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3 Aug 2012 07:00
ARCONTECH GROUP PLC
("Arcontech" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2012
Arcontech Group plc (AIM: ARC), a provider of enterprise level real-time software solutions to the investment banking and broking sectors, reports its preliminary results for the year ended 30 June 2012.
Chairman's Statement
Arcontech Group plc has achieved notable progress during the year ended 30 June 2012. The business is now focused on the CityVision suite of software products with particular emphasis on Multi Vendor Contribution Systems ("MVCS"), Excelerator, our real time Excel product and CityVision Cache.
We believe that the opportunities for our products are at a level not previously experienced by the group. We do, however, have to convert these opportunities into sales. Whilst this has proved a little frustrating, with decision-making and proof of concept trials taking longer, we have secured new contracts of almost £1 million over three years. As at 30 June 2012 the contracted annual recurring licence fees amounted to £1,589,110 (2011: £1,538,216) representing approximately 76% of our annual costs (2011: 73%).
Turnover for the year increased by 14% to £1,463,530 (2011: £1,287,409). The underlying increase was 28% after eliminating revenue from the loss-making AXE product, which we stopped actively marketing during the year. The operating loss for the year was £595,147 (2011: £817,855). During the year we continued to invest significantly in product development and improvement. These costs are written off as they are incurred.
Financing
As at 30 June 2012 Arcontech had cash balances of £746,675 (2011: £841,204). The reduction in our cash resources is due to the operating loss incurred during the year, arising primarily due to our continued investment in product development together with lengthening payment periods from clients. Based upon the level of our sales prospects and our continued tight control of costs the Board believes that Arcontech has sufficient financial resources to see the business through to profitability.
Employees
As in previous years I should like to thank our employees for their continued hard work, dedication and support over the last twelve months. Working in a small business often requires employees to be extremely flexible and understanding, this is greatly appreciated.
Outlook
With the level of sales prospects that Arcontech presently has we are hopeful of making significant progress towards breakeven in the coming year. It remains, however, difficult to determine the precise timing of future contracts, as sales cycles remain protracted. To help improve our chances of success we are looking to increase our sales resource in the coming months.
Richard Last
Chairman
2 August 2012
Chief Executive's Review
I am pleased with the progress made this year with the enhancement and rationalisation of the CityVision product suite. CityVision now addresses several areas of current demand in a more appropriate and immediately deployable manner and we are seeing strong interest, evidenced by increased sales, from both new and existing clients.
The uptake of the redesigned 'Excelerator' product, which provides a vendor-neutral means of publishing and receiving real-time market data into Microsoft Excel, has increased significantly. Excelerator's ability to integrate with, and provide a migration path between, Thomson Reuters and Bloomberg is a compelling value proposition amongst investment banks eager to reduce costs and reduce lock-in to particular vendors.
CityVision Cache, a new product development this year, gives customers increased choice of technology and is also attracting strong interest, with recent new sales.
New contracts have been longer in negotiation than I would have liked, impairing our revenue growth. Nonetheless, the number of ongoing and successful product evaluations and prospects at or close to contract stage support optimism over forward revenues.
Interest from outside the UK and, in particular, new sales activity in the Nordic regions continues and we have seen several of the new contracts anticipated in last year's review. We have further refined our offerings for integration with Thomson Reuters and Bloomberg and the new product developments mentioned last year are now deployed with Tier 1 and Tier 2 investments banks, facilitating considerable cost reductions and future flexibility.
Increased sales and marketing activity, resulting in significant product interest, has demanded additional pre and post sales resource to support trials and product roll-out. We have recruited in response to this demand and our expanded, experienced support team is well equipped to deal with forecast new business.
Some notable points for the year have been:
·; Successful live deployment of CityVision in multiple regions
·; New contracts for Excelerator, MVCS and CityVision Cache
·; Upgrade of several clients to the enhanced product set
·; 100% retention of existing CityVision clients
·; Increase in contracted recurring revenues of approximately £1 million
Our status as an independent software supplier, with two-way interfaces between the popular vendors, positions us well to take advantage of the prevailing demand for customer choice of data vendor and delivery technology.
I would like to thank the board, our staff and particularly our new and existing clients for their continued support and look forward to further successes in the coming year.
Andrew Miller
Chief Executive
Enquiries:
Arcontech Group plc |
|
Andrew Miller, Chief Executive |
|
Sarah Wisbey | +44 20 7256 2300 |
|
|
Northland Capital Partners Limited |
|
Shane Gallwey | +44 20 7796 8823 |
Group Income Statement
For the year ended 30 June 2012
| 2012 |
| 2011 |
| £ |
| £ |
|
|
|
|
Revenue | 1,463,530 |
| 1,287,409 |
|
|
|
|
Distribution costs | (19,477) |
| (16,428) |
|
|
|
|
Administrative costs | (2,039,200) |
| (2,088,836) |
Operating loss | (595,147) |
| (817,855) |
|
|
|
|
Finance income | 8,756 |
| 13,134 |
Loss before taxation | (586,391) |
| (804,721) |
|
|
|
|
Taxation | 85,319 |
| 132,683 |
Loss for the year after tax | (501,072) |
| (672,038) |
Total comprehensive income | (501,072) |
| (672,038) |
Loss per share (basic and diluted) | (0.03)p |
| (0.04)p |
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2012
Group:
| Share capital | Share premium | Share option reserve | Retained earnings | Total equity |
| £ | £ | £ | £ | £ |
Balance at 1 July 2010 | 1,531,315 | 9,428,169 | 143,297 | (8,300,747) | 2,802,034 |
|
|
|
|
|
|
Loss for the year | - | - | - | (672,038) | (672,038) |
Total comprehensive income for the year | - | - | - | (672,038) | (672,038) |
|
|
|
|
|
|
Share-based payments | - | - | 2,241 | - | 2,241 |
|
|
|
|
|
|
Balance at 30 June 2011 | 1,531,315 | 9,428,169 | 145,538 | (8,972,785) | 2,132,237 |
|
|
|
|
|
|
Loss for the year | - | - | - | (501,072) | (501,072) |
Total comprehensive income for the year | - | - | - | (501,072) | (501,072) |
|
|
|
|
|
|
Share-based payments | - | - | 45,222 | - | 45,222 |
Balance at 30 June 2012 | 1,531,315 | 9,428,169 | 190,760 | (9,473,857) | 1,676,387 |
Company:
| Share capital | Share premium | Share option reserve | Retained earnings | Total equity |
| £ | £ | £ | £ | £ |
Balance at 1 July 2010 | 1,531,315 | 9,428,169 | 143,297 | (7,447,378) | 3,655,403 |
|
|
|
|
|
|
Loss for the year | - | - | - | (82,460) | (82,460) |
Total comprehensive income for the year | - | - | - | (82,460) | (82,460) |
|
|
|
|
|
|
Share-based payments | - | - | 2,241 | - | 2,241 |
|
|
|
|
|
|
Balance at 30 June 2011 | 1,531,315 | 9,428,169 | 145,538 | (7,529,838) | 3,575,184 |
|
|
|
|
|
|
Loss for the year | - | - | - | (35,850) | (35,850) |
Total comprehensive income for the year | - | - | - | (35,850) | (35,850) |
|
|
|
|
|
|
Share-based payments | - | - | 45,222 | - | 45,222 |
Balance at 30 June 2012 | 1,531,315 | 9,428,169 | 190,760 | (7,565,688) | 3,584,556 |
Balance Sheets
As at 30 June 2012
| Group2012£ |
| Group2011£ |
| Company2012£ |
| Company2011 £ |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill | 1,715,153 |
| 1,715,153 |
| - |
| - |
|
|
|
|
|
|
|
|
Property, plant and equipment | 34,263 |
| 37,426 |
| - |
| - |
|
|
|
|
|
|
|
|
Investments in subsidiaries | - |
| - |
| 2,017,373 |
| 2,017,373 |
Total non-current assets | 1,749,416 |
| 1,752,579 |
| 2,017,373 |
| 2,017,373 |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other receivables | 667,637 |
| 366,425 |
| 1,845,027 |
| 1,450,431 |
|
|
|
|
|
|
|
|
Cash and cash equivalents | 746,675 |
| 841,204 |
| 37,595 |
| 471,172 |
Total current assets | 1,414,312 |
| 1,207,629 |
| 1,882,622 |
| 1,921,603 |
|
|
|
|
|
|
|
|
Current liabilities | |||||||
Trade and other payables | (1,487,341) | (827,971) | (315,439) | (363,792) | |||
Total current liabilities | (1,487,341) | (827,971) | (315,439) | (363,792) | |||
|
|
|
|
|
|
| |
Net current (liabilities)/assets | (73,030) |
| 379,658 |
| 1,567,183 |
| 1,557,811 |
|
|
|
|
|
|
| |
Net assets | 1,676,387 |
| 2,132,237 |
| 3,584,556 |
| 3,575,184 |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Called up share capital | 1,531,315 |
| 1,531,315 |
| 1,531,315 |
| 1,531,315 |
|
|
|
|
|
|
|
|
Share premium account | 9,428,169 |
| 9,428,169 |
| 9,428,169 |
| 9,428,169 |
|
|
|
|
|
|
|
|
Share option reserve | 190,760 |
| 145,538 |
| 190,760 |
| 145,538 |
|
|
|
|
|
|
|
|
Retained earnings | (9,473,857) |
| (8,972,785) |
| (7,565,688) |
| (7,529,838) |
| 1,676,387 | 2,132,237 |
| 3,584,556 |
| 3,575,184 |
Group Cash Flow Statement
For the year ended 30 June 2012
| 2012 |
| 2011 |
|
| £ |
| £ |
|
|
|
|
|
|
Net cash used in operating activities | (90,351) |
| (747,493) |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Interest received | 8,756 |
| 13,134 |
|
|
|
|
|
|
Purchases of plant and equipment | (12,934) |
| (11,214) |
|
|
|
|
|
|
Disposal of plant and equipment | - |
| 401 |
|
Net cash (used)/received in investing activities | (4,178) |
| 2,321 |
|
Net decrease in cash and cash equivalents | (94,529) |
| (745,172) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of year | 841,204 |
| 1,586,376 |
|
Cash and cash equivalents at end of year | 746,675 |
| 841,204 |
|
Company Cash Flow Statement
For the year ended 30 June 2012
| 2012 |
| 2011 |
|
| £ |
| £ |
|
Net cash used in operating activities | (435,926) |
| (395,785) |
|
Investing activities |
|
|
|
|
|
|
|
|
|
Interest received | 2,349 |
| 7,579 |
|
Net cash generated from investing activities | 2,349 |
| 7,579 |
|
Net decrease in cash and cash equivalents | (433,577) |
| (388,206) |
|
|
|
|
|
|
Cash and cash equivalents at beginning of year | 471,172 |
| 859,378 |
|
Cash and cash equivalents at end of year | 37,595 |
| 471,172 |
|
Notes to the Financial Statements
For the year ended 30 June 2012
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
These 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.
On the basis of current projections, confidence of future profitability and cash balances held, the Directors have adopted the going concern basis in the preparation of the financial statements.
The financial statements have been prepared under the historical cost convention.
2. Revenue
An analysis of the Group's revenue is as follows:
|
| 2012£ |
| 2011£ |
|
|
|
|
|
|
|
Financial information service, advertising and sponsorship, software development and consultancy |
| 1,463,530 |
| 1,287,409 |
|
All of the Group's revenue relates to continuing activities.
3. Operating loss for the year is stated after charging:
|
| 2012£ |
| 2011£ |
|
Depreciation of plant and equipment |
| 15,552 |
| 16,893 |
|
Loss on disposal of fixed assets |
| 545 |
| 3,091 |
|
Staff costs (see note 7) |
| 1,408,153 |
| 1,473,442 |
|
Operating lease rentals - land and buildings (see note 21) |
| 79,000 |
| 73,075 |
|
Research and development |
| 669,400 |
| 812,559 |
|
4. Loss per share
|
| 2012 |
| 2011 |
|
|
| £ |
| £ |
|
Earnings |
|
|
|
|
|
Earnings for the purpose of basic and diluted earnings per share being net loss attributable to equity shareholders |
| (501,072) |
| (672,038) |
|
|
| (501,072) |
| (672,038) |
|
|
| No. |
| No. |
|
Number of shares |
|
|
|
|
|
Weighted average number of ordinary shares for the purpose of basic earnings per share |
| 1,531,314,870 |
| 1,531,314,870 |
|
|
|
|
|
|
|
Number of dilutive shares under option |
| - |
| - |
|
Weighted average number of ordinary shares for the purposes of dilutive earnings per share |
| 1,531,314,870 |
| 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. Share options are anti-dilutive and are therefore not included above.
5. Dividends
There were no dividends paid or proposed during the period (2011: £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 23 October 2012 at 10 a.m.
8. Annual Report & Accounts
Copies of the Annual Report & Accounts will be sent to shareholders shortly and are 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.
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