APC Technology Regulatory News (APC)

Advanced Power Components Plc

("APC", the "Group" or the "Company")

Unaudited Interim Results for the six months ended 28 February 2013

Advanced Power Components plc (AIM: PLC), a specialist distributor and manufacturers' representative of electronic components and smart, energy saving products, is pleased to announce its interim results for the six months ended 28 February 2013.

Highlights:

§ Revenues for the period up 25% to £9.19 million (H1 2012: £7.33 million)

§ Profit before tax of £47,000 (H1 2012: £19,000)

§ Continued momentum in cleantech sector

§ Increased equity holding in Minimise Limited ("Minimise") to 51%

§ Increased shareholding in QV Controls Limited ("QV Controls") to 75% (and subsequently increased to 100%)

§ Acquired 90% of Minimise Energy Limited ("Minimise Energy") and 100% of CeroUK Limited ("CeroUK"), the latter being merged into Minimise Energy

§ Minimise performed very well having secured significant contracts for low energy lighting products from a major UK retailer

Commenting on the results, Mark Robinson, APC's Chief Executive, said:

"Despite difficult market conditions that continue to affect the traditional business, the Group has made marked progress in the first half of 2013. The increase in revenues is promising and I am pleased to report that we are already seeing a sizeable return on the investment we have made into clean technology products and services. The Board is committed to continuing to pursue opportunities in the cleantech sector, and remains confident that it is the right strategy to ensure the Group continues to deliver growth to shareholders and builds on the successes it has already achieved. We have a strong pipeline going into the second half and I look forward to updating the market on further developments in due course."

Enquiries:

Notes to Editors:

About Advanced Power Components

Advanced Power Components plc (APC) is one of the UK's leading distributors of specialist electronic components and a provider of technologies developed to reduce energy consumption or generate electricity more sustainably.

Since incorporation in 1982, APC has developed long-standing relationships with manufacturers of specialist electronic components and with customers who put significant value on our deep understanding of the challenges of their individual markets, technical expertise and attention to detail. Markets include defence, aerospace, space, transportation, medical and industrial sectors. Products are wide ranging in their complexity and in their application and are sold through a number of semi-autonomous teams. Each team focuses on specific technologies or markets but are true to the Company's central business strategy of adding value in the supply chain.

Through Minimise Energy, the Group promotes a range of technologies developed to reduce energy consumption and associated carbon emissions associated with traditional offerings. These products are either sold individually, through subsidiaries Minimise Limited and QV Controls Limited or may be combined to provide an integrated, multi technology solution to the challenge of improving the energy efficiency of an entire organisation.

Sales teams:

§ APC-Contech - Custom Keyboards and Data Input Devices

§ APC-Displays+ - Displays and Embedded Systems

§ APC-Hero - Sensors, Optoelectronics, Semiconductors

§ APC-HiRel - Electronic Components for High Reliability Applications

§ APC-Locator - Obsolescence and Allocation Specialists

§ APC-Novacom - Microwave and RF Components

§ APC-Time - Timing Systems, Time and Frequency Generators

Subsidiaries:

§ Minimise Energy Limited - integrated, multi technology energy efficiency solutions including financing options

§ Minimise Limited - LED lighting, imop™, air-conditioning optimisation technologies

§ QV Controls Limited - Energy efficient energy monitoring and control systems

Chairman's Statement

The six month period ended 28 February 2013 was one of significant positive development for the Group. Revenues of £9,187,000 were 25.4% higher than in the corresponding period in the prior year (£7,328,000) principally as a result of the Group's diversification into the cleantech sector. Profit before taxation was £47,000 compared with £19,000 reported for the first half of 2012, despite significantly increased investment by the Group intended to strengthen its position in this rapidly expanding market.

In the first half of the financial year, APC increased its equity holding in Minimise Limited ("Minimise") to 51% (from 36.2% as at 31 August 2012), increased its shareholding in QV Controls Limited ("QV Controls") to 75% (and has subsequently been increased to 100%), acquired 90% of Minimise Energy Limited ("Minimise Energy") and 100% of CeroUK Limited ("CeroUK"), the latter being merged into Minimise Energy. We are very pleased to be able to report that Minimise performed very well during the period, something which has encouraged the Board of Directors to increase overall investment in the cleantech sector. Most notably Minimise secured significant contracts for low energy lighting products from a major UK retailer and although the majority of shipments and revenue recognition associated with those contracts will be made in the second half of the financial year, the profit generated to date has enabled the Group to continue to pursue this investment strategy, which the Board firmly believes is in the long term best interests of the Group.

The Group sees the opportunities being created in cleantech as fundamental to the long-term success of APC and is therefore actively exploring opportunities to increase its presence in the sector. The Group is currently engaged in negotiations, which, if successfully concluded, would significantly strengthen its position.

Administrative expenses increased in the period to £2,420,000 compared with the corresponding period in the prior year (£1,996,000) as a result of the consolidation of Minimise as a subsidiary and investment in the other clean tech subsidiaries, QV Controls, Minimise Energy and CeroUK.

Performance in the traditional electronic components business continues to be affected by the general weakness in the UK economy but the business remains profitable despite the difficult market conditions. Whilst the Board remains committed to developing this side of the business it believes that a conservative approach to further investment is prudent in advance of an improvement in the UK's economy.

The Group's net debt increased in the period to £1,729,000 compared to £1,028,000 at 31 August 2012 and £940,000 at 29 February 2012. The increased debt is a consequence of higher working capital required for the growth as well as the investment being made in sales and marketing to support the growth in cleantech business.

In summary, the outlook is very encouraging with numerous opportunities presenting themselves as the market for clean technology products and services evolves. Accordingly, the Board is committed to the continued realignment of the Group toward this sector and is actively pursuing a number of opportunities to increase investment in and to leverage off the successes experienced to-date.

Leonard Seelig

Chairman

17 May 2013

There are no elements of Comprehensive Income other than those included in profit for the period.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

1. General information

Advanced Power Components plc is a public limited Company ("the Company / the Group") incorporated in the United Kingdom under the Companies Act 1985 (registration number 01635609). The Company is domiciled in the United Kingdom and its registered address is 47 Riverside, Medway City Estate, Rochester, Kent, ME2 4DP. The Company's Ordinary Shares are traded on The AIM Market of the London Stock Exchange. The Group's principal activities are the supply and distribution of electronic components.

2. Basis of preparation

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs). The principal accounting policies used in preparing the interim results are those it expects to apply in its financial statements for the year ended 31 August 2013 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 August 2012.

The financial information does not contain all of the information that is required to be disclosed in a full set of IFRS financial statements. The financial information for the six months ended 28 February 2013 and 29 February 2012 is unreviewed and unaudited and does not constitute the Group's statutory financial statements for those periods. The comparative financial information for the full year ended 31 August 2012 has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

The financial information in the Interim Report is presented in Sterling and all values are rounded to the nearest thousand pounds (£000) except when otherwise indicated.

3. Acquisitions

On 6 September 2012 the Group increased its equity holding in Minimise Limited to 51% (31 August 2012: 36.2%) and as from 1 September 2012 has consolidated Minimise Limited as a subsidiary, previously it was treated as an associated company. The transition from associate to subsidiary has been accounted for as a deemed disposal and acquisition.

On 6 September 2012 the Group acquired control over 90% Minimise Energy Limited. The purchase and transfer of the existing share capital and investment in new share capital was made over a number of months between September 2012 and 2013. The Group elected to consolidate this company as a subsidiary from the date control was gained rather than the date that share ownership transferred.

On 1 October 2012 the Group increased its equity holding in QV Controls Limited to 75% (31 August 2013: 70%). Consideration for this transaction was in the form of swapping short-term debt for equity.

On 1 November 2012 the Group acquired 100% of the share capital of CeroUK Limited. Consideration was in cash of £23,250 and shares in APC valued at £23,250.

A summary of the transactions is set out below, for information. A full disclosure will be made in the Group's annual report and accounts in accordance with IFRS 3.

4. Segmental information

The majority of the Group's activity arises in the United Kingdom from the Group's principal activities of Electronic Component Distribution under the "APC" brand and Clean Technology products and services under the "Minimise" brand. Since increasing its equity holding in Minimise Limited to 51% and consolidating that company as a subsidiary, the directors have managed and monitor the APC and Minimise operations as separate segments. 

The board intends to report segmental information for APC and Minimise in its report and accounts, and provides the following unaudited information in advance of the full disclosure required by IFRS.

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 for the six months 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 they are excluded from the calculation of diluted earnings per share.

The profit for the period and the weighted average number of shares used in the calculations are set out in the following table: -

There were 30,378,987 shares in issue at 28 February 2013.

6. Copies of Interim report

The Interim report is available to view and download from the Company's website at www.apc-plc.co.uk. If shareholders would like a hardcopy of the interim report they should contact the Company Secretary, Mr Rob Smith.