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30 Apr 2015 07:00
Trading Update
Ubisense ("Ubisense" or the "Company") (LON:UBI), a market leader in enterprise location intelligence solutions, announces an update on current trading.
Following the end of the Company's seasonally quiet first quarter ended 31 March 2015, the Board has reviewed the outlook for the half year to 30 June and the full year to 31 December 2015. As highlighted in the 2014 preliminary results, the Company continues its transition towards a greater emphasis on its Solutions business and a lesser focus on the lower gross margin Services business; strategically the Board believes this is the right way for Ubisense to maximise its market opportunity, albeit that it reduces revenue visibility in the short and medium term.
As an example of the success of this strategy, the company has recently completed a first-time Solutions sales of Smart Factory into General Motors, one of the top three global automotive manufacturers with over 45 vehicle production plants worldwide.
However, as a result of two specific installation contract delays with existing customers in the automotive segment, it now appears that contract additions in the second quarter will be lower than the Board had anticipated, which is likely to result in Solutions revenues for the first half of 2015 being broadly in line with the first half of 2014. Services revenues for the first half remain in line with the Board's expectations.
The contracts in question are now seen as more likely to be installed in the second half of 2015. The Board considers it prudent to plan on the basis that not all of the H1 revenue shortfall will be recovered in H2. Tight cost control and deferral of planned recruitment will partly mitigate any profit impact for the full year.
In order to help drive the necessary improvements in sales effectiveness and pipeline conversion, the Board is pleased to announce that Peter Harverson, a current non-executive director of the Company with a wealth of sales and operations experience at Sun Microsystems, Intel and Texas Instruments, will become Vice Chairman, with immediate effect, and will provide senior oversight and leadership to the sales team on an interim basis.
The Company continues to enjoy a supportive relationship with its main lending bank and is in compliance with all applicable covenants under its principal committed bank facilities expiring August 2016 and August 2018. The Board is also in discussions with its brokers Numis Securities regarding the timing and amount of a possible equity fundraising to strengthen the balance sheet.
Enquiries:
Ubisense Group plc +44 (0) 1223 535170
Richard Green, Chief Executive
Robert Parker, Chief Financial Officer
Numis Securities Limited +44 (0) 7260 1000
Rupert Krefting (Corporate Broking)
Simon Willis, James Lillywhite (Corporate Finance)
Montfort Communications +44 (0) 20 3514 0897
Nick Miles +44 (0) 7973 130669
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