-embargoed for 25 Sept.
7am-
Ultima Networks Plc
(“Ultima”
or the “Company”)
Interim Results for the six
months ended 30 June 2008
Ultima announces its half yearly results for the six months ended 30 June 2008. Ultima operates through two divisions: the Services Division and the Products Division. The Services Division develops and supplies computer based application software and services to the legal profession, whilst the Products Division is responsible for the development and sale of consumer and specialist electronic goods including a recent move into the distribution of solar panels for large scale energy generation.
Highlights for the
period
·
Turnover
up 24% to £0.84m (H1 2007: £0.68m)
·
Pre tax
profit down 21% to £55,000 (H1 2007: £70,000)
·
Debt free
with cash at bank of £1.03m
·
Launched
the latest Legal IT product “Cognito Office”
Highlights since the period-end
·
Acquisition
of JCS Computer Software - highly
complementary and strengthens market position
·
Distribution
agreement with Silicon CPV Plc heralds move into large scale solar power
Professor Humayun
Mughal, Chairman and CEO, commented:
“I am pleased to
report that the six months ended 30 June 2008 has been a period of strong sales
growth and has seen an evolution in the operating activities in the Company. The
Company remains debt free with cash at bank of over £1 million at 30 June 2008
which leaves it well placed for further growth.
Our
main objective going forwards continues to be the profitable expansion of the company through
a mixture of organic growth and the acquisition of
complementary businesses. We continue to focus on the improvement of the operating
contribution from the Services Division and the
continued growth of our Products Division to achieve this objective.
I am excited by our recent move into
renewable energy through the distribution agreement with Silicon CPV plc a
photovoltaic technology company and we have high hopes that this will lead to a
shift in revenues for Ultima. We look forward to announcing further news in
this regard in the short term.”
25 September 2008
Enquiries:
|
Ultima Networks Plc Humayun Mughal, Chairman and Chief Exec, Anthony Klein |
01279 821 200 |
|
Blomfield Corporate Finance Limited Alan MacKenzie James Pinner |
020 7489 4500 |
|
Haggie Financial LLP Nicholas Nelson Kathy Boate |
020 7417 8989 |
Chairman and Chief Executive’s Statement
Overview
The Company continues to make excellent
progress with overall turnover up by 24% from the first half of 2007.
In a trading update on 21 July 2008, we
reported that sales of software to the legal profession had seen a mild
slowdown given the transition to an upgraded product in the latter part of the
period which had created a diversion of internal resources from front line
marketing. Our investment in R&D has enabled the successful launch of the
latest product “Cognito Office “.
On 23rd September 2008 the
Company announced the acquisition of JCS Computer Solutions Limited (“JCS”) and
its merger with Cognito Software Ltd, the Company’s legal software brand.
Although only small, the acquisition is significant in that it positions
Cognito Software Ltd as a leading player in this sector, able to offer a
greater diversity of complementary products. The purchase consideration was
£268,000 representing excellent value for the Company’s shareholders given
JCS’s net assets of £108,000 and last reported pre-tax profit of £65,000.
The period under review saw the completion
of the development of the latest incarnation of electric bicycle which was
launched to encouraging industry acclaim at the end of July. The directors
believe that this product using the Company’s own lightweight battery
technology, is the most highly evolved electric bicycle in the world. An active
promotional campaign is underway and the response is encouraging.
In a recent development last month, the
Products Division entered the solar energy products market via a distribution
agreement with Silicon CPV Plc (“SCPV”).
SCPV has advanced the process of mass solar power generation through its
own concentrated photovoltaic technology (a proprietary technology designed to
increase the efficiency over traditional photovoltaic cells). The Company’s
role will be to act in the distribution of SCPV’s solar panels to the
installers of large scale solar farms which, it is hoped, will provide
significant revenues in future years.
Financial
Summary
In the six months to 30 June 2008 the Group
achieved increased sales of £841,000 (H1 2007: £678,000) and a pre-tax
profit of £55,000 (H1 2007: profit £70,000).
The Services Division made an operating loss of £21,000 (H1 2007: profit £27,000) on sales of £264,000 (H1 2007: £287,000). This division comprises Cognito Software a provider of application software and services to the legal profession and Integrated Publishing Systems whose activities have been merged into Cognito Software in order to improve management control and reduce overheads.
The Products Division
contributed an operating profit of £51,000 (H1 2007: profit £24,000) on sales of £577,000 (H1 2007: £391,000). This division
solely comprises UTN Solutions (North)
and has had continuing success with its PowaCycle branded range of
electric bicycles, which have been complemented by the regular introduction of
new models and are increasingly being sold through a growing number of
appointed dealers throughout the UK.
Due to the expected availability of brought
forward losses, there has been no adjustment for taxation in the period.
Prof.
Humayun Akhter Mughal
Chairman and Chief Executive Officer
|
Consolidated
Income Statement |
Unaudited |
Unaudited |
Audited |
|
Six Months
ended 30th June 2008 |
Half Year |
Half Year |
Full Year |
|
|
2008 |
2007 |
2007 |
|
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
Revenue |
841 |
678 |
1,564 |
|
|
|
|
|
|
Cost of Sales |
326 |
208 |
452 |
|
|
|
|
|
|
Gross Profit |
515 |
470 |
1,112 |
|
|
|
|
|
|
Selling and
administration expenses |
485 |
419 |
883 |
|
|
|
|
|
|
Other operating
income |
- |
- |
4 |
|
|
|
|
|
|
Operating
Profit |
30 |
51 |
233 |
|
|
|
|
|
|
Finance Income |
25 |
19 |
43 |
|
Finance Costs |
|
|
|
|
|
|
|
|
|
Profit before
taxation |
55 |
70 |
276 |
|
|
|
|
|
|
Tax
Income/(expense) |
- |
12 |
(11) |
|
|
|
|
|
|
Profit/(loss)
for the period attributable to equity |
55 |
82 |
265 |
|
holders of the
parent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted earnings per share derived |
|
|
|
|
from total and
continuing operations-pence |
0.03 |
0.04 |
0.13 |
All of the Company’s operations are classified as continuing.
|
Consolidated
balance sheet |
|
|
|
|
|
30/06/2008 |
30/06/2007 |
31/12/2007 |
|
|
Unaudited |
Unaudited |
Audited |
|
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Non
Current assets |
|
|
|
|
Property, plant
and equipment |
119 |
123 |
120 |
|
Intangible
assets-development costs |
39 |
5 |
6 |
|
Deferred tax asset |
5 |
4 |
5 |
|
|
163 |
132 |
131 |
|
Total
noncurrent assets |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
Inventories |
240 |
254 |
257 |
|
Trade and other
receivables |
218 |
139 |
284 |
|
Cash and cash
equivalents |
1,028 |
907 |
1,026 |
|
|
|
|
|
|
Total current
assets |
1,486 |
1,300 |
1,567 |
|
|
|
|
|
|
Total assets |
1,649 |
1,432 |
1,698 |
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
|
Trade and other
payables |
95 |
85 |
97 |
|
Current tax
liabilities |
16 |
36 |
69 |
|
Corporation tax
liability |
29 |
5 |
29 |
|
Accruals and
deferred income |
285 |
321 |
335 |
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities |
425 |
447 |
530 |
|
|
|
|
|
|
Total
liabilities |
425 |
447 |
530 |
|
|
|
|
|
|
Net assets |
1,224 |
985 |
1,168 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
Called up share
capital |
7,554 |
7,554 |
7,554 |
|
Share premium
account |
5,602 |
5,602 |
5,602 |
|
Other reserves |
- |
1,334 |
- |
|
Retained
earnings |
(11,932) |
(13,505) |
(11,988) |
|
|
|
|
|
|
Total equity |
1,224 |
985 |
1,168 |
|
Consolidated
cash flow statement |
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Half Year |
Half Year |
Full Year |
|
|
2008 |
2007 |
2007 |
|
|
£000 |
£000 |
£000 |
|
|
|
|
|
|
Cash flows from
operating activities |
|
|
|
|
Operating
profit for the financial period |
30 |
51 |
233 |
|
Depreciation
and amortisation charges |
9 |
8 |
17 |
|
(Increase)/decrease
in inventories |
17 |
(46) |
(49) |
|
Decrease/(Increase)
in trade and other receivables |
66 |
95 |
(50) |
|
Increase/decrease
in trade and other payables and accruals |
(105) |
(50) |
9 |
|
|
|
|
|
|
Net cash
generated from operating activities |
17 |
58 |
160 |
|
|
|
|
|
|
Investment
activities |
|
|
|
|
Interest
received |
25 |
19 |
43 |
|
Purchase of
property, plant and equipment |
(5) |
- |
(5) |
|
Intangible
development costs |
(35) |
(2) |
(4) |
|
|
|
|
|
|
Net cash flow
from investing activities |
(15) |
17 |
34 |
|
|
|
|
|
|
|
|
|
|
|
Net movement in
cash and equivalents |
2 |
75 |
194 |
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period |
1,026 |
832 |
832 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of
this period |
1,028 |
907 |
1,026 |
|
Consolidated
statement of changes in equity |
|
|
|||
|
(i) Six months
ended 30 June 2008 – Unaudited |
|
|
|||
|
|
|
|
|
|
|
|
|
Called
up |
Share
|
Other |
Retained |
Total |
|
|
Share
capital |
Premium |
Reserve |
Earnings |
equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At
1 January 2008 |
7,554 |
5,602 |
- |
(11,988) |
1,168 |
|
Profit
for the period |
- |
- |
- |
55 |
55 |
|
|
|
|
|
|
|
|
At
30 June 2008 |
7,554 |
5,602 |
- |
(11,932) |
1,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(ii) Six months
ended 30 June 2007 – Unaudited |
|
|
|||
|
|
|
|
|
|
|
|
|
Called
up |
Share
|
Other |
Retained |
Total |
|
|
Share
capital |
Premium |
Reserve |
Earnings |
Equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At
1 January 2007 |
7,554 |
5,602 |
1,334 |
(13,587) |
903 |
|
Profit
for the period |
- |
- |
- |
82 |
82 |
|
|
|
|
|
|
|
|
At
30 June 2007 |
7,554 |
5,602 |
1,334 |
(13,505) |
985 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(iii) Year
ended 31 December 2007 – Audited |
|
|
|
||
|
|
|
|
|
|
|
|
|
Called
up |
Share
|
Other |
Retained |
Total |
|
|
Share
capital |
premium |
Reserve |
Earnings |
Equity |
|
|
£000 |
£000 |
£000 |
£000 |
£000 |
|
At
1 January 2007 |
7,554 |
5,602 |
1,334 |
(13,587) |
|
|
Profit
for the year |
- |
- |
- |
265 |
|
|
Transfer |
- |
- |
(1,334) |
1,334 |
- |
|
At
31 December 2007 |
7,554 |
5,602 |
- |
(11,988) |
1,168 |
1. Segmental Reporting
Ultima operates two main business segments, IT and related services (the Services Division) and electronic and other products (Products Division). The revenue and net operating profit (before interest and tax) generated by each segment are summarised as follows:-
|
|
|
|
|
|
|
Unaudited |
Unaudited |
Audited |
|
|
Half
year |
Half year |
Full year |
|
|
2008 |
2007 |
2007 |
|
|
£000 |
£000 |
£000 |
|
Revenue |
|
|
|
|
United Kingdom |
841 |
678 |
1,564 |
|
|
|
|
|
|
Total |
841 |
678 |
1,564 |
|
|
|
|
|
|
Revenue |
|
|
|
|
Services Division |
264 |
287 |
701 |
|
Products Division |
577 |
391 |
863 |
|
|
|
|
|
|
Total |
841 |
678 |
1,564 |
|
|
|
|
|
|
Operating profit before exceptional items |
|
|
|
|
Services Division |
(21) |
27 |
148 |
|
Products Division |
51 |
24 |
85 |
|
|
|
|
|
|
Total |
30 |
51 |
233 |
|
|
|
|
|
2. Basis of preparation
The consolidated interim financial statements
have been prepared in accordance with the AIM Rules for Companies and prepared
on a basis consistent with the recognition measurement principles of International
Financial Reporting Standards (“IFRS”) as adopted by the EU and the accounting
policies set out in the group’s financial statements for the year ended 31
December 2007.
The consolidated interim financial statements
are unaudited and include all adjustments which management considers necessary
for a fair presentation of the group’s financial position, operating results
and cash flows for the 6 month periods ended 30 June 2008 and 30 June 2007.
As permitted, the group has chosen not to
adopt IAS 34 ‘Interim Financial Statements’ in preparing these interim
financial statements and therefore the interim financial information is not in
full compliance with IFRS disclosure.
The preparation of interim financial
statements requires management to make judgements, estimates and assumptions that
affect the application of policies and reported amounts of assets and
liabilities, income and expenses. Actual
results may differ from these estimates.
These interim financial statements have been
prepared under the historical cost convention.
Due
to the expected availability of brought forward losses, no provision has been
made for application of taxation for the period under review..
The company has not proposed or declared an
interim dividend.
Basic earnings per share has been calculated
based on the profit on ordinary activities after taxation and the weighted
average number of shares in issue for the period of 204,747,964 (June 2007:
204,747,964 and December 2007: 204,747,964). There are no options having a
dilutive impact on earnings per share.
This interim statement was approved by the
board on 23rd September 2008 and has not been audited by the company's auditors
Grant Thornton UK LLP. The comparatives for the full year ended 31 December
2007 are not the Company's full statutory accounts for that year. A copy of the
statutory accounts for that year, which were prepared under IFRS, has been
delivered to the Registrar of Companies. The auditors' report on those accounts
was unqualified, did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
did not contain a statement under section 237(2)-(3) of the Companies Act 1985.
A copy of this interim statement is
available at the Company's registered office at Ultima Networks plc, Akhter
House, Perry Road, Harlow, CM18 7PN and on the company’s website, www.ultimanetworks.co.uk