UNG.L Regulatory News (UNG)

15 Aug 2007 07:01

Universe Group PLC15 August 2007 For Immediate Release: 15 August 2007 UNIVERSE GROUP PLC INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2007 Universe Group plc ('Universe' or the 'Company'), the AIM (UNG.L) listed retail and loyalty systems company, is pleased to announce its interim results for the six months to 30 June 2007. John Scholes, Chairman, commented: "Universe's interim results include income deferred from 2006 but also represent a general improvement from last year's disappointing trading and a welcome return to profitability. I am pleased to report that good progress has been made towards strategically developing Universe into a global IT-based managed services group." Highlights • Operating profit on continuing business £613,000 (H1 2006: £380,000); • EPS on continuing business of 0.39p (2006: 0.28p); • PBT on continuing business £447,000 (2006: £177,000); • Management team strengthened by addition of key staff to realise new strategy: o Appointment of Malcolm Coster as Non-Executive Director, previously President of Europe, Middle East and Africa with UNISYS o Charles Goulding was appointed to manage the operational re-organisation and execute growth strategy for HTEC o Richard Philips has joined as Head of HTEC's International Division o Darren Graham has joined as Head of HTEC's Retail Division • Strategy to restructure HTEC focuses on cross-selling products and expanding the online services model to new territories; • Further contract wins with BP Netherlands and another of the world's largest oil companies, post period end. Commenting, Paul Cooper, Chief Executive of Universe, said: "The retail division is pushing for sales from the expanding independent forecourt sector as the oil majors continue to exit from forecourt ownership. Initiatives at HTEC include the introduction, of a revenue share model on Jet wash, Air tower and Vacuum systems linked through our online managed service solution and the ongoing deployment of online payment systems. The first trial of an online Electronic Funds Transfer (EFT) system with a major supermarket is currently taking place and HTEC will continue to develop new revenue streams from its use of online data management." For Further Information: Universe Group plc 023 8068 9510Paul Cooper, Chief Executive OfficerJohn Scholes, Chairman Charles Stanley Securities 020 7149 6000Nominated Adviser and BrokerRussell CookCarl Holmes Tavistock Communications 0207 920 3150John WestAndrew Dunn CHAIRMAN'S STATEMENT Since becoming Chairman at the beginning of the year I have worked with PaulCooper, the new Group CEO, to implement a number of important changes for thedevelopment of Universe Group. Universe's interim results include income deferred from 2006 but also representa general improvement from last year's disappointing trading and a welcomereturn to profitability. I am pleased to report that good progress has been madetowards strategically developing Universe into a global IT-based managedservices group. The major challenges of the period were to transfer the Group's bankingarrangements to a new banking partner, raise new equity finance to strengthenthe balance sheet and provide for growth, and to undertake a complete review ofoperations to enable a growth strategy to be put into place. Our banking facilities were transferred to HBOS in May with new loan and invoicediscounting facilities being made available. In April, £3.0 million was raised from a share placing. The placing brought in anumber of new investors, together with support from certain existing investors,to strengthen the shareholder base. The funds are being applied to debtreduction and working capital improvement, sales and marketing development andproduct clarification. Following our operational review we have organised HTEC into 3 divisions: •Retail Division focusing on the UK market; •International Division dealing with the major oil companies and distribution channels outside of the UK; and •Manufacturing Services. A talented top team of sales professionals has been recruited to drive growthinto new markets with new products alongside marketing and branding initiativesfor existing products. The development team has been strengthened with theaddition of a new IT Director to accelerate the product clarification previouslyannounced and deliver the innovative and market leading solutions for which HTECis known. As we previously announced, Ray Mackie stepped down from the board in May. Ourthanks go to Ray for his support and work at Universe. As announced today, I am delighted to welcome Malcolm Coster to our board.Malcolm brings much relevant experience to Universe from his long career ininternational IT roles including senior management positions with Unisys,Coopers and Lybrand and BP. Our recovery is now well underway and I am confident that Universe is poised forfuture growth. We have an enthusiastic team dedicated to delivering results forcustomers and shareholders from a coherent product strategy. John ScholesChairman14 August 2007 Chief Executives Business Review Overview Universe Group trades today through one operating subsidiary, HTEC Limited. HTECis acknowledged as an industry leader in the supply of petrol forecourttechnology. We were first to supply an unattended chip and pin payment terminalfor outdoor use and are now about to implement the first global online loyaltysystem for a major oil company with data centre collection points on threecontinents. The challenge is to build on this pedigree. A product clarification review has identified key strengths in online paymentsystems and online loyalty systems, which will form the basis of a comprehensivefuture product offering of a complete hosted, online managed system for petrolforecourts. In-house designed and manufactured hardware sitting alongside robustsystems single out HTEC as a leading supplier in its market. Over 30 percent ofUK petrol forecourts are equipped with HTEC products, two of the UK's majorsupermarkets use our systems and five of the six world's major oil companies areHTEC clients. Future development is being accelerated to keep HTEC as the market leader withproducts and services being designed to generate recurring revenue frommulti-year service agreements rather than single point sales. Financial Review Profit Before Tax and Non Recurring Items was £577,000, an increase of 165 percent. over the previous half year. Non-recurring costs of £130,000 in total areconnected to the Group's rebanking and restructuring costs associated with thestrategic review. The benefit of the restructuring costs approximates to asaving of £300,000 in a full year. This is being used to fund growth in theexpanded sales team. Earnings per share from continuing operations of 0.39p are up from 0.28p for thesix months to 30 June 2006. Total revenue was £6.2m (2006: £6.4m) and although marginally down on 2006 theBoard is confident the changes that have been made at HTEC are reversing thisdecline. Net cash generated during the period was £1.2m. This has contributed to thestrengthened balance sheet where net current assets increased to £1.1m from netcurrent liabilities of£3.0m at 31st December 2006. During the period underreview the Company benefited from a share placing to raise £3.0, repayment ofthe overdraft £473,000 and repayment of the invoice discounting facility of£998,000 together with a reduction of creditors that built up mainly as a resultof the rebanking exercise. Operations The Retail Division is pushing for sales from the expanding independentforecourt sector as the oil majors continue to exit from forecourt ownership.Initiatives at HTEC include the introduction of a revenue share model on Jetwash, Air tower and Vacuum systems linked through our online managed servicesolution and the ongoing deployment of online payment systems. The first trialof an online EFT system with a major supermarket is currently taking place andHTEC will continue to develop new revenue streams from its use of online datamanagement. International business development is key to future growth. In particular we areexploring new relationships to expand the powerful online loyalty software. Thisproduct is unique in the market place in being IP based, real time and able tolink to the majority of forecourt POS systems as well as being able to runreactive promotions that are based on the customers type and behaviour which canbe changed at a moments notice. It is this capability and scalability that makesit an attractive product for marketing service companies as they seek to meetretail client demands for sophisticated online loyalty and promotional campaignsthat are outside their current technical competence. Using the existing office in Madrid we are targeting the Iberia peninsular as animmediate priority. The 2007 trading period however, is not expected to seesignificant gains from this activity. Work continues on the contract awardannounced last year for a major oil company where development is expected tocomplete in October 2007 with the first rollout scheduled for early 2008 inEurope. I am confident that with the current order book and identified prospectsUniverse will achieve a satisfactory outcome for the year. Paul CooperChief Executive Officer14 August 2007 Consolidated Income Statement (unaudited)for the 6 months ended 30 June 2007 Six Six Year to months months 31 to 30 to 30 December June June 2007 2006 2006 £'000 £'000 £'000 Revenue 6,236 6,397 11,346 Net operating costs excluding non-recurring items (5,553) (6,017) (10,690) ------- ------- --------Operating profit before non-recurring items 683 380 656 Non-recurring items (70) - (3,483) ------- ------- --------Operating profit/(loss) 613 380 (2,827) ------- ------- --------Finance costs excluding non-recurring items (106) (162) (326) Non-recurring finance costs (60) (41) (359) Finance costs (166) (203) (685) ------- ------- --------Profit/(loss) before taxation 447 177 (3,512) Taxation (107) - - ------- ------- --------Profit/(loss) for the period from continuing 340 177 (3,512)operations Loss for the period from discontinued operations - (1,134) (3,007) ------- ------- --------Profit/(loss) for the period attributable to equity 340 (957) (6,519) ------- ------- --------shareholders Earnings/(loss) per share pence pence penceBasic and dilutedContinuing 0.39 0.28 (5.41) Discontinued - (1.76) (4.63) ------- ------- -------- 0.39 (1.48) (10.04) ------- ------- -------- Six Six Year to months months 31 to 30 to 30 December June June 2007 2006 2006 £'000 £'000 £'000Statement of Changes in equity (unaudited) At 1 January 18,201 24,638 24,638 Revaluation change - (131) (131) Shares issued 3,083 391 389 Profit/(loss) for the period attributable to equity 340 (957) (6,519)shareholders Dividends to shareholders - (164) (164) Translation difference - (34) (12) ------- ------- -------- 21,624 23,743 18,201 ------- ------- -------- Consolidated Balance Sheet (unaudited)as at 30 June 2007 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000 Fixed assets Goodwill 17,250 20,060 17,250 Development costs 2,673 2,650 2,655 Property, plant and equipment 1,359 1,820 1,472 ------- ------- -------- 21,282 24,530 21,377 ------- ------- --------Current assets Inventories 1,502 1,646 1,205 Trade and other receivables 2,473 2,687 1,793 Cash at cash equivalents 750 144 5 ------- ------- -------- 4,725 4,477 3,003 Assets held for sale - 2,319 854 ------- ------- -------- 4,725 6,796 3,857 ------- ------- -------- ------- ------- --------Total assets 26,007 31,326 25,234 ------- ------- --------Current liabilities Trade and other payables (2,557) (2,927) (3,412) Tax liabilities (398) (329) (296) Short term borrowings (772) (2,911) (3,140) ------- ------- -------- (3,727) (6,167) (6,848) Liabilities directly associated with assetsclassified as held for sale - - (154) ------- ------- -------- (3,727) (6,167) (7,002) ------- ------- --------Non current liabilities Medium term borrowings (656) (1,089) (31) Deferred tax - (327) - ------- ------- --------Total liabilities (4,383) (7,583) (7,033) ------- ------- -------- ------- ------- --------Net assets 21,624 23,743 18,201 ------- ------- --------Equity Share capital 5,735 3,281 3,281 Share premium account 10,746 10,119 10,117 Other reserves 8,603 8,604 8,603 Translation reserve (181) (203) (181) Profit and loss account (3,279) 1,942 (3,619) ------- ------- --------Total equity 21,624 23,743 18,201 ------- ------- -------- Consolidated Cash Flow Statement (unaudited)for the six months ended 30 June 2007 Six Six Year to months months 31 to 30 to 30 December June June 2007 2006 2006 £'000 £'000 £'000 Cash flows from operating activitiesOperating profit/(loss)- Continuing 613 380 (2,827)- Discontinued - (1,134) (3,334)Depreciation and amortisation 330 290 629Loss on disposal of fixed assets - 231 -Impairments - 923 5,624Movement in working capital:(Increase)/decrease in inventories (297) 149 590(Increase)/decrease in receivables (134) 57 951(Decrease)/increase in payables (832) (155) 175Interest paid (166) (162) (326)Dividends paid (23) (115) (255)Tax paid (5) (61) (94) ------- ------- --------Net cash (outflow)/inflow from operating activities (514) 403 1,133 ------- ------- -------- Cash flows from investing activitiesPurchase of tangible fixed assets (64) (58) (79)Purchase of intangible fixed assets (171) (220) (366)Disposal of fixed assets - 8 - ------- ------- --------Net cash outflow from investing activities (235) (270) (445) ------- ------- --------Cash flow from financing activitiesCapital elements of lease payments (46) (83) (166)Repayment of loans (2,465) (362) (979)Issue of shares net of expenses 3,083 395 389Other new loans 1,400 (85) - ------- ------- --------Net cash inflow/(outflow) from financing 1,972 (135) (756) ------- ------- --------Increase/(decrease) in cash and cash equivalents 1,223 (2) (68)Cash and cash equivalent at beginning of period (473) 146 (393)Exchange differences - - (12) ------- ------- --------Cash and cash equivalents at end of period 750 144 (473) ------- ------- -------- Notes to Interim accounts for six months ended 30 June 2007 1. The annual financial statements of the company for the year ended 31 December 2006 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. The financial information for the year ended 31 December 2006 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was not qualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. 3. Losses from non-recurring items in 2006 were principally in respect of the impairment of HTEC goodwill and the cost of group restructuring. Losses from non-recurring items in 2007 were in respect of redundancies. Losses from discontinued operations in 2006 were principally in respect of the impairment of assets and liabilities on the disposal of Bellword S.a.r.l. 4. 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 2006. 5. The earnings per share is calculated by reference to the results and the weighted average of 88,035,735 shares in issue during the period. The number of shares in issue at 30 June 2007 was 114,704,539. 6. The Company will not pay an interim dividend for the six months to 30 June 2007 (2006 : nil) 7. 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. This information is provided by RNS The company news service from the London Stock Exchange