TIDMARC
RNS Number : 7438X
Arcontech Group PLC
02 September 2020
ARCONTECH GROUP PLC
("Arcontech", the "Company" or the "Group")
Final Results for the year ended 30 June 2020
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
2020.
Financial Highlights:
-- Revenue increased by 4% to GBP2,955,314 (2019: GBP2,841,362 restated)
-- Profit before tax increased by 12% to GBP1,040,969 (2019: GBP931,717 restated)
-- Cash balances up 23% to GBP5,006,969 as at 30 June 2020 (30 June 2019: GBP4,063,484)
-- Fully diluted earnings per share of 9.03p (2019: 7.42p restated)
-- Final dividend increased 25% to 2.5 pence per share (2019: 2.0 pence per share)
Operational Highlights:
-- Desktop software solution end users increase to 130 from 90
-- Continued investment in sales and products despite challenging background
-- Successful rollout of RESTful interface, new interface for MVCS and Cache
-- Continued strong cash generation and high proportion of recurring revenue
Commenting on the results, Richard Last, Chairman of Arcontech
said:
"Our recurring annual licence fees provide a stable base for the
business and our pipeline of prospects remains positive, but, as
with most businesses we face a number of uncertainties: the impact
of the COVID-19 pandemic, Brexit and changes taking place in the
financial markets, as well as with our competitors. However,
against this background our workforce has shown resilience and
flexibility in dealing with the consequences of the pandemic and
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 have
the ingredients for growth, despite the macro economic climate.
However, given the uncertain backdrop the outlook needs to be
tempered by the possibility of further magnification of our
traditionally long and complex sales cycles."
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 solid progress for
Arcontech, despite the global pandemic, with good growth in profit
before taxation for the year ended 30 June 2020 to GBP1,040,969
(2019: GBP931,717 restated (refer to the Notes for further detail
on 2019 restated numbers)), a year-on-year increase of 12%. These
figures include accruals no longer required which are unrelated to
the underlying business amounting to GBP86,500 (2019: GBP156,786).
After adjusting for release of these accruals, profit before
taxation is GBP954,469 (2019: GBP774,931 restated), an increase of
23% over the previous year. 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 an increase in turnover for the year of 4% against a
challenging business backdrop particularly in the second half.
Revenue grew by GBP113,952 to GBP2,955,314 (2019: GBP2,841,362
restated) primarily through increasing our product sales to
existing customers, including growing our Desktop software solution
customer base to 130 (2019:90), which is a creditable performance.
Whilst sales to new customers in the year have not been what we had
hoped due to extending sales cycles and potential customers less
inclined to take on new products during the pandemic, our pipeline
of opportunities with potential new customers is looking
increasingly positive, particularly for server-side software
products. In the year to 30 June 2020 recurring annual license fees
accounted for 93% of our revenue with the bulk of the balance
represented by fees under contract but subject to some
fluctuation.
Statutory earnings per share for the year to 30 June 2020 was
9.22p (7.51p) an increase of 23% over the corresponding figure for
the previous 12 months. These figures included the release of
accruals mentioned above. The tax credit for the year was
GBP176,734 (2019: GBP60,318) reflecting the benefits from historic
tax losses and recognition of a deferred tax asset. As at 30 June
2020 Arcontech had tax losses of approximately GBP7.5m to offset
against future trading profits. We believe a better representation
of our performance is provided by fully diluted earnings per share
based on profit before taxation, excluding the release of accruals
relating to a legacy liability that has no direct connection with
the Group's revenues or costs incurred for the year under review.
On this basis adjusted earnings per share was 8.39p, a 34% increase
over the adjusted earnings figure of 6.24p for the year to 30 June
2019.
Financing
As at 30 June 2020 Arcontech had, excluding right of use lease
liabilities, no debt and cash balances of GBP5,006,969 (2019:
GBP4,063,484) an increase of 23%. This represents a cash conversion
of adjusted operating profit (determined as operating profit before
share-based payments and before the release of accruals in respect
of prior years) of 90% (2019: 109%). 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, subject to approval at the Annual
General Meeting, we intend to pay a dividend of 2.5 pence per share
for the year ended 30 June 2020 (30 June 2019: 2.0 pence), an
increase of 25%, to those shareholders on the register as at the
close of business on 11 September 2020, with an ex-dividend date of
10 September 2020.
Employees
Arcontech has a small, highly effective and committed workforce
that has proved more than up to delivering excellent customer
service whilst working remotely due to the COVID-19 pandemic .On
behalf of the Board and shareholders I should like to thank them
for their continued support, commitment and dedication to the
Company and its customers .
Board
As has been previously reported I am standing down, after 13
years, as Chairman and Non-executive director at our forthcoming
Annual General Meeting (AGM), which is due to take place on 29
September 2020. Geoff Wicks, who joined the Board as a
non-executive director on 20 July will take over as Chairman; I
wish him well in taking Arcontech through the next stages of its
development. I should like to thank my Board colleagues, Matthew
Jeffs and Louise Barton as well as our Head of Development Darren
Lewis for their support; we have taken Arcontech on a long journey
to achieving good sustainable profits with excellent cash
generation. I wish them and Arcontech every success for the
future.
Outlook
Our recurring annual licence fees provide a stable base for the
business and our pipeline of prospects remains positive, but, as
with most businesses we face a number of uncertainties: the impact
of the COVID-19 pandemic, Brexit and changes taking place in the
financial markets, as well as with our competitors. However,
against this background our workforce has shown resilience and
flexibility in dealing with the consequences of the pandemic and
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 have
the ingredients for growth, despite the macro economic climate.
However, given the uncertain backdrop the outlook needs to be
tempered by the possibility of further magnification of our
traditionally long and complex sales cycles.
Richard Last
Chairman and Non-Executive Director
Chief Executive's Review
During the year we continued to focus on expanding and
delivering on the sales pipeline whilst controlling costs,
resulting in a statutory profit before tax of GBP1,040,969 (2019
restated: GBP931,717), an increase of 12% compared to the previous
year and a 23% increase in adjusted profit to GBP954,469.
The year under review also saw the number of end users for our
desktop software solution increase so that we now have a total of
130 end users (2019 - 90) amongst 3 global institutions.
Excelerator numbers remained stable.
With regard to development, we rolled out our RESTful interface
which has been performing as expected. This will significantly
increase the available data for consumption for our current and
future clients by enabling content in JSON and SQL formats to be
pulled into our software from the web or intranets to use in
spreadsheets, templates and charts.
We have also rolled out our new GUI for Director, which is our
interface for MVCS and our Cache for which feedback has been
excellent. The new interface has made administration intuitive and
straight forward whilst adding value by, for example, alerting
designated staff to data or communication issues when they happen
instead of when they are reported by users of the data. Therefore
reducing or removing operational, reputational and financial
risk.
Work on our sales structure continued with the recruitment of
two sales professionals at the end of January. Regrettably no
sooner than we had conducted product training and allocated
territories, the increase in COVID-19 infections required we
protect our staff and work from home. This exercise which was
undertaken in March went very smoothly thanks to the staff
themselves.
Our staff adjusted to this change pragmatically and since
decamping to their respective home-offices, we have supported our
clients seamlessly and developed and rolled out new software to
accommodate vendor developments, and more generally, to meet
clients' needs. Equally, our sales staff continued to uncover new
opportunities and develop those already in the pipeline. Such
dedication and professionalism reflects well on the company for
which the board and I are very grateful. Richard Last steps down as
Chairman after the AGM on 29 September 2020 after 13 years. He has
played a major part in turning Arcontech from a loss making company
to the profitable one it is today. The Board thanks him for his
valuable contribution to the success of the Group during his term
of office. Geoff Wicks becomes Chairman after the AGM on 29
September and we very much look forward to working with him.
The impact of COVID-19 has also been felt by our existing
clients although to-date we have seen little impact on our
business. It remains to be seen whether there will be permanent
changes to the manner in which we secure future growth by signing
up completely new clients given the new norm of online interaction.
Our challenge is to ensure we devise our own strategies to succeed
in this environment. We have already seen one positive in that we
can meet people without the cost of travel or attending
tradeshows.
Improving the frequency of sales remains our prime focus against
our traditional background of a long sales cycle. We believe the
expanded product offering and sales capability, along with our
clients and potential clients need to reduce costs, should improve
the frequency of sales.
We will also continue to explore opportunities with other
organisations that can complement our offerings, whilst remaining
alert for strategic acquisition opportunities that will benefit the
Group.
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 2020.
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 GBP2,955,314 (2019: GBP2,841,362 Measurement:
restated; 2018: GBP2,519,699) 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 GBP1,131,203 (2019: Measurement:
GBP835,248 restated; 2018: GBP889,584) 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 GBP5,006,969 (2019: GBP4,063,484; Measurement:
2018: GBP3,210,058) 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) 9.22p (2019: Measurement:
7.51p restated; 2018: 7.14p) Earnings after tax divided
by the weighted average
number of shares
Performance:
Continued growth
--------------------------------
Earnings per share (diluted) 9.03p Measurement:
(2019: 7.42p restated; 2018: 7.09p) Earnings after tax divided
by the fully diluted number
of shares
Performance:
Continued growth
--------------------------------
Non-financial KPIs :
Staff retention rate (net) 91% (2019: Measurement:
100%; 2018: 92%) 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
COVID-19 pandemic The Directors and employees are operating remotely in order to protect their health and
safety
At present the Company believes that there should be no significant material disruption to
its work
Brexit Arcontech is a global company and as such seeks growth across a geographically diverse
customer
base
Relations with shareholders
Section 172(1) Statement - Promotion of the Company for the
benefit of the members as a whole
The Directors believe they have acted in the way most likely to
promote the success of the Group for the benefit of its members as
a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
-- Consider the likely consequences of any decision in the long term;
-- Act fairly between the members of the Company;
-- Maintain a reputation for high standards of business conduct;
-- Consider the interests of the Company's employees;
-- Foster the Company's relationships with suppliers, customers and others; and
-- Consider the impact of the Company's operations on the community and the environment.
The Group's operation is the development and sale of proprietary
software and provision of computer consultancy services. The Board
has identified its key stakeholders as its customers, shareholders,
employees and suppliers. The Board keeps itself appraised of its
key stakeholders' interests through a combination of both direct
and indirect engagement, and the Board has regard to these
interests when discharging its duties.
The application of the s172 requirements can be demonstrated in
relation to some of the key decisions made during the year to 30
June 2020:
-- Allocation of the Group's capital in a way which offers
significant returns to shareholders in line with the Company's
dividend policy, while also ensuring that the Group retains
flexibility to continue to deploy capital towards profitable
growth;
-- Adapting a rapid response to the working location
restrictions arising from the COVID-19 pandemic, ensuring that the
Group continued to deliver both the high level of service and
security that our customers depend on without compromising the
health and safety of employees.
During the year to 30 June 2020, the Board assessed its current
activities between the Board and its stakeholders, which
demonstrated that the Board actively engages with its stakeholders
and takes their various objectives into consideration when making
decisions. Specifically, actions the Board has taken to engage with
its stakeholders over the last twelve months include:
-- Attended the 2019 AGM to answer questions and receive
additional feedback from investors;
-- Arranged meetings with certain stakeholders to provide them
with updates on the Company's operational activities and other
general corporate updates;
-- We discussed feedback from investors' and analysts' meetings
following the release of our annual and half-year announcements. We
have an investor relations programme of meetings with existing and
potential shareholders; and
-- Monitored company culture and engaged with employees on
efforts to continuously improve company culture and morale.
The Board believes that appropriate steps and considerations
have been taken during the year so that each Director has an
understanding of the various key stakeholders of the Company. The
Board recognises its responsibility to contemplate all such
stakeholder needs and concerns as part of its discussions,
decision-making, and in the course of taking actions, and will
continue to make stakeholder engagement a top priority in the
coming years.
Approved on behalf of the board on 1 September 2020.
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2020
Restated
2020 2019
GBP GBP
Revenue 2,955,314 2,841,362
Administrative costs (1,917,502) (1,936,829)
Operating profit 1,037,812 904,533
Net finance income 3,157 27,184
Profit before taxation 1,040,969 931,717
Taxation 176,734 60,318
Profit for the year after tax 1,217,703 992,035
----------------------------------------------- ------------- -------------
Total comprehensive income for the year 1,217,703 992,035
----------------------------------------------- ------------- -------------
Earnings per share (basic) 9.22p 7.51p
----------------------------------------------- ------------- -------------
Adjusted* Earnings per share (basic) 8.56p 6.32p
----------------------------------------------- ------------- -------------
Earnings per share (diluted) 9.03p 7.42p
----------------------------------------------- ------------- -------------
Adjusted* Earnings per share (diluted) 8.39p 6.24p
-------------------------------------------- ------- -------
*Adjusted to exclude the release of accruals for administrative
costs of GBP86,500 (2019: GBP156,786) in respect of prior
years.
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2020
Group:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
Balance at 30 June 2018 1,651,314 56,381 56,366 2,011,689 3,775,750
Profit for the year - - - 1,117,461 1,117,461
Adjustment for IFRS 15 restatement (125,426) (125,426)
Total comprehensive income for the year - - - 992,035 992,035
Dividend paid - - - (171,334) (171,334)
Share-based payments - - 53,857 - 53,857
Transfer between reserves - - (10,576) 10,576 -
Restated Balance at 30 June 2019 1,651,314 56,381 99,647 2,842,966 4,650,308
Profit for the year - - - 1,217,703 1,217,703
Total comprehensive income for the year - - - 1,217,703 1,217,703
Dividend paid - - - (263,591) (263,591)
Share-based payments - - 98,428 - 98,428
Transfer between reserves - - (9,436) 9,436 -
Balance at 30 June 2020 1,651,314 56,381 188,639 3,806,514 5,702,848
------------------------------------------ ----------- ---------- ---------------------- ----------- -----------
Company:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
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 expense 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 at 30 June 2019 1,651,314 56,381 99,647 4,378,109 6,185,451
Profit for the year - - - 326,348 326,348
------------------------------------------ ----------- ---------- ---------------------- ----------- ------------
Total comprehensive income for the year - - - 326,348 326,348
Dividend paid - - - (263,591) (263,591)
Share-based payments - - 98,428 - 98,428
Transfer between reserves - - (9,436) 9,436 -
Balance as at 30 June 2020 1,651,314 56,381 188,639 4,450,302 6,346,636
------------------------------------------ ----------- ---------- ---------------------- ----------- ------------
Balance Sheets
As at 30 June 2020
Restated
Group Group Company Company
2020 2019 2020 2019
GBP GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 - -
Property, plant and equipment 19,316 15,011 - -
Right of use asset 512,061 - - -
Investments in subsidiaries - - 2,017,471 2,017,471
Deferred tax asset 452,000 285,000 151,000 125,000
Trade and other receivables 141,750 141,750 - -
--------------------------------- -------------- -------------- ------------ ------------
Total non-current assets 2,840,280 2,156,914 2,168,471 2,142,471
--------------------------------- -------------- -------------- ------------ ------------
Current assets
Trade and other receivables 192,632 263,875 3,181,410 3,073,519
Cash and cash equivalents 5,006,969 4,063,484 1,146,700 1,078,755
--------------------------------- -------------- -------------- ------------ ------------
Total current assets 5,199,601 4,327,359 4,328,110 4,152,274
--------------------------------- -------------- -------------- ------------ ------------
Current liabilities
Trade and other payables (1,851,037) (1,833,965) (149,945) (109,294)
Lease liabilities (141,693) - - -
-------------------------------- -------------- -------------- ------------ ------------
Total current liabilities (1,992,730) (1,833,965) (149,945) (109,294)
--------------------------------- -------------- -------------- ------------ ------------
Non-current liabilities
Lease liabilities (344,303) - - -
-------------------------------- -------------- -------------- ------------ ------------
Total Non-current liabilities (344,303) - - -
Net current assets 3,206,871 2,493,394 4,178,165 4,042,980
--------------------------------- -------------- -------------- ------------ ------------
Net assets 5,702,848 4,650,308 6,346,636 6,185,451
--------------------------------- -------------- -------------- ------------ ------------
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 188,639 99,647 188,639 99,647
Retained earnings 3,806,514 2,842,966 4,450,302 4,378,109
--------------------------------- -------------- -------------- ------------ ------------
5,702,848 4,650,308 6,346,636 6,185,451
-------------------------------- -------------- -------------- ------------ ------------
Group Cash Flow Statement
For the year ended 30 June 2020
Restated
2020 2019
GBP GBP
Cash generated from operations 1,315,421 966,060
Tax recovered 9,734 45,318
Net cash generated from operating activities 1,325,155 1,011,378
-------------------------------------------------- ----------- -----------
Investing activities
Interest received 29,914 27,184
Purchases of plant and equipment (12,750) (13,802)
Net cash generated from investing activities 17,164 13,382
-------------------------------------------------- ----------- -----------
Financing activities
Dividend paid (263,591) (171,334)
Payment of lease liabilities (135,243) -
Net cash used in financing activities (398,834) (171,334)
-------------------------------------------------- ----------- -----------
Net increase in cash and cash equivalents 943,485 853,426
Cash and cash equivalents at beginning of year 4,063,484 3,210,058
-------------------------------------------------- ----------- -----------
Cash and cash equivalents at end of year 5,006,969 4,063,484
-------------------------------------------------- ----------- -----------
Notes to the Financial Statements
For the year ended 30 June 2020
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
1 September 2020. 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 2020 or 30 June 2019.
The financial information set out in this announcement does not
comprise the Group's statutory accounts for the years ended 30 June
2020 or 30 June 2019.
The financial information has been extracted from the statutory
accounts of the Company for the years ended 30 June 2020 or 30 June
2019. 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 2019 have been
delivered to the Registrar of Companies, whereas those for the year
ended 30 June 2020 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
Operating segments:
The G r o up r e p o r ts 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.
Restated
2020 2019
GBP GBP
Revenue by segment
Software development and licence fees 2,955,315 2,841,362
-------------------------------------------------------------------- -------------- --------------
External segment revenue 2,955,315 2,841,362
-------------------------------------------------------------------- -------------- --------------
Operating profit by segment
Software development and licence fees 1,575,029 1,387,813
Unallocated overheads (563,976) (483,280)
-------------------------------------------------------------------- -------------- --------------
Total operating profit 1,011,053 904,533
Finance income 29,916 27,184
Total profit before tax as reported in the Group income statement 1,040,969 931,717
-------------------------------------------------------------------- -------------- --------------
2020 2019
GBP GBP
Segment total of assets
Software development and licence fees 6,514,118 5,196,369
Unallocated assets 4,533,110 4,357,274
---------------------------------------- ------------- -------------
11,047,228 9,553,643
Less intercompany debtors (3,174,349) (3,069,370)
Total assets 7,872,879 6,484,273
---------------------------------------- ------------- -------------
2020 2019
GBP GBP
Segment total of liabilities
Software development and licence fees 5,360,835 3,642,199
Unallocated liabilities 150,546 109,591
---------------------------------------- --------------- --------------
5,511,381 3,751,790
Less intercompany creditors (3,174,349) (3,069,370)
---------------------------------------- --------------- --------------
Total liabilities 2,337,032 682,420
---------------------------------------- --------------- --------------
2020 2019
GBP GBP
Additions of property, plant and equipment assets by segment
Software development and licence fees 12,749 13,802
------------------------------------------------------------------------------------------- ------- -------
Total additions 12,749 13,802
------------------------------------------------------------------------------------------- ------- -------
2020 2019
GBP GBP
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees 8,444 16,732
Total depreciation 8,444 16,732
------------------------------------------------------------------------------------------- ------- -------
Non-current assets by country 2020 2019
GBP GBP
UK 2,840,280 2,156,914
Total non-current assets 2,840,280 2,156,914
-------------------------------- ---------- ----------
Restated
Geographical information - External revenue 2020 2019
GBP GBP
UK 2,000,457 1,910,969
Europe (excluding UK) 821,193 804,989
Africa 45,000 44,938
North America 78,177 75,767
Australia 4,267 -
Asia Pacific 6,221 4,699
2,955,315 2,841,362
--------------------------------------------- ---------- ----------
During the year there were 3 customers (2019: 4) who accounted
for more than 10% of the Group's revenues as follows:
2020 2019
Value of % of Total Value of % of Total
sales sales
GBP GBP
Customer 1 659,327 22% 643,491 22%
Customer 2 516,605 17% 507,373 18%
Customer 3 371,536 13% 376,411 13%
Customer 4 300,696 10% 280,906 10%
------------ ---------- ----------- ---------- -----------
1,848,164 62% 1,808,181 63%
------------ ---------- ----------- ---------- -----------
These revenues are attributable to the software development and
licence fees segment.
Earnings per share
Restated
2020 2019
GBP GBP
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit
attributable
to equity shareholders 1,217,703 992,035
1,217,703 992,035
-------------------------------------------------------------------------------------- ----------- ----------
No. No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per
share 13,210,510 13,210,510
Number of dilutive shares under option 268,484 165,223
------------------------------------------------------------------------------------ ------------ ------------
Weighted average number of ordinary shares for the purposes of dilutive earnings
per share 13,478,994 13,375,733
------------------------------------------------------------------------------------ ------------ ------------
T h e 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 ca lcu l a t i on is d o ne to d e t e rm i ne t he nu
m ber of s ha r es t h at c ou ld h ave b e en acq u i r ed at f a
ir va l u e, b a s ed u p on t he m o n e t a ry va l ue of t he su
bscr i p t i on r i gh ts a t t ach ed to o u tst a n d i ng s ha
re o p t i o ns.
Net cash generated from operations - Group
Restated
2020 2019
GBP GBP
Operating profit 1,037,812 904,533
Depreciation charge 154,747 16,732
Non cash share option charges 98,428 53,857
Lease interest paid (26,757) -
Adjustment for IFRS 16 (37,125) -
Decrease/(increase) in trade and other receivables 71,244 46,248
Decrease in trade and other payables 17,072 (55,310)
Cash generated from operations 1,315,421 966,060
Dividends
A final dividend of 2.5 pence will be proposed at the Annual
General Meeting but has not been recognised as it requires approval
(2019: 2.0 pence).
Prior year restatement
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 and has also
sought independent advice. 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 comparatives for the year 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 year 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
Basic earnings per share decreased from 8.49p to 7.40p
Diluted earnings per share decreased from 8.35p to 7.30p
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:
Trade and other payables - Deferred income (Note 15) increased
by GBP1,151,545
A third statement of financial position as at the beginning of
the preceding period has not been presented in accordance with IAS8
paragraph 42 as the amount relating to the preceding period is
immaterial.
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 29 September 2020 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.
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END
FR KKDBBDBKBCCK
(END) Dow Jones Newswires
September 02, 2020 02:06 ET (06:06 GMT)
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