ULTIMA NETWORKS (UTN)

 

LSE:UTN: Final Results

ULTIMA NETWORKS

23 May 2014 07:00:10

Ultima Networks PLC

RNS Number : 8719H
Ultima Networks PLC
23 May 2014
 



 

 

 

                                                                                                        

Ultima Networks Plc
("Ultima" or "the Company")

Final Results
for the Year Ended 31 December 2013

The Directors are pleased to announce the audited results of the Company and its subsidiaries (together the "Group" or the "Ultima Group") for the year ended 31 December 2013.

The Ultima Group's operations consist of three divisions: IT Services, Green Technology Products and Green Power. These divisions are involved respectively in the sale of software to the legal profession, the development and sale of specialist electrical goods and the development of clean power generation through solar installations in Spain, Italy and the United Kingdom.

FINANCIAL HIGHLIGHTS

·      Group revenue is £2,261,000  (2012: £2,678,000)

 

·      Net (loss)/profit after Tax is (£156,000)  (2012: £136,000)

 

·      Group administration expenses is £1,122,000  (2012: £1,096,000)

 

·      Operating (loss)/profit is (£47,000)  (2012: £81,000)

 

·      Earnings per share is (0.06p)  (2012: 0.05p)

 

·      Cash at bank at the year end was £185,000  (2012: £237,000)

 

·      Net assets is £3,452,000  (2012:£3,605,000)

 

 

 

 

 

For Further Enquiries:

Ultima Networks plc                                                                                         01279 821 200

Prof. Humayun Mughal, Chairman and CEO

Zeus Capital Ltd (nominated adviser and broker)                                       0161 831 1512

Tim Metcalfe
Nick Cowles

CHAIRMAN'S STATEMENT

Introduction

Ultima has experienced another challenging trading year in its established markets but the group has continued investment programs of product developments in both the IT services and renewable energy sectors. Investment into research and development is crucial for competitive positioning of the Group's long term future.

The Green Technology division has seen good levels of interest in its new products and services. The group installed the first of its "Oasis" Containerised Hybrid Solar Plant in Saudi Arabia during October 2013. The performance of this plant has exceeded the original projections. A larger version of "Oasis" Hybrid Solar Power plant is scheduled for commissioning during June 2014 in Pilansberg Game reserve South Africa. The Group is following up a number of additional opportunities for this technology from telecom operators in Saudi Arabia and from mining companies in South Africa.

Two renewable heat pilot installations, ground source and air source systems, were successfully completed during the year. These reference installations should enable the Group to secure accreditation for MCS (Micro Generation Certification Scheme) in the area of Renewable Heat Installations.

The sales of Electric Bicycles in the UK have been stable but the European sales failed to see any improvements despite the restructuring of the sales channel. The group is reviewing its position in the European markets for these products and an annualised cost saving of £50,000 has been implemented in its European operations to take effect during the financial year 2014.

The IT Services division has continued further development of its FiLos suite of software products. FiLos has been well received by our customers and just over half of our client base has now implemented the new software suite. FiLos software suite provides solutions for complete management of day to day operation of legal firms. I am pleased to report that progress during the year was stable with clients being added and the existing clients continuing to adopt the company's FiLos legal software suite. The division continues to generate significant cash for the group.

Financial Results

In the year ended 31 December 2013, the Group achieved sales of £2,261,000 (2012: £2,678,000) with an operating loss of £47,000 (2012: operating profit of £81,000). A non-recurring cost of £131,000 relating to restructuring costs and a provision for potential legal expenses to defend a claim brought against the IT services division resulted in a pre-tax loss for the Group of £184,000 (2012: profit of £71,000). The Research and Development tax credit was £28,000 (2012: £65,000) and therefore the loss for the financial year was £156,000 (2012: operating profit of £136,000).

Costs relating to the administration of the Group operations are included in the overheads of the parent company. The costs incurred in 2013 were £190,000 (2012: £182,000).

The Group had cash at bank of £185,000 (2012: £237,000). Any balance of cash funds not required for working capital purposes is being placed on short term bank deposit to maximise interest receivable. Cash was utilised in the year to support the Green technology division activities. Cash was also used to fund continued development by the IT Products division and the design and development of renewable heat solutions.

IT Services division

The IT Services division made an operating profit of £389,000 (2012: £335,000) on sales of £890,000 (2012: £937,000) Sales fell by 5%, compared to the previous year. The division provides computer application software and other related services to small and medium size legal practices in England and Wales.

The division operates from two locations (Midlands and South West England). Since the 1st January 2013 the division has operated as Cognito Software a division of Ultima Networks plc. The division's management team has continued to develop the FiLos software suite which is helping to retain customers and improving the opportunity of attracting larger legal practices.

During the current financial year the division has made substantial investment into the continuous development of and improvement of the FiLos product portfolio.  The market for legal software continues to be very competitive with the potential client base undergoing a degree of restructuring to adapt to changes in government support for legal services. Cognito has remained stable during the year with clients continuing to migrate to the new FiLos legal software suite.

The outlook for the division is for continued improvement in overall performance and profitability based on the quality of the software solutions being offered to a niche market sector and the loyalty arising from attention to client needs.

The division has a policy of actively considering opportunities to enable growth through acquisition and will continue to review the market to identify potential targets.

Green Technology division

The Green Technology division made an operating loss of £321,000 (2012: £72,000) on sales of £1,371,000 (2012: £1,741,000). The division suffered from a lack of sales of its premium range of electric bicycles into continental Europe with consumer demand for luxury products in the UK remaining weak. Infineum BV made a loss of £53,000 for the first year of trading. The UK division of electric bikes and luxury products made a loss of £147,000 compared to a loss of £158,000 the prior year.

During the year the division sold its Four Solar PV installations supplied under its free solar energy schools initiative.

Central overheads

Costs relating to the administration of the Group operations are included in the overheads of the parent company. The costs incurred in 2013 were £190,000 (2012: £182,000).

Humayun Mughal

Chief Executive Officer

23 May 2014

 





2013

£000

 

 

 

2012

£000

 

Revenue



2,261


2,678

Cost of sales



(1,186)


(1,502)

Gross profit



1,075


1,176

Administration expenses



(1,122)


(1,096)

Other operating income



0


1

Operating (loss)/profit



(47)


81

Exceptional items



(131)


0







Finance (expenditure)/income



(6)


(10)

Profit before taxation



(184)


71

Taxation recovery



28


65

Profit for the year



 

(156)


 

136

Other comprehensive income:

Exchange difference on translating foreign operations



     3


    (21)

Total comprehensive income for the year attributable to equity holders of the parent



  (153)


    115

 

Basic and diluted earnings per share - pence


 

 

 

(0.06)


 

0.05

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 

 

 

All amounts relate to continuing activities.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013

 




2013

£000


2012

£000

ASSETS






Non current assets






Property, plant and equipment



1,366


1,671

Intangible assets - development costs



1,244


1,135

Goodwill



118


118

Intangible assets - other



134


143

Deferred tax assets



-


-







Total non current assets



2,862


3,067







Current assets






Inventories



435


394

Trade and other receivables



872


1,150

Cash and cash equivalents



185


237







Total current assets



1,492


1,781







Total assets



4,354


4,848







LIABILITIES






Non current Liabilities






Deferred tax



53


53







Total non current liabilities



53


53







Current liabilities






Trade and other payables



382


801

Current tax liabilities



136


112

Accruals and deferred income



331


277







Total current liabilities



849


1,190







Total liabilities



902


1,243






Net assets



3,452


3,605

 

 

 



 

 

 

2013

£000


2012

£000

EQUITY






Capital and reserves attributable to equity holders of the parent






Called up share capital



8,299


8,299

Share premium account



5,843


5,843

Other reserves



202


202

Retained Earnings



(10,855)


 (10,699)

Translation of foreign operations



(37)


(40)










3,452


3,605

 

 

 

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2013

 




2013

£000


2012

£000







Profit for the financial year



(156)


136

Taxation expense



 (28)


 (65)

Interest



6


10

Comprehensive income



3)


(21)

Depreciation charges



48


52

Amortisation of intangibles



116


155







Operating profit before changes in working capital



(11)


267







Decrease/(Increase) in inventories



(41)


106

Decrease/(Increase) in trade and other receivables



278)


(539)

(Decrease)/increase in trade payables and other capital liabilities



(341)


(223)







Cash (used in)/generated from operations



(115)


(389)







Taxation



28


65







Net cash (used in)/generated from operating activities



(87)


(324)







Cash flows from investing activities






Purchase of property, plant and equipment



257)


422

Development expenditure



(216)


(239)

Other intangibles



-


-

Net proceeds of ordinary shares issue



-


-







Net cash used in investing activities



  41


  183







Cash flows from financing activities






Interest received



(6)


(10)







Net cash generated from financing activities



(6)


(10)

 

 

 

 

 

 



 

 

 

 



Net (decrease)/increase in cash and cash equivalents



(52)


  (151)







Cash and cash equivalents at beginning of the period



237


388







Cash and cash equivalents at end of the period



185


237

 

 
























 








 

 










 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 31 DECEMBER 2013

 









 

 

 

 


Called up share

capital

£000

Share premium

 

£000

Other reserves

 

£000

Retained earnings

 

£000

Translation of foreign operations

 

£000

Total

Equity

 

£000

Year ended 31 December 2013








As 1 January 2013


8,299

5,843

202

(10,699)

(40)

3,605

Share Issue


-

-

-

-

-

-

Total comprehensive income for the year


 

-

 

-

 

-

 

(156)

 

3

 

(153)









At 31 December 2013


8,299

5,843

202

(10,855)

(37)

3,452

 

 








Year ended 31 December 2012








As 1 January 2012


8,299

5,843

202

(10,835)

(19)

3,490

Share Issue


-

-

-

-

-

-

Total comprehensive income for the year


 

-

 

-

 

-

 

136

 

(21)

 

115









At 31 December 2012


8,299

5,843

202

(10,699)

(40)

3,605

 

 

The Group operates in the United Kingdom, Italy and Spain.

At 31 December 2013, the Group is organised into two principal business segments:

 

IT and related services (comprising legal and publishing application software)

 

Green technology (comprising electric bicycles, energy saving lamps, educational electronic kits and development of  solar power parks)

 

The segmental results for the year ended 31 December 2013 are as follows:

 



IT and related services

UK

£000

Green technology

£000

Unallocated

 

 

£000

Group

 

 

£000







Revenue


890

757

614

2,261







Depreciation


4

41

3

48

Amortisation


54

62

-

116

Interest payable


-

4

2

6

 

Operating profit/(loss)


389

(275)

(161)

 

(47)

 

 






 

 

 

 

 

 

 

The segmental results for the year ended 31 December 2012 were as follows:










IT and related services

UK

£000

Green technology

£000

Unallocated

 

 

£000

Group

 

 

£000

 







 

Revenue


937

1,741

-

2,678

 







 

Depreciation


2

50

-

52

 







 

Amortisation


72

83

-

155

 







 

Interest payable


-

10

-

10

 







 

Operating profit/(loss)


35

46

-

81

 

 

 

The other information of the segments are as follows:

 




2013


IT and related services

UK

£000

Green technology

£000

Unallocated

 

 

£000

Group

 

 

£000

 







 







 

Segment assets


1,370

2,984

-

4,354

 

Segment liabilities


(100)

(802)

-

(902)

 







 

Net assets


1,270

2,182

-

3,452

 

 

STATEMENT

This statement was approved by the directors on the  22 May 2014. This statement does not constitute the group's statutory accounts for the year ended 31 December 2013. Statutory accounts for the year ended 31 December 2013 have been delivered to the Registrar of Companies. The auditor's report for those accounts was unqualified and did not contain any statement under section 495 of the Companies Act 2006. The auditor's report for the accounts to 31 December 2013 is unqualified.

The Annual report and Accounts, including the notice of annual general meeting for 2014 will be made available to the shareholders and the public on the Company's web site (http://www.ultima-networks.co.uk/) and the Company will make a further announcement in this regard at the appropriate date.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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