3rd Jul 2009 07:00
Universe Group PLC
3 July 2009
Trading update
Universe Group plc ("Universe" or the "Group"), the AIM (UNG.L) listed retail and loyalty systems group, makes the following statement on trading in the year to date ahead of the announcement of its unaudited half year results for the 6 months ended 30 June 2009 expected to be released on 12 August 2009.
The Directors announce that they expect to report an operating profit in the first 6 months as opposed to a loss for the same period last year. However, across all market sectors the Group is experiencing delays or postponements of significant capital projects following the general trend of the economy in a period of recession. Discussions with customers indicate that this will continue to be the case throughout 2009. Managed service income remained in line with the Group's forecasts.
Total sales for the six months were down by more than 10% against the same period last year, almost entirely attributable to the Group's continuing withdrawal from contract manufacturing. Full year sales forecasts are therefore being revised downwards to reflect this trend and the continued uncertainty regarding projects in the Group's main petrol forecourt markets.
Cost reduction programmes which were initiated in mid-2008 have continued and are now delivering significant benefits to mitigate the reduced level of sales. Whilst the Directors expect trading in the second half of the financial year to continue to be profitable, the lower sales forecast will inevitably lead to a shortfall against current market expectations of operating profit, albeit operating profit is still expected to show an improvement on that reported for the year ended 31 December 2008.
The focus on improving profitability and tight cost control has enabled the Group to reduce its borrowings by approximately £500,000 during the 6 months ended 30 June 2009 and generate cash balances in excess of £500,000 at that date.
The main trading highlight in the first half has been the continued successful implementation of a major global loyalty programme which has recorded approximately 50 million transactions in the period. Prospects in this area of the business are exciting and will take Universe into wider geographic markets.
The UK petrol forecourt market is not immune from the recession; however, the Group is concentrating on its strong customer base with continued development of enhanced business information systems.
Paul Cooper, Group CEO of Universe Group plc commented:
"Whilst the global recession has affected our growth drive, as without exception our major customers have delayed or postponed new capital projects, operational initiatives relating to cost control and cash flow have strengthened the Balance Sheet. At the same time we remain focussed on the development of market leading software products for our customer base and the introduction of those products into new markets."
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For further information:
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Universe Group PLC
Paul Cooper, Chief Executive Officer
Bob Smeeton, Finance Director
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Tel: 023 8068 9510
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Arbuthnot Securities Limited
Tom Griffiths
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Tel: 020 7012 2000
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END
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