UNG.L Regulatory News (UNG)

8 Sep 2006 07:02

Universe Group PLC08 September 2006 8 SEPTEMBER 2006 UNIVERSE GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 Universe Group plc ("Universe" or the "Company"), the AIM listed retail andinformation systems company, is pleased to announce its interim results for thesix months to 30 June 2006. Key Points • Operating profit on continuing business £380,000 (2005: £940,000); • EPS on continuing business of 0.28p (2005: 0.98p); • PBT on continuing business £177,000 (2005: £633,000); • Net debt reduced by £73,000 following share placing in March 2006; • Paul Cooper has been appointed today as a Non-Executive Director; • Sale of bureau business proceeding ; and • Strategy for HTEC focuses on cross-selling products to existing customers and expanding the online services model to new territories. Commenting, Ray Mackie, Chairman of Universe, said: "We are confident that animprovement in trading in the second half year will result in a satisfactoryoutcome for the full year, and that trading next year will benefit from thedelay in roll-outs from 2006 to 2007 by two of our major customers." For Further Information: Universe Group plc 023 8068 9510Ray Mackie, Chairman Charles Stanley Securities 020 7149 6000Russell Cook Bishopsgate Communications Ltd 020 7430 1600Dominic BarrettoFran Read CHAIRMAN'S STATEMENT In the first half of 2006, the Company achieved an operating profit oncontinuing business of £380,000 (H1 2005: £940,000). The reason for theoperating profit being held back was roll-out delays which, looking ahead, willnow benefit next year's figures. The same period last year benefited from majorHydraPOS and HydraOPT roll-outs. Operating profits were struck after what wereformerly accounted for as exceptional items, but before the Currency Divisiondiscontinuing operations. Results The Company's sales on continuing business at HTEC were £6.4 million against£9.4 million for 2005. On this figure, we achieved a profit before tax of£177,000 (2005: £633,000). Earnings per share, on continuing business, stands at0.28 pence per share, against 0.98 pence last year on a comparable basis. Cash flow and net debt Cash flow from operations at £403,000 was an improvement on the second half of2005, but was not sufficient to cover the Company's investment needs and loanrepayments. Our net debt reduced, however, by £73,000 as a result of a shareplacing in March, which provided further capital of £395,000 net of expenses. Atthe period end our net debt was £3,856,000 (year end £3,929,000). Retail and Information Systems HTEC has seen a number of significant new business wins in the past year, whichinclude Pace Petroleum, Anglia Co-op, Clinton Cards and new work for two majoroil companies. However, as anticipated in my AGM statement, HTEC had a veryquiet first half. Delivered sales were lower than the previous year, which hadseen major HydraPOS projects for ASDA, Morrisons and major terminal orders forPayPoint. Taking each of Universe's major HTEC product areas in turn, the Board envisagesexcellent prospects. The main products within the HTEC portfolio are: • HydraPOS: a Point of Sale system for petrol retailers. • HydraOPT: a Chip & Pin enabled unattended payment system. • Gemini: an Electronic Funds Transfer ("EFT") terminal for use with the Gemini Intelligent PINpad. • HTEC On-Line: a suite of on-line services. All our products and services give Universe continuing revenue afterinstallation. The Company's recurring service income was 40% of HTEC sales inthe first half. HydraPOS HydraPOS is now in operation in ASDA, Morrisons, PACE, Murco and Anglia Co-op.In most cases, we are partnered with Toshiba. The HydraPOS is the systemsplatform for the successful Morrisons Miles on-line loyalty programme. Hydra OPT The Hydra Outdoor Payment Terminal is in use on unattended forecourts, fastlanes and for night time trading at ASDA, at all Morrison's RegionalDistribution Centres and on a pilot basis, at five Morrison stores. ASDA now has31 fully unattended forecourts all using HydraOPT. Important liaisons have beenestablished with pump providers and we anticipate this will lead to a wideningof the customer base for Hydra OPT installations. In this regard we are workingwith Gilbarco and Wayne, the two leading petrol pump providers, to integrateHydra OPT into their pump heads. Thus far HTEC has an OPT fully integrated with Gilbarco's SK700 and Euroline andanother integrated with the Wayne 9000. The latter can also be integrated with,one of the latest in the product range, the Wayne Global Star. Gemini Gemini has been developed to operate Chip & PIN with the Gemini IntelligentPINpad. As with many PINpad providers teething difficulties slowed us down in2006 and also had significant cost. A Gemini derivative is the hardware platformused for our on-line loyalty schemes for BP in some European countries. On-Line Services HTEC has created a number of on-line products, which will lead back toprofitable growth. The Company has on-line loyalty business with Morrisons andBP in Netherlands and Portugal. Virtual Back Office, which enables managers tocontrol their petrol forecourts (and the same applies in other business sectors)from wherever there is an internet connection is being made available to ouron-line customers. With on-line services installed in Holland and Portugal, as well as in the UK,the Company has a pilot development underway for one major oil company which, onthe basis the pilot is successful, will be installed in many countries in Europeand elsewhere. Another major oil company, an established customer of HTEC, isalso evaluating the service. I will to be able to update shareholders further onthis news in due course. Currency Division There have been significant changes in this Division. Last year Universe soldthe First Remit business to Travelex Money Transfer Ltd. Since the AGM in May2006, the Board has embarked on selling the Bureau business in Paris. This hasattracted a lot of interest and the Board has selected one of the bidders, withwhom we have exchanged a Letter of Intent, to have the exclusive right to buythe business up to 30 September 2006. We have written off the goodwill arisingon the acquisition of this business. The Board Keith Buchanan left the Board on 30 June after a full three-year term as aNon-Executive Director, and Catherine Wines, who was Managing Director of theCurrency Division, left the Board on 31 August. Catherine continues to assistthe Board as Group Company Secretary. I would like to thank both Keith andCatherine for their contribution as members of the Board. Paul Cooper has been appointed today as a Non-Executive Director, and I amdelighted to welcome him to Universe. Strategy and Prospects I would like to take this opportunity to set out the Board's strategy fordeveloping HTEC. HTEC is a well established technology company with blue chipcustomers. The management team has an excellent product line-up and willconcentrate on selling additional products and services to our existingcustomers, some of whom do not benefit from our entire range of services. Ourproducts include our on-line services which are extremely well suited to be soldand delivered outside the UK. These will therefore be a key part of ourexpansion programme. We also plan to increase our recurring revenue derived from support, fieldservice and on-line data services. We have already seen an increase in thisrevenue and continued effort in this area will provide more stability to ourrevenues. Finally, we are investigating how some of our products can be sold to thenon-petrol sector. Having partnered Clinton Cards in updating their POS we arenow helping them with installation. We intend to build on this experience withother retailers. The capital released by the disposal of the bureau business will reduce our netdebt and we are committed to maintaining low gearing. Accordingly, havingreduced the dividend in past years, we will withdraw from the dividend lists forthe present time to enable the cash saved to be used for the expansion of thebusiness. The Board is confident that our order book and expectations for the second halfyear and for 2007 will result in a satisfactory outcome for the full year andthat trading next year will benefit from the delay in roll-outs from 2006 to2007 by two of our major customers. R J MackieChairman8 September 2006 Universe Group Plc Consolidated Income Statement (unaudited)For the 6 months ended 30 June 2006 Six months Restated Restated Six months Year to 31 To 30 June to 30 June December 2006 2005 2005 £'000 £'000 £'000 Revenue 6,397 9,421 15,669Net operating costs (6,017) (8,481) (14,143) __________ __________ __________ Operating profit on continuingoperations 380 940 1,526 Finance costs (203) (307) (546) __________ __________ __________ Profit before taxation 177 633 980 Taxation - (35) (119) __________ __________ __________ Profit for the period from continuingoperations 177 598 861 Discontinued operations: Loss for the period from discontinuedoperations (note 2) (1,134) (458) (623) __________ __________ __________Profit for the period attributable toequity Shareholders (957) 140 238 __________ __________ __________ Earnings/(loss) per share pence pence pence Basic and diluted - Continuing 0.28 0.98 1.40 - Discontinued (1.76) (0.75) (1.01) Statement of Changes in equity (unaudited) At 1 January 24,638 24,724 24,724Revaluation changes (131) - (170)Deferred tax on revaluation change - - 60Shares issued 391 76 342Profit/(loss) for the period (957) 140 238Exchange differences (198) 10 (99)Dividends declared - (305) (457) __________ __________ __________ 23,743 24,645 24,638 __________ __________ __________ Universe Group Plc Consolidated balance sheet (unaudited)as at 30 June 2006 30 June 30 June 31 December 2006 2005 2005 £'000 £'000 £'000 Fixed assetsGoodwill 20,060 20,983 20,983Development costs 2,650 1,791 2,533Fonds de commerce - 2,498 2,433Property, plant and equipment 1,820 2,463 2,068 __________ __________ __________ 24,530 27,735 28,017 __________ __________ __________ Current assetsInventories 1,646 2,037 1,795Trade and other receivables 2,687 2,853 2,744Cash and cash equivalents 144 261 146Assets held for sale 2,319 - - __________ __________ __________ 6,796 5,151 4,685 __________ __________ __________Total assets 31,326 32,886 32,702 __________ __________ __________ Current liabilitiesTrade and other payables (2,927) (3,911) (3,272)Tax liabilities (329) (312) (390)Short-term borrowings (2,911) (1,667) (2,621) __________ __________ __________ (6,167) (5,890) (6,283) Non-current liabilitiesMedium term borrowings (1,089) (1,964) (1,454)Deferred tax (327) (387) (327) __________ __________ __________Total liabilities (7,583) (8,241) (8,064) __________ __________ __________ __________ __________ __________Net assets 23,743 24,645 24,638 __________ __________ __________ EquityShare capital 3,281 3,063 3,186Share premium account 10,119 9,604 9,823Revaluation reserves - 301 131Other reserves 8,604 8,679 8,603Profit and loss account 1,739 2,998 2,895 __________ __________ __________Total equity 23,743 24,645 24,638 __________ __________ __________ Universe Group Plc Consolidated cash flow statement (unaudited)for the 6 months ended 30 June 2006 Six months Six months Year to 31 to 30 June to 30 June December 2006 2005 2005 £'000 £'000 £'000 Cash flows from operating activities Operating profit - Continuing 380 940 1,526 - Discontinued (211) (458) (623)Depreciation and amortisation 290 906 933Loss on disposal of fixed assets 231 251 0Movement in working capital 51 213 (17)Interest paid (162) (266) (465)Dividends paid (115) (191) (305)Tax paid (61) 0 0 __________ __________ __________Net cash inflow from operatingactivities 403 1,395 1,049 __________ __________ __________ Cash flows from investing activitiesPurchase of tangible fixed assets (58) (68) (294)Purchase of intangible fixed assets (220) (202) (856)Sale of fixed assets 8 0 570Acquisitions and disposals 0 0 191 __________ __________ __________Net cash outflow from investingactivities (270) (270) (389) __________ __________ __________ Cash flow from financing activitiesCapital elements of lease payments (83) (328) (432)Repayment of loans (362) (786) (945)Issue of shares net of expenses 395 0 342Other new loans (85) 0 290 __________ __________ __________Net cash outflow from financing (135) (1,114) (745) __________ __________ __________ (Decrease)/increase in cash and cashequivalents in period (2) 11 (85) Cash and cash equivalents at beginningof period 146 250 250 Exchange differences - - (19) __________ __________ __________Cash and cash equivalents at end ofperiod 144 261 146 __________ __________ __________ Universe Group Plc Notes to Interim accounts for six months ended 30 June 2006 1 The annual financial statements of the company for the year ended 31 December 2005 were prepared in accordance with the International Financial Reporting Standards (IFRS). Accordingly, the interim financial report has been prepared using accounting policies consistent with IFRS. 2 Losses from discontinued operations is principally from the bureaux business in 2006 including £923,000 of Goodwill written off. The figures for 2005 are in respect of the disposal of the money transfer business and restatement of the bureaux figures to discontinued. 3 The half-year results were neither audited nor reviewed by the auditors. The interim financial information has been prepared on the basis of accounting policies set out in the group's statutory accounts for the year ended 31 December 2005. 4 The interim report will be circulated to all shareholders and copies will be available from the Company's head and registered office:- Southampton International Park, George Curl way, Southampton, SO18 2RX. 5 The earnings per share is calculated by reference to the results and the weighted average of 64,316,492 shares in issue during the period. The number of shares in issue at 30 June 2006 was 65,611,987. This information is provided by RNS The company news service from the London Stock Exchange