7 million and HK$135 million) (the "Sale"). The investor paid HK$6.17 million to the Group upon entering into the Agreement.

Following the request from the Investor that the further payment is deferred for a further 3 months, the balance remains due to be paid to UniVision in cash, or some other method, to be mutually agreed by the Group, Hua Xin and the Investor, by 22 December 2012.

The core CCTV business produced sales of HK$40.3m and profit before interest and tax of HK$0.8m. Our Gross Margin remained stable and the turnover was slightly decreased in the period. This was due to the decrease in product sales in Hong Kong and maintenance segment in Taiwan. The Board expects that the performance of the balance of the financial year will be more favourable following several major contracts awarded and to be awarded in the second half of the year.

Newer technologies are beginning to enter the CCTV market such as IP and High Definition. The Group is continuing to work on a number of different solutions in these areas. Also, we recently employed a representative in the United Arab Emirates for undertake CCTV business on our behalf. The Group provides the solutions to enable them to expand our overseas business.

Our objective remains to expand our Electrical and Mechanical business ("E&M"). However, due to the lack of available capital no new E&M contracts are currently being undertaken. The Board regards the extension of its activities in E&M as the next step in delivering shareholder value.

Financial Review

During the current six month period revenues for the Group decreased by13% to HK$41m (H1 2011: HK$47m). The decrease in revenue was mainly due to HK$4m drop of the Group's E&M business in PRC and Hong Kong, a HK$2.3m decrease in the Group's Hong Kong product sales which mainly caused by lost of sales by an one-off customer and decrease in sales orders from the existing customers.

Our construction contracts division recorded a 23% revenue growth, mainly due to the40% growth of  in the Taiwan business, which compensated for 19% fall in revenue in the Group's maintenance business caused by the Taiwan business. On the other hand, the maintenancebusiness in Hong Kong is relatively stable and provides a higher profit margin. The maintenance contract with MTR Corporation Limited has been renewed for a further three year period which commenced on 1 January 2012. It provides constant cash flow for the Group's operations. In August 2012the Group was awarded a new construction contract by Hong Kong Government for the Kai Tak Cruise Terminal with a contract value of HK$10.96m,. It further strengthens the Group's position in the Security and Surveillance Systems business in Hong Kong.

Gross profit margin fell to 26% (2011: 28%). The major reason being a significant dropped in GP in Taiwan's maintenance contracts that from 29% to 21%, due to keen competition. Inflation also led to the increase in the material costs and direct costs, such as wages and sub-contracting charges during the reporting period.

Finance costs dropped significantly during the period as the loan due to Mayne Management Limited, the group's former major shareholder became interest free. (2011: HK$3.5m). The outstanding principal of loan remained HK$31m (US$3.97m) and is scheduled to be repaid on 31 March, 2013.

Profit before interest and tax during the period at HK$0.4m (H1 2011: Profit HK$3.3m), whilst the Group recorded a profit attributable to the equity holders of HK$0.002m (H1 2011: loss HK$0.7m).

The business of our Taiwan subsidiary has improved and it declared a dividend of TWD3.2m (HK$0.83m) during the period. The dividend will be paid to the holding company in December, 2012 after deducting the withholding tax.

Prospects

With a stable Security & Surveillance business providing a platform for growth in the E&M sector the Board is confident in being able to generate significant shareholder value over the coming years.

The Group expect to be able to expand the CCTV business by employing overseas representative and also anticipate that we may be able to secure some major contracts in the second half of the financial year.

The Group believe the E&M business in the PRC is their growth market the board continue to assess opportunities to raising funding to expand in the E&M marketplace in the PRC.

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

14 December 2012

Consolidated Statements of Comprehensive Income (Unaudited)
For the six months ended 30 September 2012
			2012	2011	2012		2011
			HK$000	HK$000	￡'000		￡'000
Revenue			40,650	46,769	3,302		3,699
Cost of sales			(29,980)	(33,651)	(2,435)		(2,661)
Gross profit			10,670	13,118	867		1,038
Other income			73	206	6		16
Selling and distribution expenses			(597)	(546)	(49)		(43)
Administrative expenses			(9,741)	(9,497)	(791)		(751)
Finance costs			(225)	(3,783)	(18)		(299)
Profit/(loss)before income tax			180	(502)	15		(39)
Income tax expense			(0)	(0)	(0)		(0)
Profit / (loss) for the period			180	(502)	15		(39)
Other comprehensive income / (loss):
Exchange differences arising on translation of foreign operations			88	2,567	(51)		397
Total comprehensive income / (loss) for the period			268	2,065	(36)		358
Profit/ (loss) attributable to:
Equity holders of the company			2	(659)	1		(52)
Non-controlling interests			178	157	14		13
			180	(502)	15		(39)
Total comprehensive income / (loss) attributable to:
Equity holders of the company			78	2,016	(51)		346
Non-controlling interests			190	49	15		12
			268	2,065	(36)		358
Profit /(loss) per share			HK Cents	HK Cents	Pence		Pence
Basic			0.0006	(0.1718)	(0.0000)		(0.0136)
Diluted			N/A	N/A	N/A		N/A

All revenues are from continuing operations.

Consolidated Balance Sheet (Unaudited)
As at 30 September 2012
	As at 30 September
	2012			2011	2012	2011
	HK$000			HK$000	￡'000	￡'000
ASSETS
Non-current assets
Plant and equipment	1,509			1,447	121	119
Goodwill	399			399	26	26
Amount due from customers for contract-in-progress	16,672			16,452	1,332	1,352
Total non-current assets	18,580			18,298	1,479	1,497
Current assets
Inventories	12,779			12,168	1,021	1,000
Trade receivables	13,069			13,490	1,044	1,108
Amount due from customers for contract-in-progress	163,623			165,560	13,074	13,606
Deposits, prepayments and other receivables	16,539			21,196	1,322	1,743
Cash and bank balances		4,798		5,223	383	429
Total current assets		210,808		217,637	16,844	17,886
Total assets		229,388		235,935	18,323	19,383
Consolidated Balance Sheet (Unaudited) (Continued)
As at 30 September 2012
			As at 30 September
			2012	2011	2012	2011
			HK$000	HK$000	￡'000	￡'000
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables		49,885		67,447	3,986	5,543
Amounts due to customers for contract-in-progress		8,936		9,850	714	810
Current tax liability		15,129		14,993	1,209	1,232
Interest-bearing borrowings			12,359	14,632	988	1,202
Loan from the former shareholder			31,000	44,800	2,477	3,682
Financial guarantee liabilities			3,861	-	308	-
Obligation under finance lease			100	36	8	3
Total current liabilities			121,270	151,758	9,690	12,472
Non-current liabilities
Obligation under finance lease			216	-	18	-
Total liabilities			121,486	151,758	9,708	12,472
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	-	7	-
Retained earnings			35,061	12,054	2,258	415
Translation reserve			11,073	9,538	1,964	2,030
			105,449	80,814	8,419	6,635
Non-controlling interest			2,453	3,363	196	276
Total equity			107,902	84,177	8,615	6,911
Total liabilities and equity			229,388	235,935	18,323	19,383

Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2012
						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 2011			1,698	2,193	467	156		143		1,632		-		6,289			264			6,553
Profit for the year			-	-	1,798	-		-		-		-		1,798			(52)			1,746
Exchange difference arising on translation of foreign operations			-	-	-	-		-		383		-		383			1			384
Balance at 31 March 2012			1,698	2,193	2,265	156		143		2,015		-		8,470			213			8,683
Profit for the six months ended 30 September 2012				-	-	-		-		-		-		-			15			15
Transfer to statutory surplus reserves					(7)							7		-			-			-
Dividend distribution to non-controlling interest by a subsidiary																	(32)			(32)
Exchange difference arising on translation of foreign operations				-	-	-		-		(51)		-		(51)			-			(51)
Balance at 30 September 2012			1,698	2,193	2,258	156		143		1,964		7		8,419			196			8,615

Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2012
						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 2011			23,980	31,054	12,713	2,117		2,071		6,863		-		78,798			3,314			82,112
Profit for the year			-	-	22,439	-		-		-		-		22,439			(643)			21,796
Exchange difference arising on translation of foreign operations			-	-	-	-		-		4,134		-		4,134			(9)			4,125
Balance at 31 March 2012			23,980	31,054	35,152	2,117		2,071		10,997		-		105,371			2,662			108,033
Profit for the six months ended 30 September 2012			-	-	2	-		-		-		-		2			178			180
Transfer to statutory surplus reserves					(93)							93		-			-			-
Dividend distribution to non-controlling interest by a subsidiary																	(399)			(399)
Exchange difference arising on translation of foreign operations			-	-	-	-		-		76		-		76			12			88
Balance at 30 September 2012			23,980	31,054	35,061	2,117		2,071		11,073		93		105,449			2,453			107,902

Consolidated Statement of Cash Flows (Unaudited)
For the six months ended 30 September 2012
			For the six months ended 30 September
			2012	2011	2012	2011
CASH FLOW FROM OPERATING ACTIVITIES			HK$000	HK$000	£'000	£'000
Profit / (loss) for the period			180	(502)	15	(39)
Adjustments for:
Depreciation of plant and equipment			269	262	22	20
(Gain) / loss on disposal of plant and equipment			-	(3)	-	-
Interest income			(2)	(2)	-	-
Non-cash finance costs			-	3,473	-	274
Finance costs paid			226	310	18	25
			673	3,538	55	280
Changes in operating assets and liabilities:
Decrease / (increase) in inventories			786	(886)	63	(73)
Increase in trade receivables			(4,678)	(2,512)	(373)	(206)
Increase in amounts due from customers for contract-in-progress			(5,124)	(5,129)	(409)	(421)
Increase in deposits, prepayments and other receivables			(1,296)	(10,100)	(104)	(831)
Increase in amounts due to customers for contract-in-progress			3,712	4,046	296	333
Increase in trade and other payables Decrease in tax payable			2,642  (212)	479 -	211      (17)	39 -
Cash used in operations			(3,497)	(10,564)	(278)	(879)
Income tax paid			(127)	(73)	(10)	(5)
Net cash used in operating activities			(3,624)	(10,637)	(288)	(884)
Consolidated Statement of Cash Flows (Unaudited) (Continued)
For the six months ended 30 September 2012
			For the six months ended 30 September
			2012	2011	2012	2011
			HK$000	HK$000	£'000	£'000
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment			(411)	(377)	(32)	(31)
Proceeds from disposal of plant and equipment			-	3	-	-
Interest received			2	2	-	-
Net cash used in investing activities			(409)	(372)	(32)	(31)
CASH FLOWS FROM FINANCING ACTIVITIES
Finance costs paid			(226)	(310)	(18)	(25)
Proceeds from interest-bearing borrowings			3,147	2,795	251	230
Repayment of loan to the former shareholder			-	(2,000)	-	(164)
Repayment of obligation under finance lease			(56)	(24)	(5)	(2)
Net cash generated from financing activities			2,865	461	228	39
NET DECREASE IN CASH AND CASH EQUIVALENTS			(1,168)	(10,548)	(92)	(876)
EFFECT OF CHANGE IN EXCHANGE RATES			(302)	2,959	(29)	282
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD			6,268	12,812	504	1,023
CASH AND CASH EQUIVALENTS AT END OF PERIOD			4,798	5,223	383	429

Notes to the Interim financial statements for the six months ended 30 September 2012

1.     Basis of preparation

The unaudited interim financial statements for the six months ended 30 September 2012 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 2012. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2012, 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 loss attributable to equity holders of the Group for the six months ended 30 September 2012 of HK$0.002m (H1 2011: Loss HK$0.7m), and the weighted average of 383,677,323 (H1 2011: 383,677,323) ordinary shares in issue during the period.

There were no potential dilutive instruments at either financial period end.

3.     Half Year 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.

 

END

 

 

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