Interim Results
UniVision Engineering Ltd
14 December 2007
UniVision Engineering Limited
('UniVision' or 'The Group')
Interim Results
For the Six Months Ended 30 September 2007
UniVision Engineering Limited, 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, today announces its interim results for the six months ended 30
September 2007
Highlights
* Turnover increased by 64% to HK$84m (H1 2006 : HK$51m ).
* Operating profit up 4.6% to HK$11.3m (H1 2006 : HK$10.8m ).
* Basic and fully diluted earnings per share of HK$0.026 (H1 2006 : HK$0.026).
* Strong domestic performance in Greater China Region
* Chun Hung Wong to take over as Group CEO from 1 Jan 2008 following
retirement of Stephen Chan
Mr. Stephen Koo, Chairman, added:
'Trading in the first half of the year has been satisfactory. Turnover has
improved considerably with a strong contribution from T.Com Tech and Leader
Smart, acquired in October 2006.
'The Group is currently involved in a number of significant projects which we
expect to come to fruition in the second half of the year and therefore remain
optimistic of a strong trading performance for the year as a whole.'
For further information visit www.uvel.com or contact:
UniVision Engineering Limited +852 2389 3256
Stephen Koo, Chairman
Danny Yip, Finance Director
HB Corporate +44 (0) 207 510 8600
Jim McGeever/Rory Creedon
Threadneedle Communications +44 (0) 207 936 9605
Graham Herring/Josh Royston
Chairman's Statement
I am pleased to report on the results of UniVision Engineering Limited and its
subsidiary for the six months ended 30 September 2007.
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 acquisition
of a majority shareholding in T-Com Tech. Co. Ltd and the 100% shareholding of
Leader Smart Engineering Co., Ltd to expand our market in PRC has added momentum
to our continued growth.
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 and Asia in order to respond to
growing demand in the surveillance industry.
Financial Review
During the period turnover increased by 64% to HK$84m (H1 2006 : HK$51m).
This growth is attributable to additional sales to existing clients, the
improvement in market conditions and also the contribution of our subsidiary,
T-Com Tech. Co. Ltd and Leader Smart Engineering Co., Ltd. which was acquired in
October 2006.
Operating profit increased by 4.6% to HK$11.3m ( H1 2006 : HK$10.8m), whilst net
profit decreased by 3% to HK$9.9m ( H1 2006 : HK$10.2m ) mainly due to the
provision of taxation in the subsidiaries.
Operating profit when reported in Pounds Sterling shows a reduction from £745k
in the first half of 2006 to £722k. This is due to the appreciation of the Pound
Sterling versus the Hong Kong Dollar for the two comparable periods.
Basic and fully diluted earnings per share remained level at HK$0.026 ( H1 2006
: HK$0.026). This is due to the issue of new ordinary shares as part of the
consideration for Leader Smart in October 2006 and the placing in March 2007.
Cash and cash equivalents at 30 September 2007 showed a deficit of HK8.9m. The
Group is currently involved in a large number of significant projects which
require high levels of capex, which is the main reason for the reduction in the
Group's cash balance. We expect these projects to come to fruition in the second
half of this year and therefore remain optimistic of a strong trading
performance for the year as a whole.
Business Review
Markets
IP Video provides the CCTV industry with a unique set of tools to improve the
quality of CCTV coverage, which has proved particularly useful for the demands
of the transportation industry, which has used the analogue system for a decade.
Using a Hybrid IP analogue system is the most cost effective way to connect IP
and analogue cameras with CCTV Matrix Controllers and DVS. Hybrid solutions
provide large installed base analogue cameras with a gateway to transmit video
streams from networks and the Internet.
There are considerable opportunities in Greater China which is providing avenues
for the Hybrid solutions. The Group is looking into many different solutions,
including Video compression technology MPEG-4 and H.264, 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.
The Board believes that UniVision will be among the pioneers in providing the
most effective solutions for businesses in the airport, rail and traffic
surveillance industries and we hope to expand our sphere of business
accordingly.
Technologies, Solutions and Products
On the solutions side, an ongoing product development programme is in place to
cater for the needs of the Group's growing client base in the Asia Pacific
region.
The Group's newly developed Digital Video Server with PC and embedded base
solutions came to market in July 2007 and have been used in several projects in
Hong Kong. A new brand name for these products is expected to be announced in
early 2008. A newly developed Video Amplifier with an on-screen display function
was launched at the same time and the first order is due to be implemented into
the CCTV System for the Hong Kong Island Area Traffic Control. We are currently
working on H.264 CoDec with built in video analysis algorithms which we expect
to launch early in the next financial year.
Acquisitions and Investments
The success of our investment in T-Com Tech. Co. Ltd and Leader Smart (Shanghai)
Ltd has reinforced the Group's strategy of acquiring interests in companies with
strategic value. To this end, the Group is currently assessing a number of
companies in related fields with a view to making further strategic investments.
The Board
The Directors are also pleased to announce the appointment and promotion to the
Board, with effect from 1 Jan, 2008, of Mr. Chun Hung Wong to the position of
Chief Executive. Mr Wong, aged 48, is currently the Group's Operations
Director.. Our outgoing CEO, Mr. Stephen Chan, has announced his intention to
retire from 1 Jan 2008.
There is no other information relating to Mr. Chun Hung Wong which would
otherwise fall to be disclosed under the provisions of paragraph (g) of Schedule
2 to the AIM Rules.
Prospects
The Group's performance domestically has been strong with new revenue streams
from both the public and private sector in the Greater China Region. We are
working with partners in Australia, Thailand, and Dubai in securing product
distribution channels. We continue to enhance our product and application
development programmes.
The first few months of the current financial year have been very encouraging.
In view of the strong demand for 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 Group.
MR. STEPHEN KOO
EXECUTIVE CHAIRMAN
14 December 2007
Consolidated Income Statement (Unaudited)
For the six months ended 30 September 2007
For the six month ended 30 Sep.
2007 2006 2007 2006
HK$000 HK$000 £'000 £'000
Turnover 84,095 51,072 5,377 3,520
Cost of Sales (63,596) (31,853) (4,066) (2,195)
Gross Profit 20,499 19,219 1,311 1,325
Other Revenue 1,203 1,152 77 79
Distribution Costs (547) (418) (35) (29)
Administrative Expenses (9,868) (9,146) (631) (630)
Profit From Operations 11,287 10,807 722 745
Finance Costs (719) (600) (46) (41)
Profit before taxation 10,568 10,208 676 704
Taxation 682 (44) -
Profit for the period 9,886 10,208 632 704
Profit attributable to:
Equity holders of the
parent 9,874 8,406 631 580
Minority Interests 12 1,802 1 124
9,886 10,208 632 704
Earnings per Share HK$ HK$ Pence pence
Basic and Diluted 0.026 0.026 0.16 0.18
Consolidated
BalanceSheet
(Unaudited)
as at 30 September 2007
As at 30 September
2007 2006 2007 2006
HK$000 HK$000 £'000 £'000
ASSETS
Non-Current Assets
Plant and equipment 5,253 2,229 333 154
Intangible assets 0 1,821 0 125
Goodwill 14,310 4,354 907 300
19,563 8,404 1,240 579
Current assets
Inventories 17,962 11,795 1,139 813
Due from construction
contract customers 17,713 14,017 1,123 966
Trade receivables 58,115 35,201 3,684 2,426
Deposit, prepayment and
other receivables 16,458 30,471 1,043 2100
Cash and cash
equivalents (8,961) 5,885 (568) 406
101,287 97,369 6,421 6,747
Total assets 120,850 105,773 7,661 7,326
LIABILITIES
Current liabilities
Due to construction
contract customers 1,688 4,077 107 281
Trade payables and
accruals 18,682 40,490 1,184 2,827
20,370 44,567 1,291 3,108
Total liabilities 20,370 44,567 1,291 3,108
Net Assets 100,480 61,206 6,370 4,218
EQUITY
Capital and reserves
Share Capital 23,980 20,207 1,698 1,451
Share Premium 31,054 17,177 2,193 1,729
Special Capital Reserve 4,188 2,071 299 143
Retained Earnings 36,147 17,925 2,401 1,225
Exchange Differences 771 (714) (496) (193)
96,140 56,666 6,095 3,905
Minority Interests 4,340 4,540 275 313
Total equity 100,480 61,206 6,370 4,218
Consolidated Statement of Changes in Equity (Unaudited)
For the six months ended 30 September 2007
Share Share Retained Special Exchange Minority Total
Capital Premium Earnings Capital Differences Interests equity
Reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1
April 2006 1,451 1,279 489 299 95 - 3,613
Net profit for
the period - - 579 - - - 579
Minority
Interest 313 313
Effect of
translation - - - - (287) - (287)
Balance at 30
September 2006 1,451 1,279 1,068 299 (192) 313 4,218
Issue of shares
for acquisition
of a subsidiary 23 217 - - - 165 405
Issue of shares
upon placing 224 811 - - - - 1,035
Share issue
costs - (114) - - - - (114)
Net Profit for
the period - - 702 - - (193) 509
Effect of
translation - - - - (178) - (178)
Balance at 31
March 2007 1,698 2,193 1,770 299 (370) 285 5,875
Net profit for
the period - - 631 - - 1 632
Effect of
translation - - - - (126) (11) (137)
Balance at 30
September 2007 1,698 2,193 2,401 299 (496) 275 6,370
UniVision Engineering Limited
Consolidated Statement of Changes in Equity
For the six months ended 30 September, 2007
Retained Special Special Exchange Minority Total
earning/ capital capital
Share Share (accumulated) reserve reserve different sub-total Interest equiv.
Capital premium 'A' 'B' (HKD)
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Balance at 31 March
2006 - previously
reported 20,207 17,177 9,521 - 2,071 48,976 48,976
Recovery of
provision for bad
debts (182) 182 - -
Recovery of
provision for
obsolete inventories 1,935 1,935 1,935
Provision for
obsolete
inventories (1,935) (1,935) (1,935)
Balance at 31
March 2006 -
restated 20,207 17,177 7,404 2,117 2,071 - 48,976 - 48,976
Net profit for
the period 10,207 10,208 10,208
Effect of
translation (530) (530) (530)
Minority
Interest - 2,552 2,552
Balance at 30
September 2006 20,207 17,177 17,612 2,117 2,071 (530) 58,654 2,552 61,206
Issue of shares
for acquisition
of a subsidiary
undertaking 335 3,165 530 4,030 4,030
Issue of shares
upon placing 3,438 12,475 15,913 15,913
Share issue
cost (1,763) (1,763) (1,763)
Net profit for
the year 8,661 8,661 1,776 10,437
Effect of
translation 21 21 21
Balance at 31
March 2007 23,980 31,054 26,273 2,117 2,071 21 85,516 4,328 89,844
Net profit for
the year 9,874 9,874 12 9,886
Effect of
translation 750 750 750
Balance at 30
Sept., 2007 23,980 31,054 36,147 2,117 2,071 771 96,140 4,340 100,480
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2007
GBP Rate: GBP Rate:
GBP 15.773 14.51 14.51
2007 2006 2007 2006
CASH FLOW FROM OPERATING ACTIVITIES HK$000 HK$000 £'000 £'000
Profit / (loss) before taxation 10,568 10,208 676 704
Adjustments for:
Depreciation 577 291 37 20
Admission to AIM costs
impairment of Goodwill
Reversal of provision for bad debts
Provision for obsolete inventories
Written back on trade payables and
accruals
Gain on disposals of plant and equipment
Interest income
Interest expenses
Operating profit / (loss) before working
capital changes 11,145 10,499 713 724
Decrease/(increase) in inventories (2,469) (3,796) (157) (262)
Decrease/(increase) in accounts
receivable (24,773) 119 (1,570) 8
Increase in amounts due from construction
contract customers 1,511 96
Decrease in retention receivables
Decrease/(increase) in deposits, prepayments
and other receivables 320 (12,201) 20 (841)
Increase in amount due from a related
company (26) (1) (2)
(Increase)/decrease in amount due from
an associate
(Decrease)/increase in amounts due to construction
contract customers
(Decrease)/Increase in amounts invest to
contract 5,829 402
(Decrease)/Increase in accounts payable
and accruals 289 (1,052) 19 (73)
Decrease/(Increase) in investment in
Securities (17) (1)
Decrease in amount due to a related
company
Effect of changes in foreign exchange 1,052 764 61 53
Net cash (used in)/from operations (12,951) 144 (820) 10
Tax paid (682) (44)
Net cash inflow from operating
activities (13,633) 144 (864) 10
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of plant and equipment (593) (326) (38) (22)
Acquisition of intangible assets
Acquisition of an associate
Investment in associate (NOTE 1) (5,912) (407)
Proceeds from sales of plant and
equipment
Interest received
Receipts from disposal of a subsidiary
(Increase)/decrease/ in pledged deposits (4,306) (297)
Net cash from/(used in) investing
activities (593) (10,544) (38) (726)
CASH FLOWS FROM FINANCING ACTIVITIES
Interest paid
Dividend paid
Proceeds from issuance of share capital
Proceeds from bank loan
Proceeds from finance leases
Payment of finance lease liabilities
Payment of bank loan
Payment of other loan
Payment for Legal fee- IPO & OTHER
EXPENSE (302) (536) (19) (37)
Minority Interest (4,540) (313)
Repayment of amount due to immediate
holding company
Payment of amount due to ultimate
holding company
Net cash generated from/(used in) financing
activities (302) (5,076) (19) (350)
NET INCREASE IN CASH AND CASH
EQUIVALENTS (14,528) (15,476) (921) (1,066)
EFFECT OF CHANGES IN FOREIGN EXCHANGE (9)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 5,567 21,361 362 1,472
CASH AND CASH EQUIVALENTS AT END OF
PERIOD (8,961) 5,885 (568) 406
NOTE (1)
Cash consolidation 7,350 507
balance and cash acquired (1,438) (99)
cash flow on business combination , net of
cash acquired 0 5,912 0 407
Notes to the Interim financial statements for the six months ended 30 September
2007
1. Basis of preparation
The unaudited interim financial statements for the six months ended 30 September
2007 have been prepared under International Financial Reporting Standards
('IFRS') using the policies consistent with those applied to the annual
financial statements for the year ended 31 March 2007 The interim financial
statements, together with the comparative information contained in this report
for the six months ended 30 September 2007, does not constitute the statutory
accounts of the Company.
2. Earnings per share
The calculation of basic and diluted earnings per share is based on the net
profit attributable to equity holders of the parent for the period ended 30
September 2007 of HK$8.4m (2006 : HK$9.8m), and the weighted average of
383,677,323 ( 2006 : 323,313,333) ordinary shares in issue during the period.
There were no potential dilutive ordinary shares outstanding during the period
(2006 : Nil )
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