Unigel Group PLC - Half-year Report

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 2024. Comparative data is for the period ended 30 June 2023 and the year ended 31 December 2023.

Operational highlights

The Group continues to make good progress in various business areas:

·      Successful transition of Unigel UK's Tolling services in its Malaysian operations

·      Operational improvement in operations and logistics in Unitape's operations

·      Market share gains in our steel tape business

·      Improvement in profit margins through higher margins product mix, cost controls and productivity gains

Financial highlights

Key figures for the six months to 30 June 2024 with comparatives for the six months to 30 June 2023 and the year to 31 December 2023 were as follows:

                                                                       6 months        6 months             Year

                                                                        30.06.24         30.06.23            31.12.23

Revenue                                                           £14.80m         £17.95m            £28.47m

Gross profit                                                       £3.01m         £2.39m             £4.09m

Gross profit percentage                                      20.3%          13.3%               14.4%

Administrative expenses                                     £1.78m         £1.47m             £3.17m

Profit after tax                                                    £0.93m         £0.63m             £0.61m

A dividend of 2.5p per share was distributed 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 is now a wholly owned subsidiary of the Group following the acquisition of the minority shareholder's 40% holding. Unigel 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 weaker start in the global fibre optic cable industry, our businesses outperformed expectations in the first half of 2024.  Most of the gains were in the steel tape segment in the US, but we also managed to chalk up strong sales in the thixotropic gel and cable components trading business in certain selected markets.

The global fibre optic cable industry, which is a key market for the Group, continued to show lethargic demand growth across most major markets in the first half of 2024.  We see a continued slowdown in telecommunications network deployment as telcos remain cautious due to inflation, persistent high interest rates and anaemic economic recovery in most markets. 

Our business initiatives to improve overall engagement with our customer base and focus on operational efficiency are starting to see tangible results in our bottom line for the first half of 2024 despite increased logistics cost due to geopolitical development. We continue to improve our cost structure and execute more efficiently across all business domains.

The Group is maintaining an optimistic but cautious outlook for the remainder of 2024.

Business review

Although turnover for the six months to 30 June 2024 reduced by 17.6% compared to the previous six months, gross margin improved significantly as raw material prices and logistics costs continued to become more stable. Administrative overheads rose by 21.3% compared to the previous six months mainly due to exchange rate gains and losses across the two periods. Profit after tax rose by 47.7% to £0.93m in the six months to 30 June 2024. The Group balance sheet showed net assets of £4.40m as at 30 June 2024 compared to £2.88m on 30 June 2023 and £2.57m on 31 December 2023.

Outlook

According to the IMF, the global economy is expected to grow by 3.2 percent in 2024 whilst macroeconomic uncertainties continue due to geopolitical conflicts, trade tensions, persistent inflation and a longer than anticipated high-interest rate environment. In our industry, we do see some optimistic signs in certain markets as some of the global telcos start to normalise their capital investment from their lower investment levels of 2022 and 2023.

Chairman

Sven Janne Sjoden

UNIGEL GROUP PLC

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

PERIOD ENDED 30 JUNE 2024

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.