Unigel Group PLC - Replacement Half-year Report

The 'Interim Results' announcement released on 31 August 2023 at 7:00 AM under RNS No 8648K has been reformatted.

All material details remain unchanged.

The full text is shown below.

Unigel Group plc

(the "Group" or the "Company")

Interim Results

Unigel Group plc (AQSE: UNX), the manufacturer and supplier of materials used in the manufacture of telecommunication fibre optic cables announces its unaudited half-year results for the period ended 30 June 2023. Comparative data is for the post-acquisition six month period ended 31 December 2022.

Operational highlights

The Group continues to make progress in operational improvements:

·      New customer acquisitions in both our steel tape and thixotropic gel businesses

·      De-risking and diversifying our raw material sourcing base

·      Cost improvement in our logistics and material handling activities

·      Operating cost improvement through optimisation of production staff and administrative resources

Financial highlights

Key figures for the six months to 30 June 2023 with comparatives for the six months to 31 December 2022 were as follows:

·      Revenue of £17.95m (£18.83m)

·      Gross profit of £2.39m with a gross profit margin of 13.3% (£2.23m and 11.8%)

·      Administrative expenses of £1.47m (£1.73m)

·      Profit after tax of £0.63m (£0.32m)

·      Final dividend of 2.5p per share distributed post period end in July 2023

This announcement contains inside information for the purposes of the UK Market Abuse Regulation and the Directors of the Company are responsible for the release of this announcement.

Enquiries:  

Notes to Editors

Unigel Group plc is the holding company whose operating subsidiaries, Unigel (UK) Limited ("Unigel") and Unitape Limited ("Unitape") manufacture and distribute materials used in the manufacture of telecommunication fibre optic cables.

Unigel, in which the Group has a 60.0% holding, formulates, manufactures, and markets thixotropic gels primarily to the fibre optic cable industry. In addition, it also makes specialty gel products for the construction, green energy, and high voltage transmission apparatus markets.

Unitape, a wholly owned subsidiary of the Group, is one of the largest domestic manufacturers and suppliers of laminated steel tapes to the fibre optic cable industry in North America.

Chief Executive Officer's review

Despite a less favourable operating environment across most key markets, Unigel Group plc registered good overall results in all key performance indicators except revenue growth. The global fibre optic cable industry, which is a key market for the Group, registered negative industry growth of 3.4% in the first half of 2023.  Globally, there has been a slowdown in telecommunications network deployment including 5G networks as telcos postponed their network investment due to weaker business sentiment caused by macroeconomic concerns such as inflation, high interest rates and anaemic economic recovery in some major markets. 

However, there is a general industry consensus that network investment is expected to improve in 2024. The Group had implemented new initiatives to improve overall engagement with our customer base post Covid, and we are starting to see some tangible results from our business development initiatives of the past 2 years.  We continue to improve our cost structure and execute more efficiently across all business domains.

The Group is cautiously optimistic about our business performance in the second half of 2023.

Business review

Although turnover for the six months to 30 June 2023 reduced by just under 5% compared to the previous six months, gross margin improved as raw material prices and logistics costs became more stable. Administrative overheads fell by 15% compared to the previous six months with the major savings coming from more efficient staffing levels in production and an improved foreign exchange environment. Profit after tax rose by 94% to £0.63m in the six months to 30 June 2023. The Group balance sheet showed net assets of £2.88m as at 30 June 2023 compared to £2.32m on 31 December 2022.

Outlook

The global economy continues to be challenged by macroeconomic uncertainties including inflation, high interest rates, weaker investment sentiments and a docile economic recovery in China. Barring unforeseen circumstances, the Group continues to be cautiously optimistic about the outlook of our business performance for the second half of 2023.

Chairman

Sven Janne Sjoden

UNIGEL GROUP PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PERIOD ENDED 30 JUNE 2023

1.  ACCOUNTING POLICIES

     Company information

     The company is a public limited company incorporated in England and Wales (registered number 13934232) and its registered office is Unigel House, 7 Park View, Alder Close, Eastbourne, BN23 6QE.

     The principal activity of the group is the manufacture and sale of cable filling and flooding compounds, associated pumping and delivery equipment, and tapes.

     Accounting convention and basis of preparation

     The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland and the Companies Act 2006.

     The preparation of the consolidated financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the group's accounting policies. Information is given in the accounting policies noted below. 

2.  EARNINGS PER SHARE

Earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of ordinary shares in issue during the period.

3.   CALLED UP SHARE CAPITAL

4.   FORWARD-LOOKING STATEMENTS

Certain statements made in this announcement are forward-looking statements. These forward-looking statements are not historical facts but rather are based on the Group's current expectations, estimates and projections about its industry; its beliefs; and assumptions. Words such as 'anticipates,' 'expects,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond the Group's control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecast in the forward-looking statements. The Group cautions security holders and prospective security holders not to place undue reliance on these forward-looking statements, which reflect the view of the Group only as of the date of this announcement. The forward-looking statements made in this announcement relate only to events as of the date on which the statements are made. The Group will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances, or unanticipated events occurring after the date of this announcement except as required by law or by any appropriate regulatory authority.