Univision Regulatory News (UVEL)

26 Jul 2006 11:40

UniVision Engineering Ltd26 July 2006 For immediate release 26 July 2006 UniVision Engineering Limited ("UniVision" or the "Company") Preliminary Results for the year ended 31 March 2006 UniVision Engineering Limited, the Hong Kong based designer and installer ofdigital surveillance and integrated security systems, today announces itspreliminary results for the year ended 31 March 2006. Commenting on the results, Mr. Stephen Koo, Chairman, said: "The year underreview was another exciting and successful year for the Company and itsshareholders with growth substantially ahead of budget." HIGHLIGHTS * Profit before tax (excluding listing expenses) up 79% to £902,387 (2005: £502,993) * Turnover up 47% to £3.89m (2005: £2.65m) * Acquisition of a majority shareholding in T-Com Tech. Co. Ltd since the year end - expected to be earnings enhancing in current year * Order book for the first quarter of financial year 2007 significantly ahead of the same period last year On current trading and prospects, Mr. Stephen Koo added: "I am pleased topresent our first annual results since our Company's Admission to trading on AIMin December 2005. UniVision has continued to strengthen its position in the AsiaPacific region closed circuit television ("CCTV") market." "We are satisfied with the results achieved for the year and we are confident inthe Company's long-term growth potential, especially given the launch of theCompany's new products in the third quarter of financial year 2007. Ourobjectives are to further develop our expertise in producing high quality,reliable and innovative digital video solutions and to consolidate our salesnetwork throughout the Greater China region in order to respond to the growingdemand in the surveillance industry domestically and internationally. The Boardis confident of making further significant progress in the current year." -Ends- For further information visit www.uvel.com or contact: UniVision Engineering Limited +852 2389 3256Stephen Koo, ChairmanJohnny Tang, Finance Director Tavistock Communications 020 7920 3150Christian Taylor - WilkinsonMatt Ridsdale About UniVision Engineering Limited: UniVision Engineering Limited, incorporated in Hong Kong in 1979, is wellestablished in Hong Kong, Macau and China. The Company designs, sources andsells its own brand-name products and OEM products, including MicroprocessorCCTV Control Systems, Video Distribution Amplifiers, Fibre Optic TransmissionSystems and Smart Card Access Systems. 26 July 2006 UniVision Engineering Limited ("UniVision" or the "Company") Preliminary Results for the year ended 31 March 2006 CHAIRMAN'S STATEMENT INTRODUCTION I am pleased to report on the results of the Company for the financial yearended 31 March 2006, our first year as a public company, which has proved to bean exciting and successful period for Univision. The Company's Admission to the AIM of the London Stock Exchange in December 2005has given us the opportunity to access international capital markets and enhanceour growing reputation in the commercial marketplace, particularly in Europe,where we see significant growth opportunities to develop as an internationalcompany and create greater value for our shareholders. We have been providing our customers with digital surveillance and integratedsecurity systems - "total surveillance video solutions" - in the Pacific regionfor a number of years and, as our product range and skills base have grown, weare increasingly able to deliver to clients on a global basis. The recentacquisition of a majority shareholding in T-Com Tech. Co. Ltd has added momentumto our continued growth. We are confident in the Company's long-term growth potential, especially giventhe launch of our new products in the third quarter of financial year 2007. Ourobjectives are to further develop our expertise in producing high quality,reliable and innovative digital video solutions and to consolidate our salesnetwork throughout the Greater China region in order to respond to growingdemand in the surveillance industry both domestic and international. FINANCIAL REVIEW During the period under review, turnover increased by 47% to £3.89m (2005:£2.65m). This growth is attributable to additional sales to existing clients,the improvement in market conditions and heightened awareness in the areas onwhich we focus. The development of new applications has generated additionalrevenue streams both from existing and new clients, which is particularlypleasing. I am delighted that turnover for the period was significantly higherthan our internal forecasts. Gross profit margin remains the same at 33% (2005: 33%). Distribution costsincreased by 23% to £94,133 (2005: £76,570). Administration expenses, otheroperating expenses and non-operating expenses were in line with the Company'sincrease in capital investment, marketing and office expansion rising by 124% to£927,412 (2005: £414,332). The increase is principally due to the cost ofAdmission of UniVision's shares to AIM in December 2005. Net growth in profit before tax after excluding all one-off expenses relating tothe Company's flotation increased by 79% to £0.9 million. Basic earnings per share have fallen slightly to 0.18p from 0.20p reflecting agreater number of shares in issue following the flotation together with relatedexpenses of the float of £392,380, charged to the income statement, which keptnet profits to £510,007 compared to £502,993 in the previous period. MARKET REVIEW It is forecast that by 2008 total global revenues for digital surveillance videoequipment will amount to approximately US$ 1.2 billion. Industrial and economicgrowth in Hong Kong, China and Macau together with global events such as theBeijing Olympics 2008, Shanghai Expo 2010, all lead to increased construction offacilities, such as hotels, shopping centres, and convention and exhibitioncentres. The continuing demand for digital video products such as Digital VideoRecorders (DVRs), Network Video Recorders (NVRs) and Internet Protocol (IP)cameras shows no signs of slowing. BUSINESS REVIEW MarketsHybrid solutions which connect IP and analogue cameras with CCTV MatrixControllers and DVRs became mainstream in 2006. Hybrid solutions provide largeinstalled base analogue cameras with a gateway to transmit video streams fromnetworks and the Internet. The Company is looking into many different solutions,including: * Video compression technology MPEG-4 and H.264 enables real-time transmission of high quality video over a low bandwidth network. We believe that MPEG-4 is a leading compression standard which will gradually be replaced by H.264 in the next two years. * Intelligent video analysis software that enables the tracking of suspicious objects and checks for rule violation by those objects. This is an additional feature to the present video management system for bombs, unattended objects and people flow monitoring. * Digital Encoder and Decoder (CoDec) with built-in video analysis algorithms in the Homeland Security field such as intruder detection, loitering detection, left behind objects and trip wire will be the new area of interest. We believe this is the transformation of analogue to Digital Video Systems. Hong Kong Automatic Traffic Control is the first contract for UniVision to deploy its digital CoDec for video transmission over fibre network using TCP/IP technology. This technology and project reference helps to increase our contract hit rate and increases our turnover and margins for new projects of a similar nature. The Board believes that an open platform to integrate various systems, such ascameras, Matrix, DVRs, Card Access Systems and Fire Alarm Systems, to provide atotal integrated security solution will be the next major development within thedigital security market. We also believe that UniVision will be among thepioneers of this movement and we hope to expand our sphere of businessaccordingly. Technologies, Solutions and ProductsOn the solutions side, an ongoing IT development programme is in place to caterfor the needs of the Company's growing client base in the Asia Pacific region. The Company is currently developing a new digital server series with PC andembedded base solutions using our own designed integrated circuit microchips(with video control, video overlay and multiplexer functions), together with anopen platform central monitoring system which is capable of integrating withvarious bands of DVRs, Access Control, Matrix and Fire Alarm Systems with highlevel integration. These products will be launched in the third quarter of 2007.We are currently working on H.264 CoDec with built in video analysis algorithmswhich we expect to launch in early financial year 2008. Acquisitions and InvestmentsThe success of our investment in T-Com Tech. Co. Ltd in the first quarter offinancial year 2007 has reinforced the Company's strategy of acquiring interestsin companies with synergistic and/or strategic value. To this end, the Companyis currently assessing a number of companies in related fields with a view tomaking further strategic investments. Contract WinsDuring the reporting period, I am pleased to report that the Company was awardeda number of high profile projects including the CCTV System for the World TradeOrganization Convention, Hong Kong Airport Skyplaza Car Park CCTV System, Museumof Coastal Defence CCTV System and the Taipo Sewage Plant CCTV System. Macau CasinosAs well as growing our business by winning public sector mandates our reputationhas grown in the entertainment and leisure industry and several significantprojects were undertaken in Macau. The key projects took place at the Grand ViewCasino, Jai-A-Lai Casino, Emperor Casino, Diamente Casino, and the LouvreCasino. The Board sees the leisure industry becoming an area of substantialopportunity over the coming years and the strategy put in place to capitalise onthese developments is bearing fruit. MTR & MaintenanceOur maintenance contracts are particularly important to the business byproviding strong visibility in our revenue and I am delighted that we havecontinued to develop this side of the business. In particular our relationshipwith the Mass Transit Railway has proved to be significant with a further 3-yearmaintenance contract for the CCTV, Public Address and Passenger InformationDisplay System (PIDS). This was also extended during the period to include theimportant Disneyland Line. In August 2005 UniVision entered into a 5-yearmaintenance contract with the Tai Po and North District Traffic Control and twoseparate 3-year maintenance contracts were entered into with the Hong KongPolice for Border Control and Stanley Prison's Correctional Service Departmentin December 2005 and March 2006 respectively. PROSPECTS The Company's performance domestically has been strong with new revenue streamsfrom both the public and private sector. Our London office is expected to beoperational in the fourth quarter of financial year 2007 and will spearhead ourexpansion into the UK and European markets whilst our product and applicationdevelopment programmes continue to enhance and expand well. The first few months of the current financial year have been very encouraging.In view of the strong demand for our camera, DVRs, Optical Transceiver andMatrix products from our existing customers, and the positive sentiment andexposure towards the digital surveillance products in general, the Board isconfident of making further significant progress in the current year. Finally, on behalf of the Board, I would like to thank our customers, suppliersand shareholders for their continued support of UniVision. I would also like toacknowledge the hard work of the management and all the staff for theircontribution and dedication to the Company. MR. STEPHEN KOOEXECUTIVE CHAIRMAN26 July 2006 INCOME STATEMENTFor the year ended 31 March 2006 Note 2006 2005 £ £ Turnover 3,886,780 2,645,742 Cost of sales (2,607,317) (1,767,709) ------------ ------------Gross profit 1,279,463 878,033 Other revenue 257,611 132,741Distribution costs (94,133) (76,570)Administrative expenses (475,948) (414,332)Other operating expenses (59,084) - ------------ ------------Profit from operations 3 907,909 519,872Non-operating expenses 4 (392,380) -Finance costs 5 (5,522) (16,879) ------------ ------------Profit before taxation 510,007 502,993 Taxation 6 - - ------------ ------------Profit for the year 510,007 502,993 ============ ============ -------------------------------------------------------------------------------- Earnings per share Basic 7 0.18p 0.20p ============ ============Diluted 7 0.18p 0.20p ============ ============-------------------------------------------------------------------------------- BALANCE SHEETAt 31 March 2006 2006 2005 £ £ ASSETS Non-current assets Plant and equipment 13,665 9,445 ------------ ------------Current assets Inventories 192,213 616,704Due from construction contract customers 934,195 371,300Trade receivables 1,303,736 737,831Other receivables 898,869 329,085Cash and cash equivalents 1,414,313 381,815 ------------ ------------ 4,743,326 2,436,735 ------------ ------------Total assets 4,756,991 2,446,180 ============ ============ EQUITY Capital and reserves Share capital 1,451,085 1,167,981Share premium 1,278,981 -Special capital reserve 143,439 143,439Retained earnings 644,611 134,604Exchange differences 95,023 (18,449) ------------ ------------Total equity 3,613,139 1,427,575 ============ ============ LIABILITIES Current liabilities Due to construction contract customers 452,536 252,569Trade payables and accruals 691,316 766,036 ------------ ------------ 1,143,852 1,018,605 ------------ ------------Total liabilities 1,143,852 1,018,605 ============ ============Total equity and liabilities 4,756,991 2,446,180 ============ ============ STATEMENT OF CHANGES IN EQUITYFor the year ended 31 March 2006 Special Share Share Retained capital Exchange capital premium earnings reserve differences Total ------------- ------------- ------------- ------------- ------------- ------------- £ £ £ £ £ £ Balance at 1 April 2004(1) 12,742,506 - (12,618,834) - 7,223 130,895 Issue of share capital 986,721 - - - - 986,721 Capital reduction (12,845,324) - 12,659,055 143,439 42,830 - Interim dividend paid - - (161,411) - - (161,411) Net profit for the year - - 502,993 - - 502,993 Effect of translation - - - - (31,623) (31,623) ------------- ------------- ------------- ------------- ------------- -------------Balance at 31 March 2005(1) 883,903 - 381,803 143,439 18,430 1,427,575 Presentational currency adjustment(2) 284,078 - (247,199) - (36,879) - ------------- ------------- ------------- ------------- ------------- ------------- Balance at 31 March 2005 - restated 1,167,981 - 134,604 143,439 (18,449) 1,427,575 Issue of shares upon listing 235,015 1,279,985 - - - 1,515,000 Issue of shares upon placing 48,089 261,911 - - - 310,000 Share issue costs - (262,915) - - - (262,915) Net profit for the year - - 510,007 - - 510,007 Effect of translation - - - - 113,472 113,472 ------------- ------------- ------------- ------------- ------------- ------------- Balance at 31 March 2006 1,451,085 1,278,981 644,611 143,439 95,023 3,613,139 ============= ============= ============= ============= ============= ============= (1) As previously reported in the Admission Document dated 9 December 2005(2) Adjustment to better reflect the impact of currency translation on the capital reduction on 20 November 2004 The currency translation from Hong Kong dollars to the presentational currencyof £ Sterling used in these financial statements has no impact on the availabledistributable reserves of the Company which at 31 March 2006 were HK$9,520,984(31 March 2005: HK$2,445,954). CASH FLOW STATEMENTFor the year ended 31 March 2006 2006 2005 £ £ CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 510,007 502,993Adjustments for: Depreciation 5,833 5,265Admission to AIM costs 392,380 -Reversal of provision for bad debts (13,124) -Provision for obsolete inventories 59,084 -Written back on trade payables and accruals (77,136) -Interest income (15,929) (18,930)Interest expenses - 11,294 ------------ ------------ Operating profit before working capital changes 861,115 500,622Decrease in inventories 404,631 16,225Increase in trade receivables (481,284) (101,742)Increase in amounts due from construction contract customers (520,553) (72,339)Decrease in retention receivables 24,578 11,878(Increase)/Decrease in deposits, prepayments and other receivables (248,595) 67,123Decrease in amount due from a related company - 122,339Increase in amounts due to construction contract customers 175,351 82,361(Decrease)/Increase in trade payables and accruals (56,660) 240,243Decrease in amount due to a related company - (185,240)Effect of changes in foreign exchange (36,890) (4,032) ------------ ------------Net cash from operations 121,693 677,438 ------------ ------------CASH FLOWS FROM INVESTING ACTIVITIES Purchases of plant and equipment (9,207) (7,152)Receipts from settlement of short term loan 176,465 -Advance of short term loan receivable (360,428) -Increase in pledged deposits (122,655) (33,931)Interest received 15,929 189 ------------ ------------Net cash used in investing activities (299,896) (40,894) ------------ ------------CASH FLOWS FROM FINANCING ACTIVITIES Interest paid - (11,294)Dividend paid - (161,411)Proceeds from issue of shares 1,810,000 986,721Payment for issue of shares and admission to AIM (653,220) -Payment of finance lease liabilities - (2,107)Payment of bank loan - (1,028,385)Repayment of amount due to immediate holding company - (129,865)Payment of amount due to ultimate holding company - (31,268) ------------ ------------Net cash (used in)/from financing activities 1,156,780 (377,609) ------------ ------------NET INCREASE IN CASH AND CASH EQUIVALENTS 978,577 258,935 EFFECT OF CHANGES IN FOREIGN EXCHANGE 53,921 (8,387) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 381,815 131,267 ------------ ------------CASH AND CASH EQUIVALENTS AT END OF YEAR 1,414,313 381,815 ============ ============ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Cash and cash equivalents 1,414,313 381,815 ============ ============ NOTES TO THE FINANCIAL STATEMENTSFor the year ended 31 March 2006 1. GENERAL INFORMATION The Company is incorporated in Hong Kong as a limited company. The address ofits registered office is 8/F Lever Tech Centre, 69-71 King Yip Street, KwunTong, Kowloon, Hong Kong. The Company has its primary listing on the Alternative Investment Market of theLondon Stock Exchange ("AIM"). The Company is engaged in the supply, design, installation and maintenance ofclosed circuit television and surveillance systems and the sale of securitysystem related products. 2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS The financial statements have been prepared under the historical costconvention. In the current year, the Company has applied all InternationalFinancial Reporting Standards ("IFRSs") (which also include the InternationalAccounting Standards ("IASs") and Interpretations) issued by the InternationalAccounting Standards Board and International Financial Reporting InterpretationsCommittee relevant to its operations and effective for periods beginning on 1January 2005. The transition from accounting principles generally accepted inHong Kong (HKGAAP) to IFRS has not resulted in material impact on the Company'saccounting policies and has no effect on the amounts reported in the incomestatement, balance sheet, cash flow statement and statement of changes in equityfor the current or prior years. This preliminary statement, which has been agreed with the auditors, wasapproved by the Board on 26 July, 2006. It is not the Company's statutoryaccounts. The statutory accounts for the year ended 31 March 2005 received anaudit report which was unqualified. The statutory accounts for the year ended 31March 2006 have not yet been approved, audited or filed. The preparation of financial statements in conformity with IFRSs requires theuse of certain critical accounting estimates. It also requires management toexercise its judgement in the process of applying the Company's accountingpolicies. The Company has not applied the new IFRSs in issue at the date of authorisationof the financial statements but are not yet effective. In addition, the HongKong Companies (Amendment) Ordinance 2005 came into effect on 1 December 2005and would be first applicable to the Company's financial statements for theperiod beginning 1 January 2006. The application of these IFRSs and amendmentsare not expected to have material impact on the financial statements of theCompany. 3. PROFIT FROM OPERATIONS Profit from operations is stated after charging / (crediting) the following: 2006 2005 £ £ Cost of inventories recognised as expenses 1,457,844 1,056,173Provision for obsolete inventories 59,084 -Auditors' remuneration 28,834 10,423Depreciation Leased plant and equipment - 1,232 Owned plant and equipment 5,833 4,033 5,833 5,265 Directors' remuneration 89,494 32,450Net exchange (gains)/losses (26,189) 1,088Reversal of bad debt provisions (13,124) -Research and development costs 25,585 -Operating leases - land and buildings 28,079 33,618Staff costs (excluding directors' remuneration) 522,289 464,547Written back on trade payables and accruals (77,136) - ============ ============ 4. NON-OPERATING EXPENSES 2006 2005 £ £ Total share issue and admission to AIM costs 668,220 - ============ ============Charged to equity: Share placing costs 15,500 -Share issue costs upon admission to AIM 247,415 - ------------ ------------ 262,915 -Charged to income statement Admission to AIM costs 392,380 -Exchange differences 12,925 - ------------ ------------Total share issue and admission to AIM costs 668,220 - ============ ============ A total of 50,500,000 and 10,333,333 new ordinary shares were issued and haveraised £1,500,000 and £310,000 during the admission to AIM and placing processrespectively. The total share issue and listing costs amounted to £668,220, in which £15,000was settled by issuance of new ordinary shares to Insinger de Beaufort in partsatisfaction of their fee for the admission to AIM process. A portion of theseshare issue costs that relates to stock market listing have been recognised asan expense in the year and a portion of these share issue costs that relates toissuing new shares have been charged to equity. 5. FINANCE COSTS 2006 2005 £ £ Bank charges 5,522 5,427Bank loan interest - 11,294Finance leases charges - 158 ------------ ------------ 5,522 16,879 ============ ============ 6. TAXATION No provision for Hong Kong profits tax has been made in the financial statementssince the Company has sufficient tax losses brought forward to set off againstcurrent year's assessable profit. The taxation on the Company's profit before taxation differs from thetheoretical amount that would arise using Hong Kong profits tax rate as follows: 2006 2005 £ £ Profit before taxation 510,007 502,993 ------------ ------------Tax at Hong Kong profits tax rate of 17.5% 89,251 88,024Tax effect of income that is not taxable in determining taxable profit (2,297) -Tax effect of expenses that are not deductible in determining taxable profit 82,685 185Tax effect of temporary differences not recognised (1,126) (1,303)Tax effect of utilisation of tax losses not previously recognised (168,513) (86,906) ------------ ------------Taxation charge - - ============ ============ At the balance sheet date, the Company has unused tax losses of £6,274,096(2005: £6,799,368) that are available for offset against future taxable profitsof the Company. No deferred tax asset has been recognised due to theunpredictability of the future profit streams. Tax losses may be carried forwardindefinitely. No provision for deferred tax liabilities has been made in the financialstatements as the tax effect of temporary differences is immaterial to theCompany. 7. EARNINGS PER SHARE The calculation of basic and diluted earnings per share is based on the netprofit attributable to shareholders for the year of £510,007 (2005: £502,993),and the weighted average of 279,155,799 (2005: 257,931,950) ordinary shares inissue during the year. There were no potential dilutive ordinary shares outstanding during the year(2005: Nil). 8. EVENTS AFTER THE BALANCE SHEET DATE Subsequent to the balance sheet date, in a press announcement of the Companydated 17 May 2006, the directors of the Company stated that the Company hadsuccessfully completed the acquisition of 52.25% equity interests in T-Com Tech.Co. Ltd at a cash consideration of approximately £514,000. T-Com Tech. Co. Ltd., established in 1998, is a security system integrator and aturn-key provider of technology-based security solutions for medium and largecommercial enterprises and government agencies in Taiwan. It is also engaged inthe sale of closed circuit television systems, access control systems,integrated security systems and intelligent transport systems in Taiwan and toTaiwan's manufacturer in PRC. This information is provided by RNS The company news service from the London Stock Exchange