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Universe Grp. (UNG)

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Tuesday 11 March, 2003

Universe Grp.

Final Results

Universe Group PLC
11 March 2003



UNIVERSE GROUP PLC
11 MARCH 2003


                               UNIVERSE GROUP PLC
                   UNAUDITED PRELIMINARY RESULTS FOR THE YEAR
                             ENDED 31 DECEMBER 2002


Universe Group plc, the retail and information systems company, is pleased to
announce its Unaudited Preliminary Results for the year ended 31 December 2002.

Main features:

-     Turnover of £34.5 million (2001:  £59.0 million)

-     Operating profit of £1,565,000 (2001:  £2,890,000)

-     Adjusted earnings per share 3.1p (2001:  5.5p)

-     Rebuttal under FRS10 adopted for goodwill; no impairment in the period

-     Profit before tax £889,000 (2001:  £858,000)

-     Proposed final dividend of 1.17p (2001:  1.17p), making a total for
      the year of 1.95p


Commenting, Ray Mackie, Group Chief Executive of Universe Group said:

'I am pleased to report that we have achieved an improved second half
performance after reporting difficult trading conditions in the first six
months.  HTEC had a steady start to the year; important petrol retailer orders
for HydraPOS were won which benefited the second half of the year and continue
into the first half of 2003.

Master Change remains profitable even in the absence of US tourists and each
additional shop makes a contribution to our profits.  In the second half we
opened two new bureaux, one in Paris and the other in London; both new bureaux
are making a useful contribution.  At First Remit transaction numbers have been
rising rapidly and we anticipate further growth this year, as the network
develops and First Remit becomes more established.  We are budgeting that this
business will reach break-even point in the first half of this year and will
make a positive contribution for the full year.'


For Further Information:

Universe Group plc
Ray Mackie, Group Chief Executive                   020 7486 9074

Charles Stanley & Co. Limited
Russell Cook                                        020 7739 8200


CHAIRMAN'S STATEMENT

It would be hard to imagine a more inimical trading background than that which
we faced in 2002.  The world-wide collapse in demand for the telecommunications
and other electronic products created great difficulties for our HTEC
subsidiary; the introduction of the Euro and the virtual disappearance of
American tourists from Europe had a sharp adverse impact on Master Change; and
First Remit, our new money transfer business, continued to need finance to fund
its growth.

Against this background, it is pleasing to report that we continued to operate
profitably, that HTEC improved its results in the first half of 2002 compared
with the second half of 2001, improved again in the second half and entered 2003
with a much stronger order book than that of the year before.  In spite of its
difficulties, Master Change earned a significant gross profit in its major
trading area, Paris.  First Remit, meanwhile, was demonstrating its potential to
become a very substantial enterprise.


DIVIDENDS

While our profits and earnings fell the Board feels confident enough in the
group's prospects to recommend an unchanged final dividend of 1.17 pence for the
year, making a same-again total of 1.95 pence; after a year of reduced
profitability this is not the time to raise the payment.  This will be paid out
of adjusted earnings of 3.1 pence on the Ordinary share capital as enlarged by
our July rights issue.  Thus cover is 1.5 times.


SCRIP ALTERNATIVE

We would like to give our shareholders the opportunity of taking dividends in
shares, rather than in cash.  A proposal to put a scrip arrangement in place
will be put to the Annual General Meeting on May 12.


RIGHTS ISSUE

We announced a 1 for 5 rights issue in July.  This was fully underwritten and
the proceeds were received in mid-August.  The net funds raised, £1.24 million,
have been used principally in the development of First Remit.


BOARD

I became non-executive Chairman on October 1, allowing Ray Mackie to concentrate
on the all-important role of Chief Executive.  On the same day Keith Buchanan, a
non-Executive Director since May 2002, joined the executive team as Group
Finance Director. Keith has brought to Universe a vast amount of large company
experience and we are extremely lucky to have him.  Your Board intends to
consider the Executive/Non-Executive balance of the team later in the year.


STAFF

If ever there was a year when a Chairman's Statement should have started with
praise for the employees, rather than ending with it, this year was it.  We owe
a large debt of gratitude to a highly motivated and committed group of men and
women whose skill and determination have delivered a set of results that are far
better than at times looked possible.  On your behalf, I thank and congratulate
them.


PROSPECTS

Master Change continues to be affected by the rumours of war.  First Remit on
the other hand is starting to fulfil its promise, while HTEC has a very solid
order book.  I am therefore more than a little optimistic that Ray Mackie and
his team will drive the business forward and deliver an improved set of results
this year.


G Welham
Chairman
11 March 2003



CHIEF EXECUTIVE'S REVIEW

I am pleased to report that we have achieved an improved second half performance
after reporting difficult trading conditions in the first six months. Operating
profits for the year of £1.6million, excluding goodwill amortisation and
operating exceptionals, were still well down on 2001's £2.9million.  The
reduction in Operating Profit is a consequence of a number of factors, which I
mentioned in my half-year statement.  These were:

     -   The introduction of the Euro and the reduction in the number of US
         tourists in Europe affecting Master Change
     -   A reduction in CEM telecoms activity impacting HTEC sales
     -   Operating costs at First Remit in its start up period

All these factors continued into the second half but, as I report below, the
impact has been offset by improvement elsewhere.


Results

Sales fell to £34.5 million from £59.0 million.  However profits before tax
increased to £889,000 compared with £858,000 last year.  Last year's profit was
struck after amortisation of goodwill of £1.3m and exceptional items of £0.2m
but there is no amortisation charge this year as I will explain.  Adjusted
earnings per share are 3.1 pence, down from adjusted EPS of 5.5 pence earned
last year.


Currency Exchange

We operate two businesses in this division.  Our original currency business,
Master Change, operates bureaux de change principally in Paris and also
elsewhere in France and in Austria, Belgium and London.  We operate from 25
shops of which 14 are in central Paris adjacent to tourist attractions.  Our
other business, First Remit is still in start-up mode.  It operates an
international money transfer system sending small cash sums from, broadly
speaking, West to East.  From a standing start at the beginning of last year we
now operate from four essentially 'send' countries to 34 'receive' countries.

The introduction of the Euro reduced our trade at Master Change by between 20
and 25%.  In addition, the absence of US tourists from Paris in their usual
large numbers has resulted in a further reduction in turnover of a similar
order.  The major currencies now traded at Master Change are the US dollar, Yen,
Euro and Pound Sterling.  As a matter of course we also accept Canadian,
Australian, Singapore and Hong Kong dollars, the South African Rand and Swedish
Crowns.

The main season for Master Change commenced in July and was very disappointing
despite some seasonal upturn.  However, Master Change remains profitable and
each additional shop makes a positive contribution to our profits.  In the
second half we opened two new bureaux, one in Paris and the other in London;
both new bureaux are making a contribution to our profits.

We are extremely pleased to report continued progress at First Remit, which
operated at a loss in the year, with an additional cash cost for opening in new
countries and cash deposits are sometimes required by banking regulators.  By
the year-end we had invested £1.9million in First Remit.

Since the year-end we have opened in Morocco, Tanzania, Ghana and Iran, taking
our country list to 38 countries.  We will be opening in our fifth 'send'
country, Canada, during this month.

Transaction numbers have been rising rapidly and we anticipate further growth
this year, as the network develops and First Remit becomes more established.  We
are budgeting that the business will reach break-even point in the first half of
this year and will make a positive contribution for the full year.


Retail and Information Systems

The principal company in this division is HTEC Limited.  HTEC provides payment
and loyalty systems to the retail petrol industry, contract electronic
manufacturing (CEM) principally for telecommunications equipment and data
services in connection with systems it has supplied.

HTEC had a steady start to the year and having regard to the reduction in CEM
has put in a good profit performance compared with the previous year.  Important
petrol retailer orders for HydraPOS were won which benefited the second half of
the year and continue into the first half of 2003.  Several new CEM customers
have been gained.  2003 will mark the introduction of Chip and PIN payment card
technology in the UK and HTEC's developments in this area represent a
significant opportunity to provide upgrade paths for retailers, including HTEC's
existing base of clients.

The First Remit operating software system was developed by HTEC and the computer
system is also hosted by HTEC at our secure facilities in Southampton.  The
development effort continues as the system is tested by the expansion of the
First Remit data flows.

HTEC has developed an exciting new range of data services that initially
encompass an advanced on-line loyalty product and a 'virtual back office' for
retailers.  Both take advantage of the lower cost of on-line communications to
offer retailers enhanced real time features and management time savings.


Goodwill

In our annual report for 2001 I made special mention of goodwill and we provided
an additional column in the profit and loss account to show the effect of
goodwill amortisation.  Australia and Canada have followed the US in banning
amortisation and the International Accounting Standards Board has now published
an exposure draft, ED3, which is expected in due course to ban the amortisation
of goodwill in the UK and elsewhere.

Most of our goodwill arose on the acquisition of HTEC and we believe our
goodwill has an indefinite life under FRS10 (the current applicable standard)
because we consider the acquired business to be durable, and the goodwill to be
capable of continued measurement.  The durability of the HTEC business is
evidenced by the company's blue-chip customer base, the proprietary rights in
the HTEC products and the experience that comes from being in business for the
past twenty-four years

FRS10 continues to allow a choice of treatment for goodwill.  Where an acquired
business is judged to be durable the associated goodwill can be carried and
subjected to an impairment review; where it is not judged to be durable
amortisation over its life is required.  We have now changed our policy to adopt
the impairment regime as we believe the new policy is more appropriate to our
circumstances and this change is being discussed with the auditors.

Our goodwill has been tested for impairment and no impairment charge is required
for 2002.   If the 20-year amortisation policy had continued, the amortisation
charge in this period would have been the same as last year with no offsetting
tax relief but no impact on distributable profits.  Our goodwill will be tested
again at every accounting date.


Rights Issue

I am very pleased to say that our rights issue, which took place in the summer
was completed successfully.  It was fully underwritten and brought in a net
£1.24 million of cash.  We are making good use of this new money in the
development of First Remit and our ambitions for First Remit are extremely high.

Ray Mackie
Group Chief Executive
11 March 2003


CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER


                                                                                  2002               2001
                                                                                  £000               £000
                                                                             Unaudited          Unaudited

Turnover                                                                        34,487             58,990

Operating Profit
Operating profit before amortisation of goodwill                                 1,565              2,890
Amortisation of goodwill                                                             0            (1,296)
Operating exceptional items                                                      (238)                  0
                                                                         -------------      -------------
Total Operating Profit                                                           1,327              1,594



Exceptional items                                                                    0              (202)
                                                                         -------------      -------------

Profit on ordinary activities before interest and taxation                       1,327              1,392
                                                                                 
Net interest (payable)                                                           (438)              (534)
                                                                         -------------      -------------
Profit on Ordinary Activities before taxation                                      889                858


Tax on ordinary activities                                                        (77)              (753)
                                                                              ========           ========

Profit for the financial year                                                      812                105
Dividends                                                                        (648)              (566)
                                                                              ========           ========

Retained Profit/(loss) for the financial year                                      164              (461)
Profit and loss account at 1 January                                             6,958              7,547
Exchange differences                                                               104              (128)
                                                                              ========           ========

Profit and loss account at 31 December                                           7,226              6,958
                                                                              ========           ========

Earnings Per Share                                                               Pence              Pence
                                                                                               (adjusted)

  Basic and Diluted                                                                2.5                0.4
  Basic before amortisation of Goodwill and Post-Tax 
  Exceptional items                                                                3.1                5.5
                                                                                   

There is no material difference between the profit on ordinary activities before
taxation and the retained profit for the year stated above and their historic
cost equivalents.

Earnings per share for 2001 has been adjusted to take account of the 2002 rights
issue.


BALANCE SHEETS AS AT 31 DECEMBER

                                                                                         Group
                                                                                  2002              2001
                                                                                  £000              £000
                                                                             Unaudited         Unaudited


Fixed Assets
Intangible Assets                                                               22,969            21,562
Tangible Assets                                                                  6,546             6,541
                                                                         -------------     -------------
                                                                                29,515            28,103
                                                                              ========          ========

Current assets
  Stocks                                                                         2,611             3,045
  Debtors: Amounts falling due within one year                                   3,176             2,431
  Cash at Bank and in Hand                                                         396               598
                                                                         -------------     -------------
                                                                                 6,183             6,074

Creditors
Amounts falling due within one year                                            (8,528)           (7,755)
                                                                         -------------     -------------

Net Current Liabilities                                                        (2,345)           (1,681)
                                                                         -------------     -------------

Total Assets less Current liabilities                                           27,170            26,422

Creditors: Amounts falling due after more than one year                        (3,251)           (4,220)
                                                                         -------------     -------------

Net Assets                                                                      23,919            22,202
                                                                              ========          ========

Capital & Reserves
  Called up share capital                                                        1,782             1,449
  Share premium account                                                          5,717             4,601
  Revaluation reserve                                                              585               585
  Other Reserves                                                                 8,605             8,605
  Profit & loss account                                                          7,226             6,958
                                                                         -------------     -------------
Equity Shareholders' Funds                                                      23,915            22,198
Equity Minority Interest                                                             4                 4
                                                                         -------------     -------------
Capital Employed                                                                23,919            22,202
                                                                              ========          ========


CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER

                                                                     
                                                     Notes to cash              2002               2001
                                                         flow                   £000               £000
                                                                             Unaudited          Unaudited

Net cash inflow from operating activities                  1                     1,382              3,761

                                                                         -------------      -------------
Returns from investments and servicing of 
finance
Interest received                                                                    0                 21
Interest paid                                                                    (427)              (595)
                                                                         -------------      -------------

Net cash outflow from returns on investment and
servicing of finance                                                             (427)              (574)
                                                                              ========           ========
Taxation                                                                         (395)              (863)
                                                                              ========           ========

Capital expenditure and financial investment
Tangible fixed assets                                                             (70)            (2,102)
Intangible fixed assets                                                        (1,473)              (579)
Sale of tangible fixed assets                                                        0                722
                                                                         -------------      -------------

Net cash outflow from capital expenditure and
financial investment                                                           (1,543)            (1,959)
                                                                               
                                                                         -------------      -------------
Acquisitions and disposals
Costs of demerger                                                                    -               (46)
                                                                              ========           ========

Net cash outflow from acquisitions and 
disposals                                                                            0               (46)
                                                                              ========           ========

Equity dividends paid                                                            (571)              (548)

                                                                         -------------      -------------

Net cash (outflow)/inflow before management of
liquid resources and financing                                                 (1,554)              (229)
                                                                               
                                                                         -------------      -------------

Management of liquid resources
Sale of listed securities                                                            -                227
                                                                         -------------      -------------

Financing
Capital elements of lease repayments                                             (237)              (165)
Repayment of bank loans                                                          (960)            (1,240)
Issue of shares net of expenses                                                  1,449                 75
                                                                         -------------      -------------
Net cash outflow from financing                                                    252            (1,330)
                                                                         -------------      -------------
Decrease in cash in the year                                                   (1,302)            (1,332)
                                                                              ========           ========


NOTES TO CONSOLIDATED CASH FLOW STATEMENT

1. Reconciliation of Operating Profit to net cash inflow from trading activities


                                                                                 2002                 2001
                                                                                 £000                 £000
                                                                            Unaudited            Unaudited

Operating profit                                                                1,327                1,594
Depreciation and amortisation                                                     648                1,845
Loss/(Profit) on disposal                                                           -                  (2)
Decrease/(Increase) in stocks and work in progress                                434                (363)
(Increase)/Decrease in debtors                                                  (478)                  992
(Decrease) in creditors                                                         (549)                (305)
                                                                        -------------        -------------
Net cash inflow from operating activities                                       1,382                3,761
                                                                             ========             ========



2. Reconciliation of Movement in Net Debt

                                                                                 2002                 2001
                                                                                 £000                 £000
                                                                            Unaudited            Unaudited

Decrease in cash in the year                                                  (1,302)              (1,332)
Cash flow from decrease in debt and lease financing                             1,197                1,644
                                                                        -------------        -------------

Changes in net debt resulting from cash flows                                   (105)                  312
New Finance leases                                                              (411)                (498)
Exchange Differences                                                                0                 (25)
                                                                             ========             ========

Movement in net debt in the period                                              (516)                (211)
Net debt at 1 January                                                         (6,480)              (6,269)
                                                                        -------------        -------------
Net debt at 31 December                                                       (6,996)              (6,480)
                                                                             ========             ========


3. Analysis of net debt

                                                  As at 1                        New      As at 31
                                                  January                    Finance      December 
                                                     2002    Cash Flow        Leases          2002
                                                     £000         £000          £000          £000

Cash in Hand at Bank                                  598        (202)             0           396
Overdrafts                                        (1,718)      (1,100)             0       (2,818)
                                              -----------  -----------   -----------   -----------
                                                  (1,120)      (1,302)             0       (2,422)
Due debt within 1 year                              (960)         (40)             0       (1,000)
Debt due after 1 year                             (4,000)        1,000             0       (3,000)
Net Bank Debt                                     (6,080)        (342)             0       (6,422)

Finance Leases                                      (400)          237         (411)         (574)
                                              -----------  -----------   -----------   -----------
Net Debt                                          (6,480)        (105)         (411)       (6,996)
                                                  =======      =======       =======       =======


RECONCILATION OF MOVEMENTS IN GROUP SHAREHOLDER'S FUNDS

                                                                                 2002                 2001
                                                                            Unaudited            Unaudited
                                                                                 £000                 £000

Retained profit/(loss) for the financial year                                     164                (461)
New share capital issued (net of expenses)                                      1,449                   75
Exchange differences                                                              104                (128)
                                                                        -------------        -------------
Net addition/(reduction) to shareholders' funds                                 1,717                (514)
Opening shareholder's funds                                                    22,198               22,712
                                                                        -------------        -------------
Closing shareholders' funds                                                    23,915               22,198
                                                                             ========             ========





Notes:


1.    Financial Information

      These statements do not constitute accounts as defined by section 240 of 
      the Companies Act 1985.

      The financial information for the full preceding year is based on the 
      statutory accounts for the financial year ended 31 December 2001.  Those 
      accounts, on which the auditors issued an unqualified opinion, have been 
      delivered to the Registrar of Companies.

2.    Operating Exceptional Items

      Operating Exceptional Items, (£238k) principally represent redundancy 
      costs, the cost of bureaux closures, and legal fees relating to an 
      abortive acquisition.

3.    Earnings per share

      The earnings per share is calculated by reference to the weighted average 
      of 32,027,000 shares in issue during the year.  The number of shares in 
      issue at 31 December 2002 was 35,623,109.  Earnings per share for 2001 has 
      been adjusted to take account of the 2002 rights issue.

4.    Dividend

      The Board is recommending a final dividend of 1.17p per ordinary share 
      (2002: 1.17p) payable on 3 July, to all shareholders on the register on 
      4 April 2003, subject to approval at the AGM to be held on 12 May.

END




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