Important Note: This article is copyright of AimZine Ltd. No part should be copied, reproduced or distributed in any way without prior consent. This means that it is illegal to post Aimzine content on bulletin boards without prior permission.

Over recent years a considerable number of AIM’s smaller companies have struggled to survive and many have left the market.   Those that have survived and retained their listing must have some positive attributes that have enabled them to continue.  Amongst the survivors, there should be some tiddlers which could provide exciting investment opportunities. It is with such thoughts in mind and some interesting director share purchases that I have selected Universe Group (UNG) for this month’s AIM Snippet column.

Lengthy decline

The Company was first admitted to AIM in 1995 as Card Clear and renamed Universe Group in January 2000. Universe’s subsidiary, HTEC Ltd, is one of Europe's largest providers of Loyalty, Payment and Forecourt Technology Solutions with over thirty years experience in providing payment and loyalty solutions to the retail and petroleum industry.

Since 2000 Universe’s shares have followed a long downward path and hit an all time low of 1.25 early in January this year. It would seem that this low share price may have prompted both the Non-executive Chairman and the Chief Executive Officer to make inaugural share purchases.

On 11 January CEO, Stephen McLeod bought 1.3 million shares and Chairman, Robert Goddard, Chairman, acquired 700,000 Ordinary Shares, both purchases were made at a price of 1.4p per share. Then, on 27 January, the Chief Executive purchased a further 2.0 million shares, on this occasion at 1.5 pence per share.

Confidence expressed

In its interim results for the six months to 30 June 2011, released in September, Universe reported a loss before tax of £235,000 on “stable” revenue of £5.7 million. The reported loss included an exceptional restructuring charge of £370,000 and the Company reported cash inflow from operations of £374,000.

The Chairman’s statement in the interim results makes for interesting reading and speaks of rationalisation and cost cutting and concludes:

“The Board is confident that the recent management changes, a focus on driving client delivery, an improving order book and a significantly reduced cost base will together quickly lead to improved operational performance.”

The recent share purchases suggest that the directors continue to be confident of improved performance.

As always, the purpose of this Snippet column is to highlight a particular situation worthy of further research and monitoring. The Group’s website here is helpful in understanding Universe’s HTEC businesses.

shares have followed a long downward path

an impoving order book

 Copyright © Aimzine Ltd 2012

Recent AIM Snippets

Return to: February AimZine Front Page