Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that on 2 October 2020 it granted a total of 155,000 options (“Options”) over ordinary shares of £0.125 in the Company (“Ordinary Shares”) under the Company’s EMI and non EMI schemes to various employees.
Options were granted to the following persons disclosing managerial responsibility (“PDMRs”): Matthew Jeffs (Chief Executive), Geoff Wicks (Non-Executive Chairman), Ben Hodges (Finance Director) and Darren Lewis (Head of Development).
The Options have been granted at a price of 164.5p pence per Ordinary Share, being the closing mid-market price of an Ordinary Share on 2 October 2020. They will be exercisable from 30 June 2023.
For Matthew Jeffs and Darren Lewis, the Options will vest subject to the Company’s compound annual rate of growth in fully diluted earnings* for the three financial years ending 30 June 2023, subject to performance criteria as follows:
– compound annual earnings growth of 10% or more – fully vested (100%);
– compound annual earnings growth between 5%-10% – partial vesting between 0% and 100% on a sliding scale; and
– compound annual earnings growth of 5% and below – nil.
Dependent on the performance criteria above being achieved, the maximum number of Options that will vest and become exercisable is as follows:
Director/PDMR
Number of Options
Matthew Jeffs
50,000
Darren Lewis
20,000
Geoff Wicks has been granted 30,000 Options that are not subject to performance criteria. Ben Hodges has been granted 10,000 Options that are not subject to performance criteria. The 45,000 Options granted to non-PDMR employees are also not subject to performance criteria.
Any Ordinary Shares arising from the vesting of Options must be held for a period of two years.
Following this grant, there are a total of 657,618 options outstanding, representing approximately 4.9% of the current issued share capital of the Company.
Further detail is set out in the PDMR disclosure tables below.
* Fully diluted earnings will be based on: (a) the Company’s pre-tax profit excluding exceptional items and the share option charge and (b) the current UK corporation tax rate of 19%, such that the fully diluted earnings calculation takes no account of R&D and deferred tax credits. For the purposes of the fully diluted earnings calculation, the applied rate of corporation tax will remain constant at 19% irrespective of any current or future changes to corporation tax.
Enquiries:
Arcontech Group plc
020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
Carl Holmes/Simon Hicks
020 7220 0500
To access more information on the Group please visit: www.arcontech.com
Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them
1.
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Matthew Jeffs
2.
Reason for the Notification
a)
Position/status
Chief Executive
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Geoff Wicks
2.
Reason for the Notification
a)
Position/status
Non-Executive Chairman
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Darren Lewis
2.
Reason for the Notification
a)
Position/status
Head of Development
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Ben Hodges
2.
Reason for the Notification
a)
Position/status
Finance Director
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Arcontech signs agreement to upgrade longstanding Tier 1 Client
ARCONTECH GROUP PLC
(“Arcontech” or the “Company”)
Arcontech signs agreement to upgrade longstanding Tier 1 Client
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, is pleased to announce the signing of a new agreement (the “Agreement”) with a longstanding Tier 1 bank client (the “Client”). The agreement relates to the migration of the Client from Windows to Linux and to upgrade its systems to Arcontech’s new graphical user interface (“GUI”) and monitoring functionality for the client’s MVCS (Multi-Vendor Contribution System). Together with the new business win to contribute to Factset announced on 2 October 2020, the additional recurring revenue will be approximately £100,000 per annum.
The Agreement is a result of the Client effectively outgrowing their existing system in terms of data throughput and destinations which include Bloomberg, Refinitiv, Factset, Six-Telekurs, ICE and internal applications. The Client also wished to capitalise on the additional functionality available with Arcontech’s new GUI, which as well as monitoring and recording data flow and system usage allows for immediate identification of issues and the ability to alert by e-mail, to reduce the risk associated with sending their data to numerous market data vendors and internal destinations. Other factors included the ability to send data to Refinitiv in their new Contribution Channel format and connect MVCS to ITRS Geneos, the Client’s overarching monitoring system. The potential to resolve data issues before the banks clients or their business were affected was a key factor in Arcontech winning this contract.
Matthew Jeffs, CEO of Arcontech said: “We are very happy to enter a new phase of providing contribution software for this client based on the Red Hat Linux operating system. The majority of our clients now use Linux which brings benefits of consistency with other systems the bank has usually deployed. This migration is also a good example of our ability to receive data from proprietary sources and to support multiple destinations including those using FIX based protocols. In this instance, as well as existing destinations, we will also be supporting the new Refinitiv Contribution Channel format which can handle greater throughput of data. That said, Arcontech software will continue to support Market Link Protocol wherever used which has long been established as a default contribution format.”
Enquiries:
Arcontech Group plc
020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
Carl Holmes/Simon Hicks
020 7220 0500
To access more information on the Group please visit: www.arcontech.com
New client win to contribute data to Factset
ARCONTECH GROUP PLC
(“Arcontech”, the “Company” or the “Group”)
New client win to contribute data to Factset
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, is pleased to announce the signing of a new Tier 1 bank client for its MVCS (Multi-Vendor Contribution System), which enables those that create market data content, whether instrument prices, results or statements, to be contributed to multiple vendors and internal consumers at the same time after updating only once.
Discussions commenced as the bank wished to contribute real-time prices to Factset where the bank’s clients wanted to view them for which their existing market–data infrastructure provider was unable to help. Although anticipated revenues are not expected to be material initially, it is the start of an important relationship with a Tier 1 global institution.
Matthew Jeffs, CEO of Arcontech said:
“We most frequently provide our software to enable contributions to be made to Bloomberg and Refinitiv, however, we are increasingly receiving requests to send client data to other vendors and venues like Factset and Tradeweb along with a need to repurpose data internally for example into risk management systems or use by other desks. More generally, regulatory pressures coupled with the need to reduce risk, are encouraging financial market participants to ensure any data sent to the market is managed and recorded for audit. We enable our clients to do this by consolidating the data so it is known exactly what is being sent to whom as well as to monitoring the data flow. The monitoring function can alert the client by e-mail and block the data if a price is not within market parameters or simply alert the administrator if a communications line fails. We therefore enable our clients to take action at the soonest possible moment to minimise any associated risks with their prices being sent to the market.”
Enquiries:
Arcontech Group plc
020 7256 2300
Richard Last, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit: www.arcontech.com
Result of AGM & Confirmation of Appointment of Chairman
ARCONTECH GROUP PLC
(“Arcontech”, the “Company” or the “Group”)
Result of AGM & Confirmation of Appointment of Chairman
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that at the Annual General Meeting of the Company held earlier today, all Resolutions were duly passed.
Chairman appointment
Further to the announcement of 20 July 2020, the Company confirms that Geoff Wicks has succeeded Richard Last as Non-Executive Chairman.
Enquiries:
Arcontech Group plc
020 7256 2300
Richard Last, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit: www.arcontech.com
Issue of Equity & Director / PDMR Shareholding
ARCONTECH GROUP PLC
(“Arcontech”, the “Company” or the “Group”)
Issue of Equity & Director / PDMR Shareholding
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that it has applied to the London Stock Exchange for 80,000 ordinary shares of £0.125 each in the Company (“Ordinary Shares”) to be admitted to trading on AIM (“Admission”). The new Ordinary Shares are being issued subsequent to an exercise of options over Ordinary Shares by Darren Lewis, Head of Development and a PDMR of the Company, at a price of 23.75p per Ordinary Share.
It is expected that Admission will become effective and trading will commence in the new Ordinary Shares at 8.00 a.m. on 15 September 2020. On Admission the Company’s issued share capital will comprise 13,290,510 Ordinary Shares, of which none are held in treasury. Therefore the total number of Ordinary Shares in the Company with voting rights will be 13,290,510 This figure may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA’s Disclosure Guidance and Transparency Rules.
Notification and public disclosure of transactions by persons discharging managerial responsibilities and persons closely associated with them.
1.
Details of the person discharging managerial responsibilities / person closely associated
a)
Names
Darren Lewis – Head of Development
2.
Reason for the Notification
a)
Position/status
See 1 (a) above –PDMR of the Company
b)
Initial notification/ Amendment
Initial Notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Ordinary Shares of £0.125
Identification code
GB00BDBBJZ03
b)
Nature of the transaction
Exercise of Options over Ordinary Shares
c)
Price(s) and volume(s)
Exercise Price: 23.75 pence
Volume: 80,000
d)
Aggregated information:
·Aggregated volume
·Price
See 4 (c) above
e)
Date of the transaction
9 September 2020
f)
Place of the transaction
Outside a trading venue
Enquiries:
Arcontech Group plc
020 7256 2300
Richard Last, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit: www.arcontech.com
Report and accounts for the Year Ended 30 June 2020
Preliminary results for the year ending 30 June 2020
ARCONTECH GROUP PLC
(“Arcontech”, the “Company” or the “Group”)
Final Results for the year ended 30 June 2020
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, is pleased to announce its final audited results for the year ended 30 June 2020.
Financial Highlights:
· Revenue increased by 4% to £2,955,314 (2019: £2,841,362 restated)
· Profit before tax increased by 12% to £1,040,969 (2019: £931,717 restated)
· Cash balances up 23% to £5,006,969 as at 30 June 2020 (30 June 2019: £4,063,484)
· Fully diluted earnings per share of 9.03p (2019: 7.42p restated)
· Final dividend increased 25% to 2.5 pence per share (2019: 2.0 pence per share)
Operational Highlights:
· Desktop software solution end users increase to 130 from 90
· Continued investment in sales and products despite challenging background
· Successful rollout of RESTful interface, new interface for MVCS and Cache
· Continued strong cash generation and high proportion of recurring revenue
Commenting on the results, Richard Last, Chairman of Arcontech said:
“Our recurring annual licence fees provide a stable base for the business and our pipeline of prospects remains positive, but, as with most businesses we face a number of uncertainties: the impact of the COVID-19 pandemic, Brexit and changes taking place in the financial markets, as well as with our competitors. However, against this background our workforce has shown resilience and flexibility in dealing with the consequences of the pandemic and our customer relationships remain strong We are a global business and believe we offer excellent levels of support and operational flexibility as well as significant competitiveness, hence, we have the ingredients for growth, despite the macro economic climate. However, given the uncertain backdrop the outlook needs to be tempered by the possibility of further magnification of our traditionally long and complex sales cycles.”
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Enquiries:
Arcontech Group plc
020 7256 2300
Richard Last, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks
To access more information on the Group please visit: www.arcontech.com
Chairman’s Statement
I am pleased to report another year of solid progress for Arcontech, despite the global pandemic, with good growth in profit before taxation for the year ended 30 June 2020 to £1,040,969 (2019: £931,717 restated (refer to the Notes for further detail on 2019 restated numbers)), a year-on-year increase of 12%. These figures include accruals no longer required which are unrelated to the underlying business amounting to £86,500 (2019: £156,786). After adjusting for release of these accruals, profit before taxation is £954,469 (2019: £774,931 restated), an increase of 23% over the previous year. This demonstrates the significant profit conversion from increased revenues as we are able to deliver more from our existing and well managed cost base.
We achieved an increase in turnover for the year of 4% against a challenging business backdrop particularly in the second half. Revenue grew by £113,952 to £2,955,314 (2019: £2,841,362 restated) primarily through increasing our product sales to existing customers, including growing our Desktop software solution customer base to 130 (2019:90), which is a creditable performance. Whilst sales to new customers in the year have not been what we had hoped due to extending sales cycles and potential customers less inclined to take on new products during the pandemic, our pipeline of opportunities with potential new customers is looking increasingly positive, particularly for server-side software products. In the year to 30 June 2020 recurring annual license fees accounted for 93% of our revenue with the bulk of the balance represented by fees under contract but subject to some fluctuation.
Statutory earnings per share for the year to 30 June 2020 was 9.22p (7.51p) an increase of 23% over the corresponding figure for the previous 12 months. These figures included the release of accruals mentioned above. The tax credit for the year was £176,734 (2019: £60,318) reflecting the benefits from historic tax losses and recognition of a deferred tax asset. As at 30 June 2020 Arcontech had tax losses of approximately £7.5m to offset against future trading profits. We believe a better representation of our performance is provided by fully diluted earnings per share based on profit before taxation, excluding the release of accruals relating to a legacy liability that has no direct connection with the Group’s revenues or costs incurred for the year under review. On this basis adjusted earnings per share was 8.39p, a 34% increase over the adjusted earnings figure of 6.24p for the year to 30 June 2019.
Financing
As at 30 June 2020 Arcontech had, excluding right of use lease liabilities, no debt and cash balances of £5,006,969 (2019: £4,063,484) an increase of 23%. This represents a cash conversion of adjusted operating profit (determined as operating profit before share-based payments and before the release of accruals in respect of prior years) of 90% (2019: 109%). Arcontech continues to be well financed and has a robust balance sheet which is highly desirable for a small, growing software company.
Dividend
I am pleased to announce that, subject to approval at the Annual General Meeting, we intend to pay a dividend of 2.5 pence per share for the year ended 30 June 2020 (30 June 2019: 2.0 pence), an increase of 25%, to those shareholders on the register as at the close of business on 11 September 2020, with an ex-dividend date of 10 September 2020.
Employees
Arcontech has a small, highly effective and committed workforce that has proved more than up to delivering excellent customer service whilst working remotely due to the COVID-19 pandemic .On behalf of the Board and shareholders I should like to thank them for their continued support, commitment and dedication to the Company and its customers .
Board
As has been previously reported I am standing down, after 13 years, as Chairman and Non-executive director at our forthcoming Annual General Meeting (AGM), which is due to take place on 29 September 2020. Geoff Wicks, who joined the Board as a non-executive director on 20 July will take over as Chairman; I wish him well in taking Arcontech through the next stages of its development. I should like to thank my Board colleagues, Matthew Jeffs and Louise Barton as well as our Head of Development Darren Lewis for their support; we have taken Arcontech on a long journey to achieving good sustainable profits with excellent cash generation. I wish them and Arcontech every success for the future.
Outlook
Our recurring annual licence fees provide a stable base for the business and our pipeline of prospects remains positive, but, as with most businesses we face a number of uncertainties: the impact of the COVID-19 pandemic, Brexit and changes taking place in the financial markets, as well as with our competitors. However, against this background our workforce has shown resilience and flexibility in dealing with the consequences of the pandemic and our customer relationships remain strong. We are a global business and believe we offer excellent levels of support and operational flexibility as well as significant competitiveness, hence, we have the ingredients for growth, despite the macro economic climate. However, given the uncertain backdrop the outlook needs to be tempered by the possibility of further magnification of our traditionally long and complex sales cycles.
Richard Last
Chairman and Non-Executive Director
Chief Executive’s Review
During the year we continued to focus on expanding and delivering on the sales pipeline whilst controlling costs, resulting in a statutory profit before tax of £1,040,969 (2019 restated: £931,717), an increase of 12% compared to the previous year and a 23% increase in adjusted profit to £954,469.
The year under review also saw the number of end users for our desktop software solution increase so that we now have a total of 130 end users (2019 – 90) amongst 3 global institutions. Excelerator numbers remained stable.
With regard to development, we rolled out our RESTful interface which has been performing as expected. This will significantly increase the available data for consumption for our current and future clients by enabling content in JSON and SQL formats to be pulled into our software from the web or intranets to use in spreadsheets, templates and charts.
We have also rolled out our new GUI for Director, which is our interface for MVCS and our Cache for which feedback has been excellent. The new interface has made administration intuitive and straight forward whilst adding value by, for example, alerting designated staff to data or communication issues when they happen instead of when they are reported by users of the data. Therefore reducing or removing operational, reputational and financial risk.
Work on our sales structure continued with the recruitment of two sales professionals at the end of January. Regrettably no sooner than we had conducted product training and allocated territories, the increase in COVID-19 infections required we protect our staff and work from home. This exercise which was undertaken in March went very smoothly thanks to the staff themselves.
Our staff adjusted to this change pragmatically and since decamping to their respective home-offices, we have supported our clients seamlessly and developed and rolled out new software to accommodate vendor developments, and more generally, to meet clients’ needs. Equally, our sales staff continued to uncover new opportunities and develop those already in the pipeline. Such dedication and professionalism reflects well on the company for which the board and I are very grateful. Richard Last steps down as Chairman after the AGM on 29 September 2020 after 13 years. He has played a major part in turning Arcontech from a loss making company to the profitable one it is today. The Board thanks him for his valuable contribution to the success of the Group during his term of office. Geoff Wicks becomes Chairman after the AGM on 29 September and we very much look forward to working with him.
The impact of COVID-19 has also been felt by our existing clients although to-date we have seen little impact on our business. It remains to be seen whether there will be permanent changes to the manner in which we secure future growth by signing up completely new clients given the new norm of online interaction. Our challenge is to ensure we devise our own strategies to succeed in this environment. We have already seen one positive in that we can meet people without the cost of travel or attending tradeshows.
Improving the frequency of sales remains our prime focus against our traditional background of a long sales cycle. We believe the expanded product offering and sales capability, along with our clients and potential clients need to reduce costs, should improve the frequency of sales.
We will also continue to explore opportunities with other organisations that can complement our offerings, whilst remaining alert for strategic acquisition opportunities that will benefit the Group.
Matthew Jeffs
Chief Executive
Strategic Report
The Directors present the group strategic report for Arcontech Group plc and its subsidiaries for the year ended 30 June 2020.
Principal activities
The principal activities of the Company and its subsidiaries during the year were the development and sale of proprietary software and provision of computer consultancy services.
Review of the business and prospects
A full review of the operations, financial position and prospects of the Group is given in the Chairman’s Statement and Chief Executive’s Review.
Key performance indicators (KPIs)
The Directors monitor the business using management reports and information, reviewed and discussed at monthly Board meetings. Financial and non-financial KPIs used in this report include:
Measurement:Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation) Performance:Continued growth driven by increased sales of our product offering
Measurement:Profit after tax and before release of accruals for administrative costs in respect of prior years Performance:Continued growth reflects increase in revenues whilst continuing to maintain tight cost control
Measurement:Cash and cash equivalents held at the end of the year Performance:The Group continues to maintain healthy cash balances subject to any exceptional circumstances or acquisition opportunities
Earnings per share (basic) 9.22p (2019: 7.51p restated; 2018: 7.14p)
Measurement:Earnings after tax divided by the weighted average number of shares Performance:Continued growth
Earnings per share (diluted) 9.03p (2019: 7.42p restated; 2018: 7.09p)
Measurement:Earnings after tax divided by the fully diluted number of shares Performance:Continued growth
Measurement:Net retention after adjusting for joiners and leavers during the year Performance:Staff morale from our dedicated employees remains strong, reflected in the stable retention rate
Principal risks and uncertainties
The Group’s performance is affected by a number of risks and uncertainties, which the Board monitor on an ongoing basis in order to identify, manage and minimise their possible impact. General risks and uncertainties include changes in economic conditions, interest rate fluctuations and the impact of competition. The Group’s principal risk areas and the action taken to mitigate their outcome are shown below:
Risk area
Mitigation
Competition
Ongoing investment in research and development
Responding to the changing needs of clients to remain competitive
Loss of key personnel
Employee share option scheme in place
COVID-19 pandemic
The Directors and employees are operating remotely in order to protect their health and safety
At present the Company believes that there should be no significant material disruption to its work
Brexit
Arcontech is a global company and as such seeks growth across a geographically diverse customer base
Relations with shareholders
Section 172(1) Statement – Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the success of the Group for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long term;
· Act fairly between the members of the Company;
· Maintain a reputation for high standards of business conduct;
· Consider the interests of the Company’s employees;
· Foster the Company’s relationships with suppliers, customers and others; and
· Consider the impact of the Company’s operations on the community and the environment.
The Group’s operation is the development and sale of proprietary software and provision of computer consultancy services. The Board has identified its key stakeholders as its customers, shareholders, employees and suppliers. The Board keeps itself appraised of its key stakeholders’ interests through a combination of both direct and indirect engagement, and the Board has regard to these interests when discharging its duties.
The application of the s172 requirements can be demonstrated in relation to some of the key decisions made during the year to 30 June 2020:
· Allocation of the Group’s capital in a way which offers significant returns to shareholders in line with the Company’s dividend policy, while also ensuring that the Group retains flexibility to continue to deploy capital towards profitable growth;
· Adapting a rapid response to the working location restrictions arising from the COVID-19 pandemic, ensuring that the Group continued to deliver both the high level of service and security that our customers depend on without compromising the health and safety of employees.
During the year to 30 June 2020, the Board assessed its current activities between the Board and its stakeholders, which demonstrated that the Board actively engages with its stakeholders and takes their various objectives into consideration when making decisions. Specifically, actions the Board has taken to engage with its stakeholders over the last twelve months include:
· Attended the 2019 AGM to answer questions and receive additional feedback from investors;
· Arranged meetings with certain stakeholders to provide them with updates on the Company’s operational activities and other general corporate updates;
· We discussed feedback from investors’ and analysts’ meetings following the release of our annual and half-year announcements. We have an investor relations programme of meetings with existing and potential shareholders; and
· Monitored company culture and engaged with employees on efforts to continuously improve company culture and morale.
The Board believes that appropriate steps and considerations have been taken during the year so that each Director has an understanding of the various key stakeholders of the Company. The Board recognises its responsibility to contemplate all such stakeholder needs and concerns as part of its discussions, decision-making, and in the course of taking actions, and will continue to make stakeholder engagement a top priority in the coming years.
Approved on behalf of the board on 1 September 2020.
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2020
2020
Restated2019
£
£
Revenue
2,955,314
2,841,362
Administrative costs
(1,917,502)
(1,936,829)
Operating profit
1,037,812
904,533
Net finance income
3,157
27,184
Profit before taxation
1,040,969
931,717
Taxation
176,734
60,318
Profit for the year after tax
1,217,703
992,035
Total comprehensive income for the year
1,217,703
992,035
Earnings per share (basic)
9.22p
7.51p
Adjusted* Earnings per share (basic)
8.56p
6.32p
Earnings per share (diluted)
9.03p
7.42p
Adjusted* Earnings per share (diluted)
8.39p
6.24p
*Adjusted to exclude the release of accruals for administrative costs of £86,500 (2019: £156,786) in respect of prior years.
All of the results relate to continuing operations.
Statement of Changes in Equity
For the year ended 30 June 2020
Group:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
Balance at 30 June 2018
1,651,314
56,381
56,366
2,011,689
3,775,750
Profit for the year
–
–
–
1,117,461
1,117,461
Adjustment for IFRS 15 restatement
(125,426)
(125,426)
Total comprehensive income for the year
–
–
–
992,035
992,035
Dividend paid
–
–
–
(171,334)
(171,334)
Share-based payments
–
–
53,857
–
53,857
Transfer between reserves
–
–
(10,576)
10,576
–
Restated Balance at 30 June 2019
1,651,314
56,381
99,647
2,842,966
4,650,308
Profit for the year
–
–
–
1,217,703
1,217,703
Total comprehensive income for the year
–
–
–
1,217,703
1,217,703
Dividend paid
–
–
–
(263,591)
(263,591)
Share-based payments
–
–
98,428
–
98,428
Transfer between reserves
–
–
(9,436)
9,436
–
Balance at 30 June 2020
1,651,314
56,381
188,639
3,806,514
5,702,848
Company:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
Balance at 30 June 2018
1,651,314
56,381
56,366
4,196,617
5,960,678
Profit for the year
–
–
–
342,250
342,250
Total comprehensive expense for the year
–
–
–
342,250
342,250
Dividend paid
–
–
–
(171,334)
(171,334)
Share-based payments
–
–
53,857
–
53,857
Transfer between reserves
–
–
(10,576)
10,576
–
Balance at 30 June 2019
1,651,314
56,381
99,647
4,378,109
6,185,451
Profit for the year
–
–
–
326,348
326,348
Total comprehensive income for the year
–
–
–
326,348
326,348
Dividend paid
–
–
–
(263,591)
(263,591)
Share-based payments
–
–
98,428
–
98,428
Transfer between reserves
–
–
(9,436)
9,436
–
Balance as at 30 June 2020
1,651,314
56,381
188,639
4,450,302
6,346,636
Balance Sheets
As at 30 June 2020
Group 2020 £
RestatedGroup 2019£
Company 2020 £
Company 2019£
Non-current assets
Goodwill
1,715,153
1,715,153
–
–
Property, plant and equipment
19,316
15,011
–
–
Right of use asset
512,061
–
–
–
Investments in subsidiaries
–
–
2,017,471
2,017,471
Deferred tax asset
452,000
285,000
151,000
125,000
Trade and other receivables
141,750
141,750
–
–
Total non-current assets
2,840,280
2,156,914
2,168,471
2,142,471
Current assets
Trade and other receivables
192,632
263,875
3,181,410
3,073,519
Cash and cash equivalents
5,006,969
4,063,484
1,146,700
1,078,755
Total current assets
5,199,601
4,327,359
4,328,110
4,152,274
Current liabilities
Trade and other payables
(1,851,037)
(1,833,965)
(149,945)
(109,294)
Lease liabilities
(141,693)
–
–
–
Total current liabilities
(1,992,730)
(1,833,965)
(149,945)
(109,294)
Non-current liabilities
Lease liabilities
(344,303)
–
–
–
Total Non-current liabilities
(344,303)
–
–
–
Net current assets
3,206,871
2,493,394
4,178,165
4,042,980
Net assets
5,702,848
4,650,308
6,346,636
6,185,451
Equity
Called up share capital
1,651,314
1,651,314
1,651,314
1,651,314
Share premium account
56,381
56,381
56,381
56,381
Share option reserve
188,639
99,647
188,639
99,647
Retained earnings
3,806,514
2,842,966
4,450,302
4,378,109
5,702,848
4,650,308
6,346,636
6,185,451
Group Cash Flow Statement
For the year ended 30 June 2020
2020
Restated2019
£
£
Cash generated from operations
1,315,421
966,060
Tax recovered
9,734
45,318
Net cash generated from operating activities
1,325,155
1,011,378
Investing activities
Interest received
29,914
27,184
Purchases of plant and equipment
(12,750)
(13,802)
Net cash generated from investing activities
17,164
13,382
Financing activities
Dividend paid
(263,591)
(171,334)
Payment of lease liabilities
(135,243)
–
Net cash used in financing activities
(398,834)
(171,334)
Net increase in cash and cash equivalents
943,485
853,426
Cash and cash equivalents at beginning of year
4,063,484
3,210,058
Cash and cash equivalents at end of year
5,006,969
4,063,484
Notes to the Financial Statements
For the year ended 30 June 2020
Status of financial information
Arcontech Group plc is a public limited company incorporated in England and Wales whose ordinary shares of £0.125 each are traded on the AIM Market of the London Stock Exchange. The Company’s registered office is 1st Floor, 11-21 Paul Street, London, EC2A 4JU.
The Board of Directors approved this preliminary announcement on 1 September 2020. Whilst the financial information included in this preliminary announcement has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as endorsed by the European Union, this announcement does not itself contain sufficient information to comply with all the disclosure requirements of IFRS and does not constitute statutory accounts of the Company for the years ended 30 June 2020 or 30 June 2019.
The financial information set out in this announcement does not comprise the Group’s statutory accounts for the years ended 30 June 2020 or 30 June 2019.
The financial information has been extracted from the statutory accounts of the Company for the years ended 30 June 2020 or 30 June 2019. The auditors reported on those accounts; their reports were unqualified and did not contain a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006.
The statutory accounts for the year ended 30 June 2019 have been delivered to the Registrar of Companies, whereas those for the year ended 30 June 2020 will be delivered to the Registrar of Companies following the Company’s Annual General Meeting.
Operating segments:
The Group reports internally to the Chief Operating Decision Maker (CODM), who is considered to be the Board. Intersegment license fees and management charges are not included in the reports reviewed by the CODM during the year but are calculated for statutory reporting purposes and therefore are excluded from the following revenue and operating profit disclosures.
2020
Restated2019
£
£
Revenue by segment
Software development and licence fees
2,955,315
2,841,362
External segment revenue
2,955,315
2,841,362
Operating profit by segment
Software development and licence fees
1,575,029
1,387,813
Unallocated overheads
(563,976)
(483,280)
Total operating profit
1,011,053
904,533
Finance income
29,916
27,184
Total profit before tax as reported in the Group income statement
1,040,969
931,717
2020
2019
£
£
Segment total of assets
Software development and licence fees
6,514,118
5,196,369
Unallocated assets
4,533,110
4,357,274
11,047,228
9,553,643
Less intercompany debtors
(3,174,349)
(3,069,370)
Total assets
7,872,879
6,484,273
2020
2019
£
£
Segment total of liabilities
Software development and licence fees
5,360,835
3,642,199
Unallocated liabilities
150,546
109,591
5,511,381
3,751,790
Less intercompany creditors
(3,174,349)
(3,069,370)
Total liabilities
2,337,032
682,420
2020
2019
£
£
Additions of property, plant and equipment assets by segment
Software development and licence fees
12,749
13,802
Total additions
12,749
13,802
2020
2019
£
£
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees
8,444
16,732
Total depreciation
8,444
16,732
Non-current assets by country
2020
2019
£
£
UK
2,840,280
2,156,914
Total non-current assets
2,840,280
2,156,914
Geographical information – External revenue
2020
Restated2019
£
£
UK
2,000,457
1,910,969
Europe (excluding UK)
821,193
804,989
Africa
45,000
44,938
North America
78,177
75,767
Australia
4,267
–
Asia Pacific
6,221
4,699
2,955,315
2,841,362
During the year there were 3 customers (2019: 4) who accounted for more than 10% of the Group’s revenues as follows:
2020
2019
Value of sales £
% of Total
Value of sales£
% of Total
Customer 1
659,327
22%
643,491
22%
Customer 2
516,605
17%
507,373
18%
Customer 3
371,536
13%
376,411
13%
Customer 4
300,696
10%
280,906
10%
1,848,164
62%
1,808,181
63%
These revenues are attributable to the software development and licence fees segment.
Earnings per share
2020
Restated2019
£
£
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders
1,217,703
992,035
1,217,703
992,035
No.
No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share
13,210,510
13,210,510
Number of dilutive shares under option
268,484
165,223
Weighted average number of ordinary shares for the purposes of dilutive earnings per share
13,478,994
13,375,733
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.
Net cash generated from operations – Group
2020
Restated2019
£
£
Operating profit
1,037,812
904,533
Depreciation charge
154,747
16,732
Non cash share option charges
98,428
53,857
Lease interest paid
(26,757)
–
Adjustment for IFRS 16
(37,125)
–
Decrease/(increase) in trade and other receivables
71,244
46,248
Decrease in trade and other payables
17,072
(55,310)
Cash generated from operations
1,315,421
966,060
Dividends
A final dividend of 2.5 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2019: 2.0 pence).
Prior year restatement
IFRS 15 “Revenue from contracts with customers” was adopted from 1 July 2018 in line with transitional provisions provided in the new standards. The audited financial statements for the year ended 30 June 2019 recognised revenue from recurring license fees on an ‘at a point in time’ basis. The Group has undertaken a further review and analysis of its offering and performance obligations under the terms of recurring license fee contracts and has also sought independent advice. The conclusion reached is that in the context of IFRS 15 the correct approach for the recognition of revenue is on an over time basis whereby deferred income arises upon entering into a license fee agreement and is then subsequently recognised as revenue across the remaining passage of time on the license.
This is consistent with the Group’s approach to revenue recognition for recurring license fees prior to the introduction of IFRS 15.
The comparatives for the year to 30 June 2019 have been restated in this report to recognise revenue from recurring license fee contracts on an over time basis. The effect of this change on the trading result for the year to 30 June 2019 as a result of this change in revenue recognition policy is shown below.
Group Income Statement and Statement of Comprehensive Income:
Revenue decreased by £125,426
Profit for the year before taxation and after taxation decreased by £125,426
Basic earnings per share decreased from 8.49p to 7.40p
Diluted earnings per share decreased from 8.35p to 7.30p
Statement of Changes in Equity:
Total comprehensive income for the year at 30 June 2019 decreased by £125,426
Retained earnings at 30 June 2019 decreased by £1,151,545
Group Balance Sheet:
Trade and other payables – Deferred income (Note 15) increased by £1,151,545
A third statement of financial position as at the beginning of the preceding period has not been presented in accordance with IAS8 paragraph 42 as the amount relating to the preceding period is immaterial.
Annual General Meeting
The Annual General Meeting of Arcontech Group PLC will be held at the Company’s offices, 1st Floor, 11-21 Paul Street, London EC2A 4JU on 29 September 2020 at 10.00 a.m.
Annual report and accounts
Copies of the annual report and accounts will be sent to shareholders shortly and will be available from the Company Secretary at the Company’s registered office at 1st Floor, 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
Trading Update / Notice of Results
27th August 2020
ARCONTECH GROUP PLC
(“Arcontech” or the “Company”)
Notice of Results
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that the Company’s results for the 12 months ended 30 June 2020 are expected to be announced on 2nd September 2020 and the Board looks forward to updating shareholders with further details at that time.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and Non-Executive Director
07713 214484
Matthew Jeffs, Chief Executive
020 7256 2300
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks (corporate finance)Tim Harper (ECM)
To access more information on the Group please visit: www.arcontech.com
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Board Appointment
ARCONTECH
GROUP PLC
(“Arcontech”
or the “Company”)
Board appointment
Arcontech (AIM: ARC), the provider of
products and services for real-time financial market data processing and
trading, is pleased to announce that Geoff Wicks will join the Board as a
Non-Executive Director with immediate effect. It is anticipated that Mr Wicks
will succeed Richard Last as Non-Executive Chairman following the Company’s
AGM, expected to be held in September 2020.
Mr Wicks was most recently Chairman of ULS
Technology plc, the provider of online technology platforms for the UK
conveyancing and financial intermediary markets. Prior to this, he was CEO of
Group NBT plc, a specialist in online brand protection and digital asset
management, from 2001 until he led the sale of the business to HgCapital in
2011. He remained part of the Group NBT business, now renamed NetNames, as a
non-executive director until 2013. Mr Wicks spent much of his earlier career at
Reuters, including heading divisions in the UK, France and Nordic regions and
latterly was director of corporate communications. Prior to Reuters, Geoff
worked in the banking and insurance industries.
The following information regarding the
appointment of Geoffrey Alan Wicks (aged 71) is required to be disclosed under
Schedule 2(g) of the AIM Rules for Companies:
Current directorships and/or
partnerships
Former directorships and/or partnerships
(within the last five years)
Raggleswood Residents Association
Limited
Castlecombe Primary School
ULS Technology plc
There are no further disclosures to be
made under Schedule 2(g) of the AIM Rules for Companies.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and Non-Executive Director
07713 214484
Matthew Jeffs, Chief Executive
020 7256 2300
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks (corporate finance)
Camille Gochez (ECM)
To access more information on the Group
please visit:www.arcontech.com
The
information communicated in this announcement contains inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Trading Update / Notice of Results
ARCONTECH
GROUP PLC
(“Arcontech”
or the “Company”)
Trading Update / Notice of Results
Arcontech (AIM: ARC), the provider of products and services
for real-time financial market data processing and trading, is pleased to
announce that profit for the year ended 30 June 2020 is expected to be in line
with market expectations. Unaudited net cash at 30 June 2020 amounted to £5.01 million
(at 30 June 2019: £4.06 million). We have continued to invest in sales and
marketing resources and confirm that the Company has not furloughed any staff,
drawn on any publicly available funding or delayed payment of PAYE and VAT.
Subject to shareholder approval at the Annual General
Meeting, the Board anticipates paying a dividend in line with the Company’s
dividend policy.
Financial expectations noted above are preliminary and
subject to year-end financial close and audit review processes.
Notice of Results
The Company’s results for the 12 months ended 30 June 2020
are expected to be announced in late August 2020 and the Board look forward to
updating shareholders with further details at that time.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and Non-Executive Director
07713 214484
Matthew Jeffs, Chief Executive
020 7256 2300
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks (corporate finance)
Camille Gochez (ECM)
To access more information on the Group
please visit:www.arcontech.com
The
information communicated in this announcement contains inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Directorate change and Appointment of Company Secretary
Arcontech Group PLC
01 June 2020
ARCONTECH GROUP PLC
(“Arcontech” or the “Company”)
Directorate change and Appointment of Company Secretary
Arcontech (AIM: ARC), the provider of products and services for
real-time financial market data processing and trading, announces today that
Richard Last, non-executive Chairman, has decided to stand down from the Board
at the next Annual General meeting scheduled for September 2020.
We would like to thank Richard, who has been a director and
Chairman of the company since January 2007, for his support, guidance and
contribution that has enabled Arcontech to become a successful, profitable and
cash generative business.
Richard commented “I have enjoyed working with Matthew
and the team and as a supportive shareholder look forward to Arcontech
continuing the excellent progress made to date”.
To provide for an orderly handover, the Board has already
commenced the search for a new non-executive Chairman.
Appointment of Company Secretary
Arcontech would also like to announce the appointment of Ben
Hodges CPA, as Company Secretary. Ben is also the Finance Director for the
principle subsidiary of the Group.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and Non-Executive
Director
07713 214484
Matthew Jeffs, Chief
Executive
020 7256 2300
finnCap Ltd (Nomad &
Broker)
020 7220 0500
Carl Holmes/Simon Hicks (corporate finance)
Camille Gochez (ECM)
To access more information on the Group please visit: www.arcontech.com
Interim Results for the six months ended 31 December 2019
ARCONTECH GROUP PLC
(“Arcontech” or the “Group”)
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2019
Arcontech
(AIM: ARC), the provider of products and services for real-time financial market
data processing and trading, is
pleased to report its unaudited results for the six months ended 31 December
2019.
Highlights:
Turnover increased by 7.5% to £1,473,651
(six months ended 31 December 2018: £1,371,107)
Profit before tax increased by 22%
to £551,847 (six months ended 31 December 2018: £452,756)
Adjusted profit before tax (before
release of accruals for administrative costs in respect of prior years but
including share based payments) increased by 52% to £509,347 (six months ended
31 December 2018: £335,470)
Annual run-rate of recurring revenues
at 31 December 2019 increased by 3% to £2.87 million (at 31 December 2018:
£2.78 million)
Cash of £4,400,455
as at 31 December 2019 (31 December
2018: £3,231,830)
Trading in line and on track to meet
full year market expectations
Richard
Last, Chairman of Arcontech Group, said:
“The Board is pleased with Arcontech’s growth in revenue and adjusted profit before tax. Cash at the half year was £1,168,625 higher than the previous half year, further strengthening the Balance Sheet and demonstrating the cash generative and robust nature of the business. We have continued to invest in product development to add value to existing and prospective clients whilst making our products more competitive and compelling when compared with alternatives. Whilst there remain global factors that can affect our always long and unpredictable sales cycle, we remain positive about the Group’s long term prospects and the Board expects results for the full year to be in line with expectations.”
Enquiries:
Arcontech Group plc
020 7256 2300
Richard Last, Chairman and
Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
020 7220 0500
Carl Holmes/Simon Hicks
Camille Gochez – ECM
To access more information on the Group please visit: www.arcontech.com
The
information communicated in this announcement contains inside information for
the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
The interim report will only be available to view online enabling the Group to communicate in a more environmentally friendly and cost-effective manner.
Arcontech Group PLC Trading Update & Notice of Results
UK Regulatory (RNS & others)
RNS Number : 5531E
Arcontech Group PLC
28 February 2020
ARCONTECH GROUP PLC
(“Arcontech” or the “Company”)
Trading update & Notice of Results
Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that results for the six months year ended 31 December 2019 will be in line with management expectations.
Notice of Results
The Company’s results for the six months ended 31 December 2019 are expected to be announced on 5 March 2020 and the Directors look forward to updating shareholders with further details at that time.
Enquiries:
Arcontech Group plc
Richard Last, Chairman and Non-Executive Director 07713 214484
Matthew Jeffs, Chief Executive 020 7256 2300
finnCap Ltd (Nomad & Broker) 020 7220 0500
Carl Holmes/Simon Hicks (corporate finance)
Camille Gochez (ECM)
To access more information on the Group please visit: www.arcontech.com