Last checked at 18 Aug 2014 07:00
Arcontech Group plc
("Arcontech", the "Company" or the "Group")
Final Results for the Year Ended 30 June 2014
Chairman's Statement
Arcontech has achieved a significantly improved operating result for the year ended 30 June 2014, with a loss before taxation and exceptional items of £35,565 (2013: loss before taxation and exceptional items of £340,750). After taking the benefit of the Research and Development tax credit of £100,251 (2013: £88,905) which the company receives due to the amount it has invested in qualifying product design and development, Arcontech achieved a profit after tax of £64,686 (2013: loss after tax of £251,845).
Turnover for the year was £1,981,375 (2013: £1,830,717), an increase of 8%. This increase, whilst positive, is lower than we would have hoped to achieve due in part to the continued lengthening of sales cycles and to customers prioritising areas subject to greater regulatory focus than those addressed by our products. However, at 30 June 2014 the annual recurring licence fees amounted to £1,985,355 (2013: £1,884,778) representing 98% of our annualised running costs (2013: 87%).
As a result of negative distributable reserves, Arcontech has not been able to declare a dividend (2013:£Nil). We intend, however, when the company moves into sustainable profitability, to seek court approval to re-designate our reserves and thereby enable the company to pay dividends.
Financing
As at 30 June 2014 Arcontech had no debt and cash balances of £733,676 (2013: £878,804), this reduction being due to the timing of sales invoicing and of cash receipts from customers. Nevertheless, the company remains well financed.
Employees
Our employees are core to our business. They have responded positively to the challenges presented by a competitive market place during the last financial year and we again thank them for their continued hard work, dedication and support.
Outlook
With Arcontech's lower cost base and improved product offering we believe that the company is well placed to continue to grow its revenues. The level of sales prospects the company has are significant, however the timing of their conversion into actual sales orders is, as in previous years, extremely difficult to predict. We remain convinced that opportunities for the sale of our products to international investment banks, central banks and other financial institutions remain strong.
Richard Last
Chairman
Chief Executive's Review
During the year we have continued to work on positioning the business so that we have a solid, efficient and effective platform from which to grow. At the same time we have worked with our existing clients to strengthen and grow our relationships whilst also prospecting for new opportunities. In both areas we have succeeded and are now well positioned to move forward.
We have managed to reduce costs in running the organisation so that it is efficient and productive with all areas complementing each other in our goal for growth. We implemented stricter controls on development to ensure work undertaken generated revenue and contributed to making our offerings more competitive. We also improved the way in which we test our software by building out automated processes where possible, which although requiring human input at the scripting phase does not require subsequent repetitive and costly human intervention.
Growing the business has been successful too, in a very challenging market. Ongoing issues in the marketplace such as the LIBOR-fixing scandal and staff reductions have served to prolong decision making. Despite this we managed to grow revenues by 8% and we are pleased to say we believe Excelerator to be the leading Excel Add-In in the financial market-place with one client having rolled out more than 300 positions across the organisation. We are also happy to have secured the world's oldest international financial organisation as a new MVCS client.
More generally we have also expanded our discussions with clients to identify additional areas in which we can add value to embed us further within their businesses and to aid development of our product portfolio. At the same time we have continued to improve our marketing function which, together with our overall business and sales strategy, increasingly addresses issues of regulation and compliance.
As we build on what has been done and develop these areas I look forward to achieving greater progress.
Matthew Jeffs
Chief Executive
For further information please visit www.arcontech.com
Enquiries
Arcontech Group plc Matthew Jeffs, CEO |
+44 20 7256 2300 |
Northland Capital Partners Limited Matthew Johnson / Lauren Kettle |
+44 20 7382 1100 |
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2014
| Note |
2014 | Before exceptional items 2013 | Exceptional items 2013 |
| Total 2013 |
|
| £ | £ | £ |
| £ |
|
|
|
|
|
|
|
Revenue | 2 | 1,981,375 | 1,830,717 | - |
| 1,830,717 |
|
|
|
|
|
|
|
Distribution costs |
| (31,439) | (28,468) | - |
| (28,468) |
|
|
|
|
|
|
|
Administrative costs |
|
(1,989,156) |
(2,150,126) | (160,994) |
|
(2,311,120) |
|
|
|
|
|
|
|
Operating loss | 3 |
(39,220) |
(347,877) | (160,994) |
|
(508,871) |
|
|
|
|
|
|
|
Finance income |
| 3,655 | 7,127 | - |
| 7,127 |
Loss before taxation |
|
(35,565) |
(340,750) | (160,994) |
|
(501,744) |
|
|
|
|
|
|
|
Taxation |
|
100,251 |
88,905 | - |
|
88,905 |
Profit/(loss) for the year after tax |
|
64,686 |
(251,845) | (160,994) |
|
(412,839) |
Total comprehensive income for the year |
|
64,686 |
(251,845) | (160,994) |
|
(412,839) |
Profit/(loss) per share (basic and diluted) | 4 |
0.004p |
|
|
|
(0.027)p |
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2014
Group:
| Share capital | Share premium | Share option reserve | Retained earnings | Total equity |
| £ | £ | £ | £ | £ |
Balance at 30 June 2012 | 1,531,315 | 9,428,169 | 190,760 | (9,473,857) | 1,676,387 |
|
|
|
|
|
|
Loss for the year | - | - | - | (412,839) | (412,839) |
Total comprehensive income for the year | - | - | - | (412,839) | (412,839) |
|
|
|
|
|
|
Share-based payments | - | - | 62,474 | - | 62,474 |
|
|
|
|
|
|
Balance at 30 June 2013 | 1,531,315 | 9,428,169 | 253,234 | (9,886,696) | 1,326,022 |
|
|
|
|
|
|
Profit for the year | - | - | - | 64,686 | 64,686 |
Total comprehensive income for the year | - | - | - | 64,686 | 64,686 |
Issue of shares | 5,357 | 2,143 | - | - | 7,500 |
|
|
|
|
|
|
Share-based payments | - | - | 18,677 | - | 18,677 |
Share-based payments provision released | - | - | (199,349) | 199,349 | - |
Balance at 30 June 2014 | 1,536,672 | 9,430,312 | 72,562 | (9,622,661) | 1,416,885 |
Company:
| Share capital | Share premium | Share option reserve | Retained earnings | Total equity |
| £ | £ | £ | £ | £ |
Balance at 30 June 2012 | 1,531,315 | 9,428,169 | 190,760 | (7,565,688) | 3,584,556 |
|
|
|
|
|
|
Loss for the year | - | - | - | (189,820) | (189.820) |
Total comprehensive income for the year | - | - | - | (189,820) | (189.820) |
|
|
|
|
|
|
Share-based payments | - | - | 62,474 | - | 62,474 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June 2013 | 1,531,315 | 9,428,169 | 253,234 | (7,755,508) | 3,457,210 |
|
|
|
|
|
|
Profit for the year | - | - | - | 23,186 | 23,186 |
Total comprehensive income for the year | - | - | - | 23,186 | 23,186 |
|
|
|
|
|
|
Issue of shares | 5,357 | 2,143 | - | - | 7,500 |
|
|
|
|
|
|
Share-based payments | - | - | 18,677 | - | 18,677 |
|
|
|
|
|
|
Share-based payments provision released | - | - | (199,349) | 53,091 | (146,258) |
Balance as at 30 June 2014 | 1,536,672 | 9,430,312 | 72,562 | (7,679,231) | 3,360,315 |
Balance Sheets
As at 30 June 2014
|
| Group2014£ |
| Group2013£ |
| Company2014£ |
| Company2013 £ |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
| 1,715,153 |
| 1,715,153 |
| - |
| - |
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
| 19,112 |
| 25,044 |
| - |
| - |
|
|
|
|
|
|
|
|
|
Investments in subsidiaries |
| - |
| - |
| 2,017,373 |
| 2,017,373 |
Total non-current assets |
| 1,734,265 |
| 1,740,197 |
| 2,017,373 |
| 2,017,373 |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables |
| 361,016 |
| 591,780 |
| 1,510,725 |
| 1,648,084 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
| 733,676 |
| 878,804 |
| 37,854 |
| 54,817 |
Total current assets |
| 1,094,692 |
| 1,470,584 |
| 1,548,579 |
| 1,702,901 |
|
|
|
|
|
|
|
|
|
Current liabilities | ||||||||
Trade and other payables | (1,412,072) | (1,884,759) | (205,637) | (263,064) | ||||
Total current liabilities | (1,412,072) | (1,884,759) | (205,637) | (263,064) | ||||
|
|
|
|
|
|
| ||
Net current (liabilities)/assets | (317,380) |
| (414,175) |
| 1,342,942 |
| 1,439,837 | |
|
|
|
|
|
|
| ||
Net assets |
| 1,416,885 |
| 1,326,022 |
| 3,360,315 |
| 3,457,210 |
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Called up share capital |
| 1,536,672 |
| 1,531,315 |
| 1,536,672 |
| 1,531,315 |
|
|
|
|
|
|
|
|
|
Share premium account |
| 9,430,312 |
| 9,428,169 |
| 9,430,312 |
| 9,428,169 |
|
|
|
|
|
|
|
|
|
Share option reserve |
| 72,562 |
| 253,234 |
| 72,562 |
| 253,234 |
|
|
|
|
|
|
|
|
|
Retained earnings |
| (9,622,661) |
| (9,886,696) |
| (7,679,231) |
| (7,755,508) |
|
| 1,416,885 | 1,326,022 |
| 3,360,315 |
| 3,457,210 |
Approved on behalf of the board on 15 August 2014 by:
Matthew Jeffs | Michael Levy |
Chief Executive | Group Finance Director |
Group Cash Flow Statement
For the year ended 30 June 2014
| Note | 2014 |
| 2013 |
|
|
| £ |
| £ |
|
|
|
|
|
|
|
Net cash ( used in)/generated from operating activities |
| (151,013) |
| 130,081 |
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
Interest received |
| 3,655 |
| 7,127 |
|
|
|
|
|
|
|
Purchases of plant and equipment |
| (5,270) |
| (5,079) |
|
|
|
|
|
|
|
Issue of shares |
| 7,500 |
| - |
|
Net cash generated from investing activities |
| 5,885 |
| 2,048 |
|
Net (decrease)/increase in cash and cash equivalents |
| (145,128) |
| 132,129 |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
| 878,804 |
| 746,675 |
|
Cash and cash equivalents at end of year |
| 733,676 |
| 878,804 |
|
Company Cash Flow Statement
For the year ended 30 June 2014
|
| 2014 |
| 2013 |
|
|
| £ |
| £ |
|
Net cash (used in)/generated from operating activities |
| (24,652) |
| 16,915 |
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
Interest received |
| 189 |
| 307 |
|
|
|
|
|
|
|
Issue of shares |
| 7,500 |
| - |
|
Net cash generated from investing activities |
| 7,689 |
| 307 |
|
Net (decrease)/increase in cash and cash equivalents |
| (16,963) |
| 17,222 |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
| 54,817 |
| 37,595 |
|
Cash and cash equivalents at end of year |
| 37,854 |
| 54,817 |
|
Notes to the Financial Statements
For the year ended 30 June 2014
1. Accounting policies
The principal accounting policies are summarised below. They have all been applied consistently throughout the period covered bythese financial statements.
Reporting entity
Arcontech Group PLC ("the Company") is a company incorporated in the United Kingdom. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (together referred to as "the Group").
Basis ofpreparation
The financial information set out above for the years ended 30 June 2014 and 2013 does not constitute the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006 but is derived from those accounts. Statutory accounts for the year ended 30 June 2013 have been delivered to the Registrar of Companies and those for 2014 will be delivered following the Company's annual general meeting. The auditors have reported on those accounts. The auditors' reports were unqualified and did not contain statements under s.498 (2) or (3) Companies Act 2006. The results have been prepared using accounting policies consistent with those used in the preparation of the statutory accounts.
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") endorsed by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost convention.
2. Revenue
An analysis of the Group's revenue is as follows:
|
| 2014£ |
| 2013£ |
|
|
|
|
|
|
|
Financial information service, advertising and sponsorship, software development and consultancy |
| 1,981,375 |
| 1,830,717 |
|
All of the Group's revenue relates to continuing activities.
3. Operating loss for the year is stated after charging:
|
| 2014£ |
| 2013£ |
|
Depreciation of plant and equipment |
| 10,736 |
| 13,951 |
|
Loss on disposal of fixed assets |
| 465 |
| 346 |
|
Staff costs |
| 1,476,944 |
| 1,645,544 |
|
Operating lease rentals - land and buildings |
| 79,000 |
| 79,000 |
|
Research and development |
| 736,867 |
| 729,095 |
|
4. Loss per share
|
| 2014 |
| 2013 |
|
|
| £ |
| £ |
|
Earnings |
|
|
|
|
|
Earnings for the purpose of basic and diluted earnings per share being net profit/(loss) attributable to equity shareholders |
| 64,686 |
| (412,839) |
|
|
| 64,686 |
| (412,839) |
|
|
| No. |
| No. |
|
Number of shares |
|
|
|
|
|
Weighted average number of ordinary shares for the purpose of basic earnings per share |
| 1,531,505,672 |
| 1,531,314,870 |
|
|
|
|
|
|
|
Number of dilutive shares under option |
| 13,314,419 |
| - |
|
Weighted average number of ordinary shares for the purposes of dilutive earnings per share |
| 1,544,820,092 |
| 1,531,314,870 |
|
The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from share options. A calculation is done to determine the number of shares that could have been acquired at fair value, based upon the monetary value of the subscription rights attached to outstanding share options.
5. Dividends
There were no dividends paid or proposed during the period (2013: £Nil).
6. Post balance sheet events
There were no events since the balance sheet date, which materially affect the position of the Group.
7. Annual General Meeting
The annual general meeting of the "Company" will be held at the Company's offices, 8th Floor, Finsbury Tower, 103-105 Bunhill Row, London EC1Y 8LZ on 29 October 2014 at 10 a.m.
8. Annual report and accounts
Copies of the annual report and accounts will be sent to shareholders in due course and will be available from the Company Secretary at the Company's registered office at 8th Floor Finsbury Tower, 103-105 Bunhill Row, London, EC1Y 8LZ or from the Company's website at www.arcontech.com.