ARC Arcontech Group Plc

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:

To access more information on the Group please visit: 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

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

GROUP CASH FLOW STATEMENT

GROUP STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL INFORMATION

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.

9.   Trade and other receivables

	31 December 2024 £ (unaudited)		31 December 2023 £ (unaudited)		30 June 2024 £ (audited)
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 2024 £ (unaudited)		31 December 2023 £ (unaudited)		30 June 2024 £ (audited)
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 2024 £ (unaudited)		31 December 2023 £ (unaudited)		30 June 2024 £ (audited)
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 December			Six months ended 31 December		Year ended   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)
Increase in trade and other receivables		(133,039)			(990,910)		(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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END

 

 

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