APC Technology Regulatory News (APC)

APC Technology Group PLC("APC" or the "Group")

Trading Statement

APC Technology Group PLC (AIM: APC), is pleased to provide an update on its current trading.

The Group's energy efficiency business, which trades under the Minimise brand, has continued its focus on widening its client base and the Board is pleased to report that significant progress has been made in this regard.

In particular, the Company has received a letter of intent to enable it to begin the manufacture of LED lighting, which will be fitted into refrigeration units in around 500 stores operated by one of the UK's major food and clothing retailers over the next twelve weeks. This letter of intent, which has been issued to facilitate the start of production while Minimise is added to the customers approved supplier list, has an initial nominal value of £1 million and is anticipated to be part of a wider roll out of low energy lighting to this company in which the Group hopes to participate. The value of the overall project is expected to increase once the full site surveying process is underway.

In addition, the Board is pleased to report that Minimise is in the final stages of negotiations for orders with another six new and significant customers in various market sectors which, if placed, will generate significant growth and greatly reduce reliance on any one customer early in the next financial year. Orders are expected imminently from a number of these customers.

The Board also reports that it has signed a distribution and licensing agreement with Isotera Limited, a company which offers a unique 'contactless power' technology that removes the need for individual drivers for LED lights. This emerging technology is designed to reduce lighting infrastructure and installation costs while improving the reliability of LED based lighting systems. This agreement provides Minimise Energy with the rights to deploy the technology along with the Minimise brand of LED lights in the UK and in certain markets overseas and the Board is pleased to announce that initial orders have now been received.

The Board is also pleased to report that the Company's electronic component distribution business continues to perform in line with expectations.

Record shipments to Minimise's largest customer were made in the second quarter of the current financial year. However, due to the well-publicised reallocation of capital budgets at this customer, shipments ceased at the beginning of April and, whilst the Company expects them to resume in the coming months, it remains unclear as to the exact timing.

Overall, taking into account the positive impact that the broadening Minimise customer base is expected to have in the next financial year, the Board is pleased with progress to date and views the future with confidence. However, the short term reduction in shipments to our current largest customer, coupled with the fact that orders from new customers are being received a little too late to be fulfilled entirely in the current financial year, is likely to mean that revenues and profits for the current financial year will be below market expectations.

The Board continues to evaluate ways to expand the products and services provided to customers wishing to improve the overall sustainability and therefore the profitability of their organisations and looks forward to announcing further positive progress in due course.

Leonard Seelig, Non-Executive Chairman, commented:

"We are very pleased with the progress being made by our business. Recent customer wins, as well as the growing depth of our customer pipeline and new product enhancements more than offset the short term reduction in profitability, and we look forward to the future with confidence". 

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