REG - UniVision Eng Ltd - Half Yearly Report <Origin Href="QuoteRef">UVEL.L</Origin>

UniVision EngineeringAnnouncement

11/12/2015 11:11

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 (H12014: HK$3m);
 Revenue decreased by 16% to HK$34m (H12014HK$41m).
Mr. Stephen Sin Mo KOO, Executive Chairman, added: 
"Our Company has a good track record and high market recognitionin 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 (H12014: 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"
Translationreserve
Surplus reserve
Sub-total
interest
Total equity


'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"
Translationreserve
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 beenprepared 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 thecomparative 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 attributableto equity holders of the Group for the six months ended 30 September 2015of 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.

This information is provided by RNS
The company news service from the London Stock Exchange
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