TIDMARC
RNS Number : 7151G
Arcontech Group PLC
10 August 2016
ARCONTECH GROUP PLC
("Arcontech", the "Company" or the "Group")
Final Results for the Year Ended 30 June 2016
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
2016.
Financial highlights
-- Profit before tax of GBP302,329 (2015: GBP243,660)
-- Cash balance of GBP1,633,159 (2015: GBP1,069,755)
-- Basic earnings per share of 0.027p (2015: 0.023p)
Operational highlights
-- 'Soft launch' of a new Desktop product
-- Good cost control (costs lowered by 2%)
-- Continued investment in R&D to develop new solutions for existing and new clients
-- Pipeline currently unaffected by Brexit
Distributable reserves and Proposed Share Consolidation
In March 2016 Arcontech obtained court approval to cancel its
share premium account, creating positive distributable reserves.
This will enable the directors to recommend the payment of
dividends out of retained profits in the future, should the Board
feel this is appropriate.
Due to the large number of shares in issue and to avoid
fractional entitlements to any future dividend, it is the Board's
intention to consolidate the number of shares prior to announcing a
dividend. Further details of the proposed share consolidation will
be provided to shareholders in the Notice of Annual General
Meeting.
Commenting on the results, Richard Last, Chairman of Arcontech
said:
"We believe, as a result of continued product investment and
from listening to our customers, we have a good product set that is
suitable for our markets. Our focus is now fundamentally on winning
new business and whilst we believe the opportunities for increased
sales exist, the sales cycle remains longer than we would like. We
also need to fully compensate for the reduction in revenue during
the year from the Asian focused bank. Our prospects, however,
whilst positive need to be tempered against uncertainties in the
banking sector as a result of the low interest rate environment and
potential issues following Brexit."
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and
Non-Executive Director 07713 214484
020 7256
Matthew Jeffs, Chief Executive 2300
finnCap Ltd (Nomad & Broker)
020 7220
Carl Holmes/Simon Hicks 0500
To access more information on the Group please visit:
www.arcontech.com
Chairman's Statement
Arcontech Group plc ("Arcontech" or the "Company") is pleased to
report a profit before taxation for the year ended 30 June 2016 of
GBP302,329 compared to GBP243,660 for the year ended 30 June 2015.
After taking the benefit of the Research and Development tax credit
of GBP105,813 (2015: GBP109,378) which the company receives due to
the amount it has invested in qualifying product design and
development, Arcontech achieved a profit after tax of GBP408,142
(2015: GBP353,038).
Turnover for the year increased modestly by 0.5% to GBP2,141,630
(2015: GBP2,129,958) reflecting the situation that new business
predominantly from existing customers only marginally exceeded the
impact of the loss in revenue from the Asian focused bank,
previously reported, from the start of the second half. With the
"soft launch" of our new Desktop product we would expect to see
increased sales momentum in the coming year.
Throughout the year ended 30 June 2016 we maintained tight
control of costs which has helped improve our profitability. We
have continued to invest in new product development which we expect
to maintain going forward as we believe product development and
innovation is key to our future success. Further investment in
sales and marketing resources is expected but this will be
dependent on new sales wins.
Financing
As at 30 June 2016 Arcontech had no debt and cash balances of
GBP1,633,159 (2015: GBP1,069,755), reflecting increased
profitability. This leaves the business well financed for the
future.
Employees
Once again I would like to thank our employees who are the core
of the business and whose support and dedication is greatly
appreciated.
Outlook
We believe, as a result of continued product investment and from
listening to our customers, we have a good product set that is
suitable for our markets. Our focus is now fundamentally on winning
new business and whilst we believe the opportunities for increased
sales exist, the sales cycle remains longer than we would like. We
also need to fully compensate for the reduction in revenue during
the year from the Asian focused bank. Our prospects, however,
whilst positive need to be tempered against uncertainties in the
banking sector as a result of the low interest rate environment and
potential issues following Brexit.
Richard Last
Chairman
Chief Executive's Review
I am pleased to report that during the year our continued
attention to managing costs whilst bringing the sales pipeline
forward, has resulted in an increase in profit before tax of 24%
compared to the previous year.
Our endeavours resulted in revenue growth of 0.5% and a
reduction in costs of 2%. This had a significant and positive
impact to our bottom line to generate a profit before tax of
GBP302,329.
As well as progressing the sales pipeline, this year has also
seen us improve our product offering by adding functionality to
existing products as well as building out the product portfolio
with a new Desktop component. This is currently in trials with
several Tier 1 clients with whom prospects for commercial
deployment are looking very promising.
More generally, the outlook for the business remains positive
and as yet has been unaffected by the wider uncertainties
surrounding Brexit. What does continue to affect revenues, however,
is the length of the sales cycle. This is largely attributable to
the fact that our traditional offerings invariably need to displace
an incumbent for which the existing contract terms can affect our
prospects. As has been stated previously, however, once a
commercial relationship has been established, we inevitably find
many opportunities to grow the relationship both through
displacement and development of new solutions. We also look forward
to securing cornerstone clients for our newly developed Desktop
component in order to generate new and additional revenues outside
of our traditional target market due to the broad appeal of its
value proposition.
Having maintained momentum and grown profitability over the
previous year, we have reconfirmed the value of our products to the
market whilst strengthening our position. We are now working to
capitalise on this by increasing revenues. Sales growth remains our
clear priority.
Matthew Jeffs
Chief Executive
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2016
2016 2015
GBP GBP
Revenue 2,141,630 2,129,958
Administrative costs (1,849,257) (1,890,242)
Operating profit 292,373 239,716
Finance income 9,956 3,944
------------------------------------------ ------------- ------------------
Profit before taxation 302,329 243,660
Taxation 105,813 109,378
Profit for the year after tax 408,142 353,038
------------------------------------------ ------------- ------------------
Total comprehensive income for the year 408,142 353,038
------------------------------------------ ------------- ------------------
Earnings per share (basic) 0.027p 0.023p
------------------------------------------ ------------- ------------------
Earnings per share (diluted) 0.026p 0.023p
------------------------------------------ ------------- ------------------
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2016
Group:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
Balance at 30 June 2014 1,536,672 9,430,312 72,562 (9,622,661) 1,416,885
Profit for the year - - - 353,038 353,038
Total comprehensive income for the year - - - 353,038 353,038
Share-based payments - - 20,199 - 20,199
Balance at 30 June 2015 1,536,672 9,430,312 92,761 (9,269,623) 1,790,122
Profit for the year - - - 408,142 408,142
Total comprehensive income for the year - - - 408,142 408,142
Cancellation of share premium account - (9,430,312) - 9,430,312 -
Issue of shares 5,060 2,024 - - 7,084
Share-based payments - - 26,931 - 26,931
Balance at 30 June 2016 1,541,732 2,024 119,692 568,831 2,232,279
------------------------------------------ ---------- ------------ --------------------- ------------ ----------
Balance Sheet
As at 30 June 2016
Group Group
2016 2015
GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153
Property, plant
and equipment 44,785 41,605
Trade and other
receivables 141,750 141,750
Total non-current
assets 1,901,688 1,898,508
---------------------------------- ------------ ------------
Current assets
Trade and other
receivables 265,360 478,402
Cash and cash equivalents 1,633,159 1,069,755
---------------------------------- ------------ ------------
Total current assets 1,898,519 1,548,157
---------------------------------- ------------ ------------
Current liabilities
Trade and other
payables (1,567,928) (1,656,543)
---------------------------------- ------------ ------------
Total current liabilities (1,567,928) (1,656,543)
---------------------------------- ------------ ------------
Net current assets/(liabilities) 330,591 (108,386)
---------------------------------- ------------ ------------
Net assets 2,232,279 1,790,122
---------------------------------- ------------ ------------
Equity
Called up share
capital 1,541,732 1,536,672
Share premium account 2,024 9,430,312
Share option reserve 119,692 92,761
Retained earnings 568,831 (9,269,623)
---------------------------------- ------------ ------------
2,232,279 1,790,122
---------------------------------- ------------ ------------
Group Cash Flow Statement
For the year ended 30 June 2016
2016 2015
GBP GBP
Net cash generated from operating activities 567,420 369,982
------------------------------------------------ ---------- ----------
Investing activities
Interest received 9,956 3,944
Purchases of plant and equipment (21,056) (38,014)
Proceeds of sales of plant and equipment - 167
Net cash invested in investing activities (11,100) (33,903)
------------------------------------------------ ---------- ----------
Financing activities
Issue of shares 7,084 -
------------------------------------------------ ---------- ----------
Net cash generated from financing activities 7,084 -
------------------------------------------------ ---------- ----------
Net increase in cash and cash equivalents 563,404 336,079
Cash and cash equivalents at beginning of year 1,069,755 733,676
------------------------------------------------ ---------- ----------
Cash and cash equivalents at end of year 1,633,159 1,069,755
------------------------------------------------ ---------- ----------
Notes to the Financial Information
For the year ended 30 June 2016
1. Status of financial information
Arcontech Group plc is a public limited company incorporated in
England and Wales whose ordinary shares of 0.1p 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
9 August 2016. 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 2016 or 30 June 2015.
The financial information has been extracted from the statutory
accounts of the Company for the years ended 30 June 2016 and 30
June 2015. The auditors reported on those accounts; their reports
were 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 statutory accounts for the year ended 30 June 2015 have been
delivered to the Registrar of Companies, whereas those for the year
ended 30 June 2016 will be delivered to the Registrar of Companies
following the Company's Annual General Meeting.
2. Basis of preparation
This financial information has been prepared in accordance with
the principles of International Financial Reporting Standards
("IFRS") as adopted by the European Union and International
Financial Reporting Interpretations Committee ("IFRIC")
recommendations and with those parts of the Companies Act 2006
applicable to companies reporting under IFRS. For the purposes of
the preparation of the consolidated financial information, the
Group has applied all standards and interpretations that are
effective for accounting periods beginning on or after 1 July 2015.
There have been no changes in accounting policies during the year.
The financial information has been prepared under the historical
cost convention unless otherwise stated.
3. Profit per share
2016 2015
GBP GBP
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit
attributable
to equity shareholders 408,142 353,038
408,142 353,038
------------------------------------------------------------------------------------------- -------- --------
No. No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings
per share 1,537,198,758 1,536,672,013
Number of dilutive shares under option 26,682,073 15,602,384
-------------------------------------------------------------------------------- -------------- --------------
Weighted average number of ordinary shares for the purposes of dilutive
earnings per share 1,563,880,831 1,552,274,847
-------------------------------------------------------------------------------- -------------- --------------
The calculation of diluted earnings per share assumes conversion
of all potentially dilutive ordinary shares, all of which arise
from share options. A calculation is done to determine the number
of shares that could have been acquired at fair value, based upon
the monetary value of the subscription rights attached to
outstanding share options.
4. 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 27 September 2016 at 10 a.m.
5. 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKCDQQBKDOFK
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