TIDMUTN
PRELIMINARY ANNOUNCEMENT OF UNAUDITED RESULTS FOR THE YEAR ENDED 31 DECEMBER 2008
ULTIMA NETWORKS PLC
("Ultima" or the "Company")
28 May 2009
The Directors are pleased to announce the unaudited preliminary results of
Ultima Networks plc and its subsidiaries (the "Group" or the "Ultima Group") for
the year ended 31 December 2008.
The Ultima Group's operations consist of two divisions; IT Services and
Green Technology Products. These divisions are respectively involved in the
sale of software to the legal profession and the development and sale of
specialist electrical goods and clean power generation resources including solar
parks in Spain and Italy.
Highlights of 2008
· J.C.S Computing Solutions Ltd acquired for GBP295,000, including directly
attributable costs, during the year.
· Land acquired in Southern Italy for GBP507,000 which will be used to
develop a 3MW solar park.
Unaudited financial highlights
· Group revenue was GBP1,977,000 (2007: GBP1,564,000)
· Gross margin for the year was 67% compared with 71% in 2007
· Group administration expenses were GBP1,097,000 (2007: GBP883,000)
· Operating profit was GBP246,000 (2007: GBP233,000)
· Profit on ordinary activities before taxation for the year was GBP281,000
(2007: GBP276,000)
· Earnings per share was 0.13p (2007: 0.13p)
· Cash at bank at the year end was GBP122,000 (2007: GBP1,026,000)
· Consolidated balance sheet has increased net assets by GBP260,000 to
GBP1,428,000 (2007: GBP1,168,000)
Chairman's statement
I am very pleased to present the unaudited results for the Group in what has
been a year of growth and expansion into new products, technologies and
geographical areas. The year has seen significant transitions in both the IT
Services and the Green Technology Products divisions which we expect to
capitalise on over the forthcoming years and, I believe, put us in a strong
position for growth across the Group.
In the year ended 31 December 2008, the Group achieved a 26% increase in sales to
GBP1,977,000 (2007: GBP1,564,000) and 6% increase in operating profit to GBP246,000
(2007: GBP233,000).
IT Services division
The IT Services division made an operating profit of GBP126,000 (2007: GBP148,000)
on sales of GBP708,000 (2007: GBP701,000). This division principally provides
computer application software and related support and other services to the
legal profession with Cognito Software continuing to be the major contributor.
In July 2008, the division was strengthened by the acquisition of J.C.S.
Computing Solutions Limited ("JCS"), a supplier of software and services to the
legal profession. These activities were merged with Cognito resulting in the
substantial strengthening of both the customer base and the management team.
The Group has invested in a new document production and management system, which
will be integrated with the existing Cognito Software and targeted to existing
customers in the legal IT sector. Additional staff and other resources have been
employed to ensure the efficient implementation of this project. The system will
also be available in a standalone version for sale to all professional services
firms.
I believe the IT Services division's management team now is well equipped to
grow this division by fully integrating the existing products, developing new
products and winning new customers. The combination of Cognito and JCS into one
division should also have both cost and operational benefits in the ongoing
development of new products to meet the increasing challenges our customers
face.
Green Technology Products division
The Green Technology Products division contributed an operating profit of
GBP124,000 (2007: GBP85,000) on sales of GBP1,269,000 (2007: GBP863,000). This division
has found continuing success with its competitively priced PowaCycle branded
range of electric bicycles, which are refreshed by the regular introduction of
new models and are increasingly being sold through a growing number of appointed
dealers throughout the UK, which totalled over 100 at the year end.
The Group has invested in a completely new premium priced Infineum branded range
of electric bicycles, which will incorporate a new and unique stackable battery
giving the rider a choice over battery weight and distance travelled. This new
range of electric bicycles is expected to fully complement the existing
PowaCycle range and therefore increase sales and profits of the division.
The division distributes the cycles though a network of over 100 dealers based
throughout the UK and is in the process of establishing a European network
following the establishment of a distribution facility based in Monchengladbach,
Germany and the recent announcement of a distribution agreement for sales in the
Benelux region.
The year has also seen some transformative developments in our quest to expand
into the solar generation arena in the Green Technology Products division which
we believe will play an increasingly significant part in the future growth of
the Group.
During the year we have formed new Italian subsidiaries to acquire land and
property on which we plan to develop solar power parks. The Group's intention is
to seek funding to begin construction and commissioning of solar farms,
commencing with installations on the land acquired in Southern Italy. Our plan
is to develop a 3MW solar park in Italy and a 100KW pilot project to demonstrate
our technology.
Recently we have received a connection agreement for the 3MW Italian Solar Park
to the Italian Grid system which will enable the solar park to benefit from
sales under Italian government tariffs once the park is financed and
constructed. The 100KW Spanish Solar Park has also received Spanish government
approval for the off take of energy created by the park, once financed and
built, at a fixed price of 32 Euro cents for a period of 25 years.
We are very excited about the move into the solar power arena, there is clearly
a growing awareness of the need for renewable sources of energy and with the
growing incentives available to support this demand in the EU we are confident
that these projects will be a major part of the Group's growth in coming years.
Whilst there is still a great deal of work to be done in raising the necessary
funds to finance these projects and in constructing and operating the solar
parks we believe that the financial commitment to the projects at this stage
will reap substantial benefits in 2-3 years.
Outlook
Whilst the economic outlook is still difficult, we believe 2008 has been a great
year and against the backdrop of difficult financial conditions we have managed
to boost both revenues and profits. Our acquisition of JCS is already proving
successful and we are confident that the management of that division will
continue to deliver growth and both operational and financial benefits going
forwards.
The expansion in the Green Technology Products division is, however, potentially
the most exciting for the Group with the launch of new products into new
countries in the electronic bike division and the achievement of significant
milestones towards our plans to build solar parks in Spain and Italy.
There are clearly still challenges ahead in the economic conditions we face
which will impact all divisions of the business but we are confident that the
foundation stones we have laid in 2008 will allow us to grow across all areas of
the Group. The company will clearly need to raise funds and/or borrowings in
order to construct the solar parks and we are confident that, despite the
difficult market conditions we face, we will be able to find the necessary funds
in order to expand in this direction which we feel is essential to underpin the
growth we hope to deliver to the benefit of our shareholders over the coming
years.
We look forward to another successful year despite the economic outlook and to
achieving even further milestones towards our continued growth in 2009.
Enquiries:
Ultima Networks plc +44 (0) 1279 821 200
Prof. Humayun Mughal
Blomfield Corporate Finance Limited(Nominated adviser and broker) +44 (0) 207 489 4500
Alan MacKenzie or
James Pinner
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31
DECEMBER 2008
Unaudited
2008 2007
GBP000 GBP000
Revenue 1,977 1,564
Cost of sales (648) (452)
________ ________
Gross profit 1,329 1,112
Administration
expenses (1,097) (883)
Other operating
income 14 4
________ ________
Operating
profit 246 233
Finance income 35 43
________ ________
Profit before
taxation 281 276
Taxation
expenses (21) (11)
________ ________
Profit for the period
attributable to equity holders
of the parent 260 265
======== ========
Basic and diluted earnings per
share - pence 0.13 0.13
======== ========
All amounts relate to continuing activities.
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2008
Unaudited
2008 2007
GBP000 GBP000
ASSETS
Non current assets
Property, plant and equipment 621 120
Intangible assets - development costs 78 6
Goodwill 118 -
Intangible assets - others 181 -
Deferred tax asset 6 5
________ ________
Total non current assets 1,004 131
________ ________
Current assets
Inventories 452 257
Trade and other receivables 404 284
Cash and cash equivalents 122 1,026
________ ________
Total current assets 978 1,567
________ ________
Total assets 1,982 1,698
________ ________
LIABILITIES
Non current liabilities
Deferred tax 50 -
________ ________
Total non current liabilities 50 -
________ ________
Current liabilities
Trade and other payables 81 97
Current tax liabilities 132 98
Accruals and deferred income 291 335
________ ________
Total current liabilities 504 530
________ ________
Total liabilities 554 530
________ ________
Net assets 1,428 1,168
======== ========
EQUITY
Capital and reserves attributable to equity holders of the
parent
Called up share capital 7,554 7,554
Share premium account 5,602 5,602
Other reserves 202 202
Retained earnings (11,930) (12,190)
________ ________
1,428 1,168
======== ========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2008
Unaudited
2008 2007
GBP000 GBP000
Profit for the financial period 260 265
Taxation expense 21 11
Interest receivable (35) (43)
Depreciation charges 13 12
Amortisation of intangibles 19 5
________ ________
Operating profit before
changes in working capital 278 250
Increase in inventories (195) (49)
Increase in trade and other
receivables (19) (50)
(Decrease)/increase in trade payables
and other current liabilities (248) 9
________ ________
Cash (used in)/generated from
operations (184) 160
Taxation - -
________ ________
Net cash (used in)/generated
from operating activities (184) 160
________ ________
Cash flows from investing activities
Purchase of property, plant and
equipment (510) (5)
Development expenditure (82) (4)
Acquisition of subsidiaries net of
cash acquired (163) -
________ ________
Net cash used in
investing activities (755) (9)
________ ________
Cash flows from financing activities
Interest received 35 43
________ ________
Net cash generated from financing
activities 35 43
________ ________
Net (decrease)/increase in cash and
cash equivalents (904) 194
Cash and cash equivalents at
beginning of the period 1,026 832
________ ________
Cash and cash equivalents at
end of the period 122 1,026
======== ========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2008
Called up Share Other Retained Total
share premium reserve earnings equity
capital
GBP000 GBP000 GBP000 GBP000 GBP000
Year ended 31 December 2008
(Unaudited)
As 1 January 2008 7,554 5,602 202 (12,190) 1,168
Profit for the period
and total income or
expense for the period - - - 260 260
______________________________________
At 31 December 2008 7,554 5,602 202 (11,930) 1,428
======================================
Year ended 31 December 2007
As 1 January 2007 7,554 5,602 1,334 (13,587) 903
Profit for the period
and total income or
expense for the period - - - 265 265
Transfer - - (1,132) 1,132 -
______________________________________
At 31 December 2007 7,554 5,602 202 (12,190) 1,168
======================================
The Group operates in the United Kingdom and Italy.
At 31 December 2008, the Group is organised into two principal business
segments:
· IT Services (comprising legal and publishing application
software)
· Green Technology Products (comprising electric bicycles, energy saving
lamps, educational electronic kits and development of solar power parks)
The unaudited segmental results for the year ended 31 December 2008 are as
follows:
IT Green Green Unallocated Group
Services Technology Technology
UK UK Italy
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 708 1,269 - - 1,977
================================================
Operating profit/(loss) 126 133 (9) (4) 246
Finance income 35
_______
Profit before taxation 281
=======
Depreciation 5 4 - 4 13
Amortisation 9 6 4 - 19
The segmental results for the year ended 31 December 2007 are as follows:
IT Green Green Unallocated Group
Services Technology Technology
UK UK Italy
GBP000 GBP000 GBP000 GBP000 GBP000
Revenue 701 863 - - 1,564
================================================
Operating profit 148 85 - - 233
Finance income 43
_______
Profit before taxation 276
=======
Depreciation 4 3 - 5 12
Amortisation - 5 - - 5
The other information of the segments are as follows:
2008 (unaudited)
IT Green Green Unallocated Group
Services Technology Technology
UK UK Italy
GBP000 GBP000 GBP000 GBP000 GBP000
Segment assets 549 714 541 178 1,982
Segment liabilities (367) (44) (4) (139) (554)
________________________________________________
Net assets 182 670 537 39 1,428
================================================
Capital expenditure 47 35 523 299 904
2007
IT and Green Green Unallocated Group
related services technology technology
UK UK Italy
GBP000 GBP000 GBP000 GBP000 GBP000
Segment assets 153 405 - 1,142 1,700
Segment liabilities (380) (73) - (79) (532)
________________________________________________
Net assets/
(liabilities) (227) 332 - 1,063 1,168
================================================
Capital expenditure 6 4 - - 10
PRELIMINARY STATEMENT
This preliminary statement was approved by the directors on 22 May 2009. This
statement does not constitute the Group's statutory accounts for the year ended
31 December 2008. Statutory accounts for the year ended 31 December 2007 have
been delivered to the Registrar of companies. The auditors' report on those
accounts was unqualified and did not contain any statement under section 237(2)
or (3) of the Companies Act 1985. The auditors have yet to report on the
statutory accounts for the year ended 31 December 2008.
The Annual Report for 2008 will be posted to shareholders by 19 June 2009 and
will be available to the public from the Company's registered office at Ultima
Networks plc, Akhter House, Perry Road, Harlow CM18 7PN and on the Company's
website (www.ultima-networks.co.uk).
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