APC Technology Regulatory News (APC)

Advanced Power Components plc

Unaudited Interim Results for the six months ended 29 February 2012

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 interim results for the six months ended 29 February 2012.

 Highlights:

§ Revenues for the period of £7.33 million (H1 2011: £6.52 million)

§ Profit before tax of £19,000, including a planned loss of £85,000 incurred by QV Controls Limited and £25,000 in restructuring costs (H1 2011: £100,000)

§ Basic and diluted earnings per share of 0.1p (H1 2011: 0.3p)

§ Improved financial position and reduction in Net Debt to £0.9 million (H1 2011: £1.7 million)

§ Acceleration of investment into the green technology sector

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

"Whilst the electronic component sector has been difficult so far this year, we have taken action to ensure that our costs remain controlled and we can continue to increase our investment into the green tech market, where progress has been encouraging and we see considerable potential both in the UK and overseas."

Enquiries:

Notes to Editors:

About Advanced Power Components

APC plc is a leading specialist distributor of electronic components, comprising nine 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 imop™ is a manufacturer and distributor of power saving equipment which optimises the performance of electrical motors, leading to reduced energy consumption and cost savings.

§ QV Controls Limited is a designer, manufacturer and supplier of DALI-IP technology based lighting and energy management systems that improve energy efficiency and lighting performance within commercial, industrial and high end residential buildings.

The six month period ended 29 February 2012 has seen APC accelerate a process of diversification which the Board of Directors believes will result in revenues in the Company's core electronic component distribution business being supplemented to an increasing degree by revenues generated by sales of 'green' products and technologies which increase the efficiency of the use of electricity.

Sales revenues in the period under review of £7,328,000 were 12.4% higher than in the corresponding period in the prior year (£6,519,000) and gross margins were slightly lower at 28.2% compared with 29.0% in the first half of 2011. Administrative expenses increased in the period to £1,996,000 compared with the corresponding period in the prior year (£1,725,000) but were lower than the level incurred in the second half of 2011 (£2,072,000). Although the profit before taxation was lower at £19,000 compared with £100,000 reported for the first half of 2011, it should be noted that the result for the current period included a planned loss of £85,000 incurred by QV Controls Limited as we invest in building that business and £25,000 in restructuring costs. Adjusting for the QV Controls loss and restructuring costs, APC would have achieved a profit before tax of £129,000.

The Company's financial position has continued to improve. Net debt at the period end reduced to £940,000 compared to £1,243,000 at 31 August 2011 and £1,725,000 at 28 February 2011.

APC started the financial year with a strong order backlog but the value of new orders received in the second quarter of the financial year fell below the level that would be expected and resulted in a reduction in the order backlog for both February and more generally for the third quarter of the financial year. This downward trend is considered to be consistent with the weakness that has been apparent in the UK's electronic component distribution market which, after a significant contraction in 2011 is expected to stabilise in the first half of 2012 before returning to modest growth in the second half of the year.

As previously announced, and considering the continued uncertainty both in the UK electronic component sector and the wider economy, the outlook for APC's core business for the remainder of 2012 has become very difficult to forecast and will remain so until order intake stabilises. However, the actions taken to reduce administrative costs and control working capital provide a stable platform for the business from which it can progress as the market improves. 

To ensure that the Group is investing its resources most appropriately for the current business environment a restructuring exercise has been undertaken. Overheads within the Company's distribution business have been reduced to align costs to the best estimate of distribution revenues for the second half of the year. In addition, the Group continues to manage cash resources carefully and continues to operate comfortably within the headroom of its credit facilities and banking covenants.

The Board feels that the recent weakness in the UK's electronic component distribution market underlines the importance of the commitment made to expand the Group's involvement in the clean tech sector. QV Controls Limited, the lighting controls business acquired in 2011, is developing considerable potential and, although current revenues are small, the prospects and opportunities for the business are looking positive. Minimise Limited, in which APC holds an 18% shareholding, has been steadily increasing its sales of imop™ products made by APC with customers both in the UK and overseas. Whilst the Board continues to recognise that investment in the clean-tech sector is reducing near term profitability, it is increasingly encouraged by the progress being made and continues to actively explore a number of options to increase the Company's exposure to this growing market.

Will David

Chairman

23 March 2012

CONDENSED CONSOLIDATED INCOME STATEMENT

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 2012 and are unchanged from those disclosed in the Group's Annual Report for the year ended 31 August 2011.

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 29 February 2012 and 28 February 2011 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 2011 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 auditors' report on those 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 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. 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.

4. 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 25,700,928 shares in issue at 28 February 2012.

5. Analysis of net funds

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.