Half Yearly Report

RNS Number : 8088I
UniVision Engineering Ltd
11 December 2015
 

11 December 2015

  UniVision Engineering Limited

("UniVision" or the "Group")

  Interim Results

For the Six Months Ended 30 September 2015

 

 

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 2015. 

 

Highlights:

·    Profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m);

·    Revenue decreased by 16% to HK$34m (H1 2014 HK$41m).

 

 

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

 

"Our Company has a good track record and high market recognition in the surveillance business. Though the revenue decreased in this period mainly due to increasing competition and the delay of major government infrastructure projects, the anticipated extension of MTR railway lines will provide the business opportunity for growth 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  

Richard Morrison /Ivy Wang                www.zaicf.com           

 

 

 

 

 

 

 

 

 


Chairman's Statement

 

Introduction

 

The Group's turnover has decreased by 16% and gross margin percentage has decreased to 28% (H1 2014: 32%) in the six months' reporting period due to increasing competition and the delay of major government infrastructure projects. Nevertheless, the Board expects that the business will improve as several proposed major infrastructure projects are expected in the coming years.

 

The Directors remain confident of the future of UniVision and are cautiously optimistic about the Group's prospects.

 

The Company has paid a final dividend to the shareholders for the last three financial years. The Board intends to maintain the dividend policy in the coming years.

 

 

Financial Review

 

In the six month period revenues for the Group decreased by 16% to HK$34m (H1 2014: HK$41m). The decrease of HK$7m in the revenue was mainly due to a drop of 27% in the Group's maintenance construction business. Changes to the scope in the service provided in the new maintenance contract to MTR Corporation Limited and lower sub-contract income received for its coming major CCTV replacement project contributed to the fall in revenues. The reduction of expenditure budget by local customers for improving and replacement of their surveillance systems also led to the decrease in job orders in the Taiwan subsidiary.

 

The Group's construction business is comparatively stable recording a 3% drop in revenue. The Hong Kong business recorded 8.5% growth mainly due to projects relating to the MTR railway lines and depot. Project delays of the Hong Kong-Zhuhai-Macao Bridge lead to the deferred contract income and increased construction costs. Nevertheless, the Group expects to receive compensation for the delay from the customer. The Group's Taiwan subsidiary recorded 15% fall in revenue in its construction business.

 

Group gross profit margin has decreased to 28% (2014: 32%). Gross profit margin in the Hong Kong construction business slightly improved from 34% to 36%, partly compensating for a lower gross profit margin of 12% in Group's maintenance business for the period due to keen market competition, initial purchase cost for installation of equipment and increased cost for changing parts for systems. The gross profit margin in product sales remains stable at 29%.

 

Loss before interest and tax during the period at HK$0.58m (H1 2014: profit HK$2.4m), whilst the Group recorded a profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m). The Group's Hong Kong subsidiary was profitable even in the competitive environment. The Group's Taiwanese subsidiary which UniVision owns a 52.25% interest, recorded an operating loss during the six months ended 30 September 2015. It was required to pay one-off liquidated damages TWD4.8m (approx. HKD1.2m) to a local customer during the period. The Group is implementing various effective measures to deal with the effect of decrease in revenue.

 

The Taiwan subsidiary declared a dividend of TWD1.76m (HK$0.43m) during the period. The dividend will be paid to the holding company after deducting the withholding tax.

 

The Comparative figures in the Financial Statements in 2014 included the Leader Smart Group which has been spun off in 31 March, 2015.

 

During the period under review, the relative weak in HK$ against GBP has led to 2.26% depreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. 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 2014 that were unaffected by exchange rate fluctuations.

 

 

 

Business Review

Market

 

Univision will commit resources to accessing and developing new technologies and solutions to cope with the future opportunities in High Definition CCTV System technology

 

The increase in concern over security and safety, and also the demand for high-quality images are two contributing factors for the growth of the CCTV market. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will increase in coming years.

 

 

Business

 

During the period, the Hong Kong Company has participated in the Pre-Qualification process for the CCTV Replacement project for Hong Kong MTR.  The project is expected to replace about 6,500 CCTV camera from analogue-based to IP-based.  Since we are the CCTV System maintainer for MTR, we are in a good position to bid for this project.

 

To support the Pre-Qualification, the Company is negotiating partnership arrangements with certain PRC real estate groups. In order to facilitate any relationship with PRC companies and due to the volume of work which would result if the Company won the tender, UniVision is undertaking a strategic review of its interest in T-Com, its Taiwan subsidiary, and may look to dispose or distribute its shares in T-Com to its shareholders.

 

On the other hand, the Company observed that new players are coming to bid for the projects which we have been in good position to obtain. Increased competition leads to reduced income and so the Company is explore other market segments to compensate for this loss and strengthen the business growth.

 

 

Prospects

The Company will actively tender for new construction contracts while maintains its stake in the maintenance sector of Security & Surveillance market. As the subsequent completion of some major infrastructure projects and extension of railway lines, the Board is optimistic on the business growth in the coming years.

 

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

 

11 December 2015

 


 

 

UniVision Engineering Limited

Consolidated Statements of Comprehensive Income (Unaudited)


 

For the six months ended 30 September 2015

 




 




         For the six months ended 30 September

 




2015

2014

2015

2014

 




HK$000

HK$000

'000

'000

 

Revenue



34,444

40,811

2,895

3,148

 

Cost of sales



(24,721)

(27,907)

 

(2,078)

(2,152)

 

Gross profit



9,723

12,904

817

996

 

Other income



247

20

21

1

 

Other gains and (loss)



(12)

12

(1)

1

 

Selling and distribution expenses



(777)

(816)

(65)

(63)

 

Administrative expenses


(9,552)

(9,517)

(803)

(734)


 

Finance costs



(212)

(154)

(18)

(12)

 

(Loss)/Profit before income tax


(583)

2,449

(49)

189


 

Income tax expense



(0)

(0)

(0)

(0)

 

(Loss)/Profit for the period


(583)

2,449

(49)

189


 








 

Other comprehensive (loss) /income:






 

Exchange differences arising on translation of foreign operations

(482)

1,215

(166)

367

 

Total comprehensive (loss) /income  for the period

(1,065)

3,664

(215)

556

 

 

 

 







 




 

 


















Profit/ (loss) attributable to:







Equity holders of the company

449

3,029

38

233

 

Non-controlling interests



(1,032)

(580)

(87)

(44)

 




(583)

2,449

(49)

189

 








 

Total comprehensive income / (loss) attributable to:






Equity holders of the company

162

4,235

(102)

594

 

Non-controlling interests



(1,227)

(571)

(113)

(38)

 




(1,065)

3,664

(215)

556

 








 

Profit per share

HK Cents

HK Cents

Pence

Pence

 

Basic



0.1173

0.7895

   0.0099

0.0609

 

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 2015











As at 30 September


2015

2014

2015

2014


HK$000

HK$000

'000

'000

ASSETS





Non-current assets





Plant and equipment

708

469

60

37

Goodwill

399

399

26

26

Amount due from customers for contract-in-progress

 

34,152

 

17,285

 

2,908

 

1,371






Total non-current assets

35,259

18,153

2,994

1,434






Current assets





Inventories

12,770

13,092

1,088

1,039






Trade receivables

9,517

15,126

810

1,200






Amount due from customers for contract-in-progress

21,697

168,239

1,847

13,347






Deposits, prepayments and other receivables

17,825

17,483

1,517

1,388






Cash and bank balances

10,129

4,168

862

330






Total current assets

71,938

218,108

6,124

17,304






Total assets

107,197

236,261

9,118

18,738

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Financial

Position (Unaudited) (Continued)



As at 30 September 2015











As at 30 September


2015

2014

2015

2014


HK$000

HK$000

'000

'000

LIABILITIES AND EQUITY




Current liabilities





Trade and other payables

19,587

53,125

1,667

4,215






Amounts due to customers for contract-in-progress

 

11,773

8,068

1,003

640






Current tax liability

373

15,706

32

1,246






Interest-bearing borrowings

13,288

9,394

1,131

745






Financial guarantee liabilities

 

-

 

3,950

-

 

313






Obligation under finance lease

52

88

4

7






Total current liabilities

45,073

90,331

3,837

7,166






Non-current liabilities





Obligation under finance lease

-

52

-

4






Total liabilities

45,073

90,383

3,837

7,170






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

221

93

18

8






Retained earnings

(278)

69,835

(22)

5,069






Translation reserve

(115)

13,344

833

2,033


59,050

142,494

  5,019

11,300






Non-controlling interest

3,074

3,384

262

268






Total equity

62,124

145,878

5,281

11,568






Total liabilities and equity

107,197

236,261

9,118

18,738



 

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



'000

'000

'000

'000

'000

'000

'000

'000

'000

'000

 













 

Balance at 1 April 2014


1,698

2,193

4,928

156

143

1,670

8

10,796

333

11,130

 













 

Profit for the year


-

-

60

-

-

-

-

60

52

112

 

Exchange difference arising on translation of foreign operations







18


18

33

51

 

Transfer to statuary surplus reserves




(7)




7




 

Total comprehensive income


-

-

53

-

-

18

7

78

85

163

 

Dividend paid




(104)





(104)


(104)

 

Demerger by Dividend in specie




(791)





(791)


(791)

 

Effect on deconsolidation




(4,015)



(722)

7

(4,731)


(4,731)

 

Dividend distributed to non-controlling interest by a subsidiary










(26)

(26)

 

Balance at 31 March 2015


1,698

2,193

71

156

143

966

22

5,248

392

5,641

 













 

Profit/(loss) for the six months ended 30 September 2015



-

38

-

-

-

-

38

(87)

(49)

 

Transfer to statutory surplus

 Reserves




(4)




4




 

Exchange difference arising on translation of foreign operations



-

-

-

-

(140)


(140)

(26)

(167)

 

Total comprehensive income




34



(140)

4

(102)

(113)

(216)

 

Dividend declared




(127)





(127)

-

(127)

 

Reversal of translated effect on demerger







7

(7)



-

 

Dividend distributed to non-controlling interest by a subsidiary










(17)

(17)

 

Balance at 30 September 2015


1,698

2,193

(22)

156

143

833

19

5,019

262

5,281

 













 


 

 

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 2014


23,980

31,054

67,995

2,117

2,071

12,137

93

 139,448

4,302

143,750

 

Profit for the year


-

-

749

-

-

-

-

749

657   

1,407

 

Transfer to statutory surplus reserves


-

-

(80)

-

-

-

80

-

-

-

 

Exchange difference arising on translation of foreign operations


-

-

-

-

-

229

-

229

(110)

119

 

Total comprehensive income


-

-

669

-

-

229

80

978

546

1,526

 

Dividend paid




(1,189)





(1,189)


(1,189)

 

Demerger by Dividend in specie



-

(9,089)


-

-


(9,089)

-

(9,089)

 

Effect on demerger



-

(57,569)


-

(12,272)

78

(69,764)

-

(69,764)

 

Dividend distributed to non-controlling



-



-

-



(342)

(342)

 

Balance at 31 March 2015


23,980

31,054

817

2,117

2,071

94

251

60,384

4,507

64,892

 

Profit/(loss) for the six months ended 30 September 2015


-

-

449

-

-

-

-

449

(1,032)

(583)

 

Transfer to statutory surplus reserves


-

-

(48)


-

-

48


-

-

 

Exchange difference arising on translation of foreign operations


-

-

-

-

-

(287)

-

(287)

(194)

(482)

 

Total comprehensive income


-

-

401

-

-

(287)

48

162

(1,227)

(1,065)

 

Dividend declared


-

-

(1,496)

-

-

-


(1,496)

-

(1,496)

 

Reversal of translated effect on demerger


-

-

-

-

-

78

(78)


-

-

 

Dividend distributed to non-controlling interest by a subsidiary


-

-

-

-

-

-


-

(207)

(207)

 

Balance at 30 September 2015


23,980

31,054

(278)

2,1177

2,071

(115)

221

59,050

3,074

62,124

 



 

Consolidated Statement of Cash Flows (Unaudited)







For the six months ended 30 September 2015

 

 




For the six months ended 30 September

 




2015

2014

2015

2014

 

 CASH FLOW FROM OPERATING ACTIVITIES



HK$000

HK$000

£'000

£'000

 

(Loss)/Profit before income tax for the period



(582)

2,449

(49)

189

 

Adjustments for:







 

Depreciation of plant and equipment



152

602

13

46

 

Interest income



(2)

(2)

-

-

 

Finance costs paid



212

154

18

12

 


(220)

3,203

(18)

247

 

Changes in operating assets and liabilities:







 

Decrease in inventories



1,075

580

90

45

 

(Increase)/decrease in trade receivables



1,558

(2,925)

130

(225)

 

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

3,624

(4,442)

304

(342)

 

(Increase) / decrease in deposits, prepayments and other receivables

316

(6,170)

28

(476)

 

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



(1,599)

1,740

(134)

134

 

Increase / (decrease) in trade and other payables

Decrease in tax payable



       (5,986)       (22)

3,495

-

         (503)          (2)

269

-

 

 

Cash generated (used) in /from operations



 

(1,254)

 

(4,519)

 

(105)

 

(348)

 

Income tax paid



- 

- 

- 

- 

 

Net cash generated (used) in / from operating activities



(1,254)

(4,519)

(105)

(348)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statement of Cash Flows (Unaudited) (Continued)








For the six months ended 30 September 2015











For the six months ended 30 September

)




2015

2014

2015

2014

 




HK$000

HK$000

£'000

£'000

 

CASH FLOWS FROM INVESTING ACTIVITIES







 

Purchase of plant and equipment



(322)

(154)

(27)

(12)

 

Interest received



2

2

-

-

 

Increase in pledged deposits



(2,000)

-

(168)

-

 

Net cash used in investing activities



(2,320)

(152)

(195)

(12)

 

 

 







 

CASH FLOWS FROM FINANCING ACTIVITIES







 

Finance costs paid



(212)

(154)

(18)

(12)

 

Proceed from / (repayment of) interest-bearing borrowings



401

3,706

34

286

 

Repayment of obligation under finance lease



(44)

(44)

(4)

(3)

 

Net cash generated from financing activities

145

3,508

12

271

 








 

NET DECREASE IN CASH AND CASH EQUIVALENTS



(3,429)

(1,163)

(288)

(89)

 








 

EFFECT OF CHANGE IN EXCHANGE RATES



(473)

427

(71)

40

 








 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


14,031

4,904

1,221

379

 








 

CASH AND CASH EQUIVALENTS AT END OF PERIOD



10,129

4,168

862

330

 








 








 








 








 






 GBP Rate :14.51

 


Notes to the Interim financial statements for the six months ended 30 September 2015

 

1.     Basis of preparation

 

The unaudited interim financial statements for the six months ended 30 September 2015 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 2015. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2014, 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 2015 of HK$0.4m (H1 2014: HK$3m), and the weighted average of 383,677,323 (H1 2014: 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.

 

 

 


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