07:00 Tue 23 Feb 2021
Arcontech Group PLC - Interim Results
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED
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
Highlights:
· Turnover increased by 4.7% to
· Profit before tax decreased by 8% to
· Annual run-rate of recurring revenues at
· Net cash of
· Profit before tax for the year to
"The Board is pleased with Arcontech's progress in the first half of the year. While the effects of the COVID-19 pandemic have continued to overshadow the market we have grown revenue with the addition of an important new customer and a significant upgrade to an existing tier one customer. At the same time we have maintained good profit levels after investing in future growth. We believe we are in a good position to accelerate growth once market conditions improve.
Enquiries:
Arcontech Group plc |
020 7256 2300 |
|
|
|
|
|
|
finnCap Ltd (Nomad & Broker) |
020 7220 0500 |
|
|
|
|
To access more information on the Group please visit: www.arcontech.com
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of
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 was delighted to join the board of Arcontech as a Non-Executive Director in
In these uncertain times Arcontech has continued to perform well, with sound revenue growth but a reduction in profit before tax due to the effect of the investment in building the sales team which is expected to enhance future earnings. The market continues to be challenging with customer contact limited and decisions being delayed due to remote working. However, the enhanced sales team is making good progress growing the list of prospective new customers, which bodes well for the future.
Revenue was
Our strategy is to support our existing customers and to maximise opportunities to provide a wider range of services to them. At the same time we have invested in building our sales capability to grow our customer base globally. We also continue to focus on our desktop products to augment our server-side business.
The enlarged sales team has made good progress reaching out to potential new customers. The prevailing market conditions have meant that the sales cycle is taking much longer than in normal times. We are pleased with the progress made and are confident that growth will improve once we are in a more normal market.
Financing
Our cash position remains excellent, with cash balances of
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.
Employees
Our staff are now all working from home and I would like to thank them for their hard work adapting to this challenge. The Company has been able to continue to provide full support to existing customers, which has included performing software upgrades and helping with data centre moves whilst at the same time supporting proof of concept projects and progressing the development of new products.
Outlook
We expect conditions in the second half of the year to remain challenging. It seems unlikely that our sales team will have greater access to customers until at least the end of the year, however, we are confident that we will build on current growth once market conditions improve.
Geoff Wicks
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
|
|
Note |
Six months ended 31 December |
|
Six months ended 31 December |
|
Year ended 30 June |
|
|
|
2020 |
|
2019 |
|
2020 |
|
|
|
(unaudited) £ |
|
(unaudited) £ |
|
(audited) £ |
|
|
|
|
|
|
|
|
Revenue |
|
|
1,542,816 |
|
1,473,651 |
|
2,955,314 |
|
|
|
|
|
|
|
|
Administrative costs |
|
|
(1,034,043) |
|
(924,211) |
|
(1,917,502) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit |
|
4 |
508,773 |
|
549,440 |
|
1,037,812 |
|
|
|
|
|
|
|
|
Finance income |
|
|
8,442 |
|
16,573 |
|
29,914 |
|
|
|
|
|
|
|
|
Finance costs |
|
|
(10,978) |
|
(14,166) |
|
(26,757) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before taxation |
|
|
506,237 |
|
551,847 |
|
1,040,949 |
|
|
|
|
|
|
|
|
Taxation |
|
6 |
- |
|
9,734 |
|
176,734 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period after tax |
|
|
506,237 |
|
561,581 |
|
1,217,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
506,237 |
|
561,581 |
|
1,217,703 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit per share (basic) |
|
|
3.82p |
|
4.25p |
|
9.22p |
|
|
|
|
|
|
|
|
Adjusted* Profit per share (basic) |
|
|
3.49p |
|
3.93p |
|
8.56p |
|
|
|
|
|
|
|
|
Profit per share (diluted) |
|
|
3.76p |
|
4.17p |
|
9.03p |
|
|
|
|
|
|
|
|
Adjusted* Profit per share (diluted) |
|
|
3.43p |
|
3.85p |
|
8.39p |
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
|
Note |
|
|
|
|
30 June 2020 |
|
|
(unaudited) £ |
|
(unaudited) £ |
|
(audited) £ |
Non-current assets |
|
|
|
|
|
|
Goodwill |
|
1,715,153 |
|
1,715,153 |
|
1,715,153 |
Property, plant and equipment |
|
15,697 |
|
17,084 |
|
19,316 |
Right of use asset |
10 |
438,908 |
|
588,212 |
|
512,061 |
Deferred tax asset |
|
452,000 |
|
285,000 |
|
452,000 |
Trade and other receivables |
|
141,750 |
|
141,750 |
|
141,750 |
|
|
|
|
|
|
|
Total non-current assets |
|
2,763,508 |
|
2,747,199 |
|
2,840,280 |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Trade and other receivables |
|
759,655 |
|
608,910 |
|
192,632 |
Cash and cash equivalents |
|
4,997,822 |
|
4,400,455 |
|
5,006,969 |
|
|
|
|
|
|
|
Total current assets |
|
5,757,477 |
|
5,009,365 |
|
5,199,601 |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
|
(643,512) |
|
(694,215) |
|
(655,907) |
Deferred income |
|
(1,483,908) |
|
(1,513,941) |
|
(1,195,130) |
Lease liabilities |
10 |
(162,000) |
|
(162,000) |
|
(141,693) |
|
|
|
|
|
|
|
Total current liabilities |
|
(2,289,420) |
|
(2,370,156) |
|
(1,992,730) |
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Lease liabilities |
10 |
(253,974) |
|
(392,405) |
|
(344,303) |
|
|
|
|
|
|
|
Total non-current liabilities |
|
(253,974) |
|
(392,405) |
|
(344,303) |
|
|
|
|
|
|
|
Net current assets |
|
3,468,057 |
|
2,639,209 |
|
3,206,871 |
|
|
|
|
|
|
|
Net assets |
|
5,977,591 |
|
4,994,003 |
|
5,702,848 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
Share capital |
|
1,661,314 |
|
1,651,314 |
|
1,651,314 |
Share premium account |
|
65,381 |
|
56,381 |
|
56,381 |
Shares to be issued |
|
31,642 |
|
- |
|
- |
Share option reserve |
|
206,797 |
|
145,352 |
|
188,639 |
Retained earnings |
|
4,012,457 |
|
3,140,956 |
|
3,806,514 |
|
|
|
|
|
|
|
|
|
5,977,591 |
|
4,994,003 |
|
5,702,848 |
|
|
|
|
|
|
|
GROUP CASH FLOW STATEMENT
|
|
Note |
Six months ended 31 December |
|
Six months ended 31 December |
|
Year ended 30 June |
|
|
|
2020 |
|
2019 |
|
2020 |
|
|
|
(unaudited) £ |
|
(unaudited) £ |
|
(audited) £ |
|
|
|
|
|
|
|
|
Cash generated from operating activities |
|
9 |
336,866 |
|
646,861 |
|
1,315,421 |
|
|
|
|
|
|
|
|
Tax recovered |
|
6 |
- |
|
9,734 |
|
9,734 |
|
|
|
|
|
|
|
|
Net cash generated from operating activities |
|
|
336,866 |
|
656,595 |
|
1,325,155 |
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest received |
|
|
8,442 |
|
16,573 |
|
29,914 |
Purchases of plant and equipment |
|
|
(1,482) |
|
(5,772) |
|
(12,750) |
|
|
|
|
|
|
|
|
Net cash generated from investing activities |
|
|
6,960 |
|
10,801 |
|
17,164 |
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the exercise of options |
|
|
50,642 |
|
- |
|
- |
|
|
|
|
|
|
|
|
Dividends paid |
|
|
(333,594) |
|
(263,591) |
|
(263,591) |
|
|
|
|
|
|
|
|
Payment of lease liabilities |
|
|
(70,021) |
|
(66,834) |
|
(135,243) |
|
|
|
|
|
|
|
|
Net cash used in financing activities |
|
|
(352,973) |
|
(330,425) |
|
(398,834) |
Net (decrease) / increase in cash and cash equivalents |
|
|
(9,147) |
|
336,971 |
|
943,485 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
|
5,006,969 |
|
4,063,484 |
|
4,063,484 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
|
4,997,822 |
|
4,400,455 |
|
5,006,969 |
GROUP STATEMENT OF CHANGES IN EQUITY
|
Share capital |
Share premium |
Shares to be issued |
Share-based payments reserve |
Retained earnings |
Total
|
|
£ |
£ |
£ |
£ |
£ |
£ |
At |
1,651,314 |
56,381 |
- |
56,366 |
2,011,689 |
3,775,750 |
Total comprehensive income for the period |
-
|
-
|
-
|
-
|
561,581 |
561,581 |
Dividends paid |
- |
- |
- |
- |
(263,591) |
(263,591) |
Share-based payments |
- |
- |
- |
45,705 |
- |
45,705 |
At |
1,651,314 |
56,381 |
- |
145,352 |
3,140,956 |
4,994,003 |
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
656,122 |
656,122
|
Share-based payments |
- |
- |
- |
52,723 |
- |
52,723 |
Realisation of share option reserve |
- |
- |
- |
(9,436) |
9,436 |
- |
At |
1,651,314 |
56,381 |
- |
188,639 |
3,806,514 |
5,702,848 |
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
506,237 |
506,237 |
Exercise of options |
10,000 |
9,000 |
31,642 |
- |
- |
50,642 |
Transfer between reserves |
- |
- |
- |
(33,300) |
33,300 |
- |
Dividends paid |
- |
- |
- |
- |
(333,594) |
(333,594) |
Share-based payments |
- |
- |
- |
51,458
|
- |
51,458
|
At |
1,661,314 |
65,381 |
31,642* |
206,797 |
4,012,457 |
5,977,591 |
* At
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended
2. The financial information for the year ended
3. Copies of this statement are available from the Company Secretary at the Company's registered office at 1st Floor
4. Operating profit is stated after release of accruals for administrative expenses in respect of prior years of
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
The number of dilutive shares under option at
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
8. The Directors have elected not to apply IAS 34 Interim financial reporting.
9. Cash generated from operations
|
|
Six months ended 31 December |
|
Six months ended 31 December |
|
Year ended 30 June |
|
|
|
|
|
|
2020 |
|
2019 |
|
2020 |
|
|
|
|
|
|
(unaudited) £ |
|
(unaudited) £ |
|
(audited) £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit |
|
508,773 |
|
549,440 |
|
1,037,812 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation charge |
|
78,254 |
|
77,226 |
|
154,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash share option charges |
|
51,457 |
|
45,705 |
|
98,428 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease interest paid |
|
(10,978) |
|
(14,166) |
|
(26,757) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for adoption of IFRS 16 |
|
- |
|
(40,500) |
|
(37,125) |
|
|
|
|
(Increase)/decrease in trade and other receivables |
|
(567,023) |
|
(345,035) |
|
71,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in trade and other payables |
|
276,383 |
|
374,191 |
|
17,072 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash generated from operations |
|
336,866 |
|
646,861 |
|
1,315,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
10. 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 use asset £ |
|
Prepayments
£ |
|
Lease liability £ |
|
Income statement £ |
As at |
512,061 |
|
- |
|
(485,996) |
|
- |
|
|
|
|
|
|
|
|
Depreciation |
(73,153) |
|
- |
|
- |
|
(73,153) |
Interest |
- |
|
- |
|
(10,978) |
|
(10,978) |
Lease payments |
- |
|
- |
|
81,000 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value at |
438,908 |
|
- |
|
(415,974) |
|
(84,131) |
|
|
|
|
|
|
|
|
|
Right of use asset £ |
|
Prepayments
£ |
|
Lease liability £ |
|
Income statement £ |
As at |
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
Recognised on adoption of IFRS 16 |
661,739 |
|
(40,500) |
|
(621,239) |
|
- |
Depreciation |
(73,527) |
|
- |
|
- |
|
(73,527) |
Interest |
- |
|
- |
|
(14,166) |
|
(14,166) |
Lease payments |
- |
|
- |
|
81,000 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying value at |
588,212 |
|
(40,500) |
|
(554,405) |
|
(87,693) |
|
|
|
|
|
|
|
|
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of...
FOR OUR FULL DISCLAIMER CLICK HERE