Last checked at 23 Dec 2009 11:15
23 December 2009
UniVision Engineering Limited
("UniVision" or the "Group")
Interim Results
For the Six Months Ended 30 September 2009
UniVision Engineering Limited, the Hong Kong based Group whose principal activities are the supply, design, installation and maintenance of closed circuit television and surveillance systems, and the sale of security related products, today announces its interim results for the six months ended 30 September 2009.
Highlights
Revenue decreased by 31% to HK$44m (H1 2008: HK$64m).
Operating profit decreased by 39% to HK$6.8m (H1 2008: HK$11.2m).
Profit attributable to equity holders of the parent at HK$2.8m (H1 2008: HK$3.8m).
Basic earnings per ordinary share of HK$0.007 (H1 2008: HK$0.010).
Mr. Stephen Sin Mo KOO, Executive Chairman, added:
"Our performance has been affected as a result of the global economic downturn which has hindered progress in our larger projects. We are unable to access funds easily for our projects and thus still remain cautious on further expansion and getting involved in potential projects
The Group remains confident it will maintain a competitive advantage in the second half of the year in its core CCTV and surveillance business which still experiences strong demand, and achieve growth through the Electrical and Mechanical ("E&M") business."
For further information visit www.uvel.com or contact:
| UniVision Engineering Limited Stephen Sin Mo KOO, Executive Chairman Chun Hung WONG, Chief Executive Officer Danny Kwok Fai YIP, Finance Director | +852 2389 3256 |
| Allenby Capital Limited Imran Ahmad/Nick Athanas | +44 (0) 203 328 5656 |
Chairman's Statement
I am pleased to report on the results of the Group for the six months ended 30 September 2009.
Financial Review
During the period revenue decreased by 31% to HK$44m (H1 2008: HK$64m).
The business has been affected by the continuing adverse economic condition of the global economy and from market fluctuations. Operating profit during the period decreased by 39% to HK$6.8m (H1 2008: HK$11.2m), whilst profit attributable to the equity holders of the parent decreased by 26% to HK$2.8m (H1 2008: HK$3.8m) mainly due to the decrease in turnover generated for the six month period.
Basic and fully diluted earnings per share decreased to HK$0.007 (H1 2008: HK$0.010).
The Group is currently involved in a small number of significant projects which require high levels of capital expenditure, which was the main reason for the re- financing of the Zhongshan Project, as announced on 10 December 2009. We remain confident that these projects will come to fruition in the second half of this year. Though the finance costs for the period have caused some burden to the profit during the period, we are cautiously optimistic of a good trading performance for the year as a whole.
During the period under review, the relative strengthening in the HK$ against sterling has led to an 18.8% appreciation in the GBP reporting amount in the consolidated income statement and an 11.5% appreciation in the consolidated balance sheet. All figures in GBP in the financial statements need to be adjusted for comparative purposes. The financial data is also presented in HK$ to show a fair comparison with the comparative figures in 2008 that were unaffected by exchange rate fluctuations.
Business Review
Markets
The Board of UniVision are of the view that IP Video still plays the role of the transitional technology from analogue to digital in the CCTV industry. An increasing number of users are leveraging IP video to improve business and operational efficiency and effectiveness. For example, IMS Research predicted in 2008 that over the next three years, the market for megapixel cameras will grow at a compound growth rate in excess of 100%. IMS Research also stated recently that the growth rate for global IP video surveillance equipment is likely to exceed 15% per annum while in contrast the global market for analogue video surveillance equipment is expected to fall in the coming years. The Group is working with different solutions, including video compression technology, digital encoder and decoders with a built-in video analysis algorithm, as well as video management platforms.
The Board is confident that the network video market will have strong growth potential in the coming years and considers that the Company is well placed to reap the benefits of this growth.
The property linked E&M business in the People's Republic of China ("PRC") is still our primary target for growth. We have a successful shopping mall project in Zhongshan which we expect to be completed and ready for sales in approximately four months. However, the timetable for completion will heavily depend on the funding available for the project. As announced on 10 December 2009 a sale and re-purchase agreement has been entered into by the property developer and re-purchaser to provide short-term financing to assist in the completion of the Zhongshan project.
Technologies, Solutions and Products
The Board believes that the Group will be among the pioneers in providing the most effective solutions for businesses involved in airport, rail and traffic surveillance industry as technological advances will bring the development of more sophisticated, intelligent and integrated systems.
The embedded DVR, which is sold under the UniVision brand, has been used in several projects in Hong Kong. The newly developed Video Amplifier with an on-screen display function has also been used in one of our projects. We are working on video analysis algorithms as well as video management platform which we expect to launch in the coming financial year.
Acquisitions and Investments
The Group currently has no acquisitions or investments in the pipeline. However, we are always assessing possible opportunities with a view to making further strategic investments in the markets which we operate in.
Prospects
While we are focusing on various maintenance projects and the market for our hybrid IP system, we will also be assessing and developing new technologies and solutions to cope with future opportunities.
The E&M business in the PRC is still one of our growth target markets. We have a shopping mall project in Zhongshan, the PRC, which is in the final stage of completion. Also, another resort project in Huangshan in the PRC has been started.
On behalf of the Board, I would like to thank our customers, suppliers and shareholders for their continued support of UniVision. I would also like to acknowledge the hard work of the management and all the staff for their contribution and dedication to the Group.
MR. STEPHEN SIN MO KOO
EXECUTIVE CHAIRMAN
23 December 2009
| Consolidated Income Statement (Unaudited) | ||||||||||||
| For the six months ended 30 September 2009 | ||||||||||||
| For the six months ended 30 September | ||||||||||||
| 2009 | 2008 | 2009 | 2008 | |||||||||
| HK$000 | HK$000 | ￡'000 | ￡'000 | |||||||||
| Revenue | 44,408 | 64,473 | 3,628 | 4,276 | ||||||||
| Cost of sales | (26,589) | (41,205) | (2,172) | (2,733) | ||||||||
| Gross profit | 17,819 | 23,268 | 1,456 | 1,543 | ||||||||
| Other income | 145 | 1,459 | 12 | 97 | ||||||||
| Selling and distribution expenses | (577) | (564) | (47) | (37) | ||||||||
| Administrative expenses | (10,585) | (12,947) | (865) | (859) | ||||||||
| Profit from operations | 6,802 | 11,216 | 556 | 744 | ||||||||
| Finance costs | (3,852) | (5,850) | (315) | (388) | ||||||||
| Profit before income tax | 2,950 | 5,366 | 241 | 356 | ||||||||
| Income tax expense | (484) | (1,491) | (39) | (99) | ||||||||
| Profit for the period | 2,466 | 3,875 | 202 | 257 | ||||||||
| Profit attributable to: | ||||||||||||
| Equity holders of the parent | 2,807 | 3,802 | 230 | 252 | ||||||||
| Minority interest | (341) | 73 | (28) | 5 | ||||||||
| 2,466 | 3,875 | 202 | 257 | |||||||||
| Earnings per ordinary share | HK$ | HK$ | Pence | Pence | ||||||||
| Basic | 0.007 | 0.010 | 0.060 | 0.066 | ||||||||
| Diluted | N/A | N/A | N/A | N/A | ||||||||
| Consolidated Balance Sheet (Unaudited) | ||||
| As at 30 September 2009 | ||||
| As at 30 September | ||||
| 2009 | 2008 | 2009 | 2008 | |
| HK$000 | HK$000 | ￡'000 | ￡'000 | |
| ASSETS | ||||
| Non-current assets | ||||
| Plant and equipment | 3,141 | 5,167 | 254 | 369 |
| Goodwill | 10,125 | 14,284 | 693 | 1,021 |
| Total non-current assets | 13,266 | 19,451 | 947 | 1,390 |
| Current assets | ||||
| Inventories | 10,857 | 17,620 | 877 | 1,259 |
| Amounts due from construction contract customers | 152,959 | 143,106 | 12,355 | 10,224 |
| Trade receivables | 24,614 | 24,275 | 1,988 | 1,734 |
| Deposits, prepayments and other receivables | 32,552 | 30,469 | 2,630 | 2,177 |
| Tax recoverable | 273 | 257 | 22 | 18 |
| Cash and cash equivalents | 5,601 | 6,274 | 452 | 448 |
| Total current assets | 226,856 | 222,001 | 18,324 | 15,860 |
| Total assets | 240,122 | 241,452 | 19,271 | 17,250 |
| Consolidated Balance Sheet (Unaudited) (Continued) | ||||
| As at 30 September 2009 | ||||
| As at 30 September | ||||
| 2009 | 2008 | 2009 | 2008 | |
| HK$000 | HK$000 | ￡'000 | ￡'000 | |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | ||||
| Amounts due to construction contract customers | 11,095 | 15,417 | 896 | 1,101 |
| Bank loans | 11,764 | 32,097 | 951 | 2,293 |
| Loan from a related company | 46,800 | 39,000 | 3,780 | 2,786 |
| Trade and other payables | 49,038 | 28,800 | 3,960 | 2,057 |
| Tax payable | 13,976 | 9,327 | 1,129 | 667 |
| Obligation under finance lease | 47 | 47 | 4 | 4 |
| Total current liabilities | 132,720 | 124,688 | 10,720 | 8,908 |
| Non-current liabilities | ||||
| Obligation under finance lease | 83 | 130 | 7 | 9 |
| Total liabilities | 132,803 | 124,818 | 10,727 | 8,917 |
| Capital and reserves | ||||
| Share capital | 23,980 | 23,980 | 1,698 | 1,698 |
| Share premium | 31,054 | 31,054 | 2,193 | 2,193 |
| Special capital reserve | 4,188 | 4,188 | 299 | 299 |
| Retained earnings | 43,562 | 52,013 | 2,845 | 3,422 |
| Exchange reserve | 2,223 | 3,062 | 1,322 | 554 |
| 105,007 | 114,297 | 8,357 | 8,166 | |
| Minority interest | 2,312 | 2,337 | 187 | 167 |
| Total shareholders' equity | 107,319 | 116,634 | 8,544 | 8,333 |
| Total liabilities and equity | 240,122 | 241,452 | 19,271 | 17,250 |
| Consolidated Statement of Changes in Equity (Unaudited) | |||||||||||
| For the six months ended 30 September 2009 | |||||||||||
| Special capital | Special capital | ||||||||||
| Sharecapital | Sharepremium | Retainedearnings | reserve"A" | reserve "B" | Exchangereserve | Sub-total | Minorityinterest | Total equity | |||
| ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | |||
| Balance at 1 April 2008 | 1,698 | 2,193 | 3,170 | 156 | 143 | (223) | 7,137 | 154 | 7,291 | ||
| Net profit for the six months ended 30 September 2008 | - | - | 252 | - | - | - | 252 | 5 | 257 | ||
| Effect of translation | - | - | - | - | - | 777 | 777 | 8 | 785 | ||
| Balance at 30 September 2008 | 1,698 | 2,193 | 3,422 | 156 | 143 | 554 | 8,166 | 167 | 8,333 | ||
| Net loss for the six months ended 31 March 2009 | - | - | (807) | - | - | - | (807) | 24 | (783) | ||
| Effect of translation | - | - | - | - | - | 1,619 | 1,619 | 41 | 1,660 | ||
| Balance at 31 March 2009 | 1,698 | 2,193 | 2,615 | 156 | 143 | 2,173 | 8,978 | 232 | 9,210 | ||
| Net profit for the six months ended 30 September 2009 | - | - | 230 | - | - | - | 230 | (28) | 202 | ||
| Effect of translation | - | - | - | - | - | (851) | (851) | (17) | (868) | ||
| Balance at 30 September 2009 | 1,698 | 2,193 | 2,845 | 156 | 143 | 1,322 | 8,357 | 187 | 8,544 | ||
| Consolidated Statement of Changes in Equity (Unaudited) | |||||||||||
| For the six months ended 30 September 2009 | |||||||||||
| Special capital | Special capital | ||||||||||
| Sharecapital | Sharepremium | Retainedearnings | reserve "A" | reserve "B" | Exchangereserve | Sub-total | Minorityinterest | Total equity | |||
| HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |||
| Balance at 1 April 2008 | 23,980 | 31,054 | 48,211 | 2,117 | 2,071 | 2,634 | 110,067 | 2,401 | 112,468 | ||
| Net profit for the six months ended 30 September 2008 | - | - | 3,802 | - | - | - | 3,802 | 73 | 3,875 | ||
| Effect of translation | - | - | - | - | - | 428 | 428 | (137) | 291 | ||
| Balance at 30 September 2008 | 23,980 | 31,054 | 52,013 | 2,117 | 2,071 | 3,062 | 114,297 | 2,337 | 116,634 | ||
| Net loss for the six months ended 31 March 2009 | - | - | (11,258) | - | - | - | (11,258) | 327 | (10,931) | ||
| Effect of translation | - | - | - | - | - | (1,446) | (1,446) | (99) | (1,545) | ||
| Balance at 31 March 2009 | 23,980 | 31,054 | 40,755 | 2,117 | 2,071 | 1,616 | 101,593 | 2,565 | 104,158 | ||
| Net profit for the six months ended 30 September 2009 | - | - | 2,807 | - | - | - | 2,807 | (341) | 2,466 | ||
| Effect of translation | - | - | - | - | - | 607 | 607 | 88 | 695 | ||
| Balance at 30 September 2009 | 23,980 | 31,054 | 43,562 | 2,117 | 2,071 | 2,223 | 105,007 | 2,312 | 107,319 | ||
| Consolidated Cash Flow Statement (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the six months ended 30 September 2009
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| GBP Rate :14.51 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the Interim financial statements for the six months ended 30 September 2009
1. Basis of preparation
The unaudited interim financial statements for the six months ended 30 September 2009 have been prepared in accordance with International Financial Reporting Standards ("IFRSs") using the policies consistent with those applied to the annual financial statements for the year ended 31 March 2009. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2008, does not constitute the statutory accounts of the Company.
2. Earnings per share
The calculation of basic earnings per ordinary share is based on the profit attributable to equity holders of the Group for the six months ended 30 September 2009 of HK$2.8m (H1 2008: HK$3.8m), and the weighted average of 383,677,323 (H1 2008: 383,677,323) ordinary shares in issue during the period.
There were no potential dilutive instruments at either financial period end.
3. Post balance sheet event
During the month of November 2009 the Group's wholly owned subsidiary, Leader Smart Engineering (Shanghai) Limited ("Leader Smart") entered into a sale and re-purchase agreement as the guarantor between Zhongshan Fu Li Wa Property Development Limited (the "Property Developer") and Zhongshan Jun Yue Property Development Limited (the "Re-Purchaser"), (the "Agreement"). The Agreement is for the Re-Purchaser to acquire five construction contracts for the ownership of certain parts of the premises within the Zhongshan Project, for a total consideration of RMB 40 million (GBP 3.6 million). The Board of UniVision expects that these funds will allow the Property Developer to bring the Zhongshan Project to completion in an expected timeframe of four months.
Leader Smart has been the main contractor responsible for interior design and installation for the Zhongshan Project. It is carrying out construction contracts on the Zhongshan Project worth GBP 11.4 million. The Board of Univision expect these contracts will be settled either in cash from the proceeds of the sale of the shopping mall once completed or through the provision of interest on property rights from the Property Developer on completion of the Zhongshan Project.
The Re-Purchaser is a third party finance provider and is purchasing the construction contracts for the ownership of certain portions of the premises within the Zhongshan Project. The Agreement is repayable 5 months from the delivery of the contracts. The first contract, signed on 30 November 2009, is valued at RMB 29.5 million (GBP 2.6 million).
4. Interim report
Copies of the interim report will be available for inspection at the registered office of the Company, 8/F Lever Tech Centre, 69-71 King Yip Street, Kwan Tong, Hong Kong and available on the Company's website (www.uvel.com).