TIDMUNG
RNS Number : 2953N
Universe Group PLC
29 September 2021
29 September 2021
AIM: UNG.L
Universe Group plc
("Universe", the "Group" or the "Company")
INTERIM RESULTS FOR THE SIX MONTHSED 30 JUNE 2021
Universe Group plc (AIM: UNG.L), a leading developer and
supplier of retail management solutions, payment and loyalty
systems, is pleased to announce its unaudited interim results for
the six months ended 30 June 2021.
Highlights
-- Revenues up by 19.8% in H1 2021 at GBP11.70 million (H1 2020: GBP9.77
million)
-- Successful extension to payment solutions contract for a substantial
UK grocery customer
-- Successful five-year extension of an existing contract with a major
international oil and gas group for the provision of loyalty services
Europe-wide.
-- Adjusted EBITDA of GBP0.32 million (H1 2020: GBP0.79 million)
-- Operating loss GBP0.96 million (H1 2020: GBP0.65 million)
-- Loss per share 0.39 pence (H1 2020: 0.33 pence)
-- Net cash outflow from operations GBP0.36 million (H1 2020: net inflow
GBP0.10 million)
-- Net debt at 30 June 2021 GBP6.04 million (31 December 2020: GBP4.68
million); reduced to GBP2.30 million shortly after 30 June 2021
-- Current visibility of H2 2021 revenues of GBP10.0 million through
existing recurring and repeatable revenues, augmented by the order
book
Andrew Blazye, Executive Chairman of Universe, commented:
"The first half of 2021 saw continued impacts from the COVID-19
pandemic, including lockdowns in the first quarter. In addition, we
appointed a new senior management team who are finalising the
development of a refocussed strategy. Against this background, I am
delighted that we achieved revenues in excess of the same period in
2020, which was coupled with the renewal of two significant
contracts.
"We were delighted to have finalised our contract with a major
UK grocery customer during the first half and we have now completed
a challenging, but successful roll-out process. I am very grateful
to our customer services and installation teams who showed great
teamwork to complete the project to the satisfaction of all. We are
also pleased to report the re-signing of a contract with a major
international oil and gas company for the provision of loyalty
services. Additionally, our recent launch of the latest version of
our RMS platform, ab-initio, has met with encouraging market
response and bodes well for future revenues.
"With the arrival of a new management team, led by Neil Radley
as CEO and Adrian Wilding as CFO, the business has started to
develop a fresh strategic approach and a real focus on the
business' key strengths. The start of the journey is reflected in a
new approach to our segmental reporting, which indicates our future
focus. These changes have been made to align our efforts
consistently across the business on our three key revenue segments
of Payment Solutions, Enterprise Management Solutions, and Data
(including Loyalty) Solutions.
"Following the revenues recognised of GBP11.7 million in the
first half, there are further revenues of GBP10.0 million currently
visible through existing recurring and repeatable revenue contracts
and the order book to year end. We are very conscious of the need
to fully execute this order book over the rest of the year.
"With a sound balance sheet showing an improving net debt
position and undrawn banking facilities, we remain cautiously
optimistic that we can meet the Board's expectations in 2021 and
see growth in the coming years."
For further information:
Universe Group plc T: +44 2380 689 510
Andrew Blazye, Executive Chairman
Neil Radley, Chief Executive Officer
Adrian Wilding, Chief Financial Officer
finnCap T: +44 2072 200 500
Henrik Persson / Seamus Fricker (Corporate
Finance)
Richard Chambers (Corporate Broking)
IFC Advisory T: +44 2039 346 630
Tim Metcalfe / Florence Chandler
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU No. 596/2014) which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of
this announcement, this inside information is now considered to be
in the public domain.
CHAIRMAN'S STATEMENT
Whilst the first half, and particularly the first quarter
continued to be dominated by the impact of the COVID-19 pandemic
and the third lockdown impacting the Group's ability to close new
business, overall results were supported by recurring revenues and
the successful extensions of an existing contract with a major
UK-based supermarket and an international oil and gas company.
The supermarket contract extension required a major roll-out of
payment solutions over a three-month period, the revenue being
recognised in line with installation milestones.
During the period we welcomed Neil Radley as the Group's new
Chief Executive Officer and Adrian Wilding as the new Chief
Financial Officer, together with a number of other senior
hires.
With the arrival of a new management team, the business has
started to develop a fresh strategic approach and a real focus on
the business' key strengths. The start of the journey is reflected
in a new approach to our segmental reporting, which indicates our
future focus. These changes have been made to align our efforts
consistently across the business on our three key revenue segments
of Payment Solutions, Enterprise Management Solutions, and Data
Solutions and will also provide stakeholders with improved
information.
Financial Results
Profit & Loss
Revenues for H1 2021 totalled GBP11.70 million (H1 2020: GBP9.77
million), with recurring and other revenues totalling GBP5.81
million (H1 2020: GBP5.94 million) and GBP5.89 million (H1 2020:
GBP3.83 million) respectively. Excluding the impact of GBP3.5
million earned in respect of the roll-out of payment solutions,
other revenues decreased from GBP3.83 million in H1 2020 to GBP2.39
million due to lower consultancy and bespoke development revenue
generated during the first quarter 2021.
Customer retention has remained strong with recurring revenues
across each segment maintaining their historic run-rates. Recurring
revenues are expected to be at least sustained at similar levels
going forward.
Gross profit increased by GBP0.22 million to GBP5.12 million (H1
2020: GBP4.90 million) and the gross margin decreased to 43.7% (H1
2020: 50.1%), primarily due to the cost of the payment solution
roll-out which diluted the higher margins earned by data and
payment solutions.
Administrative expenses, adjusted for the amortisation of
acquired intangibles increased by 10.6% on the comparative period
from GBP5.36 million in H1 2020 to GBP5.93 million in H1 2021. The
increase was primarily due to one-off expenses for consultancy and
costs incurred in relation to management changes totalling GBP0.90
million in H1 2021, offset by lower payroll costs during H1 2021 of
GBP0.33 million. Excluding the one of charges, administrative
expenses were reduced by 6.2% in the period.
Earnings before interest, taxes, share-based payments,
depreciation, amortisation and acquisition costs expensed
("Adjusted EBITDA") was GBP0.32 million (H1 2020: GBP0.79 million),
with the increase in gross profit offset by the additional one-off
administrative expenses referred to above.
The operating loss was GBP0.96 million (H1 2020: GBP0.65
million). Excluding the one-off charges the loss was GBP0.06m.
Net finance expense was GBP0.15 million (H1 2020: GBP0.19
million) and included six months of interest on the GBP3.50 million
HSBC 4-year term loan and GBP1.31m HSBC trade loan as well as
notional interest on the right-of-use assets.
The underlying tax credit for the period was GBP0.10 million (H1
2020: GBP0.00 million).
Loss per share for the period was 0.39 pence (H1 2020: 0.33
pence).
Balance sheet and cash flow
Current assets increased by GBP2.83 million to GBP14.59 million
at 30 June 2021 from GBP11.77 million at 31 December 2020,
reflecting an increase in trade debtors, offset by a decrease in
stock, as a result of finalising the contract with a major UK
grocer and commencing the roll-out of this project. Current
liabilities increased by GBP4.31 million to GBP14.78 million from
GBP10.46 million at 31 December 2020 primarily as a result of
increased deferred revenue and the draw-down of unused bank
facilities of GBP1.0 million. Both net current assets and
non-current liabilities include the remainder of the HSBC GBP3.50
million term loan.
Of note, and subsequent to the balance sheet date at 30 June
2021, the trade loan totalling GBP1.31 million and GBP0.44 million
of HSBC term loan instalments were repaid, following the conclusion
of commercial arrangements in relation to the UK supermarket
contract extension, reducing net debt from GBP6.04 million to
GBP2.30 million by mid-July 2021.
Cash outflows from operating activities in the half year were
GBP0.35 million (H1 2020: inflows GBP0.1 million). The main change
is due to reduction in operating cash flows from the finalisation
of commercial arrangements relating to the contract extension post
June 2021.
Investment in the core business continued apace with development
costs incurred totalling GBP0.89 million (H1 2020: GBP0.78 million)
primarily focused on our next generation of outdoor payment
terminals and developing a fuel capability for our retail
systems.
Capital expenditure in the period was GBP0.05 million (H1 2020:
GBP0.18 million).
Cash at 30 June 2021 was GBP0.62 million compared to GBP1.83
million at 31 December 2020
Current trading
Whilst the majority of the COVID-19 restrictions have now been
lifted and many of our customers are able to return to a new
normal, we continue to assess the pandemic's impact on trading in
the current year. With the new fuel capability ready for our
flagship retail management systems and enhanced payment solution
capabilities, we look forward to closing out on several
opportunities over the coming months.
The roll-out of the payment solution project for the major UK
supermarket has now been completed post period end and the revenues
have now been fully earned and recognised.
Existing customer relationships remain strong with the new
management team already building on those relationships. It is
encouraging that the Group completed revenues of GBP11.7 million in
H1 2021, with further revenues of GBP10.0 million visible through
existing recurring and repeatable revenue contracts and the order
book. In the current market context, the Group is mindful that the
final value, terms and timing of delivery of the order book,
remains subject to ongoing discussions.
Outlook
The business is going through a significant period of change
following the restructuring of the senior management team and new
hires. The work currently in train to refresh our approach and
focus provides confidence in our ability to respond to an
ever-increasing amount of change within the fuel and convenience
retail market. We are pleased to see our first half revenues hold
up despite the effects of COVID-19 and the management changes. Much
work was done in the first quarter to allow the business to
continue to operate effectively under the new restrictions, whilst
still allowing our field engineers to be able to service our
clients. I am very grateful to all our staff for the resilience
they have shown.
Despite difficult market conditions, we have won significant
contract renewals with major clients as well as a major payment
device contract. Our recent launch of the latest version of our RMS
platform, ab-initio, has met with encouraging market response and
bodes well for future revenues.
We are very conscious of the need to fully execute against the
order book over the rest of the year, but with a sound balance
sheet showing reducing net debt and undrawn banking facilities, we
remain cautiously optimistic that we can meet the Board's
expectations in 2021 and see growth in the coming years.
Andrew Blazye
Executive Chairman
29 September 2021
Consolidated Statement of Total Comprehensive Income
(unaudited)
For the six months ended 30 June 2021
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
GBP'000 GBP'000 GBP'000
Revenue 11,702 9,769 19,750
Cost of sales (6,587) (4,874) (11,156)
--------------------------------------- ----------- ----------- -------------
Gross profit 5,115 4,895 8,594
Adjusted administrative expenses (5,927) (5,355) (8,682)
--------------------------------------- ----------- ----------- -------------
Adjusted operating profit (812) (450) (88)
Adjusted administrative items:
Acquisition costs expensed - (30) (30)
Amortisation of acquired intangibles (145) (157) (290)
Share-based payments - (2) -
--------------------------------------- ----------- ----------- -------------
(145) (189) (320)
--------------------------------------- ----------- ----------- -------------
Total administrative expenses (6,072) (5,544) (9,002)
--------------------------------------- ----------- ----------- -------------
Statutory operating (loss)/profit (957) (649) (408)
--------------------------------------- ----------- ----------- -------------
Finance income - 10 10
Finance expense (152) (187) (302)
--------------------------------------- ----------- ----------- -------------
(Loss)/profit before taxation (1,109) (826) (700)
Taxation 97 - 85
---------------------------------------
(Loss)/profit and total comprehensive
income for the period (1,012) (826) (615)
--------------------------------------- ----------- ----------- -------------
Earnings per share Pence Pence Pence
----------------------------------- ------- ------- -------
Basic (losses)/earnings per share (0.39) (0.33) (0.24)
----------------------------------- ------- ------- -------
Diluted (losses)/earnings per
share (0.39) (0.33) (0.24)
----------------------------------- ------- ------- -------
Condensed Consolidated Statement GBP'000 GBP'000 GBP'000
of Changes in Equity
--------------------------------------- -------- -------- --------
At start of period 23,547 23,714 24,153
--------------------------------------- -------- -------- --------
(Loss)/profit and total comprehensive
(expense)/income for the period (1,012) (826) (615)
Share issue net of expenses 9
Share-based payments - 2 -
--------------------------------------- -------- -------- --------
At end of period 22,535 22,890 23,547
--------------------------------------- -------- -------- --------
Condensed Consolidated Balance Sheet (unaudited)
As at 30 June 2021
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill and other intangibles 17,952 18,230 18,097
Development costs 3,945 2,909 3,541
Property, plant and equipment 1,035 1,176 1,252
Right-of-use assets 3,006 2,910 3,394
25,938 25,225 25,919
-------------------------------- ----------- ----------- -------------
Current assets
Inventories 2,398 5,106 4,816
Trade and other receivables 11,133 3,541 4,691
Current tax asset 448 334 432
Cash and cash equivalents 615 4,089 1,829
-------------------------------- ----------- ----------- -------------
14,594 13,070 11,768
-------------------------------- ----------- ----------- -------------
Total assets 40,532 38,295 38,052
-------------------------------- ----------- ----------- -------------
Current liabilities
Trade and other payables (10,490) (9,353) (7,136)
Borrowings (4,277) (1,592) (3,324)
Deferred consideration - (274) -
(14,767) (11,219) (10,460)
-------------------------------- ----------- ----------- -------------
Non-current liabilities
Borrowings (2,376) (3,024) (3,191)
Deferred tax (854) (1,162) (854)
-------------------------------- ----------- ----------- -------------
(3,230) (4,186) (4,045)
-------------------------------- ----------- ----------- -------------
Total liabilities (17,997) (15,405) (14,505)
-------------------------------- ----------- ----------- -------------
Net assets 22,535 22,890 23,547
-------------------------------- ----------- ----------- -------------
Equity
Share capital 2,611 2,602 2,611
Capital redemption reserve 4,588 4,588 4,588
Share premium 14,021 14,021 14,021
Merger reserve 2,269 2,269 2,269
Translation reserve (225) (225) (225)
Retained earnings (729) (365) 283
-------------------------------- ----------- ----------- -------------
Total equity attributable
to equity shareholders 22,535 22,890 23,547
-------------------------------- ----------- ----------- -------------
Consolidated Cash Flow Statement (unaudited)
For the period ended 30 June 2021 Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
--------------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------------- ----------- ----------- -------------
Net cash flows from operating activities
Loss before taxation (1,109) (826) (700)
Depreciation and amortisation 1,280 1,407 2,891
Share option charge - 2 -
Finance income - (10) (10)
Finance expense 152 187 302
----------- -------------
323 760 2,483
Decrease / (increase) in inventories 2,418 (3,798) (3,688)
(Increase) / decrease in receivables (6,442) 1,712 692
Increase / (decrease) in payables 3,354 1,634 (713)
Interest received - 10 10
Interest paid (81) (156) (235)
Tax received 81 118 236
-------------------------------------------- ----------- ----------- -------------
Net cash (outflow) / inflow from
operating activities (347) 100 (1,215)
-------------------------------------------- ----------- ----------- -------------
Cash flows from investing activities:
Acquisition of subsidiary undertakings - - (274)
Purchase of property, plant and equipment (45) (175) (239)
Expenditure on capitalised product
development (896) (787) (1,597)
-------------------------------------------- ----------- ----------- -------------
Net cash outflow from investing activities (941) (962) (2,110)
-------------------------------------------- ----------- ----------- -------------
Cash flow from financing activities:
Proceeds from issue of shares - - 9
Repayments of leases liabilities (707) (795) (1,693)
Repayments of obligations under operating
leases
Repayment of loans (219) (661) (1,175)
New loans raised 1,000 - 1,606
-------------------------------------------- ----------- ----------- -------------
Net cash outflow from financing activities 74 (1,456) (1,181)
-------------------------------------------- ----------- ----------- -------------
Decrease in cash and cash equivalents (1,214) (2,318) (4,578)
Cash and cash equivalents at beginning
of period 1,829 6,407 6,407
-------------------------------------------- ----------- ----------- -------------
Cash and cash equivalents at end
of period 615 4,089 1,829
-------------------------------------------- ----------- ----------- -------------
Borrowings
-------------------------------------------- ----------- ----------- -------------
Current
Lease obligations 719 778 986
Operating leases
Bank loans 3,619 875 2,399
Capitalised loan fees (61) (61) (61)
-------------------------------------------- ----------- ----------- -------------
4,277 1,592 3,324
-------------------------------------------- ----------- ----------- -------------
Non-current
Lease obligations 1,769 1,605 2,174
Operating leases
Bank loans 656 1,527 1,095
Capitalised loan fees (49) (108) (78)
-------------------------------------------- ----------- ----------- -------------
2,376 3,024 3,191
-------------------------------------------- ----------- ----------- -------------
Net (debt)/cash (6,038) (527) (4,686)
-------------------------------------------- ----------- ----------- -------------
Notes
1. General information
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 2021 and in accordance
with international accounting standards. 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 2020.
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.
The financial information for the year ended 31 December 2020
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.
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.
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 2020.
2. Turnover analysis
Six months ended Six months ended Year ended 31 December
30 June 2021 30 June 2020 2020
------------
Recurring Other Total Recurring Other Total Recurring Other Total
------------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------ ------------- -------------- ------------- ------------- -------------- ------------- ------------- -------------- -------------
Payment
solutions 2,719 4,976 7,695 2,799 1,972 4,771 5,542 4,757 10,299
Enterprise
management
solutions 1,580 299 1,879 1,666 378 2,044 3,426 765 4,191
Data and
loyalty
services 1,515 613 2,128 1,478 1,476 2,954 3,058 2,202 5,260
------------- -------------- ------------- ------------- -------------- ------------- ------------- -------------- -------------
5,814 5,888 11,702 5,943 3,826 9,769 12,026 7,724 19,750
------------ ------------- -------------- ------------- ------------- -------------- ------------- ------------- -------------- -------------
3. Adjusted EBITDA
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
-------------------------------------
GBP'000 GBP'000 GBP'000
------------------------------------- ----------- ----------- -------------
Revenue 11,702 9,769 19,750
Cost of sales (6,587) (4,874) (11,156)
------------------------------------- ----------- ----------- -------------
Gross profit 5,115 4,895 8,594
Administrative expenses (6,072) (5,544) (9,002)
------------------------------------- ----------- ----------- -------------
Operating loss (957) (649) (408)
Add back:
Depreciation on owned assets 262 254 386
Depreciation on right-of-use assets 381 473 949
Amortisation of intangible assets 492 523 691
Amortisation of acquired intangible
assets 145 157 290
EBITDA 323 758 1,908
Share-based payments - 2 -
Acquisition costs expensed - 30 30
------------------------------------- ----------- ----------- -------------
Adjusted EBITDA 323 790 1,938
------------------------------------- ----------- ----------- -------------
4. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
---------------------------------------------
GBP'000 GBP'000 GBP'000
--------------------------------------------- ----------------------- ----------------------- ------------------
Earnings
Loss after tax - used for basic and diluted
earnings per share (1,012) (826) (615)
Number of shares No '000 No '000 No '000
--------------------------------------------- ----------------------- ----------------------- ------------------
Weighted average number of ordinary shares
for the purposes of basic and operating
earnings per share 260,565 251,080 260,565
Dilutive effect of share options 542 2,656 542
--------------------------------------------- ----------------------- ----------------------- ------------------
261,107 253,736 261,107
--------------------------------------------- ----------------------- ----------------------- ------------------
pence pence pence
--------------------------------------------- ----------------------- ----------------------- ------------------
Basic (losses)/earnings per share (0.39) (0.33) (0.24)
--------------------------------------------- ----------------------- ----------------------- ------------------
Diluted (losses)/earnings per share (0.39) (0.33) (0.24)
--------------------------------------------- ----------------------- ----------------------- ------------------
The number of shares in issue at 30 June 2021 was
260,191,720.
5. Net finance expense
Six months Six months Year ended
ended 30 ended 30 31 December
June 2021 June 2020 2020
--------------------------------------
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- -------------
Interest receivable on bank deposits - 10 10
Finance income - 10 10
-------------------------------------- ----------- ----------- -------------
Interest payable on bank loans
and overdrafts (71) (5) (107)
Interest payable on leases (40) (51) (106)
Other interest (10) (100) (28)
Amortisation of loan fees (31) (31) (61)
--------------------------------------
Finance expense (152) (187) (302)
-------------------------------------- ----------- ----------- -------------
Net finance expense (152) (177) (292)
-------------------------------------- ----------- ----------- -------------
6. 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR PPUQCBUPGGBR
(END) Dow Jones Newswires
September 29, 2021 02:00 ET (06:00 GMT)
Universe (LSE:UNG)
Historical Stock Chart
From Jul 2024 to Aug 2024
Universe (LSE:UNG)
Historical Stock Chart
From Aug 2023 to Aug 2024
