REG - Arcontech Group PLC - Interim Results
24/02/2025 07:00
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RNS Number : 1093Y Arcontech Group PLC 24 February 2025
ARCONTECH GROUP PLC
("Arcontech" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024
Arcontech (AIM: ARC), the provider of products and services for real-time
financial market data processing and trading, reports its unaudited results
for the six months ended 31 December 2024.
Overview:
* Revenue increased by 4.3% to £1,511,346 (H1 2023: £1,448,804)
* Recurring revenues represented 97% of total revenues for the period (H1 2023:
100%)
* Adjusted EBITDA* decreased by 12.1% to £446,513 (H1 2023: £507,668)
reflecting the expected increase in staff costs
(* adjusted ebitda is defined as operating profit before depreciation,
amortisation, share base payments and releases of historic accruals relating
to administrative expenses)
* Profit before tax decreased by 3.8% to £518,166 (H1 2023: £538,790)
* Our preferred measure of adjusted profit before tax, which excludes the
release of accruals unrelated to the underlying business, decreased by 7.5% to
£494,360 (H1 2023: £534,775)
* Net cash of £7,166,839 at 31 December 2024, up 24.9% (H1 2023:
£5,734,226). The period under review saw the return to a normal billing cycle
for one of our large customers, and a record dividend payment of £501,479 on
1 November 2024
* Trading in line with full year market expectations and confident in the full
year outturn
Geoff Wicks, Chairman of Arcontech, said:
"The improvements to market conditions we mentioned in our Preliminary
Statement last year have continued and the growth has materialised. We remain
cautious as customers are careful about increasing their costs and lead times
remain long. However, our pipeline is strong and we are confident about our
future and the full year outturn."
Enquiries:
Arcontech Group plc 020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
Cavendish Capital Markets Ltd (Nomad & Broker) 020 7220 0500
Carl Holmes/Rory Sale (Corporate Finance)
Harriet Ward (Corporate Broking)
To access more information on the Group please visit: www.arcontech.com
(http://www.arcontech.com)
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
Arcontech has seen continued growth and although market conditions have
improved many customers are cautious about embarking on new projects and
increasing their cost base. As a result our pipeline has improved but lead
times remain long. Our continued focus on our core market has ensured we
continue to build the potential for future growth.
Our expected growth is likely to be tempered by some downsizing at larger
customers as technology and markets change, however we are confident that new
business will continue to work its way through the pipeline. With the
complexity of markets changing, we have started to see some one-off contracts
for work to change and embed our products into our customers' systems. It
remains a small part of our business.
Revenue was £1.51 million, up 4.3% on the same period last year, Profit
before tax ("PBT") was £0.51 million, down 3.8% on the same period last year.
Adjusted profit before tax, which is PBT before the release of accruals for
administrative costs in respect of prior years was £0.50 million, down 7.5%
on the previous year.
Financing
Our balance sheet remains robust with net cash of £7.1 million, £1.2 million
higher than at 31 December 2023. The cash generation profile for the period
normalised with a return to regular timing of the billing cycle for a large
customer. This cash position allows for continued investment in sales and
products and for us to remain alert to opportunities to acquire small
complementary businesses.
Dividend
No interim dividend is proposed to be paid in respect of the half year. The
Board expects to continue its policy of paying a dividend following the
announcement of its full year results.
Outlook
The improvements to market conditions we mentioned in our Preliminary
Statement last year have continued and the growth has materialised. We remain
cautious as customers are careful about increasing their costs and lead times
remain long. However, our pipeline is strong and we are confident about our
future and the full year outturn.
Geoff Wicks
Chairman and Non-Executive Director
GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
Note Six months ended 31 Six months ended 31 Year ended
December December
30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Revenue 1,511,346 1,448,804 2,910,232
Administrative costs (1,109,882) (1,039,456) (2,040,541)
Operating profit 4 401,464 409,348 869,691
Finance income 139,066 126,055 247,903
Finance costs 12 (22,364) 3,387 (18,635)
Profit before taxation 518,166 538,790 1,098,959
Taxation 6 - - (31,302)
518,166 538,790
Profit for the period after tax 1,067,657
Total comprehensive income 518,166 538,790 1,067,657
Profit per share (basic) 3.87p 4.03p 7.98p
Adjusted* Profit per share (basic) 3.70p 4.00p 7.80p
Profit per share (diluted) 3.85p 4.02p 7.96p
Adjusted* Profit per share (diluted) 3.68p 3.99p 7.78p
All of the results relate to continuing operations and there was no other
comprehensive income in the period.
* Before release of accruals for administrative costs in respect of prior
years.
GROUP BALANCE SHEET
31 December 2024 31 December 2023 30 June
Note 2024
(unaudited) (unaudited) (audited)
£ £ £
Non-current assets
Goodwill 1,715,153 1,715,153 1,715,153
Property, plant and equipment 10,220 6,325 5,404
Right of use asset 12 447,279 559,098 503,190
Deferred tax asset 358,000 328,000 358,000
Trade and other receivables 9 141,750 141,750 141,750
Total non-current assets 2,672,402 2,750,326 2,723,497
Current assets
Trade and other receivables 9 821,336 1,335,408 677,069
Cash and cash equivalents 7,166,839 5,734,226 7,160,177
Total current assets 7,988,175 7,069,634 7,837,246
Current liabilities
Trade and other payables 10 (594,088) (473,512) (595,190)
Deferred income (1,221,194) (1,013,405) (1,092,835)
Lease liabilities 12 (114,893) (68,869) (110,308)
Provisions - (50,000) -
Total current liabilities (1,930,175) (1,605,786) (1,798,333)
Non-current liabilities
Lease liabilities 12 (368,748) (483,641) (427,365)
Provisions (70,000) (20,000) (70,000)
Total non-current liabilities (438,748) (503,641) (497,365)
Net current assets 6,058,000 5,463,848 6,038,913
Net assets 8,291,654 7,710,533 8,265,045
Equity
Share capital 1,671,601 1,671,601 1,671,601
Share premium account 115,761 115,761 115,761
Share option reserve 340,668 305,101 330,746
Retained earnings 6,163,624 5,618,070 6,146,937
8,291,654 7,710,533 8,265,045
GROUP CASH FLOW STATEMENT
Note Six months ended 31 Six months ended 31 Year ended
December December
30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Cash generated from / (used in) operating activities 11 432,237 (296,937)
1,051,177
Tax paid 6 - - (15,586)
Net cash generated from / (used in) operating activities 432,237 (296,937)
1,035,591
Investing activities
Interest received 137,775 126,055 247,903
Proceeds on disposal of fixed assets - 417 417
Purchases of plant and equipment (7,840) (3,471) (12,055)
Net cash generated from investing activities
129,935 123,001 236,265
Financing activities
Dividends paid (501,479) (468,048) (468,048)
Payment of lease liabilities (54,031) (35,031) (54,872)
Net cash used in financing activities (555,510) (503,079) (522,920)
Net increase / (decrease) in cash and cash equivalents 6,662 (677,015) 748,936
Cash and cash equivalents at beginning of period
7,160,177 6,411,241 6,411,241
Cash and cash equivalents at end of period
7,166,839 5,734,266 7,160,177
GROUP STATEMENT OF CHANGES IN EQUITY
Share Share Share-option reserve Retained Total
capital premium earnings
£ £ £ £ £
At 1 July 2023 1,671,601 115,761 279,455 5,547,328 7,614,145
Profit for the period - - - 538,790 538,790
Total comprehensive income for the period - - - 538,790 538,790
Dividends paid - - - (468,048) (468,048)
Share-based payments - - 25,646 - 25,646
Total transactions with owners - - 25,646 (468,048) (442,402)
At 31 December 2023 1,671,601 115,761 305,101 5,618,070 7,710,533
Profit for the period - - - 528,867 528,867
Total comprehensive income for the period - - - 528,867 528,867
Share-based payments - - 25,645 - 25,645
Total transactions with owners - - 25,645 - 25,645
At 30 June 2024 1,671,601 115,761 330,746 6,146,937 8,265,045
Profit for the period - - - 518,166 518,166
Total comprehensive income for the period - - - 518,166 518,166
Dividends paid - - - (501,479) (501,479)
Share-based payments - - 9,922 - 9,922
Total transactions with owners - - 9,922 (501,479) (491,557)
At 31 December 2024 1,671,601 115,761 340,668 6,163,624 8,291,654
NOTES TO THE FINANCIAL INFORMATION
1. The figures for the six months ended 31 December 2024 and 31 December
2023 are unaudited and do not constitute statutory accounts. The accounting
policies adopted are consistent with those applied by the Group in the
preparation of the annual consolidated financial statements for the year ended
30 June 2024. The Group has not early adopted any standard, interpretation or
amendment that has been issued but is not yet effective. Several amendments
and interpretations apply for the first time in the 2025 financial year, but
these do not have a material impact on the interim condensed consolidated
financial statements of the Group.
2. The financial information for the year ended 30 June 2024 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 2024, which were prepared in accordance with UK-adopted
international accounting standards, 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 (http://www.arcontech.com)
.
4. Operating profit is stated after release of accruals for administrative
expenses in respect of prior years of £23,806 (31 December 2023: £4,014; 30
June 2024: £24,603).
5. 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 2024 of 13,372,811 (31 December 2023: 13,372,811 30 June 2024:
13,372,811).
The number of dilutive shares under option at 31 December 2024 was 76,017 (31
December 2023: 26,988; 30 June 2024: 31,620). 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.
6. 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 paid represents the cash
payment of tax liability from the preceding income tax year.
7. A final dividend in respect of the year ended 30 June 2024 of 3.75
pence per share (2023: 3.50 pence per share) was paid on 1 November 2024.
8. The Directors have elected not to apply IAS 34 Interim financial
reporting.
9. Trade and other receivables
31 December 31 December 30 June
2024
2023
2024
£
£
£
(unaudited)
(audited)
(unaudited)
Due within one year:
Trade and other receivables 628,762 1,137,648 458,227
Prepayments and accrued income 192,575 197,760 218,842
Other receivables - - -
821,336 1,335,408 677,069
31 December 31 December 30 June
2024
2023
2024
£
£
£
(unaudited)
(audited)
(unaudited)
Due after more than one year:
Other receivables 141,750 141,750 141,750
141,750 141,750 141,750
The long term trade receivable of £141,750 is the rental agreement deposit
for the Group's Paul Street office.
10. Trade and other payables
31 December 31 December 30 June
2024
2023
2024
£
£
£
(unaudited)
(audited)
(unaudited)
Trade payables 88,874 27,055 61,328
Other tax and social security payable 169,864 69,714 106,899
Other payables and accruals 335,350 376,743 426,963
594,088 473,512 595,190
11. Cash generated from operations
Six months ended 31 Six months ended 31 Year ended
December December
30 June
2024 2023 2024
(unaudited) (unaudited) (audited)
£ £ £
Operating profit 401,464 409,348 869,691
Depreciation charge 58,933 76,688 134,518
Non-cash share option charges 9,922 25,646 51,291
Lease interest charge (21,569) (476) (18,435)
Other interest charge (795) (1,141) (200)
Profit on disposal of fixed assets - (152) (151)
(133,039) (990,910)
Increase in trade and other receivables
(318,958)
Increase in trade and other payables 117,321 184,060 333,421
Cash generated from / (used in) operations
432,237 (296,937) 1,051,177
12. Leases
As a lessee, under IFRS 16 the Group recognises right-of-use assets and lease
liabilities for all leases on its balance sheet. The only lease applicable
under IFRS 16 is the Group's office.
The key impacts on the Statement of Comprehensive Income and the Statement of
Financial Position are as follows:
Right of use asset Lease liability Income statement
£ £ £
As at 1 July 2024 503,190 (537,672) -
Depreciation (55,911) - (55,910)
Interest - (21,569) ( ) (21,569)
Lease payments - 75,600 -
Carrying value at 31 December 2024 447,279 (483,641) (77,479)
( )
Right of use asset Lease liability Income statement
£ £ £
As at 1 July 2023 73,152 (40,324) -
Recognition of new lease under IFRS 16 559,803 (552,220) -
Depreciation (73,857) - (73,857)
Liability write-back at expiry - 5,293 5,293
Interest - (765) ( ) (765)
Lease payments - 35,506 -
Carrying value at 31 December 2023 559,098 (552,510) (69,329)
Contractual maturity analysis of lease liabilities as at 31 December 2024
Less than 3 months 3 - 12 months 1 - 5 Years Longer than 5 Years Total
£ £
£ £ £
Lease liabilities 37,800 113,400 332,441 - 483,641
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