Apc Technology Share Discussion Threads

[jailbird] 19/4/2018 08:21

With you on this KemcheYou have not called balance sheet concerns over last 2 years wrong yet

[diku] 18/4/2018 22:29

Where is the Mello 2018?...

[glasshalfull] 18/4/2018 21:59

Early days kemche. Good to have your skepticism here as an alternative to my bullish posts that have a tinge of the rose coloured spectacles about them!!!

Have to say I was impressed with Michael Thompson, FD who also appeared very focused. I did say in my latest post they’d made progress & acknowledged that they’ve still a lot to do. Good enough for me...we all have different timeframes & investment rationale. I’ve spoken with the team a number of times now & they have mentioned milestones which they are beginning to deliver against.

Rome ne s'est pas faite en un jour!

Recognise you may not be in dialogue with APC (nor wish to be) but I’d certainly recommend the Mello 2018 event as an opportunity to attend a presentation, with the additional opportunity to ask the team about the working capital position & balance sheet. I’ve also spoken with John Conoley who has arranged for the Parity team to attend.

Kind regards,
GHF

[kemche] 18/4/2018 20:52

Working capital (excluding liabilities) improved by £843k!

"net debt should fall to £2.9m by year end from £4.0m at end of Feb 2018." That is an improvement of £1.3m (if we take the real debt figure of £4.2m as per the accounts).

This will presumably be paid from profits generated in the second half. They made £353k PBT in the first half so an operating margin of 4.1%. To make £1.3m operating profit in the second half, at the same operating margin, they will need sales of £18.8m or a 119% increase in turnover (or 219% of the first half turnover). If they achieve that then I am a hat.

There is also a minor matter of a £100k loan note and £270k to be paid for the acquisition.

It is possible. But is it probable?

And why do we keep reinventing the definition of working capital?

I am sure that I have made some grave errors in my calculations in which case please do forgive the foregoing.

[glasshalfull] 18/4/2018 18:32

Evening everyone,

I’m currently on holiday abroad & don’t have the time nor inclination for a lengthy write-up on H1 2018 results.

I had the opportunity of a chat with the management team earlier today & delighted with progress as APC emerges from extensive restructure & now begins to deliver profitable growth as highlighted via recent strategic announcements. We are at the early stages of this next chapter, but the signs are positive.

Importantly the company delivered PBT +740% to £0.35m & Op Profit +45% to £0.55m. H1 bookings also increased to £9m.

Working capital (excluding net debt) moved from a deficit of £0.5m as at the end of FY 2017 to a surplus of £0.6m as the end of the interims. Emphasis during H1 was on improving trade payables with the previous position having now unwound, which will help with existing relationships & I’d imagine assist in attracting new suppliers.

Management will of course be presenting at Mello 2018 in a weeks time, so investors will have the opportunity to evaluate the investment case first hand. They confirmed that the growth drivers are in place & they have good control now of fixed costs which resulted in them maintaining the 35% gross margin. While the debtor level has increased this is simply due to the acquisition of First Byte & timing of contracts. The team reiterated no bad debts.

Management v pleased with First Byte which has been successfully integrated into APC Locator.

Focus is very much as described in recent presentations on the growth drivers. I think we’ll see a combination of decent organic growth moving forward aligned with sensible bolt-on acquisitions that improve their Electronic & Components business offering.

The b/s should strengthen in the next 6 months with Stockdale indicating that net debt should fall to £2.9m by year end from £4.0m at end of Feb 2018. As mentioned, net debt had risen to this level due to higher invoice discounting debt reflective of increased trading & inclusion of First Byte.

As mentioned previously, I’m enjoying watching this turnaround story unfold & convinced the entire APC team are working exceptionally hard to realign the business & while they’ve made much progress there is still a considerable amount still to do. I believe we shall witness an ever improving picture around trading statements & results in the months and years ahead.

Kind regards,
GHF

[battlebus2] 18/4/2018 17:31

Let’s hope so.

[playful] 18/4/2018 17:29

Big trade just came out as almost 1 Million @ 8p

If I was a betting man I'd say there is a fair chance our friends at Rockridge Investments have increased their holding and helped a distressed seller get a fair price.

[rinson] 17/4/2018 22:15

Disappointing market reaction but good numbers maintaining the recovery. If progress continues the full year results should show more than a million profit. Retail broker still needed in my opinion as present broker doing nothing to increase interest.

[geraldus] 17/4/2018 19:23

I had hopes for a possible price of ten pennies this morning after the ints but the market said otherwise.Shall keep holding and also the faith.

[zipstuck] 17/4/2018 18:31

The sizeable tax losses on the balance sheet would make this an attractive takeover target.

Borrowings increased to fund an acquisition

This is a glass half full stock for me though I can understand why it is a glass half empty for others.

The ship has been steadied and the flip side of debt is a chance to use gearing to enhance profits as all divisions seem to be performing.I appreciate the risks.

[kemche] 17/4/2018 14:47

"I'd say working capital has not been better for a long time." Precisely which working capital are you referring to? The one which shows the current liabilities dwarf the current assets by £3.337 million? An odd take if I may say so.

[brownie69] 17/4/2018 14:29

Macarre has nailed it for me.

Regarding a placing. Why would they contemplate it now? Its been a tough couple of years but the turnaround is very much evidence. I'd say working capital has not been better for a long time. Does not make sense for a placing now, not like bad old days when we had no choice. The business can grow organically from here. The only placing i could contemplate would be a deal that was significantly earning enhancing on an EPS basis. However if First Micro is typical of the kind of deal that they can do then no new equity should be needed.

[kemche] 17/4/2018 13:38

macarre, any observations on the cashflow, quick ratio or the state of the balance sheet at all?

[this_is_me] 17/4/2018 12:59

One swallow doesn't make a summer. A commitment not to make diluting placements at give away prices would brighten people up more.

Market reaction says few are excited. Feel free to go all in with your portfolio resources.

[macarre] 17/4/2018 11:28

Revenue and profit up. Gross margin maintained and admin expenses down. If this is not exciting, what is then?

[kemche] 17/4/2018 09:04

thisisme, many a word.........watch this space.

[this_is_me] 17/4/2018 08:46

Not very exciting but the strategy looks sensible. Hopefully we will not have another give away placing.

[playful] 17/4/2018 08:44

New case study just published on the company website:

Kingston Council car parks are lighter and more energy efficient with full lighting upgrade

[battlebus2] 17/4/2018 07:41

Very pleased playful 👍

[playful] 17/4/2018 07:22

Management continue to execute very well here with today’s results providing shareholders much confidence for the future.

Operating profit before exceptional items increased 45%

Total profit for the period increased to £0.4m (H1 2017: £0.1m), compared with £0.2m for the whole year ended August 2017.

Revenue increased to £8.6m (H1 2017 £8.3m) up 14% from the £7.3m posted in H2 2017.

First half bookings increased to £9.0m (H1 2017 £8.25m), representing a positive book-to-bill ratio.

Commenting on the results, Richard Hodgson, Chief Executive, said:

"These results represent a significant increase in profitability for the Group and highlight the success of following a focused strategy of driving high margin, design-in distribution sales through a reduced fixed cost base. This profit has then been re-invested into a strengthened balance sheet.

With this foundation in place, we are fully committed to delivering increased profit and cash generation from increased revenue from our existing technologies and new complementary product lines and through targeted bolt-on acquistions.

I would like to thank our staff, whose tremendous effort and unfailing team spirit has given us this great platform and opportunity."

[cockerhoop] 16/4/2018 08:34

Further indications of the similarities between APC & SOLI distribution arms with what appears to be the transfer of VPT distribution for UK & Ireland from APC to SOLI.