RNS Number : 4805B
Universe Group PLC
18 August 2008
18 August 2008
UNIVERSE GROUP PLC
INTERIM RESULTS FOR THE 6 MONTHS ENDED 30th JUNE 2008
Universe Group plc ( "Universe", the "Company" or the "Group"), the AIM (UNG.L) listed
retail and loyalty systems provider, is pleased
to announce its unaudited interim results for the six months to 30th June 2008.
Highlights
* Revenue increased by 26% to £7.9m (2007: £6.2m)
* Operating loss £(483k) ( 2007: profit of £613k)
* Loss before tax £(618k) (2007: profit of £447k)
* Loss Per Share (0.54p) (2007: EPS 0.39p)
* Establishment of JetSet Wash Systems Limited
* Acquisition of the business of AIB Services Limited
* Acquisition of WSF Limited
* Establishment of PCML Limited as a joint venture to launch a B2B prepaid card
solution.
John Scholes, Chairman, commented:
"The strong revenue growth in the UK petrol forecourt market has consolidated our market
leading position and was the key driver behind
the Company's 26% increase in revenue compared to 2007. The new JetSet operation complements
this and will now start to contribute
significantly to both revenue and profitability in future periods. International growth has
been slower than expected but is nonetheless
progressing. While the investment in future growth and the continued transformation into an
end-to-end managed services solution provider
has impacted profitability in the first half of the year, the results of this investment
should show positively in future periods."
Paul Cooper, Chief Executive, commented:
"The revenue growth from the UK petrol forecourt market reflects the progress in both
sales performance and product enhancement as set
out in our growth strategy. Disappointingly the overall sales mix resulted in a lower than
anticipated margin which, added to the investment
in the setting up of JetSet, caused an overall loss in H1. After a slow start, the
International Division business will grow as contracts
come on line. An improved performance in Q2 compared to Q1 was in line with the Company's
expectations. This trend is expected to continue
and lead to future growth and a better performance in H2."
For Further Information:
Universe Group plc 023 8068 9510
Paul Cooper,Chief Executive
Officer
John Scholes, Chairman
Arbuthnot Securities Limited 020 7012 2000
Tom Griffiths
Tavistock Communications 020 7920 3150
John West
Andrew Dunn
CHAIRMAN'S STATEMENT
We continue to reposition Universe as an end-to-end solutions provider incorporating
design, build, test and running of mission critical
retail systems. Our core systems provide on-line loyalty and managed services information and
processing systems for oil companies and
petrol retailers, now including on-line payment processing.
Meeting the demands of increasingly stringent regulation and fraud prevention when
handling online payment transactions requires an ever
increasing level of sophistication in our systems and data centre. We currently process some
£6 billion of transactions a year for leading
retailers and international oil companies. We continue to invest in technology to meet market
demands and in H1 achieved important
certifications for both systems and hardware in relation to handling on-line chip and pin
payments.
The H1 results reflect considerable progress as evidenced by the revenue growth. This was
achieved despite a significant revenue
shortfall from the HTEC International Division where a major system rollout has been delayed
by the customer for a full 12 months.
Start up losses from JetSet also impacted the H1 results, but have created a platform for
good future performance. Equipment rollouts
are underway for a number of customers, including a global oil company and a number of UK
supermarket groups. The contract wins achieved by
JetSet in such a short time frame are very encouraging and will generate a continuing and
predictable revenue stream. It is anticipated that
JetSet will become profitable in H2.
The Company continues to enjoy the support of its bank, HBOS, and a new 3 year £1.6m
facility, replacing the existing £1.2m 2 year
facility, was put in place to provide working capital and fund the purchase of the AIB
Services Limited business.
We continue to strengthen the operating team to drive further growth, in particular, the
recruitment of Jeff Dakin, an experienced IT
industry professional to head up data centre services is a welcome addition to the team.
Whilst it is disappointing to have to report an overall loss for H1, which was impacted by
a combination of system implementation delays
in HTEC's International Division and investment in the JetSet start up, the top line revenue
growth of 26% demonstrates that the platform
for further growth is in place.
Universe continues to win new contracts and has enhanced its reputation in its markets
giving me confidence that the Company will
deliver good results for shareholders and customers alike.
John Scholes
Chairman
CHIEF EXECUTIVE'S BUSINESS REVIEW
Universe Group is made up of HTEC, JetSet and the joint venture PCML Limited.
HTEC as an acknowledged leader in the supply of petrol forecourt systems technology has
continued with its strategy to be an end-to-end
solutions provider. The company designs, builds, tests and operates mission critical retail
systems through its own data centre. Its robust
applications allow customers an easy integration route to their other business systems. Its
clients include major UK supermarket groups,
convenience store brand leaders and global oil companies. Systems include chip and pin payment
terminals, unmanned outdoor payment
terminals, on-line loyalty systems and forecourt point of sale systems.
The last year has been dedicated to building on this pedigree whilst further positioning
the product set as a managed service solution.The strengths of HTEC's on line payment and loyalty schemes have been further developed to
create new revenue streams from transaction
handling in the data centre. On-line EFT (electronic funds transfer) is now being used by a
number of HTEC's customers.
Retail sales in H1 increased by 42% to £4.7m (2007: £3.3m). This increase was due to new
contract wins and growth from existing
customers. Data Centre revenues declined to £1.3m (2007: £1.5m), due in part to lower
development revenue as systems were handed over and
the slower than anticipated deployment of systems by customers. This should reverse in 2009 as
significant revenue streams begin from the
deployment of these delivered systems.
JetSet (previously refered to as JAV- jet, air and vac.)
The move into this business last year by HTEC highlighted the need both to have supply
chain control through having in-house
manufacturing and a service operation with national coverage. These two requirements were met
by the acquisition of the business of an
established company in the field, AIB Services in Bedford and the purchase of the Edinburgh
based WSF Limited. All "JAV" business is now
operated from the manufacturing facility in Bedford through the newly established JetSet. The
Group's results in H1 were impacted by start
up losses of £183k. Jet Set's performance is dictated by a revenue share model and therefore
the business has predictable revenue streams
once equipment is on site. JetSet has recently won some prestigious contracts and should now
move into profit. H2 will see an accelerated
placement of equipment. The revenue share model involves JetSet retaining ownership of the
equipment and sharing the revenue taken by
machines with the site owner over a contracted service term.
PCML
This new joint venture was set up in H1 to handle pre-paid business to business payment
cards, primarily into the petrol retail sector.The first scheme for a major oil company in Portugal is scheduled to go live in October 2008. This reference system will then be used as a
model for other schemes.
Financial Review
Group revenues increased by 26% to £7.9m (2007: £6.2m) which was in line with the
Company's expectations. However, a loss before tax of
£618k (2007: profit of £447k) resulted from start up losses at JetSet, Group costs and HTEC
recording a relatively small operating profit.HTEC's performance was below expectations as the mix of business lowered margins and
international sales from new schemes have been slow to
deploy. HTEC also continued to invest in sales activity and product enhancement to drive
future sales. The cost base will not significantly
increase as the sales revenues continue to grow. Further restructuring costs of £136k
resulting from actions started in 2007 also impacted
the H1 results.
The balance sheet includes investment of £364k in the new JetSet business and further
investment of £258k in the development of software
systems. This investment together with the cash outflow from trading of £138k was financed by
the combination of a new 3 year £1.6m loan
facility which replaced the existing £1.2m 2 year facility and a partial drawdown (72%) of
the Group's invoice discounting facility. The net
effect of this refinancing was a £994k inflow from financing activity.
I am confident that with the current order book and identified opportunities, Universe
will produce a satisfactory outcome for the full
year.
Paul Cooper
Chief Executive Officer
Universe Group plc
Consolidated Income Statement (unaudited)
for the 6 months ended 30th June 2008
Six months Six
months Year to
to 30th June to 30th
June 31st December
2008
2007 2007
£'000
£'000 £'000
Revenue 7,863
6,236 13,186
Net operating costs excluding non-recurring items (8,210)
(5,553) (12,344)
Operating (loss)/profit before non-recurring items (347)
683 842
Non-recurring items (136)
(70) (2,415)
Operating (loss)/profit (483)
613 (1,573)
Finance costs excluding non-recurring items (135)
(106) (189)
Non-recurring finance costs -
(60) (120)
Finance costs (135)
(166) (309)
(Loss)/profit before taxation (618)
447 (1,882)
Taxation -
(107) -
(Loss)/profit for the period attributable to equity (618)
340 (1,882)
shareholders
(Loss)/earnings per share pence
pence pence
Basic and diluted - Continuing (0.54)
0.39 (1.85)
Statement of Changes in Equity (unaudited)
At 1 January 19,531
18,201 18,201
Shares issued -
3,083 3,102
Share options issued -
- 110
(Loss)/profit for the period attributable to equity shareholders (618)
340 (1,882)
18,913
21,624 19,531
Universe Group plc
Consolidated Balance Sheet (unaudited)
as at 30th June 2008
30th June 30th June 31st December
2008 2007 2007
£'000 £'000 £'000
Fixed assets
Goodwill 17,492 17,250 17,250
Development costs 925 2,673 800
Property, plant and equipment 2,628 1,359 2,170
21,045 21,282 20,220
Current assets
Inventories 1,933 1,502 1,768
Trade and other receivables 2,555 2,473 2,720
Cash and cash equivalents 2 750 93
4,490 4,725 4,581
Total assets 25,535 26,007 24,801
Current liabilities
Trade and other payables (3,107) (2,557) (3,119)
Tax liabilities (373) (398) (373)
Short term borrowings (1,506) (772) (888)
(4,986) (3,727) (4,380)
Non current liabilities
Medium term borrowings (1,636) (656) (890)
Total liabilities (6,622) (4,383) (5,270)
Net assets 18,913 21,624 19,531
Equity
Share capital 5,747 5,735 5,747
Equity reserve 110 - 110
Share premium account 10,753 10,746 10,753
Other reserves 8,603 8,603 8,603
Translation reserve (181) (181) (181)
Profit and loss account (6,119) (3,279) (5,501)
Total equity 18,913 21,624 19,531
Universe Group plc
Consolidated Cash Flow Statement (unaudited)
for the six months ended 30th June 2008
Six months Six months
Year
to 30th June to 30th June to
31st December
2008 2007
2007
£'000 £'000
£'000
Cash flows from operating activities
Operating (loss)/profit (483) 613
(1,573)
Depreciation and amortisation 345 330
601
Impairments - -
2,306
Share-based payment expense -
110
(138) 943
1,444
Movement in working capital:
(Increase)/decrease in inventories (94) (297)
(563)
(Increase)/decrease in receivables 243 (134)
(777)
(Decrease)/increase in payables (293) (832)
(236)
Interest paid (135) (189)
(309)
Tax paid - (5)
20
Net cash outflow from operating activities (417) (514)
(421)
Cash flows from investing activities
Acquisition of business and subsidiary (364) -
-
Purchase of tangible fixed assets (46) (64)
(371)
Purchase of intangible fixed assets (258) (171)
(650)
Disposal of fixed assets - -
550
Net cash outflow from investing activities (668) (235)
(471)
Cash flow from financing activities
Repayment of obligations under finance leases (159) (46)
(101)
Repayment of borrowings (1,097) (2,465)
(3,414)
Issue of shares net of expenses - 3,083
3,102
New bank loans raised 2,250 1,400
1,871
Net cash inflow from financing 994 1,972
1,458
(Decrease)/increase in cash and cash equivalents (91) 1,223
566
Cash and cash equivalents at beginning of period 93 (473)
(473)
Exchange differences - -
-
Cash and cash equivalents at end of period 2 750
93
Universe Group plc
Notes to Interim accounts for six months ended 30th June 2008
1 The annual financial statements of the company for the year ended 31st December
2007 were prepared
in accordance with International Financial Reporting Standards (IFRS).Accordingly, the interim
financial report has been prepared using accounting policies consistent with
IFRS.
2 The financial information for the year ended 31st December 2007 does not
constitute statutory accounts
as defined in section 240 of the Companies Act 1985. 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 237 (2) or (3) of the
Companies Act 1985.
3 Losses from non-recurring items in the six months ended 30th June 2007 and 2008 were
in respect of reorganisation
Costs.
Losses from non-recurring items in the year ended 31st December 2007 were in
respect of reorganisation costs
and the impairment of development costs.
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 31st December 2007.
5 The interim report will be circulated to all shareholders and copies 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.
6 Earnings per share is calculated by reference to the results and the weighted
average of 114,704,539
shares in issue during the period. The number of shares in issue at 30th June
2008 was 114,704,539.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GUUMURUPRGQA
|