29th Mar 2005 07:00
Universe Group PLC29 March 2005 Tuesday 29 March 2005 UNIVERSE GROUP PLC UNAUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004 Universe Group plc, ("Universe" or the "Company"), the retail and informationsystems company, is pleased to announce its Unaudited Preliminary Results forthe year ended 31 December 2004. Main features: • Operating profit before exceptional items and development costs up 5 per cent. to £1,879,000 (2003: £1,790,000) • Adjusted earnings per share of 2.2p (2003: 3.0p) • Operating exceptional costs of £905,000 (2003: £645,000) principally for rationalising Master Change • First Remit development costs of £443,000 (2003: £3,183,000) written off • Loss before tax £74,000 (2003: £2,730,000) • Proposed final dividend of 0.5p making a total for the year of 0.75p Commenting, Ray Mackie, Chairman and Chief Executive of Universe said: "In 2004 we achieved an operating profit before exceptional items and beforeFirst Remit development costs which was 5% better than that achieved last year.As expected, HTEC had a strong second half and did particularly well in thecontext of continuing preparations for rolling out Chip and PIN technology inour payment systems. Currency Division incurred smaller operating losses thanlast year as we consolidated our positions in both Master Change and FirstRemit. At HTEC we are seeking to ensure we capitalise on our technology and the currentorder position indicates that we should be able to do so. Currency Division hasbeen rationalised and I expect this to result in an improvement in our figuresfor the current year." For Further Information: Universe Group plcRay Mackie, Group Chief Executive 020 7287 0888 Charles Stanley & Co LimitedRussell Cook 020 7739 8200 CHAIRMAN'S STATEMENT In 2004 we achieved an operating profit before exceptional items and beforeFirst Remit development costs which was 5% better than that achieved last year.As expected, HTEC had a strong second half and did particularly well in thecontext of continuing preparations for rolling out Chip and PIN technology inour payment systems. Currency Division incurred smaller operating losses thanlast year as we consolidated our positions in both Master Change and FirstRemit. Overall, group operating profits before exceptional items were£1,879,000 compared to £1,790,000 last year. RESULTS Our sales were £44.0 million against £42.1 million for last year. On thisfigure we incurred a loss before tax of £74,000 after exceptional charges of£905,000 and First Remit development costs of £443,000 compared with a lossbefore tax of £2,730,000 last year when development costs for 2002 and 2003 werewritten off at the year end. Our earnings per share, adjusted for operatingexceptionals, development costs and amortisation of development loan issue costsare 2.2 pence compared to 3.0 pence last year. This is based on adjustedearnings of £1,342,000 (2003 £1,163,000). RETAIL AND INFORMATION SYSTEMS HTEC had a relatively quiet first half from a delivered sales perspective whilewe and our major customers prepared for the move to Chip and PIN. In the secondhalf our orders and contracts with, in particular ASDA, Morrisons and PayPointenabled us to make a good deal of progress. The picture for our future growthis a good one. Gemini As I said at the half year, the Gemini EFT Terminal has now been specified by,and is in use with, two major oil companies and a major independent paymentservice provider. Gemini derivatives are also in use with a third oil companyand other customers as a loyalty terminal. The Gemini Intelligent PINpad isbeing installed now. A touch screen derivative and other special features haveenabled us to enter the non-petrol arena with a new customer. HydraPOS This Point of Sale System has proved itself as a petrol forecourt leader and isnow being supplied with industry standard PINpads. The roll out across thepetrol forecourts of two of the major supermarket groups is continuing in thefirst half of this year. We are now also achieving important HydraPOS sales inthe independent and convenience sectors of the market. Hydra OPT This petrol outdoor payment system is a crossover between Gemini and HydraPOStechnology and is EMV approved. A good number of the new OPTs have beeninstalled and this is a system for rolling out in the UK over several years. Services The service component of our business continues to grow with each generation ofdevices put into the field by HTEC. In addition, our data handling departmentis expanding with on-line loyalty business making a positive contribution fromour installed base. CURRENCY DIVISION There are two activities in this Division. These are bureaux de change andinternational money transfer, trading as Master Change and First Remitrespectively. We have been reducing the Master Change shop estate to a core of goodperformers. In the year we closed Salzburg in Austria, shops in Rue de laHarpe, Huchette, Boulevard St Germain and Boulevard St Michel in Paris, andAntibes in the South of France. After these closures we now trade from fifteenshops of which ten are in Paris. Two further shops in London and one inStrasbourg will be closed during the first half of 2005. The bureaux businesswill then consist of ten shops in Paris. The shops in Vienna and London will bepart of First Remit. The closures have of course had a substantial cost andthis cost has resulted in significant exceptional items. Last year I said we would have a period of consolidation at First Remit. Wehave improved our prices and margins at the expense of volume growth but even sovalue sent at £15 million was 50% more than was sent in 2003. Development hascontinued at a reduced pace; we have opened in Cyprus and we have a new licencein Austria. We have new banking partners in Congo, Gambia, Ghana, Sri Lanka,Morocco and Philippines. The international money transfer market has been very competitive in 2004. Thismade our work on prices and margins all the more important. The competitionwill remain challenging in 2005 but we intend to make further progress againstthis competitive background. GOODWILL We believe our businesses have an indefinite life and we do not amortise thegoodwill arising on consolidation. This has been the subject of adverse commentby our auditors in recent years and, again, this year. The IFRS regime will beadopted from 1 January 2005 and our treatment will be consistent with IFRS. DIVIDEND Having regard to an interim dividend this year that came from reserves we arecontinuing to adopt a prudent approach. Accordingly our final dividend will bereduced to 0.5 pence per share. Payment will be on 6 July 2005 and a scripalternative will be offered. STAFF It has been a challenging year and I am grateful for the efforts our staff havemade to overcome the challenges that have faced us. PROSPECTS At HTEC we are seeking to ensure we capitalise on our technology and the currentorder position indicates that we should be able to do so. Currency Division hasbeen rationalised and I expect this to result in an improvement in our figuresfor the current year. R J MackieChairman and Chief Executive29 March 2005 Unaudited consolidated profit and loss account for the year ended 31 December 2004 Notes 2004 2003 £000s £000s Turnover 43,992 42,129 Operating profit/(loss)Operating profit before development cost write-offand exceptional operating costs 2 1,879 1,790Development costs written - off (443) (3,183)Exceptional operating costs 3 (905) (645) Operating profit/(loss) on ordinary activities beforeinterest and taxation 531 (2,038)Net interest payable and similar charges (605) (692) Loss on ordinary activitiesbefore taxation (74) (2,730) Tax on ordinary activities (13) (61) Loss for the financial year after taxation (87) (2,791)Dividends (458) (729) Retained loss for the financial year (545) (3,520)Profit and loss account at 1 January 3,850 7,226Exchange differences (70) 144 Profit and loss account at 31 December 3,235 3,850 (Loss)/earnings per share Pence Pence Basic and diluted 4 (0.1) (7.0)Adjusted before development cost write -off, operating exceptional costs and amortisation ofdevelopmentloan issue costs 4 2.2 3.0 Unaudited Balance Sheets as at31 December 2004 Group 2004 2003 £000s £000sFixed assets Intangible Assets 22,599 22,039 Tangible Assets 5,200 6,005 Investments - - 27,799 28,044Current assets Stocks 3,012 2,660 Debtors Amounts due within one year 3,005 3,419 Amounts due after one year - - 3,005 3,419 Cash at bank and in hand 250 310 6,267 6,389Creditors Amounts falling due within one year (6,911) (9,143) (644) (2,754) Net current liabilities Total assets less current liabilities 27,155 25,290 Creditors:Amounts falling due after more than oneyear (2,349) (317) Net assets 24,806 24,973 Capital & reserves Called up share capital 3,053 2,931 Share capital to be issued 38 - Share premium account 9,576 9,155 Revaluation reserve 301 352 Other reserves 8,603 8,683 Profit & loss account 3,235 3,850 24,806 24,971 Equity shareholders' fundsEquity minority interest - 2 Capital employed 24,806 24,973 Unaudited Consolidated Cash Flow statement for the year ended 31 December 2004 Notes 2004 2003 £000s £000s Net cash inflow from operating activities 2,104 2,155 Returns on investments and servicing offinanceInterest received 7 5Interest paid (531) (536)Loan issue costs - (203) Net cash outflow from returns oninvestment and servicing of finance (524) (734) Taxation (29) 234 Capital expenditurePurchase of tangible fixed assets (449) (76)Purchase of intangible fixed assets (1,252) (2,518)Sale of tangible fixed assets 269 228 (1,432) (2,366) Net cash outflow from capital expenditureand financial investment Acquisitions and disposalsPurchase of minority interest (2) (2) Net cash outflow from acquisitions anddisposals (2) (2) Equity dividends paid (608) (385) Net cash outflow before financing (491) (1,098) FinancingCapital elements of lease repayments (372) (383)Repayment of bank Loans (311) (800)Issue of shares net of expenses 433 3,733Other new loans 1,155 386 Net cash inflow from financing 905 2,936 Increase in cash in the year 414 1,838 Reconciliation of Movements in Group Shareholders' Funds 2004 (unaudited) £'000 Retained loss for the financial year (545)New share capital (net of expenses) 581Exchange differences ( 70)Other movements (131) Net reduction to shareholders' funds (165)Opening shareholders' funds 24,971 Closing shareholders' funds 24,806 Notes: 1. Financial Information These statements do not constitute accounts as defined by section 240 of the Companies Act 1985. The financial information for the full preceding year is based on the statutory accounts for the financial year ended 31 December 2003. Those accounts, on which the auditors issued a qualified opinion with regard to the treatment of goodwill, have been delivered to the Registrar of Companies. 2. Analysis of Operating Profits The operating profit by division is: 2004 2003 £'000 £'000 HTEC 2,426 2,353Currency Division (187) (214)Central costs (360) (349) 1,879 1,790 3. Operating Exceptional Items Operating Exceptional Items, £905,000 (2002: £645,000) principally represent redundancy costs and the cost of bureaux closures. 4. Earnings per Share The earnings per share is calculated by reference to the weighted average of 59,866,000 shares in issue during the year. The number of shares in issue at 31 December 2004 was 61,054,766. 5. Reconciliation of movement in Net Debt 2004 £'000 Increase in cash in the year 414Cash flow from debt and lease financing (310) Change in net debt resulting from cash flows 104New Finance leases (138)Other items (175) Movement in net debt in the period (209)Net debt at 1 January (4,375) Net debt at 31 December (4,584) 6. Dividend The Board is recommending a final dividend of 0.5p per ordinary share payable on 6 July 2005, to shareholders on the register on 20 May 2005 subject to approval at the AGM to be held on 13 May 2005. 7. Report and Accounts Copies of the Annual Report and Accounts will be sent to shareholders on 8 April 2005 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. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
UNG.L