TIDMAPC
RNS Number : 1146I
APC Technology Group PLC
23 March 2015
APC Technology Group PLC ("APC", "Group" or the "Company")
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 six months ended 28 February 2015.
Headlines
-- Group revenues for the period anticipated to be up
approximately 20% on H1 2014
-- Further strengthening and diversification of customer
base
-- Expansion of Minimise Group through the creation of Minimise
Water Limited and Minimise Generation Limited
-- Delivery of cross-selling momentum and operational
efficiencies following the acquisition of Green Compliance plc
-- Working capital position enhanced by GBP3.5m fundraising
during the period and GBP6m invoice discounting facility
Financial Performance
In the six months ended 28 February 2015, the Group is expected
to report sales of approximately GBP14.4m (2014 H1: GBP12.1m) and
to declare an operating profit before interest, tax, amortisation
and exceptional costs of approximately GBP250,000 (2014 H1:
GBP791,000) when it publishes its interim results at the end of
May. Exceptional costs incurred in the period include acquisition
costs in respect of Green Compliance plc of GBP650,000,
restructuring costs of GBP150,000 and discontinued costs relating
to the acquisition of Green Compliance plc totalling GBP350,000.
The majority of the one off costs relating to the integration of
Green Compliance into the Group have now been expensed.
Revenue Growth
Revenues in Minimise Energy were approximately GBP4.0m during
the period (2014 H1: GBP5.9m). Importantly, however, as a result of
investments made during the period to strengthen sales and
marketing activities, significant progress was made in reducing
over-reliance on any one customer with sales to customers other
than Wm Morrisons increasing 300% from GBP0.9m to GBP3.6m. Further
recent expansion of the Minimise Energy order book indicates that
sales in the second half will be significantly higher than in the
first half year of the year.
Half year revenues in Green Compliance, which now trades as a
part of Minimise Water, were in line with expectations at GBP4.1m.
This business has maintained its core water hygiene and treatment
contract base and has begun to develop new revenue streams through
an extension of its products and services related to the management
of water consumption.
Minimise Solutions, the Group's sustainability consulting
business, had a successful period of growth with a new contract
secured with Royal Mail Group supplementing revenues from other new
and existing clients. Minimise Finance secured its initial energy
efficiency projects during the period and has a number of
significant proposals under review. Both Minimise Solutions and
Minimise Finance are intended to be profitable in their own rights
as well as serving to generate and support sales for the other
parts of the Minimise Group.
Sales continue to grow overseas where Minimise Energy has
operations in Miami, Florida in the USA and Waterloo, Ontario in
Canada. Operations were expanded during the latter months of 2014
and, whilst these businesses are still at a relatively early stage,
the value of opportunities under development is growing and
progress is encouraging.
Revenues in APC's electronic component distribution business,
which trades as Advanced Power Components, were flat at
approximately GBP6.2m when compared with the corresponding period
in the prior year. The order book for the second half of the
current financial year is strong which is consistent with historic
trading patterns in which the second half of the year is typically
stronger than the first half in this part of the business.
Operational Performance
Following the acquisition of Green Compliance plc in September
2014 and the creation of Minimise Generation Limited in January
2015, APC's Minimise Group now delivers an expanded range of
innovative technologies, products and services, including energy
efficiency, energy generation, water management, sustainability
consulting and project financing, to a significantly expanded
customer base.
Since the Green Compliance acquisition a number of important
integration milestones have been reached. From a sales and
marketing perspective, Salesforce CRM, a customer relationship
management platform, has been rolled out across the Minimise Group
to improve sales pipeline visibility and opportunity management. A
number of cross-selling initiatives have already been implemented
using this platform, including the Minimise internal commission
sharing 'ReferAll' programme which has already identified close to
100 new customer opportunities. The impact of these initiatives has
been enhanced as a result of a complete rebranding exercise
undertaken across the Minimise businesses. This has made the
Company's wider sustainability offering easier to understand from a
commercial standpoint and is expected to have a significant impact
on the expansion of the customer base. Significant internal
restructuring is on-going with steps being taken to rationalise
head office costs, drive operational efficiencies and leverage
economies of scale.
Working Capital and Funding for Growth
Between December 2014 and February 2015 GBP3.5m of cash was
raised to fund expansion via the placing of, in aggregate,
17,193,182 new ordinary shares in the Company. Net debt at the end
of the period was GBP1.25m including cash on hand of GBP2.4m,
GBP2.9m drawn on the invoice finance facility (against a gross
debtor book of GBP4.5m) and GBP750,000 of unsecured loan notes from
shareholders, which are due to be redeemed in July 2015. This is a
GBP500,000 improvement on the pro-forma balance sheet net debt
position as at August 2014.
In addition to the aforementioned acquisition, restructuring and
re-financing costs incurred during the period, the Group invested
approximately GBP300,000 to create Minimise Generation, GBP400,000
in expanding its operations in the Americas and GBP1.2m in working
capital to support the recent growth in Minimise Energy. These
measured investments, supported by the Company's shareholders, are
enabling the Group to move into the next phase of its
development.
Summary
In summary, the Group continues to invest to create an
organisation with the potential to deliver revenues and profits on
a significantly higher scale than has been achieved in prior years.
The Board is very appreciative of the Group's shareholders, whose
investment and continued support has enabled the Group to create a
stable working capital base to fund this exciting phase in its
development, and look forward to the future with confidence.
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 (Nominated
Adviser) 020 7409 3494
James Harris / Angela Hallett / Ritchie Balmer
Northland Capital Partners Limited
(Broker) 020 7796 8800
John Howes / Alice Lane
Redleaf Communications (Financial
PR) 020 7382 4730
Rebecca Sanders-Hewett / David Ison / Hope Armstrong
This information is provided by RNS
The company news service from the London Stock Exchange
END
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