REG - UniVision Eng Ltd - Interim Results <Origin Href="QuoteRef">UVEL.L</Origin>

UniVision EngineeringAnnouncement

19/12/2014 11:11

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 (H12013: HK$3.3m);
 Revenue decreased by 22% to HK$41m (H12013HK$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 LimitedTel: +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)2070602220
Richard Morrisonwww.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 revenuesand 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 financialyears.
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 revenuewas 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 theconstruction 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 18December 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 cashflow 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 (H12013: 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 imagesto replace the older surveillance systemsare 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 theircoreSecurity 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
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"
Translationreserve
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"
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 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 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 2014. The interim financial statements, together with thecomparative 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 attributableto equity holders of the Group for the six months ended 30 September 2014of 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.

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