TIDMAPC
RNS Number : 8188C
APC Technology Group PLC
22 January 2015
Date: 22 January 2015
On behalf of: APC Technology Group PLC ('APC' or 'the Company')
Embargoed until: 0700hrs
APC Technology Group PLC
("APC", the "Group" or the "Company")
Final results for the year ended 31 August 2014
APC Technology Group plc (AIM: APC), the provider of
technologies and services intended to help improve organisational
sustainability and specialist distributor of electronic components,
is pleased to announce its preliminary results for the year ended
31 August 2014.
Highlights
-- 15% increase in gross profit to GBP7.6m (2013: GBP6.6m)
-- 17% increase in operating profit before exceptional costs and
share based payments, to GBP0.573m (2013: GBP0.491m)
-- Revenue GBP20.6 million (2013: GBP21.7 million)
-- Further diversification into sustainable technologies sector,
with the creation of Minimise Solutions, Minimise Finance and
Minimise Generation.
-- Investment in a disruptive commercial energy procurement
platform through Open Energy Market.
-- Post year-end acquisition of Green Compliance plc and
establishment of Minimise Water widens APC's cleantech
diversification into water management.
-- Specialist electronic component distribution business
launches Products(+) online purchasing website.
-- Board and senior management team strengthened.
Mark Robinson, CEO of APC Technology Group PLC, commented:
"During the year under review and in the subsequent months our
strategy for diversification into the cleantech sector has been
widened to include more aspects of sustainability relating to the
built environment. Very tangible progress has been made to
significantly increase the customer base, the range of
technologies, products and services offered and the breadth of
geographical territories covered. The Company is now addressing a
huge and rapidly growing market with a business model that we
believe has the potential to create significant shareholder value
in the future."
Enquiries:
APC Technology Group PLC 01634 290588
Mark Robinson, Chief Executive www.apc-plc.co.uk
Officer
Richard Hodgson, Chief Financial
Officer
Strand Hanson Limited 020 7409 3494
James Harris / Angela Hallett / Ritchie Balmer
Northland Capital Partners
Limited 020 7796 8800
John Howes / Alice Lane
Redleaf Polhill 020 7382 4730
Rebecca Sanders-Hewett / David apc@redleafpr.com
Ison
Notes to Editors:
About APC Technology Group PLC
Since 2009 APC has been in a process of diversification. The
distribution of specialist electronic components, which has
represented the majority of revenues since incorporation in 1982,
remains a key part of the business but the rapid growth of Minimise
Energy, coupled with the creation of Minimise Finance and Minimise
Solutions, the recent acquisition of Green Compliance plc and the
even more recent incorporation of Minimise Generation has created a
sustainability focussed business that is set to grow rapidly in the
UK, North and Latin America with the potential to generate
significant, profitable growth for the foreseeable future.
APC's sustainability related activities are designed to offer
its clients a simple, 'one stop shop' approach to meeting their
sustainability obligations. With sustainability related consulting,
energy management, water management and project financing under one
roof the relationships required to overcome the obstacles which
have historically held up sustainability enhancing projects are
being created.
APC's electronic component distribution business, trading as
Advanced Power Components, sells specialist components into
defence, aerospace, space, transportation medical and industrial
sectors. The Company's value-add business model, centred upon the
technical experience and capabilities of the Company's sales
engineers, are of value to both clients and suppliers, for whom APC
typically acts on an exclusive basis.
CHAIRMAN'S STATEMENT
Last year I reported on a period of substantial change and
redefinition of our businesses and I am pleased to report that this
process continued throughout the year ended 31 August 2014 and post
year-end.
During this period, the Board's focus shifted from strategy
definition to implementation. Whilst we fully intend to further
develop our electronic component distribution business, we
recognise the very significant potential for growth in the
sustainability sector and have taken steps to define and strengthen
our position in this rapidly growing arena.
Our strategy to address this potential is clear: Minimise
companies will provide our customers with a combination of
technologies, products and services to assist them in managing the
overall sustainability of their built estate. These products and
services will be technologically advanced, will be of consistently
high quality, will be priced to ensure that our customers achieve
an attractive financial return and, wherever possible, will be
owned within the Group. Specifically, Minimise Energy delivers
energy-efficiency related products and technologies, Minimise Water
delivers water management products and services via the Green
Compliance business and Minimise Generation will design and deliver
on-site renewable energy generation and storage systems. These
businesses are supported by our sustainability focused consulting
company Minimise Solutions and by Minimise Finance, which is
developing financing models for energy related projects. We believe
that having expertise in each of these complementary fields within
a single organisation significantly differentiates us from our
competition.
Post year-end the Board began to restructure and enhance senior
management expertise across the business in order to ensure
successful implementation of the strategy. Richard Hodgson joined
the Board as Chief Financial Officer following the acquisition of
Green Compliance plc (of which he was CFO) and subsequently Andrew
Shortis has been appointed as Managing Director of Minimise
Holdings. In addition, the Minimise Energy Americas management has
been restructured, with Rod Foster being named as Managing Director
with overall responsibility for North and Latin America.
Trading
Despite a small fall in total sales during the year, to
GBP20,634,000 (2013: GBP21,657,000), we managed to increase
operating profit before exceptional items and share based payments
by 17% to GBP573,000 (2013: GBP491,000) as a result of a number of
cost cutting initiatives undertaken by the Group, together with
margin improvement.
Sales of the Group's energy saving and efficiency products and
services continued to be significant in the financial year at
GBP8,178,000 (2013: GBP8,951,000). Continued orders from Wm
Morrisons Supermarkets PLC drove first half performance, with
substantive orders from other leading names in retailing, banking
and transport growing in importance throughout the latter stages of
the year. Sales in Advanced Power Components, our electronic
component distribution business, were GBP12,456,000 (2013:
GBP12,706,000). These relatively flat revenues were in line with
the general distribution market. We are pleased that we maintained
our share of this market through several positive developments in
relationships with our suppliers, including an increase in our
international representation, stocking arrangements with certain
manufacturers and the creation of a new website for online
purchases, "Products(+") , which started generating revenue after
the financial year-end and is already seeing orders from different
parts of the world.
Liquidity
The financial year ended with net borrowing of GBP202,000 (2013:
net cash GBP1,048,000), the cash outflow in the year reflecting the
investment activities undertaken during the year. Subsequent to the
year-end, in December 2014, we raised an additional GBP2,075,000
before expenses through a share placing, to strengthen the balance
sheet and provide funds for further expansion.
Dividend
The Board has once again reviewed the Company's dividend policy.
Whilst it considers it desirable to pay dividends in the long term,
it has again concluded that a greater return can be made to
shareholders by investing available funds in the many opportunities
for profitable growth now facing the Group. The Board is therefore
not recommending a dividend for 2014 (2013: GBPnil).
Board of Directors
Richard Hodgson, previously Chief Financial & Operating
Officer of Green Compliance plc, has been appointed Chief Financial
Officer and Director after Rob Smith's resignation as Finance
Director earlier in the year. Additionally, Andrew Shortis has been
appointed to the APC Board as Managing Director of Minimise
Holdings where he will have responsibility for our sustainability
division. Mark Robinson retires by rotation and offers himself for
re-election. Tessa Laws also retires by rotation but will not be
offering herself for re-election.
The Board intends to appoint an additional non-executive
director in the near future.
Future
During 2014 we have invested significantly in the building of an
organisation which we believe is uniquely placed to exploit the
growing opportunities within the sustainability sector and to
further cement our position in the electronic component
distribution industry. This investment has continued post year end
and we are optimistic that the strategy we are implementing is
putting in place the foundations of profitable growth.
I would like to take this opportunity to thank our management,
staff and advisors for their hard work and professionalism and our
partners and shareholders for their support.
I would also like to acknowledge and thank Tessa Laws for the
hard work and significant contribution she made while serving on
the Board. We wish her success in her future activities.
Leonard Seelig
Chairman
22 January 2015
Chief Executive Officer's Review
The financial year under review and the early months of the new
financial year, continue to be transformative for APC. The scope of
our diversification into the cleantech sector has been widened to
include more aspects of sustainability relating to the built
environment. Very tangible progress has been made to significantly
increase the customer base, the range of technologies, the products
and services offered and the breadth of geographical territories
covered. The Company is now addressing a huge and rapidly growing
market with a business model that we believe has the potential to
create significant shareholder value in the future.
During the year under review the Minimise brand has been
extended to cover energy efficiency through Minimise Energy
Limited, energy related consultancy services through Minimise
Solutions Limited and energy project financing through Minimise
Finance Limited. Each of these businesses has played a significant
role in attracting a number of high profile customers to the Group.
Following the post year-end acquisition of Green Compliance plc,
the Minimise brand has been extended further into Minimise Water
and the very recent creation of Minimise Generation Limited enables
the Group to offer on-site renewable generation to our expanding
customer base.
In the last financial year our core electronic component
distribution business has remained strong relative to the
distribution sector in general and a number of opportunities to
strengthen it further are being explored.
Electronic Component Distribution
Revenues in our specialist electronic component distribution
business declined by 2% compared with 2013 and market conditions
remain difficult, but there continue to be a number of very
positive developments across the business.
The focus remains on specialist applications where our sales
engineers provide a valuable technical conduit between the
specialist component manufacturers that we represent and our
customers' design engineering teams. This engineering and
logistical expertise is most valued in situations where end use
equipment is operating in extreme conditions and component failure
would be catastrophic, so the majority of our efforts are focussed
on growing business in these relatively niche areas. Key
applications in the year under review included components for
flight critical systems on civil aircraft, counter IED (improvised
explosive devices) equipment, satellites and space exploration and
oil and gas 'down hole' applications encountering extreme
temperatures. In addition, we saw continued success in the
promotion of infection control keyboards and accessories to UK
health service providers and have enjoyed the first real signs of
success in the sale of ultra-capacitors into a variety of
applications including renewable energy systems.
Plans and initiatives are constantly being implemented to grow
this part of our business and post year-end a project undertaken
with the encouragement of some of our key component suppliers to
release an on-line sales platform has resulted in the release of
the "Products(+") Online Store which is one part of an initiative
to generate more revenues internationally, a strategy that we
believe offers good future growth prospects.
The distribution business is managed as a single reporting unit
within which separately branded specialist sales teams focus on
specific product ranges and address targeted markets:
Contech: the medical and broadcast sectors remained buoyant in
the year under review. In particular, success to date in promoting
infection control keyboards to hospitals has been supplemented by
good progress in promoting the same products to dentists and
veterinaries.
Hero: the refocussing of this business on growing a base of new
design-wins in growing technology sectors remains a challenge but
good progress has been made, especially in renewable energy
applications where ultra-capacitors offer excellent advantages over
traditional capacitor or battery technologies.
HiRel: design wins and sales into civil aircraft and space
applications were particularly strong in the year under review, as
a number of long term programmes moved into the full production
phase. We are seeing some excellent opportunities going forward,
both for these core products and for our more recent innovative
lines in high temperature semiconductors and semi-custom
interconnect products.
Locator: obsolescence management and an increasing infiltration
of counterfeit components into all high reliability markets
continues to drive a need for the services and expertise we provide
to the defence, aerospace, oil and gas and transport sectors. Key
customer relationships continue to be nurtured and significant
business has been secured as a result.
Novacom: the demand for components used in improvised explosive
device (IED) jamming systems remained particularly strong despite
the reduction in the deployment of UK armed forces overseas, a
trend that we are seeing continue into the current financial
year.
Time: as anticipated, continued steady growth was achieved in
this part of our business, as the need for accurate timing systems
grew in line with an expansion in global trading.
Displays+: revenues for displays and for single board computers
are expected to grow steadily over the next few years following our
appointment as the prime route to market for NLT displays on 1(st)
October 2014. NLT, a joint venture between NEC displays and AVIC
Technologies, is one of the top five displays manufacturers in the
world and we are already starting to develop some significant
opportunities.
Sustainability Activities
During the last financial year revenues generated in the
cleantech sector gathered momentum in the first half but then
slowed significantly in the spring as demand from Minimise Energy's
key customer at that time ceased for the remainder of the year.
However, throughout the whole of the year and post year end many
initiatives were underway across the business to reduce dependence
upon any one customer, product, technology or geography. Though
these efforts did not produce results early enough to offset the
shortfall in revenues and profits in the financial year under
review, they are now starting to have a positive impact across the
Group:
Minimise Energy: in the latter stages of the last financial year
significant progress was made to widen Minimise Energy's customer
base for LED lighting and monitoring and control systems in
particular. A number of initial orders, received from one of the
UK's largest food and clothing retailers and one of the country's
foremost high street banks, have been supplemented by further
orders post year-end from those same customers and others.
Contracts have now been received from Royal Mail Group for a
mixture of products and services and from a number of organisations
in North and Central America, including a mid-sized food retailer
and a national restaurant chain. The level of activity focussed on
new business development in this market sector in the UK and in the
Americas is significantly higher than at any point in the past.
Minimise Solutions: the contract awarded to Minimise Solutions
by Royal Mail Group post year-end represents a very significant
landmark for this business, which provides sustainability-focussed
consulting services intended to deliver tangible financial benefits
through the implementation of a comprehensive sustainability
strategy. A close working relationship between Minimise Energy and
Minimise Solutions teams presented the client with a compelling
proposition, which included the creation of an energy management
strategy to be implemented through to the end of 2017. This
strategy has already resulted in the receipt of orders for
monitoring and control systems and LED lighting, the majority of
which will be installed by the end of 2015. In addition Minimise
Solutions is winning business from a number of other customers,
which is expected to result in both consulting revenues and in the
sale of products and technologies during the strategy
implementation stage.
Minimise Finance: whilst this recently-formed part of the
business has yet to secure its initial contracts, we believe that
energy project financing will be critical to our growth in future
years. Detailed contracts continue to be drafted and reviewed
against upcoming changes to accounting standards and through this
process much deeper client relationships are being developed which
are expected to lead to significant future business.
Invisible Systems Limited (ISL): the ISL hardware and Realtime
Online reporting software are increasingly critical to the Group's
strategy of educating clients in the consumption of utilities and
measuring the results of action taken. Sales in the year under
review were limited while the system functionality was enhanced and
client relationships were developed, but some significant contracts
have been placed post year-end and revenues are expected to grow
significantly in the current financial year as existing orders are
delivered and the system is promoted right across the Group.
Open Energy Market Limited (OEM): following investment to
acquire 10% of OEM in July 2014, we are pleased to report that the
company, which has created the UK's first autonomous online energy
procurement platform for corporate energy users, has made excellent
progress in enhancing system functionality and has secured a number
of contracts, most significantly from a high profile restaurant
chain with more than 300 sites in the UK. We believe that helping
energy-aware, and eventually water-aware, corporate customers to
reduce both the level of their consumption and the base cost of the
utilities is a natural extension of the services we provide and
cross-selling initiatives are to be released in the spring of 2015.
OEM's disruptive online procurement platform, which is marketed and
sold as a service offered by Minimise Solutions, provides energy
buyers direct access to the UK's top 14 gas and electricity
providers, offering an efficient and fully transparent way to
manage their energy procurement. OEM's customer base includes both
public and private sector companies and the technology is proven to
generate total energy cost savings of between 2% and 10% compared
with traditional procurement methods.
Minimise Water: since its acquisition in September 2014, Green
Compliance has traded in line with expectations, while a
comprehensive plan is being implemented to integrate it into the
Group through the establishment of Minimise Water. As anticipated,
opportunities are emerging to promote water management services to
Minimise customers and energy management services to the extensive
Green Compliance customer base. Initially we are focussed upon
extending the technology from Invisible Systems Limited (ISL), to
provide a powerful, but simple to install, wireless cloud-based
monitoring system to develop an understanding of water consumption
in the same way that it currently details energy usage. The cost
effective nature of a system able to monitor both energy and water
consumption is clear, as is the potential to develop recurring
consulting and analysis revenues plus technology and product
revenues once opportunities are identified to reduce consumption in
a cost effective way
Through the above companies, we believe that our Minimise brand
offers a persuasive proposition for organisations interested in
reducing waste in their property portfolio by becoming more
sustainable in terms of energy and water consumption. Post year-end
the Group has also created Minimise Generation Limited to design
and deliver on-site renewable energy generation and energy storage
systems, for which we believe there is a significant opportunity
within the same customer base.
Outlook
We remain confident that our strategy to diversify into the
wider market for sustainability products and services is well
timed. We believe that it has the potential to generate significant
shareholder value as the model is developed and as demand is
fuelled by increasing global awareness of the need for
organisations to become more sustainable. The market for technology
and service to facilitate greater energy efficiency is very
significant in its own right, but we believe that recent steps to
add water sustainability, and to begin to focus on on-site
renewable generation, are important as well. With technologies to
promote energy efficiency, on-site generation and water efficiency,
all supported by sustainability-focussed consulting and project
financing, APC is clearly differentiated in the market; we know
from recent experience that the model is appreciated by the
customer base that is working with us. This strategy will take time
to build but is already delivering positive results. We continue to
benefit from the stability of our specialist electronic component
distribution business, which provides the Group with a firm
foundation.
Mark Robinson
Chief Executive Officer
CONSOLIDATED STATEMENT OF INCOME
For the year ended 31 August 2014
2014 2013
Note GBP000 GBP000
Revenue 2 20,634 21,657
Cost of sales (13,076) (15,100)
Gross profit 7,558 6,557
Administrative expenses (6,957) (6,064)
Share of results of
associates (28) (2)
Operating profit before
exceptional items and
share based payments 573 491
Exceptional items (43) 4,152
Share Based Payments (103) (34)
--------------------------------------------------- ----- ---------------------------- ---------
Operating profit 427 4,609
Financing income 3 14 9
Financing costs 3 (59) (101)
Profit before taxation 382 4,517
Taxation expense 4 (80) (256)
Profit for the financial
year 302 4,261
============================ =========
Attributable to:
Equity holders of the
parent 554 4,065
Non-controlling interests (252) 196
302 4,261
============================ =========
Attributable to equity
holders of the parent:
Basic earnings per share 5 1.0p 11.6p
Diluted earnings per
share 5 0.9p 11.2p
Earnings per share on
operating profit before
exceptional costs and
share based payments 1.0p 1.3p
There were no other items of comprehensive income. Accordingly,
no consolidated statement of comprehensive income has been
prepared. There were no discontinued activities in either 2014 or
2013.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 August 2014
2014 2013
GBP000 GBP000
Non-current assets
Intangible assets 7,260 7,173
Property, plant and
equipment 343 192
Investment in associates 1,415 1,243
Financial assets 156 -
Deferred tax asset 33
9,207 8,608
-------- --------
Current assets
Inventories 2,237 1,592
Trade and other receivables 4,011 3,987
Cash and cash equivalents 552 1,182
6,800 6,761
-------- --------
Total assets 16,007 15,369
-------- --------
Current liabilities
Trade and other payables (3,651) (4,530)
Borrowings (754) (134)
Current tax liability (99) (32)
(4,504) (4,696)
-------- --------
Total assets less current
liabilities 11,503 10,673
Non - current liabilities
Financial Liabilities (102) (60)
Deferred tax liability (16) (22)
Net assets 11,385 10,591
======== ========
Equity attributable
to the equity holders
of the parent
Called - up share capital 1,199 1,147
Share premium account 8,244 8,010
Share option reserve 398 295
Translation reserve (10) -
Retained earnings 1,611 1,180
Equity attributable
to the equity holders
of the parent 11,442 10,632
Non-controlling interests (57) (41)
Total equity 11,385 10,591
======== ========
Consolidated statement of Changes in Equity
For the year ended
31 August 2014
Non-controlling
Attributable to the equity holders of the parent interests
Attributable Share
to the equity Share option
holders of the Share premium valuation Other Translation Retained Retained
parent Capital account reserve reserves reserve earnings Total earnings Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 31 August
2012 592 790 261 9 - 1,787 3,439 (52) 3,387
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Profit for the
year - - - - - 4,065 4,065 196 4,261
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Total
comprehensive
income for the
year - - - - - 4,065 4,065 196 4,261
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Transactions
with equity
holders of the
parent
Issue of new
shares 555 7,220 - - - - 7,775 - 7,775
Convertible
loan notes - - - (9) - 9 - - -
Non-controlling
interest
acquired - - - - - 185 185 (185) -
IAS27 transfer
to reserve on
business
acquisition - - - - - (4,866) (4,866) - (4,866)
Share option
charge - - 34 - - - 34 - 34
555 7,220 34 (9) - (4,672) 3,128 (185) 2,943
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
At 31 August
2013 1,147 8,010 295 - - 1,180 10,632 (41) 10,591
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Profit for the
year - - - - - 554 554 (252) 302
Other
comprehensive
income - - - - (10) - (10) (7) (17)
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Total
comprehensive
income for the
year - - - - (10) 554 544 (259) 285
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
Transactions
with equity
holders of the
parent
Issue of new
shares 52 234 - - - - 286 - 286
Group and
non-controlling
interest in
new subsidiary - - - - - 304 304 202 506
Non-controlling
interest
acquired - - - - - (41) (41) 41 -
IAS 27 transfer
to reserves - - - - - (386) (386) - (386)
Share option
charge - - 103 - - - 103 - 103
52 234 103 - - (123) 266 243 509
-------- -------- ---------- --------- ------------- --------- -------- ---------------- --------
At 31 August
2014 1,199 8,244 398 - (10) 1,611 11,442 (57) 11,385
======== ======== ========== ========= ============= ========= ======== ================ ========
ConSolidated statement OF CASH FLOWS
For the year ended 31 August 2014
Group Group
2014 2013
Reconciliation of cash flows from operating
activities GBP000 GBP000
Profit before taxation for the financial
year 382 4,517
Share of results of associates 28 2
Loss on disposal of property, plant and
equipment 5 1
Finance costs 59 101
Finance income (14) (9)
(Increase)/decrease in financial assets (156) 143
Taxation payments (52) (58)
Depreciation of property, plant and equipment 99 92
(Increase) / decrease in inventories (645) (946)
(Increase) / decrease in trade and other
receivables (24) (1,434)
(Decrease) / Increase in trade and other
payables (813) 2,201
Fair value adjustments - (4,152)
Acquisition of non-controlling interest 371
Share-based payments charge 103 34
Net cash from operating activities (657) 492
------- --------
Cash flows from investing activities
Acquisition of property, plant and equipment (202) (113)
Acquisition of subsidiary undertakings,
net of cash acquired (385) (879)
Acquisition of shares in associate (750)
Other investment (200) -
Proceeds from sale of equipment - 14
Eligible development costs capitalised (87)
Net cash used in investing activities (874) (1,728)
------- --------
Cash flows from financing activities
Finance income 14 -
Finance costs (59) (101)
Proceeds of Share Issue 286 3,056
Proceeds from issue of convertible loan
notes - 100
Finance Leases 42 39
Bank short-term invoice discounting facility 639 (567)
Repayment of bank loan facility (21) (125)
Net cash from financing activities 901 2,402
------- --------
(Decrease)/ increase in net cash (630) 1,166
------- --------
Cash and cash equivalents as at 1 September 1,182 16
(Decrease)/increase in net cash (630) 1,166
Cash and cash equivalents as at 31 August 552 1,182
======= ========
Notes to the Consolidated Financial Statements
For the year ended 31 August 2014
1. Basis of preparation
Statement of compliance
These Financial Statements have been prepared under the
historical cost convention, as modified by the revaluation of
certain financial assets at fair value, as required by IAS 39
Financial Instruments: Recognition and Measurement. The basis of
consolidation is set out below. These financial statements have
been prepared in accordance with IFRS as adopted by the European
Union, and with those parts of the Companies Acts applicable to
companies reporting under IFRS.
The financial information contained in this announcement has
been prepared on the basis of the accounting policies set out in
the statutory accounts for the year ended 31 August 2014. While the
financial information has been prepared in accordance with the
recognition and measurement criteria of IFRS, this announcement
does not itself contain sufficient information to comply with IFRS.
The Group expects to publish full financial statements that comply
with IFRS in February 2015.
2. Revenue and segmental information
Operating Segments
IFRS 8 "operating segments", requires consideration of the chief
operating decision maker ('COD M') within the Group. In line with
the Group's internal reporting framework and management structure,
the key strategic and operating decisions are made by the CEO, who
reviews internal monthly management reports, budget and forecast
information as part of this. Accordingly the CEO is deemed to be
the COD M.
Operating segments have then been identified based on the
reporting information and management structures within the
Group.
The Group had one customer representing over 10% of revenue
(GBP6,463,000) and most of the revenue in the Cleantech segment was
derived from this one customer.
The Group operates in two trading business segments.
-- The distribution of specialist electronic components
(Distribution).
-- The sale of smart energy saving products and services
(Cleantech).
The Group also contains a central services segment that provides
support to the trading businesses.
In the table overleaf reportable segment assets and liabilities
include inter segment balances. These have been included to reflect
the assets and liabilities of the segment as monies are freely
moved around the group to provide funding for working capital where
required. The central services have been allocated between the two
revenue-earning segments. The head office costs represent
exceptional costs/(credits) associated with acquisitions and
goodwill.
Head
Distribution Cleantech office Total
Segmental Information GBP000 GBP000 GBP000 GBP000
2014
Revenue
Total 12,456 8,178 - 20,634
Intercompany - - - -
Revenue from external
customers 12,456 8,178 - 20,634
------------- ---------- -------- ---------
Profit /(loss) before
tax 508 (83) (43) 382
Fair value adjustments -
Taxation (80)
---------
Profit after tax 302
---------
Statement of Financial
Position
Assets 7,172 4,445 4,339 15,956
Liabilities (2,450) (2,108) (75) (4,633)
Net assets 4,722 2,337 4,264 11,323
------------- ---------- -------- ---------
Other
Net finance income
/ (expense) (25) (20) - (45)
Capital expenditure 51 201 - 252
-Property, plant and
equipment 123 220 - 343
-Depreciation 33 66 - 99
-Capitalised development
expenditure - 87 - 87
---------------------------- ------------- ---------- -------- ---------
Clean Head
Distribution Tech office Total
Segmental Information GBP000 GBP000 GBP000 GBP000
2013
Revenue
Total 12,706 8,951 - 21,657
Intercompany - - - -
Revenue from external
customers 12,706 8,951 - 21,657
------------- ---------- -------- ---------
Profit /(loss) before
tax 127 363 (273) 217
Fair value adjustments 4,300
Taxation (256)
---------
Profit after tax 4,261
---------
Balance Sheet
Assets 6,839 4,191 4,339 15,369
Liabilities (2,303) (2,454) (21) (4,778))
Net assets 4,536 1,737 4,318 10.591
------------- ---------- -------- ---------
Other
Net finance income
/ (expense) (92) (79) - (171)
Capital expenditure 19 133 - 152
-Property, plant and
equipment 84 108 - 192
-Depreciation 59 6 - 65
-Capitalised development
expenditure - - - -
--------------------------- ------------- ---------- -------- ---------
3. Net Financing
2014 2013
GBP000 GBP000
Financing income
Other Interest receivable 14 9
======= =======
Financing costs
Bank interest payable - 51
Convertible loan note interest
payable - 23
Other interest payable 4 -
Other finance costs 55 27
59 101
======= =======
4. Taxation
(a) Analysis of charge in period
2014 2013
GBP000 GBP000
Current tax:
UK corporation tax on profits
for the current year 119 32
Adjustments in respect
of prior years - 3
------- -------
Total current tax 119 35
Deferred tax (39) 221
Tax charge on profit
on ordinary activities 80 256
======= =======
(b) Factors affecting the tax charge for the period
The tax charge for the period is different to the standard rate
of corporation tax in the UK. The composite rate of corporation tax
for this purpose has been taken as 21.58% for 2014 (2013:
23.58%).
The differences are explained below:
2014 2013
GBP000 GBP000
Profit on ordinary activities
before tax 382 4,517
------- --------
Rate of corporation
tax 21.58% 23.58%
Tax on profit based on standard
rate 83 1,065
Effects of:
Accelerated capital
allowances (19) 9
Expenses not deductible for
tax purposes 45 100
Non taxable fair value
gain - (1,014)
Share options exercised
in year (138) -
Share options vested
but not exercised (33) -
Losses in overseas subsidiaries 136 -
Losses carried forward - 96
Effects of associates 6 -
Total tax charge for the period 80 256
======= ========
5. Earnings per share
The calculation of basic earnings per share is based on the
profit after taxation attributable to equity holders of the parent
company for the period and the weighted average number of shares in
issue during the period.
Diluted earnings per share is calculated by adjusting the
weighted average number of shares outstanding by the dilutive
effect of Ordinary Shares that the Company may potentially issue
relating to its share option scheme.
Earnings per share on operating profit before exceptional costs
are considered to be the most realistic measure of earnings and the
calculation is based on the weighted average number of shares.
The profit for the year and the weighted average number of
shares used in the calculations are set out below:
2014 2013
GBP000 GBP000
Earnings - profit attributable to
equity holders of the parent 554 4,065
---------- ----------
Earnings - operating profit before
exceptional costs and share based
payments 573 491
---------- ----------
Weighted average number of
shares 58,087,144 35,088,635
Dilutive / free Shares 1,083,989 1,234,142
Diluted number of
shares 59,171,133 36,322,777
Earnings per share 1.0p 11.6p
Diluted earnings per
share 0.9p 11.2p
Earnings per share
based on operating
profit before exceptional
costs and share based
payments 1.0p 1.3p
6. Events after the reporting period
Acquisition of Green Compliance plc
On 12 September 2014 the Group acquired through an all-share
offer 100% of the share capital of Green Compliance plc ("Green
Compliance"), a company incorporated in England and listed on AIM,
whose principal activity comprises the provision of water quality
monitoring services, in order to broaden its Clean Tech activities
into the market for water management. The purchase consideration
consisted of the issue of 2 new ordinary shares in APC Technology
Group PLC for every 71 shares in Green Compliance.
Provisional details of net assets acquired and goodwill are set
out below:
GBP000
Total purchase consideration : share offer as set out above 4,759
Fair value of net liabilities acquired (see below) 4,051
Goodwill 8,810
The above goodwill is attributable to Green Compliance's strong
position in the water hygiene and treatment market. The Board is
currently considering whether there are separately identifiable
intangible assets.
Due to the limited time available between the acquisition and
the approval of these financial statements, the Group is still in
the process of finalising the list of identifiable assets and
liabilities and establishing the fair values of those assets and
liabilities acquired but it is anticipated that the fair value of
the consideration paid over the book value of the net assets
acquired will include customer relationships and goodwill
representing the value attributable to new business and the
assembled and trained workforce.
As at the date of acquisition, 12 September 2014 the net assets
of Green Compliance, based on unaudited management accounts and
reported under IFRS, were as follows:
Fair value
GBP000
Cash and cash equivalents 213
Trade and other receivables 1,529
Trade and other payables (4,041)
Borrowings (1,752)
Net liabilities acquired (4,051)
------------
Included in the balance sheet of Green Compliance plc was
acquired goodwill of GBP6,182,000 making net acquired assets,
including goodwill, of GBP2,131,000.
Exercise of share options
Options over 45,000 shares were exercised on 25 September 2014
with proceeds of GBP4,050.
Share placing
On 8 December 2014 the Board effected a share placing with
certain existing and new investors, which raised GBP2,075,000
before expenses, to strengthen the balance sheet and provide funds
for further expansion.
7. Publication of non-statutory accounts
The financial information set out in this announcement does not
constitute the statutory financial statements for the year ended 31
August 2014 and the year ended 31 August 2013 in accordance with
section 434 of the Companies Act 2006 but is derived from those
accounts.
The financial statements for the year ended 31 August 2013 were
prepared in accordance with Adopted IFRS and have been delivered to
the Registrar of Companies. The financial statements for the year
ended 31 August 2014 will be delivered to the Registrar of
Companies following the Company's Annual General Meeting. The
auditor's report on both accounts was unqualified, did not include
references to any matters to which the auditor drew attention by
way of emphasis without qualifying their report and did not contain
statements under sections 498(2) or (3) of the Companies Act
2006.
The full audited financial statements of APC Technology Group
PLC for the year ended 31 August 2014 are expected to be posted to
shareholders on Tuesday 3 February 2015 and will be available to
the public at the Company's registered office, 47 Riverside, Medway
City Estate, Rochester, Kent, ME2 4DP and available to view on the
Company's website at www.apc-plc.co.uk from the date of
posting.
8. Annual General Meeting
The Annual General Meeting of the Company will be held on
Thursday 26 February 2015 at 12 noon at the offices of Strand
Hanson Limited, 26 Mount Row, London, W1K 3SQ.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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