Interim Results

RNS Number : 2989A
UniVision Engineering Ltd
19 December 2014
 



 

  UniVision Engineering Limited

("UniVision" or the "Group")

  Interim Results

For the Six Months Ended 30 September 2014

 

 

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 2014. 

 

Highlights:

·     Profit attributable to the equity holders of HK$3m (H1 2013: HK$3.3m);

·     Revenue decreased by 22% to HK$41m (H1 2013 HK$52m).

 

 

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

 

"Our CCTV business has a high market recognition which provides a competitive advantage. We are pleased to have been successful in winning the MTRC maintenance contract for the 2015-2017 period. Local government infrastructure projects and the extension of MTR railway lines will support growth of the Group's income in future years though the revenue decreased in this period."

  

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                                       www.zaicf.com           

 

 

Chairman's Statement

 

Introduction

 

As announced on 2 December 2014, the Company proposed to demerge its Electrical and Mechanical ("E&M") and property division (the "Proposed Demerger") through an "in-specie" distribution of shares to UniVision's shareholders. The Board believes that the Proposed Demerger is in the best interests of the Company and Univision's shareholders. It will allow Univision to focus on its core Security and Surveillance business whilst the Leader Smart Group focuses on properties which are not related to Univision's core security and surveillance systems business. In fact, the two segments operate independently of each other and have different growth rates, business strategies and risk profiles. The procedure of Proposed Demerger is being carried out. Should all regulatory and tax clearances be obtained further details of the management, strategy and off-market dealing facilities in Leader Smart shares will be announced to the market. The Board will explore the possible trading platform for the listing of Leader Smart after the proposed distribution of shares.

 

The Company is still waiting for the judgment from the Guangzhou Arbitration Commission and will update the market about the Arbitration Process relating to Zhongshan Shopping Mall.  

 

The core CCTV business continues to produce stable revenues and cash flows to the Group in facing of keen market competition. Our Gross Margin percentage has improved to 32% (H1 2013: 27%) though turnover decreased by 22% in the six month period. The Board expects that the business will improve following the announcement of several major proposed infrastructure projects in the coming years.

 

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

 

Recognising the patience and confidence in Univision by its investors, the Company has paid a final dividend to the shareholders for the last two financial years.

 

 

Financial Review

 

In the six month period revenues for the Group decreased by 22% to HK$41m (H1 2013: HK$52m). The decrease of HK$11m in the revenue was mainly due to a significant drop in revenue in the Group's Taiwan construction business, which was caused by the decrease in job orders and delay of projects. These were caused by the reduction of expenditure budget by a local major customer. Further, last year's comparable figures included construction contract income of HK$7m from the Kai Tak Cruise Terminal project in Hong Kong. These factors led to revenue from the construction contracts division, including the E&M business, falling by 45%.

 

The maintenance business in Hong Kong is stable and continues to provide a steady profit margin. The Group's major customers are public organisations and sizeable private enterprises. As announced on 18 December 2014, the Group was awarded a new maintenance contract with MTR Corporation Limited for three years commencing on 1 January 2015. It demonstrates the ability of the Group to successfully win high profile projects against keen market competition. The main maintenance contract and its sub-contracts will provide regular cash flow for the Group's operations. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will increase in coming years. On the other hand, the Group's Taiwan maintenance business has improved and recorded a growth of HK$4.1m which partly offsets the significant fall in revenue in its construction business.

 

Group gross profit margin improved to 32% (2013: 27%). Gross profit margin in the Hong Kong construction business improved from 23% to 34%, compensating for a lower gross profit margin of 18% in Taiwan's construction business for the period due to increased cost for changing parts for systems.

 

Profit before interest and tax during the period at HK$2.6m (H1 2013: HK$3.6m), whilst the Group recorded a profit attributable to the equity holders of HK$3m (H1 2013: HK$3.3m).

 

The Taiwan subsidiary declared a dividend of TWD2.8m (HK$0.73m) during the period. The dividend has been paid to the holding company in December 2014 after deducting the withholding tax.

 

During the period under review, the relative weak in HK$ against GBP has led to 8.3% depreciation in the GBP reporting amount in the Consolidated Statement of Comprehensive Income. 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 2013 that were unaffected by exchange rate fluctuations.

 

 

Business Review

Market

 

High Definition CCTV System technology is maturing and more solutions are available in the market. In the coming year Univision will commit resources to accessing and developing new technologies and solutions to cope with the future opportunities in this area.

 

The increase in concern over security and safety, and also the demand for high-quality images to replace the older surveillance systems are two contributing factors for the growth of the CCTV market.

 

 

New Contract

 

The Company was awarded two maintenance contracts from MTR Corporation Limited for CCTV and Public Address Systems in Hong Kong. The period of contracts are over three years commencing from 1 January 2015 to 31 December 2017. Along with these two maintenance contracts, more derived jobs are expected to follow.

 

Prospects

As the Company has stable income from the maintenance sector of our Security & Surveillance business and the subsequent completion of some major infrastructure projects and extension of railway lines, the Board are optimistic on the business growth in the coming years.

 

The Proposed Demerger will allow the management of Univision to have a more defined business focus on their core Security and Surveillance Systems business and enhance their responsiveness to market changes.

 

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

 

19 December 2014

 

 

 

UniVision Engineering Limited

Consolidated Statements of Comprehensive Income (Unaudited)


For the six months ended 30 September 2014

 







         For the six months ended 30 September

 




2014

2013

2014

2013

 




HK$000

HK$000

'000

'000

 

Revenue



40,811

52,103

3,148

4,353

 

Cost of sales



(27,907)

(38,066)

 

(2,152)

(3,180)

 

Gross profit



12,904

14,037

996

1,173

 

Other income



20

64

1

5

 

Other gains and (loss)



12

(585)

1

(49)

 

Selling and distribution expenses



(816)

(793)

(63)

(66)

 

Administrative expenses


(9,517)

(9,132)

(734)

(763)


Finance costs



(154)

(164)

(12)

(14)

 

Profit before income tax


2,449

3,427

189

286


Income tax expense



(0)

(0)

(0)

(0)

 

Profit for the period


2,449

3,427

189

286









 

Other comprehensive income / (loss):






 

Exchange differences arising on translation of foreign operations

1,215

1,692

367

(462)

 

Total comprehensive income / (loss) for the period

3,664

5,119

556

(176)

 

 

 

 

 

 

 

 

 

 

 

 







 

Profit/ (loss) attributable to:







 

Equity holders of the company

3,029

3,332

233

278

 

Non-controlling interests



(580)

95

(44)

8

 




2,449

3,427

189

286

 








 

Total comprehensive income / (loss) attributable to:






 

Equity holders of the company

4,235

4,978

594

(169)

 

Non-controlling interests



(571)

141

(38)

(7)

 




3,664

5,119

556

(176)

 








 

Profit /(loss) per share

HK Cents

HK Cents

Pence

Pence

 

Basic



0.7895

0.8683

   0.0609

0.0726

 

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 2014











As at 30 September


2014

2013

2014

2013


HK$000

HK$000

'000

'000

ASSETS





Non-current assets





Plant and equipment

469

890

37

71

Goodwill

399

399

26

26

Amount due from customers for contract-in-progress

 

17,285

 

17,115

 

1,371

 

1,364






Total non-current assets

18,153

18,404

1,434

1,461






Current assets





Inventories

13,092

14,678

1,039

1,169






Trade receivables

15,126

12,922

1,200

1,131






Amount due from customers for contract-in-progress

168,239

166,918

13,347

13,307






Deposits, prepayments and other receivables

17,483

14,697

1,388

1,174






Cash and bank balances

4,168

6,093

330

485






Total current assets

218,108

215,308

17,304

17,166






Total assets

236,261

233,712

18,738

18,627






LIABILITIES AND EQUITY




Current liabilities





Trade and other payables

53,125

58,037

4,215

4,627






Amounts due to customers for contract-in-progress

 

8,068

4,568

640

364






Current tax liability

15,706

16,019

1,246

1,277






Interest-bearing borrowings

9,394

6,824

745

545






Loan from the former shareholder

-

30,800

-

2,455






Financial guarantee liabilities

 

3,950

 

3,963

 

313

 

316






Obligation under finance lease

88

88

7

7






Total current liabilities

90,331

120,299

7,166

9,591






Non-current liabilities





Obligation under finance lease

52

140

4

11






Total liabilities

90,383

120,439

7,170

9,602






Equity





Share capital

23,980

23,980

1,698

1,698






Share premium

31,054

31,054

2,193






Special capital reserve

4,188

4,188

299

299






Statutory surplus reserve

93

93

8

8






Retained earnings

69,835

36,527

5,069

2,378






Translation reserve

13,344

13,948

2,033

2,171


142,494

109,790

  11,300

8,747






Non-controlling interest

3,384

3,483

268

278






Total equity

145,878

113,273

11,568

9,025






Total liabilities and equity

236,261

233,712

18,738

18,627



 

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

Total equity



'000

'000

'000

'000

'000

'000

'000

'000

'000

'000













Balance at 1 April 2013


1,698

2,193

2,349

156

143

2,620

8

9,167

285

8,684













Profit for the year


-

-

2,820

-

-

-

-

2,820

84

184

Exchange difference arising on translation of foreign operations







(949)


(949)

(35)


Total comprehensive income


-

-

2,820

-

-

(949)

-

1,871

49

616

Dividend paid




(242)





(242)


768

Balance at 31 March 2014


1,698

2,193

4,927

156

143

1,671

8

10,796

334

9,452













Profit for the six months ended 30 September 2014



-

233

-

-

-

-

233

(44)

286













Exchange difference arising on translation of foreign operations



-

-

-

-

362


362

5

(464)

Total comprehensive income




233



362


594

(39)

(178)

Dividend declared




(91)





(91)

-

(249)

Dividend distributed to non-controlling interest by a subsidiary










(27)


Balance at 30 September 2014


1,698

2,193

5,069

156

143

2,033

8

11,300

268

9,025













 



 

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 2013


23,980

31,054

36,188

2,117

2,071

12,303

93

107,805

3,342

108,033













Profit for the year


-

-

34,800

-

-

-

-

34,800

1,038   

2,261

Exchange difference arising on translation of foreign operations


-

-

-

-

-

(166)

-

(166)

(76)

-

Total comprehensive income


-

-

34,800

-

-

(166)

-

(166)

962

1,253

Dividend paid

 




(2,992)



-

-

(2,992)

-

3,114

Balance at 31 March 2014


23,980

31,054

67,996

2,117

2,071

12,137

93

139,447

4,304

111,147













Profit for the six months ended 30 September 2014


-

-

3,029

-

-

-

-

3,029

(582)

3,427

Exchange difference arising on translation of foreign operations


-

-

-

-

-

1,207

-

1,207

9

1,692

Total comprehensive income




3,029



1,207


4,236

(573)

5,119

Dividend declared




(1,190)





(1,190)


(2,993)

Dividend distributed to non-controlling interest by a subsidiary










(347)


Balance at 30 September 2014


23,980

31,054

69,835

2,117

2,071

13,344

93

142,493

3,384

113,273













 



 

Consolidated Statement of Cash Flows (Unaudited)







For the six months ended 30 September 2014

 

 




For the six months ended 30 September

 




2014

2013

2014

2013

 

 CASH FLOW FROM OPERATING ACTIVITIES



HK$000

HK$000

£'000

£'000

 

Profit before income tax for the period



2,449

3,427

189

286

 

Adjustments for:







 

Depreciation of plant and equipment



602

287

46

25

 

Loss on disposal of plant and equipment



-

16

-

1

 

Interest income



(2)

(2)

-

-

 

Finance costs paid



154

164

12

14

 


3,203

3,892

247

326

 

Changes in operating assets and liabilities:







 

Decrease / (Increase) in inventories



580

(1,348)

45

(107)

 

Increase in trade receivables



(2,925)

(5,678)

(225)

(454)

 

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

(4,442)

(2,283)

(342)

(182)

 

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

(6,170)

593

(476)

47

 

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



1,740

(226)

134

(18)

 

Increase in trade and other payables

Decrease in tax payable



        3,495       -

6,562

(57)

          269          -

523

(4)

 

 

Cash generated (used) in /from operations



 

(4,519)

 

1,455

 

(348)

 

131

 

Income tax paid



- 

- 

- 

- 

 

Net cash generated (used) in / from operating activities



(4,519)

1,455

(348)

131

 





















)








 








 

CASH FLOWS FROM INVESTING ACTIVITIES







 

Purchase of plant and equipment



(154)

(152)

(12)

(12)

 

Interest received



2

2

-

-

 

Net cash used in investing activities



(152)

(150)

(12)

(12)

 

 

 







 

CASH FLOWS FROM FINANCING ACTIVITIES







 

Finance costs paid



(154)

(164)

(12)

(14)

 

Proceed from / (repayment of) interest-bearing borrowings



3,706

(3,825)

286

(305)

 

Repayment of obligation under finance lease



(44)

(43)

(3)

(3)

 

Net cash generated from financing activities

3,508

(4,032)

271

(322)

 








 

NET DECREASE IN CASH AND CASH EQUIVALENTS



(1,163)

(2,727)

(89)

(203)

 








 

EFFECT OF CHANGE IN EXCHANGE RATES



427

1,947

40

103

 








 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


4,904

6,873

379

585

 








 

CASH AND CASH EQUIVALENTS AT END OF PERIOD



4,168

6,093

330

485

 








 








 








 








 






 GBP Rate :14.51

 

Notes to the Interim financial statements for the six months ended 30 September 2014

 

1.     Basis of preparation

 

The unaudited interim financial statements for the six months ended 30 September 2014 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 2014. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2013, 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 2014 of HK$3m (H1 2013: HK$3.3m), and the weighted average of 383,677,323 (H1 2013: 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, 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.

 

 


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