TIDMARC
RNS Number : 0674R
Arcontech Group PLC
27 February 2023
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 202 2
Arcontech (AIM: ARC), the provider of products and services for
real-time financial market data processing and trading, report s
its unaudited results for the six months ended 31 December 202 2
.
Overview:
-- Turnover decreased by 6.6% to GBP1,357,041 (H1 2021: GBP1,452,498) due to the effect of contract losses announced
during the previous financial year
-- Profit before tax decreased by 13.2% to GBP372,414 (H1 2021: GBP428,924) reflecting the lower turnover
-- Our preferred measure of adjusted profit before tax, which excludes the release of accruals unrelated to the
underlying business, declined by 13.3% to GBP367,914 (H1 2021: GBP424,425)
-- Recurring revenues represented 100% of total revenues for the period (H1 2021: 98%)
-- Net cash of GBP5,908,814 at 31 December 2022, up 5.13% (H1 2021: GBP5,620,352) after a record dividend payment of
GBP434,616 paid on 24 October 2022
-- Revenue and profit before tax for the year to 30 June 2023 are expected to be in line with current expectations
Geoff Wicks, Chairman of Arcontech, said:
"Our strategy to support our existing customers to maximise
opportunities while building our sales capability to grow our
customer base globally, ensures we focus on growth in our core
market. We are starting to see small amounts of growth and are
confident that this will continue, although this must be balanced
against continuing difficult markets for our customers."
Enquiries:
Arcontech Group plc 020 7256 2300
Geoff Wicks, Chairman and Non-Executive
Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker) 020 7220 0500
Carl Holmes/ George Dollemore
Harriet Ward (ECM)
To access more information on the Group please visit:
www.arcontech.com
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
While our results for the first half of this year show a decline
in both revenue and profit compared to the same period last year,
this is the result of the loss of business in the second half of
last year. This impact will continue in the second half of the year
given the recurring nature of our revenue. However, we are starting
to see some growth with new and existing clients although the
market remains difficult with customers seeking to reduce spend and
prospects continuing to take time to commit.
We have worked hard at retaining customers and now have a
significant proportion of our customer base on longer term
contracts. At the same time, we are building a prospect list that
gives us confidence of sustainable growth in the future. We have
also managed our costs appropriately to ensure continued strong
profitability and excellent cash generation.
Revenue was GBP1,357,041, down 6.6% on the same period last
year, due to the loss of two contracts in the second half of
2021/22. Profit before tax ("PBT") was GBP372,414, 13.2% lower than
the same period last year, reflecting the loss of revenue. Adjusted
profit before tax, which is PBT before the release of accruals for
administrative costs in respect of prior years, was down 13.3% to
GBP367,914.
We continue to invest in our sales, marketing and support teams
which has helped us to retain our excellent customer list and to
start to build back some of the business lost in the previous
financial year.
Financing
Our balance sheet remains robust with net cash of GBP5.9
million, GBP0.3 million higher than at 31 December 2022, and GBP0.1
million lower than the level at 30 June 2022 after payment to
shareholders of a record dividend of GBP0.4 million. This cash
position provides resources for continued investment in sales and
products and for small complementary acquisitions.
Dividend
No interim dividend is proposed to be paid in respect of the
half year. The Board expects to continue its policy of paying a
dividend following the announcement of its full year results.
Outlook
Our strategy to support our existing customers to maximise
opportunities while building our sales capability to grow our
customer base globally, ensures we focus on growth in our core
market. We are starting to see small amounts of growth and are
confident that this will continue although this must be balanced
against continuing difficult markets for our customers.
Geoff Wicks
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
Note Six months Six months
ended 31 ended 31 Year ended
December December 30 June
202 2 20 21 202 2
(unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 1,357,041 1,452,498 2,757,795
( 1,999,523
Administrative costs (995,636) (1,021,879) )
------------ ------------ -------------
Operating profit 4 361,405 430,619 758,272
Finance income 15,840 6,521 13,911
( 13,610
Finance costs (4,831) (8,216) )
------------ ------------ -------------
Profit before taxation 372,414 428,924 758,573
------------ ------------ -------------
Taxation 6 - - (148,007)
------------
Profit for the period
after tax 372,414 428,924 610,566
------------ ------------ -------------
Total comprehensive
income 372,414 428,924 610,566
Profit per share (basic) 2.78p 3.21p 4.57 p
Adjusted* Profit per
share (basic) 2.75p 3.18p 4.50 p
Profit per share (diluted) 2.77p 3.20p 4.56 p
Adjusted* Profit per
share (diluted) 2.74p 3.16p 4.49 p
All of the results relate to continuing operations and there was
no other comprehensive income in the period.
* Before release of accruals for administrative costs in respect
of prior years.
GROUP BALANCE SHEET
31 December 31 December 30 June
Note 202 2 20 21 202 2
(unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 1,715,153
Property, plant
and equipment 4,420 7,489 6,545
Right of use asset 12 146,303 292,606 219,455
Deferred tax asset 318,000 471,000 318,000
Trade and other
receivables 141,750 141,750 141,750
Total non-current
assets 2,325,626 2,627,998 2,400,903
Current assets
Trade and other
receivables 9 1,584,539 322,885 348,686
Cash and cash
equivalents 5,908,814 5,620,352 6,026,468
-------------- -------------- ------------
Total current
assets 7,493,353 5,943,237 6,375,154
Current liabilities
Trade and other ( 630,644
payables 10 (891,203) (553,435) )
( 978,236
Deferred income (1,854,240) (1,017,829) )
( 148,450
Lease liabilities 12 (118,994) (151,948) )
Total current ( 1,757,330
liabilities (2,864,437) (1,723,212) )
Non-current liabilities
( 47,403
Lease liabilities 12 - (118,994) )
Total non-current ( 47,403
liabilities - (118,994) )
Net current assets 4,628,916 4,220,025 4,617,824
Net assets 6,954,542 6,729,029 6,971,324
Equity
Share capital 1,671,601 1,671,601 1,671,601
Share premium
account 115,761 115,761 115,761
Share option reserve 306,440 290,713 270,825
Retained earnings 4,860,740 4,650,954 4,913,137
6,954,542 6,729,029 6,971,324
GROUP CASH FLOW STATEMENT
Note Six months Six months Year ended
ended 31 ended 31 30 June
December December
202 2 20 21 2022
(unaudited) (unaudited) (audited)
GBP GBP GBP
Cash generated from operating
activities 11 383,087 630,439 1,109,608
Tax paid 6 (4,993) - (2,642)
Net cash generated from
operating activities 378,094 630,439 1,106,966
Investing activities
Interest received 15,840 6,521 13,911
Purchases of plant and ( 2,688
equipment (114) (527) )
Net cash generated from
investing activities 15,726 5,994 11,223
------------ ------------ ---------------
Financing activities
Proceeds from the exercise
of options - 29,024 29,025
( 367,752
Dividends paid (434,616) (367,202) )
( 148,450
Payment of lease liabilities (76,859) (73,360) )
Net cash used in financing ( 487,177
activities (511,475) (411,538) )
------------ ------------ ---------------
Net (decrease) / increase
in cash and cash equivalents (117,655) 224,895 631,012
Cash and cash equivalents
at beginning of period 6,026,469 5,395,457 5,395,457
Cash and cash equivalents
at end of period 5,908,814 5,620,352 6,026,469
============ ============ ===============
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share-based Retained Total
capital premium payments earnings
reserve
GBP GBP GBP GBP GBP
At 1 July 2021 1,665,977 92,360 271,207 4,553,329 6,582,873
Profit for the
period - - - 428,924 428,924
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
Total
comprehensive
income for the
period - - - 428,924 428,924
Exercise of
options
[1] 5,624 23,401 - - 29,025
Transfer
between
reserves - - (35,904) 35,904 -
Dividends paid - - - (367,202) (367,202)
Share-based
payments - - 55,409 - 55,409
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
Total
transactions
with owners 5,624 23,401 19,505 (331,298) (282,768)
At 31 December
2021 1,671,601 115,761 290,712 4,650,955 6,729,029
Profit for the
period - - - 181,642 181,642
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
Total
comprehensive
income for the
period - - - 181,642 181,642
Transfer
between
reserves - - (81,090) 81,090 -
Dividends paid - - - (550) (550)
Share-based
payments - - 61,203 - 61,203
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
Total
transactions
with owners - - (19,887) 80,540 60,653
At 30 June 2022 1,671,601 115,761 270,825 4,913,137 6,971,324
Profit for the
period - - - 372,414 372,414
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
Total
comprehensive
income for the
period - - - 372,414 372,414
Transfer
between
reserves - - (9,805) 9,805 -
Dividends paid - - - (434,616) (434,616)
Share-based
payments - - 45,420 - 45,420
Total
transactions
with owners - - 35,615 (424,811) (389,196)
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
At 31 December
2022 1,671,601 115,761 306,440 4,860,740 6,954,542
---------------- ------------------- ------------------- ------------------ ----------------- -------------------
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended 31 December 202 2, and
31 December 202 1, are unaudited and do not constitute statutory
accounts. The accounting policies adopted are consistent with those
applied by the Group in the preparation of the annual consolidated
financial statements for the year ended 30 June 202 2 . The Group
has not early adopted any standard, interpretation or amendment
that has been issued but is not yet effective. Several amendments
and interpretations apply for the first time in 202 2 , but these
do not have a material impact on the interim condensed consolidated
financial statements of the Group.
2. The financial information for the year ended 30 June 202 2
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 202 2 ,
which were prepared in accordance with UK-adopted international
accounting standards , 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 GBP4,500 (31
December 20 21 : GBP 4,500 ; 30 June 202 2 : GBP9,000).
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 202 2 of 13,372,811 (31 December 20
21 : 13,355,719 30 June 202 2 : 13,364,195).
The number of dilutive shares under option at 31 December 202 2
was 18,612 (31 December 20 21 : 62,727 ; 30 June 202 2 : 25,145).
The c a lcu l a t i on of d il u t ed e a r n i n gs per sh a re
assu m es c on v e rsi on of a ll po t e n t i a lly d i l u t ive
o r d i na ry shares, all of w h i ch a r ise f r om sh a re op t i
on s. 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 paid represents the cash payment of tax
liability from the preceding income tax year .
7. A final dividend in respect of the year ended 30 June 202 2
of 3.25 pence per share (20 21 : 2. 75 pence per share) was paid on
24 October 202 2 .
8. The Directors have elected not to apply IAS 34 Interim financial reporting.
9. Trade and other receivables
31 December 31 December 30 June
2022 2021 2022
GBP GBP GBP
(unaudited) (unaudited) (audited)
Due within one year:
Trade and other receivables 1,468,165 209,800 196,541
Prepayments and accrued income 116,374 113,085 152,145
1,584,539 322,885 348,686
-------------------------------- ------------- ------------- -----------
10. Trade and other payables
31 December 31 December 30 June
2022 2021 2022
GBP GBP GBP
(unaudited) (unaudited) (audited)
Trade payables 33,078 45,063 77,772
Other tax and social security payable 319,265 64,548 62,148
Other payables and accruals 538,860 443,824 490,724
891,203 553,435 630,644
--------------------------------------------- ------------- ------------- -----------
11. Cash generated from operations
Six months Six months Year ended
ended 31 ended 31 30 June
December December
202 2 20 21 202 2
(unaudited) (unaudited) (audited)
GBP GBP GBP
Operating profit 361,405 430,619 758,272
Depreciation charge 75,390 77,337 153,594
Non-cash share option charges 45,420 55,410 116,612
(4,141 ( 13,550
Lease interest paid ) (7,640) )
Other interest paid (690) (576) (60)
(Increase) /decrease in trade
and other receivables (1,240,846) 147,432 126,624
Increase /(decrease) in trade
and other payables 1,146,549 (72,143) (31,884)
Cash generated from operations 383,087 630,439 1,109,608
12. Leases
As a lessee, under IFRS 16 the Group recognises right-of-use
assets and lease liabilities for all leases on its balance sheet.
The only lease applicable under IFRS 16 is the Group's office.
The key impacts on the Statement of Comprehensive Income and the
Statement of Financial Position are as follows:
Right of Lease liability Income
use asset GBP statement
GBP GBP
As at 1 July 202 2 219,455 (195,853) -
Depreciation (73,152) - (73,152)
Interest - (4,141) (4,141)
Lease payments - 81,000 -
Carrying value at 31 December
202 2 146,303 (118,994) (77,293)
----------- ---------------- -----------
Right of Lease liability Income statement
use asset GBP GBP
GBP
( 344,303
As at 1 July 202 1 365,758 ) -
(73,15 (73,15 2
Depreciation 2 ) - )
( 7,640 ( 7,640
Interest - ) )
Lease payments - 81,000 -
Carrying value at 31 December ( 270,943 ( 80,792
202 1 292,606 ) )
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END
IR FIFIIFEIDFIV
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