TIDMARC
RNS Number : 1957R
Arcontech Group PLC
27 February 2019
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 2018
Arcontech (AIM: ARC), the provider of products and services for
real-time financial market data processing and trading, is pleased
to report its unaudited results for the six months ended 31
December 2018.
Highlights:
-- Turnover increased by 13% to GBP1,371,107 (six months ended 31 December 2017: GBP1,213,776)
-- Profit before tax increased by 91% to GBP452,756 (six months
ended 31 December 2017: GBP237,581)
-- Adjusted profit before tax (before release of accruals for
administrative costs in respect of prior years) increased by 41% to
GBP335,470 (six months ended 31 December 2017: GBP237,581)
-- Annual run-rate of recurring revenues at 31 December 2018
increased by 14% to GBP2.78 million (at 31 December 2017: GBP2.43
million).
-- Cash of GBP3,231,830 as at 31 December 2018 (31 December 2017: GBP2,663,935)
-- Trading in line and on track to meet management's full year expectations
Richard Last, Chairman of Arcontech Group, said:
"The Board is pleased with Arcontech's growth in revenue and
adjusted profit before tax. Cash at the half year was GBP567,895
higher than the previous half year, further strengthening the
Balance Sheet. We have continued to invest in product development
to maintain and enhance our propositions to the market. Our sales
cycle is often long and unpredictable however we remain positive
about the Group's long term prospects and the Board expects results
for the full year to be in line with expectations."
Enquiries:
Arcontech Group plc 020 7256 2300
Richard Last, Chairman and Non-Executive
Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker) 020 7220 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit:
www.arcontech.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
The interim report will only be available to view online
enabling the Group to communicate in a more environmentally
friendly and cost-effective manner.
Chairman's Statement
I am pleased to report that Arcontech has continued to grow
profits in the six-month period ended 31 December 2018, reporting
an adjusted profit before tax of GBP335,470 (six months ended 31
December 2017: GBP237,581) an increase of 41%. Turnover increased
by 13% to GBP1,371,107 compared to the corresponding six-month
period in 2017 where turnover amounted to GBP1,213,776. This
reflects the growth in recurring annual licence fees, primarily
from existing customers, which on an annualised basis amounted to
GBP2.78 million at 31 December 2018, compared to GBP2.43 million as
at 31 December 2017. Fully diluted earnings per share were 3.72
pence per share compared to 2.36 pence per share for the
corresponding period last year.
During the half year to 31 December 2018 Arcontech's increase in
revenues reflects the full year effect of sales made during the
year to 30 June 2018 and the impact of selling more products into
the existing customer base. We are continuing to trial our Desktop
software solution and have made a number of enhancements following
positive comments from customers and prospective users. Usage has
increased with existing customers by approximately 75% to 70. We
also continue to see demand for our Excelerator product with
additional users to an approximate value of GBP225,000-pa being
deployed by two existing clients.
For the server-side of the business our MVCS (Multi-Vendor
Contribution System) and Real-time Cache continue to make a
significant contribution to group revenue. We have continued to
invest in the development and enhancement of these products to
further optimise their efficiency whilst enhancing the customer
experience. This work helps integrate the products further within
the client environment, however, new sales in this area are
significant projects in themselves and although we have a number of
qualified prospects, none have contracted in the half year. A
further benefit of that work is that both the MVCS and our
Real-time Cache are increasingly seen as preferable alternatives to
competitive offerings which also help our pipeline.
Financing
The Group has a strong financial position with cash balances at
the 31 December 2018 of GBP3,231,830 (31 December 2017
GBP2,663,935), an increase of GBP567,895, providing a sound basis
for continued investment in the business. The small increase in
cash between 30 June 2018 and 31 December 2018 principally reflects
timing differences in relation to advance payments.
Dividend
No interim dividend is proposed to be paid in respect of the
half year, although the Board does expect to continue its policy of
paying a dividend following the announcement of its full year
results.
Employees
I should like to thank our employees and directors for their
continued hard work and dedication, which I know is appreciated by
our customers and shareholders alike.
Outlook
Arcontech has a sound business base supported by a high level of
recurring revenues and a strong balance sheet. Our business is
international with customers operating in the UK, Europe, the USA,
Hong Kong and Singapore. As such it is the Board's view that we are
unlikely to be adversely affected by Brexit. We propose to maintain
ongoing investment in product development and enhancement, and as a
result of working with existing customers we are delivering world
class solutions which provide cost savings and competitive
advantage. As we repeatedly note in our statements to shareholders
we remain mindful of the long and unpredictable sales cycles we
often face and the challenges this brings in predicting the timing
of contract wins. Nevertheless, the Board views the long term
future for the business with optimism and in the short term expects
results for the full year to be in line with expectations.
Richard Last
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
Note Six months Six months Year ended
ended 31 ended 31 30 June
December December
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 1,371,107 1,213,776 2,519,699
Administrative costs (931,902) (982,528) (1,958,176)
Operating profit 4 439,205 231,248 561,523
Finance income 13,551 6,333 14,109
Profit before taxation 452,756 237,581 575,632
Taxation 6 45,318 69,452 339,452
Profit for the period
after tax 498,074 307,033 915,084
Total comprehensive income 498,074 307,033 915,084
Profit per share (basic) 3.77p 2.42p 7.14p
Adjusted* Profit per share
(basic) 2.88p 2.42p 6.94p
Profit per share (diluted) 3.72p 2.36p 7.09p
Adjusted* Profit per share
(diluted) 2.84p 2.36p 6.90p
*Adjusted for release of accruals for administrative expenses in
respect of prior years
All of the results relate to continuing operations.
GROUP BALANCE SHEET
31 December 31 December 30 June
2018 2017
(unaudited) (unaudited) 2018
(audited)
GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 1,715,153
Property, plant and equipment 11,398 24,834 17,941
Deferred tax asset 270,000 - 270,000
Trade and other receivables 141,750 141,750 141,750
Total non-current assets 2,138,301 1,881,737 2,144,844
Current assets
Trade and other receivables 320,608 624,781 310,123
Cash and cash equivalents 3,231,830 2,663,935 3,210,058
Total current assets 3,552,438 3,288,716 3,520,181
Current liabilities
Trade and other payables (769,105) (865,561) (863,156)
Deferred income (801,409) (1,233,990) (1,026,119)
Total current liabilities (1,570,514) (2,099,251) (1,889,275)
Net current assets 1,981,924 1,189,465 1,630,906
Net assets 4,120,225 3,071,202 3,775,750
Equity
Share capital 1,651,314 1,600,375 1,651,314
Share premium account 56,381 24,881 56,381
Share option reserve 74,101 225,591 56,366
Retained earnings 2,338,429 1,220,355 2,011,689
4,120,225 3,071,202 3,775,750
GROUP CASH FLOW STATEMENT
Note Six months Six months Year ended
ended 31 ended 31 30 June
December December
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Net cash generated from operating
activities 9 181,880 94,113 552,111
Investing activities
Interest received 13,551 6,333 14,109
Purchases of plant and equipment (2,325) - (2,090)
Net cash generated from investing
activities 11,226 6,333 12,019
------------ ------------ ---------------
Financing activities
Issue of shares - 52,778 135,217
Dividends paid (171,334) (125,760) (125,760)
Net cash (used in)/generated
from financing activities (171,334) (72,982) 9,457
------------ ------------ ---------------
Net increase in cash and cash
equivalents 21,772 27,464 573,587
Cash and cash equivalents
at beginning of period 3,210,058 2,636,471 2,636,471
Cash and cash equivalents
at end of period 3,231,830 2,663,935 3,210,058
============ ============ ===============
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share-based Retained Total
capital premium paymentsreserve earnings
GBP GBP GBP GBP GBP
At 1 July 2017 1,562,676 9,802 188,425 1,039,082 2,799,985
Total
comprehensive
income for the
period - - - 307,033 307,033
Issue of shares 37,699 15,079 - - 52,778
Dividends paid - - - (125,760) (125,760)
Share-based
payments - - 37,166 - 37,166
At 31 December
2017 1,600,375 24,881 225,591 1,220,355 3,071,202
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
Total
comprehensive
income for the
period - - - 608,051 608,051
Issue of shares 50,939 31,500 - - 82,439
Share-based
payments - - 14,058 - 14,058
Realisation of
share option
reserve - - (183,283) 183,283 -
At 30 June 2018 1,651,314 56,381 56,366 2,011,689 3,775,750
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
Total
comprehensive
income for the
period - - - 498,074 498,074
Dividends paid - - - (171,334) (171,334)
Share-based
payments - - 17,735 - 17,735
At 31 December
2018 1,651,314 56,381 74,101 2,338,429 4,120,225
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended 31 December 2018 and 31
December 2017 are unaudited and do not constitute statutory
accounts. The interim results have been prepared using accounting
policies which are consistent with International Financial
Reporting Standards as adopted by the European Union and are
expected to be adopted in the next annual accounts.
2. The financial information for the year ended 30 June 2018 set
out in this interim report does not comprise the Group's statutory
accounts as defined in section 434 of the Companies Act 2006. The
statutory accounts for the year ended 30 June 2018, which were
prepared under International Financial Reporting Standards (IFRS)
as adopted for use in the EU, applied in accordance with the
provisions of the Companies Act 2006, have been delivered to the
Registrar of Companies. The auditors reported on those accounts;
their report was unqualified and did not contain a statement under
either Section 498(2) or Section 498(3) of the Companies Act 2006
and did not include references to any matters to which the auditor
drew attention by way of emphasis.
3. Copies of this statement are available from the Company
Secretary at the Company's registered office at 1(st) Floor 11-21
Paul Street, London, EC2A 4JU or from the Company's website at
www.arcontech.com.
4. Operating profit is stated after release of accruals for
administrative expenses in respect of prior years of GBP117,286 (31
December 2017: Nil; 30 June 2018: GBP25,500).
5. Earnings per share have been calculated based on the profit
after tax and the weighted average number of shares in issue during
the half year ended 31 December 2018 of 13,210,510 (31 December
2017: 12,675,498; 30 June 2018: 12,396,220).
The number of dilutive shares under option at 31 December 2018
was 189,343 (31 December 2017: 330,023; 30 June 2018: 77,699). The
calculation of diluted earnings per share assumes conversion of all
potentially dilutive ordinary shares, all of which arise from share
options. A calculation is done to determine the number of shares
that could have been acquired at the average market price during
the period, based upon the issue price of the outstanding share
options including future charges to be recognised under the
share-based payment arrangements.
6. Taxation is based on the unaudited results and provision has
been estimated at the rate applicable to the Company at the time of
this statement and expected to be applied to the total annual
earnings. No corporation tax has been charged in the period as any
liability has been offset against tax losses brought forward from
prior years. The tax credit represents the cash recovery of
Research & Development tax credits during the period.
7. A final dividend in respect of the year ended 30 June 2018 of
1.30 pence per share (2017 1.0 pence per share) was paid on 4
October 2018.
8. The Directors have elected not to apply IAS34 Interim financial reporting.
9. Net cash generated from operations
Six months Six months Year ended
ended 31 ended 31 30 June
December December
2018 2017 2018
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating profit 439,205 231,248 561,523
Depreciation charge 8,868 8,991 17,974
Non cash share option charges 17,735 37,166 51,224
Increase in trade and other
receivables (10,485) (379,833) (134,626)
(Decrease)/increase in trade
and other payables (318,761) 196,541 (13,436)
Tax recovered 45,318 - 69,452
Cash generated from operations 181,880 94,113 552,111
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LLFLDFIIRFIA
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February 27, 2019 02:00 ET (07:00 GMT)
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