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12 February 2013
ULTIMA NETWORKS PLC
("Ultima", "the Group" or the "Company")
The Board of Ultima, the AIM listed IT and Green Technology company, is pleased to update its shareholders with a review of operation to the year ended 31 December 2012.
Ultima now operates through two divisions: the IT Services division, and the Green Technology division.
The IT Services division develops and supplies computer based application software and services to the legal profession. Progress during the year was stable, with clients continuing to migrate to the Company's new FiLos legal software suite. The adverse economic environment has seen the Company sign up a number of new "single partner" law firms, as larger practices reduce employee numbers. The Company is now offering monthly rental contracts for the software, which the Company expects to convert into larger sales contracts at some point in the future as the size of the new clients' practices grow. The division still provides a high level of recurring revenue for the Company.
The Green Technology division was restructured during 2012 and is responsible for the development and supply of electric powered bicycles under the brands "Powacycle" and "Infineum"; and also provides renewable energy solutions for the development of clean power generation through solar and other renewable power sources with installations in the UK and solar parks in Spain and under development in Italy.
During 2012 the Company highlighted an exciting project in Mexico where it would be working with the Mexican Department of Education to supply approx. 200kw of power through a specially developed hybrid PV system to over 100 schools. This pilot scheme is still under evaluation by the Mexican government and the Company is ready to roll out its systems as soon as the contract is signed. Finally, should the pilot phases be successful there is the opportunity for a significant number of schools across Mexico to join the scheme.
The total power output for the PV solar installations carried out by the Company in UK has now reached 1.1MW and the Company is looking to complete a number of local medium sized projects (over 50kw) in the coming months.
The Company's newly launched renewable heat solutions - Ground Source Heat and Air Source Heat - have had their first test installations in the UK to provide accreditation references. Ultima is one of the first UK suppliers of this environmentally friendly and novel home heating system to commence testing. The Department of Energy will launch, on 1 September 2013, its Renewable Heat Initiative ("RHI"), allowing users of this technology to receive a subsidy that will cover all installation costs over a period of 7 years.
In the interim results the Company expected an improvement in the sales of electric powered bicycles following a restructuring of its European distribution channel; however disappointingly, sales in the second half of the year were lower than expectated due to the on-going recession in mainland Europe. The Company is planning to launch its own subsidiary in Holland this month, to enable it to increase its brand awareness and stock a larger range of its cycles in situ. Benelux countries remain the Company's largest market in Europe and the new subsidiary is expected to grow brand recognition and position itself to take advantage of recovery in consumer confidence. In the UK, the over 50 age group is the key target audience and the Company expects that sales will increase once consumer spending rises.
Given the fall in demand for Ultima's electric powered bicycles in 2012 the Group's revenues for the full year will be lower than the previous financial year, however with the further investment in the developing of existing and potential new products, the Board believes the Group is now well positioned for growth.
Prof. Humayun Mughal, Chairman and CEO of Ultima, commented,
"The Group's commitment to investment in the development of existing and potential new products and technologies has continued despite the backdrop of a continuation of tough economic and market conditions. Our intention is to ensure all divisions are well placed to take advantage of growth opportunities as business and consumer confidence returns.
"Uncertainties in the Eurozone resulted in a fall in demand for the Green Technology division's range of electrically assisted bicycles which has led to a review and subsequent improvement of the distribution channel and an expectation of a recovery in market share during 2013. The division also saw an increase in sales of PV renewable energy solutions and is in the process of extending its range of products by providing renewable heat installations and by developing its overseas markets by providing a range of customised renewable solutions into countries such as Mexico and Morocco. The IT Services division continues to roll out its FiLOS legal software suite increasing the size and scope of its customer base, and this is expected to continue during 2013 and is a direct result of the Group's investment in continuous product development."
Ultima Networks plc 01279 821200
Prof. Humayun Mughal, Chairman and Chief Executive
Zeus Capital Limited(Nominated Adviser and Broker) 0161 831 1512
Leander(Financial PR) 07795 168157
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