APC Technology Regulatory News (APC)

Advanced Power Components plc

Trading Statement

Advanced Power Components plc (AIM: APC), a specialist distributor and manufacturers' representative of electronic components, is pleased to provide an update on current trading and performance for the year ended 31 August 2011.

We anticipate announcing our final results early in December 2011 and expect profits for the year to show substantial improvement over the prior year in line with expectations. We also expect to announce a further reduction in net debt of approximately £300,000 for the year resulting in a cumulative decline in net debt from £2.2 million at 31 August 2009 to £1.4 million at 31 August 2011.

The Group continues to be involved in a process of change on a number of levels, both strategically and tactically, as we seek ways to achieve meaningful growth in profitability and deliver substantial long term shareholder value. We are pleased to say that we are making progress both in terms of current trading and in terms of new opportunities for future growth being created.

In the financial year ended 31 August 2011 our core electronic components business performed very well and surpassed the targets we set at the beginning of the year. Orders and product shipments increased and gross margins improved compared to the previous financial year. We firmly believe that this is a result of our increasing focus on managing the design-in process of products manufactured by key suppliers, who fully recognise the value of the technical expertise that we offer across every part of the business. Performances in our Hero and Displays+ businesses were particularly strong despite uncertain market conditions. Our specialist keyboard business, Contech, had a disappointing year in which it suffered from cuts in health sector IT spending but despite this the unit made a contribution to profit and implemented a recovery plan in the year that should enable it to grow in FY2012. Novacom, Hirel and Locator all put in solid performances, improving over the prior year and performing broadly in line with their individual targets.

Accordingly, we are entering into FY2012 with a strong order book and good prospects in our core business. However, despite this positive outlook we remain very aware that our short term trading will continue to be subject to variations in the prevailing economic conditions. With this in mind, we continue to seek the correct balance between short term growth and the longer term investment which will allow the Group to take advantage of the return of more favourable market conditions. We continue to invest in our people and have recently recruited a number of graduates intended to contribute to the longer term development of the Group.

We have also strengthened our strategy of diversification into the emerging markets for products and technologies developed to increase the efficiency of the use of electricity. We strongly believe that this emerging global market offers very significant opportunities although it remains difficult to predict when the combination of the increasing cost of electricity and forthcoming punitive national legislation will combine to make investment related to sustainability compelling for the overall business community both in the UK and internationally. It has become clear that this "tipping point" has not yet been reached and the sales of our imop™ products to date reflect that. However, despite the slower than envisaged start we remain confident that the investment we have made in developing this product range will yield results and are currently working on some interesting opportunities in the UK and overseas which, if successful, will provide a step change in the imop™ business and be the foundation for future announcements.

During the year, we invested further into our diversification into the green technology sector with the acquisition of the business and assets of Quo Vadis Limited and the establishment of a new subsidiary, QV Controls Limited (in which we hold 70% of the equity). The business is currently being rebranded and is about to be remarketed on the back of a soon to be released case study, demonstrating the ability of the technology to make savings in energy consumption related to lighting in a commercial building of more than 80%. Again, we considered carefully the balance between short term profitability and the creation of long term potential as the business made a loss of approximately £36,000 in the FY2011 results and is not anticipated to provide a meaningful level of return until FY2013. Despite this, we view this as a strategic acquisition.

In addition we continue to investigate and develop opportunities to add further products and technologies to create a wider green technology portfolio.

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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.