|
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| Company |
Ultima Networks PLC |
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| TIDM |
UTN |
| Headline |
Final Results Preliminary Statement of results |
| Released |
11:41 24-May-07 |
| Number |
2150 |
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Company number 1435584
Ultima Networks plc
Preliminary Statement of Results
Year ended 31 December 2006
Chairman's Statement
The Group has achieved an operating profit of £225,000 (2005: loss £115,000) on increased Group
sales of £1,398,000 (2005: £1,074,000). All of the Group's subsidiaries were profitable for the year.
The IT and Related Services division made an operating profit of £126,000 (2005:£148,000) on sales of £778,000
(2005: £639,000). Cognito Software, the provider of application software and services to the legal profession,
was the major contributor to this division. The other company in this division is Integrated Publishing Systems.
The Green Technology Products Division contributed an operating profit of £99,000 (2005:£91,000) on sales of
£620,000 (2005: £329,000). All of the sales in this division were generated by UTN Solutions (North),
being mainly through the sales of its PowaCycle branded range of electric bicycles. The other company in
this division is the holding company, which did not produce sales, but generated Other operating income
from renting its former freehold property in Bradford.
On 29 September 2006 the holding company completed the sale of its freehold property in Bradford to an unconnected
third party for a cash sum of £4.2m. This sale generated a profit of £462,000, which has been disclosed as an
exceptional item in the financial statements. The proceeds from the sale have been applied primarily in repaying
the bank overdraft, the term loans to Lloyds TSB Bank plc and Akhter Group plc, which were all secured on the
property, as well as repaying the outstanding unsecured 8% loan notes and accrued interest. The sale did not give
rise to a charge to corporation tax.
The Group is now debt free and had cash at bank at the year end of £832,000 available for working capital purposes
and to fund investment in the profitable expansion of the Group.
Pre-tax profit of the group, excluding exceptional items, was £86,000, being a significant improvement on last
year's loss of £325,000. Pre-tax profit of the group, including exceptional items, was £548,000 (2005: loss £360,000).
The main objective of the Group for 2007 and beyond is to grow profitably by a mix of organic growth and through
the acquisition of complementary businesses. It is intended to give particular focus to the IT and Related Services
division to achieve this.
Humayun Akhter Mughal
Chairman and Chief Executive Officer
23 May 2007
2006 Financial Highlights
Group turnover was £1,398,000 (2005: £1,074,000)
Gross margin for the year was 73% compared with 70% in 2005
Group selling and administration expenses were £985,000 (2005: £1,109,000)
Profit on ordinary activities before taxation for the year was £548,000
(2005: loss £360,000)
Earnings per share increased to 0.25p (2005: loss per share 0.20p)
Net debt, comprising of bank overdraft, term loans to Lloyds TSB Bank plc
and Akhter Group plc and unsecured 8% loan notes, was repaid during the year (2005: £3,248,000)
Cash at bank at the year end £832,000 (2005: bank overdraft £184,000)
Consolidated balance sheet has increased net assets of £903,000 (2005:£388,000)
Continuing operations remain profitable with operating profits of £225,000(2005: £239,000)
Consolidated profit and loss account
for the year ended 31 December 2006
2006 2005
£000 £000
Turnover
Continuing operations 1,398 968
Discontinued operations - 106
1,398 1,074
Cost of sales
Continuing operations (372) (238)
Discontinued operations - (89)
(372) (327)
Gross profit
Continuing operations 1,026 730
Discontinued operations - 17
1,026 747
Selling and administration expenses
Continuing operations (985) (738)
Discontinued operations - (371)
(985) (1,109)
Other operating income
Continuing operations 184 247
Operating profit/ (loss)
Continuing operations 225 239
Discontinued operations - (354)
225 (115)
Exceptional item - disposal of 462 -
freehold property
Exceptional item - discontinued - (35)
operations
Profit/ (loss) on ordinary 687 (150)
activities before interest and
taxation
Net interest payable and similar (139) (210)
charges
Profit/ (loss) on ordinary 548 (360)
activities before taxation
Taxation (33) (40)
Retained profit/ (loss) for the 515 (400)
financial year
Basic and diluted earnings/ (loss)
per share - pence
Continuing operations 0.25 (0.01)
Discontinued operations - (0.19)
Consolidated statement of total recognised gains and losses
for the year ended 31 December 2006
2006 2005
£000 £000
Retained profit/ (loss) for the financial 515 (400)
year
Currency translation differences on - (10)
foreign investment
Total recognised gains and (losses) 515 (410)
relating to the financial year
Reconciliation of movement in equity shareholders' funds
for the year ended 31 December 2006
Group Company
2006 2005 2006 2005
£000 £000 £000 £000
Retained profit/ (loss) for the 515 (400) 226 (2,372)
financial year
Issue of ordinary share capital - 7 - 7
Currency translation - (10) - -
differences on foreign currency
Net increase/ (decrease) to 515 (403) 226 (2,365)
equity shareholders' funds
Opening equity shareholders' 388 791 381 2,746
funds
Closing equity shareholders' 903 388 607 381
funds
Consolidated balance sheet
at 31 December 2006
2006 2005
£000 £000 £000 £000
Fixed assets
Tangible assets 127 3,907
Intangible assets 7 -
134 3,907
Current assets
Stocks 208 114
Debtors 238 232
Cash at bank and in hand 832 4
1,278 350
Creditors: amounts falling (509) (1,674)
due within one year
Net current assets/ 769 (1,324)
(liabilities)
Total assets less current 903 2,583
liabilities
Creditors: amounts falling - (2,195)
due after more than one
Year
Net assets 903 388
Capital and reserves
Called up share capital 7,554 7,554
Share premium account 5,602 5,602
Revaluation reserve - 2,071
Other reserves 1,334 1,334
Profit and loss account (13,587) (16,173)
Equity shareholders' funds 903 388
Consolidated cash flow statement
for the year ended 31 December 2006
2006 2005
£000 £000
Cash inflow from operating 159 56
activities
Returns on investments and (215) (169)
servicing of finance
Taxation - -
Acquisitions - (45)
Capital expenditure and 4,136 (8)
financial investment
Cash inflow/ (outflow) before 4,080 (166)
management of liquid
resources and financing
Financing (3,068) (251)
Increase/ (decrease) in cash 1,012 (417)
in the year
Reconciliation of net cash flow to movement in net
funds/ (debt)
£000 £000
Increase/ (decrease) in cash 1,012 (417)
in the year
Cash outflow from decrease 3,068 258
in debt and lease financing
Decrease/ (increase) in net 4,080 (159)
debt from cashflows
Movement in net debt in the 4,080 (159)
year
Net debt at the start of the (3,248) (3,089)
year
Net funds/ (debt) at the end 832 (3,248)
of the year
SEGMENTAL REPORTING
Turnover represents sales of products and services to customers outside the
Group excluding value added tax or equivalent sales tax. The analysis of
turnover by geographical destination and division is as follows:
2006 2005
£000 £000
TURNOVER
United Kingdom - 1,398 968
continuing operations
United Kingdom - - 99
discontinued operations
1,398 1,067
North America - - 7
discontinued operations
Total 1,398 1,074
TURNOVER
IT and related services - 778 639
continuing operations
IT and related services - - 106
discontinued operations
778 745
Other products - 620 329
continuing operations
Total 1,398 1,074
2006 2006
£000 £000
PROFIT/ (LOSS) ON
ORDINARY ACTIVITIES
BEFORE INTEREST AND
EXCEPTIONAL ITEMS
IT and related services - 126 148
continuing operations
IT and related services - - (354)
discontinued operations
126 (206)
Other products - 99 91
continuing operations
Total 225 (115)
OTHER OPERATING INCOME
2006 2005
£000 £000
Rent receivable from freehold 180 247
property
Royalty receivable from sale of 4 -
subsidiary
184 247
EXCEPTIONAL ITEM - Disposal of freehold property
2006 2005
£000 £000
Valuation 3,900 -
Accumulated depreciation (199) -
Net book value 3,701 -
Costs of disposal 37 -
Profit on disposal 462 -
Cash consideration 4,200 -
On 29 September 2006 the Company completed the sale of its freehold
property in Bradford to an unconnected third party. The sale did not give
rise to a charge to corporation tax. Also, the balance on revaluation
reserve was realised and therefore has been transferred to profit and loss
account.
TAXATION
2006 2005
£000 £000
Corporation Tax
Current tax on income for the year 17 -
Current taxation - -
Deferred taxation
Net origination and reversal of 16 40
timing differences (note 17)
Tax charge on profit on ordinary 33 40
activities
Current tax reconciliation
Profit/ (loss) on ordinary activities 548 (360)
before taxation
Theoretical tax at UK corporation tax 104 (108)
rate 19% (2005: 30%)
Effects of:
- profit on sale of property (88) -
covered by losses
- expenditure not tax deductible 17 51
- accelerated capital allowances (1) (6)
- movement in losses (15) 31
- R&D tax credits - (5)
- tax in overseas subsidiary - 37
17 -
The corporation tax rate has been changed from the standard rate of 30%
applied in the prior year to reflect the actual rate applicable to the
current year of 19%.
EARNINGS PER SHARE
2006 2005
Number Number
Weighted average ordinary shares in 204,747,96 204,600,55
issue during the year 4 9
Potentially dilutive share options - 100,000
under the Group's share option
schemes
Weighted average ordinary shares for 204,747,96 204,700,55
diluted earnings per share 4 9
£'s £'s
Earnings/ (loss) attributable to
shareholders:
Continuing operations 515,000 (12,000)
Discontinued operations - (388,000)
The calculation of earnings per ordinary share is based on the profit/
(loss) after tax and the weighted average number of ordinary shares in
issue during the year.
RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW
2006 2005
£000 £000
Operating profit/ (loss)
Continuing operations 225 239
Discontinued operations - (354)
Depreciation and
amortisation charges
Continuing operations 99 124
Discontinued operations - 26
Loss on disposal of fixed
assets
Continuing operations - -
Discontinued operations - 31
(Increase)/ decrease in
stocks
Continuing operations (94) (12)
Discontinued operations - 28
(Increase)/ decrease in
debtors
Continuing operations (22) 53
Discontinued operations - 53
(Decrease)/ increase in
creditors
Continuing operations (49) (326)
Discontinued operations - 194
Net cash inflow/ (outflow)
from operating activities
Continuing operations 159 78
Discontinued operations - (22)
Net cash inflow from 159 56
operating activities
ANALYSIS OF CASHFLOWS
2006 2005
£000 £000
Returns on investment and
servicing of finance
Interest paid (226) (169)
Interest received 11 -
Net cash outflow from returns (215) (169)
on investment and
servicing of finance
Capital expenditure and
financial investment
Purchase of tangible fixed
assets
Continuing operations (17) (4)
Discontinued operations - (4)
Purchase of intangible (10) -
development costs
Sale of tangible fixed assets 4,163 -
Net cash inflow/ (outflow) from 4,136 (8)
capital expenditure investment
Acquisitions
Purchase of shares in subsidiary - (45)
Net cash outflow from - (45)
acquisitions
Financing
Issue of ordinary share capital - 7
Bank loan draw downs - 80
Repayment of bank loans (1,721) (226)
Repayment of other loans (830) (112)
Repayment of loan notes (517) -
Net cash outflow from financing (3,068) (251)
ANALYSIS OF NET FUNDS/ (DEBT)
At At end
beginning Cash flow of year
of year
£000 £000 £000
Cash at bank and in hand 4 828 832
Bank overdrafts (184) 184 -
(180) 1,012 832
Bank loans (1,721) 1,721 -
Other loans (830) 830 -
(2,731) 3,563 832
Loan notes (517) 517 -
Total (3,248) 4,080 832
PRELIMINARY STATEMENT
This preliminary statement was approved by the directors on 23 May 2007. It
has been agreed with the auditors, but does not constitute the Group's
statutory accounts for the year ended 31 December 2006. Statutory accounts
for the year ended 31 December 2005 have been delivered to the Registrar of
companies. The auditors' report on those accounts was unqualified and did
not contain any statement under section 237(2) or (3) of the Companies Act
1985. The auditors have yet to report on the statutory accounts for the
year ended 31 December 2006
The Annual Report for 2006 will be posted to shareholders by 22 June 2007
and will be available to the public from the Company's registered office at
Ultima Networks plc, Akhter House, Perry Road, Harlow, CM18 7PN and website
www.ultima-networks.co.uk
Contacts:
Rob Piper, Finance Director - Tel: 01279 821200
Alan MacKenzie, ARM Corporate Finance - Tel: 020 7512 0191