TIDMAPC
RNS Number : 8841W
APC Technology Group PLC
13 November 2014
APC Technology Group PLC ("APC" or the "Group")
Trading Statement
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 provide an update on its current trading and
anticipated results for the year ended 31 August 2014.
Highlights
-- Financial results for the year ended 31 August 2014 in line
with expectations
-- Significant new contracts awarded in UK and North America,
including leading retailers, banks and restaurant chains
-- Completion of the acquisition of Green Compliance PLC ("Green
Compliance") and positive early signs with regard to integration
and cross-selling initiatives
-- New GBP6m group working capital facility agreed
Financial Performance
The Group is pleased to report that its results for the year
ended 31 August 2014, which are expected to be released in January
2015, are in line with market expectations.
Working Capital
The Group is also pleased to announce that it has agreed a new
GBP6m working capital facility with ABN Commercial Finance which
will allow it to consolidate all of its working capital facilities.
Negotiations are also underway to consolidate all of its clearing
banking arrangements.
Customer wins and recurring revenues
During the period under review, the Group's energy
efficiency-related business, Minimise Energy, made significant
progress in its objective to further expand its customer base and
reduce reliance on any one customer. 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. In addition, a contract has now been received from the
UK's largest logistics company and from a number of organisations
in North and Central America, including a mid-sized food retailer
and a national restaurant chain. This new business includes orders
for LED lighting in combination with monitoring and control
systems.
While the relative scale of these contracts is, in some cases,
significant in its own right, it is important to recognise that a
number of them include a sizeable element of recurring revenues.
These recurring revenues relate to the generation of energy-related
data and the provision of consulting services. These services
enable clients to utilise the data in order to drive a reduction in
their consumption of utilities through the implementation of
technology and behavioural change, and are typically long term
contracts extending to a minimum of three years.
Strategy
During the past year, the Board has clearly defined and begun to
implement an expanded strategy for APC's sustainability-related
businesses. The success of Minimise Energy in LED lighting and
energy-related monitoring and control systems has funded the
investment required to enable the Group to capitalise on the
increasing interest in the wider sustainability agenda, with the
energy efficiency focus of Minimise Energy now supplemented by the
water management capabilities provided by the now wholly owned
subsidiary, Green Compliance Limited, and the addition of
sustainability focussed consulting and project financing services.
The recent contract win at the UK's largest logistics company
contains a significant element of recurring revenues from long term
energy management consulting, which the Board considers to be a
critical part of a wide sustainability service and technology
offering. The Group is in the process of developing proposals for
energy efficiency service agreements (EESA's) for a number of
customers which, if successful, would lead to significant roll out
of energy efficiency-related technologies over the next few years.
The Board believes that these very positive recent developments
represent a strong validation of the Group's overall strategy.
Expansion & Integration
Overall, the Board considers that the variety of products and
services involved in new contracts in the UK and elsewhere is
evidence of early success in the delivery of its strategy to expand
the product and service offering and to extend operations
internationally. The Board remains committed to strengthening the
Group's technical capabilities and anticipates the release of a
number of new products and services during the current financial
year. Additionally, the Board is now planning to increase
investment in order to drive further progress in North and Latin
America.
Following the acquisition of Green Compliance, significant steps
have already been taken to drive down the operating costs for the
enlarged Group. The additional costs to be incurred by
strengthening the senior management team are expected to be more
than offset by cost reductions elsewhere across the Group. These
changes, which remove a layer of management, are providing
attractive career development opportunities for key individuals
already within the Group. In addition, a number of integration
activities have been initiated. Cross-selling activities across the
Group are underway and have already resulted in the creation of a
number of proposals for energy-related products and services plus
water management-related monitoring systems. Accordingly, the Board
is very satisfied by the progress that has been made since the
transaction was completed on 12 September 2014.
Strengthening of the Senior Management team
In addition to the previously announced appointment of Richard
Hodgson to the role of Group CFO and as a Director of the Company,
the Group has moved quickly to further strengthen the senior
management team with the appointment of Andrew Shortis who assumes
responsibility for APC's sustainability-related subsidiaries and
associate companies as well as direct management responsibility for
Minimise Energy.
Also, considering the aforementioned successes in the Americas,
the Board has moved to strengthen operations there with the
appointment of Rod Foster as Chief Executive of Minimise Energy
Americas. This appointment is part of a strategy to increase
investment into business development across North, South and
Central America which together consume an estimated thirteen times
more power than the UK.
Current Outlook
Trading in Advanced Power Components, APC's electronic component
distribution business, and in the recently acquired Green
Compliance, continues to be stable and is in line with expectations
after the initial two months of the new financial year.
Minimise Energy continues to make progress as it builds revenues
across an ever-expanding customer base. With the scale of contracts
under negotiation increasing, and the coordination of sales
activities with Green Compliance already well underway, the Board
remains very optimistic as to the Group's future prospects.
Mark Robinson, CEO of APC Technology Group PLC, commented:
"The momentum in the business is encouraging and I firmly
believe that we are still only scratching the surface in terms of
capitalising on the market opportunity which exists across the
sustainability sector. The Group has continued to benefit from an
ever-increasing demand for its services and has ambitious plans for
further growth which I look forward to reporting on in the coming
months."
Enquiries:
APC Technology Group
PLC 01634 290588
Mark Robinson, Chief www.apc-plc.co.uk
Executive 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 apc@redleafpr.com
/ David Ison
This information is provided by RNS
The company news service from the London Stock Exchange
END
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