TIDMARC
RNS Number : 8453J
Arcontech Group PLC
22 August 2019
ARCONTECH GROUP PLC
("Arcontech", the "Company" or the "Group")
Final Results for the year ended 30 June 2019
Arcontech (AIM: ARC), the provider of products and services for
real-time financial market data processing and trading, is pleased
to announce its final audited results for the year ended 30 June
2019.
Financial Highlights:
-- Revenue increased by 18% to GBP2,966,788 (2018: GBP2,519,699)
-- Profit before tax of GBP1,057,143 (2018: GBP575,632)
-- Revenue and profit before and after tax increased by GBP125,426 on adoption of IFRS 15
-- Cash balances up 27% GBP4,063,484 (2018: GBP3,210,058)
-- Fully diluted earnings per share of 8.35p (2018: 7.09p)
-- Final dividend of 2.0 pence per share (2018: 1.3 pence per share)
Operational Highlights:
-- Doubled number of paying desktop software solution users to 90
-- Sold 300 Excelerators taking total users to 1,410
-- Building a RESTful interface to provide access to more data sources
-- Added new pre-sales resource
-- Strong cash generation and recurring revenue
Commenting on the results, Richard Last, Chairman of Arcontech
said:
"As a business we face a number of uncertainties: Brexit and
changes taking place in the financial markets, as well as with our
competitors. However, against this backdrop, our customer
relationships remain strong. We are a global business and believe
we offer excellent levels of support and operational flexibility as
well as significant competitiveness, hence, we would expect to see
continued growth, despite the macro climate. Our pipeline of
prospects remains positive, albeit, as we have consistently noted,
the outlook needs to be tempered by the traditionally long and
complex sales cycles that are a feature of our business."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
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
Chairman's Statement
I am pleased to report another year of progress for Arcontech
Group plc ("Arcontech" or the "Company") with good growth in profit
before taxation for the year ended 30 June 2019 to GBP1,057,143
(2018: GBP575,632), a year-on-year increase of 84% (62% before the
adoption of IFRS 15 "Revenue from contracts with customers").
During the year we re-assessed the level of accruals to be carried
forward on our balance sheet, as a result of which we have released
accruals no longer required of GBP156,786 (2018: GBP25,500). After
adjusting for release of these accruals, profit before taxation
would have been GBP900,357 (2018: GBP550,132), an increase of 64%
over the previous year (35% before adoption of IFRS 15). This
demonstrates the significant profit conversion from increased
revenues as we are able to deliver more from our existing and well
managed cost base.
We achieved a good increase in turnover for the year which grew
by 18% to GBP2,966,788 (2018: GBP2,519,699) a year-on-year increase
of GBP447,089 (GBP321,633 before the adoption of IFRS 15). This was
achieved primarily through increasing our product sales to existing
customers. We sold 300 Excelerators bringing those deployed in our
customer base to 1,410 and doubled our Desktop software solution
customer base to 90. Whilst sales to new customers have not been
significant during the year, our pipeline of opportunities with
potential new customers is already proving positive, particularly
for our Excelerator and Desktop software products.
We believe that fully diluted earnings based on profit before
taxation, excluding the release of provisions noted above, provides
a better measure of our underlying performance. As at 30 June 2019
Arcontech had tax losses of approximately GBP8.7m to offset against
future trading profits. On this basis earnings (determined as
profit before tax, assuming no tax charge/credit for the year,)
grew by 58% to 6.73p (36% before adoption of IFRS 15) during the
year ended 30 June 2019 (30 June 2018: 4.26p). Based on the actual
tax charge, adjusted earnings grew by 4.1% to 7.18p during the year
to 30 June 2019 (30 June 2018: 6.90p) reflecting the reduction in
the overall tax credit.
Financing
As at 30 June 2019 Arcontech had no debt and cash balances of
GBP4,063,484 (2018: GBP3,210,058) an increase of 27% which
represents a cash conversion of adjusted operating profit
(determined as operating profit before share-based payments and
before the release of accruals for administrative costs in respect
of prior years) of 109% (2018: 94%). Arcontech continues to be well
financed and has a robust balance sheet which is highly desirable
for a small, growing software company.
Dividend
I am pleased to announce that subsequent to the year-end we
agreed to propose, subject to approval at the Annual General
Meeting, to pay a dividend of 2.0 pence per share for the year
ended 30 June 2019 (30 June 2018: 1.30 pence), an increase of 54%,
to those shareholders on the register as at the close of business
on 6 September
2019, with an ex-dividend date of 5 September 2019.
Employees
Arcontech has a small, highly effective and committed workforce
that is customer focused. Their hard work, continued support and
dedication, is greatly appreciated and for which I thank them. I
should also like to thank my colleagues on the Board for their
continued support.
Outlook
As a business we face a number of uncertainties: Brexit and
changes taking place in the financial markets, as well as with our
competitors. However, against this backdrop, our customer
relationships remain strong. We are a global business and believe
we offer excellent levels of support and operational flexibility as
well as significant competitiveness, hence, we would expect to see
continued growth, despite the macro climate. Our pipeline of
prospects remains positive, albeit, as we have consistently noted,
the outlook needs to be tempered by the traditionally long and
complex sales cycles that are a feature of our business.
Richard Last
Chairman and Non-Executive Director
Chief Executive's Review
I am pleased to report that during the year we maintained our
focus on expanding and delivering on the sales pipeline whilst
continuing to control costs, which resulted in a profit before tax
of GBP1,057,143 (2018: GBP575,632), an increase of 84% (2018: 54%)
compared to the previous year and a creditable performance by the
Group.
The year under review saw the two global clients using our
Desktop software solution increase their usage and the signing of
another client, bringing the total to three, the third being a
completely new client. We now have a total of 90 end users (2018:
45) and continue to work with other clients where we are running
trials.
We also managed to grow our Excelerator end users by just over
300 which, together with our Desktop software solution, means a
further 345 end users of Arcontech software.
To increase the value provided and therefore the use case for
both Excelerator and our Desktop software solution we have also
been working with a client on building a RESTful interface which
will enable content in JSON and SQL formats to be pulled into our
software from the web or intranets to display and use in
spreadsheets, templates and charts. This provides a huge increase
in the data available to be consumed and can benefit any
client.
We are also working on our server-side offerings to provide
added value. To this end, we have been collaborating with key
clients to develop the first iteration of a new GUI for Director,
our interface for MVCS and our Cache.
Work on improving our sales structure continued too and we have
added a pre-sales support function. This role works with sales
personnel and their clients as a dedicated resource for technical
issues, whereas previously the requirement was fulfilled by support
or development staff which interfered with the development
process.
The length of the sales cycle continues to be longer that we
would like, however, we believe the expanded product offering and
sales capability should improve the frequency of sales. Coupled
with the excellent work of our development and support teams, we
continue to build on and broaden our strengths whilst working with
our clients to help meet their ever-changing needs.
As ever, our overriding focus remains on sales growth and
building our pipeline. At the same time, we are continuing to
explore opportunities with other organisations that can complement
our offerings, whilst remaining alert for strategic acquisition
opportunities that will benefit the Group.
We look forward to continued growth in the year ahead.
Matthew Jeffs
Chief Executive
Strategic Report
The Directors present the group strategic report for Arcontech
Group plc and its subsidiaries for the year ended 30 June 2019.
Principal activities
The principal activities of the Company and its subsidiaries
during the year were the development and sale of proprietary
software and provision of computer consultancy services.
Review of the business and prospects
A full review of the operations, financial position and
prospects of the Group is given in the Chairman's Statement and
Chief Executive's Review.
Key performance indicators (KPIs)
The Directors monitor the business using management reports and
information, reviewed and discussed at monthly Board meetings.
Financial and non-financial KPIs used in this report include:
Financial KPIs:
Revenue GBP2,966,788 (2018: GBP2,519,699; 2017: GBP2,307,751) Measurement:
Revenue from sales made to all customers (excluding intra-group
sales which eliminate on consolidation)
Performance:
Continued growth driven by increased sales of our product
offering
Adjusted profit GBP960,675 (2018: GBP889,584; 2017: GBP441,996) Measurement:
Profit after tax and before release of accruals for
administrative costs in respect of prior years
Performance:
Continued growth reflects increase in revenues whilst continuing
to maintain tight cost control
Cash GBP4,063,484 (2018: GBP3,210,058; 2017: GBP2,636,471) Measurement:
Cash and cash equivalents held at the end of the year
Performance:
The Group continues to maintain healthy cash balances
subject to any exceptional circumstances or acquisition
opportunities
Earnings per share (basic) 8.46p (2018: 7.14p; 2017: 3.79p) Measurement:
Earnings after tax divided by the weighted average number of
shares
Performance:
Continued growth
Earnings per share (diluted) 8.35p (2018: 7.09p; 2017: 3.68p) Measurement:
Earnings after tax divided by the fully diluted number of
shares
Performance:
Continued growth
Non-financial KPIs:
Staff retention rate (net) 100% (2018: 92%; 2017: 100%) Measurement:
Net retention after adjusting for joiners and leavers during the
year
Performance:
Staff morale from our dedicated employees remains strong,
reflected in the stable retention rate
Principal risks and uncertainties
The Group's performance is affected by a number of risks and
uncertainties, which the Board monitor on an ongoing basis in order
to identify, manage and minimise their possible impact. General
risks and uncertainties include changes in economic conditions,
interest rate fluctuations and the impact of competition. The
Group's principal risk areas and the action taken to mitigate their
outcome are shown below:
Risk area Mitigation
Competition Ongoing investment in research and development
Responding to the changing needs of clients to remain competitive
Loss of key personnel Employee share option scheme in place
Approved on behalf of the board on 21 August 2019 by:
Matthew Jeffs Michael Levy
Chief Executive Group Finance Director
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2019
2019 2018
GBP GBP
Revenue 2,966,788 2,519,699
Administrative costs (1,936,829) (1,958,176)
Operating profit 1,029,959 561,523
Finance income 27,184 14,109
Profit before taxation 1,057,143 575,632
Taxation 60,318 339,452
Profit for the year after tax 1,117,461 915,084
---------------------------------------------- ------------ ------------
Total comprehensive income for the year 1,117,461 915,084
---------------------------------------------- ------------ ------------
Earnings per share (basic) 8.46p 7.14p
---------------------------------------------- ------------ ------------
Adjusted* Earnings per share (basic) 7.27p 6.94p
---------------------------------------------- ------------ ------------
Earnings per share (diluted) 8.35p 7.09p
---------------------------------------------- ------------ ------------
Adjusted* Earnings per share (diluted) 7.18p 6.90p
------------------------------------------- ------ ------
*Adjusted for release of accruals for administrative costs of
GBP156,786 (2018: GBP25,500) in respect of prior years.
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2019
Group:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
Balance at 30 June 2017 1,562,676 9,802 188,425 1,039,082 2,799,985
Profit for the year - - - 915,084 915,084
Total comprehensive income for the year - - - 915,084 915,084
Dividend paid - - - (125,760) (125,760)
Issue of shares 88,638 46,579 - - 135,217
Share-based payments - - 51,224 - 51,224
Transfer between reserves - - (183,283) 183,283 -
Balance at 30 June 2018 1,651,314 56,381 56,366 2,011,689 3,775,750
Adjustment for adoption of IFRS 15 - - - 1,026,119 1,026,119
Profit for the year - - - 1,117,461 1,117,461
Total comprehensive income for the year - - 1,117,461 1,117,461
Dividend paid - - - (171,334) (171,334)
Share-based payments - - 53,857 - 53,857
Transfer between reserves - - (10,576) 10,576 -
Balance at 30 June 2019 1,651,314 56,381 99,647 3,994,511 5,801,853
----------------------------------------- ---------- --------- --------------------- ---------- ----------
Company:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
Balance at 30 June 2017 1,562,676 9,802 188,425 3,062,385 4,823,288
Profit for the year - - - 1,076,709 1,076,709
Total comprehensive expense for the year - - - 1,076,709 1,076,709
Dividend paid - - - (125,760) (125,760)
Issue of shares 88,638 46,579 - - 135,217
Share-based payments - - 51,224 - 51,224
Transfer between reserves - - (183,283) 183,283 -
------------------------------------------ ---------- --------- --------------------- ---------- -----------
Balance at 30 June 2018 1,651,314 56,381 56,366 4,196,617 5,960,678
Profit for the year - - - 342,250 342,250
------------------------------------------ ---------- --------- --------------------- ---------- -----------
Total comprehensive income for the year - - - 342,250 342,250
Dividend paid - - - (171,334) (171,334)
Share-based payments - - 53,857 - 53,857
Transfer between reserves - - (10,576) 10,576 -
Balance as at 30 June 2019 1,651,314 56,381 99,647 4,378,109 6,185,451
------------------------------------------ ---------- --------- --------------------- ---------- -----------
Balance Sheet
Registered number: 04062416
As at 30 June 2019
Group Group Company Company
2019 2018 2019 2018
GBP GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 - -
Property, plant and equipment 15,011 17,941 - -
Investments in subsidiaries - - 2,017,471 2,017,471
Deferred tax asset 285,000 270,000 125,000 50,000
Trade and other receivables 141,750 141,750 - -
Total non-current assets 2,156,914 2,144,844 2,142,471 2,067,471
-------------------------------- ---------- ------------ ---------- ----------
Current assets
Trade and other receivables 263,875 310,123 3,073,519 2,571,949
Cash and cash equivalents 4,063,484 3,210,058 1,078,755 1,458,390
-------------------------------- ---------- ------------ ---------- ----------
Total current assets 4,327,359 3,520,181 4,152,274 4,030,339
-------------------------------- ---------- ------------ ---------- ----------
Current liabilities
Trade and other payables (682,420) (1,889,275) (109,294) (137,132)
-------------------------------- ---------- ------------ ---------- ----------
Total current liabilities (682,420) (1,889,275) (109,294) (137,132)
-------------------------------- ---------- ------------ ---------- ----------
Net current assets 3,644,939 1,630,906 4,042,980 3,893,207
-------------------------------- ---------- ------------ ---------- ----------
Net assets 5,801,853 3,775,750 6,185,451 5,960,678
-------------------------------- ---------- ------------ ---------- ----------
Equity
Called up share capital 1,651,314 1,651,314 1,651,314 1,651,314
Share premium account 56,381 56,381 56,381 56,381
Share option reserve 99,647 56,366 99,647 56,366
Retained earnings 3,994,511 2,011,689 4,378,109 4,196,617
-------------------------------- ---------- ------------ ---------- ----------
5,801,853 3,775,750 6,185,451 5,960,678
------------------------------- ---------- ------------ ---------- ----------
Group Cash Flow Statement
For the year ended 30 June 2019
2019 2018
GBP GBP
Cash generated from operations 966,060 482,659
Tax recovered 45,318 69,452
Net cash generated from operating activities 1,011,378 552,111
------------------------------------------------------------- ---------- ----------
Investing activities
Interest received 27,184 14,109
Purchases of plant and equipment (13,802) (2,090)
Net cash generated from investing activities 13,382 12,019
------------------------------------------------------------- ---------- ----------
Financing activities
Issue of shares - 135,217
Dividend paid (171,334) (125,760)
Net cash (invested in)/generated from financing activities (171,334) 9,457
------------------------------------------------------------- ---------- ----------
Net increase in cash and cash equivalents 853,426 573,587
Cash and cash equivalents at beginning of year 3,210,058 2,636,471
------------------------------------------------------------- ---------- ----------
Cash and cash equivalents at end of year 4,063,484 3,210,058
------------------------------------------------------------- ---------- ----------
Notes to the Financial Statements For the year ended 30 June
2019
Status of financial information
Arcontech Group plc is a public limited company incorporated in
England and Wales whose ordinary shares of GBP0.125 each are traded
on the AIM Market of the London Stock Exchange. The Company's
registered office is 1st Floor, 11-21 Paul Street, London, EC2A
4JU.
The Board of Directors approved this preliminary announcement on
21 August 2019. Whilst the financial information included in this
preliminary announcement has been prepared in accordance with
International Financial Reporting Standards ("IFRS") as endorsed by
the European Union, this announcement does not itself contain
sufficient information to comply with all the disclosure
requirements of IFRS and does not constitute statutory accounts of
the Company for the years ended 30 June 2019 or 30 June 2018.
The financial information set out in this announcement does not
comprise the Group's statutory accounts for the years ended 30 June
2019 or 30 June 2018.
The financial information has been extracted from the statutory
accounts of the Company for the years ended 30 June 2019 or 30 June
2018. The auditors reported on those accounts; their reports were
unqualified and did not contain a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying
their report and did not contain a statement under either Section
498 (2) or Section 498 (3) of the Companies Act 2006.
The statutory accounts for the year ended 30 June 2018 have been
delivered to the Registrar of Companies, whereas those for the year
ended 30 June 2019 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
Operating segments:
The Group reports internally to the Chief Operating Decision
Maker (CODM), who is considered to be the Board. Intersegment
license fees and management charges are not included in the reports
reviewed by the CODM during the year but are calculated for
statutory reporting purposes and therefore are excluded from the
following revenue and operating profit disclosures.
2019 2018
GBP GBP
Revenue by segment
Software development and licence fees 2,966,788 2,519,699
-------------------------------------------------------------------- ----------- ----------
External segment revenue 2,966,788 2,519,699
-------------------------------------------------------------------- ----------- ----------
Operating profit by segment
Software development and licence fees 1,513,240 1,126,932
Unallocated overheads (483,281) (565,409)
-------------------------------------------------------------------- ----------- ----------
Total operating profit 1,029,959 561,523
Finance income 27,184 14,109
Total profit before tax as reported in the Group income statement 1,057,143 575,632
-------------------------------------------------------------------- ----------- ----------
2019 2018
GBP GBP
Segment total of assets
Software development and licence fees 5,196,369 4,090,852
Unallocated assets 4,357,274 4,140,338
---------------------------------------- ------------- ------------
9,553,643 8,231,190
Less inter company debtors (3,069,370) (2,566,166)
Total assets 6,484,273 5,665,024
---------------------------------------- ------------- ------------
2019 2018
GBP GBP
Segment total of liabilities
Software development and licence fees 3,642,199 4,318,229
Unallocated liabilities 109,591 137,212
---------------------------------------- ------------ ------------
3,751,790 4,455,441
Less inter company creditors (3,069,370) (2,566,166)
---------------------------------------- ------------ ------------
Total liabilities 682,420 1,889,275
---------------------------------------- ------------ ------------
2019 2018
GBP GBP
Additions of property, plant and equipment assets by segment
Software development and licence fees 13,802 2,090
------------------------------------------------------------------------------------------- ------- -------
Total additions 13,802 2,090
------------------------------------------------------------------------------------------- ------- -------
2019 2018
GBP GBP
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees 16,732 17,974
Total depreciation 16,732 17,974
------------------------------------------------------------------------------------------- ------- -------
Non-current assets by country 2019 2018
GBP GBP
UK 2,156,914 2,144,844
Total non-current assets 2,156,914 2,144,844
-------------------------------- ---------- ----------
Geographical information - External revenue 2019 2018
GBP GBP
UK 1,997,490 1,669,949
Europe (excluding UK) 822,251 796,468
Africa 45,000 22,562
North America 99,010 28,488
Asia Pacific 3,037 2,232
2,966,788 2,519,699
--------------------------------------------- ---------- ----------
During the year there were 4 customers (2018: 3) who accounted
for more than 10% of the Group's revenues as follows:
2019 2018
Value of % of Total Value of % of Total
sales sales
GBP GBP
Customer 1 643,491 22% 620,630 25%
Customer 2 527,145 18% 477,258 19%
Customer 3 378,326 13% 375,219 15%
Customer 4 361,426 12% 96,000 4%
------------ ---------- ----------- ---------- -----------
1,910,388 65% 1,569,107 63%
------------ ---------- ----------- ---------- -----------
These revenues are attributable to the software development and
licence fees segment.
Earnings per share
2019 2018
GBP GBP
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit
attributable
to equity shareholders 1,117,461 915,084
1,117,461 915,084
----------------------------------------------------------------------------------------- ---------- --------
No. No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per
share 13,210,510 12,821,702
Number of dilutive shares under option 165,223 77,699
-------------------------------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares for the purposes of dilutive earnings per
share 13,375,733 12,899,401
-------------------------------------------------------------------------------------- ----------- -----------
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 fair value, based upon
the monetary value of the subscription rights attached to
outstanding share options.
Net cash generated from operations - Group
2019 2018
GBP GBP
Operating profit 1,029,959 561,523
Depreciation charge 16,732 17,974
Non cash share option charges 53,857 51,224
Adjustment for adoption of IFRS 15 1,026,119 -
Decrease/(increase) in trade and other receivables 46,248 (134,626)
Decrease in trade and other payables (1,206,855) (13,436)
Cash generated from operations 966,060 482,659
Dividends
A final dividend of 2.0 pence will be proposed at the Annual
General Meeting but has not been recognised as it requires approval
(2018: 1.3 pence).
Annual General Meeting
The Annual General Meeting of Arcontech Group PLC will be held
at the Company's offices, 1st Floor, 11-21 Paul Street, London EC2A
4JU on 3 October 2019 at 10.00 a.m.
Annual report and accounts
Copies of the annual report and accounts will be sent to
shareholders shortly and will be available from the Company
Secretary at the Company's registered office at 1st Floor, 11-21
Paul Street, London, EC2A 4JU or from the Company's website at
www.arcontech.com
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
FR CKDDQOBKDAFB
(END) Dow Jones Newswires
August 22, 2019 02:00 ET (06:00 GMT)
Arcontech (LSE:ARC)
Historical Stock Chart
Von Dez 2024 bis Jan 2025
Arcontech (LSE:ARC)
Historical Stock Chart
Von Jan 2024 bis Jan 2025
