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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Arcontech Group Plc | LSE:ARC | London | Ordinary Share | GB00BDBBJZ03 | ORD GBP0.125 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 106.50 | 105.00 | 108.00 | 106.50 | 106.50 | 106.50 | 5,824 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Computer Programming Service | 2.73M | 980k | 0.0733 | 14.53 | 14.24M |
From Apr 2019 to Apr 2024
TIDMARC
RNS Number : 8502N
Arcontech Group PLC
14 August 2017
ARCONTECH GROUP PLC
("Arcontech", the "Company" or the "Group")
Final Results for the year ended 30 June 2017
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 2017.
Financial Highlights:
-- Revenue of GBP2,307,751 (2016:GBP2,141,630) -- Adjusted profit before tax* of GBP441,996 (2016: GBP329,260) -- Profit before tax of GBP373,263 (2016:GBP302,329) -- Cash balance of GBP2,636,471 (2016:GBP1,633,159) -- Basic earnings per share of 3.79p (2016 3.38p) -- Maiden final dividend of 1 pence per share
*Adjusted for share-based payments
Operational Highlights:
-- Healthy injection of new contracts mainly through additional sales of server-side infrastructure solutions to existing customers, with full benefit to come in 2017/18
-- New desktop software solution currently in proof of concept trials at five Tier 1 banks -- Continued investment in sales & marketing with increased sales focus on Asia -- Increased participation in the fintech community with wider benefits for the group -- Strong cash generation
Commenting on the results, Richard Last, Chairman of Arcontech said:
"Arcontech is a well-run business where costs, including continued product investment, are well controlled such that increases in revenue materially improve profitability. Our focus is, therefore, on winning new business. Whilst we believe the opportunities for increased sales exist, the sales cycle is unpredictable and remains longer than we would like. Our prospects are positive, albeit they need to be tempered against uncertainties in the investment banking and finance sectors, as a result of the low interest rate environment and issues following Brexit."
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Enquiries:
Hot Features
Premium
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
Chairman's Statement
Arcontech Group plc ("Arcontech" or the "Company") is pleased to report a profit before share-based payments and taxation for the year ended 30 June 2017 of GBP441,996 (2016: GBP329,260), a year-on-year increase of 34.2%. After taking the benefit of the Research and Development tax credit of GBP96,988 (2016: GBP105,813) which the Company receives, due to the amount it has invested in qualifying product design and development and the cost of share based payments of GBP68,733 (2016: GBP26,931), Arcontech achieved a profit after tax of GBP470,251 (2016: GBP408,142) for the year.
Turnover for the year increased by 7.8% to GBP2,307,751 (2016: GBP2,141,630) this was achieved mainly through additional sales of server-side infrastructure solutions to existing customers. The level of new sales has not yet benefitted from the new business expected from our new desktop software solution launched earlier in the year. Expected desktop solution sales in 2018 and the full year effect of the net new sales achieved in the year ended 30 June 2017 is expected to lead to an increase in turnover for the year ending 30 June 2018.
We have continued to operate tight cost control throughout the year, whilst maintaining investment in product development and enhancement, which we expect to sustain going forward. The sales resource was increased during the year, which, together with marketing, are areas where we expect to see additional investment in 2018.
Financing
As at 30 June 2017 Arcontech had net cash balances of GBP2,636,471 (2016: GBP1,633,159), reflecting increased profitability and an improved working capital position. The business is well financed for the future and has a robust balance sheet.
Dividend and Share Consolidation
Having completed the cancellation of the share premium account (creating positive distributable reserves) and the share consolidation, I am pleased to announce that subsequent to the year-end we agreed to propose, subject to approval at the Annual General Meeting, to pay a maiden dividend of 1 pence per share for the year ended 30 June 2017, to those shareholders on the register as at the close of business on 25 August 2017, with an ex-dividend date of 24 August 2017.
Employees
We have a small team of dedicated employees who are the core of our business. I would like to thank them for their hard work and continued support which is greatly appreciated.
Outlook
Arcontech is a well-run business where costs, including continued product investment, are well controlled such that increases in revenue materially improve profitability. Our focus is, therefore, on winning new business. Whilst we believe the opportunities for increased sales exist, the sales cycle is unpredictable and remains longer than we would like. Our prospects are positive, albeit they need to be tempered against uncertainties in the investment banking and finance sectors, as a result of the low interest rate environment and issues following Brexit.
Richard Last
Chairman and Non-Executive Director
Chief Executive's Review
I am pleased to report that during the year our continued attention to costs whilst building out and delivering on the sales pipeline resulted in a profit before tax of GBP373,263 (2016: GBP302,329), an increase of 23.5% compared to the previous year.
During the year under review we have further reconfirmed the value of our products and quality of support to the market by increasing the use of our server-side solutions such as our real-time last value cache and symbol mapper with existing clients, and on the desktop with Excelerator, whilst not receiving a single contract cancellation.
We continue to progress the sales pipeline and improve our product offering by adding functionality to existing products as well as enhancing our new desktop software solution. This software solution continues to be of significant interest to our clients, with one of the trials with Tier 1 clients culminating in a signed agreement for its deployment in New York. It is hoped by both ourselves, and our client, that it will expand from there and be rolled out in additional office locations over coming months. The prospects elsewhere, whilst taking time, continue to develop and are looking promising.
To increase sales growth, in January 2017 we recruited a sales person in Hong Kong to explore opportunities in this region.
During the year we have also increased our participation in the fintech community, where we believe we can both add and receive value. This includes becoming members of the OpenMAMA steering committee and more recently, the Symphony Foundation. Both these global, open source, not for profit organisations include major Tier 1 clients and non-clients as members, who we are working closely with, whilst providing vendor agnostic solutions to the market data needs of the broader financial community.
The outlook for the business remains positive and to date unaffected by the wider uncertainties surrounding Brexit. The length of the sales cycle is something that is a constant and the only realistic way to address it is to create more sales opportunities. This is being done by building solutions that increase the addressable market whilst increasing our sales resource. As a result, the sales pipeline is looking healthy.
In order to supplement the Company's growth strategy, we will continue to review prospective complementary acquisition opportunities.
With such a strong foundation, we will keep working to strengthen our position by focusing on increasing revenues. Going forward, sales growth remains our clear priority.
Matthew Jeffs
Chief Executive
Strategic Report
The Directors present the group strategic report for Arcontech Group plc and its subsidiaries for the year ended 30 June 2017.
Principal activities
The principal activities of the Company and its subsidiaries during the year were the development and sale of proprietary software and provision of computer consultancy services.
Review of the business and prospects
A full review of the operations, financial position and prospects of the Group is given in the Chairman's Statement and Chief Executive's Review above.
Key performance indicators (KPIs)
The Directors monitor the business using management reports and information, reviewed and discussed at monthly Board meetings. Financial and non-financial KPIs used in this report include:
Financial KPIs:
Revenue GBP2,307,751 (2016: Measurement:
GBP2,141,630; 2015: GBP2,129,958) Revenue from sales made
to all customers (excluding
intra-group sales which
eliminate on consolidation)
Performance:
Continued growth driven
by increased sales of
our product offering
----------------------------------- ---------------------------------------------
Adjusted profit GBP441,996 Measurement:
(2016: GBP329,260; 2015: Profit before share based
GBP263,859) payments and tax
Performance:
Continued growth reflects
increase in revenues whilst
continuing to maintain
tight cost control
----------------------------------- ---------------------------------------------
Cash GBP2,636,471 (2016: Measurement:
GBP1,633,159; 2015: GBP1,069,755) Cash and cash equivalents
held at the end of the
year
Performance:
The Group intends to maintain
cash balances at this
level subject to any exceptional
items or acquisition opportunities
that may arise
----------------------------------- ---------------------------------------------
Non-financial KPIs:
Staff retention rate (net) Measurement:
100% (2016: 93%; 2015: Net movement in joiners
93%) and leavers as a percentage
of the number of staff
at the beginning of the
year
Performance:
Staff morale from our
dedicated employees remains
strong, reflected in the
net increase
--------------------------- -----------------------------
Principal risks and uncertainties
The Group's performance is affected by a number of risks and uncertainties, which the Board monitor on an ongoing basis in order to identify, manage and minimise their possible impact. General risks and uncertainties include changes in economic conditions, interest rate fluctuations and the impact of competition. The Group's principal risk areas and the action taken to mitigate their outcome are shown below:
Risk area Mitigation
Competition Ongoing investment in research and development
Responding to the changing needs of clients to remain competitive
Loss of key personnel Employee share option scheme in place
Approved on behalf of the board on 11 August 2017 by:
Matthew Jeffs Michael Levy Chief Executive Group Finance Director
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2017
2016
2017 as restated
GBP GBP
Revenue 2,307,751 2,141,630
Administrative costs (1,942,430) (1,849,257)
Operating profit 365,321 292,373
Finance income 7,942 9,956
Profit before taxation 373,263 302,329
Taxation 96,988 105,813
Profit for the year after tax 470,251 408,142
--------------------------------------------- ------------ --------------
Total comprehensive income for the year 470,251 408,142
--------------------------------------------- ------------ --------------
Earnings per share (basic) 3.79p 3.38p
--------------------------------------------- ------------ --------------
Earnings per share (diluted) 3.68p 3.25p
--------------------------------------------- ------------ --------------
Comparative figures for the year ended 30 June 2016 have been restated to take into account the share consolidation carried out in September 2016.
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2017
Group:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
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
Profit for the year - - - 470,251 470,251
Total comprehensive income for the year 1,541,732 2,024 119,692 1,039,082 2,702,530
Issue of shares 20,944 7,778 - - 28,722
Share-based payments - - 68,733 - 68,733
Balance at 30 June 2017 1,562,676 9,802 188,425 1,039,082 2,799,985
------------------------------------------- ---------- ------------ --------------------- ------------ ----------
Company:
Share Share Retained Total
capital premium Share option reserve earnings equity
GBP GBP GBP GBP GBP
Balance at 30 June 2015 1,536,672 9,430,312 92,761 (7,797,685) 3,262,060
Profit for the year - - - 10,899 10,899
------------------------------------------- ---------- ------------ --------------------- ------------ ----------
Total comprehensive expense for the year - - - 10,899 10,899
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 1,643,526 3,306,974
Profit for the year - - - 1,418,859 1,418,859
------------------------------------------- ---------- ------------ --------------------- ------------ ----------
Total comprehensive income for the year 1,541,732 2,024 119,692 3,062,385 4,725,833
Issue of shares 20,944 7,778 - - 28,722
Share-based payments - - 68,733 - 68,733
Balance as at 30 June 2017 1,562,676 9,802 188,425 3,062,385 4,823,288
------------------------------------------- ---------- ------------ --------------------- ------------ ----------
Balance Sheets
Registered number: 04062416
As at 30 June 2017
Group Group Company Company
2017 2016 2017 2016
GBP GBP GBP GBP
Non-current assets
Goodwill 1,715,153 1,715,153 - -
Property, plant
and equipment 33,825 44,785 - -
Investments in
subsidiaries - - 2,017,373 2,017,373
Trade and other
receivables 141,750 141,750 - -
Total non-current
assets 1,890,728 1,901,688 2,017,373 2,017,373
--------------------------- ------------- ------------- ----------- -------------
Current assets
Trade and other
receivables 175,496 265,360 1,806,341 206,769
Cash and cash equivalents 2,636,471 1,633,159 1,658,039 1,272,292
--------------------------- ------------- ------------- ----------- -------------
Total current assets 2,811,967 1,898,519 3,464,380 1,479,061
--------------------------- ------------- ------------- ----------- -------------
Current liabilities
Trade and other
payables (1,902,710) (1,567,928) (658,465) (189,460)
--------------------------- ------------- ------------- ----------- -------------
Total current liabilities (1,902,710) (1,567,928) (658,465) (189,460)
--------------------------- ------------- ------------- ----------- -------------
Net current assets 909,257 330,591 2,805,915 1,289,601
--------------------------- ------------- ------------- ----------- -------------
Net assets 2,799,985 2,232,279 4,823,288 3,306,974
--------------------------- ------------- ------------- ----------- -------------
Equity
Called up share
capital 1,562,676 1,541,732 1,562,676 1,541,732
Share premium account 9,802 2,024 9,802 2,024
Share option reserve 188,425 119,692 188,425 119,692
Retained earnings 1,039,082 568,831 3,062,385 1,643,526
--------------------------- ------------- ------------- ----------- -------------
2,799,985 2,232,279 4,823,288 3,306,974
--------------------------- ------------- ------------- ----------- -------------
The profit dealt with in the financial statements of the Parent Company was GBP1,418,859 (2016: GBP10,899).
Approved on behalf of the board on 11 August 2017 by:
Matthew Jeffs Michael Levy Chief Executive Group Finance Director
Group Cash Flow Statement
For the year ended 30 June 2017
2017 2016
GBP GBP
Net cash generated from operating activities 974,800 567,420
------------------------------------------------ ---------- ----------
Investing activities
Interest received 7,942 9,956
Purchases of plant and equipment (8,152) (21,056)
Net cash invested in investing activities (210) (11,100)
------------------------------------------------ ---------- ----------
Financing activities
Issue of shares 28,722 7,084
------------------------------------------------ ---------- ----------
Net cash generated from financing activities 28,722 7,084
------------------------------------------------ ---------- ----------
Net increase in cash and cash equivalents 1,003,312 563,404
Cash and cash equivalents at beginning of year 1,633,159 1,069,755
------------------------------------------------ ---------- ----------
Cash and cash equivalents at end of year 2,636,471 1,633,159
------------------------------------------------ ---------- ----------
Company Cash Flow Statement
For the year ended 30 June 2017
2017 2016
GBP GBP
Net cash generated from operating
activities 349,506 605,860
------------------------------------- ---------- ----------
Investing activities
Interest received 7,519 9,441
------------------------------------- ---------- ----------
Net cash generated from investing
activities 7,519 9,441
------------------------------------- ---------- ----------
Financing activities
Issue of shares 28,722 7,084
------------------------------------- ---------- ----------
Net cash generated from financing
activities 28,722 7,084
------------------------------------- ---------- ----------
Net increase in cash and cash
equivalents 385,747 622,385
Cash and cash equivalents at
beginning of year 1,272,292 649,907
------------------------------------- ---------- ----------
Cash and cash equivalents at
end of year 1,658,039 1,272,292
------------------------------------- ---------- ----------
Notes to the Financial Statements For the year ended 30 June 2017
Status of financial information
Arcontech Group plc is a public limited company incorporated in England and Wales whose ordinary shares of GBP0.125 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 11 August 2017. 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 2017 or 30 June 2016.
The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 30 June 2017 or 30 June 2016.
The financial information has been extracted from the statutory accounts of the Company for the years ended 30 June 2017 or 30 June 2016. The auditors reported on those accounts; their reports were unqualified and did not contain a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006.
The statutory accounts for the year ended 30 June 2016 have been delivered to the Registrar of Companies, whereas those for the year ended 30 June 2017 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.
Operating segments:
The Group reports internally to the Chief Operating Decision Maker (CODM), who is considered to be the Board. Intersegment license fees and management charges are not included in the reports reviewed by the CODM during the year but are calculated for statutory reporting purposes and therefore are excluded from the following revenue and operating profit disclosures.
2017 2016
GBP GBP
Revenue by segment
Software development and licence fees 2,307,751 2,141,630
-------------------------------------------------------------------- ---------- ----------
External segment revenue 2,307,751 2,141,630
-------------------------------------------------------------------- ---------- ----------
Operating profit by segment
Software development and licence fees 854,981 656,226
Unallocated overheads (489,660) (363,853)
-------------------------------------------------------------------- ---------- ----------
Total operating profit 365,321 292,373
Finance income 7,942 9,956
Total profit before tax as reported in the Group income statement 373,263 302,329
-------------------------------------------------------------------- ---------- ----------
2017 2016
GBP GBP
Segment total of assets
Software development and licence fees 3,547,110 4,419,890
Unallocated assets 3,802,083 1,795,400
---------------------------------------- ------------ ------------
7,349,193 6,215,290
Less inter company debtors (2,646,498) (2,415,083)
Total assets 4,702,695 3,800,207
---------------------------------------- ------------ ------------
2017 2016
GBP GBP
Segment total liabilities
Software development and licence fees 3,890,649 3,792,521
Unallocated liabilities 658,560 190,490
---------------------------------------- ------------ ------------
4,549,209 3,983,011
Less inter company creditors (2,646,499) (2,415,083)
---------------------------------------- ------------ ------------
Total liabilities 1,902,710 1,567,928
---------------------------------------- ------------ ------------
2017 2016
GBP GBP
Additions of property, plant and equipment assets by segment
Software development and licence fees 8,152 21,056
----------------------------------------------------------------- ------ -------
Total additions 8,152 21,056
----------------------------------------------------------------- ------ -------
Disposals of property, plant and equipment assets by segment
Software development and licence fees 2,699 26,462
----------------------------------------------------------------- ------ -------
Total disposals 2,699 26,462
----------------------------------------------------------------- ------ -------
2017 2016
GBP GBP
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees 19,112 17,140
Total depreciation 19,112 17,140
------------------------------------------------------------------------------------------- ------- -------
Non-current assets by country 2017 2016
GBP GBP
UK 1,890,728 1,901,688
1,890,728 1,901,688
------------------------------- ---------- ----------
Geographical information - External revenue 2017 2016
GBP GBP
UK 1,600,027 1,354,976
Europe (excluding UK) 652,894 463,437
North America 27,830 127,459
Asia Pacific 27,000 195,758
2,307,751 2,141,630
--------------------------------------------- ---------- ----------
During the year there were 3 customers (2016: 1) who accounted for more than 10% of the Group's revenues as follows:
2017 2016
Value of % of Total Value of % of Total
sales sales
GBP GBP
Customer 1 612,998 27% 601,616 28%
Customer 2 357,327 15% - -
Customer 3 309,232 13% - -
------------ ---------- ----------- --------- -----------
1,279,557 55% 601,616 28%
------------ ---------- ----------- --------- -----------
These revenues are attributable to the software development and licence fees segment.
Profit per share
2017 2016
as restated
GBP GBP
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit
attributable
to equity shareholders 470,251 408,142
470,251 408,142
--------------------------------------------------------------------------------------- -------- ------------
No. No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per
share 12,396,220 12,297,590
Number of dilutive shares under option 367,595 213,457
-------------------------------------------------------------------------------------- ----------- -----------
Weighted average number of ordinary shares for the purposes of dilutive earnings per
share 12,763,815 12,511,047
-------------------------------------------------------------------------------------- ----------- -----------
The number of shares for the year ended 30 June 2017 takes into account the share consolidation of 125:1 carried out in September 2016. The number of shares for the year ended 30 June 2016 has been restated accordingly.
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.
Dividends
A final dividend of 1 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2016: GBPNil).
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 26 September 2017 at 10.00 a.m.
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 OKNDPKBKBPFD
(END) Dow Jones Newswires
August 14, 2017 02:00 ET (06:00 GMT)
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