Final Results

RNS Number : 9118K

Universe Group PLC

28 April 2010

 

 

Universe Group PLC

("Universe" or the "Group")

 

Preliminary results for the year ended 31st December 2009

 

 

Universe Group PLC UNG.L the AIM listed retail and loyalty systems group today announces its preliminary results for the year ended 31st December 2009.

 

Highlights

 

·; Revenue decreased 12.5% to £14.49 million (2008: £16.56 million).

 

·; Increased gross margin percentage to 36% (2008: 33%) driven by improved sales mix and cost reductions.

 

·; Loss after tax of £0.50 million (2008: loss of £0.35 million)*

 

·; Operating profit before exceptional items up 45% to £0.75 million (2008: £0.52 million)**

 

·; EBITDA before exceptional items up 53% to £1.85 million (2008: £1.20 million)**

 

·; Statutory operating loss of £0.15 million (2008: loss of £0.11 million)

 

·; Significant contract extension in Petrol Forecourt Solutions division

 

 

* After exceptional costs of £1.0 million, mainly comprising restructuring costs (2008: After exceptional costs of £0.6 million mainly comprising restructuring costs.).

 

** Before exceptional costs of £0.9 million mainly comprising restructuring costs.(2008: Before exceptional costs of £0.6 million mainly comprising restructuring costs.).

 

Unless specified otherwise, all references to adjusted operating profit and adjusted profit before tax throughout this announcement exclude the exceptional costs disclosed in ** above.

 

John Scholes, Chairman, commented:

 

"As reported in the interim results, 2009 has seen a period of weak demand from our major customers and this has been a difficult back drop against which to continue the transition of the Group from manufacturer to solutions provider.

 

"Nevertheless, despite the poor economic climate, I am delighted to be able to report that the benefits of this transition have allowed the Group to show improved underlying profitability despite reduced turnover. The challenge for 2010 is to return the Group to a position of turnover growth whilst maintaining that increased underlying profitability. Progress in winning new business is being made in all four divisions of the Group and coupled with the restructuring that has already occurred, turnover growth would provide the Group with a firm foundation for future enhanced profitability."

 

 

For further information:
Universe Group PLC Paul Cooper,Chief Executive Officer John Scholes, Chairman	023 8068 9510
Arbuthnot Securities Limited Tom Griffiths	020 7012 2000
Tavistock Communications John West Andrew Dunn	020 7920 3150

 

 

Chairman's Report

 

Introduction

As reported in the interim results, 2009 has seen a period of weak demand from our major customers and this has been a difficult back drop against which to continue the transition of the Group from manufacturer to solutions provider.

 

Nevertheless, despite the poor economic climate, I am delighted to be able to report that the benefits of this transition have allowed the Group to show improved underlying profitability despite reduced turnover. Operating profit, before exceptional items, increased by 45% in 2009 to £750,000 (2008: £516,000). EBITDA before exceptional items grew in the same period by 53% to £1,845,000 (2008: £1,208,000).

 

Exceptional items totalling £1,005,000 were incurred during the year mainly as a result of further restructuring of the Group. These costs contributed to an overall loss before taxation of £599,000 (2008: loss of £484,000).

 

The highlight of the year was undoubtedly the signing of an enhanced contract with Wm Morrison Supermarkets Plc. Morrisons is a long established and valued customer of the Group and we are delighted to extend that relationship into the foreseeable future.

 

Results

 

The impact of weak demand saw Group turnover fall by 12.5% compared to the prior year. This is a larger fall than reported at the half year, but was expected given the strength of demand experienced in late 2008. Turnover in the second half was slightly less than reported in the first half (3% down) but operating profitability was higher in the second half, as a result of the cost reductions implemented earlier in the year.

 

With an improvement in the sales mix, gross margin percentage increased to 35.9% from 32.6% in the prior year, reflecting the benefits of the move from manufacturing to services and the consequent restructuring of the business. Savings in our operational cost base have been made and Group headcount has been reduced by 17% during the course of the year, resulting in a reduction in staff costs of 19%. It is also worthy of note that two of the Group's four segments actually grew their turnover during the year.

 

Operating profit, before exceptional items, represents a 5.1% operating margin, compared to 3.1% in 2008. The 9% reduction in administrative costs was a significant component of this improvement.

 

During the year we incurred significant restructuring costs of £801,000 (2008:£534,000), as we continued the transition from manufacturing to solutions provider. Incurring these costs enables the Group to proceed with a much reduced cost base and enhanced operational gearing. As the wider business community recovers confidence and normal levels of capital expenditure resume, the Board anticipates that this reduced cost base should allow the Group to benefit from a recovery in demand for our products and services. We continue to pay close attention to our cost base, although we would not expect further exceptional costs of the scale reported here in the foreseeable future.

 

 

Approach by Brulines Group plc

The approach by Brulines Group plc was a significant event during the year. Whilst we remain in an offer period there is no agreement for Brulines to undertake any due diligence on the Company. However it is also worth noting the impact on trading that an approach of this sort can have. The requirement to obtain Brulines' consent resulted in a frustrating and unavoidable delay in signing the Morrisons' contract. This delay impacted 2009's results, and in addition significant costs were incurred primarily relating to increased advisers fees.

 

The approach from Brulines continues to be a significant distraction for the management team whose main focus has to be guiding the Group through these difficult economic conditions. It is worth repeating here that the Directors remain committed to delivering value to all of the Group's shareholders.

 

Annual General Meeting

At the 2009 Annual General Meeting a proposed resolution to allow the Group to issue share options or to raise funds via a placing did not receive sufficient shareholder support. After significant changes to the management team over the last two years the Group is unable to align the team's interests with those of its shareholders, a situation which the Board does not believe is satisfactory. In addition the Groups ability to raise funds if necessary via a placing is equally as important. Obtaining additional debt finance currently is both expensive and difficult, and without recourse to potential sources of equity funding the Group runs the risk of missing out on opportunities that may arise.

 

For these reasons, enabling resolutions will be proposed at the forthcoming AGM and I would urge all shareholders to vote in favour.

 

 

Board of Directors

After 23 years of outstanding service, both in an executive and a non-executive capacity, Barrie Brinkman has decided to stand down as a director at the conclusion of the 2010 Annual General Meeting. I thank Barrie for his contribution over the years.

 

 

Dividend

Whilst we continue to focus on delivering growth in profits, the availability of funding to deliver such growth impacted results in 2009. The receipt of £1 million of further funding from our bank late in the year should not disguise the difficulties of obtaining finance during 2009. The existing credit facilities require significant capital repayments during 2010, and consequently we do not recommend paying a dividend for the year. We will continue to review the position regarding future dividend payments as the Group progresses.

 

 

Outlook and Prospects

Being able to report an increase in underlying profitability, despite a reduction in turnover, shows the progress that has been made. However, the challenge for 2010 is to return the Group to a position of turnover growth whilst maintaining that increased underlying profitability. Progress in winning new business is being made in all four divisions of the Group and coupled with the restructuring that has already occurred, turnover growth would provide the Group with a firm foundation for future enhanced profitability.

 

John Scholes

Chairman

 

28th April 2010

 

 

Chief Executive's Report

 

In the face of the most severe global economic downturn in recent years the focus for 2009 was necessarily improving profitability, cash flow and developing recurring revenue streams. Growth was inevitably affected by capital expenditure freezes within much of our customer base as well as by the continuing squeeze on available debt finance. Underlying operational profitability before exceptional items improved as a result of tough cost reductions. These actions will continue to improve profitability and cash flow and will ensure that full advantage can be taken in any future economic up turn.

 

Financial Performance Review and Key Performance Indicators

 

The Group recorded an overall loss before taxation of £599,000 (2008: loss of £484,000) which was significantly impacted by £1,005,000 of exceptional items. This mostly related to £801,000 of restructuring costs reflecting cost cutting programmes in our manufacturing operation, and the closure of our Spanish office. Whilst an increasing loss is disappointing the exceptional costs incurred were necessary to allow the Group to meet the twin challenges of a business in transition and a difficult economic environment. Levels of cost remain under review at all times, however the main foreseeable restructuring costs have now been incurred.

 

The early action taken on cost reduction reduced overhead costs by 9% to £4,454,000 (2008: £4,882,000) and provided the platform for a 45% increase in operating profit, before exceptional items, to £750,000 (2008: £516,000). This was against the disappointment of a revenue decrease of 12.5% resulting from the economic recession. Despite this, gross margins grew to 35.9% from 32.6% in the prior year. Operating margin, before exceptional items, rose to 5.1% from 3.1% in 2008 and is moving towards our goal of exceeding 10%. Profit before tax and exceptional items, increased by 149% to £406,000 (2008: £163,000).

 

The 53% growth in EBITDA (as calculated in note 3) from £1,208,000 to £1,845,000 demonstrates that progress continues to be made in improving operational cash generation. Investment in fixed assets over the last two years has changed the Group's cost structure, increasing the total depreciation and amortisation charge by £403,000 from the prior year. Whilst investment will continue the asset base is now in place that will allow the Group to deliver growth.

 

The Board will continue to monitor revenue change, operating profit, cash generation and customer satisfaction as key performance indicators. Service excellence has become an essential element in customer relationships with demands for improved service level agreement ('SLA') targets being widespread. Overall SLAs for 2009 were 94% (2008: 96%) which are above contractual requirements. Contracted service revenues are a key element of PFS sales and requests from an increasing number of customers are being made for a 24/7 service.

 

 

Universe Data Systems (UDS)

 

The segmental reporting breakdown shows an increase in revenue of 63% for the year to £3,086,000 (2008: £1,885,000) which in turn drove segmental profit to £959,000 (2008: loss of £69,000).

 

During the later part of 2008 UDS began the roll out of what is believed to be the largest and only truly global real time loyalty scheme. Early 2009 saw the web based system go live in four European countries with licence arrangements for more to come on stream in future periods. In excess of 100m transactions have been processed by our data centre for the first year and significant ongoing revenue streams will accrue from the initial five year agreement.

 

Currently the PCIDSS approved data centre handles £8 billion worth of transactions per year and has loyalty schemes with up to 14 million members operating in a real time environment. HTEC provides Mission Critical Services to two of the UK's supermarket groups and four of the major oil companies, either in the UK or Europe.

 

Progress has been made during the year to establish UDS outside the petrol and oil industry. Partnerships and alliances with market specialists are continuing to introduce exciting new opportunities as UDS is positioned as a data handling platform in the extended loyalty and customer relationship management ('CRM') space.

 

Long sales cycles remain a feature of loyalty systems projects but a growing number of interesting opportunities are now presenting themselves, which indicate strong future potential based on a recurring revenue model. The SaaS (software as a service) model of operation gives increasing benefits to both customer and supplier as utilisation of capacity increases.

During the year, development was completed on the automatic number plate recognition software (ANPR) range enabling agreements to be signed with five channel partners in the latter part of 2009. The HTEC data centre can hold and process data with reference to a central database for partners dependent on the application. The rapidly increasing market for surveillance and security products will provide a growing sales channel for future years. The ANPR product range now includes forecourt drive off control, car park barrier control, visitor systems and a central on-line warning list database.

 

 

Petrol Forecourt Systems (PFS)

 

The PFS business segment produced £1,644,000 (2008: £2,486,000) of profit and remains the Group's largest and most profitable segment despite a 25% fall in turnover. Prior year sales and profit benefited from a major supermarket payment terminal rollout but excluding that underlying sales were up 15% compared to 2008. Recurring contract business is in excess of 70% of turnover for this segment.

 

The core solutions of the PFS business relate to the supply of point of sale (POS) payment systems and wet stock management reporting.

 

HTEC has occupied a prominent position in the UK forecourt managed services market for a number of years and its systems currently run the petrol forecourts of two major supermarket chains and over 33% of all UK forecourts have HTEC equipment on them. Development of the software continues in order to improve functionality for the growing convenience store market, and to allow easier integration with other third party products.

 

HTEC has a wide range of end to end approvals to handle bank and fuel payment cards and will continue to be a market leader for this type of payment processing. HTEC's payment terminals are recognised as some of the most secure within the industry, meeting the challenges posed constantly from card fraud criminals. Investment in the next generation payment terminal which will begin roll out in 2010 has been carefully controlled to give a rapid payback to the Group.

 

Disappointingly, 2010 saw a fall in turnover as customers cut back on new project spending. I can however report that we renewed a significant long term contract with Morrisons for enhanced services supporting its store IT replacement project.

 

New outdoor payment terminal roll outs were particularly badly affected last year as capital expenditure plans were put on hold. This product is however now opening up new markets related to airfields, marinas and commercial truck stops.

 

 

Manufacturing (CEM)

 

The traditional core business of HTEC, subcontract design and manufacture, has over a number of years been in decline. Continued monitoring showed that although it was loss making at the pre tax level, it did have a positive contribution to fixed overheads so an immediate disposal was ruled out as impractical because of the requirement to supply components for other segments of the Group.

 

Revenue continued to decline in 2009 to £2,056,000 (2008: £3,263,000). Whilst the cost base was significantly reduced to ensure a positive contribution to fixed overheads a loss at the operating profit level was recorded of £97,000 (2008: loss £120,000). Encouragingly the economic challenges last year have actually benefited this part of the business and new customers are creating welcome opportunities early in 2010.

JetSet

 

The financial crisis which began in 2008 continued to seriously affect the JetSet business. The market became increasingly tough as capital expenditure was cut back and asset finance to support machine placement was still both difficult to obtain and unreasonably expensive. Despite the conditions, turnover increased by 31% to £1,933,000 (2008: £1,475,000) However, due to having to operate the production facility in Bedford at below capacity, operating losses increased to £241,000 (2008: loss of £181,000) particularly weighted to the earlier part of the year.

 

By Q4 of 2009 JetSet was EBITDA positive and with an improved trading environment has a high expectation of achieving regular and sustainable profitable trading. Visibility of potential prestigious future contracts with existing Group customers demonstrates that the business has growth potential assuming new asset funding avenues are available.

 

The concept of revenue share from equipment owned by JetSet and sited on the customers' premises has already resulted in the winning of contracts from customers such as ASDA, Co-op and BP, clearly demonstrating the cross selling opportunity from other Universe business units.

 

Prior year adjustment in respect of Goodwill

 

The introduction of IFRS8 on Segmental Reporting has required the Group to allocate the historic goodwill associated with the HTEC subsidiary (£17.3 million) across the operating segments contained within HTEC. A significant proportion of this goodwill (£6.3 million) has necessarily been allocated to the historic Manufacturing segment. The requirement to allocate goodwill to the segments is a change of accounting policy and consequently must be applied retrospectively, resulting in the allocation being made as at 1 January 2007. Cash flow forecasts for the segment, at that time, would not support the carrying value of the goodwill allocated to Manufacturing and consequently an impairment provision of £5.1 million would have been required had impairment been measured on a segmental basis in 2007. Consequently a £5.1 million provision has been booked in 2009 and treated as a prior year adjustment.

 

Balance Sheet, Cash Flow, Banking Facilities and Going Concern

 

During 2009 the priority has been to generate cash and to improve the debt repayment profile of the Group's borrowings. By the year end net borrowings (debt less cash) had dropped from £3.2 million to £2.5 million, and the repayment profile had improved significantly, with 73% of net borrowings due in more than one year (2008: 45%). Debt repayment will remain a significant drain on the Group's cash flow in 2010, with scheduled repayments due of £858,000, but this debt repayment burden is scheduled to drop significantly in 2011.

 

Overall the Group generated £1.1 million of cash during the period. Clearly the negotiation of a new long term loan from our bankers was a significant part of that, but in reality most of these proceeds served to refresh facilities that have been paid down over the last two years on an accelerated schedule. Net proceeds from financing activities were £371,000, with the balance of the cash arising from £1.4 million generated by the operation, net of the £707,000 invested into software product development and an expansion of the JetSet revenue share estate.

 

During the year the Group breached one of its banking covenants, in respect of the net worth of the group which has been significantly impacted by the goodwill impairment referred to above. All other covenants were met, and the breach has been subsequently waived by HBOS. HBOS has also agreed to remove covenants from both loans going forward, and compliance with the loan terms now rests on the ability to repay loan instalments as they fall due. The directors have reviewed financial forecasts for the business covering the 12 months from the date of this report and are confident that the repayment schedule will be satisfied and that the Group will be able to operate within its current banking facilities. As a result, the Directors have continued to adopt the going concern basis in preparing the financial statements.

 

Outlook

The strategy of the management team is to grow and transform the Group from lower margin product sale and manufacturing activity to a software and services business with associated recurring revenue targeted at tier 1 businesses. Dealing with the burdensome debt structure, limited funding for investment and an inappropriate operational structure has been a difficult task. Restructuring write offs have been higher than expected and new product development has been hindered by ongoing support requirements from legacy products.

 

2010 sees us go in to a year where the cost structure has been significantly improved by the actions taken in 2008/9, new products have been added to the portfolio and the economy is emerging from a deep recession. The Group is now better placed to deliver growth and profitability. 2010 will see further debt reduction and by the end of this year our debt repayment profile will have improved significantly.

 

The sales pipeline for UDS continues to grow and strategic partnerships within the loyalty/CRM field are beginning to generate significant new opportunities. The PFS business is maintaining its market leading position and is seeing growth opportunities from its major customers. JetSet has the potential to move into profit this year and reach critical mass for equipment placements.

 

 

Paul Cooper

Chief Executive Officer

 

28th April 2010

 

 

Consolidated statement of comprehensive income

For the year ended 31st December 2009

			Before exceptional items	Exceptional items	2009 Total	2008 Total
			£'000	£'000	£'000	£'000
						as restated
Continuing operations
Revenue			14,493	-	14,493	16,556
Cost of sales			(9,289)	-	(9,289)	(11,158)
Gross profit			5,204	-	5,204	5,398
Administrative expenses			(4,454)	(900)	(5,354)	(5,509)
Operating profit /(loss)			750	(900)	(150)	(111)
Finance costs			(344)	(105)	(449)	(373)
Profit/(loss) before taxation			406	(1,005)	(599)	(484)
Taxation					99	139
Loss for the year attributable to equity shareholders					(500)	(345)
Loss per share
Basic and diluted					(0.44)p	(0.30)p

 

 

 

 

Consolidated Statement of Recognised Income and Expenditure

For the year ended 31st December 2009

	2009 Total	2008 Total
	£'000	£'000
Exchange differences on translation of foreign operations	(3)	(35)
Net expense recognised directly in equity	(3)	(35)
Loss for the year	(500)	(345)
Total recognised income and expense for the year attributable to equity shareholders	(503)	(380)
Prior period adjustment	(5,100)
Total recognised income and expense recognised in the year attributable to equity shareholders	(5,603)

 

Consolidated Statement of Changes in Equity

For the year ended 31st December 2009

 

 

 

 

	Share capital £'000	Equity reserve £'000	Share premium £'000	Merger reserve on acquisition £'000	Translation reserve £'000	Profit and loss £'000	Total equity £'000
At 1 January 2008 as previously reported	5,747	110	10,753	8,603	(181)	(5,501)	19,531
Prior period adjustment (see note 2)	-	-	-	-	-	(5,100)	(5,100)
Reserves transfer	-	-	-	(5,100)	-	5,100	-
At 1 January 2008 as restated	5,747	110	10,753	3,503	(181)	(5,501)	14,431
Loss for the year attributable to equity shareholders	-	-	-	-	-	(345)	(345)
Translation differences	-	-	-	-	(35)	-	(35)
Share adjustment	(12)	-	-	-	-	-	(12)
At 1 January 2009	5,735	110	10,753	3,503	(216)	(5,846)	14,039
Loss for the year attributable to equity shareholders	-	-	-	-	-	(500)	(500)
Translation difference	-	-	-	-	(3)	-	(3)
At 31 December 2009	5,735	110	10,753	3,503	(219)	(6,346)	13,536

 

The transfer of £5.1 million from the profit and loss reserve to the merger reserve relates to the impairment of goodwill that was created upon the acquisition of HTEC Limited on which the merger reserve was created (see note 2).

 

 

 

Consolidated Balance Sheet

As at 31st December 2009

			2009	2008	2007
			£000	£000 as restated	£000 as restated
Non-current assets
Goodwill			12,612	12,612	12,150
Other intangible assets			1,007	1,113	800
Property, plant and equipment			2,805	3,093	2,170
			16,424	16,818	15,120
Current assets
Inventories			1,269	1,647	1,768
Trade and other receivables			3,060	3,061	2,720
Cash and cash equivalents			1,145	70	93
			5,474	4,778	4,581
Total assets			21,898	21,596	19,701
Current liabilities
Trade and other payables			(4,421)	(4,008)	(3,119)
Current tax liabilities			(335)	(315)	(373)
Short term borrowings			(2,218)	(1,951)	(888)
			(6,974)	(6,274)	(4,380)
Non-current liabilities
Medium term borrowings			(1,388)	(1,283)	(890)
Total liabilities			(8,632)	(7,557)	(5,270)
Net assets			13,536	14,039	14,431
Equity
Share capital			5,735	5,735	5,747
Equity reserve			110	110	110
Share premium			10,753	10,753	10,753
Other reserves			3,503	3,503	3,503
Translation reserve			(219)	(216)	(181)
Profit and loss account			(6,346)	(5,846)	(5,501)
Total equity			13,536	14,039	14,431

 

 

 

Consolidated Cash Flow Statement

For the year ended 31st December 2009

			2009	2008
			£000	£000
Cash flows from operating activities:
Operating loss - continuing operations			(150)	(111)
Depreciation and amortisation			1,095	692
Profit on disposal of fixed assets			(14)	-
Impairments			20	10
			951	591
Movement in working capital:
Decrease in inventories			379	208
Increase in receivables			(52)	(150)
Increase in payables			414	533
Interest paid including exceptional finance costs			(429)	(353)
Tax received/(paid)			148	(3)
Net cash inflow from operating activities			1,411	826
Cash flows from investing activities:
Acquisition of subsidiary undertakings			-	(388)
Purchase of plant, property & equipment			(397)	(1,198)
Expenditure on product development			(327)	(569)
Proceeds from sale of fixed assets			17	-
Net cash outflow from investing activities			(707)	(2,155)
Cash flow from financing activities:
Repayments of obligations under finance leases			(437)	(439)
Repayment of borrowings			(765)	(1,389)
New bank loans raised			1,573	3,134
Net cash inflow from financing			371	1,306
Increase/(decrease) in cash and cash equivalents			1,075	(23)
Cash and cash equivalents at beginning of year			70	93
Cash and cash equivalents at end of year			1,145	70

 

Notes

 

1. General information

 

 

Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The group intends to publish full financial statements that comply with IFRS.

 

The preliminary announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the year ended 31 December 2009

 

The financial information contained in the preliminary announcement does not constitute the Group's statutory results for the year ended 31st December 2009 or 2008 but is derived from those accounts. The above figures for the year ended 31st December 2009 and 2008 are an abridged version of the Group's audited accounts. The auditors have reported on these accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis; and did not contain any statements required under either s237(2) or s237(3) of the Companies Act 1985 or s498(2) or s498(3) of the Companies Act 2006. The full annual report and accounts will be posted to shareholders shortly and the Annual General Meeting will be held on 28th June 2010. The statutory accounts for 2009 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

 

This preliminary announcement was approved by the board on 28th April 2010.

 

2. Prior period adjustments

 

The introduction of IFRS 8, Segmental Reporting, has given rise to two prior period adjustments:

 

a) The Group has restated the carrying value of goodwill associated with the HTEC subsidiary. This is as a result of the adoption of IFRS 8 which requires goodwill to be allocated to operating segments. The transitional provisions of IFRS 8 allows that allocation of goodwill to be prepared as at 1 January 2007, the date at which the Group introduced segmental reporting of the three segments currently recognised within the HTEC subsidiary. Goodwill has been allocated based upon value in use calculations for the three segments reflecting their operational cash flows in 2007. The results of this exercise are to allocate goodwill across the segments as follows:

	PFS £'000	Mfg £'000	UDS £'000	Total £'000
As at 1 January 2007	9,228	6,334	1,688	17,250

Impairment testing of these balances indicated that a £5.1 million write off of goodwill in the manufacturing segment was required, and this has been booked in 2007 as a prior year period adjustment as it arises from the adoption of a new accounting standard. This gives rise to the restatement of previous years net assets as follows:

				Goodwill £'000
Adjustment to opening net assets at 1 January 2007 and January 2008				(5,100)

b) The introduction of IFRS8 Segmental Reporting, lead to a review of cost classification. Consequently the Group will now recognise the cost of its software engineering department as a component of cost of sales. In previous years these costs have been included within administrative expenses and the comparative information for the year ended 31 December 2008 has been restated to reflect this revised treatment. This gives rise to the restatement of prior year cost of sales and administrative expenses as follows:

		Before exceptional items £'000	Exceptional items £'000	2008 Total £'000
(Increase) in cost of sales		(970)	-	(970)
Decrease in administrative expenses		970	-	970

 

3. Operating Profit and EBITDA before Exceptional Items

 

			2009 £000	2008 £000 as restated
Revenue			14,493	16,556
Cost of sales			(9,289)	(11,158)
Gross profit			5,204	5,398
Administrative expenses			(4,454)	(4,882)
Exceptional items			(900)	(627)
Operating profit			(150)	(111)
Add back: exceptional items			900	627
Operating profit before exceptional items			750	516
Add back:
Depreciation			662	436
Amortisation			433	256
EBITDA before exceptional items			1,845	1,208

 

4. Segment information

 

The Group now has four business segments, operating within HTEC Limited and Jet Set Wash Systems Limited. All material operations are in the UK. HTEC Limited is currently organised into three trading divisions: Universe Data Services, Manufacturing and Petrol Forecourt Solutions. Further information is presented below on a divisional basis.

	UDS 2009 £000	Manufacturing 2009 £'000	PFS 2009 £'000	Jet Set 2009 £'000	Total 2009 £000
Revenue - all external	3,086	2,056	7,418	1,933	14,493
Gross profit	1,650	278	2,764	512	5,204
Segment expenses	(691)	(375)	(1,120)	(753)	(2,939)
Segment result	959	(97)	1,644	(241)	2,265
Central and corporate costs					(1,515)
Operating profit					750
Unallocated items:
Exceptional items					(1,005)
Finance costs					(344)
Taxation					99
Loss for the year					(500)

 

 

 

 

 

4. Segment information (continued)

 

	UDS 2008 £000	Mfg 2008 £'000	PFS 2008 £'000	Jet Set 2008 £'000	Total 2008 £000
	As restated	As restated	As restated		As restated
Revenue - all external	1,885	3,263	9,933	1,475	16,556
Gross profit	638	501	3,556	703	5,398
Segment expenses	(707)	(621)	(1,070)	(884)	(3,282)
Segment result	(69)	(120)	2,486	(181)	2,116
Central and corporate costs					(1,600)
Operating profit					516
Unallocated items:
Exceptional items					(627)
Finance costs					(373)
Taxation					139
Loss for the year					(345)

 

It is not currently possible to present segment assets and liabilities on a divisional basis and so these are presented on the basis of statutory reporting entities.

 

	HTEC 2009 £000	Jet Set 2009 £000	Corporate 2009 £000	Total 2009 £000
Total assets	19,869	1,886	143	21,898
Total liabilities	(5,038)	(1,310)	(2,014)	(8,362)
Net book amount	14,831	576	(1,871)	13,536
Other information:
Depreciation and amortisation	898	197	-	1,095
Impairment of assets	-	20	-	20
Capital expenditure:
Tangible assets	101	296	-	397
Intangible assets	327	-	-	327
Total	428	296	-	724

 

 

 

 

 

4. Segment information (continued)

	HTEC 2008 £000	Jet Set 2008 £000	Corporate 2008 £000	Total 2008 £000
	As restated			As restated
Total assets	19,392	2,063	141	21,596
Total liabilities	(4,746)	(1,366)	(1,445)	(7,557)
Net book amount	14,646	697	(1,304)	14,039
Other information:
Depreciation and amortisation	616	76	-	692
			-
Impairment of assets	10	-	-	10
Capital expenditure:
Tangible assets	420	959	-	1,379
Intangible assets	569	462	-	1,031
Total	989	1,421	-	2,410

 

5. Exceptional items

		2009 £000	2008 £000
Administrative expenses
Advisor fees in respect of Brulines approach		99	-
Group restructuring costs*		801	534
Stock written off as a result of EU Legislation		-	93
		900	627
* Consisting mainly of redundancy costs and the closure of the Spanish office
Finance costs
Refinancing costs		85	-
Interest on tax provision		20	20
		105	20

 

 

6. Loss per share from continuing operations

 

The calculation of the basic and diluted loss per share is based on the following data:

Loss from continuing operations	2009 £000	2008 £000
Loss for the purposes of basic and diluted earnings per share being net loss attributable to equity holders of the parent	(500)	(345)
	Number	Number
	'000	'000
Number of shares
Weighted average number of ordinary shares for the purposes of basic loss per share	114,705	114,705
Weighted average number of ordinary shares for the purposes of diluted loss per share	114,705	114,705
Loss per share	2009 Pence	2008 pence
Basic & diluted - continuing	(0.44)	(0.30)

 

 

7. Report and Accounts

 

Copies of the Annual Report and Accounts will be sent to shareholders in May 2010 and copies will also be available, free of charge, from the Company's registered office at George Curl Way, Southampton International Park, Southampton, SO18 2RX and from the Company's website, www.universeplc.com

 

 

This information is provided by RNS

The company news service from the London Stock Exchange