TIDMARC
RNS Number : 5683F
Arcontech Group PLC
22 February 2018
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHSED 31 DECEMBER 2017
Arcontech (AIM: ARC), the provider of products and services for
real-time financial market data processing and trading, is pleased
to report its unaudited results for the six months ended 31
December 2017.
Highlights:
-- Turnover increased by 9% to GBP1,213,776 (six months ended 31 December 2016: GBP1,115,232)
-- Profit before tax increased by 10% to GBP237,581 (six months
ended 31 December 2016: GBP216,270)
-- Annual run-rate of recurring revenues at 31 December 2017
increased by 13% to GBP2.43 million (at 31 December 2016: GBP2.15
million). Net cash of GBP2,663,935 as at 31 December 2017 (31
December 2016: GBP2,089,855)
-- Trading in line and on track to meet management's full year expectations
Richard Last, Chairman of Arcontech Group, said:
"Arcontech's ongoing investment in product development and
enhancement, coupled with the flexibility provided by its strong
balance sheet and high level of recurring revenues, supports the
Board's confidence in the Groups long term future and its ability
to meet the challenges in its business environment. Although we
remain mindful of the long and unpredictable sales cycles we often
face and the challenges this brings in predicting the timing of
contract wins, the Board expects results for the full year to be in
line with expectations."
Enquiries:
020 7256
Arcontech Group plc 2300
Richard Last, Chairman and
Non-Executive Director
Matthew Jeffs, Chief Executive
020 7220
finnCap Ltd (Nomad & Broker) 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit:
www.arcontech.com
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
The interim report will only be available to view online
enabling the Group to communicate in a more environmentally
friendly and cost-effective manner.
Chairman's Statement
I am pleased to report that Arcontech has continued to grow
profits in the six-month period ended 31 December 2017, reporting
an operating profit of GBP231,248 (2016: GBP212,006) and profit
before tax of GBP237,581 (2016: GBP216,270). Turnover increased by
9% to GBP1,213,776 compared to the corresponding six-month period
where turnover amounted to GBP1,115,232. This reflects the
continued steady growth in recurring annual licence fees, which on
an annualised basis amounted to GBP2.43 million at 31 December
2017, compared to GBP2.15 million as at 31 December 2016.
Fully diluted earnings per share were 2.36 pence per share
compared to 2.45 pence per share for the corresponding period last
year. This reduction is attributable to the reduction in tax
credits in respect of our investment in eligible product Research
and Development compared to the same period last year.
During the half year to 31 December 2017 we have secured another
client for our new desktop software solution, now giving Arcontech
a presence in two large global financial institutions. This new
client sees much potential in the offering and we hope to expand
its usage across the organisation as we jointly identify and
incorporate additional features and functionality to enable greater
efficiencies to be achieved. Details of the product enhancements
have been well received by our trial base of Tier 1 banks. Usage of
our Excelerator product has also grown with 70 additional positions
across three existing clients.
For the server-side of the business we have been busy installing
the previously contracted and reported MVCS upgrades which have
gone to plan. Arcontech has also signed an agreement with a new
client for our real-time cache and calculations engine which is
scheduled to be commissioned in the near future.
As usual the sales cycles remain long and unpredictable due
mainly to the nature of our customer base and our prospects. To an
extent the situation has been exacerbated by our client's need to
focus on meeting MiFID II and GDPR requirements. We have relocated
our Hong Kong sales resource to London to enable us to focus on the
larger global organisations which are in the main, headquartered in
London, New York and Europe.
Financing
Arcontech had net cash balances at 31 December 2017 of
GBP2,663,935 (31 December 2016: GBP2,089,855). The small increase
in cash resources between the year-end and 31 December, 2017,
reflects the payment of our maiden dividend and timing issues
related to the collection of year-end debtors and the Research and
Development tax credit. The Group's strong financial position
provides a sound basis for future growth and continued investment
in product development.
Dividend
Although no interim dividend is proposed, subject to continued
growth and meeting expectations for the business, the Board expects
to continue its policy of paying a dividend following the
announcement of its full year results.
Employees
I should like to take this opportunity to thank our employees
and Directors for their hard work and dedication, and I look
forward to continuing to work together in the future.
Outlook
Arcontech's ongoing investment in product development and
enhancement, coupled with the flexibility provided by its strong
balance sheet and high level of recurring revenues, supports the
Board's confidence in the Groups long term future and its ability
to meet the challenges in its business environment. Although we
remain mindful of the long and unpredictable sales cycles we often
face and the challenges this brings in predicting the timing of
contract wins, the Board expects results for the full year to be in
line with expectations.
Richard Last
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
Six months Six months Year ended
ended ended 30 June
31 31
December December
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Revenue 1,213,776 1,115,232 2,307,751
Administrative costs (982,528) (903,226) (1,942,430)
Operating profit 231,248 212,006 365,321
Finance income 6,333 4,264 7,942
Profit before taxation 237,581 216,270 373,263
Taxation 69,452 96,988 96,988
Profit for the period
after tax 307,033 313,258 470,251
Total comprehensive
income 307,033 313,258 470,251
Profit per share
(basic) 2.42p 2.53p 3.79p
Profit per share
(diluted) 2.36p 2.45p 3.68p
All of the results relate to continuing operations.
BALANCE SHEETS
31 December 31 December 30 June
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 1,715,153
Property, plant
and equipment 24,834 43,557 33,825
Trade and other
receivables 141,750 141,750 141,750
Total non-current
assets 1,881,737 1,900,460 1,890,728
Current assets
Trade and other
receivables 624,781 592,378 175,496
Cash and cash equivalents 2,663,935 2,089,855 2,636,471
Total current assets 3,288,716 2,682,233 2,811,967
Current liabilities
Trade and other
payables (865,561) (858,332) (915,101)
Deferred income (1,233,990) (1,155,942) (987,609)
Total current liabilities (2,099,251) (2,014,274) (1,902,710)
Net current assets 1,189,465 667,959 909,257
Net assets 3,071,202 2,568,419 2,799,985
Equity
Share capital 1,600,375 1,548,886 1,562,676
Share premium account 24,881 4,286 9,802
Share option reserve 225,591 133,158 188,425
Retained earnings 1,220,355 882,089 1,039,082
3,071,202 2,568,419 2,799,985
GROUP CASH FLOW STATEMENT
Six months Six months Year ended
ended ended 30 June
31 31
December December
2017 2016 2017
(unaudited) (unaudited) (audited)
GBP GBP GBP
Net cash generated from
operating activities 94,113 450,431 974,800
Investing activities
Interest received 6,333 4,264 7,942
Purchases of plant and
equipment - (7,415) (8,152)
Net cash generated from/(invested
in) investing activities 6,333 (3,151) (210)
------------ ------------ ------------
Financing activities
Issue of shares 52,778 9,416 28,722
Dividends paid (125,760) - -
Net cash (used in)/generated
from financing activities (72,982) 9,416 28,722
------------ ------------ ------------
Net increase in cash
and cash equivalents 27,464 456,696 1,003,312
Cash and cash equivalents
at beginning of period 2,636,471 1,633,159 1,633,159
Cash and cash equivalents
at end of period 2,663,935 2,089,855 2,636,471
============ ============ ============
STATEMENT OF CHANGES IN EQUITY
Share Share Share-based Retained Total
capital premium payments earnings
reserve
GBP GBP GBP GBP GBP
At 1 July
2016 1,541,732 2,024 119,692 568,831 2,232,279
Total comprehensive
income for
the period - - - 313,258 313,258
Issue of shares 7,154 2,262 - - 9,416
Share-based
payments - - 13,466 - 13,466
At 31 December
2016 1,548,886 4,286 133,158 882,089 2,568,419
--------------------- ---------- --------- ------------ ---------- ----------
Total comprehensive
income for
the period - - - 156,993 156,993
Issue of shares 13,790 5,516 - - 19,306
Share-based
payments - - 55,267 - 55,267
At 30 June
2017 1,562,676 9,802 188,425 1,039,082 2,799,985
--------------------- ---------- --------- ------------ ---------- ----------
Total comprehensive
income for
the period - - - 307,033 307,033
Issue of shares 37,699 15,079 - - 52,778
Dividends
paid - - - (125,760) (125,760)
Share-based
payments - - 37,166 - 37,166
At 31 December
2017 1,600,375 24,881 225,591 1,220,355 3,071,202
--------------------- ---------- --------- ------------ ---------- ----------
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended 31 December 2017 and 31
December 2016 are unaudited and do not constitute statutory
accounts. The interim results have been prepared using accounting
policies which are consistent with International Financial
Reporting Standards as adopted by the European Union and are
expected to be adopted in the next annual accounts.
2. The financial information for the year ended 30 June 2017 set
out in this interim report does not comprise the Group's statutory
accounts as defined in section 434 of the Companies Act 2006. The
statutory accounts for the year ended 30 June 2017, which were
prepared under International Financial Reporting Standards (IFRS)
as adopted for use in the EU, applied in accordance with the
provisions of the Companies Act 2006, have been delivered to the
Registrar of Companies. The auditors reported on those accounts;
their report was 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.
3. Copies of this statement are available from the Company
Secretary at the Company's registered office at 1(st) Floor 11-21
Paul Street, London, EC2A 4JU or from the Company's website at
www.arcontech.com.
4. Earnings per share have been calculated based on the profit
after tax and the weighted average number of shares in issue during
the half year ended 31 December 2017 of 12,675,498 (31 December
2016: 12,360,981; 30 June 2017: 12,396,220). The number of shares
for the period ended 31 December 2016 take into account the share
consolidation of 125:1 carried out in September 2016.
The number of dilutive shares under option at 31 December 2017
was 330,023 (31 December 2016: 427,317; 30 June 2017: 367,595). 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 the average market price during
the period, based upon the issue price of the outstanding share
options including future charges to be recognised under the
share-based payment arrangements.
5. Taxation is based on the unaudited results and provision has
been estimated at the rate applicable to the Company at the time of
this statement and expected to be applied to the total annual
earnings. No corporation tax has been charged in the period as any
liability has been offset against tax losses brought forward from
prior years. The tax credit represents the cash recovery of
Research & Development tax credits during the period.
6. A final dividend in respect of the year ended 30 June 2017 of
1.0 pence per share (2016 Nil) was paid on 29 September 2017.
7. The Directors have elected not to apply IAS34 Interim financial reporting.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EFLFLVLFEBBD
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