UniVision Engineering shares plummet despite projected impact of major contract

UniVision Engineering saw its shares plummet on Thursday after the company reported that its expected growth "will become more evident" after a full year of contribution from a major new contract.

The Hong Kong based CCTV and surveillance systems firm’s final results for the year ended 31 March showed an 18.5% increase in revenues from continuing operations to £5.6m, which was almost offset by a 19% increase in cost of sales leading to a 13% increase in gross profit compared to the previous year.

The revenue increase was driven by 34% growth in construction contracts, largely from the major ‘replacement of CCTV systems project’ with MTR Corporation which commenced in May.

Stephen Sin Mo Koo, executive chairman of UniVision, said: "Given our current commitment to the major contract and other customers, we will need to manage our growth carefully and will manage our expansion carefully, with a view to controlling cost and maintaining our margins."

Throughout the full year, the AIM-traded firm's gross profit margin for continuing operations remained stable at 32%.

UniVision’s net debt increased by 56% to £2.5m over the year, with cash and cash assets were down 41% at £1m over the same period and a proposed final dividend of HK0.43 cents, up 5% from the prior year.

"As there are several major local infrastructure projects are due to be completed in the coming years, including the High Speed Railway extension (Hong Kong Section), the new runway for Hong Kong International Airport and the extension of MTR lines in Hong Kong, these will provide opportunity for business growth," said Koo.

UniVision’s shares were down 17.39% at 1.90p at 1037 BST.