TIDMARC
RNS Number : 0594F
Arcontech Group PLC
05 March 2020
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 2019
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 2019.
Highlights:
-- Turnover increased by 7.5% to GBP1,473,651 (six months ended 31 December 2018: GBP1,371,107)
-- Profit before tax increased by 22% to GBP551,847 (six months
ended 31 December 2018: GBP452,756)
-- Adjusted profit before tax (before release of accruals for
administrative costs in respect of prior years but including share
based payments) increased by 52% to GBP509,347 (six months ended 31
December 2018: GBP335,470)
-- Annual run-rate of recurring revenues at 31 December 2019
increased by 3% to GBP2.87 million (at 31 December 2018: GBP2.78
million)
-- Cash of GBP4,400,455 as at 31 December 2019 (31 December 2018: GBP3,231,830)
-- Trading in line and on track to meet full year market 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 GBP1,168,625
higher than the previous half year, further strengthening the
Balance Sheet and demonstrating the cash generative and robust
nature of the business. We have continued to invest in product
development to add value to existing and prospective clients whilst
making our products more competitive and compelling when compared
with alternatives. Whilst there remain global factors that can
affect our always long and unpredictable sales cycle, 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
Camille Gochez - ECM
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 2019 in line with
expectations, reporting an adjusted profit before tax of GBP509,347
(six months ended 31 December 2018: GBP335,470) an increase of 52%.
Turnover increased by 7.5% to GBP1,473,651 compared to the
corresponding six-month period in 2018 where turnover amounted to
GBP1,371,107. This reflects the growth in recurring annual licence
fees, primarily from existing customers, which on an annualised
basis amounted to GBP2.87 million at 31 December 2019, compared to
GBP2.78 million as at 31 December 2018. Declared fully diluted
earnings per share were 4.17 pence per share compared to 3.72 pence
per share for the corresponding period last year, while adjusted
fully diluted earnings per share increased by 36% to 3.85p over the
same period.
During the half year to 31 December 2019 Arcontech's increase in
revenues reflects the full year effect of sales made during the
year to 30 June 2019 and the impact of selling more Excelerator
Add-in's into the existing customer base. During the half year and
in the run up to Brexit we did notice decisions being put on hold
as clients considered their options. That said, we continue to
trial our Desktop software solution with a number of blue chip
organisations and usage has increased by approximately 71% to 120
(70 in December 2018). We also added a new client user. Excelerator
users have remained stable.
For the server-side of the business which consists of our MVCS
(Multi-Vendor Contribution System) and Real-time Cache, we have
continued developments to provide visualisation of data throughput,
which is in Alpha-test and for which client feedback is very
positive. This will make our server-side software more competitive
and add value in terms of faster identification and resolution of
any data or performance issues thus reducing risk for the
client.
Financing
The Group has a strong financial position with cash balances at
the 31 December 2019 of GBP4,400,455 (31 December 2018
GBP3,231,830), an increase of GBP1,168,625, providing a sound basis
for continued investment in the business and demonstrating the cash
generative nature of the business. The increase in cash between 30
June 2019 and 31 December 2019 principally reflects net cash
inflows from operations less dividends paid to shareholders during
the period.
Dividend
No interim dividend is proposed to be paid in respect of the
half year.The Board does expect to continue its policy of paying a
dividend following the announcement of its full year results.
Employees
I would 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 robust 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. We propose to maintain ongoing investment
in product development and to bolster our sales efforts. 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.
The Board is also currently monitoring the Coronavirus and
assessing the possible impact on the Group's business. While there
has been no impact to date, if the spread of the virus is prolonged
it may lead to companies delaying capital expenditure, which may
reduce new business. There is expected to be no impact on existing
revenues. That said, 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 market expectations.
Richard Last
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
Note Six months Six months Restated*
ended 31 ended 31 Year ended
December December 30 June
2019 2018 2019
GBP GBP GBP
Revenue 1,473,651 1,371,107 2,841,362
Administrative costs (924,211) (931,902) (1,936,829)
Operating profit 4 549,440 439,205 904,533
Finance income 16,573 13,551 27,184
Finance costs (14,166) - -
Profit before taxation 551,847 452,756 931,717
Taxation 6 9,734 45,318 60,318
Profit for the period
after tax 561,581 498,074 992,035
Total comprehensive income 561,581 498,074 992,035
Profit per share (basic) 4.25p 3.77p 7.40p
Adjusted** Profit per
share (basic) 3.93p 2.88p 6.88p
Profit per share (diluted) 4.17p 3.72p 7.30p
Adjusted** Profit per
share (diluted) 3.85p 2.84p 6.79p
* See note 11
**Adjusted to exclude the release of accruals for administrative
expenses in respect of prior years
All of the results relate to continuing operations.
GROUP BALANCE SHEET
Restated*
31 December 31 December 30 June
Note 2019 2018 2019
GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 1,715,153
Property, plant and
equipment 17,084 11,398 15,011
Right of use asset 10 588,212 - -
Deferred tax asset 285,000 270,000 285,000
Trade and other receivables 141,750 141,750 141,750
Total non-current
assets 2,747,199 2,138,301 2,156,914
Current assets
Trade and other receivables 608,910 320,608 263,875
Cash and cash equivalents 4,400,455 3,231,830 4,063,484
-------------- ---------------- ------------
Total current assets 5,009,365 3,552,438 4,327,359
Current liabilities
Trade and other payables (694,215) (769,105) (682,420)
Deferred income (1,513,941) (801,409) (1,151,545)
Lease liabilities 10 (162,000) - -
Total current liabilities (2,370,156) (1,570,514) (1,833,965)
Non-current liabilities
Lease liabilities 10 (392,405) - -
Total non-current (392,405) - -
liabilities
Net current assets 2,639,209 1,981,924 2,493,394
Net assets 4,994,003 4,120,225 4,650,308
Equity
Share capital 1,651,314 1,651,314 1,651,314
Share premium account 56,381 56,381 56,381
Share option reserve 145,352 74,101 99,647
Retained earnings 3,140,956 2,338,429 2,842,966
4,994,003 4,120,225 4,650,308
* See note 11
GROUP CASH FLOW STATEMENT
Note Six months Six months Year ended
ended 31 ended 31 30 June
December December
2019 2018 2019
GBP GBP GBP
Cash generated from operating
activities 9 661,027 136,562 966,060
Tax recovered 9,734 45,318 45,318
Net cash generated from operating
activities 670,761 181,880 1,011,378
Investing activities
Interest received 16,573 13,551 27,184
Purchases of plant and equipment (5,772) (2,325) (13,802)
Net cash generated from investing
activities 10,801 11,226 13,382
------------ ------------ ---------------
Financing activities
Dividends paid (263,591) (171,334) (171,334)
Payment of lease liabilities (81,000) - -
Net cash used in financing
activities (344,591) (171,334) (171,334)
------------ ------------ ---------------
Net increase in cash and cash
equivalents 336,971 21,772 853,426
Cash and cash equivalents
at beginning of period 4,063,484 3,210,058 3,210,058
Cash and cash equivalents
at end of period 4,400,455 3,231,830 4,063,484
============ ============ ===============
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share-based Retained Total
capital premium paymentsreserve earnings
GBP GBP GBP GBP GBP
At 1 July 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
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
Total
comprehensive
income for the
period - - - 493,961 493,961
Share-based
payments - - 36,122 - 36,122
Realisation of
share option
reserve - - (10,576) 10,576 -
At 30 June 2019 1,651,314 56,381 99,647 2,842,966 4,650,308
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
Total
comprehensive
income for the
period - - - 561,581 561,581
Dividends paid - - - (263,591) (263,591)
Share-based
payments - - 45,705 - 45,705
At 31 December
2019 1,651,314 56,381 145,352 3,140,956 4,994,003
----------------- ----------------- -------------------- ------------------ ------------------- -----------------
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended 31 December 2019 and 31
December 2018 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. IFRS 16 Leases
has been applied for the first time in preparing the interim
financial information. Note 10 sets out the key impacts on the
Statement of Comprehensive Income and the Statement of Financial
Position of the adoption of the new standard.
2. The financial information for the year ended 30 June 2019 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 2019, 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. The auditors have not reported
on the restatement of the information for the year ended 30 June
2019 as explained in note 11.
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 GBP42,500 (31
December 2018: GBP117,286; 30 June 2019: GBP156,786).
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 2019 of 13,210,510 (31 December
2018: 13,210,510; 30 June 2019: 13,210,510).
The number of dilutive shares under option at 31 December 2019
was 256,341 (31 December 2018: 189,343; 30 June 2019: 165,223). 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 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 2019 of
2.0 pence per share (2018: 1.3 pence per share) was paid on 11
October 2019.
8. The Directors have elected not to apply IAS34 Interim financial reporting.
9. Cash generated from operations
Six months Six months Year ended
ended 31 ended 31 30 June
December December
2019 2018 2019
GBP GBP GBP
Operating profit 549,440 439,205 904,533
Depreciation charge 77,226 8,868 16,732
Non-cash share option charges 45,705 17,735 53,857
Adjustment for adoption of -
IFRS 16 (40,500) -
(Increase)/decrease in trade
and other receivables (345,035) (10,485) 46,248
Increase/(Decrease) in trade
and other payables 374,191 (318,761) (55,310)
Cash generated from operations 661,027 136,562 966,060
10. Adoption of accounting standard IFRS 16
The Group has adopted IFRS 16 using the modified retrospective
approach with the effect of applying this standard at the date of
initial recognition of 1 July 2019, consequently comparatives have
not been restated.
As a lessee, the Group has previously classified leases as
operating or finance leases based on whether the lease transferred
significantly all of the risks and rewards incidental to the
ownership of the underlying asset. 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 Prepayments Lease Income
use asset GBP liability statement
GBP GBP GBP
As at 1 July 2019 - - - -
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 81,000
Carrying value at 31 December
2019 588,212 (40,500) (554,405) (6,693)
----------- ------------ ----------- -----------
11. Revision to revenue recognition policy under IFRS 15
IFRS 15 "Revenue from contracts with customers" was adopted from
1 July 2018 in line with transitional provisions provided in the
new standards. The audited financial statements for the year ended
30 June 2019 recognised revenue from recurring license fees on an
'at a point in time' basis. The Group has undertaken a further
review and analysis of its offering and performance obligations
under the terms of recurring license fee contracts. The conclusion
reached is that in the context of IFRS 15 the correct approach for
the recognition of revenue is on an over time basis whereby
deferred income arises upon entering into a license fee agreement
and is then subsequently recognised as revenue across the remaining
passage of time on the license.
This is consistent with the Group's approach to revenue
recognition for recurring license fees prior to the introduction of
IFRS 15.
The interim report for the six months ended 31 December 2018
reported revenue on an over time basis and accordingly there have
been no changes to six month comparatives presented in this
report.
The comparatives for the twelve month period to 30 June 2019
have been restated in this report to recognise revenue from
recurring license fee contracts on an over time basis. The effect
of this change on the trading result for the twelve months to 30
June 2019 as a result of this change in revenue recognition policy
is shown below.
Group Income Statement and Statement of Comprehensive
Income:
Revenue decreased by GBP125,426
Profit for the year before taxation and after taxation decreased
by GBP125,426
Statement of Changes in Equity:
Total comprehensive income for the year at 30 June 2019
decreased by GBP125,426
Retained earnings at 30 June 2019 decreased by GBP1,151,545
Group Balance Sheet:
Deferred income increased by GBP1,151,545
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 FFFIFVTISIII
(END) Dow Jones Newswires
March 05, 2020 02:00 ET (07:00 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
