Apc Technology Share Discussion Threads

[aishah] 08/6/2016 13:41

Launch of Internet of Things (IoT) business unit

APC Technology Group PLC (AIM:APC), the provider of technologies and services to improve organisational sustainability and provider of specialist electronic components, has launched APC Smartwave to consolidate its existing comprehensive range of Internet of Things (IoT) products under one banner to capitalise on the huge potential of the IoT marketplace. This is a natural extension of the Advanced Power Components offering, providing products and technologies that improve connectivity and help increase operational performance for customers.

APC Smartwave will provide a combined IoT and Cleantech offering, with products including sensors, display products, computing solutions, wireless products, LED components and energy harvesting and storage technologies. It will operate as part of the Advanced Power Components division and has already established on-going relationships with leading IoT component suppliers including Advantech, Adeunis, Libelium and Zentri. APC Smartwave offers flexible and scalable IoT solutions backed by engineer-to-engineer expertise and technical support

Richard Hodgson, Chief Executive of APC Technology Group PLC, commented:

"Internet of Things technology is transforming the way we live and work. By connecting everyday objects and enabling them to exchange data, the opportunity for improved efficiencies and cost savings is vast.

"We have already made encouraging progress in this space despite the market being in its relative infancy, and with the number of connected devices set to more than treble by 2020(1) , we expect demand for Smartwave's IoT products to continue to grow.

"I am particularly pleased that this initiative is being delivered by existing resources and is as a result of greater focus on the products and solutions that we already have around the Group rather than through the addition of more overhead or investment."

[my retirement fund] 08/6/2016 13:34

The Board is mindful of the Group’s working capital resources as we re-focus the business but we are very pleased to announce that we have extended our £6m invoice finance facility with ABN Commercial Finance out to 31 December 2016. Central corporate costs have also been reviewed and these will be kept to a minimum.
The Board believes that the measures already being implemented will provide a stable platform for profitable growth through both margin improvement and transactional sales delivery.

[cockerhoop] 01/6/2016 10:07

Northern shrewdie Stuart Hawthorne now over 4%, you would have thought he'd have waited for the fundraising :-)

[jailbird] 31/5/2016 14:22

Yes good question Kemeche.

Simon will they need another fund raising?. Please add your professional opinion on this question.

I am sure APC will need more cash. But happy to be proved wrong.

[kemche] 31/5/2016 13:10

Simon, Will they need another fundraising?

[jailbird] 31/5/2016 12:29

Mr T,

Your Broker friends are never wrong are they!!

[jailbird] 31/5/2016 12:28

Some ppl are in denial Kemche,

We told them so before, may have to do it again.

Mr Templar, appears to be working for the so called professionals.

[kemche] 31/5/2016 12:22

Simon, would I be right in assuming that the following no longer applies. Shrewd cookies there at CF!



Simon Templar QC 10 Jan'16 - 19:29 - 2 of 363 0 0

CF forecasts Nov 2015

Company forecast to have a positive cash-flow this year of £339k and £1,264 in 2016/17

I do not see a need for either a further placing nor the need for loan notes.

Forecast cash on deposit: 2016 £1,312,000 2017 £2,308,000

Forecasts very conservative in my opinion as first quarter trading has exceeded management expectations.

[kemche] 31/5/2016 12:18

rinson, the components business makes a 4.5% P PBT margin, whereas the Minimise business ( I think they should brand that as Minimal) produces a wafer thin PBT margin of 1.7%.

The components business is a kit shifter - a very competitive business, where they seem to be making a decent turn. How much more can they sweat this?

As for Minimal, that requires a lot of bodies which will produce humdrum profits, and that is IF they control that properly - job costing is notoriously difficult.

So I remain comfortable with my forecasts, CF comfortable with theirs, and Simon with his.

I will order some Rennies just in case - however I don't think I will have the need for them :)

[simon templar qc] 31/5/2016 12:16

CF

"Further out we have again shaded back revenue but kept our higher gross margin assumption. This leads to an increased PBT in FY 2017 rising to £1.7m from £1.5m and EPS to 1.2p from 1.1p. Similarly FY 2018 sees PBT rise to £2.7m from £2.6m and EPS to 2.1p from 2.0p.
Valuation
We now forecast 2018 EPS at 2.1p giving a CAGR of 19% from 2014. Using the last historic EPS figure and a PEG of 1.0x this gives us a target price of 20p, up from 18p. If we move this logic two years ahead (to avoid the negative EPS in FY 2015) then we could see a valuation of 32p. At this point we think the lower figure still offers strong upside and a degree of conservatism."

[simon templar qc] 31/5/2016 12:14

CF

"We continue to think that APC has sufficient working capital to cover the growth we expect. While the company alludes to limited flexibility to do more, we think that this can correct itself in the near future as internal cash generation improves potentially adding further value."

[qs99] 31/5/2016 12:10

or if all "stakeholders", why not lengthened creditor terms, faster debtor payment required or deposits increased, or bank facility increased....does not always mean equity IMO / DYOR

[jailbird] 31/5/2016 12:05

"With the CONTINUED SUPPORT OF ITS STAKEHOLDERS, the business will deliver profitable growth in future periods"

This is a key statement, it means it will need further cash raising to achieve profitability gojnfg forward.

[rinson] 31/5/2016 11:53

K - Not aware of any CF forecast that gives HI info. Further I have not seen any CF forecast which mentions £1m net cash inflow. The point I was trying to make was that the increased PM would probably be enough to avoid a cash call. Best get some Rennies on hand just in case!

[kemche] 31/5/2016 11:35

rinson, Just as a matter of interest, how did the CF forecast for H1 fare in terms of turnover, profit and crucially net debt?

If CF forecasts happen and they make £1m net cash inflow in H2 then not only will I eat my hat but yours too.

[rinson] 31/5/2016 11:30

Kemche - If the CF forecasted numbers happen in H2 then the increased Profit % should put an extra £1m in the kitty. However if there is a massive increase in turnover.............
If a cash call happens this time I doubt there will be many takers at any price.

[modform] 31/5/2016 11:20

To work out valuation on a peg of 1 is bonkers, when a large number of small caps are running profitability with a peg of less than 0.5.

[kemche] 31/5/2016 10:54

Simon,

As at August 2015: Net current assets = £8.2m, Net current liabilities = £11.1m, shortfall = £2.9m. At the time, Simon = "the company does not need funding", CF = "the company does not need funding".

February 2016: The company = "yes we do need funding". "Can we have £1.2m please?"

May 31 2016 (for February 2016 accounts):Net current assets = £8.7m, Net current liabilities = £12.0m, shortfall = £3.3m. At the time, Simon = "the company does not need funding", CF = "the company does not need funding", the company: "The Board is mindful of the constraints on the Company's growth of the Company's working capital position but is confident that, with the CONTINUED SUPPORT OF ITS STAKEHOLDERS, the business will deliver profitable growth in future periods and is trading in line with market expectations for the current fiscal year."


Note that the shortfall is NOW HIGHER than at the year-end - AND THAT IS AFTER THE £1.2 FUNDRAISING in February 2016.


That is all from a non professional amateur cursory reading of the accounts which may be completely wrong. Those CF boys no doubt know what they are doing :)

[brownie69] 31/5/2016 10:13

Looks like the turnaround is still WIP but on track.

Lower revenue at the expense of low margin business is no concern and I note that CF think that the higher margins are sustainable.

Cash is the only issue for the negative camp, but it seems that the cash generation will be stronger under the new revised model. Tight but OK would be my verdict.

Post period orders confirm the increased market traction.

Overall as a holder I'm a happy bunny and will top up if it trades below 8p

[simon templar qc] 31/5/2016 09:48

kemche see playfus post which says it all. Thanks playful!

[jailbird] 31/5/2016 09:44

Bought in early.. LolWhere are we now ?...hmmmmThere was a blip to buy sub 7p once beginning of March and the unlucky ones who bought above 11pIt has been hovering at an average price of 8.5p for the last 8 months , when it dropped from 17p.

[kemche] 31/5/2016 09:37

Simon, What do you make of the balance sheet? Do you foresee any problems with working capital?

[playful] 31/5/2016 09:32

CF have plugged the numbers into their spreadsheet and said target price increases to 20p from 18p

We now forecast 2018 EPS at 2.1p giving a CAGR of 19% from 2014. Using the last historic EPS figure and a PEG of 1.0x this gives us a target price of 20p, up from 18p. If we move this logic two years ahead (to avoid the negative EPS in FY 2015) then we could see a valuation of 32p. At this point we think the lower figure still offers strong upside and a degree of conservatism.

APC has sufficient working capital to cover the growth we expect. While the company alludes to limited flexibility to do more, we think that this can correct itself in the near future as internal cash generation improves potentially adding further value