APC Technology Regulatory News (APC)

Advanced Power Components plc

Trading Statement

Advanced Power Components plc (AIM: APC) ('the Group'), a specialist distributor and manufacturers' representative of electronic components, today announces a trading update for the six months ended 29 February 2012.

The Board of APC expects revenues to be in the region of £7.3 million and to report a small net profit before tax, compared with £6.5 million and £100,000 during the same period ending February 2011.

APC started the financial year with a strong order backlog, and trading was in line with internal budgets for the first 5 months of the year. However, 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 in-part a result of continued destocking within the supply chain of a number of our customers and in-part because of the general uncertainty in the market which has delayed the placing of some significant long term contracts. As a result, the Company's second half revenues have become very difficult to forecast and will remain so until order intake stabilises. Whilst new order intake in February has recovered compared with December and January, it is too early to say whether this level of intake will be sustained in advance of a more general recovery in the market.

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. Costs for this restructuring exercise, estimated to be in the region of £25,000, will be included within the Group's interim results, which are expected to be released in May 2012. 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. However, as a result of the uncertainty outlined above, it is unlikely that the Group will achieve market estimates for the full year, although at this stage in the financial year, based on current trading trends and the actions taken to reduce overheads, the Board is confident that APC will break even at the net profit before tax level as a minimum.

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. The prospective markets for both imop™ and the Minimise ranges of LED lighting products are large and growing both in the UK and overseas where Minimise has been working to establish sales channels into geographic markets that are showing rapid growth.

Whilst the Board continues to recognise that investment in the clean-tech sector is reducing near term profitability, it is confident that further investment into the clean-tech arena is in the best medium to long term interest of shareholders and are actively exploring a number of options to increase the Company's exposure to this growing market.

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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.