LONDON (Alliance News) - Honk Kong-based closed circuit television and surveillance systems producer UniVision Engineering Ltd said Thursday that its annual revenue grew 17%, mainly driven by construction contracts signed during the year.
Shares however, were trading down 25% at 1.735 pence each as the company said that MTR Corp Ltd, with whom it signed a major contract in May 2017, has suspended the company from "tendering for additional public works contracts" for up to six months from the end of July.
"The major contract with MTR led to a significant annualised outstanding workload value which requires the company to have additional working capital in the financial assessment by the Hong Kong Government Works Branch. A shortfall in working capital of GBP620,000 existed in the 2017 financial test," the company said.
It added: "The board regard the effect of this temporary suspension as insignificant given the current state of the business."
For the year to March 31, the company posted revenue up to GBP5.6 million from GBP4.8 million a year ago.
The company said the increase was mainly due to a 34% growth in construction contracts which came largely from the replacement of CCTV systems project it signed with Hang Seng-listed MTR Corp.
The company had said in April that the contract it signed with MTR Corp - worth GBP36.4 million spread over six years - would "lead to a step-change" in revenue and profitability in the short to medium term.
UniVision added that it expects the "transformational" contract to provide further growth during the current financial year as it will provide a full 12 months contribution.
Pretax profit increased to GBP734,761 from GBP451,615 the prior year, as the company reduced its administrative expenses and swung to a net gain on other items of GBP19,622 compared to a GBP11,529 loss a year ago. "Other items net gains" include foreign exchange gains or losses, disposals of plant, equipment and subsidiaries and impairment charges.
The company added that during the year, the weakness of the Hong Kong Dollar against sterling led to a significant non-cash loss of GBP779,000, as it led to a 14% depreciation in the sterling reporting amount of the company's statement.
UniVision upped its final dividend by 4.9% to HKD0.43, equivalent to 0.03 pence, from HKD0.41 a year ago.
In April, Univision shares jumped by 20% after the company termed 2018 financial year as a "transformational year" and said that revenue and profit for the period would be ahead of its 2017 financial year figures.
Univision (UVEL)