Last checked at 11 Dec 2015 11:03
11 December 2015
UniVision Engineering Limited
("UniVision" or the "Group")
Interim Results
For the Six Months Ended 30 September 2015
UniVision, 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, is pleased to announce its unaudited interim results for the six months ended 30 September 2015.
Highlights:
· Profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m);
· Revenue decreased by 16% to HK$34m (H1 2014 HK$41m).
Mr. Stephen Sin Mo KOO, Executive Chairman, added:
"Our Company has a good track record and high market recognition in the surveillance business. Though the revenue decreased in this period mainly due to increasing competition and the delay of major government infrastructure projects, the anticipated extension of MTR railway lines will provide the business opportunity for growth in the coming years."
For further information visit www.uvel.com or contact:
UniVision Engineering Limited Tel: +852 2389 3256
Stephen Koo, Executive Chairman www.uvel.com
Chun Pan Wong, Chief Executive Officer
Danny Kwok Fai Yip, Finance Director
Nicholas Lyth, Non-Executive Director Tel: +44 (0) 7769 906686
ZAI Corporate Finance Limited
(Nominated Adviser and Broker) Tel: +44 (0)20 7060 2220
Richard Morrison /Ivy Wang www.zaicf.com
Chairman's Statement
Introduction
The Group's turnover has decreased by 16% and gross margin percentage has decreased to 28% (H1 2014: 32%) in the six months' reporting period due to increasing competition and the delay of major government infrastructure projects. Nevertheless, the Board expects that the business will improve as several proposed major infrastructure projects are expected in the coming years.
The Directors remain confident of the future of UniVision and are cautiously optimistic about the Group's prospects.
The Company has paid a final dividend to the shareholders for the last three financial years. The Board intends to maintain the dividend policy in the coming years.
Financial Review
In the six month period revenues for the Group decreased by 16% to HK$34m (H1 2014: HK$41m). The decrease of HK$7m in the revenue was mainly due to a drop of 27% in the Group's maintenance construction business. Changes to the scope in the service provided in the new maintenance contract to MTR Corporation Limited and lower sub-contract income received for its coming major CCTV replacement project contributed to the fall in revenues. The reduction of expenditure budget by local customers for improving and replacement of their surveillance systems also led to the decrease in job orders in the Taiwan subsidiary.
The Group's construction business is comparatively stable recording a 3% drop in revenue. The Hong Kong business recorded 8.5% growth mainly due to projects relating to the MTR railway lines and depot. Project delays of the Hong Kong-Zhuhai-Macao Bridge lead to the deferred contract income and increased construction costs. Nevertheless, the Group expects to receive compensation for the delay from the customer. The Group's Taiwan subsidiary recorded 15% fall in revenue in its construction business.
Group gross profit margin has decreased to 28% (2014: 32%). Gross profit margin in the Hong Kong construction business slightly improved from 34% to 36%, partly compensating for a lower gross profit margin of 12% in Group's maintenance business for the period due to keen market competition, initial purchase cost for installation of equipment and increased cost for changing parts for systems. The gross profit margin in product sales remains stable at 29%.
Loss before interest and tax during the period at HK$0.58m (H1 2014: profit HK$2.4m), whilst the Group recorded a profit attributable to the equity holders of HK$0.4m (H1 2014: HK$3m). The Group's Hong Kong subsidiary was profitable even in the competitive environment. The Group's Taiwanese subsidiary which UniVision owns a 52.25% interest, recorded an operating loss during the six months ended 30 September 2015. It was required to pay one-off liquidated damages TWD4.8m (approx. HKD1.2m) to a local customer during the period. The Group is implementing various effective measures to deal with the effect of decrease in revenue.
The Taiwan subsidiary declared a dividend of TWD1.76m (HK$0.43m) during the period. The dividend will be paid to the holding company after deducting the withholding tax.
The Comparative figures in the Financial Statements in 2014 included the Leader Smart Group which has been spun off in 31 March, 2015.
During the period under review, the relative weak in HK$ against GBP has led to 2.26% depreciation in the GBP reporting amount in the Consolidated Statement of Financial Position. All figures in GBP in the Statement need to be adjusted for comparative purposes. The financial data is also presented in HK$ to provide a comparison with the comparative figures in 2014 that were unaffected by exchange rate fluctuations.
Business Review
Market
Univision will commit resources to accessing and developing new technologies and solutions to cope with the future opportunities in High Definition CCTV System technology
The increase in concern over security and safety, and also the demand for high-quality images are two contributing factors for the growth of the CCTV market. The Board anticipates demand for Security and Surveillance Systems from local government infrastructure projects and the commercial sector will increase in coming years.
Business
During the period, the Hong Kong Company has participated in the Pre-Qualification process for the CCTV Replacement project for Hong Kong MTR. The project is expected to replace about 6,500 CCTV camera from analogue-based to IP-based. Since we are the CCTV System maintainer for MTR, we are in a good position to bid for this project.
To support the Pre-Qualification, the Company is negotiating partnership arrangements with certain PRC real estate groups. In order to facilitate any relationship with PRC companies and due to the volume of work which would result if the Company won the tender, UniVision is undertaking a strategic review of its interest in T-Com, its Taiwan subsidiary, and may look to dispose or distribute its shares in T-Com to its shareholders.
On the other hand, the Company observed that new players are coming to bid for the projects which we have been in good position to obtain. Increased competition leads to reduced income and so the Company is explore other market segments to compensate for this loss and strengthen the business growth.
Prospects
The Company will actively tender for new construction contracts while maintains its stake in the maintenance sector of Security & Surveillance market. As the subsequent completion of some major infrastructure projects and extension of railway lines, the Board is optimistic on the business growth in the coming years.
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
11 December 2015
UniVision Engineering Limited Consolidated Statements of Comprehensive Income (Unaudited) |
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For the six months ended 30 September 2015
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For the six months ended 30 September |
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2015 | 2014 | 2015 | 2014 |
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HK$000 | HK$000 | ￡'000 | ￡'000 |
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Revenue | 34,444 | 40,811 | 2,895 | 3,148 |
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Cost of sales | (24,721) | (27,907) |
(2,078) | (2,152) |
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Gross profit | 9,723 | 12,904 | 817 | 996 |
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Other income | 247 | 20 | 21 | 1 |
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Other gains and (loss) | (12) | 12 | (1) | 1 |
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Selling and distribution expenses | (777) | (816) | (65) | (63) |
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Administrative expenses | (9,552) | (9,517) | (803) | (734) |
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Finance costs | (212) | (154) | (18) | (12) |
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(Loss)/Profit before income tax | (583) | 2,449 | (49) | 189 |
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Income tax expense | (0) | (0) | (0) | (0) |
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(Loss)/Profit for the period | (583) | 2,449 | (49) | 189 |
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Other comprehensive (loss) /income: |
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Exchange differences arising on translation of foreign operations | (482) | 1,215 | (166) | 367 |
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Total comprehensive (loss) /income for the period | (1,065) | 3,664 | (215) | 556 |
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Profit/ (loss) attributable to: | ||||||||||||||||||
Equity holders of the company | 449 | 3,029 | 38 | 233 |
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Non-controlling interests | (1,032) | (580) | (87) | (44) |
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(583) | 2,449 | (49) | 189 |
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Total comprehensive income / (loss) attributable to: | ||||||||||||||||||
Equity holders of the company | 162 | 4,235 | (102) | 594 |
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Non-controlling interests | (1,227) | (571) | (113) | (38) |
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(1,065) | 3,664 | (215) | 556 |
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Profit per share | HK Cents | HK Cents | Pence | Pence |
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Basic | 0.1173 | 0.7895 | 0.0099 | 0.0609 |
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Diluted | N/A | N/A | N/A | N/A |
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All revenues are from continuing operations.
Consolidated Statement of Financial Position (Unaudited) | ||||||
As at 30 September 2015 | ||||||
As at 30 September | ||||||
2015 | 2014 | 2015 | 2014 | |||
HK$000 | HK$000 | ￡'000 | ￡'000 | |||
ASSETS | ||||||
Non-current assets | ||||||
Plant and equipment | 708 | 469 | 60 | 37 | ||
Goodwill | 399 | 399 | 26 | 26 | ||
Amount due from customers for contract-in-progress |
34,152 |
17,285 |
2,908 |
1,371 | ||
Total non-current assets | 35,259 | 18,153 | 2,994 | 1,434 | ||
Current assets | ||||||
Inventories | 12,770 | 13,092 | 1,088 | 1,039 | ||
Trade receivables | 9,517 | 15,126 | 810 | 1,200 | ||
Amount due from customers for contract-in-progress | 21,697 | 168,239 | 1,847 | 13,347 | ||
Deposits, prepayments and other receivables | 17,825 | 17,483 | 1,517 | 1,388 | ||
Cash and bank balances | 10,129 | 4,168 | 862 | 330 | ||
Total current assets | 71,938 | 218,108 | 6,124 | 17,304 | ||
Total assets | 107,197 | 236,261 | 9,118 | 18,738 | ||
Consolidated Statement of Financial Position (Unaudited) (Continued) | ||||||
As at 30 September 2015 | ||||||
As at 30 September | ||||||
2015 | 2014 | 2015 | 2014 | |||
HK$000 | HK$000 | ￡'000 | ￡'000 | |||
LIABILITIES AND EQUITY | ||||||
Current liabilities | ||||||
Trade and other payables | 19,587 | 53,125 | 1,667 | 4,215 | ||
Amounts due to customers for contract-in-progress |
11,773 | 8,068 | 1,003 | 640 | ||
Current tax liability | 373 | 15,706 | 32 | 1,246 | ||
Interest-bearing borrowings | 13,288 | 9,394 | 1,131 | 745 | ||
Financial guarantee liabilities |
- |
3,950 | - |
313 | ||
Obligation under finance lease | 52 | 88 | 4 | 7 | ||
Total current liabilities | 45,073 | 90,331 | 3,837 | 7,166 | ||
Non-current liabilities | ||||||
Obligation under finance lease | - | 52 | - | 4 | ||
Total liabilities | 45,073 | 90,383 | 3,837 | 7,170 | ||
Equity | ||||||
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 | ||
Statutory surplus reserve | 221 | 93 | 18 | 8 | ||
Retained earnings | (278) | 69,835 | (22) | 5,069 | ||
Translation reserve | (115) | 13,344 | 833 | 2,033 | ||
59,050 | 142,494 | 5,019 | 11,300 | |||
Non-controlling interest | 3,074 | 3,384 | 262 | 268 | ||
Total equity | 62,124 | 145,878 | 5,281 | 11,568 | ||
Total liabilities and equity | 107,197 | 236,261 | 9,118 | 18,738 | ||
Consolidated Statement of Changes in Equity
(Unaudited) in ￡'000
Special capital | Special capital | Statutory | Non- controlling | |||||||||||||||||||
Share capital | Share premium | Retained earnings | Reserve "A" | reserve "B" | Translation reserve | Surplus reserve | Sub-total | interest | Total equity | |||||||||||||
￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 | ￡'000 |
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Balance at 1 April 2014 | 1,698 | 2,193 | 4,928 | 156 | 143 | 1,670 | 8 | 10,796 | 333 | 11,130 |
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Profit for the year | - | - | 60 | - | - | - | - | 60 | 52 | 112 |
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Exchange difference arising on translation of foreign operations | 18 | 18 | 33 | 51 |
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Transfer to statuary surplus reserves | (7) | 7 |
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Total comprehensive income | - | - | 53 | - | - | 18 | 7 | 78 | 85 | 163 |
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Dividend paid | (104) | (104) | (104) |
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Demerger by Dividend in specie | (791) | (791) | (791) |
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Effect on deconsolidation | (4,015) | (722) | 7 | (4,731) | (4,731) |
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Dividend distributed to non-controlling interest by a subsidiary | (26) | (26) |
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Balance at 31 March 2015 | 1,698 | 2,193 | 71 | 156 | 143 | 966 | 22 | 5,248 | 392 | 5,641 |
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Profit/(loss) for the six months ended 30 September 2015 | - | 38 | - | - | - | - | 38 | (87) | (49) |
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Transfer to statutory surplus Reserves | (4) | 4 |
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Exchange difference arising on translation of foreign operations | - | - | - | - | (140) | (140) | (26) | (167) |
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Total comprehensive income | 34 | (140) | 4 | (102) | (113) | (216) |
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Dividend declared | (127) | (127) | - | (127) |
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Reversal of translated effect on demerger | 7 | (7) | - |
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Dividend distributed to non-controlling interest by a subsidiary | (17) | (17) |
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Balance at 30 September 2015 | 1,698 | 2,193 | (22) | 156 | 143 | 833 | 19 | 5,019 | 262 | 5,281 |
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Consolidated Statement of Changes in Equity
(Unaudited) in HK$'000
Special capital | Special capital | Statutory | Non- controlling | |||||||||
Share capital | Share premium | Retained earnings | reserve "A" | reserve "B" | Translation reserve | Surplus reserve | Sub-total | interest | Total equity |
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HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 |
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Balance at 1 April 2014 | 23,980 | 31,054 | 67,995 | 2,117 | 2,071 | 12,137 | 93 | 139,448 | 4,302 | 143,750 |
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Profit for the year | - | - | 749 | - | - | - | - | 749 | 657 | 1,407 |
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Transfer to statutory surplus reserves | - | - | (80) | - | - | - | 80 | - | - | - |
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Exchange difference arising on translation of foreign operations | - | - | - | - | - | 229 | - | 229 | (110) | 119 |
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Total comprehensive income | - | - | 669 | - | - | 229 | 80 | 978 | 546 | 1,526 |
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Dividend paid | (1,189) | (1,189) | (1,189) |
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Demerger by Dividend in specie | - | (9,089) | - | - | (9,089) | - | (9,089) |
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Effect on demerger | - | (57,569) | - | (12,272) | 78 | (69,764) | - | (69,764) |
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Dividend distributed to non-controlling | - | - | - | (342) | (342) |
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Balance at 31 March 2015 | 23,980 | 31,054 | 817 | 2,117 | 2,071 | 94 | 251 | 60,384 | 4,507 | 64,892 |
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Profit/(loss) for the six months ended 30 September 2015 | - | - | 449 | - | - | - | - | 449 | (1,032) | (583) |
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Transfer to statutory surplus reserves | - | - | (48) | - | - | 48 | - | - |
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Exchange difference arising on translation of foreign operations | - | - | - | - | - | (287) | - | (287) | (194) | (482) |
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Total comprehensive income | - | - | 401 | - | - | (287) | 48 | 162 | (1,227) | (1,065) |
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Dividend declared | - | - | (1,496) | - | - | - | (1,496) | - | (1,496) |
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Reversal of translated effect on demerger | - | - | - | - | - | 78 | (78) | - | - |
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Dividend distributed to non-controlling interest by a subsidiary | - | - | - | - | - | - | - | (207) | (207) |
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Balance at 30 September 2015 | 23,980 | 31,054 | (278) | 2,1177 | 2,071 | (115) | 221 | 59,050 | 3,074 | 62,124 |
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Consolidated Statement of Cash Flows (Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
For the six months ended 30 September 2015
| GBP Rate :14.51 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to the Interim financial statements for the six months ended 30 September 2015
1. Basis of preparation
The unaudited interim financial statements for the six months ended 30 September 2015 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 2015. The interim financial statements, together with the comparative information contained in this report for the six months ended 30 September 2014, does not constitute the statutory accounts of the Company.
2. Profit per share
The calculation of basic profit per ordinary share is based on the profit attributable to equity holders of the Group for the six months ended 30 September 2015 of HK$0.4m (H1 2014: HK$3m), and the weighted average of 383,677,323 (H1 2014: 383,677,323) ordinary shares in issue during the period.
There were no potential dilutive instruments at either financial period end.
3. Interim report
Copies of the interim report will be available for inspection at the registered office of the Company, Unit 01A, 2/F., Sunbeam Centre, 27 Shing Yip Street, Kwun Tong, Hong Kong and available on the Company's website (www.uvel.com) in accordance with rule 26 of the AIM Rules for Companies.