TIDMUNG
RNS Number : 4667A
Universe Group PLC
29 September 2015
AIM: UNG.L
UNIVERSE GROUP plc
("Universe", the "Company" or the "Group")
INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2015
Universe Group plc (AIM:UNG.L), a leading developer and supplier
of point of sale, payment and on-line loyalty systems, is pleased
to announce its unaudited interim results for the six months to 30
June 2015.
Highlights
Financial
-- Revenues increased to GBP8.83 million (2014: GBP8.78 million)
-- Adjusted EBITDA increased by 14% to GBP1.24 million (2014: GBP1.08 million)
-- Operating profit increased by 18% to GBP0.38 million (2014: GBP0.32 million)
-- Profit before tax increased by 32% to GBP0.30 million (2014: GBP0.23 million)
-- Earnings per share increased by 22% to 0.11p (2014: 0.09p)
-- Net cash inflow from operations up 29% to GBP0.93 million (2014: GBP0.73 million)
Operational
-- Continuing development of product offering
-- Acquisition of Spedinorcon in April - in line with strategy
to develop presence in convenience store sector
-- Two Board appointments (in May and September)
-- Board remains positive about prospects for the full year
Robert Goddard, Chairman of Universe, commented:
"I am pleased by the progress Universe continues to make both
corporately and operationally. The business has secured a good
level of customer orders in the first half for delivery in the
second and has also completed the refresh of our new on-line
loyalty platform. The recent launch of our new point-to-point
encryption service for payments also enhances our offering.
The acquisition of Spedinorcon in April increases our presence
in the convenience store sector in line with plans. As we look
forward, we continue to remain positive about Universe's growth
prospects."
For further information:
Universe Group plc
Robert Goddard, Chairman
Jeremy Lewis, Chief Executive
Officer
Bob Smeeton, Chief Financial
Officer +44 2380 689 510
finnCap
Stuart Andrews (corporate finance)
Tony Quirke (corporate broking) +44 2072 200 500
KTZ Communications +44 2031 786 378
Katie Tzouliadis
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report the Company's results for the six months
ended 30 June 2015.
Universe has continued to make encouraging progress, securing a
good level of customer orders in the first half for delivery in the
second. This means that we expect full year results to reflect the
same pattern as last year, with a stronger weighting of revenue and
profits in the second half.
In line with our strategic growth plan, we have continued to
invest in our business. In April, we acquired Spedinorcon Limited
("Spedi"), the retail software developer and supplier, which has
particular expertise in the convenience store market. We were also
pleased to launch a new product, 'Perseus', an innovative card
payment encryption solution. In addition, we have strengthened the
Board with the appointment of Andrew Blazye as a Non-executive
Director in May and more recently, in early September, we were
pleased to welcome Billy Tank as an Executive Director.
The second half has started well and there is a significant
schedule of hardware roll-outs and new customer deployments
currently underway.
Financial Results
Revenue for the six-month period increased to GBP8.83 million
(2014: GBP8.78 million) and gross profit improved by 4% to GBP2.66
million (2014: GBP2.56 million). Gross margin rose by one
percentage point to 30% (2014: 29%).
Administrative expenses increased slightly to GBP2.28 million
(2014: GBP2.24 million). This small increase reflects the net
effect of fees relating to the acquisition of Spedi and the
recruitment of Andrew Blazye, which were largely offset by the cost
savings initiated in the second half of last year.
Operating profit rose to GBP0.38 million (2014: GBP0.32 million)
and earnings per share increased to 0.11p (2014: 0.09p).
The combined effect of these improvements resulted in a rise of
14% in earnings before interest, taxes, share based payments,
depreciation and amortisation ('adjusted EBITDA') to GBP1.24
million (2014: GBP1.08 million).
There was a small decrease in finance costs to GBP0.08 million
(2014: GBP0.10 million) and the net tax charge of GBP0.04 million
was in line with the prior half year.
Balance sheet and cash flow
The balance sheet at the end of June remained strong, following
our successful 2014.
We have continued to invest in the core business, with the
acquisition of Spedi and ongoing R&D. Investment in product
upgrades remains a priority as we develop our next generation of
back-office software, although capitalised development was down in
the first half to GBP0.31 million (2014: GBP0.61 million). The
back-office system development, which is nearing deployment with
new customers, has been an important factor in opening up the
convenience store market.
Capital expenditure increased in the period to GBP0.32 million
(2014: GBP0.10 million) as we made certain improvements at our head
office premises to enhance workflow for our operational and
development teams.
The other significant balance sheet movement has been the
settlement of the final tranche of deferred consideration due to
the former shareholders of Indigo Retail Holdings Limited, acquired
in May 2013. Payments of GBP0.2 million were made and ordinary
shares valued at GBP0.4 million were issued. In July 2015,
performance-based payments to the original vendors totalling
GBP0.08 were made. The final payment of contingent consideration
will be made within the next 12 months.
Reflecting the improved trading performance, cash flow from
operating activities at the half year increased to GBP0.93 million
(2014: GBP0.73 million). Cash balances at 30 June stood at GBP1.97
million, compared with GBP2.06 million at 31 December 2014.
Products
We continue to invest in our core products and made good
progress in the period in further enhancing our offering. We
successfully refreshed our on-line loyalty solution and we
continued with the installation of our new outdoor payment
terminals at a major supermarket chain.
The acquisition of Spedi in April supports our continuing
development in the convenience store market. Spedi currently
supplies systems to more than 1,500 retail stores throughout the
UK, many within the Londis and Costcutter chains, and its suite of
software products complements our existing offerings. The business
has now been fully integrated into the Group.
In August, we announced that 'Perseus', our new point-to-point
encryption ("P2PE") service, has now been fully accredited. This
new solution adds an additional layer of security to card payment
transactions at the point of sale and makes HTEC the first provider
of this type of encryption technology designed to be equally adept
in both the petrol forecourt and traditional retail sectors. We
expect the first live deployment before the year end.
Market Developments
The Group's customers continue to operate in highly competitive
markets. They need to know their customers, record sales
efficiently, re-order and manage their supply lines effectively and
process payments securely. In addition, they must target their
customers with appropriate offers in a timely manner to drive
basket size and footfall. The Group's wide range of products
facilitates all of this.
Outlook
The first six months of this year saw good progress, with the
refreshing of our loyalty products, the integration of Spedi and
the completion of our P2PE service. We confidently expect a busier
second half, reflecting the same trading pattern as last year.
There is good visibility of the projects to be completed in the
second half and, reflecting this, we believe Universe remains on
track to report a satisfactory outcome for the year.
Robert Goddard
Chairman
29 September 2015
Universe Group plc
Condensed Statement of Total Comprehensive Income
(unaudited)
for the 6 months ended 30 June 2015
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 GBP'000
GBP'000 GBP'000
Continuing operations
Revenue 8,827 8,784 20,749
Cost of sales (6,170) (6,224) (14,261)
Gross profit 2,657 2,560 6,488
Administrative expenses (2,276) (2,236) (4,760)
Operating profit 381 324 1,728
Finance (costs)/income (83) (98) 25
Profit before taxation 298 226 1,753
Taxation (43) (28) (345)
----------- -----------
Profit for the period from continuing
operations 255 198 1,408
Earnings per share (see note 7) Pence Pence Pence
Basic EPS 0.11 0.09 0.65
Diluted EPS 0.11 0.08 0.60
Condensed Consolidated Statement of
Changes in Equity (unaudited)
At start of period 18,462 16,524 16,524
Total comprehensive income for the
period 255 198 1,408
Share issue net of expenses 452 424 423
Share based payments 42 42 107
(MORE TO FOLLOW) Dow Jones Newswires
September 29, 2015 02:01 ET (06:01 GMT)
----------- ----------- -------------
At end of period 19,211 17,188 18,462
----------- ----------- -------------
Universe Group plc
Condensed Consolidated Balance Sheet (unaudited)
as at 30 June 2015
30 June 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'000
Fixed assets
Goodwill and other intangibles 16,589 16,281 16,503
Property, plant and equipment 2,342 2,182 2,466
Deferred tax - 58 -
---------- ---------- --------------
18,931 18,521 18,969
---------- ---------- --------------
Current assets
Inventories 2,061 1,237 1,406
Trade and other receivables 4,366 3,908 4,221
Cash and cash equivalents 1,967 747 2,064
---------- ---------- --------------
8,394 5,892 7,691
---------- ---------- --------------
Total assets 27,325 24,413 26,660
---------- ---------- --------------
Current liabilities
Trade and other payables (5,633) (4,784) (5,138)
Corporation tax liabilities (188) (182) (188)
Borrowings (478) (370) (477)
Deferred consideration - (594) (597)
Contingent consideration (155) (100) (103)
(6,454) (6,030) (6,503)
Non-current liabilities
Borrowings (1,123) (1,117) (1,350)
Provisions for liabilities and changes (348) - (258)
Contingent consideration (189) (78) (87)
---------- ---------- --------------
(1,660) (1,195) (1,695)
Total liabilities (8,114) (7,225) (8,198)
---------- ---------- --------------
Net assets 19,211 17,188 18,462
---------- ---------- --------------
Equity
Share capital 2,309 2,203 2,203
Capital redemption reserve 4,588 4,588 4,588
Share premium account 13,062 12,717 12,716
Other reserves 2,269 2,269 2,269
Translation reserve (225) (225) (225)
Profit and loss account (2,792) (4,364) (3,089)
Total equity 19,211 17,188 18,462
---------- ---------- --------------
Universe Group plc
Condensed Consolidated Cash Flow Statement (unaudited)
for the six months ended 30 June 2015
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 GBP'000
GBP'000 GBP'000
Net cash flows from operating activities
(see note 9)
Continuing activities 951 786 3,090
Interest paid (64) (57) (124)
Tax received/(paid) 47 (3) (4)
----------- ----------- -------------
Net cash inflow from operating activities 934 726 2,962
----------- ----------- -------------
Cash flows from investing activities
Purchase of subsidiary undertaking (230) (57) (57)
Purchase of property, plant & equipment (318) (98) (243)
Expenditure on product development (309) (606) (1,146)
Net cash outflow from investing activities (857) (761) (1,446)
----------- ----------- -------------
Cash flow from financing activities
Proceeds from issue of shares 52 24 23
Repayment of obligations under finance
leases (226) (220) (453)
Net cash outflow from financing (174) (196) (430)
----------- ----------- -------------
(Decrease)/increase in cash and cash
equivalents (97) (231) 1,086
Cash and cash equivalents at beginning
of period 2,064 978 978
Cash and cash equivalents at end of
period 1,967 747 2,064
----------- ----------- -------------
Universe Group plc
Notes to Condensed Consolidated financial statements for six
months ended 30 June 2015
1 The interim financial statements, which are unaudited, have
been prepared on the basis of the accounting policies expected to
apply for the financial year to 31 December 2015 and in accordance
with the recognition and measurement principles of International
Financial Reporting Standards (IFRSs) as endorsed by the European
Union. The accounting policies applied in the preparation of these
interim financial statements are consistent with those used in the
financial statements for the year ended 31 December 2014.
The interim financial statements do not include all of the
information required for full annual financial statements and do
not comply with all the disclosures in IAS 34 'Interim Financial
Reporting'. Accordingly, whilst the interim statements have been
prepared in accordance with IFRSs, they cannot be construed as
being in full compliance with IFRSs.
2 The financial information for the year ended 31 December 2014
does not constitute statutory accounts as defined in section 434 of
the Companies Act 2006. 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 498 (2) or (3) of the Companies
Act 2006.
3 The Directors believe the Group is well placed to manage its
business risks successfully. The Group's forecasts and projections,
taking account of reasonably possible changes in trading conditions
show that the Group should be able to operate within the level of
its facilities. After making enquiries the Directors have a
reasonable expectation that the Group will have adequate resources
to continue in operational existence for the foreseeable future
(being a period of at least 12 months from the date of this
report). Accordingly they continue to adopt the going concern basis
in preparing the interim condensed financial statements.
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 2014.
5 Turnover analysis
All turnover arises within the HTEC Solutions business
segment.
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 GBP'000
GBP'000 GBP'000
Sales of hardware and new software
licences 1,564 1,343 4,801
Service and installation revenue 3,418 3,980 8,048
Hosted data service revenue 1,891 1,569 3,409
Software consultancy and license maintenance
revenue 1,954 1,892 4,491
8,827 8,784 20,749
----------- ----------- -------------
6 Operating profit and adjusted EBITDA.
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2014
2015 2014 GBP'000
GBP'000 GBP'000
Revenue 8,827 8,784 20,749
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