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Hardware & electrical equipment

APC Technology says business shake-up is paying off

APC has carried out a review to tackle problems and to focus on more profitable business

Electronics and environmental services group APC Technology (LON:APC) said a shake-up has resulted in extra business.

APC has carried out a review to tackle problems in its Minimise Group business and to focus on more profitable and cash-generative products and services.

It said the restructuring was paying off in the form of better-than-expected first quarter orders worth £3.5mln in its advanced power components arm.

The group won orders for power supplies to be used on transceiver equipment for a major UK defence programme and electronics for equipment to combat roadside bombs.

It also won a substantial follow-on contract from an unnamed UK aerospace contractor for a major export deal.

"These orders offer excellent opportunity for on-going, repeat business and further contract wins," the group said.

Its water hygiene and treatment won £1.5mln of business including a deal to supply water management services to an unidentified major hotel group.

The division also secured a contract to provide water treatment services to 1,500 key government sites across south-west England.

It said it was seeing significant interest and trials from the residential services, food manufacturing and education sectors for a water temperature monitoring system.

The group's energy consultancy arm was also benefiting from an impending deadline for companies and organisations to comply with the government's Energy Savings Opportunity Scheme (ESOS).

Chief executive Richard Hodgson said: "Not only do these contract wins and significant orders represent immediate and recurring or repeat revenue, they also enhance the group's customer base and therefore our ability to grow in the future through targeted cross-selling."

Shares in APC rose 0.88p, or more than 10%, to 9.5p.

House broker Cantor Fitzgerald said: "APC is beginning to put the problems of this summer behind it, in our view.

"A renewed focus on the more solid businesses of distribution and water appears to be paying off with new orders announced today.

"We have made some minor changes to our forecasts to reflect the new focus and to capture the impact of recent announcements on second half exceptionals.

"Our target price remains unchanged at 20p and we reiterate our 'buy' recommendation."

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