TIDMUVEL
RNS Number : 0249S
UniVision Engineering Ltd
03 July 2020
RNS ANNOUNCEMENT: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
For immediate release: 3 July 2020
UniVision Engineering Limited
("UniVision", the "Company" or the "Group")
Trading update
UniVision (AIM: UVEL), the Hong Kong based group whose principal
activities are the supply, design, installation and maintenance of
closed circuit television (CCTV) and surveillance systems, and the
sale of security related products, announces the following trading
update for the year ended 31 March 2020 and the first quarter of
this financial year.
Trading update and the Major Contract with MTR Corporation
In December 2019, the Group reported reduced revenues and margin
for the first half of its financial year due to disruption in the
business caused by the widely reported protests against the
anti-extradition bill in Hong Kong which began in June 2019, which
hit our construction revenues, and increased subcontractor charges
which reduced margins in our maintenance. At the time, we expected
some improvement in the second half of the year, but further
protest disruption was expected. Unlike the hotel, travel,
catering, retailing sectors, COVID-19 has not seriously affected
the Company's business. Nevertheless, the outbreak and effects of
Coronavirus in Hong Kong since January 2020 has further hindered
installation plans which has slowed the Group's anticipated
recovery in the second half of the year. Whilst unaudited revenue
and profits have recovered when compared to the first half of the
year, the Directors expect the full year results still to be
substantially lower than the year to 31 March 2019.
The new financial year has started very well, with existing
installation work getting more back to our expected levels as the
limited disruption caused by COVID-19 to our business and the
protests have reduced. In addition, the benefits of the Cooperation
Framework Agreement signed with China Rail in January 2020 are
already becoming apparent in relation to sub-contractor costs. The
Group has also won new contract work outlined below; whilst the
benefits of some of this new work will fall into the current
financial year, some of this work will extend until the end of
2021/early 2022.
The Major Contract with the MTR Corporation Limited in Hong Kong
("MTR Corporation")(the "Major Contract") remains the major plank
of the Group's current workload. With further agreed add-ons since
May 2017 (including the one described below), the total current
value of this contract is now HK$426.7 million (approximately
GBP43.9 million at current exchange rates) spread over a six year
period, with an expected completion date of November 2023. As at 31
March 2020, the Group has invoiced HK$131.5 million to MTRC,
leaving a further HK$295.2 million over the remaining period of the
contract. The gross valuation of certified works on the Major
Contract was HK$156.3m up to 29 February 2020.
With revenues underpinned by the Major Contract and better
sub-contractor cost visibility with China Rail as a partner, the
Directors are confident of a return to growth in the current
financial year and look forward to reporting on progress with the
final results.
New contracts awarded
Four contracts, with total value of HK$27.9m (GBP 3.8 m) have
been awarded to the Company towards the end of the first quarter
ended 30 June 2020.
The Company has obtained additional works which have been
confirmed by MTR Corporation under a s upplementary agreement to
the main contract for the replacement and provision of the CCTV
systems for 84 MTR stations and 69 stops of Light Rail, as
announced in May 2017.
The additional works shall provide 187 fixed CCTV cameras in six
MTR stations in order to monitor passengers at entrances at
concourse level, entry/exit gate arrays, customer service centres,
escalators, stairs and platforms. The scope of works include
design, supply, manufacture, delivery to site, installation,
testing, commissioning, integration to the Station CCTV S ystem and
Station Video Archive Subsystem. The value of th e additional work
is HK$16.9m.
Besides, the Company also won a new contract from City
University of Hong Kong for upgrading CCTV S ystem on campus with
two years warranty service. F urther, two contracts are awarded by
Electrical and Mechanical Services Department of Hong Kong
Government. One is for replacement of CCTV System in Cross Harbour
Tunnel (Hunghom). The other one is the enhancement works of Video
Analytic Monitoring System at Tai Tam Gap Correctional Institution.
It is the additional order from the original contract awarded as
announced in July 2019.
The benefits from these contracts will come through during the
next two financial years.
Increased banking facilities
To assist with funding of this significant major contract and
other potential sizeable projects, during the period the Company
entered into a revised facility agreement with HSBC, to increase
the scope and credit limit of banking facilities, including
increase the trade facility to HK$26m of which overdraft limit
increased to HK$8m and also provide a long term straight line loan
facility of HK$9m. This facility has provided additional working
capital to ensure that the MTRC contract and other projects can
operate smoothly.
Announcement of final results
We anticipate being able to announce our final results, for the
year ended 31 March 2020, in early September 2020.
For further information visit www.uvel.com or contact :
UniVision Engineering Limited Tel: +852 2389 3256
Stephen Koo, Chairman www.uvel.com
Danny Kwok Fai Yip, Finance Director
Nicholas Lyth, Non-Executive Director Tel: +44 (0)7769 906686
SPARK Advisory Partners Limited Tel: +44 (0)20 3368 3551
(Nominated Adviser)
Mark Brady / Neil Baldwin www. sparkadvisorypartners.com
SI Capital Limited Tel: +44 (0)1483 413500
(Broker) www.sicapital.co.uk
Nick Emerson
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END
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