TIDMUNG
RNS Number : 7674R
Universe Group PLC
26 September 2017
26 September 2017
AIM: UNG.L
Universe Group plc
("Universe", the "Company" or the "Group")
INTERIM RESULTS
FOR THE SIX MONTHSED 30 JUNE 2017
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 2017.
Highlights
-- Revenues GBP8.70 million (H1 2016: GBP9.05 million)
-- Gross profit margin improved from 30.8% to 31.8%
-- Adjusted EBITDA GBP0.96 million (H1 2016: GBP1.35 million)
-- Operating profit GBP0.22 million (H1 2016: GBP0.49 million)
-- Earnings per share 0.11p (H1 2016: 0.20p)
-- Net cash inflow from operations increased by 52% to GBP1.32
million (H1 2016: GBP0.87 million)
-- Period of continued heavy research and development in our next generation EPOS product suite
-- Administrative expenses increased by 11% as a result of
further investment in our EPOS product management team and the
enlarging of our sales teams ahead of major next generation product
launches
-- Solution implementations continuing although some still in
extended pilot to perfect functionalities working in close
partnership with clients
Robert Goddard, Chairman of Universe, commented:
"We have made good progress in further developing our next
generation of EPOS products, with live solution implementations
underway and others moving through extended pilot phases to fully
meet customer expectations. This is set to continue in the second
half of the year.
The financial results for the full year are, as in past years,
second half weighted and this year's result is more than usually
dependent on a small number of high value projects. Delays to these
would mean that the company performs materially below current
market expectations in the current financial year.
Our product developments and the positive response these are
receiving from existing and new customers give us confidence in the
long-term prospects for the Group."
For further information:
Universe Group plc
Robert Goddard, Chairman
Jeremy Lewis, Chief Executive
Officer
Daryl Paton, Chief Financial
Officer +44 2380 689 510
finnCap
Stuart Andrews (corporate
finance)
Richard Chambers (corporate
broking) +44 2072 200 500
IFC Advisory +44 207 652 9789
Tim Metcalfe
Heather Armstrong
CHAIRMAN'S STATEMENT
Introduction
We report below the Company's unaudited results for the six
months ended 30 June 2017.
The interim numbers are marginally down as compared to the
comparative figures for 2016. However, as in the prior year,
results for the full year will be heavily weighted towards the
second half. In particular, continuing delays in certain planned
customer deployments are now expected to continue into the second
half. Further, the precise timing of securing a small number of
high-value new projects remains uncertain, albeit the Company
remains confident of ultimately securing these contracts. If these
projects are not deployed or secured, respectively, on a timely
basis then the Directors anticipate that the Company will report
results materially below current market expectations.
During the period, we have continued to invest in our next
generation point-of-sale, back office and head office software
products (EPOS), which we fully expect will provide a solid
platform from which to drive future growth in both the fuel and
convenience store market places.
Financial Results
Revenues for the first half were GBP8.70 million (H1 2016:
GBP9.05 million), producing a gross profit of GBP2.77 million (H1
2016: GBP2.79 million).
The dip in revenues due to delayed customer deployments is
reflected in the decline in revenues from hardware and software
licences to GBP1.06 million (H1 2016: GBP1.81 million). This drop
has been mitigated in part by a strong performance from our
services and installation team where revenues are up 14% to GBP3.89
million (H1 2016 GBP3.40 million).
Whilst revenues dipped, we maintained gross profit with a small
improvement in gross margin to 31.8% (H1 2016: 30.8%) due to a
change in sales mix from hardware and software licences to higher
margin service and installations.
Administrative expenses were up in the period to GBP2.54 million
(H1 2016: GBP2.30 million), but in line with the second half of
2016. This was largely due to increased spending on sales and
marketing and product management resource in the second half of
2016 as we seek to capitalise on the investment in our new EPOS
product suite.
Earnings before interest, taxes, share-based payments,
depreciation and amortisation ('adjusted EBITDA') was GBP0.96
million (H1 2016: GBP1.35 million). Operating profit reduced to
GBP0.22 million (H1 2016: GBP0.49 million).
Net finance expense was GBP0.05 million (H1 2016: GBP0.01
million). This is up on the prior period which benefited from a
GBP0.05 million credit arising from the release of an
over-provision of contingent consideration payable as a result of
the acquisition of Indigo Retail Holdings Limited in 2013.
The underlying tax charge for the period was GBP0.01 million (H1
2016: GBP0.03 million). However, an adjustment relating to the
prior year of GBP0.09 million resulted in a net credit for the
period of GBP0.08 million. Earnings per share for the period were
0.11 pence (H1 2016: 0.20 pence).
Balance sheet and cash flow
The balance sheet at the end of June remained strong. Net
current assets decreased to GBP4.17 million from GBP4.33 million at
31 December 2016 and non-current liabilities reduced to GBP0.70
million from GBP0.90 million at the year end.
Investment in the core business continued with capitalised
development costs of GBP0.69 million (2016: H1 GBP0.30 million,
2016 H2 GBP0.66 million) which was focused on development of our
next-generation EPOS system.
Capital expenditure in the period was GBP0.26 million (H1 2016:
GBP0.27 million).
Cash flow from operating activities for the half year was
GBP1.32 million (H1 2016: GBP0.87 million) and the cash generated
was largely reinvested into the business as product development,
capital expenditure or debt repayment. Cash balances at 30 June
2017 were GBP3.41 million compared with GBP3.41 million at 31
December 2016.
Products
Our new EPOS product suite is being well received. We continue
to work closely with our clients to add functionality to the core
undertakings and are confident that these will soon gain wider
market acceptance.
Outlook
The first six months saw steady revenues with improving gross
margins. The balance of the year, and our ability to hit
expectations rests upon the successful completion of a small number
of key, high value, solution implementations and we are fully
focussed on these. However, there can be no certainty that they
will be delivered before the year end. Despite the difficulty in
forecasting these in the short term, we are confident that the
long-term prospects for the Group look encouraging.
Robert Goddard
Chairman
26 September 2017
Universe Group plc
Condensed Statement of Total Comprehensive
Income (unaudited)
for the 6 months ended
30 June 2017
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
GBP'000 GBP'000 GBP'000
Continuing operations
Revenue 8,700 9,051 19,712
Cost of sales (5,935) (6,261) (12,843)
--------------------- ------------------ -----------------
Gross profit 2,765 2,790 6,869
Administrative expenses (2,545) (2,296) (4,827)
--------------------- ------------------ -----------------
Operating profit 220 494 2,042
Net finance expense
(see note 10) (48) (13) (32)
--------------------- ------------------ -----------------
Profit before taxation 172 481 2,010
Taxation 80 (26) (175)
--------------------- ------------------ -----------------
Profit for the period
from continuing operations 252 455 1,835
--------------------- ------------------ -----------------
Earnings per share (see Pence Pence Pence
note 8)
Basic EPS 0.11 0.20 0.79
Diluted EPS 0.10 0.19 0.76
--------------------- ------------------ -----------------
Condensed Consolidated Statement of Changes in
Equity (unaudited)
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
GBP'000 GBP'000 GBP'000
At start of period 22,494 20,540 20,540
Total comprehensive
income for the period 252 455 1,835
Share issue net of expenses - - 3
Share based payments 18 42 116
--------------------- ------------------ -----------------
At end of period 22,764 21,037 22,494
--------------------- ------------------ -----------------
Universe Group plc
Condensed Consolidated Balance Sheet (unaudited)
as at 30 June 2017
30 June 30 June 31 December
2017 2016 2016
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill and other intangibles 13,924 14,011 13,947
Development costs 3,089 2,360 2,745
Property, plant and
equipment 2,289 2,039 2,384
19,302 18,410 19,076
--------- -------------------- -------------------
Current assets
Inventories 1,340 1,009 1,084
Trade and other receivables 3,800 3,941 5,151
Cash and cash equivalents 3,406 3,408 3,408
8,546 8,358 9,643
--------- -------------------- -------------------
Total assets 27,848 26,768 28,719
--------- -------------------- -------------------
Current liabilities
Trade and other payables (3,819) (3,826) (4,448)
Current tax liabilities - (270) (136)
Borrowings (562) (448) (686)
Contingent consideration - (377) (55)
(4,381) (4,921) (5,325)
Non-current liabilities
Borrowings (411) (528) (608)
Deferred tax (292) (230) (292)
Contingent consideration - (52) -
(703) (810) (900)
Total liabilities (5,084) (5,731) (6,225)
--------- -------------------- -------------------
Net assets 22,764 21,037 22,494
--------- -------------------- -------------------
Equity
Share capital 2,334 2,313 2,316
Capital redemption reserve 4,588 4,588 4,588
Share premium account 13,062 13,062 13,062
Merger reserve 2,269 2,269 2,269
Translation reserve (225) (225) (225)
Profit and loss account 736 (970) 484
Total equity 22,764 21,037 22,494
--------- -------------------- -------------------
Universe Group plc
Condensed Consolidated Cash Flow Statement (unaudited)
for the six months ended
30 June 2017
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2016
2017 2016
GBP'000 GBP'000 GBP'000
Net cash flows from operating activities (see
note 11)
Continuing activities 1,471 957 2,716
Interest paid (48) (49) (102)
Tax (paid)/received (101) (38) (259)
Net cash inflow from
operating activities 1,322 870 2,355
----------- ----------- -------------
Cash flows from investing
activities
Purchase of subsidiary
undertaking (55) (6) (345)
Purchase of property,
plant & equipment (257) (265) (400)
Expenditure on product
development (691) (303) (993)
Net cash outflow from
investing activities (1,003) (574) (1,738)
----------- ----------- -------------
Cash flow from financing
activities
Proceeds from issue
of shares - - 3
Repayment of obligations
under finance leases (321) (268) (592)
Net cash outflow from
financing (321) (268) (589)
----------- ----------- -------------
Increase/(decrease)
in cash and cash equivalents (2) 28 28
Cash and cash equivalents
at beginning of period 3,408 3,380 3,380
Cash and cash equivalents
at end of period 3,406 3,408 3,408
----------- ----------- -------------
Universe Group plc
Notes to Condensed Consolidated financial statements
for six months ended 30 June 2017
1 The interim financial statements, which are
unaudited, have been prepared based on the accounting
policies expected to apply for the financial year
to 31 December 2017 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
2016.
The interim financial statements do not include
all 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 2016 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 based on accounting
policies set out in the Group's statutory accounts
for the year ended 31 December 2016.
5 Turnover analysis
All turnover arises within
the HTEC Solutions business
segment.
Six months Six months Year ended
ended ended 30 31 December
30 June June 2016 2016
2017
GBP'000 GBP'000 GBP'000
Hardware and software
licenses 1,064 1,814 4,657
Service and installations 3,886 3,399 7,218
Data services 1,984 1,947 3,998
Consultancy and license
maintenance 1,766 1,891 3,839
8,700 9,051 19,712
----------- ----------- -------------
6 Operating profit and
adjusted EBITDA
Six months Six months Year ended
ended ended 30 31 December
30 June June 2016 2016
2017
GBP'000 GBP'000 GBP'000
Revenue 8,700 9,051 19,712
Cost of sales (5,935) (6,261) (12,843)
----------- ----------- -------------
Gross profit 2,765 2,790 6,869
Administrative expenses (2,545) (2,296) (4,827)
----------- ----------- -------------
Operating profit 220 494 2,042
Depreciation 352 422 870
Amortisation 370 396 743
Share option charge 18 42 116
Adjusted EBITDA 960 1,354 3,771
----------- ----------- -------------
7 Taxation
Six months Six months Year ended
ended ended 30 31 December
30 June June 2016 2016
2017
GBP'000 GBP'000 GBP'000
Current tax:
Current year charge/(credit) 14 (8) 206
Adjustments to tax charge
in respect of previous
periods (94) - (59)
----------- ----------- -------------
(80) (8) 147
Deferred tax:
Current year - 34 66
Adjustments to tax charge
in respect of previous
periods (38)
----------- ----------- -------------
- 34 28
Total tax (credit)/charge (80) 26 175
----------- ----------- -------------
8 Earnings per share
Earnings per share is calculated by reference
to the results and the weighted average of 231,598,935
shares in issue during the period (H1 2016: 231,286,435,
FY 2016: 231,347,910). Diluted earnings per share
is calculated by reference to the results and
the weighted average of 241,384,108 shares in
issue during the period (H1 2016: 239,890,379,
FY 2016: 241,553,125). The number of shares in
issue at 30 June 2017 was 231,598,935.
9 Segment information
6 months ended 30 June
2017
Solutions Corporate Total
GBP'000 GBP'000 GBP'000
Revenue 8,700 - 8,700
---------- -------------------- --------------------
Gross profit 2,765 - 2,765
Administrative expenses (2,374) (171) (2,545)
---------- -------------------- --------------------
Operating profit 391 (171) 220
Finance costs (48)
Taxation 80
Profit for the period
from continuing activities 252
--------------------
6 months ended 30 June
2016
Solutions Corporate Total
GBP'000 GBP'000 GBP'000
Revenue 9,051 - 9,051
---------- -------------------- --------------------
Gross profit 2,790 - 2,790
Administrative expenses (2,113) (183) (2,296)
---------- -------------------- --------------------
Operating profit 677 (183) 494
Finance costs (13)
Taxation (26)
Profit for the period
from continuing activities 455
--------------------
Year ended 31 December
2016
Solutions Corporate Total
GBP'000 GBP'000 GBP'000
Revenue 19,712 - 19,712
---------- -------------------- --------------------
Gross profit 6,869 - 6,869
Administrative expenses (4,203) (624) (4,827)
---------- -------------------- --------------------
Operating profit 2,666 (624) 2,042
Net finance expense (32)
Taxation (175)
Profit for the period
from continuing activities 1,835
--------------------
10 Net finance expense
Six months Six months Year ended
ended ended 30 31 December
30 June June 2016 2016
2017
GBP'000 GBP'000 GBP'000
Release of provision
for contingent consideration - 50 85
Interest receivable
on bank deposit 4 9 14
4 59 99
--------------------- --------------------- --------------------
Interest payable on
bank loans and overdrafts (1) (14) (25)
Interest payable on
finance leases (51) (51) (92)
Other interest - (7) (14)
--------------------- --------------------- --------------------
(52) (72) (131)
Net finance expense (48) (13) (32)
--------------------- --------------------- --------------------
11 Cash flows from operations
Six months Six months Year ended
ended ended 30 31 December
30 June June 2016 2016
2017
GBP'000 GBP'000 GBP'000
Continuing operations
Profit before taxation 172 481 2,010
Depreciation and amortisation 722 818 1,613
Share based payments 18 42 116
Interest payable 48 13 32
--------------------- --------------------- --------------------
960 1,354 3,771
Movement in working
capital:
(Increase)/decrease
in inventories (256) (128) (203)
Decrease/(increase)
in receivables 1,396 355 (855)
(Decrease)/increase
in payables (629) (624) 3
Net cash flow from operating
activities 1,471 957 2,716
--------------------- --------------------- --------------------
12 Copies of the interim report will be available
from the Company's head and registered office:
Southampton International Park, George Curl Way,
Southampton, SO18 2RX, and on the Company's website,
www.universeplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGUGPBUPMGRA
(END) Dow Jones Newswires
September 26, 2017 02:00 ET (06:00 GMT)
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