Last checked at 23 May 2014 07:00
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Ultima Networks Plc("Ultima" or "the Company")
Final Results for the Year Ended 31 December 2013
The Directors are pleased to announce the audited results of the Company and its subsidiaries (together the "Group" or the "Ultima Group") for the year ended 31 December 2013.
The Ultima Group's operations consist of three divisions: IT Services, Green Technology Products and Green Power. These divisions are involved respectively in the sale of software to the legal profession, the development and sale of specialist electrical goods and the development of clean power generation through solar installations in Spain, Italy and the United Kingdom.
FINANCIAL HIGHLIGHTS
· Group revenue is £2,261,000 (2012: £2,678,000)
· Net (loss)/profit after Tax is (£156,000) (2012: £136,000)
· Group administration expenses is £1,122,000 (2012: £1,096,000)
· Operating (loss)/profit is (£47,000) (2012: £81,000)
· Earnings per share is (0.06p) (2012: 0.05p)
· Cash at bank at the year end was £185,000 (2012: £237,000)
· Net assets is £3,452,000 (2012:£3,605,000)
For Further Enquiries:
Ultima Networks plc 01279 821 200
Prof. Humayun Mughal, Chairman and CEO
Zeus Capital Ltd (nominated adviser and broker) 0161 831 1512
Tim MetcalfeNick Cowles
CHAIRMAN'S STATEMENT
Introduction
Ultima has experienced another challenging trading year in its established markets but the group has continued investment programs of product developments in both the IT services and renewable energy sectors. Investment into research and development is crucial for competitive positioning of the Group's long term future.
The Green Technology division has seen good levels of interest in its new products and services. The group installed the first of its "Oasis" Containerised Hybrid Solar Plant in Saudi Arabia during October 2013. The performance of this plant has exceeded the original projections. A larger version of "Oasis" Hybrid Solar Power plant is scheduled for commissioning during June 2014 in Pilansberg Game reserve South Africa. The Group is following up a number of additional opportunities for this technology from telecom operators in Saudi Arabia and from mining companies in South Africa.
Two renewable heat pilot installations, ground source and air source systems, were successfully completed during the year. These reference installations should enable the Group to secure accreditation for MCS (Micro Generation Certification Scheme) in the area of Renewable Heat Installations.
The sales of Electric Bicycles in the UK have been stable but the European sales failed to see any improvements despite the restructuring of the sales channel. The group is reviewing its position in the European markets for these products and an annualised cost saving of £50,000 has been implemented in its European operations to take effect during the financial year 2014.
The IT Services division has continued further development of its FiLos suite of software products. FiLos has been well received by our customers and just over half of our client base has now implemented the new software suite. FiLos software suite provides solutions for complete management of day to day operation of legal firms. I am pleased to report that progress during the year was stable with clients being added and the existing clients continuing to adopt the company's FiLos legal software suite. The division continues to generate significant cash for the group.
Financial Results
In the year ended 31 December 2013, the Group achieved sales of £2,261,000 (2012: £2,678,000) with an operating loss of £47,000 (2012: operating profit of £81,000). A non-recurring cost of £131,000 relating to restructuring costs and a provision for potential legal expenses to defend a claim brought against the IT services division resulted in a pre-tax loss for the Group of £184,000 (2012: profit of £71,000). The Research and Development tax credit was £28,000 (2012: £65,000) and therefore the loss for the financial year was £156,000 (2012: operating profit of £136,000).
Costs relating to the administration of the Group operations are included in the overheads of the parent company. The costs incurred in 2013 were £190,000 (2012: £182,000).
The Group had cash at bank of £185,000 (2012: £237,000). Any balance of cash funds not required for working capital purposes is being placed on short term bank deposit to maximise interest receivable. Cash was utilised in the year to support the Green technology division activities. Cash was also used to fund continued development by the IT Products division and the design and development of renewable heat solutions.
IT Services division
The IT Services division made an operating profit of £389,000 (2012: £335,000) on sales of £890,000 (2012: £937,000) Sales fell by 5%, compared to the previous year. The division provides computer application software and other related services to small and medium size legal practices in England and Wales.
The division operates from two locations (Midlands and South West England). Since the 1st January 2013 the division has operated as Cognito Software a division of Ultima Networks plc. The division's management team has continued to develop the FiLos software suite which is helping to retain customers and improving the opportunity of attracting larger legal practices.
During the current financial year the division has made substantial investment into the continuous development of and improvement of the FiLos product portfolio. The market for legal software continues to be very competitive with the potential client base undergoing a degree of restructuring to adapt to changes in government support for legal services. Cognito has remained stable during the year with clients continuing to migrate to the new FiLos legal software suite.
The outlook for the division is for continued improvement in overall performance and profitability based on the quality of the software solutions being offered to a niche market sector and the loyalty arising from attention to client needs.
The division has a policy of actively considering opportunities to enable growth through acquisition and will continue to review the market to identify potential targets.
Green Technology division
The Green Technology division made an operating loss of £321,000 (2012: £72,000) on sales of £1,371,000 (2012: £1,741,000). The division suffered from a lack of sales of its premium range of electric bicycles into continental Europe with consumer demand for luxury products in the UK remaining weak. Infineum BV made a loss of £53,000 for the first year of trading. The UK division of electric bikes and luxury products made a loss of £147,000 compared to a loss of £158,000 the prior year.
During the year the division sold its Four Solar PV installations supplied under its free solar energy schools initiative.
Central overheads
Costs relating to the administration of the Group operations are included in the overheads of the parent company. The costs incurred in 2013 were £190,000 (2012: £182,000).
Humayun Mughal
Chief Executive Officer
23 May 2014
2013 £000
|
| 2012 £000
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Revenue | 2,261 | 2,678 | |||
Cost of sales | (1,186) | (1,502) | |||
Gross profit | 1,075 | 1,176 | |||
Administration expenses | (1,122) | (1,096) | |||
Other operating income | 0 | 1 | |||
Operating (loss)/profit | (47) | 81 | |||
Exceptional items | (131) | 0 | |||
Finance (expenditure)/income | (6) | (10) | |||
Profit before taxation | (184) | 71 | |||
Taxation recovery | 28 | 65 | |||
Profit for the year |
(156) |
136 | |||
Other comprehensive income: Exchange difference on translating foreign operations | 3 | (21) | |||
Total comprehensive income for the year attributable to equity holders of the parent | (153) | 115 | |||
Basic and diluted earnings per share - pence |
|
(0.06) |
0.05 |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
All amounts relate to continuing activities.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013
2013 £000 | 2012 £000 | ||||
ASSETS | |||||
Non current assets | |||||
Property, plant and equipment | 1,366 | 1,671 | |||
Intangible assets - development costs | 1,244 | 1,135 | |||
Goodwill | 118 | 118 | |||
Intangible assets - other | 134 | 143 | |||
Deferred tax assets | - | - | |||
Total non current assets | 2,862 | 3,067 | |||
Current assets | |||||
Inventories | 435 | 394 | |||
Trade and other receivables | 872 | 1,150 | |||
Cash and cash equivalents | 185 | 237 | |||
Total current assets | 1,492 | 1,781 | |||
Total assets | 4,354 | 4,848 | |||
LIABILITIES | |||||
Non current Liabilities | |||||
Deferred tax | 53 | 53 | |||
Total non current liabilities | 53 | 53 | |||
Current liabilities | |||||
Trade and other payables | 382 | 801 | |||
Current tax liabilities | 136 | 112 | |||
Accruals and deferred income | 331 | 277 | |||
Total current liabilities | 849 | 1,190 | |||
Total liabilities | 902 | 1,243 | |||
Net assets | 3,452 | 3,605 |
| 2013 £000 | 2012 £000 | |||
EQUITY | |||||
Capital and reserves attributable to equity holders of the parent | |||||
Called up share capital | 8,299 | 8,299 | |||
Share premium account | 5,843 | 5,843 | |||
Other reserves | 202 | 202 | |||
Retained Earnings | (10,855) | (10,699) | |||
Translation of foreign operations | (37) | (40) | |||
3,452 | 3,605 |
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 31 DECEMBER 2013
| Called up share capital £000 | Share premium
£000 | Other reserves
£000 | Retained earnings
£000 | Translation of foreign operations
£000 | Total Equity
£000 | |
Year ended 31 December 2013 | |||||||
As 1 January 2013 | 8,299 | 5,843 | 202 | (10,699) | (40) | 3,605 | |
Share Issue | - | - | - | - | - | - | |
Total comprehensive income for the year |
- |
- |
- |
(156) |
3 |
(153) | |
At 31 December 2013 | 8,299 | 5,843 | 202 | (10,855) | (37) | 3,452 | |
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Year ended 31 December 2012 | |||||||
As 1 January 2012 | 8,299 | 5,843 | 202 | (10,835) | (19) | 3,490 | |
Share Issue | - | - | - | - | - | - | |
Total comprehensive income for the year |
- |
- |
- |
136 |
(21) |
115 | |
At 31 December 2012 | 8,299 | 5,843 | 202 | (10,699) | (40) | 3,605 |
The Group operates in the United Kingdom, Italy and Spain.
At 31 December 2013, the Group is organised into two principal business segments:
IT and related services (comprising legal and publishing application software)
Green technology (comprising electric bicycles, energy saving lamps, educational electronic kits and development of solar power parks)
The segmental results for the year ended 31 December 2013 are as follows:
IT and related services UK £000 | Green technology £000 | Unallocated
£000 | Group
£000 | ||
Revenue | 890 | 757 | 614 | 2,261 | |
Depreciation | 4 | 41 | 3 | 48 | |
Amortisation | 54 | 62 | - | 116 | |
Interest payable | - | 4 | 2 | 6 | |
Operating profit/(loss) | 389 | (275) | (161) |
(47) | |
|
The segmental results for the year ended 31 December 2012 were as follows:
IT and related services UK £000 | Green technology £000 | Unallocated
£000 | Group
£000 |
| |||
| |||||||
Revenue | 937 | 1,741 | - | 2,678 |
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Depreciation | 2 | 50 | - | 52 |
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Amortisation | 72 | 83 | - | 155 |
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Interest payable | - | 10 | - | 10 |
| ||
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Operating profit/(loss) | 35 | 46 | - | 81 |
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The other information of the segments are as follows:
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2013 | IT and related services UK £000 | Green technology £000 | Unallocated
£000 | Group
£000 |
| ||
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Segment assets | 1,370 | 2,984 | - | 4,354 |
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Segment liabilities | (100) | (802) | - | (902) |
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Net assets | 1,270 | 2,182 | - | 3,452 |
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STATEMENT
This statement was approved by the directors on the 22 May 2014. This statement does not constitute the group's statutory accounts for the year ended 31 December 2013. Statutory accounts for the year ended 31 December 2013 have been delivered to the Registrar of Companies. The auditor's report for those accounts was unqualified and did not contain any statement under section 495 of the Companies Act 2006. The auditor's report for the accounts to 31 December 2013 is unqualified.
The Annual report and Accounts, including the notice of annual general meeting for 2014 will be made available to the shareholders and the public on the Company's web site (http://www.ultima-networks.co.uk/) and the Company will make a further announcement in this regard at the appropriate date.