Last checked at 2 Sep 2013 07:00
2nd September 2013
Ultima Networks Plc
("Ultima", "the Group" or "the Company")
Interim Results for the six months ended 30 June 2013
Ultima, the IT and Green Technology Company, is pleased to announce its unaudited interim results for the six months ended 30 June 2013.
Highlights for the period
· Turnover of £689,000 (H1 2012: £1,416,000)
· Operating loss of £136,000 (H1 2012: Loss £29,000)
· Cash at bank of £82,000 as at 30 June 2013 (30 June 2012: £258,000)
· Pilot Hybrid Solar Power solution being supplied to The Kingdom of Saudi Arabia 3rd quarter 2013.
· Agreement to provide solar electricity to Pilansberg Game reserve South Africa for 5 years using the company's" Oasis" containerised Hybrid Solar Power solution
Ultima operates through two divisions: the IT Services division, and the Green technology division.
The IT Services division develops and supplies computer based application software and services to the legal profession.
The Green technology division is responsible for the development and supply of electric powered bicycles and specialist electrical goods and provides renewable energy solutions for the development of clean power generation through solar and other renewable power sources with installations in the United Kingdom and in Spain.
Professor Humayun Mughal, Chairman and CEO, commented:
"During the six months ended 30 June 2013 Ultima made a group operating loss of £136,000 (H1 2012: Loss £29,000). The group maintained its policy of investing into research and product development to ensure it retains the ability to be competitive and react to market opportunities.
The IT Services division has seen continued consolidation and restructuring amongst legal practices, however, the division reported a modest increase in revenue as take up of its FiLos legal software suite continued. The Green Technology division sales of electronic bicycles into continental Europe suffered as the restructuring of its sale channel into this important market sector was completed. Demand for the division's range of electronic bicycles is expected to show recovery in the second half as the new sales and logistic arrangements become effective. The division has continued to expand the scope of its renewable energy solutions and is in the process of supplying its "Oasis" containerised Hybrid Solar Power station to the Kingdom of Saudi Arabia. The order is for a pilot project with installation taking place early September 2013. The order creates an opportunity for the division to develop further business in this economically buoyant region. The division has also signed an agreement to provide solar electricity for 5 years to the visitor centre at the Pilansberg Game reserve South Africa the power being generated by installing the company's "Oasis" containerised Hybrid Solar Power station. The divisions launch of its RHI (Renewable Heat Initiative) solutions expected in September have been delayed due to rescheduling of the Department of Energy's FIT (Feed in Tariff) programme which is not expected to be implemented until April 2014".
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"The group's principle objective going forward continues to be based upon a growth in low risk recurring revenues, a continued effort to control central overheads by improved operational efficiency and the expansion of the Company by a mixture of organic growth, through continued investment into the development of new products and an increase in renewable energy solutions, complemented by a highly selective acquisitions policy."
"We expect both divisions to make progress with the introduction of new products and improved distribution channels and investment into the development of renewable energy solutions. this will strengthen the group's green credentials and improve the opportunity for growth in revenues in the second half of 2013."
Enquiries:
Ultima Networks plc 01279 821200
Prof. Humayun Mughal, Chairman and Chief Executive
Zeus Capital Limited (Nominated Adviser and Broker) 0161 831 1512
Nick Cowles
Tim Metcalfe
Chairman and Chief Executive's Statement
Operational Review
Ultima continued its investment into the IT Services product portfolio and the development of new products in the Green Technology division in order to generate future growth in revenues.
The IT Services division has continued the roll out of the FiLos legal software suite although sales of its legacy products have been decreasing. The division's potential client base continued to see restructuring to adapt to changes in the market for legal services. These changes create opportunities for new software sales but have also seen a number of client firms leave the industry. The division has a programme of continuous product development which has proved an essential tool in maintaining demand and competitiveness and providing a platform for organic growth.
The Green Technology division saw a substantial reduction in sales of its electronic bicycles into mainland Europe resulting in a first half loss. The fall in sales was due to the need to restructure the distribution channel into the Benelux countries resulting in the division establishing a sales and distribution base in The Netherlands operating as Infineum BV. Sales into this region are expected to show recovery in the second half with improvement to logistics and margins.
The division continues to operate four Solar PV installations supplied under its free solar energy for schools initiative. These are projected to produce annual revenue in the region of £60,000 for the next 23 years.
The division's investment into capital equipment and know-how to develop ground source renewable heat solutions has continued, however, the expected launch date of the government backed FIT (Feed in Tariff) scheme has been postponed until April 2014. This has resulted in a redeployment of resources into other active areas until the FIT launch date is closer.
In Italy, the development of a 1MW Solar Park situated on the company's 22 hectares of land in the Puglia region of Southern Italy remains on hold due to an increase in adverse risk factors.
In Spain, the 100KW solar park is under repair following storm damage. The installation is contracted to receive a fixed tariff of 32 eurocents per kilowatt hour for a period of 23 years however, there is a degree of political uncertainty which may lead to a retrospective change in the level and structure of the tariff
The scheme to supply the Mexican department of Education with a specially developed l Hybrid PV system to over 100 schools remains in abeyance awaiting finalisation of contractual arrangements.
The division received an order for its "Oasis" Containerised Hybrid Solar Power station from the Kingdom of Saudi Arabia. Oasis is a compact, scalable solar power station that is capable of providing green energy for applications between 20Kw to 200Kw and is very quick to deploy. Each 20Kw power pack is incorporated into a 20 foot ISO container and delivered to site as a "ready to use "power station." The unit has been designed to cope with local (Saudi) operating conditions. The unit will be installed early September 2013 and should it meet with customer expectations follow up business is expected.
The division has signed an agreement to provide solar electricity for a 5 year period to the visitor centre at the Pilansberg Game reserve situated in the Pilansberg National park in the Bojanala Region of the North West Province of South Africa. The electricity will be generated by installing the company's "Oasis" containerised Hybrid Solar Power station as supplied to Saudi Arabia. The agreement is for a period of 5 years during which the game reserve will purchase the electricity generated by the solar solution. Electricity used in the park is provided through diesel generators there being no grid connection. The "Oasis" solar station will provide clean renewable energy and is expected to reduce the running time of generators by 90% substantially reducing Co2 emissions and helping to eliminate the noise pollution from the generators. The company is confident that following the successful deployment of "Oasis" at Pilansberg that additional business will follow from within the Pilansberg Reserve and other reserves in South Africa.
The division is working on several projects to supply emerging markets with its "Oasis" Hybrid Solar PV stations as an alternative to conventional sources of power generation and expects to be able to announce progress as developments permit.
The opportunity for growth in the global renewable energy market remains positive with opportunities to provide innovative solutions. The division expects to benefit from its experience to increase activity in international markets and develop the UK market for RHI and EPC (Engineering, Procurement and Construction) projects.
The short term economic outlook remains uncertain however the Group remains positive and considers itself well positioned to take advantage of any upturn.
The Board of Ultima remains committed to its programme of research, design and development and expect this will provide the platform for future growth opportunities.
Financial Summary
In the six months to 30 June 2013 the Group achieved sales of £689,000 (H1 2011: £1,416,000) with an operating loss of (£136,000) (H1 2012 £29,000). Reduction in sales of electronic bicycles into mainland Europe was the major contributing factor to the reduction in profitability.
The IT Services division made a profit at the operating level of £100,000 (H1 2012: £110, 000) on sales of £414,000 (H1 2012: £393,000). This division comprises Cognito Software, a provider of application software and services to the legal profession.
The Green Technology division made an operating loss of (£157,000) (H1 2012: operating loss of £44,000) on sales of £275,000 (H1 2011: £1,023,000). This division comprises the green technology products and the green energy parts of Ultima's business.
The Group central overheads for the six months to 30 June 2013 were £79,000 (H1 2012: cost of £95,000).
As a result of the expected availability of brought forward losses there has been no adjustment for taxation in the period.
Prof. Humayun Akhter Mughal,
Chairman and Chief Executive Officer
30 August 2013
Consolidated Statement of Comprehensive Income
Six Months ended 30June 2013
Unaudited Half year | Unaudited Half Year | Audited Full Year | ||
2013 | 2012 | 2012 | ||
£000's | £000's | £000's | ||
Continuing Operations | ||||
Revenue | 689 | 1,416 | 2,678 | |
Cost of Sales | 197 | 927 | 1,502 | |
Gross Profit | 492 | 489 | 1,176 | |
Selling and administration expenses | 628 | 518 | 1,396 | |
Other Operating Income | - | - | 301 | |
Operating Profit/(Loss) | (136) | (29) | 81 | |
Finance Cost | (4) | (5) | (10) | |
Profit/(Loss) before taxation | (140) | (34) | 71 | |
Taxation recovery | - | - | 65 | |
Exchange difference on translating foreign operations | - | - | (21) | |
Total comprehensive income/(Loss) for the period attributable to equity holders of the company | (140) | (34) | 115 | |
Basic and diluted earnings/(loss) per share -pence | (0.05) | (0.01) | 0.05 |
Consolidated Statement of financial position
30/06/2013 Unaudited Half year | 30/06/2012 Unaudited Half Year | 31/12/2012 Audited Full Year | |||
2013 | 2012 | 2012 | |||
£000's | £000's | £000's | |||
ASSETS | |||||
Non-Current assets | |||||
Property, plant, equipment | 1,698 | 1,631 | 1,671 | ||
Intangible assets - development costs | 1,175 | 1,075 | 1,135 | ||
Goodwill | 118 | 118 | 118 | ||
Intangible assets - other | 138 | 178 | 143 | ||
Total non-current assets | 3,129 | 3,002 | 3,067 | ||
Current assets | |||||
Inventories | 379 | 420 | 394 | ||
Trade and other receivables | 1,048 | 1,067 | 1,150 | ||
Cash and other equivalents | 82 | 258 | 237 | ||
Total current assets | 1,509 | 1,745 | 1,781 | ||
Total assets | 4,638 | 4,747 | 4,848 | ||
LIABILITIES
Non-Current liabilities | |||||
Deferred tax | 53 | 53 | 53 | ||
Total noncurrent liabilities | 53 | 53 | 53 | ||
Current Liabilities | |||||
Trade and other payables | 825 | 874 | 801 | ||
Current tax liabilities | 28 | 15 | 112 | ||
Accruals and deferred income | 267 | 349 | 277 | ||
Total current liabilities | 1,120 | 1,238 | 1,190 | ||
Total liabilities | 1,173 | 1,291 | 1,243 | ||
Net assets | 3,465 | 3,456 | 3,605 | ||
EQUITY | |||||
Capital and reserves attributable to equity holders of the company | |||||
Called up share capital | 8,299 | 8,299 | 8,299 | ||
Share premium account | 5,843 | 5,843 | 5,843 | ||
Other reserves | 202 | 202 | 202 | ||
Retained earnings | (10,839) | (10,869) | (10,699) | ||
Translations of foreign operations | (40) | (19) | (40) | ||
Total equity | 3,465 | 3,456 | 3,605 | ||
Consolidated statement of cash flows
Unaudited Half year | Unaudited Half Year | Audited Full Year | |
2013 | 2012 | 2012 | |
£000's | £000's | £000's | |
Cash Flows from operating activities | |||
Profit/(Loss) for the financial period | (140) | (34) | 136 |
Taxation expense | - | - | (65) |
Interest receivable | - | - | 10 |
Interest payable | (4) | (5) | - |
Comprehensive Income | - | - | (21) |
Depreciation charges | 23 | 20 | 52 |
Amortisation of intangibles | 73 | 69 | 155 |
Operating profit before changes in working capital | (48) | 50 | 267 |
Decrease/(Increase) in inventories | 15 | 80 | 106 |
Decrease/(Increase) in trade and other receivables | 102 | (456) | (539) |
(Decrease)/increase in trade payables and other current liabilities
| (70) | (175) | (223) |
Cash (used in)/generated from operations | (1) | (501) | (389) |
Taxation | - | - | 65 |
Net cash (used in)/generated by operating activities | (1) | (501) | (324) |
Cash flow from investing activities | |||
Purchase of property, plant and equipment | (51) | (22) | 422 |
Development expenditure | (107) | (102) | (239) |
Other intangibles | - | (30) | - |
Disposal of Property, plant and equipment | 520 | - | |
Net cash used in investing activities | (158) | 366 | 183 |
Cash flows from financing activities | |||
Interest (received)/payable | 4 | 5 | (10) |
Net cash(used in)/generated by financing activities | 4 | 5 | (10) |
Net increase/(decrease) in cash and cash equivalents | (155) | (130) | (151) |
Cash and cash equivalents at beginning of the period | 237 | 388 | 388 |
Cash and cash equivalents at end of the period | 82 | 258 | 237 |
Consolidated statement of changes in equity
(i) Six months ended 30 June 2013 - unaudited
Called up share capital | Share Premium | Other reserves | Retained earnings | Translation of foreign operations | Total Equity | |
At 1 January 2013 | 8,299 | 5,843 | 202 | (10,699) | (40) | 3,605 |
Loss for the period | (140) | (140) | ||||
At 30 June 2013 | 8,299 | 5,843 | 202 | (10,839) | (40) | 3,465 |
(ii) Six months ended 30 June 2012 - unaudited
Called up share capital | Share Premium | Other reserves | Retained earnings | Translation of foreign operations | Total Equity | |
At 1 January 2012 | 8,299 | 5,843 | 202 | (10,835) | (19) | 3,490 |
Loss for the period | (34) | (34) | ||||
At 30 June 2012 | 8,299 | 5,843 | 202 | (10,869) | (19) | 3,456 |
(iii) Year ended 31 December 2012 - Audited
Called up share capital | Share Premium | Other reserves | Retained earnings | Translation of foreign operations | Total Equity | |
At 1 January 2012 | 8,299 | 5,843 | 202 | (10,835) | (19) | 3,490 |
Total comprehensive income for the year | - | - | - | 136 | (21) | 115 |
At 31 December 2012 | 8,299 | 5,843 | 202 | (10,699) | (40) | 3,605 |
1. Segmental reporting
The Group operates in the United Kingdom, Italy and Spain.
As at 30 June 2013, the Group is organised into two principal business segments:
· IT services division (comprising legal and publishing application software)
· Green technology division (comprising electric bicycles, energy saving lamps and educational electronic kits and development and installation of renewable energy solutions)
The segmental results for the half year ended 30 June 2013 are as follows:
Unaudited Half year | Unaudited Half Year | Audited Full Year | |
2013 | 2012 | 2012 | |
£000's | £000's | £000's | |
Revenue | |||
United Kingdom | 689 | 1,416 | 2,678 |
Total | 689 | 1,416 | 2,678
|
Revenue | |||
IT Services Division | 414 | 393 | 937 |
Green Technology Division (EU) | 275 | 1,023 | 1,741 |
. | |||
Total | 689 | 1,416 | 2,678 |
Operating profit before exceptional items | |||
IT Services Division | 100 | 110 | 35 |
Green Technology Division (EU) | (157) | (44) | 46 |
Unallocated | (79) | (95) | - |
Profit before Finance Charges | (136) | (29) | 81 |
Finance Income/(payable) | (4) | (5) | (10) |
Operating profit | (140) | (34) | 71 |
Taxation Recovered | - | - | 65 |
Exchange difference on translating foreign operations | - | - | (21) |
Profit before taxation | (140) | (34) | 115 |
| |||
| Unaudited Half year | Unaudited Half Year | Audited Full Year |
2013 | 2012 | 2012 | |
£000's | £000's | £000's | |
Depreciation | |||
IT Services (UK) | 1 | 1 | 2 |
Green technology division (EU) | 2 | 2 | 4 |
Unallocated | 20 | 17 | 46 |
Group Total | 23 | 20 | 52 |
Amortisation | |||
IT Services (UK) | 27 | 30 | 72 |
Green technology division (EU) | 46 | 39 | 83 |
Group Total | 73 | 69 | 155 |
Segment Assets | |||
IT Services (UK) | 1,063 | 862 | 1,213 |
Green technology division (EU) | 3,575 | 3,885 | 3,635 |
Unallocated | 0 | 0 | 0 |
Group | 4,638 | 4,747 | 4,848 |
Segmental liabilities | |||
IT Services (UK) | (129) | (183) | (168) |
Green technology division (EU) | (1,044) | (1,108) | (1,075)) |
Unallocated | (0) | (0) | 0 |
Group | (1,173) | (1,291) | (1,243) |
Net assets | |||
IT Services (UK) | 934 | 678 | 1,045 |
Green technology division (EU) | 2,531 | 2,778 | 2,560 |
Unallocated | 0 | 0 | 0 |
Group | 3,465 | 3,456 | 3,605 |
Capital Expenditure | |||
IT Services (UK) | 72 | 77 | 184 |
Green technology division (EU) | 86 | 77 | 164 |
Green Technology Division (disposals) | - | (520) | (531) |
Group | 158 | 366 | 183 |
2 Basis of preparation
The consolidated interim financial statements have been prepared in accordance with the AIM Rules for Companies and prepared on a basis consistent with International Financial Reporting Standards ("IFRS") as adopted by the EU and the accounting policies set out in the group's financial statements for the year ended 31 December 2012.
The interim financial statements do not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006.
The consolidated interim financial statements are unaudited and include all adjustments which management considers necessary for a fair presentation of the group's financial position, operating results and cash flows for the 6 month periods ended 30 June 2013 and 30 June 2012.
The group has chosen not to adopt IAS 34 'Interim Financial Statements' in preparing these interim financial statements and therefore the interim financial information is not in full compliance with IFRS disclosure.
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
These interim financial statements have been prepared under the historical cost convention.
3 Taxation
Due to expected availability of brought forward losses, no provision has been made for application of tax for the period under review.
4 Dividends
The company has not proposed or declared an interim dividend.
5 Earnings per share
Basic earnings per share has been calculated based on the profit/ (loss) on ordinary activities after taxation and the weighted average number of shares in issue for the period of 279,176,538 (June 2012: 279,176,538 and December 2012: 279,176,538). There are no options having a dilutive impact on earnings per share.
6 Other information
This interim statement was approved by the board on 30th August 2013 and has not been audited by the company's auditors Hills Jarrett. The comparatives for the full year ended 31 December 2012 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year, which were prepared under IFRS, has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
No adjustments have been made for any changes in estimates made at the time of approval of the 2012 accounts.
A copy of this interim statement will be available shortly at the Company's registered office at Ultima Networks plc, Akhter House, Perry Road, Harlow, CM18 7PN and on the company's website, www.ultima-networks.co.uk.