APC Technology Regulatory News (APC)

Advanced Power Components plc

Final results for the year ended 31 August 2010

Advanced Power Components (AIM: APC) ("APC" or the "Company" or the "Group"), the UK specialist distributor and manufacturers' representative of electronic components, is pleased to announce its final results for the year ended 31 August 2010.

Advanced Power Components plc returned to profitability during the year despite the continuing difficult trading environment and reduced sales revenue.

Highlights

·; Revenue for the year of £13.4 million (FY 2009: £14.1 million).

·; Profit before tax of £247,000 achieved in the year, recovering from a restated loss of £752,000 in the prior year.

·; Cash inflow from operating activities £1.0 million in FY2010 compared with an outflow of £1.5 million in FY2009.

·; Net debt reduced from £2.2 million to £1.7 million.

·; Basic and diluted earnings per share of 0.7p, compared with a loss per share of 2.8p for FY 2009.

·; Development and launch of imopTM product range.

Will David, Chairman of APC, commented:

"This has been a year of sound progress for the Group, with a return to profit and strong cash generation from operations. Whilst general economic conditions remain uncertain, the continued focus on technical sales of franchised lines, along with careful management of costs and working capital, positions APC well for the future, especially considering the potential growth in sales of the imop™ product range."

Enquiries:

Notes to Editors:

About Advanced Power Components

APC plc is a leading specialist distributor of electronic components, comprising eight areas of activity:

¡ APC Hi-Rel distributes a variety of specialist electronic components into applications where component reliability is of paramount importance. Hi-Rel's franchised product lines include power semiconductors, power supplies, memory, wound and high voltage components.

¡ APC Locator is the number one solutions provider for obsolete and hard-to-find parts, with 25 years' experience in the industrial and defence/aerospace markets across Europe.

¡ APC Hero has a specialist technical sales team focussing on sensors and measurement, power management, communications & connectivity and embedded computing applications.

¡ APC Go! provides a kitting and materials management service to companies wanting to outsource non core activities, offering services ranging from material procurement to full production management.

¡ APC Displays+ provides dedicated technical and commercial support for a wide range of displays, driver boards, ICs, single board computers and all related connectivity.

¡ APC Novacom is a distributor and manufacturers' representative for RF and microwave frequency electronic components. The business is managed by a team of technical specialists with many years experience in the RF and Microwave industry.

¡ APC Contech is a distributor of specialist data input devices for industrial, broadcasting and medical sectors providing technically advanced solutions for specific application areas.

¡ APC KVAR is a manufacturer and distributor of power saving equipment which optimises the performance of electrical motors, leading to reduced energy consumption and cost savings.

Chairman's Statement

The year ended 31 August 2010 was a period of considerable progress on a number of fronts for APC, which has seen the business return to profitability with a considerable strengthening in the Company's financial position and an increased number of business opportunities.

The return to profitability resulted in part from the steps taken by management in 2009 to reduce support function costs. Consistent with its strategy for growth, this reduction in overhead was partially offset by increased investment in the development of the Company's technical sales approach to the market. As a result, the Company continues to develop new opportunities which are expected to have a positive impact on revenues and profits in the medium to long term. Improvements in cash flow stemmed from the return to profit and better working capital management, particularly by improving credit management processes and more efficient inventory controls.

Revenues in the year were £13,410,000 compared with £14,091,000 in the prior year. However, net profit before tax for the year was £247,000 compared with a loss before tax of £752,000 (restated) in 2009. Group administrative expenses were reduced as a result of decreased support function costs and improved foreign currency management from £4,682,000 in 2009 to £3,398,000. Cash inflow from operating activities was £957,000 during the year compared with an outflow of £1,509,000 in 2009.

Early in the financial year the Company secured a long term loan, backed by the Enterprise Finance Guarantee scheme, and increased invoice discounting facilities from Bank of Scotland plc. This, combined with the strong cash generation from operating activities, enabled the Group to reduce the quantum of its net debt from £2,246,000 at 31 August 2009 to £1,686,000 at 31 August 2010 and to rebalance a significant proportion of remaining debt from current to long term.

With the Company's core activities back on a sound operating and financial footing the business has been able to increase its investment in the emerging 'green technology' sector, initially focussing on the potential which exists for its imopTM products. Opportunities for this product range continue to be developed within the UK and more recently in a number of countries in which distribution and sub-licensing agreements are either in place or are in various stages of negotiation.

The Group has continued to develop its core activities and during the year signed a number of new distribution agreements, notably including an agreement with Ceramic & Microwave Products ('CMP'), part of Dover Electronic Technologies. At the same time, the ever increasing focus on the Company's 'design-in' distribution model is driving a rationalisation of the manufacturers represented, leading to an increasing focus on a smaller number of manufacturers whose products have the most significant potential and whose management view the relationship with the Company as being one of strategic long term importance.

At Board level the Company appointed Rob Smith as Finance Director in March and Ian Davidson as non-executive director in August. Both of the new directors have considerable experience in the electronics industry and have already made a significant input to the improved performance of the Company.

Current market conditions remain challenging but also are presenting numerous opportunities for growth. With a strong management team in place and a more robust financial position the Company will seek to expand its activities in the emerging green technology sector and look to enhance its core distribution business selectively.

The Group is grateful for the enduring hard work of its employees who have delivered the return to profitability and for the support and of its shareholders and Bank of Scotland plc.

Will David, MA, FCA

Chairman

30 November 2010

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 August 2010

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 August 2010

Consolidated Statement of Changes in Equity

For the year ended 31 August 2010

STATEMENT OF CASH FLOWS

For the year ended 31 August 2010

Notes to the Consolidated Financial Statements

For the year ended 31 August 2010

1. Basis of preparation

Statement of compliance

The Group's Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board as adopted by the European Union ("Adopted IFRS") and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under IFRS.

 While the financial information included in this announcement has been prepared in accordance with the recognition and measurement criteria of IFRS, this announcement does not itself contain sufficient information to comply with IFRS. The Group expects to publish full financial statements that comply with IFRS in December 2010.

2. Revenue and segmental information

The majority of the Group's activity arises in the United Kingdom from the Group's principal activity. The directors manage and monitor all operations of the business on a unified basis and consider that all of the Group's operations are in similar markets and face similar risks. Consequently, the directors consider the Group has one business and one business segment.

An analysis of revenue by geographical destination is given below:

3. Finance cost

4. Taxation

There are at present no other factors which will influence the Group's taxation in future years.

5. Earnings per share

The calculation of basic earnings per share is based on the profit after taxation for the period and the weighted average number of shares in issue during the period.

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding by the dilutive effect of ordinary shares that the Company may potentially issue relating to its convertible loan notes and its share option scheme. The profit / (loss) for the year is adjusted to add back the tax interest cost on the liability component of the convertible loan notes. Where the effect of the above adjustments is anti-dilutive, as is the case for the year ended 31 August 2010, they are excluded from the calculation of diluted earnings per share.

The profit for the year and the weighted average number of shares used in the calculation are set out below:

The loss per share reported for 2009 prior to restatement was 1.9p.

6. Publication of non-statutory accounts

The financial information set out in this announcement does not constitute the Group's financial statements for the year ended 31 August 2010 and the year ended 31 August 2009.

The financial statements for the year ended 31 August 2009 were prepared in accordance with Adopted IFRS and have been delivered to the Registrar of Companies. The financial statements for the year ended 31 August 2010 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors' report on both accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain statements under sections 498(2) or (3) of the Companies Act 2006.

The full audited financial statements of Advanced Power Components plc for the period ended 31 August 2010 will be posted to shareholders on 1 December 2010 and will be available to the public at the Company's registered office, 47 Riverside, Medway City Estate, Rochester, Kent, ME2 4DP and available to view on the Company's website at www.apc-plc.co.uk from that date.  

7. Annual General Meeting

The Annual General Meeting will be held at the offices of Reeves & Co LLP, 24 Chiswell Street, London EC1 4YX on Friday 21 January 2011 at 12:00 noon.