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Director/PDMR Shareholding

ARCONTECH GROUP PLC 

(“Arcontech” or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces today that Ben Hodges, Chief Financial Officer, purchased 6,257 ordinary shares (“Ordinary Shares”) at a price of 79.90 pence per share. Following this purchase, Ben Hodges has a beneficial interest of 13,023 Ordinary Shares in the Company representing approximately 0.10% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks,  Chairman and Non-Executive Director
Matthew Jeffs,  Chief Executive Officer

Cavendish Capital Markets Ltd (Nomad & Broker)
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)	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	Ben Hodges
2.		Reason for the Notification
a)		Position/status	Chief Financial Officer
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	ARC GB00BDBBJZ03
b)		Nature of the transactions	Purchase of Ordinary Shares
c)		Price(s) and volume(s)	Price(s) Volume(s) 79.90 pence 6,257
d)		Aggregated information: · Aggregated volumes · Prices	See 4(c) above
e)		Date of the transaction	5 March 2025
f)		Place of the transaction	London Stock Exchange

ARC – ISO certification – 12 March 2025

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Arcontech achieves ISO certifications

Arcontech Group Plc (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that it has been awarded the ISO/IEC 27001:2022 (“ISO 27001”) and ISO/IEC 22301 2019 (“ISO 22301”) certifications.

ISO 27001 is an internationally recognised security standard that determines the requirements for establishing, implementing, maintaining, and continually improving an Information Security Management System (ISMS).

ISO 22301 is the global standard for Business Continuity Management, helping organisations effectively mitigate disruptions and continue operations.

Following successful external audits by a UKAS accredited certification body, Arcontech has achieved full compliance with these global standards.

Mark Maguire, Head of Customer Support for Arcontech said:

“All of our customers and prospective clients have very rigorous requirements for information security and business continuity, exemplified by the recent introduction of the Digital Operational Resilience Act (“DORA”) in the EU. Arcontech’s UKAS accredited certification for ISO 27001 and ISO 22301 not only plays a critical role in meeting DORA requirements but also demonstrates our commitment to being a reliable and trusted partner”.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive Officer

Cavendish Capital Markets Ltd (Nomad & Broker)
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)	020 7220 0500

To access more information on the Group please visit: www.arcontech.com

Director/PDMR Shareholding

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces today that Suzanne Jeffs, a person closely associated to Matthew Jeffs, Chief Executive Officer, purchased 18,000 ordinary shares (“Ordinary Shares”) at an average price of 80.12 per share. Following this purchase, Matthew Jeffs and persons closely associated has a beneficial interest of 1,013,000 ordinary shares in the Company representing 7.57% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive Officer

Cavendish Capital Markets Ltd (Nomad & Broker)
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)	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	Suzanne Jeffs
2.		Reason for the Notification
a)		Position/status	Person closely associated with Matthew Jeffs (Chief Executive Office)
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	ARC GB00BDBBJZ03
b)		Nature of the transactions	Purchase of Ordinary Shares
c)		Price(s) and volume(s)	Price(s) Volume(s) 80.12 pence 18,000
d)		Aggregated information: · Aggregated volumes · Prices	See 4(c) above
e)		Date of the transaction	26 February 2025
f)		Place of the transaction	London Stock Exchange

Interim result for the six months ended 31 December 2024

ARCONTECH GROUP PLC

(“Arcontech” or the “Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, reports its unaudited results for the six months ended 31 December 2024.

Overview:

Revenue increased by 4.3% to £1,511,346 (H1 2023: £1,448,804)

Recurring revenues represented 97% of total revenues for the period (H1 2023: 100%)

Adjusted EBITDA* decreased by 12.1% to £446,513 (H1 2023: £507,668) reflecting the expected increase in staff costs

(* adjusted ebitda is defined as operating profit before depreciation, amortisation, share base payments and releases of historic accruals relating to administrative expenses)

Profit before tax decreased by 3.8% to £518,166 (H1 2023: £538,790)

Our preferred measure of adjusted profit before tax, which excludes the release of accruals unrelated to the underlying business, decreased by 7.5% to £494,360 (H1 2023: £534,775)

Net cash of £7,166,839 at 31 December 2024, up 24.9% (H1 2023: £5,734,226). The period under review saw the return to a normal billing cycle for one of our large customers, and a record dividend payment of £501,479 on 1 November 2024

Trading in line with full year market expectations and confident in the full year outturn

Geoff Wicks, Chairman of Arcontech, said:

“The improvements to market conditions we mentioned in our Preliminary Statement last year have continued and the growth has materialised. We remain cautious as customers are careful about increasing their costs and lead times remain long. However, our pipeline is strong and we are confident about our future and the full year outturn.”

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)

To access more information on the Group please visit: www.arcontech.com

The interim report will only be available to view online enabling the Group to communicate in a more environmentally friendly and cost-effective manner.

Chairman’s Statement

Arcontech has seen continued growth and although market conditions have improved many customers are cautious about embarking on new projects and increasing their cost base. As a result our pipeline has improved but lead times remain long. Our continued focus on our core market has ensured we continue to build the potential for future growth.

Our expected growth is likely to be tempered by some downsizing at larger customers as technology and markets change, however we are confident that new business will continue to work its way through the pipeline. With the complexity of markets changing, we have started to see some one-off contracts for work to change and embed our products into our customers’ systems. It remains a small part of our business.

Revenue was £1.51 million, up 4.3% on the same period last year, Profit before tax (“PBT”) was £0.51 million, down 3.8% on the same period last year. Adjusted profit before tax, which is PBT before the release of accruals for administrative costs in respect of prior years was £0.50 million, down 7.5% on the previous year.

Financing

Our balance sheet remains robust with net cash of £7.1 million, £1.2 million higher than at 31 December 2023. The cash generation profile for the period normalised with a return to regular timing of the billing cycle for a large customer. This cash position allows for continued investment in sales and products and for us to remain alert to opportunities to acquire small complementary businesses.

Dividend

No interim dividend is proposed to be paid in respect of the half year. The Board expects to continue its policy of paying a dividend following the announcement of its full year results.

Outlook

The improvements to market conditions we mentioned in our Preliminary Statement last year have continued and the growth has materialised. We remain cautious as customers are careful about increasing their costs and lead times remain long. However, our pipeline is strong and we are confident about our future and the full year outturn.

Geoff Wicks

Chairman and Non-Executive Director

GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2024	2023	2024
		(unaudited) £	(unaudited) £	(audited) £

Revenue		1,511,346	1,448,804	2,910,232

Administrative costs		(1,109,882)	(1,039,456)	(2,040,541)

Operating profit	4	401,464	409,348	869,691

Finance income		139,066	126,055	247,903

Finance costs	12	(22,364)	3,387	(18,635)


Profit before taxation		518,166	538,790	1,098,959

Taxation	6	–	–	(31,302)
Profit for the period after tax		518,166	538,790	1,067,657

Total comprehensive income		518,166	538,790	1,067,657

Profit per share (basic)		3.87p	4.03p	7.98p

*Adjusted Profit per share (basic)**		3.70p	4.00p	7.80p

Profit per share (diluted)		3.85p	4.02p	7.96p

*Adjusted Profit per share (diluted)**		3.68p	3.99p	7.78p

All of the results relate to continuing operations and there was no other comprehensive income in the period.

* Before release of accruals for administrative costs in respect of prior years.

GROUP BALANCE SHEET

	Note	31 December 2024	31 December 2023	30 June 2024
		(unaudited) £	(unaudited) £	(audited) £
Non-current assets
Goodwill		1,715,153	1,715,153	1,715,153
Property, plant and equipment		10,220	6,325	5,404
Right of use asset	12	447,279	559,098	503,190
Deferred tax asset		358,000	328,000	358,000
Trade and other receivables	9	141,750	141,750	141,750

Total non-current assets		2,672,402	2,750,326	2,723,497

Current assets
Trade and other receivables	9	821,336	1,335,408	677,069
Cash and cash equivalents		7,166,839	5,734,226	7,160,177

Total current assets		7,988,175	7,069,634	7,837,246

Current liabilities
Trade and other payables	10	(594,088)	(473,512)	(595,190)
Deferred income		(1,221,194)	(1,013,405)	(1,092,835)
Lease liabilities	12	(114,893)	(68,869)	(110,308)
Provisions		–	(50,000)	–

Total current liabilities		(1,930,175)	(1,605,786)	(1,798,333)

Non-current liabilities
Lease liabilities	12	(368,748)	(483,641)	(427,365)
Provisions		(70,000)	(20,000)	(70,000)

Total non-current liabilities		(438,748)	(503,641)	(497,365)

Net current assets		6,058,000	5,463,848	6,038,913

Net assets		8,291,654	7,710,533	8,265,045
Equity
Share capital		1,671,601	1,671,601	1,671,601
Share premium account		115,761	115,761	115,761
Share option reserve		340,668	305,101	330,746
Retained earnings		6,163,624	5,618,070	6,146,937

		8,291,654	7,710,533	8,265,045

GROUP CASH FLOW STATEMENT

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2024	2023	2024
		(unaudited) £	(unaudited) £	(audited) £
Cash generated from / (used in) operating activities	11	432,237	(296,937)	1,051,177

Tax paid	6	–	–	(15,586)

Net cash generated from / (used in) operating activities		432,237	(296,937)	1,035,591

Investing activities

Interest received		137,775	126,055	247,903

Proceeds on disposal of fixed assets		–	417	417
Purchases of plant and equipment		(7,840)	(3,471)	(12,055)

Net cash generated from investing activities		129,935	123,001	236,265

Financing activities

Dividends paid		(501,479)	(468,048)	(468,048)

Payment of lease liabilities		(54,031)	(35,031)	(54,872)


Net cash used in financing activities		(555,510)	(503,079)	(522,920)
Net increase / (decrease) in cash and cash equivalents		6,662	(677,015)	748,936

Cash and cash equivalents at beginning of period		7,160,177	6,411,241	6,411,241

Cash and cash equivalents at end of period		7,166,839	5,734,266	7,160,177

GROUP STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Share-option reserve	Retained earnings	Total
	£	£	£	£	£
At 1 July 2023	1,671,601	115,761	279,455	5,547,328	7,614,145
Profit for the period	–	–	–	538,790	538,790
Total comprehensive income for the period	–	–	–	538,790	538,790
Dividends paid	–	–	–	(468,048)	(468,048)
Share-based payments	–	–	25,646	–	25,646
Total transactions with owners	–	–	25,646	(468,048)	(442,402)
At 31 December 2023	1,671,601	115,761	305,101	5,618,070	7,710,533
Profit for the period	–	–	–	528,867	528,867
Total comprehensive income for the period	–	–	–	528,867	528,867
Share-based payments	–	–	25,645	–	25,645
Total transactions with owners	–	–	25,645	–	25,645
At 30 June 2024	1,671,601	115,761	330,746	6,146,937	8,265,045
Profit for the period	–	–	–	518,166	518,166
Total comprehensive income for the period	–	–	–	518,166	518,166
Dividends paid	–	–	–	(501,479)	(501,479)
Share-based payments	–	–	9,922	–	9,922
Total transactions with owners	–	–	9,922	(501,479)	(491,557)
At 31 December 2024	1,671,601	115,761	340,668	6,163,624	8,291,654

NOTES TO THE FINANCIAL INFORMATION

The figures for the six months ended 31 December 2024 and 31 December 2023 are unaudited and do not constitute statutory accounts. The accounting policies adopted are consistent with those applied by the Group in the preparation of the annual consolidated financial statements for the year ended 30 June 2024. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in the 2025 financial year, but these do not have a material impact on the interim condensed consolidated financial statements of the Group.
The financial information for the year ended 30 June 2024 set out in this interim report does not comprise the Group’s statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2024, which were prepared in accordance with UK-adopted international accounting standards, have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.
Copies of this statement are available from the Company Secretary at the Company’s registered office at 1^st Floor 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
Operating profit is stated after release of accruals for administrative expenses in respect of prior years of £23,806 (31 December 2023: £4,014; 30 June 2024: £24,603).
Earnings per share have been calculated based on the profit after tax and the weighted average number of shares in issue during the half year ended 31 December 2024 of 13,372,811 (31 December 2023: 13,372,811 30 June 2024: 13,372,811).

The number of dilutive shares under option at 31 December 2024 was 76,017 (31 December 2023: 26,988; 30 June 2024: 31,620). 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 the average market price during the period, based upon the issue price of the outstanding share options including future charges to be recognised under the share-based payment arrangements.

Taxation is based on the unaudited results and provision has been estimated at the rate applicable to the Company at the time of this statement and expected to be applied to the total annual earnings. No corporation tax has been charged in the period as any liability has been offset against tax losses brought forward from prior years. The tax paid represents the cash payment of tax liability from the preceding income tax year.
A final dividend in respect of the year ended 30 June 2024 of 3.75 pence per share (2023: 3.50 pence per share) was paid on 1 November 2024.
The Directors have elected not to apply IAS 34 Interim financial reporting.

Trade and other receivables

	31 December 2024 £ (unaudited)	31 December 2023 £ (unaudited)	30 June 2024 £ (audited)
Due within one year:

Trade and other receivables	628,762	1,137,648	458,227

Prepayments and accrued income	192,575	197,760	218,842

Other receivables	–	–	–
	821,336	1,335,408	677,069

	31 December 2024 £ (unaudited)	31 December 2023 £ (unaudited)	30 June 2024 £ (audited)
Due after more than one year:

Other receivables	141,750	141,750	141,750
	141,750	141,750	141,750

The long term trade receivable of £141,750 is the rental agreement deposit for the Group’s Paul Street office.

Trade and other payables

	31 December 2024 £ (unaudited)	31 December 2023 £ (unaudited)	30 June 2024 £ (audited)

Trade payables	88,874	27,055	61,328

Other tax and social security payable	169,864	69,714	106,899

Other payables and accruals	335,350	376,743	426,963
	594,088	473,512	595,190

Cash generated from operations

	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
	2024	2023	2024
	(unaudited) £	(unaudited) £	(audited) £

Operating profit	401,464	409,348	869,691

Depreciation charge	58,933	76,688	134,518

Non-cash share option charges	9,922	25,646	51,291

Lease interest charge	(21,569)	(476)	(18,435)

Other interest charge	(795)	(1,141)	(200)

Profit on disposal of fixed assets	–	(152)	(151)
Increase in trade and other receivables	(133,039)	(990,910)	(318,958)

Increase in trade and other payables	117,321	184,060	333,421
Cash generated from / (used in) operations	432,237	(296,937)	1,051,177

12. Leases

As a lessee, under IFRS 16 the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

	Right of use asset £	Lease liability £	Income statement £
As at 1 July 2024	503,190	(537,672)	–

Depreciation	(55,911)	–	(55,910)
Interest	–	(21,569)	(21,569)
Lease payments	–	75,600	–
Carrying value at 31 December 2024	447,279	(483,641)	(77,479)

	Right of use asset £	Lease liability £		Income statement £
As at 1 July 2023	73,152	(40,324)		–

Recognition of new lease under IFRS 16	559,803	(552,220)		–
Depreciation	(73,857)	–		(73,857)
Liability write-back at expiry	–	5,293	¹	5,293
Interest	–	(765)		(765)
Lease payments	–	35,506		–
Carrying value at 31 December 2023	559,098	(552,510)		(69,329)

Contractual maturity analysis of lease liabilities as at 31 December 2024

	Less than 3 months £	3 – 12 months £	1 – 5 Years £	Longer than 5 Years £	Total £
Lease liabilities	37,800	113,400	332,441	–	483,641

Grant of Options

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Grant of Options

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that on 4 December 2024 it granted a total of 30,000 options (“Options”) over ordinary shares of £0.125 in the Company (“Ordinary Shares”) under the Company’s EMI scheme to the following person disclosing managerial responsibility (“PDMRs”), Mark Maguire (Head of Customer Support).

The Options have been granted at a price of 125.5p pence per Ordinary Share, being the closing mid-market price of the Company’s Ordinary Shares on 3 December 2024. The Options will be exercisable from 30 June 2027 and are not subject to performance criteria.

Following this grant, there are a total of 610,500 options outstanding, representing approximately 4.5% 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 Officer

Cavendish Capital Markets Ltd (Nomad & Broker)
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)	020 7220 0500

To access more information on the Group please visit: www.arcontech.com

1.	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Mark Maguire
2.	Reason for the Notification
a)	Position/status	Head of Customer Support
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	Options over Ordinary Shares of £0.125
a)	Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Grant of Options over Ordinary Shares
c)	Price(s) and volume(s)	Price(s) Volume(s) 125.5p 30,000
d)	Aggregated information: Aggregated volumesPrices	See 4(c) above
e)	Date of the transaction	04 December 2024
f)	Place of the transaction	Off market transaction

Director/PDMR Shareholding

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces the following Director/PDMR dealing in Arcontech’s ordinary shares (“Ordinary Shares”).

Matthew Jeffs, Chief Executive Officer, and his wife, a person closely associated to Matthew Jeffs, have purchased an aggregate total of 60,000 Ordinary Shares across a number of small transactions at an average price of 119 pence per share. Following this purchase, Matthew Jeffs has a beneficial interest of 995,000 ordinary shares in the Company representing 7.44% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive Officer

Cavendish Capital Markets Ltd (Nomad & Broker)
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)	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 Officer
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	ARC GB00BDBBJZ03
b)		Nature of the transactions	Purchase of Ordinary Shares
c)		Price(s) and volume(s)	Price(s) Volume(s) 1) 120p 2) 118p 50,000 10,000
d)		Aggregated information: · Aggregated volumes · Prices	See 4(c) above
e)		Date of the transaction	7 November 2024 (50,000) 8 November 2024 (10,000)
f)		Place of the transaction	London Stock Exchange

Result of Annual General Meeting

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Result of Annual General Meeting

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.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes / Rory Sale – Corporate Finance Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Notice of Annual General Meeting 9 October 2024

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IF YOU ARE IN ANY DOUBT AS TO WHAT ACTION TO TAKE YOU ARE RECOMMENDED TO CONSULT YOUR STOCKBROKER, SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT ADVISER AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000.

If you have sold or transferred all of your ordinary shares in Arcontech Group PLC, you should pass this document to the person through whom the sale or transfer was made for transmission to the purchaser or transferee.

ARCONTECH GROUP PLC

NOTICE OF ANNUAL GENERAL MEETING

Notice of Annual General Meeting

Notice of the annual general meeting which has been convened for 10.00am on 9 October 2024 at the offices of the Company at 1^st Floor, 11-21 Paul Street, London EC2A 4JU is set out at pages 5 and 6 of this document.

To be valid, proxy votes must be received by the Company’s registrar, Link Group, as soon as possible and in any event no later than 10.00am on 7 October 2024.

ARCONTECH GROUP PLC

(Incorporated and registered in England and Wales under company number 4062416)

Registered Office

1^st Floor

11-21 Paul Street

London EC2A 4JU

17 September 2024

To the Holders of Arcontech Group PLC Shares

Dear Shareholder,

Notice of Annual General Meeting

I am pleased to be writing to you with details of our annual general meeting (AGM) which we are holding at the Company’s offices at 1^st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00am on 9 October 2024. The formal notice of the AGM is set out on pages 5 and 6 of this document.

If you would like to vote on the resolutions but cannot attend the AGM, please complete your proxy appointment using one of the methods detailed below. Please note that the Company’s registrars, Link Group, must receive your proxy appointment no later than 10.00am on 7 October 2024.

Explanatory notes on all the business to be considered at this year’s AGM can be found on pages 7 to 9.

Last year, to further reduce our environmental impact, shareholders were notified that we will be removing paper from the voting process for meetings in favour of a quicker and more secure method of voting online via our registrars’ website; https://investorcentre.linkgroup.co.uk/Login/Login. If you have not already registered for the Link Investor Centre you will need your Investor Code, which can be found on your share certificate. Once registered you will be able to vote immediately.

In the event that you do require a hard copy form of proxy, or you do not know your Investor Code, you can request this from our registrar, Link Group, by emailing shareholderenquiries@linkgroup.co.uk or calling them on 0371 664 0300 or, if calling from overseas, on +44 (0) 371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Link Group are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales. If you complete a hard copy form of proxy, please ensure that you return it to the Company’s registrars, Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, as soon as possible and no later than 10.00am on 7 October 2024.

Dividend

I am pleased to announce your Board proposes, subject to the approval of an ordinary resolution of shareholders at the AGM, to pay a dividend of 3.75 pence per share for the year ended 30 June 2024 to those shareholders on the register as at the close of business on 4 October 2024, with an ex-dividend date of 3 October 2024. If approved at the AGM, the dividend will be paid on 1 November 2024.

Buy back of shares

A special resolution is proposed to grant the Company authority to purchase its own ordinary shares in the market. The Directors will seek authority, to expire on 9 October 2025 or at the end of the annual general meeting in 2025 whichever is earlier, for the Company to purchase its own ordinary shares in the market up to a maximum of 1,337,281 ordinary shares having an aggregate nominal value of £167,160 being 10 per cent of the existing ordinary share capital in issue as at 16 September 2024 (being the latest practicable date prior to the publication of the AGM notice). The terms of this authority and its effect are described in the explanatory notes to the resolutions at the end of the AGM notice.

Recommendation

The board considers that all of the resolutions are in the best interests of the Company and its shareholders as a whole and are most likely to promote the success of the Company for the benefit of its shareholders as a whole. Accordingly, the board unanimously recommends that you vote in favour of all resolutions.

Yours Sincerely

Geoff Wicks

Chairman

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Notice of AGM posted to Shareholders	17 September 2024
Shares become ex-dividend	3 October 2024
Record date for dividend	4 October 2024
Latest time and date for receipt of Proxy Votes	10.00am on 7 October 2024
Annual general meeting	10.00am on 9 October 2024
Payment of dividend	1 November 2024

Notice of Annual General Meeting

ARCONTECH GROUP PLC

Company Number 4062416

NOTICE IS HEREBY GIVEN that the annual general meeting of Arcontech Group PLC (the “Company“) will be held at the Company’s offices, 1^st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00am on 9 October 2024 to consider, and if thought fit, pass the Ordinary and Special Resolutions specified below. Resolutions 1 to 5 will be proposed as Ordinary Resolutions and Resolutions 6 and 7 as Special Resolutions:

Ordinary Business

That the following resolutions be considered as Ordinary Resolutions:

THAT the audited financial statements of the Company for the financial year ended 30 June 2024 together with the reports on those financial statements of (i) the directors of the Company (the “Directors“) and (ii) the auditors of the Company (the “Auditors“) be received and adopted.

THAT a final dividend of 3.75 pence per ordinary share in respect of the financial year of the Company ended 30 June 2024, be declared and be paid on 1 November to ordinary shareholders whose names appear in the register of members at the close of business on 4 October 2024.

THAT PKF Littlejohn LLP be appointed as Auditors to hold office until the conclusion of the next general meeting at which financial statements are laid before the Company, and that the Directors be authorised to determine their remuneration.

THAT Matthew Jeffs, who retires by rotation under Article 106 of the Company’s articles of association, be re-elected a director of the Company.

Special Business

That the following resolution be considered as an Ordinary Resolution:

THAT in accordance with section 551 of the Companies Act 2006 (“2006 Act“), the Directors of the Company (“Directors“) be generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company (“Rights“) up to an aggregate nominal amount of £410,000 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the day falling fifteen months after the passing of this resolution or at the conclusion of the annual general meeting of the Company to be held in 2025 (whichever is earlier) save that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted or Rights to be granted and the Directors may allot shares or grant Rights in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.

This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the 2006 Act.

THAT the following resolutions be considered as Special Resolutions:

THAT subject to the passing of Resolution 5 above and in accordance with section 570 of the 2006 Act, the Directors be generally empowered to allot equity securities (as defined in section 560 of the 2006 Act) for cash pursuant to the authority conferred by Resolution 5 above and/or be and are hereby empowered pursuant to section 573 of the 2006 Act to sell ordinary shares (as defined in section 560 of the Act) held by the Company as treasury shares (as defined in section 724 of the 2006 Act) for cash, in each case for the duration of this authority, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided the power to allot equity securities and sell treasury shares shall:

6.1 in connection with a rights issue, open offer or any other pre-emptive offer in favour of holders of equity securities (as required by the rights of those securities) in proportion (as nearly as may be) to their respective holdings, subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates, legal or practical difficulties in or under the laws of any territory or the requirements of any regulatory body or stock exchange; and

6.2 (otherwise than pursuant to sub-paragraph 6.1 above) be limited to the allotment of equity securities and sale of treasury shares up to an aggregate nominal amount of £410,000; and

6.3 expire on the day falling fifteen months after the passing of this resolution or at the conclusion of the annual general meeting of the Company to be held in 2025 (whichever is earlier) (unless renewed, varied or revoked by the Company prior to or on that date) save that the Company may, before such expiry make an offer or agreement which would or might require equity securities to be allotted or treasury shares to be sold after such expiry and the Directors may allot equity securities or sell treasury shares in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.

THAT the Company be and is hereby unconditionally and generally authorised for the purpose of section 701 of the Companies Act 2006 to make market purchases (as defined in section 693 of that Act) of ordinary shares of 12.5 pence each in the capital of the Company provided that:

(i) the maximum number of shares which may be purchased is 1,337,281;

(ii) the minimum price which may be paid for each share is 12.5 pence;

(iii) the maximum price which may be paid for a share is an amount equal to the higher of (a) 105 per cent of the average of the closing price of the Company’s ordinary shares as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which such share is contracted to be purchased or (b) the higher of the price of the last independent trade and the highest current bid as stipulated by the European Commission adopted Regulatory Technical Standards pursuant to Article 5(6) of the Market Abuse Regulation; and

(iv) this authority shall expire at the conclusion of the annual general meeting of the Company to be held in 2025, or on 9 October 2025, whichever is the earlier, (except in relation to the purchase of shares the contract for which was concluded before the expiry of such authority and which might be executed wholly or partly after such expiry) unless such authority is renewed prior to such time.

By Order of the Board Registered Office:

	1^st Floor
	11-21 Paul Street
	London
………………………………………	EC2A 4JU
Ben Hodges Secretary

17 September 2024

EXPLANATORY NOTES TO EACH RESOLUTION

The following notes give an explanation of the proposed resolutions

Ordinary Resolutions

Resolutions 1 to 5 (inclusive) are proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the relevant resolution.

Report and Accounts (Resolution 1)

The directors of the Company must present the accounts to the meeting.

Dividend (Resolution 2)

The Company proposes to pay a dividend of 3.75 pence per share to shareholders on the register of members at close of business on 4 October 2024.

Reappointment and Remuneration of Auditors (Resolution 3)

Resolution 3 proposes the appointment of PKF Littlejohn LLP as Auditors of the Company and authorises the directors of the Company to fix their remuneration.

Re-election of Director (Resolution 4)

The Company’s articles of association require that any Director who was elected, or last re-elected, a Director at or before the annual general meeting held in the third calendar year before the current year shall retire by rotation, subject to re-election by a simple majority of the members. Matthew Jeffs is offering himself for re-election pursuant to the Company’s articles of association.

Authority to Allot Shares (Resolution 5)

Directors may only allot shares if authorised to do so by shareholders. The authority granted at the last Annual General Meeting (“AGM“) is due to expire at the conclusion of this year’s AGM. Therefore, this resolution seeks to grant a new authority to allow authority to allow the Directors to allot shares until the conclusion of the next AGM or until 15 months from the date of this meeting, whichever is the earlier. The maximum amount of shares which the Directors would be able to allot without further authority from shareholders is 3,280,000. It is expected that this amount will be sufficient for the day to day running of the Company.

Special Resolutions

Resolutions 6 and 7 are proposed as special resolutions. This means that for the resolutions to be passed, at least three-quarters of the votes cast must be in favour of the resolutions.

Disapplication of Pre-emption Rights (Resolution 6)

Under the requirements of the 2006 Act, ordinarily if the Directors wish to allot any of the unissued shares or sell any treasury shares (i.e. shares it has bought back in the market), they must first offer them to existing shareholders on a pro-rata basis in proportion to their shareholdings. There may be occasions however where the Directors will need the flexibility to finance business opportunities through the issue of shares or sale of treasury shares without a pre-emptive offer to existing shareholders. This resolution asks shareholders to waive the pre-emption rights on shares issued and treasury shares sold up to a maximum aggregate number of shares of 3,280,000. As with resolution 6, this authority will expire at the next AGM or within 15 months of the date of this meeting, whichever is earlier.

Buy Back of Shares (Resolution 7)

A special resolution is proposed to grant the Company authority to purchase its own ordinary shares in the market. The Directors will seek authority, to expire on 9 October 2025 or at the end of the annual general meeting in 2024 whichever is earlier, for the Company to purchase its own ordinary shares in the market up to a maximum of 1,337,281 ordinary shares having an aggregate nominal value of £167,160, being 10 per cent of the existing ordinary share capital in issue as at 16 September 2024 (being the latest practicable date prior to the publication of this Notice).

The Company’s exercise of this authority is subject to the upper and lower limits on the price payable stated in the resolution. As at 16 September 2024 (being the latest practicable date prior to the publication of this Notice), there were options outstanding to subscribe for 580,500 ordinary shares. If the outstanding options were fully exercised, they would represent 4.16 per cent of the 13,953,311 issued ordinary shares of the Company. If the buy back authority were exercised in full, that percentage would be 4.60 per cent of the reduced share capital of 12,616,030 shares.

The Directors consider it desirable and in the Company’s interests for shareholders to grant to the Company authority to exercise this power, within certain limits, to enable the Company to purchase its own ordinary shares. This authority would only be exercised if and when conditions are favourable, with a view to enhancing net asset value per share. Any shares purchased would be held as treasury shares which may, at the discretion of the Directors, be resold for cash, transferred in connection with an employee share scheme, or cancelled. No dividends will be paid on and no voting rights will be exercised in respect of treasury shares.

Notes:

The Company, pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those members registered in the register of members of the Company at the close of business two days before the meeting or any adjournment thereof, shall be entitled to attend, speak or vote at the meeting in respect of the number of shares registered in their name at the relevant time. Changes to entries in the relevant register of securities later than this shall be disregarded in determining the rights of any person to attend, speak or vote at the meeting.

Information regarding the meeting, including the information required by section 311A of the 2006 Act, can be found at the Company’s website www.arcontech.com, including information on the number of shares and voting rights.

Any member who is entitled to attend and vote at this meeting is entitled to appoint one or more persons as proxies to attend, speak and vote on their behalf at the meeting or any adjournment of it. A proxy need not be a member of the Company. You can only appoint a proxy using the procedure set out on page 2 of this notice.

You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company’s registrar, Link Group, on the details set out on page 2 of this notice.

Link Investor Centre is a free app for smartphone and tablet provided by Link Group (the company’s registrar). It allows you to securely manage and monitor your shareholdings in real time, take part in online voting, keep your details up to date, access a range of information including payment history and much more. The app is available to download on both the Apple App Store and Google Play, or by scanning the relevant QR code below. Alternatively, you may access the Link Investor Centre via a web browser at: https://investorcentre.linkgroup.co.uk/Login/Login.

CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual (available viawww.euroclear.com). CREST personal members or other CREST sponsored members, and those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & International Limited’s specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Link Group (ID RA10) by 10.00 am on 7 October 2024.

For this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the CREST Application Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, sponsored member, or has appointed a voting service provider, to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable their CREST sponsors or voting system providers are referred, in particular to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

If you are an institutional investor you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. Your proxy must be lodged by 10.00am on 7 October 2024 in order to be considered valid or, if the meeting is adjourned, by the time which is 48 hours before the time of the adjourned meeting. Before you can appoint a proxy via this process you will need to have agreed to Proxymity’s associated terms and conditions. It is important that you read these carefully as you will be bound by them and they will govern the electronic appointment of your proxy. An electronic proxy appointment via the Proxymity platform may be revoked completely by sending an authenticated message via the platform instructing the removal of your proxy vote.

Unless otherwise indicated on the Form of Proxy, CREST, Proxymity or any other electronic voting instruction, the proxy will vote as they think fit or, at their discretion, withhold from voting.

If you need help with voting online or require a hard copy form of proxy, please contact our Registrar, Link Group by email at shareholderenquiries@linkgroup.co.uk, or you may call Link on 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England and Wales. If you complete a hard copy form of proxy, please ensure that you return it to the Company’s registrars, Link Group, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, as soon as possible and no later than 10.00am on 7 October 2024.

The register of Directors’ share interests will be available for inspection at the meeting convened by this notice, as will the Directors’ service contracts.

Any corporate entity which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a member provided that they do not do so in relation to the same shares.

In the case of joint holders, the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holders and seniority shall be determined by the order in which their names stand on the register of members of the Company.

Any member attending the meeting has the right to ask questions. The Company must cause to be answered any such question relating to the business being dealt with at the meeting but no such answer need be given if: (i) to do so would interfere unduly with the preparation for the meeting or would involve the disclosure of confidential information; or (ii) it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.

Annual Report & Notice of AGM

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Posting of Annual Report & Notice of AGM

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, confirms that its Annual Report and Accounts for the year ended 30 June 2024, together with the Notice of the Annual General Meeting, have been posted to shareholders. The documents will be available to download from the Company’s website www.arcontech.com later this afternoon.

The Company’s Annual General Meeting will be held at the Company’s offices at 1st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00 a.m. on 9 October 2024.

If you will be attending the Annual General Meeting, please ensure you bring proof of identity and share ownership.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Rory Sale Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Final Results for the year ended 30 June 2024

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Final Results for the year ended 30 June 2024

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 2024.

Financial Highlights:

Turnover was £2,910,232 (2023 £2,730,172)
Profit before taxation was £1,098,959 (2023 £985,696) up by £113,263
Recurring revenues represented 99% of total revenues for the period (2023: 100%)
Net cash of £7,160,177 (2023 £6,411,241), an increase of 11.7%
Final dividend increased 7.1% to 3.75 pence per share (2023: 3.50 pence per share)

Operational Highlights:

Overall engagement with the market much stronger than the previous two years
Sales team has been increased to identify growth opportunities with existing clients
Several PoC (Proof of Concept) with prospective clients have been started
Working with clients on additional planned developments to round out offering

Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of Arcontech said:

“We are optimistic that revenue growth will continue and our strategy will be to concentrate on our core market and build out our geographic presence. We will continue to improve our products to enable us to compete in more areas of the market. We have a stable customer base and maintaining this will be key to leveraging our recurring revenue to build higher levels of growth”.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Rory Sale – Corporate Finance Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the company’s obligations under Article 17 of MAR.

Chairman’s Statement

In the year to 30 June 2024 Arcontech started to benefit from its strong sales pipeline and the Company experienced revenue growth for the first time in three years. The last four years have been challenging but the Company has maintained its market position with much of its excellent customer base intact and although lead times remain long, as is often the case with large organisations with complex requirements, new customers are coming on board and there is growth at existing customers.

We remain well placed competitively as a cost-effective provider and customers and potential customers are moving forward on projects that have been under discussion for some time. Product development has put us in a more competitive position and recent additions to our sales and support operation are helping us to broaden our base.

Turnover was £2,910,232 (2023: £2,730,172) up 6.6% on last year. A large new customer at the start of the year replaced a previously reported customer cancellation and other new sales through the year have driven this improvement, Profit before taxation (PBT) was £1,098,959 (2023: £985,696) up 11.5% on last year as a result of revenue growth flowing through to the bottom line with planned costs being delayed. Statutory earnings per share for the year to 30 June 2024 were 7.98p (2023: 7.33p).

Nearly all our revenue is recurring and, as has been reported before, many of our larger customers are on longer term contracts. So while lead times remain long, with a growing sales pipeline we are confident that we will be able to continue to grow our customer base. PBT in the year to end June 2024 benefited from planned growth in our sales and support team coming later in the year than expected so the planned costs were lower. Staff costs will therefore be at a higher level for the whole of the current year. As the current level of opportunity is continuing we will keep the need to increase the size of the team under review.

Financing

Cash balances were £7,160,177 (2023: £6,411,241) at the year end, an increase of 11.7%. This strong balance sheet allows the Company to continue to invest in organic growth. There is also potential to invest in building a revenue streams in an adjacent financial market while continuing to look at potential acquisitions in our core market.

Dividend

I am pleased to announce that subject to approval at the Annual General Meeting we intend to pay a dividend of 3.75p per share for the year ended 30 June 2024 (2023: 3.5 pence) an increase of 7.1%, to those shareholders on the register as at the close of business on 4 October 2024 with a dividend payment date of 1 November 2024.

Outlook

We are optimistic that growth will continue. Our strategy is to concentrate on our core market and to build our geographic presence`. We will continue to improve products to enable us to compete in more areas of the market. We have a stable customer base and maintaining this will be key to leveraging our recurring revenue to build higher levels of growth.

Geoff Wicks

Chairman and Non-Executive Director

Chief Executive’s Review

The 2023/24 financial year saw us return to revenue growth of 6.6% as the market continues to normalise and the relationships we have built over the years bear fruit. Whilst more than 90% of our revenues were on a recurring basis a proportion was on a flexible basis allowing certain customers to adjust usage with business demands.

After the recent inflationary period our clients and prospects are also showing greater motivation to gain control of increasing market-data costs which for many are now at a level that renders the risk and discomfort of changing their market-data platform a secondary consideration to reducing cost.

During the year we have worked to meet the needs of our larger global clients. As would be expected with the critical nature of our software, the need to integrate with existing systems and work with client developers whilst conducting extensive testing takes time and we should benefit from this work in the coming year.

The year has also seen us engage with several prospective clients and embark on proof of concept (PoC) exercises with them. Each new engagement brings new requirement requests which invariably round out our product offerings to create new opportunities at existing clients and other prospects alike. The projects being worked on are situated across the globe and consist local and global organisations.

For our existing clients we have seen interest in reducing overall market-data costs by exploring the replacement of the major providers with our solutions. Our clients appear to have broadened the number of vendors across which cost reductions are being sought which plays to our strengths and flexibility in being able to manage data from multiple vendors and sources including clients’ internal data.

We now also have dedicated sales resources to oversee our support function whilst increasing our business with existing clients by encouraging greater engagement though our support relationships. At the same time our relationship with the Asia based consultancy has facilitated engagement with several new opportunities.

All our integration and customisation work is very ably supported by our in-house development team. As a result of our increasing engagements, our short term development pipeline envisages Arcontech having the ability to offer a complete market-data platform in the coming months. This will enable us to effect the wholesale replacement of other more expensive software platforms rather than at present where we are able to replace a number of core components with one or two remaining. Already a factor in some PoC exercises we anticipate the completion of this development to make our solution a more compelling option.

During the year we have also continued to look for and had discussions with prospective acquisitions, with growth potential and fit being the primary considerations. Whilst those discussions did not progress, we continue to seek the right opportunity.

Our staff are a key asset to the Company and have continued to provide exemplary service and support to our clients. I would like to express my thanks for their continued commitment.

With our increased engagement and the encouraging signs from existing clients and prospects alike, we feel optimistic for the year ahead and beyond.

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 2024.

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 on pages 2 to 3.

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:

Financial KPIs:

Revenue £2,910,232 (2023: £2,730,172; 2022: £2,757,795) Measurement:

Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation)

Performance:

Increase from 2023 with the win of a new customer and an increase in flexible licences from certain customers.

Adjusted EBITDA £1,030,898 (2023: £1,044,522; 2022: £1,019,478) Measurement:

EBITDA before the release of accruals for administrative costs in respect of prior years, and share-based payments. This is an alternative, non-IFRS performance measure, that is considered relevant as it provides a more accurate reflection of trading performance than EBITDA. The adjusted EBITDA is EBITDA less the amount of accruals for administrative costs released as disclosed in the footnote to the Income Statement and share-based payments. The accruals release for 2023 includes a release of £110,000 which is disclosed separately in the Group Statement of Income.

Performance:

Adjusted EBITDA is flat year-on-year, reflective of both an increase in revenue and staff costs

Adjusted profit £1,043,054 (2023: £861,716; 2022: £601,566) Measurement:

Profit after tax and before release of accruals for administrative costs in respect of prior years. This is an alternative, non-IFRS performance measure, that is considered relevant as it provides a more accurate reflection of trading performance than net profit after tax. The adjusted profit is Net profit after tax less the amount of accruals for administrative costs released as disclosed in the footnote to the Income Statement. The accruals release for 2023 includes a release of £110,000 which is disclosed separately in the Group Statement of Income.

Performance:

Revenue and interest income increased, partially offset by an increase in staff costs

Strategic Report (continued)

Cash £7,160,177 (2023: £6,411,241; 2022: £6,026,468) 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) 7.98p (2023: 7.33; 2022: 4.57p) Measurement:

Earnings after tax divided by the weighted average number of shares

Performance:

Increase due to higher interest income

Earnings per share (diluted) 7.96p (2023: 7.32p; 2022: 4.56p) Measurement:

Earnings after tax divided by the fully diluted number of shares

Performance:

Increase due to higher interest income

Non-financial KPIs:

Staff retention rate (net) 94% (2023: 94%; 2022: 87%) 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

ESG

Arcontech Group plc qualified as a low energy user in the year ending 30 June 2024 and accordingly is not required to disclose energy consumption and Greenhouse Gas emission information.

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	Nature	Mitigation

Competition	Loss of business due to existing competition or new entrants into the market	Ongoing investment in research and development responding to the changing needs of clients to remain competitive

Loss of key personnel	Inability to execute business plan due to the risk of losing key personnel	Employee share option scheme in place

Brexit	Business made difficult due to increased regulations between the UK and Europe caused by Brexit	Arcontech is a global company and as such seeks growth across a geographically diverse customer base

Strategic Report (continued)

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;
The desirability of the Company maintaining a reputation for high standards of business conduct; and
Consider the impact of the Company’s operations on the community and the environment.

Section 172(1) Companies Act 2006

The Board takes decisions with the long term in mind, and collectively and individually aims to uphold the highest standards of conduct. Similarly, the Board understands that the Company can only prosper over the long term if it understands and respects the views and needs of its customers, distributors, employees, suppliers and the wider community in which it operates.

A firm understanding of investor needs is also vital to the Company’s success. The Directors are fully aware of their responsibilities to promote the success of the Company in accordance with Section 172(1) of the Companies Act 2006. The text of Section 172(1) of the Companies Act 2006 has been sent out to each main Board Director.

The Board ensures that the requirements are met, and the interests of stakeholders are considered as referred to elsewhere in this report and through a combination of the following:

A rolling agenda of matters to be considered by the Board through the year, which includes an annual strategy review meeting, where the strategic options for the following year are developed;
At each board meeting, to receive and discuss a will report on customers, employees and other colleagues, and investors;
Standing agenda points and papers;
A review of certain of these topics through the Audit Committee and the Remuneration Committee agenda items referred to in this report; and

Detailed consideration is given to of any of these factors where they are relevant to any major decisions taken by the Board during the year.

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 2024:

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;
Continuation of a hybrid location working format for staff as working environments continue to evolve post Covid-19, while 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 2024, 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:

All Directors attended the 2023 AGM to answer questions and receive additional feedback from investors;
The outcome of the AGM is published on the Company’s corporate website;
The Board receives regular updates on the views of shareholders through briefings and reports from the executive directors, and the Company’s brokers;
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;
Monitored company culture and engaged with employees on efforts to continuously improve company culture and morale; and
A range of corporate information (including all Company announcements) is also available to shareholders, investors and the public on the Company’s corporate website: www.arcontech.com.

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 30 August 2024 by:

Matthew Jeffs
Chief Executive

Group Income Statement and Statement of Comprehensive Income

For the year ended 30 June 2024

	Note	2024	2023
		£	£

Revenue	3	2,910,232	2,730,172

Administrative costs		(2,040,541)	(1,924,962)

Operating profit	4	869,691	805,210
Net finance income	5	229,268	70,486

Changes in estimated variable remuneration liability	2	–	110,000
Profit before taxation		1,098,959	985,696

Taxation	9	(31,302)	(5,587)
Profit for the year after tax		1,067,657	980,109
Total comprehensive income for the year		1,067,657	980,109
Earnings per share (basic)	10	7.98p	7.33p
*Adjusted Earnings per share (basic)**	10	7.80p	6.44p
Earnings per share (diluted)	10	7.96p	7.32p

Adjusted* Earnings per share (diluted)

7.78p

6.43p

*Adjusted to exclude the release of accruals for administrative costs of £24,603 (2023: £118,393, which included the £110,000 shown in the comparative above in respect of estimated variable remuneration liability releases in respect of prior years). This is a non-IFRS alternative performance measure that the Board considers to be a more accurate indicator of underlying trading performance. This measure has been adopted as a KPI and is disclosed in the Strategic Report on page 4.

All of the results relate to continuing operations.

There was no Other Comprehensive Income other than Profit for the year after tax for the year under review (2023: nil).

The notes on pages 33 to 59 form part of these financial statements

Statement of Changes in Equity

For the year ended 30 June 2024

Group:

	Share capital	Share premium	Share option reserve	Retained earnings	Total equity
	£	£	£	£	£
Balance at 30 June 2022	1,671,601	115,761	270,825	4,913,137	6,971,324
Profit for the year	–	–	–	980,109	980,109
Total comprehensive income for the year	–	–	–	980,109	980,109

Dividend paid	–	–	–	(434,616)	(434,616)
Share-based payments	–	–	97,328	–	97,328

Transfer between reserves	–	–	(88,698)	88,698	–
Balance at 30 June 2023	1,671,601	115,761	279,455	5,547,328	7,614,145

Profit for the year	–	–	–	1,067,657	1,067,657
Total comprehensive income for the year	–	–	–	1,067,657	1,067,657

Dividend paid	–	–	–	(468,048)	(468,048)

Share-based payments	–	–	51,291	–	51,291

Balance at 30 June 2024	1,671,601	115,761	330,746	6,146,937	8,265,045

Company:

	Share capital	Share premium	Share option reserve	Retained earnings	Total equity
	£	£	£	£	£
Balance at 30 June 2022	1,671,601	115,761	270,825	4,354,279	6,412,466

Profit for the year	–	–	–	304,044	304,044
Total comprehensive expense for the year	–	–	–	304,044	304,044

Dividend paid	–	–	–	(434,616)	(434,616)
Share-based payments	–	–	97,328	–	97,328
Transfer between reserves	–	–	(88,698)	88,698	–
Balance at 30 June 2023	1,671,601	115,761	279,455	4,312,406	6,379,222

Profit for the year	–	–	–	328,596	328,596
Total comprehensive income for the year	–	–	–	328,596	328,596

Dividend paid	–	–	–	(468,048)	(468,048)

Share-based payments	–	–	51,291	–	51,291

Balance as at 30 June 2024	1,671,601	115,761	330,746	4,172,954	6,291,061

The notes on pages 33 to 59 form part of these financial statements.

Statements of Financial Position

Registered number: 04062416

As at 30 June 2024

		Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £
	Note
Non-current assets
Goodwill	11	1,715,153	1,715,153	–	–
Property, plant and equipment	12	5,404	5,950	–	–
Right of use asset	17	503,190	73,152	–	–
Investments in subsidiaries	13	–	–	2,017,471	2,017,471
Deferred tax asset	19	358,000	328,000	71,000	68,000
Trade and other receivables	14	141,750	–	–	–

Total non-current assets		2,723,497	2,122,255	2,088,471	2,085,471

Current assets
Trade and other receivables	14	677,069	499,861	4,069,235	3,842,300
Cash and cash equivalents	15	7,160,177	6,411,241	287,606	518,678

Total current assets		7,837,246	6,911,102	4,356,841	4,360,978

Current liabilities
Trade and other payables	16	(1,688,025)	(1,308,888)	(154,251)	(67,227)
Lease liabilities	17	(110,308)	(40,324)	–	–
Provisions	18	–	(50,000)	–	–

Total current liabilities		(1,798,333)	(1,399,212)	(154,251)	(67,227)

Non-current liabilities
Lease liabilities	17	(427,365)	–	–	–
Provisions	18	(70,000)	(20,000)	–	–

Total non-current liabilities		(497,365)	(20,000)	–	–

Net current assets		6,038,913	5,511,890	4,202,590	4,293,751
Net assets		8,265,045	7,614,146	6,291,576	6,383,222

Equity
Called up share capital	20	1,671,601	1,671,601	1,671,601	1,671,601
Share premium account	21	115,761	115,761	115,760	115,760
Share option reserve	21	330,746	279,455	330,746	279,455
Retained earnings	21	6,146,937	5,547,328	4,172,954	4,312,406
		8,265,045	7,614,145	6,291,061	6,379,222

As permitted by s408 of the Companies Act 2006, the Company has not presented its own income statement. The Company profit for the year was £328,596 (2023: £304,044).

The notes on pages 33 to 59 form part of these financial statements.

Approved on behalf of the board on 30 August 2024 by:

Matthew Jeffs
Chief Executive

Group Statement of Cash Flows

For the year ended 30 June 2024

	Note	2024	2023
		£	£

Cash generated from operations	22	1,051,177	901,422

Tax paid		(15,586)	–

Net cash generated from operating activities		1,035,591	901,420
Investing activities

Interest received		247,903	76,977

Receipts from the sale of plant and equipment		417	–
Purchases of plant and equipment		(12,055)	(3,480)

Net cash generated from investing activities		236,265	73,497

Financing activities

Dividend paid		(468,048)	(434,616)

Payment of lease liabilities	17	(54,872)	(155,529)

Net cash used in financing activities		(522,920)	(590,145)
Net increase in cash and cash equivalents		748,936	384,772

Cash and cash equivalents at beginning of year		6,411,241	6,026,469
Cash and cash equivalents at end of year	15	7,160,177	6,411,241

For the year to 30 June 2024, the Group had no debt, and there were no material non-cash transactions.

The notes on pages 33 to 59 form part of these financial statements.

Company Statement of Cash Flows

For the year ended 30 June 2024

	Note	2024	2023
		£	£
Net cash generated by / (used in) operating activities	22	227,448	(129,978)

Tax paid		(1,706)	–

Net cash generated from / (used in) operating activities		225,742	(129,978)
Investing activities

Interest received		11,234	8,978

Net cash generated from investing activities		11,234	8,978

Financing activities

Dividend paid		(468,048)	(434,616)

Net cash used in financing activities		(468,048)	(434,616)
Net decrease in cash and cash equivalents		(231,072)	(555,616)

Cash and cash equivalents at beginning of year		518,678	1,074,294
Cash and cash equivalents at end of year	15	287,606	518,678

For the year to 30 June 2024, the Company had no debt, and there were no material non-cash transactions.

The notes on pages 33 to 59 form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 June 2024

Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the period covered by these financial statements except where changes have been noted below.

Reporting entity

Arcontech Group plc (“the Company”) is a company incorporated in England and Wales with a registered address at 1^st floor, 11-21 Paul Street, London, EC2A 4JU. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (together referred to as “the Group”).

Principal Activity

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.

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006.

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. As at 30 June 2024 all assets and liabilities are recorded at amortised cost, and there were no assets or liabilities recorded at fair value.

Going Concern

On the basis of current projections and having regard to the Group’s existing cash reserves, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have projected cash flow out twelve months from the date of signing this report. Revenue projection has been based on recurring revenue streams from existing customers and a forecast for new revenue from additional sales that the Directors feel is achievable. The Group has a highly stable cost base which has been reviewed to incorporate the impact of additional costs for revenue generation activities such as industry trade shows. The Directors have stress tested the cash flow projections assuming no new revenue generation and an increase in costs of up to 15%, given the current inflationary environment. Under this scenario given expected cash generation from operations and existing cash balances, the Group will have sufficient resources to continue trading for well in excess of the next twelve months. Accordingly, the Directors have adopted the going concern basis in the preparation of the financial statements.

Changes in accounting policies and disclosures

New and amended Standards and Interpretations adopted by the Group and Company

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations per the table below. The amendments and revisions were applicable for the period year 30 June 2024 but did not result in any material changes to the financial statements of the Group.

Standard	Impact on initial application	Effective date
IAS 1 (Amendments)	Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies	1 January 2023
IAS 8 (Amendments)	Accounting policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates	1 January 2023
IAS 12 (Amendments)	Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction	1 January 2023

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

Accounting policies (continued)

New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 July 2023

Standard	Impact on initial application	Effective date
IFRS S1	General Requirements for Disclosure of Sustainability-related Financial Information	TBC
IFRS S2	Climate-related Disclosures	TBC
IAS 1 (Amendments)	Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current	1 January 2024
IAS 7 (Amendments)	Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures: Supplier Finance Arrangements	TBC
IFRS 18	Presentation and disclosure of financial instruments	TBC
IFRS 9 (Amendments)	Financial Instruments and IFRS 7 Financial Instruments: Disclosures: Classification and Measurement of Financial Instruments	TBC

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 30 June 2024. Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

The contractual arrangement with the other vote holders of the investee.
Rights arising from other contractual arrangements.
The Group’s voting rights and potential voting rights.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary. The acquisition method is used to account for the acquisition of subsidiaries.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations and goodwill

On acquisition, the assets and liabilities and contingent liabilities of subsidiaries are measured at their fair value at the date of acquisition. Any excess of cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition. Goodwill arising on consolidation is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

Accounting policies (continued)

Revenue recognition

Revenue is recognised in accordance with the transfer of promised services to customers (i.e. when the customer gains control of the service) and is measured as the consideration which the group expects to be entitled to in exchange for those services. Consideration is typically fixed on the agreement of a contract except for quarterly flexible license contracts. Payment terms are agreed on a contract by contract basis.

A service is distinct if the customer can benefit from the service on its own or together with other resources that are readily available to the customer and the entity’s promise to transfer the service to the customer is separately identifiable from other promises in the contract.

Contracts with customers do not contain a financing component.

Under IFRS 15, revenue earned from contracts with customers is recognised based on a five-step model which requires the transaction price for each identified contract to be apportioned to separate performance obligations arising under the contract and recognised either when the performance obligation in the contract has been performed (point in time recognition) or over time as control of the performance obligation is transferred to the customer.

The group recognises revenue when it satisfies a performance obligation by transferring a promised service to the customer as follows:

• Revenue from recurring license fees and other license fees is recognised on an over time basis via a straight line across the period the services are provided. In reaching this conclusion the group has assessed that ongoing contractual obligations are not separately identifiable from other promises in the contract and are not distinct from the licence, and hence are accounted for as a single performance obligation. As the license is not distinct the combined performance obligation is recognised over time.

In assessing whether a licence is distinct the Group considered the continuing requirement to:–

– optimise functionality;

– optimise performance; and

– provide enhancements to ensure user regulatory compliance.

• Revenue from flexible license contracts that include variable consideration are quarterly contracts assessed at the end of each calendar quarter and revenue is recognised based on actual usage confirmed for that quarter at the point of customer acceptance;

• Revenue from project work is recognised on satisfactory completion of each project, as this is considered to be the point in time the customer gains control over the results of the project work.

Taxation

The tax charge/(credit) represents the sum of the tax payable/(receivable) and any deferred tax.

Research and development tax credits are recognised when received.

The tax payable/(receivable) is based on the taxable result for the year. The taxable result differs from the net result as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

1. Accounting policies (continued)

Taxation (continued)

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current assets and liabilities on a net basis.

Share-based payments

The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of shares or share options, is recognised as an employee benefit expense in the income statement.

The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non market-based vesting conditions) at the date of grant. Fair value is measured by the use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. A cancellation of a share award by the Group or an employee is treated consistently, resulting in an acceleration of the remaining charge within the consolidated income statement in the year of cancellation.

Impairment of tangible and intangible assets

The carrying amounts of the Group’s and Company’s tangible and intangible assets are reviewed at each year end date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated.

Expenses incurred on Research & Development are currently expensed through the income statement as the expenditure is incurred on the maintenance and enhancement of existing products. The applicability of this treatment is reviewed regularly by the Company.

For goodwill, the recoverable amount is estimated at each year end date, based on value in use. The recoverable amount of other assets is the greater of their net selling price and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

An impairment loss is recognised in the income statement whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash-generating units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

1. Accounting policies (continued)

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, on the following bases:

Leasehold property	– over the period of the lease
Computer equipment	– 33% – 40% on cost
Office furniture and equipment	– 20% – 25% on cost or reducing balance

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment.

Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

The Group does not hold any investments other than investments in subsidiaries.

Trade receivables are held in order to collect the contractual cash flows and are initially measured at the transaction price as defined in IFRS 15, as the contracts of the Group do not contain significant financing components. Impairment losses are recognised based on lifetime expected credit losses in profit or loss.

Other receivables are held in order to collect the contractual cash flows and accordingly are measured at initial recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment due to their short-term nature. A provision for impairment is established based on 12-month expected credit losses unless there has been a significant increase in credit risk when lifetime expected credit losses are recognised. The amount of any provision is recognised in the income statement.

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Effective interest rate method

The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability and allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset or liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

1. Accounting policies (continued)

Financial instruments (continued)

(a) Classification

The Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through OCI or through profit or loss); and
those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will be recorded either in profit or loss or in OCI. For investments in equity instruments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI). See Note 16 for further details.

(b) Recognition

Purchases and sales of financial assets are recognised on trade date (that is, the date on which the Group commits to purchase or sell the asset). Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.

Debt instruments

Amortised cost; Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest, are measured at amortised cost. Interest income from these financial assets is included in finance income using the effective interest rate method.

Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as a separate line item in the statement of profit or loss.

(d) Impairment

The Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Leases

Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

1. Accounting policies (continued)

Leases (continued)

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
Amounts expected to be payable by the Group under residual value guarantees;
The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period.

Right-of-use assets are measured at cost which comprises the following:

The amount of the initial measurement of the lease liability;
Any lease payments made at or before the commencement date less any lease incentives received;
Any initial direct costs; and
Restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.

Payments associated with short-term leases (term less than 12 months) and all leases of low-value assets (generally less than £4k) are recognised on a straight-line basis as an expense in profit or loss.

Provisions

Provisions are recognised when the Group has a present obligation, legal or constructive, resulting from past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the obligation.

Research and development

Research costs are charged to the income statement in the year incurred. Development expenditure is capitalised to the extent that it meets all of the criteria required by IAS 38, otherwise it is charged to the income statement in the year incurred. In order for development expenditure to meet the capitalisation criteria of IAS 38, it must be both technically feasible to complete the work, and there must be the intention to either use or sell the asset created.

Pension costs and other post-retirement benefits

The Group makes payments to occupational and employees’ personal pension schemes. Contributions payable for the year are charged in the income statement.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

1. Accounting policies (continued)

Foreign currencies

Transactions denominated in foreign currencies are translated into sterling at the exchange rate ruling when the transaction was entered into. Where consideration is received in advance of revenue being recognised the date of the transaction reflects the date the consideration is received. Foreign currency monetary assets and liabilities are translated into sterling at the exchange rate ruling at the balance sheet date. Exchange gains or losses are included in operating profit.

Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker as required by IFRS 8 “Operating Segments”. The chief operating decision-maker responsible for allocating resources and assessing performance of the operating segments has been identified as the Board of Directors. The accounting policies of the reportable segments are consistent with the accounting policies of the group as a whole. Segment profit/(loss) represents the profit/(loss) earned by each segment without allocation of foreign exchange gains or losses, investment income, interest payable and tax. This is the measure of profit that is reported to the Board of Directors for the purpose of resource allocation and the assessment of segment performance. When assessing segment performance and considering the allocation of resources, the Board of Directors review information about segment assets and liabilities. For this purpose, all assets and liabilities are allocated to reportable segments with the exception of cash and cash equivalents and current and deferred tax assets and liabilities.

2. Critical accounting judgments and key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period.

Estimates and judgements are continually evaluated and are based on historic experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Judgements

Determination of performance obligations and satisfaction thereof

For the purposes of recognising revenue, the Directors are required to identify distinct services in contracts and allocate the transaction price to the performance obligations. Details of determining performance obligations, passing of control and amounts recognised as costs incurred to obtain or fulfil a contract are given in Note 1 – Revenue recognition. There has been no change in the Group’s business model from the previous year and the Directors are satisfied that the revenue recognition policy remains correct for the year under review.

Changes in estimated variable remuneration liability

The Group Income Statement in the comparative year includes the release of £110,000 in accrued bonuses which has been disclosed separately. The Board’s best estimate of the liability to pay bonuses as at 30 June 2022 was £170,000 and this was recorded with the prior year accruals balance. In the 2023 year, £110,000 of this liability was released to the Group Income Statement following annual reappraisal of the estimated liability at 30 June 2023. The balance carried forward to future periods, is the Board’s estimation of a constructive obligation with regards to bonuses in respect of work undertaken to date in progressing new business development and sales opportunities.

Capitalisation of development costs

As described in Note 1, the Group capitalises development costs when certain criteria are met including the probability of relevant future economic benefits. The key variable in making judgement of the correct treatment of development costs is new product development versus modification and maintenance of existing products. The development work undertaken has been to existing products, and having assessed the likelihood of future economic benefit, the Directors have judged it appropriate to not capitalise any development costs (2023 – £Nil).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

2. Critical accounting judgments and key sources of estimation uncertainty (continued)

Estimates

Impairment of intangible assets and investment in subsidiary

Determining whether non-current assets are impaired requires an estimation of the value in use of the cash generating units to which non-current assets have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. The key variables used in cash flow projections are: a timeline of fourteen years (the “time period”); the forecast for the next year which is used as the base for future years; revenue and cost projections for the time period using the average rate of increase / (decrease) achieved over the preceding ten years. No provision for impairment was made in the year to the carrying value of goodwill (see note 11) or investments in subsidiaries (see note 13).

Recognition of deferred tax assets

As described in Note 1, the Group recognises deferred tax assets arising from unused tax losses when certain criteria are met including the probability that future relevant taxable profits will be available. The directors have assessed the likelihood of future taxable profits being available and have judged it appropriate to recognise deferred tax assets for unused losses. The key variables used in the calculation of deferred tax assets are: a timeline of three years out from reporting date; revenue and cost projections on the same basis as used in the assessment of impairment of goodwill; a cost of capital of 8.44%. At the year-end a deferred tax asset of £358,000 (2023 – £328,000) was recognised.

Share based payment transactions

The Company has made awards of options and over its unissued share capital to certain Directors and employees as part of their remuneration package.

The valuation of these options involves making a number of critical estimates relating to price volatility, future dividend yields, expected life of the options and forfeiture rates. These assumptions have been described in more detail in Note 20.

3. Revenue

An analysis of the Group’s revenue is as follows:

	2024 £	2023 £

Software development, licence fees and project work	2,910,232	2,730,172

All of the Group’s revenue relates to continuing activities.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

4. Operating profit for the year is stated after charging/(crediting):

	2024 £		2023 £
Depreciation of plant and equipment (see note 12)	4,752	4,074
Depreciation of leased assets (see note 17)	129,766	146,303
Interest on leased assets (see note 17)	18,435	6,471
Staff costs (see note 8)	1,499,656	1,374,676
Research and development	521,853	476,491
Release of accruals for administrative costs in respect of prior years	(24,603)	(8,393)

5. Finance income and Finance costs:

	2024 £	2023 £
Finance income
Interest on cash and cash equivalents	247,903	76,977

Finance costs
Lease interest expense	(18,435)	(6,471)
Other interest expense	(200)	(20)
Net finance income	229,268	70,486

6. Auditor’s remuneration:

	2024 £	2023 £
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts	40,500	37,750
Fees payable to the Group’s auditor for other services:
– audit of the Company’s subsidiaries	7,000	7,000
	47,500	44,750

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

7. 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.

	2024	2023
	£	£
Revenue by segment

Software development and licence fees	2,910,232	2,730,172
External segment revenue	2,910,232	2,730,172

Operating profit by segment

Software development and licence fees	1,375,772	1,366,930

Unallocated overheads	(524,716)	(458,211)
Total operating profit	851,056	908,719

Finance income	247,903	76,977
Total profit before tax as reported in the Group income statement	1,098,959	985,696

	2024	2023
	£	£
Segment total of assets
Software development and licence fees	10,056,804	8,295,757

Unallocated assets	4,564,942	4,559,078
	14,621,746	12,854,835

Less intercompany debtors	(4,061,003)	(3,821,478)
Total assets	10,560,743	9,033,357

	2024	2023
	£	£
Segment total of liabilities

Software development and licence fees	6,202,071	5,172,801

Unallocated liabilities	154,630	67,889
	6,356,701	5,240,690

Less intercompany creditors	(4,061,003)	(3,821,478)
Total liabilities	2,295,698	1,419,212

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

7. Operating segments (continued):

	2024	2023
	£	£
Additions of property, plant and equipment assets by segment

Software development and licence fees	12,055	3,480
Total additions	12,055	3,480

	2024	2023
	£	£
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees	4,752	4,074
Total depreciation	4,752	4,074

Non-current assets by country	2024	2023
	£	£
UK	2,723,497	2,122,255
Total non-current assets	2,723,497	2,122,255

Geographical information – External revenue	2024	2023
	£	£
UK	1,958,953	1,979,802
Europe (excluding UK)	585,263	584,987
Africa	45,000	42,500
North America	287,788	89,656
Australia	12,604	12,603
Asia Pacific	20,624	20,624
	2,910,232	2,730,172

During the year there were 5 customers (2023: 4) who accounted for more than 10% of the Group’s revenues as follows:

	2024		2023
	Value of sales £	% of Total	Value of sales £	% of Total

Customer 1	668,506	23%	685,720	25%
Customer 2	520,990	18%	520,990	19%
Customer 3	437,978	15%	361,152	13%
Customer 4	337,900	12%	342,588	13%
Customer 5	378,186	10%	–	–
	2,343,560	78%	1,910,451	70%

These revenues are attributable to the software development and licence fees segment.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

8. Staff costs:

	2024 £	2023 £
a) Aggregate staff costs, including Directors’ remuneration
Wages and salaries	1,267,472	1,114,182
Social security costs	152,473	136,786
Pension contributions	28,420	26,380
Share-based payments	51,291	97,328
	1,499,656	1,374,676

b) The average number of employees (including Directors) was:
Sales and administration	7	7
Development and support	10	9
	17	16

	£	£
c) Directors’ emoluments
Short-term employee benefits	322,365	252,883
Pension contributions	5,512	5,513
Share-based payments	21,000	45,673
	348,877	304,069
Social security costs	40,554	31,260
Total Director compensation	389,431	335,329

Directors’ emoluments represent the staff costs of the Company.

The average number of employees of the parent company is 3 (2023: 3)

The highest paid Director received remuneration of £270,377 (2023: £192,114).

The number of Directors that are members of a defined contribution pension scheme is 1 (2023: 1). Pension contributions paid to a defined contribution scheme in respect of the highest paid Director amounted to £5,512 (2023: £5,513).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

9. Taxation

	2024	2023
	£	£
Current tax	(61,302)	(15,587)
Deferred tax	30,000	10,000
Total tax charge for the year	31,302	5,587

The difference between the total tax credit shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:

	2024 £	2023 £
Profit on ordinary activities before tax	1,098,959	985,696

Profit on ordinary activities multiplied by the effective rate of corporation tax in the UK of 25.00% (2023: 20.49%)	274,740	201,969

Effects of:

Disallowed expenses	68	52

Temporary differences on deferred tax	1,921	494

Deferred tax asset movement	(30,000)	(10,000)

Brought forward losses utilised	(215,427)	(186,928)
Total tax charge for the year	31,302	5,587

Factors which may affect future tax charges

At 30 June 2024 the Group has tax losses of approximately £7,600,000 (2023: £8,000,000) to offset against future trading profits.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

10. Earnings per share

	2024	2023
	£	£
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders	1,067,657	980,109
	1,067,657	980,109

	No.	No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	13,372,811	13,372,811

Number of dilutive shares under option	31,620	14,805
Weighted average number of ordinary shares for the purposes of dilutive earnings per share	13,404,431	13,387,616

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.

11. Goodwill

	2024	2023
	£	£
Cost and net book amount

At 1 July 2023 and at 30 June 2024	1,715,153	1,715,153

Goodwill acquired in a business combination is allocated at acquisition, to the cash generating units (CGUs) that are expected to benefit from that business combination. The carrying amount of goodwill has been allocated as follows:

	2024	2023
	£	£
Arcontech Limited	1,715,153	1,715,153
	1,715,153	1,715,153

The CGU used in these calculations is Arcontech Limited. The group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired. The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. The discount rate is estimated using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to the CGUs. Long-term growth rates are based on industry growth forecasts. Changes in selling prices are based on past practices and expectations of future changes in the market. Changes in direct costs are based on expected cost of inflation of 6.0% and 1.8% after year 5.

Cashflow forecasts are based on the latest financial budgets and extrapolate the cashflows for the next five years based on an estimated growth in revenue representing an average rate of 3.4% (2023: 3.4%) per annum, after which the UK long-term growth rate of 1.8% is applied. The Directors consider that this rate is appropriate, given the current sales pipeline. Fluctuation in revenue is the most sensitive of assumptions. Should revenue fall by more than an average of 5% per annum then this could result in the value of goodwill being impaired.

As the Group does not have any borrowings, the rate used to discount all the forecast cash flows is 8.8% (2023: 8.8%), which represents the Group’s cost of capital.

Goodwill on the purchase of Arcontech Limited is attributable to the operating synergies that have arisen as a result of the combination.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

12. Property, plant and equipment – Group

	Leasehold Property	Office furniture & equipment	Total
Cost	£	£	£

At 1 July 2022	26,199	105,941	132,140

Additions	–	3,480	3,480

Disposals	–	(6,056)	(6,056)

At 1 July 2023	26,199	103,365	129,564

Additions	–	4,471	4,471

Disposals	(26,199)	(795)	(26,994)

At 30 June 2024	–	107,041	107,041
Depreciation

At 1 July 2022	23,520	102,076	125,596

Charge for the year	1,461	2,613	4,074

Disposals	–	(6,056)	(6,056)

At 1 July 2023	24,981	98,633	123,614

Charge for the year	1,218	3,534	4,752

Disposals	(26,199)	(530)	(26,729)

At 30 June 2024	–	101,637	101,637
Net book amount at 30 June 2024	–	5,404	5,404
Net book amount at 30 June 2023	1,218	4,732	5,950

13. Investment in subsidiaries

	2024	2023
Carrying amount	£	£

At 1 July 2023	2,017,471	2,017,471


At 30 June 2024	2,017,471	2,017,471

Details of the investments in which the Group and the Company holds 20% or more of the nominal value of any class of share capital are listed below. The Goodwill recognised in Note 11 is in connection with investments made in subsidiaries:

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

13. Investment in subsidiaries (continued)

	Country of Incorporation	Address	Nature of business	Ordinary shares held
Arcontech Solutions Limited	England	11-21 Paul Street, London EC2A 4JU	Dormant	100%
Cognita Technologies Limited	England	11-21 Paul Street, London EC2A 4JU	Software development	100%
Arcontech Limited	England	11-21 Paul Street, London EC2A 4JU	Software development and consultancy	100%

14. Trade and other receivables

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £
Due within one year:

Trade and other receivables	458,227	136,250	–	–

Amounts owed by group undertakings	–	–	4,060,904	3,821,378

Prepayments and accrued income	218,842	221,861	8,331	20,922

Other receivables	–	141,750	–	–
	677,069	499,861	4,069,235	3,842,300


	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £
Due after more than one year:

Other receivables	141,750	–	–	–
	141,750	–	–	–

Trade receivables, which are the only financial assets at amortised cost, are non-interest bearing and generally have a 30-90 day term. Due to their short maturities, the carrying amount of trade and other receivables is a reasonable approximation of their fair value. A provision for impairment of trade receivables is established using an expected loss model. Expected loss is calculated from a provision based on the expected lifetime default rates and estimates of loss on default.

As at 30 June 2024, trade receivables of £Nil were impaired (2023: £Nil) and during the year an impairment charge relating to trade receivables of £Nil (2023: £Nil) was recognised. As at 30 June 2024 trade receivables of £214,142 (2022: £63,314) were past due but not impaired as full recovery is expected. The ageing analysis of these trade receivables is as follows:

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £

Up to 3 months past due	214,142	63,314	–	–

3 to 6 months past due	–	–	–	–
	214,142	63,314	–	–

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

15. Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The Directors consider that the carrying amount of cash and cash equivalents approximates to their fair value.

16. Trade and other payables

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £

Trade payables	61,328	44,995	3,437	4,595

Amounts owed to group undertakings	–	–	100	100

Other tax and social security payable	106,899	58,185	12,612	12,740

Other payables and accruals	426,963	323,850	138,102	49,792

Deferred income	1,092,835	881,858	–	–
	1,688,025	1,308,888	154,251	67,227

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

Trade payables and other payables and accruals constitute the financial liabilities within the category “Financial liabilities at amortised cost.” The total value of Financial liabilities at amortised cost is £488,291 (2023: £368,845) which includes provisions (Refer to note 18).

17. Leases

Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

As at 30 June 2024	Lease liability £	Right of use asset £	Income statement £
Carrying value at 30 June 2023	(40,324)	73,152	–

Additions	(552,221)	559,804	–
Depreciation	–	(129,766)	(129,766)
Interest	(18,435)	–	(18,435)
Lease payments	73,307	–	–


Carrying value at 30 June 2024	(537,673)	503,190	(148,201)

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

17. Leases (continued)

Reconciliation of lease liabilities	Operating cash flow £	Financing cash flow £	Non-cash £	Total £
As at 1 July 2023	–	–	–	40,324
Cash flows:
Interest paid	(18,435)	–	–	(18,435)
Liability reduction	–	(54,872)	–	(54,872)
Non-cash changes:
New lease	–	–	552,221	552,221
Interest expense	–	–	18,435	18,435
As at 30 June 2024	(18,435)	(54,872)	570,656	537,673

As at 30 June 2023	Lease liability £	Right of use asset £	Income statement £
Carrying value at 30 June 2022	(195,853)	219,455	–

Depreciation	–	(146,303)	(146,303)
Interest	(6,471)	–	(6,471)
Lease payments	162,000	–	–


Carrying value at 30 June 2023	(40,324)	73,152	(152,774)

Reconciliation of lease liabilities	Operating cash flow £	Financing cash flow £	Non-cash £	Total £
As at 1 July 2022	–	–	–	195,853
Cash flows:
Interest paid	(6,471)	–	–	(6,471)
Liability reduction	–	(155,529)	–	(155,529)
Non-cash changes:
Interest expense	–	–	6,471	6,471
As at 30 June 2023	(6,471)	(155,529)	6,471	40,324

Contractual maturity analysis of lease liabilities as at 30 June 2024
	Less than 3 months £	3 – 12 Months £	1 – 5 Year £	Longer than 5 years £	Total £
Lease liabilities	37,800	113,400	386,473	–	537,673

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

18. Provisions

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £

As at 1 July	70,000	50,000	–	–

Increase in provision	–	20,000	–	–

As at 30 June	70,000	70,000	–	–

Disclosed as:
Current liabilities	–	50,000	–	–
Non-current liabilities	70,000	20,000	–	–

Provisions consists of dilapidations for the Office premises of £70,000 (2023: £70,000). Refer to note 1 for the Accounting Policy for Provisions. The total estimate of dilapidation costs for the Paul Street office is £50,000 which is disclosed as a current liability as at 30 June 2024, as the lease is due to beyond twelve months. The £20,000 non-current dilapidations provision relates to a potential liability in connection with a previous office. The value of the provisions has not been discounted as the impact is not material.

19. Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using the tax rate of 20.4% which is the effective tax rate of the Group. The movement on the deferred tax account is as shown below:

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £
At 1 July	328,000	318,000	68,000	56,000
Effect of change in tax rate	–	78,000	–	16,000
Effect of movement in temporary differences	30,000	(68,000)	3,000	(4,000)

At 30 June	358,000	328,000	71,000	68,000

The deferred tax asset has been recognised in relation to forecast taxable profits which are considered probable.

Losses to offset against future trading profits at 30 June 2024 amounted to approximately £7,600,000 (2023: £8,000,000).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

20. Share capital

The Company has authorised share capital of 16,000,000 Ordinary shares of £0.125 each.

Company Allotted and fully paid:	Shares of 12.5p each	Share Capital £	Share Premium £
As at 1 July 2023	13,372,811	1,671,601	115,761
As at 30 June 2024	13,372,811	1,671,601	115,761

Share options

Under the Company’s approved 2002 Share Option Scheme, certain Directors and employees held options at 30 June 2024 for unissued Ordinary Shares of 12.5 pence each as follows:

Share options	At 1 July 2023	Granted	Exercised	Lapsed	At 30 June 2024	Exercise price	Normal exercise period


Employees:	100,000	–	–	–	100,000	64.50 pence	25 Apr 20 – 24 Apr 27
	50,000	–	–	–	50,000	110.00 pence	30 Jun 21 – 29 Jun 28
	20,000	–	–	–	20,000	196.00 pence	30- Jun 22 – 27 Sep 29
	43,000	–	–	–	43,000	164.50 pence	30 Jun 23 – 2 Oct 30
	67,500	–	–	–	67,500	130.50 pence	30 Jun 24 – 11 Oct 31
	70,000	–	–	–	70,000	76.50 pence	30 Jun 25 – 21 Oct 32
Directors:		–		–
		–		–
Geoff Wicks	30,000	–	–	–	30,000	164.50 pence	30 Jun 23 – 2 Oct 30
		–		–
Matthew Jeffs	100,000	–	–	–	100,000	110.00 pence	30 Jun 21 – 29 Jun 28
	50,000	–	–	–	50,000	130.50 pence	30 Jun 24 – 11 Oct 31
	50,000	–	–	–	50,000	76.50 pence	30 Jun 25 – 21 Oct 32

Total	580,500	–	–	–	580,500

Weighted average exercise price	109.2 pence	–	–	–	109.2 pence

The number of options exercisable at 30 June 2024 was 460,500 (at 30 June 2023: 343,000), these had a weighted average exercise price of 117.7 pence (2023: 113.3 pence).

The weighted average share price as at the exercise date of the shares exercised in the year was nil pence (2023: nil pence) and of the shares were forfeited in the year was nil pence (2023: 166.2).

Options granted under the Company’s approved 2002 Share Option Scheme are forfeited when the Optionholder ceases to be a Director or employee of a Participating Company. The Directors may before the expiry of 3 months following cessation of employment permit an Optionholder to exercise their Option within a period ending no later than 12 months from the cessation of employment.

The highest price of the Company’s shares during the year was 112.0 pence, the lowest price was 61.2 pence and the price at the year-end was 92.5 pence.

The weighted average remaining contractual life of share options outstanding at 30 June 2024 was 6 years (2023: 7 years).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

20. Share capital (continued)

Share-based payments

The Group operates an approved Share Option Scheme for the benefit of Directors and employees. Options are granted to acquire shares at a specified exercise price at any time following but no later than 10 years after the grant date. There are no performance conditions on the exercise of the options granted prior to 1 July 2018. The performance conditions of those granted after 1 July 2018 which apply to executive directors and certain key staff, are set out below.

The options issued to certain directors and members of staff in November 2018, September 2019², October 2020³, October 2021 and in October 2022 will be exercisable from 30 June 2021, 30 June 2022, 30 June 2023, 30 June 2024 and 30 June 2025 respectively, dependent on the Company’s compound annual rate of growth in fully diluted earnings* for the three financial years ending 30 June 2022, 2023, 2024 and 2025, respectively.

Options issued date	Exercisable from	Dependent on the Company’s compound annual rate of growth in fully diluted earnings¹ for the three financial years ending
November 2018	30 June 2021	30 June 2021
September 2019	30 June 2022	30 June 2022
October 2020	30 June 2023	30 June 2023
October 2021	30 June 2024	30 June 2024
October 2022	30 June 2025	30 June 2025

The Options will vest 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.

Any Ordinary Shares arising from the vesting of Options must be held for a period of two years after vesting.

¹ 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.

² 70,000 options issued in September 2019 lapsed on 30 June 2022 as compound annual earnings growth targets for the financial years ended 30 June 2020, 2021 and 2022 were not achieved.

³ 70,000 options issued in October 2020 lapsed on 30 June 2023 as compound annual earnings growth targets for the financial years ended 30 June 2021, 2022 and 2023 were not achieved.

The fair value of options is valued using the Black-Scholes pricing model. An expense of £51,291 (2023: £97,328) has been recognised in the year in respect of share options granted. The cumulative share option reserve at 30 June 2024 is £330,746 (2023: £279,455).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

20. Share capital (continued)

The inputs into the Black-Scholes pricing model are as follows:

Directors & Employees
Grant date	25 Apr 2017	29 Nov 2018	27 Sep 2019	2 Oct 2020	11 Oct 2021	21 Oct 2022
Exercise price	64.5 pence	110.0 pence	196.0 pence	164.5 pence	130.5 pence	76.5 pence
Expected life	10 years	10 years	10 years	10 years	10 years	10 years
Expected volatility	50%	50%	50%	49%	45%	44%
Risk free rate of interest	0.5%	0.75%	0.75%	0.00%	0.60%	3.69%
Dividend yield	Nil	Nil	Nil	0.01%	0.01%	0.04%
Fair value of option	36.7 pence	57.0 pence	115.0 pence	91.92 pence	70.03 pence	45.47 pence

Volatility has been estimated based on the historic volatility over a period equal to the expected term from the grant date.

21. Reserves

Details of the movements in reserves are set out in the Statement of Changes in Equity. A description of each reserve is set out below.

Share capital reserve

This is used to record the aggregate nominal amount of the Company’s shares on issue.

Share premium account

This is used to record the aggregate amount or value of premiums paid when the Company’s shares are issued at a premium, net of issue costs, less amounts cancelled by court order.

Share option reserve

This relates to the fair value of options granted which has been charged to the income statement over the vesting period of the options, less amounts transferred to retained earnings.

Retained earnings

This relates to accumulated profits and losses together with distributable reserves arising from capital reductions, less amounts distributed to shareholders.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

22. Net cash generated from operations – Group

	2024	2023
	£	£

Operating profit and exceptional items before tax	869,691	915,210

Depreciation charge	134,518	150,377

Non cash share option charges	51,291	97,328

Profit on disposal of plant and equipment	(151)	–

Lease interest paid	(18,435)	(6,471)

Other interest paid	(200)	(20)

(Increase) in trade and other receivables	(318,958)	(9,425)

Increase / (decrease) in trade and other payables	333,421	(265,577)

(Increase) in provisions	–	20,000


Cash generated from operations	1,051,177	901,422

Net cash generated from operations – Company

	2024	2023
	£	£

Operating profit	316,497	284,772

Non cash share option charges	21,000	45,673

Increase in trade and other receivables	(196,644)	(469,614)

Increase in trade and other payables	86,595	9,191


Cash generated from / (used in) operations	227,448	(129,978)

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

23. Related party transactions

Group

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are disclosed in this part of the note.

Key management compensation

Key management are those persons having authority and responsibility for planning, controlling and directing the activities of the Group. In the opinion of the Board, the Group’s key management are the Directors of Arcontech Group PLC. Information regarding their compensation is given in notes 8 and 20 for each of the categories specified in IAS 24 Related Party Disclosures. All emoluments given in notes 8 and 20 relate to short-term employee benefits and there are no post-employment or other long-term benefits.

The financial statements include the following amounts in respect of services provided to the Group:

Company

Transactions between the Parent Company and its subsidiaries during the year were as follows:

Management charges payable by subsidiaries £626,698 (2023: £546,676).

The amounts due from/to subsidiaries at the balance sheet date were as follows:

	2024 £		2023 £

Amount due from subsidiaries		7,443,477	7,415,999

Less: Provision for impairment		(3,382,474)	(3,594,521)
Amount due from subsidiaries – net		4,061,003	3,821,478

During the year a provision of £212,047 was released (2023: £193,659) in respect of balances due from subsidiaries.

	2024 £	2023 £

Amount due to subsidiaries	626,698	546,676
	626,698	546,676

24. Dividends

A final dividend of 3.75 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2023: 3.5 pence).

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

25. Financial instruments

The Group’s financial instruments comprise cash and cash equivalents, and items such as trade payables and trade receivables, which arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group’s operations.

The Group’s operations expose it to a variety of financial risks including credit risk, liquidity risk and interest rate risk. Given the size of the Group, the Directors have not delegated the responsibility of monitoring financial risk management to a sub-committee of the Board. The policies set by the Board of Directors are implemented by the Company’s finance department.

Credit risk

The Group’s credit risk is primarily attributable to its trade receivables. The Group has implemented policies that require appropriate credit checks on potential customers before sales are made. The amount of exposure to any individual counterparty is subject to a limit, which is reassessed annually by the Board. Trade receivables are considered in default and subject to additional credit control procedures when they are more than 30 days past due in line with industry practice. Trade receivables are only written off when there is no reasonable expectation of recovery due to insolvency of the debtor.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	Group 2024 £	Group 2023 £	Company 2024 £	Company 2023 £
Trade receivables	458,227	136,250	–	–

Cash and cash equivalents	7,160,177	6,411,241	287,606	518,678

Amounts owed by group undertakings	–	–	4,069,092	3,821,378
	7,618,404	6,547,491	4,356,698	4,340,056

Interest rate risk

The Group has interest bearing assets and no interest-bearing liabilities. Interest bearing assets comprise only cash and cash equivalents, which earn interest at a variable rate.

The Group has not entered into any derivative transactions during the period under review.

The Group does not have any borrowings.

The Group’s cash and cash equivalents earned interest at variable rates, between 4.35% below bank base rate and 0.25% below bank base rate and at fixed/variable rates of between 1.56% below bank base rate and 0.56% below bank base rate (2023: variable rates of between 3.65% below bank base rate and 0.25% below bank base rate and at fixed/variable rates of of between 2.53% below bank base rate and 0.06% below).

Liquidity risk

The Group has no short-term debt finance. The Group monitors its levels of working capital to ensure that it can meet its liabilities as they fall due.

The Group’s financial liabilities comprise trade payables and other payables, provisions and accruals, excluding deferred income, with a carrying value equal to the gross cash flows payable of £488,291 (2023: £368,845) all of which are payable within 6 months.

Notes to the Financial Statements

For the year ended 30 June 2024 (continued)

25. Financial instruments (continued)

Market risk and sensitivity analysis

Equity price risk

The Directors do not consider themselves exposed to material equity price risk due to the nature of the Group’s operations.

Foreign currency exchange risk

The Directors do not consider themselves exposed to material foreign currency risk due to the nature of the Group’s operations. All invoices are raised in sterling.

Interest rate risk

The Group is exposed to interest rate risk as a result of positive cash balances, denominated in sterling, which earn interest at variable and fixed rates. As at 30 June 2024, if bank base rate had increased by 0.5% with all other variables held constant, post-tax profit would have been £35,801 (20223 £32,056) higher and equity would have been £35,801 (2023: £32,056) higher. Conversely, if bank base rate had fallen 0.5% with all other variables held constant, post-tax profit would have been £35,801 (2023: £32,056) lower and equity would have been £35,801 (2023: £32,056) lower.

26. Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and maintain an optimal capital structure.

The Group defines capital as being share capital plus reserves. The Board of Directors continually monitors the level of capital.

The Group is not subject to any externally imposed capital requirements.

27. Ultimate controlling party

There is no ultimate controlling party.

28. Copies of these statements

Copies of this statement are available from the Company Secretary at the Company’s registered office at 1^st Floor, 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.

Arcontech trading update year end 2024

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 for the year ended 30 June 2024 (FY24) turnover is expected to be ahead of market expectations by approximately 4% as result of increased use of product by certain customers, whilst adjusted profit before tax is expected to be ahead by approximately 20%, as a result of the aforementioned increased product usage and certain planned staff costs only being incurred at the end of the financial year (FY24).

Expectations for the current financial year (FY25) remain unchanged.

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 2024 are expected to be announced in early September 2024 and the Board look forward to updating shareholders with further details at that time.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore Harriet Ward (ECM)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

About Arcontech

Arcontech Group Plc (LSE: ARC) is the leading independent provider of financial market-data infrastructure and display solutions. With multi-source data collection, value added processing, publishing, distribution and display, Arcontech provides a highly performant, cost effective and flexible alternative to traditional market data infrastructure or building it in-house.

Solutions can be “off-the-shelf”, customised or completely new developments; Cloud, On-prem or Hybrid. Our deep domain knowledge and automated test suite ensure the right solution at the right time at the right price.

We are also Bloomberg, Refinitiv and Symphony development partners underlining our independence and ability to deliver viable, value added, vendor agnostic solutions to meet financial institutions real-time market data workflow needs.

Our clients include Global Tier 1 and Tier 2 financial market participants along with key market regulators.

For more information about us and what we can do for you, please visit: www.arcontech.com

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023

ARCONTECH GROUP PLC

(“Arcontech” or the “Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, reports its unaudited results for the six months ended 31 December 2023.

Overview:

Revenue increased by 6.8% to £1,448,804 (H1 2022: £1,357,041) reflecting the new business secured during the period under review

Profit before tax increased by 44.7% to £538,790 (H1 2022: £372,414) reflecting the contribution from higher revenues and higher interest earned on cash deposits

Our preferred measure of adjusted profit before tax, which excludes the release of accruals unrelated to the underlying business, increased by 45.3% to £534,775 (H1 2022: £367,914)

Recurring revenues represented 100% of total revenues for the period (H1 2022: 100%)

Net cash of £5,734,226 at 31 December 2023, down 2.9% (H1 2022: £5,908,814) after a record dividend payment of £468,048 paid on 3 November 2023

Revenue expectation for the full year remains in line with current market expectations however, profit before tax for the year to 30 June 2024 is expected to be slightly ahead of market expectations. This is the result of higher interest income on cash balances received than previously forecast, and a reduction in operational expenditure.

Geoff Wicks, Chairman of Arcontech, said:

“We believe our strategy has brought us through a difficult period of poor market conditions well. Our focus is firmly on our core markets where we believe we are best placed to build sustainable growth. We have invested in our ability to grow globally and although lead times and competitive markets mean slow progress, we have started to experience some growth and we are confident about this continuing.”

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore Harriet Ward (ECM)

To access more information on the Group please visit: www.arcontech.com

The interim report will only be available to view online enabling the Group to communicate in a more environmentally friendly and cost-effective manner.

Chairman’s Statement

Arcontech is beginning to see some small improvements in market conditions and new projects we have been working on come to fruition. There remain challenges in the market and lead times are longer than before but we announced one major new contract recently and we have the start of growth at existing customers. Our pipeline is improving and we are confident that we are in a good position to recover some of the ground we lost over the last few years.

We have retained a significant customer base, much of which is now on longer contracts. Nearly all our revenue is now recurring which provides good visibility and will help us to maintain growth. While we have been investing in our sales and support operations, careful cost control has allowed us to grow profit, although the last year’s H1 profit was depressed by the impact of lost business, so flatters this year’s number.

Revenue was £1.44 million, up 6.8% on the same period last year, Profit before tax (“PBT”) was £0.54 million, up 44.7% on the same period last year. Adjusted profit before tax, which is PBT before the release of accruals for administrative costs in respect of prior years was £0.53 million, up 45.3% on the previous year.

Financing

Our balance sheet remains robust with net cash of £5.7 million, £0.2 million lower than at 31 December 2022, and £0.7 million lower than the level at 30 June 2023 after payment to shareholders of a record dividend of £0.4 million, and a change to the billing cycle for a large customer. As at the date of releasing this report the net cash balance is £6.8m. This cash position allows for continued investment in sales and products and for us to remain alert to opportunities to acquire small complementary businesses.

Dividend

No interim dividend is proposed to be paid in respect of the half year. The Board expects to continue its policy of paying a dividend following the announcement of its full year results.

Outlook

We believe our strategy has brought us through a difficult period in poor market conditions in good shape. Our focus is firmly on growth in our core markets where we believe we are best placed to build sustainable growth. We have invested in our ability to grow globally and although lead times and competitive markets mean slow progress we are confident about future growth.

Geoff Wicks

Chairman and Non-Executive Director

GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2023	2022	2023
		(unaudited) £	(unaudited) £	(audited) £

Revenue		1,448,804	1,357,041	2,730,172

Administrative costs		(1,039,456)	(995,636)	(1,924,962)

Operating profit	4	409,348	361,405	805,210

Finance income		126,055	15,840	76,977

Finance costs	13	3,387	(4,831)	(6,491)

Changes in estimated variable remuneration liability	5	–	–	110,000

Profit before taxation		538,790	372,414	985,696

Taxation	7	–	–	(5,587)
Profit for the period after tax		538,790	372,414	980,109

Total comprehensive income		538,790	372,414	980,109

Profit per share (basic)		4.03p	2.78p	7.33p

*Adjusted Profit per share (basic)**		4.00p	2.75p	6.44p

Profit per share (diluted)		4.02p	2.77p	7.32p

*Adjusted Profit per share (diluted)**		3.99p	2.74p	6.43p

All of the results relate to continuing operations and there was no other comprehensive income in the period.

* Before release of accruals for administrative costs in respect of prior years.

GROUP BALANCE SHEET

	Note	31 December 2023	31 December 2022	30 June 2023
		(unaudited) £	(unaudited) £	(audited) £
Non-current assets
Goodwill		1,715,153	1,715,153	1,715,153
Property, plant and equipment		6,325	4,420	5,950
Right of use asset	13	559,098	146,303	73,152
Deferred tax asset		328,000	318,000	328,000
Trade and other receivables	10	141,750	141,750	–

Total non-current assets		2,750,326	2,325,626	2,122,255

Current assets
Trade and other receivables	10	1,335,408	1,584,539	499,861
Cash and cash equivalents		5,734,226	5,908,814	6,411,241

Total current assets		7,069,634	7,493,353	6,911,102

Current liabilities
Trade and other payables	11	(473,512)	(891,203)	(427,030)
Deferred income		(1,013,405)	(1,854,240)	(881,858)
Lease liabilities	13	(68,869)	(118,994)	(40,324)
Provisions		(50,000)	–	(50,000)

Total current liabilities		(1,605,786)	(2,864,437)	(1,399,212)

Non-current liabilities
Lease liabilities	13	(483,641)	–	–
Provisions		(20,000)	–	(20,000)

Total non-current liabilities		(503,641)	–	(20,000)

Net current assets		5,463,848	4,628,916	5,511,890

Net assets		7,710,533	6,954,542	7,614,146

Equity
Share capital		1,671,601	1,671,601	1,671,601
Share premium account		115,761	115,761	115,761
Share option reserve		305,101	306,440	279,455
Retained earnings		5,618,070	4,860,740	5,547,328

		7,710,533	6,954,542	7,614,145

GROUP CASH FLOW STATEMENT

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2023	2022	2023
		(unaudited) £	(unaudited) £	(audited) £
Cash (used in) / generated from operating activities	12	(296,937)	383,087	901,422

Tax paid	7	–	(4,993)	–

Net cash generated from operating activities		(296,937)	378,094	901,422

Investing activities

Interest received		126,055	15,840	76,977

Proceeds on disposal of fixed assets		417	–	–
Purchases of plant and equipment		(3,471)	(114)	(3,480)

Net cash generated from investing activities		123,001	15,726	73,497

Financing activities

Dividends paid		(468,048)	(434,616)	(434,616)

Payment of lease liabilities		(35,031)	(76,859)	(155,529)


Net cash used in financing activities		(503,079)	(511,475)	(590,145)
Net (decrease) / increase in cash and cash equivalents		(677,015)	(117,655)	384,772

Cash and cash equivalents at beginning of period		6,411,241	6,026,469	6,026,469

Cash and cash equivalents at end of period		5,734,266	5,908,814	6,411,241

GROUP STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Share-based payments reserve	Retained earnings	Total
	£	£	£	£	£
At 1 July 2022	1,671,601	115,761	270,825	4,913,137	6,971,324
Profit for the period	–	–	–	372,414	372,414
Total comprehensive income for the period	–	–	–	372,414	372,414
Transfer between reserves	–	–	(9,805)	9,805	–
Dividends paid	–	–	–	(434,616)	(434,616)
Share-based payments	–	–	45,420	–	45,420
Total transactions with owners	–	–	35,615	(424,811)	(389,196)
At 31 December 2022	1,671,601	115,761	306,440	4,860,740	6,954,542
Profit for the period	–	–	–	607,695	607,695
Total comprehensive income for the period	–	–	–	607,695	607,695
Transfer between reserves	–	–	(78,893)	78,893	–
Share-based payments	–	–	51,908	–	51,908
Total transactions with owners	–	–	(26,985)	78,893	51,908
At 30 June 2023	1,671,601	115,761	279,455	5,547,328	7,614,145
Profit for the period	–	–	–	538,790	538,790
Total comprehensive income for the period	–	–	–	538,790	538,790
Dividends paid	–	–	–	(468,048)	(468,048)
Share-based payments	–	–	25,646	–	25,646
Total transactions with owners	–	–	25,646	(468,048)	(442,402)
At 31 December 2023	1,671,601	115,761	305,101	5,618,070	7,710,533

NOTES TO THE FINANCIAL INFORMATION

The figures for the six months ended 31 December 2023, and 31 December 2022, are unaudited and do not constitute statutory accounts. The accounting policies adopted are consistent with those applied by the Group in the preparation of the annual consolidated financial statements for the year ended 30 June 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in 2023, but these do not have a material impact on the interim condensed consolidated financial statements of the Group.
The financial information for the year ended 30 June 2023 set out in this interim report does not comprise the Group’s statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2023, which were prepared in accordance with UK-adopted international accounting standards, have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.
Copies of this statement are available from the Company Secretary at the Company’s registered office at 1^st Floor 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
Operating profit is stated after release of accruals for administrative expenses in respect of prior years of £4,014 (31 December 2022: £4,500; 30 June 2023: £8,393).
During the year to 30 June 2023, the Group Income Statement included the release of £110,000 in accrued bonuses which was been disclosed separately. The Board’s best estimate of the liability to pay bonuses as at 30 June 2022 was £170,000 which was recorded with the prior year accruals. In the year to 30 June 2023, £110,000 of this liability was released to the Group Income Statement following annual reappraisal of the estimated liability at 30 June 2023.
Earnings per share have been calculated based on the profit after tax and the weighted average number of shares in issue during the half year ended 31 December 2023 of 13,372,811 (31 December 2022: 13,372,811 30 June 2023: 13,372,811).
The number of dilutive shares under option at 31 December 2023 was 26,988 (31 December 2022: 18,612; 30 June 2023: 14,805). 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 the average market price during the period, based upon the issue price of the outstanding share options including future charges to be recognised under the share-based payment arrangements.
Taxation is based on the unaudited results and provision has been estimated at the rate applicable to the Company at the time of this statement and expected to be applied to the total annual earnings. No corporation tax has been charged in the period as any liability has been offset against tax losses brought forward from prior years. The tax paid represents the cash payment of tax liability from the preceding income tax year.
A final dividend in respect of the year ended 30 June 2023 of 3.5 pence per share (2022: 3.25 pence per share) was paid on 3 November 2023.
The Directors have elected not to apply IAS 34 Interim financial reporting.
Trade and other receivables

	31 December 2023 £ (unaudited)	31 December 2022 £ (unaudited)	30 June 2023 £ (audited)
Due within one year:

Trade and other receivables	1,137,648	1,468,165	136,250

Prepayments and accrued income	197,760	116,374	221,861

Other receivables	–	–	141,750
	1,335,408	1,584,539	499,861

	31 December 2023 £ (unaudited)	31 December 2022 £ (unaudited)	30 June 2023 £ (audited)
Due after more than one year:

Other receivables	141,750	141,750	–
	141,750	141,750	–

Trade and other payables

	31 December 2023 £ (unaudited)	31 December 2022 £ (unaudited)	30 June 2023 £ (audited)

Trade payables	27,055	33,078	44,995

Other tax and social security payable	69,714	319,265	58,185

Other payables and accruals	376,743	538,860	323,850
	473,512	891,203	427,030

Cash generated from operations

Six months ended 31 December

Six months ended 31 December

Year ended 30 June

2023

2022

2023

(unaudited) £

(unaudited) £

(audited) £

Operating profit

409,348

361,405

915,210

Depreciation charge

76,688

75,390

150,377

Non-cash share option charges

25,646

45,420

97,328

Lease interest paid

(476)

(4,141)

(6,471)

Other interest paid

(1,141)

(690)

(20)

Profit on disposal of fixed assets

(152)

–

Increase in trade and other receivables

(990,910)

(1,240,846)

(9,425)

Increase/(decrease) in trade and other payables

184,060

1,146,549

(265,577)

Increase in provisions

–

20,000

Cash (used in) / generated from operations

(296,937)

383,087

901,422

13. Leases

As a lessee, under IFRS 16 the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

	Right of use asset £	Lease liability £		Income statement £
As at 1 July 2023	73,152	(40,324)		–

Recognition of new lease under IFRS 16	559,803	(552,220)		–
Depreciation	(73,857)	–		(73,857)
Liability write-back at expiry	–	5,293	¹	5,293
Interest	–	(765)		(765)
Lease payments	–	35,506		–

Carrying value at 31 December 2023	559,098	(552,510)		(69,329)

^{1 The lease interest charge for the period under review included a credit entry to write-off the balance of the old office lease liability at expiry of the lease. The credit arose due to the final lease payment being applied on a pro-rata basis for the final quarter. The final lease payment made was £35,506 and not £40,500 which was the amount used when calculating the initial value of the lease liability.}

	Right of use asset £	Lease liability £	Income statement £
As at 1 July 2022	219,455	(195,853)	–

Depreciation	(73,152)	–	(73,152)
Interest	–	(4,141)	(4,141)
Lease payments	–	81,000	–

Carrying value at 31 December 2022	146,303	(118,994)	(77,293)

Contractual maturity analysis of lease liabilities as at 31 December 2023

	Less than 3 months £	3 – 12 months £	1 – 5 Years £	Longer than 5 Years £	Total £
Lease liabilities	–	113,400	439,110	–	552,510

Arcontech Interim Results for the six months ended 31 December 2023

New client win to provide a real-time market data platform

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

New client win to provide a real-time market data platform

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 CityVision platform. The components being deployed include: MVCS (Multi-Vendor Contribution System) which enables those that create market data content, to contribute to multiple vendors and internal destinations at the same time; Arcontech Cache, a calculations engine that allows distribution of vendor feeds such as Bloomberg B-PIPE and Refinitiv Real-Time to end users and other destinations; along with Excelerator, the Company’s highly performant real-time Excel Add-In for data consumption and financial instrument pricing and publication.

A multi-year agreement, with the initial deployment in New York, marks the start of an important relationship with a Tier 1 global institution that should see expansion to Europe and Asia.

Matthew Jeffs, CEO of Arcontech said:

“Discussions commenced as the bank wished to both access and contribute real-time prices to a global market-data vendor, their risk-management platform and other internal systems for which the existing market-data infrastructure was unable to cope with the frequency and volume of updates. Arcontech was selected as we have tried and tested solutions for both large and small deployments as well as the ability to customise quickly to meet specific client requirements. The continual development of our systems also enables our clients to meet their resiliency, monitoring, data management, visualisation and reporting needs. This win is especially important as it underpins management’s expectations for the year whilst reinforcing our optimism in the overall business outlook which is evidencing the re-engagement of prospects interested in securing additional value whilst minimising operational risk”.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes / George Dollemore – Corporate Finance Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Result of Annual General Meeting

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Result of Annual General Meeting

Enquiries:

Arcontech Group plc 020 7256 2300

Geoff Wicks, Chairman and Non-Executive Director

Matthew Jeffs, Chief Executive

Cavendish Capital Markets Ltd (Nomad & Broker) 020 7220 0500

Carl Holmes / George Dollemore – Corporate Finance

Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Posting of Annual Report & Notice of AGM

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Posting of Annual Report & Notice of AGM

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, confirms that its Annual Report and Accounts for the year ended 30 June 2023, together with the Notice of the Annual General Meeting, have been posted to shareholders. The documents will be available to download from the Company’s website www.arcontech.com later this afternoon.

The Company’s Annual General Meeting will be held at the Company’s offices at 1st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00 a.m. on 25 October 2023.

If you will be attending the Annual General Meeting, please ensure you bring proof of identity and share
ownership.

Change of Name of Nominated Adviser and Broker

The Company also announces that its Nominated Adviser and Broker has changed its name to Cavendish Capital Markets Ltd following completion of its own corporate merger.

Enquiries:

Arcontech Group plc 020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

Cavendish Capital Markets Limited (Nomad & Broker) 020 7220 0500
Carl Holmes/George Dollemore
Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Preliminary Results for the year ended 30 June 2023

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Final Results for the year ended 30 June 2023

Financial Highlights:

Turnover was £2,730,172 (2022: £2,757,795)
Profit before taxation was £985,696 (2022: £758,573) up by £227,123
Recurring revenues represented 100% of total revenues for the period (2022: 99%)
Net cash of £6,411,241 (2022: £6,026,468), an increase of 6.4%
Final dividend increased 7.7% to 3.5 pence per share (2022: 3.25 pence per share)

Operational Highlights:

Sales team improved and building a strong pipeline of near and mid-term prospects
Singapore-based consultant engaged to extend sales reach
Continued exploration of potential complementary acquisitions
Planned developments delivered to clients for testing
Investment in technical operations e.g., Python API’s developed
PoC cloud installation tested and proven

Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of Arcontech said:

“We remain optimistic that we will return to revenue growth in the near term even though our markets remain challenging. Interest in our products is higher than we have seen for some time, and we have demonstrated we can compete in a price sensitive market with products that are market leading”.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore – Corporate Finance Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Chairman’s Statement

Arcontech retains a significant customer base and has worked hard to ensure that products are resilient and competitive. We have also successfully renewed contracts for longer periods of time in order to increase the stability of our revenue base which also provides good forward visibility. There is now revenue growth at our existing customers and a number of potential new customers at an advanced stage of negotiation. We are of course cognisant that the market for our products remains challenging as turbulence in financial markets generally has slowed down decision making and increased competitive pressure. However, the year has started positively, and the Company remains confident about the outcome for the current year.

The year to 30 June 2023 had a better level of new orders although, as reported earlier, cancellations late in the previous year and during the course of the year had a negative impact on revenue for FY23. We go into the new financial year with a growing and more positive list of potential new customers that will drive better results in future years but with our starting revenue base for the current year lower than last year.

Turnover was £2,730,172 (2022: £2,757,795) down by £27,623 on last year as a result of a net customer loss. Profit before taxation was £985,696 (2022: £758,573) up by £227,123. This increase in profit before tax is, as previously reported, due to a combination of lower than anticipated staff related costs arising from lower variable costs and delayed hires, and a release of accruals to the Consolidated Statement of Income totalling £110,000. These are expected to be once off savings in the year to 30 June 2023. 100% of our revenue was recurring and average contract periods have increased over the last year so while revenue has reduced, it has increased in resilience and quality. Statutory earnings per share for the year to 30 June 2023 were 7.33p (2022: 4.57p).

Investment in growing technical and sales and marketing operations was held back in the early part of the year as costs were kept under review. However, towards the end of the year the Company was back up to the expected staffing levels in order to support our existing base and the increasing number of customer trials and product developments.

The strong revenue base of recurring revenue gives us confidence to continue with our strategy to grow our core business and to expand into new market areas. We have started to extend our reach geographically and continue to build our sales and marketing capability.

Financing

Cash balances were £6,411,241 (2022: £6,026,468) at the year end, an increase of 6.4%. This strong balance sheet allows the Company to invest in both organic growth and to and to be alert for opportunities to make complementary acquisitions.

Dividend

I am pleased to announce that subject to approval at the Annual General Meeting we intend to pay a dividend of 3.5p per share for the year ended 30 June 2023 (2022: 3.25 pence) an increase of 7.7%, to those shareholders on the register as at the close of business on 6 October 2023 with a dividend payment date of 3 November 2023.

Outlook

We remain optimistic that we will return to revenue growth in the near term even though our markets remain challenging. Interest in our products is higher than we have seen for some time, and we have demonstrated we can compete in a price sensitive market with products that are market leading.

Geoff Wicks

Chairman and Non-Executive Director

Chief Executive’s Review

The 2022/23 financial year evidenced greater engagement with both our existing and prospective clients when compared with last year. Our continued focus on positioning ourselves as an independent provider of market-data platform components allows us to add value to the data vendors solutions and meet the varied requirements of the data consumer.

The year has seen the addition of one new client and a 9% increase in the number of end users of our products. Whilst end user growth generally has less revenue impact than the higher margin side of the business, it is encouraging, nonetheless. We are also working on several active opportunities with both existing and prospective Tier 1 clients where our software has been installed for testing. These opportunities encompass both server-side (high margin) and our user-based solutions and have involved a good degree of work to both facilitate integration and accommodate in-house client development. This work adds optionality to our product range to create additional opportunities for deployment in the wider marketplace.

During the year we have continued to work on extending the terms of our contracts with our larger clients to multiple years so that we now have just under 50% of our recurring revenues subject to multi-year agreements and further discussions are underway.

With regard to sales resources, we have two seasoned and highly experienced professionals based in London. As a result, the current pipeline is looking increasingly optimistic whilst being added to with new opportunities. Further and in recognising the value of local sales and support, we have engaged a consultants based in Asia. The consultant has several decades of experience and has been a client of Arcontech in the past. Having started working with us at the end of the reporting year we look forward to seeing the benefit of this association in terms of reassurance, continuity and new business with both clients and prospective clients, over the coming year.

During the year we have looked at and entered discussions with prospective acquisitions, however, the fit has to be right, and our search continues.

Our staff are a key asset to the Company and have continued to provide exemplary service and support to our clients. I would like to express my thanks for their continued commitment.

With our increased sales footprint and the encouraging signs from existing clients and prospects alike, we feel optimistic for the year ahead and beyond.

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 2023.

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 on pages 2 to 3.

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:

Financial KPIs:

Revenue £2,730,172 (2022: £2,757,795; 2021: £2,988,842) Measurement:

Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation)

Performance:

Loss of two customers during the year impacted sales in the second half of the year

Adjusted profit £861,716 (2022: £601,566; 2021: £959,110) Measurement:

Profit after tax and before release of accruals for administrative costs in respect of prior years . This is an alternative, non-IFRS performance measure, that is considered relevant as it provides a more accurate reflection of trading performance than net profit after tax. The adjusted profit is Net profit after tax less the amount of accruals for administrative costs released as disclosed in the footnote to the Income Statement. The accruals release for 2023 includes a release of £110,000 which is disclosed separately in the Group Statement of Income.

Performance:

Revenue is constant with the previous year and staff costs were below the previous year due to a temporary reduced headcount.

Cash £6,411,241 (2022: £6,026,468; 2021: £5,395,457) 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) 7.33p (2022: 4.57; 2021: 7.88p) Measurement:

Earnings after tax divided by the weighted average number of shares

Performance:

Decrease due to the loss of two customers during the year

Earnings per share (diluted) 7.32p (2022: 4.56p; 2021: 7.79p) Measurement:

Earnings after tax divided by the fully diluted number of shares

Performance:

Decrease due to the loss of two customers during the year

Strategic Report (continued)

Non-financial KPIs:

Staff retention rate (net) 94% (2022: 87%; 2021: 93%) 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

Risk area	Nature	Mitigation

Competition	Loss of business due to existing competition or new entrants into the market	Ongoing investment in research and development responding to the changing needs of clients to remain competitive

Loss of key personnel	Inability to execute business plan due to the risk of losing key personnel	Employee share option scheme in place

Brexit	Business made difficult due to increased regulations between the UK and Europe caused by 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;
The desirability of the Company maintaining a reputation for high standards of business conduct; and
Consider the impact of the Company’s operations on the community and the environment.

Section 172(1) Companies Act 2006

Strategic Report (continued)

The Board ensures that the requirements are met, and the interests of stakeholders are considered as referred to elsewhere in this report and through a combination of the following:

A rolling agenda of matters to be considered by the Board through the year, which includes an annual strategy review meeting, where the strategic options for the following year are developed;
At each board meeting, to receive and discuss a will report on customers, employees and other colleagues, and investors;
Standing agenda points and papers;
A review of certain of these topics through the Audit Committee and the Remuneration Committee agenda items referred to in this report; and

Detailed consideration is given to of any of these factors where they are relevant to any major decisions taken by the Board during the year.

The application of the s172 requirements can be demonstrated in relation to some of the key decisions made during the year to 30 June 2023:

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;
Continuation of a hybrid location working format for staff as working environments continue to evolve post Covid-19, while 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 2023, 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:

All Directors attended the 2022 AGM to answer questions and receive additional feedback from investors;
The outcome of the AGM is published on the Company’s corporate website;
The Board receives regular updates on the views of shareholders through briefings and reports from the executive directors, and the Company’s brokers;
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;
Monitored company culture and engaged with employees on efforts to continuously improve company culture and morale; and
A range of corporate information (including all Company announcements) is also available to shareholders, investors and the public on the Company’s corporate website: www.arcontech.com.

Approved on behalf of the board on 4 September 2023 by:

Matthew Jeffs
Chief Executive

Group Income Statement and Statement of Comprehensive Income

For the year ended 30 June 2023

	Note	2023	2022
		£	£

Revenue	3	2,730,172	2,757,795

Administrative costs		(1,924,962)	(1,999,523)

Operating profit	4	805,210	758,272
Net finance income	5	70,486	301

Changes in estimated variable remuneration liability	2	110,000	–
Profit before taxation		985,696	758,573

Taxation	9	(5,587)	(148,007)
Profit for the year after tax		980,109	610,566
Total comprehensive income for the year		980,109	610,566
Earnings per share (basic)	10	7.33p	4.57p
*Adjusted Earnings per share (basic)**	10	6.44p	4.50p
Earnings per share (diluted)	10	7.32p	4.56p

Adjusted* Earnings per share (diluted)

6.43p

4.49p

*Adjusted to exclude the release of accruals for administrative costs of £118,393 (2022: £9,000), which includes the £110,000 (2022: nil) shown above in respect of estimated variable remuneration liability releases in respect of prior years. This is a non-IFRS alternative performance measure that the Board considers to be a more accurate indicator of underlying trading performance. This measure has been adopted as a KPI and is disclosed in the Strategic Report on page 4.

All of the results relate to continuing operations.

There was no Other Comprehensive Income other than Profit for the year after tax for the year under review.

The notes on pages 33 to 59 form part of these financial statements

Statement of Changes in Equity

For the year ended 30 June 2023

Group:

	Share capital	Share premium	Share option reserve	Retained earnings	Total equity
	£	£	£	£	£
Balance at 30 June 2021	1,665,977	92,360	271,207	4,553,329	6,582,873
Profit for the year	–	–	–	610,566	610,566
Total comprehensive income for the year	–	–	–	610,566	610,566

Dividend paid	–	–	–	(367,752)	(367,752)

Exercise of options	5,624	23,401	–	–	29,025
Share-based payments	–	–	116,612	–	116,612

Transfer between reserves	–	–	(116,994)	116,994	–
Balance at 30 June 2022	1,671,601	115,761	270,825	4,913,137	6,971,324

Profit for the year	–	–	–	980,109	980,109
Total comprehensive income for the year	–	–	–	980,109	980,109

Dividend paid	–	–	–	(434,616)	(434,616)

Share-based payments	–	–	97,328	–	97,328

Transfer between reserves	–	–	(88,698)	88,698	–
Balance at 30 June 2023	1,671,601	115,761	279,455	5,547,328	7,614,145

Company:

	Share capital	Share premium	Share option reserve	Retained earnings	Total equity
	£	£	£	£	£
Balance at 30 June 2021	1,665,977	92,360	271,207	4,331,751	6,361,295

Profit for the year	–	–	–	273,286	273,286
Total comprehensive expense for the year	–	–	–	273,286	273,286

Dividend paid	–	–	–	(367,752)	(367,752)

Exercise of options	5,624	23,401	–	–	29,025
Share-based payments	–	–	116,612	–	116,612
Transfer between reserves	–	–	(116,994)	116,994	–
Balance at 30 June 2022	1,671,601	115,761	270,825	4,354,279	6,412,466

Profit for the year	–	–	–	304,044	304,044
Total comprehensive income for the year	–	–	–	304,044	304,044

Dividend paid	–	–	–	(434,616)	(434,616)

Share-based payments	–	–	97,328	–	97,328

Transfer between reserves	–	–	(88,698)	88,698	–
Balance as at 30 June 2023	1,671,601	115,761	279,455	4,312,406	6,379,222

The notes on pages 33 to 59 form part of these financial statements.

Statements of Financial Position

Registered number: 04062416

As at 30 June 2023

		Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £
	Note
Non-current assets

Goodwill	11	1,715,153	1,715,153	–	–
Property, plant and equipment	12	5,950	6,545	–	–
Right of use asset	17	73,152	219,455	–	–
Investments in subsidiaries	13	–	–	2,017,471	2,017,471
Deferred tax asset	19	328,000	318,000	68,000	56,000
Trade and other receivables	14	–	141,750	–	–

Total non-current assets		2,122,255	2,400,903	2,085,471	2,073,471

Current assets

Trade and other receivables	14	499,861	348,686	3,842,300	3,322,737
Cash and cash equivalents	15	6,411,241	6,026,468	518,678	1,074,294

Total current assets		6,911,102	6,375,154	4,360,978	4,397,031

Current liabilities

Trade and other payables	16	(1,308,888)	(1,558,880)	(67,227)	(58,036)
Lease liabilities	17	(40,324)	(148,450)	–	–
Provisions	18	(50,000)	–	–	–

Total current liabilities		(1,399,212)	(1,707,330)	(67,227)	(58,036)

Non-current liabilities

Lease liabilities	17	–	(47,403)	–	–
Provisions	18	(20,000)	(50,000)	–	–

Total non-current liabilities		(20,000)	(97,403)	–	–

Net current assets		5,511,890	4,667,824	4,293,751	4,338,995
Net assets		7,614,146	6,971,324	6,383,222	6,412,466

Equity

Called up share capital	20	1,671,601	1,671,601	1,671,601	1,671,601
Share premium account	21	115,761	115,761	115,760	115,760
Share option reserve	21	279,455	270,825	279,455	270,825
Retained earnings	21	5,547,328	4,913,137	4,312,406	4,354,279
		7,614,145	6,971,324	6,379,222	6,412,466

As permitted by s408 of the Companies Act 2006, the Company has not presented its own income statement. The parent Company profit for the year was £304,044 (2022: £273,286).

The notes on pages 33 to 59 form part of these financial statements.

Approved on behalf of the board on 4 September by:

Matthew Jees, Chief Executive

Group Statement of Cash Flows

For the year ended 30 June 2023

	Note	2023	2022
		£	£

Cash generated from operations	22	901,422	1,109,608

Tax paid		–	(2,642)

Net cash generated from operating activities		901,420	1,106,966
Investing activities

Interest received		76,977	13,911

Purchases of plant and equipment		(3,480)	(2,688)

Net cash generated from investing activities		73,497	11,223

Financing activities

Proceeds from the issue of shares		–	29,025

Dividend paid		(434,616)	(367,752)

Payment of lease liabilities	17	(155,529)	(148,450)

Net cash used in financing activities		(590,145)	(487,177)
Net increase in cash and cash equivalents		384,772	631,012

Cash and cash equivalents at beginning of year		6,026,469	5,395,457
Cash and cash equivalents at end of year	15	6,411,241	6,026,469

For the year to 30 June 2023, the Group had no debt, and there were no material non-cash transactions.

The notes on pages 33 to 59 form part of these financial statements.

Company Statement of Cash Flows

For the year ended 30 June 2023

	Note	2023	2022
		£	£
Net cash (used in) / generated by operating activities	22	(129,978)	330,075

Tax paid		–	(1,221)

Net cash (used in) / generated from operating activities		(129,978)	328,854
Investing activities

Interest received		8,978	6,426

Net cash generated from investing activities		8,978	6,426

Financing activities

Proceeds from the issue of shares		–	29,025
Dividend paid		(434,616)	(367,752)

Net cash used in financing activities		(434,616)	(338,727)
Net decrease in cash and cash equivalents		(555,616)	(3,447)

Cash and cash equivalents at beginning of year		1,074,294	1,077,741
Cash and cash equivalents at end of year	15	518,678	1,074,294

For the year to 30 June 2023, the Company had no debt, and there were no material non-cash transactions.

The notes on pages 33 to 59 form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 June 2023

Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the period covered by these financial statements except where changes have been noted below.

Reporting entity

Principal Activity

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.

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006.

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. As at 30 June 2023 all assets and liabilities are recorded at amortised cost, and there were no assets or liabilities recorded at fair value.

Going Concern

On the basis of current projections and having regard to the Group’s existing cash reserves, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have projected cash flow out twelve months from the date of signing this report. Revenue projection has been based on recurring revenue streams from existing customers and a forecast for new revenue from additional sales that the Directors feel is achievable. The Group has a highly stable cost base which has been reviewed to incorporate the impact of additional costs for revenue generation activities such as industry trade shows. The Directors have stress tested the cash flow projections assuming no new revenue generation and an increase in costs of up to 8.5%, given the current inflationary environment. Under this scenario given expected cash generation from operations and existing cash balances, the Group will have sufficient resources to continue trading for well in excess of the next twelve months. Accordingly, the Directors have adopted the going concern basis in the preparation of the financial statements.

Changes in accounting policies and disclosures

New and amended Standards and Interpretations adopted by the Group and Company

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations per the table below. The amendments and revisions were applicable for the period year 30 June 2023 but did not result in any material changes to the financial statements of the Group.

Standard	Impact on initial application	Effective date
IAS 16 (Amendments)	Property, Plant and Equipment	1 January 2022
IAS 37 (Amendments)	Provisions, Contingent Liabilities and Contingent Assets	1 January 2022
Annual Improvements to IFRS Standards	2018 – 2020 Cycle	1 January 2022

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

Accounting policies (continued)

New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 July 2022

Standard	Impact on initial application	Effective date
IAS 1 (Amendments)	Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies	1 January 2023
IAS 12 (Amendments)	ncome Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction	1 January 2023
IAS 8 (Amendments)	Accounting policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates	1 January 2023
IFRS 16 (Amendments)	Leases: Lase Liability in a Sale and Leaseback	1 January 2024
IAS 1 (Amendments)	Presentation of Financial Statements: Classification of Liabilities as Current or Non-Current	1 January 2024

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 30 June 2023. Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns.

The contractual arrangement with the other vote holders of the investee.
Rights arising from other contractual arrangements.
The Group’s voting rights and potential voting rights.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations and goodwill

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

Revenue recognition

Contracts with customers do not contain a financing component.

The group recognises revenue when it satisfies a performance obligation by transferring a promised service to the customer as follows:

In assessing whether a licence is distinct the Group considered the continuing requirement to:–

– optimise functionality;

– optimise performance; and

– provide enhancements to ensure user regulatory compliance.

• Revenue from project work is recognised on satisfactory completion of each project, as this is considered to be the point in time the customer gains control over the results of the project work.

Taxation

The tax charge/(credit) represents the sum of the tax payable/(receivable) and any deferred tax.

Research and development tax credits are recognised when received.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

1. Accounting policies (continued)

Taxation (continued)

The carrying amount of deferred tax assets is reviewed at each balance sheet date.

Share-based payments

Impairment of tangible and intangible assets

For goodwill, the recoverable amount is estimated at each year end date, based on value in use. The recoverable amount of other assets is the greater of their net selling price and value in use.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

1. Accounting policies (continued)

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, on the following bases:

Leasehold property	– over the period of the lease
Computer equipment	– 33% – 40% on cost
Office furniture and equipment	– 20% – 25% on cost or reducing balance

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment.

Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

The Group does not hold any investments other than investments in subsidiaries.

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less.

Financial liabilities and equity

Effective interest rate method

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

1. Accounting policies (continued)

Financial instruments (continued)

(a) Classification

The Group classifies its financial assets in the following measurement categories:

those to be measured subsequently at fair value (either through OCI or through profit or loss); and
those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

(b) Recognition

Debt instruments

(d) Impairment

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Leases

Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

1. Accounting policies (continued)

Leases (continued)

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
Amounts expected to be payable by the Group under residual value guarantees;
The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period.

Right-of-use assets are measured at cost which comprises the following:

The amount of the initial measurement of the lease liability;
Any lease payments made at or before the commencement date less any lease incentives received;
Any initial direct costs; and
Restoration costs.

Provisions

Research and development

Pension costs and other post-retirement benefits

The Group makes payments to occupational and employees’ personal pension schemes. Contributions payable for the year are charged in the income statement.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

1. Accounting policies (continued)

Foreign currencies

Segment reporting

2. Critical accounting judgments and key sources of estimation uncertainty

Judgements

Determination of performance obligations and satisfaction thereof

Changes in estimated variable remuneration liability

The Group Income Statement includes the release of £110,000 in accrued bonuses which has been disclosed separately in the current year. The Board’s best estimate of the liability to pay bonuses as at 30 June 2022 was £170,000 and this was recorded with the prior year accruals balance. In the current year, £110,000 of this liability was released to the Group Income Statement following annual reappraisal of the estimated liability at 30 June 2023. The balance being carried forward to the future periods, is the Board’s estimation of a constructive obligation with regards to bonuses in respect of work undertaken to date in progressing new business development and sales opportunities.

Capitalisation of development costs

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

2. Critical accounting judgments and key sources of estimation uncertainty (continued)

Estimates

Impairment of intangible assets

Recognition of deferred tax assets

Share based payment transactions

The Company has made awards of options and over its unissued share capital to certain Directors and employees as part of their remuneration package.

3. Revenue

An analysis of the Group’s revenue is as follows:

	2023 £	2022 £

Software development, licence fees and project work	2,730,172	2,757,795

All of the Group’s revenue relates to continuing activities.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

4. Operating profit for the year is stated after charging/(crediting):

	2023 £	2022 £
Depreciation of plant and equipment (see note 12)	4,074	7,291
Depreciation of leased assets (see note 17)	146,303	146,303
Interest on leased assets (see note 17)	6,471	13,550
Staff costs (see note 8)	1,374,676	1,491,348
Research and development	476,491	409,618
Release of accruals for administrative costs in respect of prior years	(8,393)	(9,000)

5. Finance income and Finance costs:

	2023 £	2022 £
Finance income
Income on cash and cash equivalents	76,977	13,911

Finance costs
Lease interest expense	(6,471)	(13,550)
Other interest expense	(20)	(60)
Net finance income	70,486	301

6. Auditor’s remuneration:

	2023 £	2022 £
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts	37,750	31,500
Fees payable to the Group’s auditor for other services:
– audit of the Company’s subsidiaries	7,000	7,000
	44,750	38,500

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

7. Operating segments:

	2023	2022
	£	£
Revenue by segment

Software development and licence fees	2,730,172	2,757,795
External segment revenue	2,730,172	2,757,795

Operating profit by segment

Software development and licence fees	1,366,930	1,193,637

Unallocated overheads	(458,211)	(448,975)
Total operating profit	908,719	744,662

Finance income	76,977	13,911
Total profit before tax as reported in the Group income statement	985,696	758,573

	2023	2022
	£	£
Segment total of assets
Software development and licence fees	8,295,757	7,541,527

Unallocated assets	4,559,078	4,545,031
	12,854,835	12,086,558

Less intercompany debtors	(3,821,478)	(3,310,501)
Total assets	9,033,357	8,776,057

	2023	2022
	£	£
Segment total of liabilities

Software development and licence fees	5,172,801	5,056,787

Unallocated liabilities	67,889	58,447
	5,240,690	5,115,234

Less intercompany creditors	(3,821,478)	(3,310,501)
Total liabilities	1,419,212	1,804,733

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

7. Operating segments (continued):

	2023	2022
	£	£
Additions of property, plant and equipment assets by segment

Software development and licence fees	3,480	2,688
Total additions	3,480	2,688

	2023	2022
	£	£
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees	4,074	7,291
Total depreciation	4,074	7,291

Non-current assets by country	2023	2022
	£	£
UK	2,122,255	2,400,903
Total non-current assets	2,122,255	2,400,903

Geographical information – External revenue	2023	2022
	£	£
UK	1,979,802	2,013,140
Europe (excluding UK)	584,987	581,981
Africa	42,500	40,000
North America	89,656	89,447
Australia	12,603	12,603
Asia Pacific	20,624	20,624
	2,730,172	2,757,795

During the year there were 4 customers (2022: 4) who accounted for more than 10% of the Group’s revenues as follows:

	2023		2022
	Value of sales £	% of Total		Value of sales £	% of Total

Customer 1	685,720	25%		672,091	24%
Customer 2	520,990	19%		523,138	19%
Customer 3	361,152	13%		360,661	13%
Customer 4	342,588	13%		285,051	10%
	1,910,451	70%		1,840,942	66%

These revenues are attributable to the software development and licence fees segment.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

8. Staff costs:

	2023 £	2022 £
a) Aggregate staff costs, including Directors’ remuneration
Wages and salaries	1,114,182	1,197,220
Social security costs	136,786	153,261
Pension contributions	26,380	24,255
Share-based payments	97,328	116,612
	1,374,676	1,491,348

b) The average number of employees (including Directors) was:
Sales and administration	7	7
Development and support	9	7
	16	14

	£	£
c) Directors’ emoluments
Short-term employee benefits	252,883	231,714
Pension contributions	5,513	5,250
Share-based payments	45,673	57,200
	304,069	294,164
Social security costs	31,260	30,843
Total Director compensation	335,329	325,007

Directors’ emoluments represent the staff costs of the parent company.

The average number of employees of the parent company is 3 (2022: 3)

The highest paid Director received remuneration of £192,114 (2022: £183,464).

The number of Directors that are members of a defined contribution pension scheme is 1 (2022: 1). Pension contributions paid to a defined contribution scheme in respect of the highest paid Director amounted to £5,513 (2022: £5,250).

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

9. Taxation

	2023	2022
	£	£
Current tax	(15,587)	4,993
Deferred tax	10,000	(153,000)
Total tax charge for the year	5,587	148,007

The difference between the total tax credit shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:

	2023 £	2022 £
Profit on ordinary activities before tax	985,696	758,573

Profit on ordinary activities multiplied by the effective rate of corporation tax in the UK of 20.49 % (2022: 19.00%)	201,969	144,128

Effects of:

Disallowed expenses	52	288

Temporary differences on deferred tax	494	796


Research and development tax credits	–	(4,993)

Deferred tax asset movement	(10,000)	153,000

Brought forward losses utilised	(186,928)	(145,212)
Total tax charge for the year	5,587	148,007

From 1 April 2023 the UK Government increased the corporation tax rates 25% on profits above £250,000. Companies with profits of £50,000 or less will be taxed at 19% and companies with profits between £50,000 and £250,000 will pay tax at 25% that is reduced by marginal relief on a sliding scale. The effect of this change to tax rates resulted in an additional £960 tax payable for the year to 30 June 2023, with the Group having an effective tax rate of 20.49%.

Factors which may affect future tax charges

At 30 June 2023 the Group has tax losses of approximately £8,000,000 (2022: £8,300,000) to offset against future trading profits.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

10. Earnings per share

	2023	2022
	£	£
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders	980,109	610,566
	980,109	610,566

	No.	No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	13,372,811	13,364,195

Number of dilutive shares under option	14,805	25,145
Weighted average number of ordinary shares for the purposes of dilutive earnings per share	13,387,616	13,389,340

11. Goodwill

	2023	2022
	£	£
Cost and net book amount

At 1 July 2022 and at 30 June 2023	1,715,153	1,715,153

	2023	2022
	£	£
Arcontech Limited	1,715,153	1,715,153
	1,715,153	1,715,153

Cashflow forecasts are based on the latest financial budgets and extrapolate the cashflows for the next five years based on an estimated growth in revenue representing an average rate of 3.4% (2022: 4.0%) per annum, after which the UK long-term growth rate of 1.8% is applied. The Directors consider that this rate is appropriate, given the current sales pipeline. Fluctuation in revenue is the most sensitive of assumptions. Should revenue fall by more than an average of 5% per annum then this could result in the value of goodwill being impaired.

As the Group does not have any borrowings, the rate used to discount all the forecast cash flows is 8.8% (2022: 8.8%), which represents the Group’s cost of capital.

Goodwill on the purchase of Arcontech Limited is attributable to the operating synergies that have arisen as a result of the combination.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

12. Property, plant and equipment – Group

	Leasehold Property	Office furniture & equipment	Total
Cost	£	£	£

At 1 July 2021	26,199	143,700	169,899

Additions	–	2,688	2,688

Disposals	–	(40,447)	(40,447)

At 1 July 2022	26,199	105,941	132,140

Additions	–	3,480	3,480

Disposals	–	(6,056)	(6,056)

At 30 June 2023	26,199	103,365	129,564
Depreciation

At 1 July 2021	22,058	136,694	158,752

Charge for the year	1,462	5,829	7,291

Disposals	–	(40,447)	(40,447)

At 1 July 2022	23,520	102,076	125,596

Charge for the year	1,461	2,613	4,074

Disposals	–	(6,056)	(6,056)

At 30 June 2023	24,981	98,633	123,614
Net book amount at 30 June 2023	1,218	4,732	5,950
Net book amount at 30 June 2022	2,679	3,865	6,545

13. Investment in subsidiaries

	2023	2022
Carrying amount	£	£

At 1 July 2022	2,017,471	2,017,471


At 30 June 2023	2,017,471	2,017,471

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

13. Investment in subsidiaries (continued)

	Country of Incorporation	Address	Nature of business	Ordinary shares held
Arcontech Solutions Limited	England	11-21 Paul Street, London EC2A 4JU	Dormant	100%
Cognita Technologies Limited	England	11-21 Paul Street, London EC2A 4JU	Software development	100%
Arcontech Limited	England	11-21 Paul Street, London EC2A 4JU	Software development and consultancy	100%

14. Trade and other receivables

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £
Due within one year:

Trade and other receivables	136,250	196,541	–	–

Amounts owed by group undertakings	–	–	3,821,378	3,310,401

Prepayments and accrued income	221,861	152,145	20,922	12,336

Other receivables	141,750	–	–	–
	499,861	348,686	3,842,300	3,322,737


	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £
Due after more than one year:

Other receivables	–	141,750	–	–
	–	141,750	–	–

As at 30 June 2023, trade receivables of £Nil were impaired (2022: £Nil) and during the year an impairment charge relating to trade receivables of £Nil (2022: £Nil) was recognised. As at 30 June 2023 trade receivables of £63,314 (2022: £nil) were past due but not impaired as fully recovery is expected. The ageing analysis of these trade receivables is as follows:

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £

Up to 3 months past due	63,314	–	–	–

3 to 6 months past due	–	–	–	–
	63,314	–	–	–

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

15. Cash and cash equivalents

16. Trade and other payables

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £

Trade payables	44,995	77,772	4,595	3,849

Amounts owed to group undertakings	–	–	100	100

Other tax and social security payable	58,185	62,148	12,740	7,843

Other payables and accruals*	323,850	440,724	49,792	46,244

Deferred income	881,858	978,236	–	–
	1,308,888	1,558,880	67,227	58,036

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

Trade payables and other payables and accruals constitute the financial liabilities within the category “Financial liabilities at amortised cost.” The total value of Financial liabilities at amortised cost is £438,845 (2022: £568,496) which includes provisions (Refer to note 18).

* Other payables and accrual includes accrued bonuses of £70,000. The material decrease in other payables and accrual is due to the release of £110,000 of accrued bonus provisions. (Refer to Note 2)

17. Leases

Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

As at 30 June 2023	Lease liability £	Right of use asset £	Income statement £
Carrying value at 30 June 2022	(195,853)	219,455	–

Depreciation	–	(146,303)	(146,303)
Interest	(6,471)	–	(6,471)
Lease payments	162,000	–	–


Carrying value at 30 June 2023	(40,324)	73,152	(152,774)

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

17. Leases (continued)

Reconciliation of lease liabilities	Operating cash flow £	Financing cash flow £	Non-cash £	Total £
As at 1 July 2022	–	–	–	195,853
Cash flows:
Interest paid	(6,471)	–	–	(6,471)
Liability reduction	–	(155,529)	–	(155,529)
Non-cash changes:
Interest expense	–	–	6,471	6,471
As at 30 June 2023	(6,471)	(155,529)	6,471	40,324

As at 30 June 2022	Lease liability £	Right of use asset £	Income statement £
Carrying value at 30 June 2021	(344,303)	365,758	–

Depreciation	–	(146,303)	(146,303)
Interest	(13,550)	–	(13,550)
Lease payments	162,000	–	–


Carrying value at 30 June 2022	(195,853)	219,455	(159,853)

Reconciliation of lease liabilities	Operating cash flow £	Financing cash flow £	Non-cash £	Total £
As at 1 July 2021	–	–	–	344,303
Cash flows:
Interest paid	(13,550)	–	–	(13,550)
Liability reduction	–	(148,450)	–	(148,450)
Non-cash changes:
Interest expense	–	–	13,550	13,550
As at 30 June 2022	(13,550)	(148,450)	13,550	195,853

Contractual maturity analysis of lease liabilities as at 30 June 2023
	Less than 3 months £	3 – 12 Months £	1 – 5 Year £	Longer than 5 years £	Total £
Lease liabilities	40,324	–	–	–	40,324

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

18. Provisions

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £

As at 1 July	50,000	50,000	–	–

Increase in provision	20,000	–	–	–

As at 30 June	70,000	50,000	–	–

Disclosed as:
Current liabilities	50,000	–	–	–
Non-current liabilities	20,000	50,000	–	–

Provisions consists of dilapidations for the Office premises of £70,000 (2022: £50,000). Refer to note 1 for the Accounting Policy for Provisions. The increase during the year is management’s estimate of an increase in cost of returning the office to it’s original state upon termination of lease. The total estimate of dilapidation costs for the Paul Street office is £50,000 which is disclosed as a current liability as at 30 June 2023, the lease is due to end within twelve months. The £20,000 non-current dilapidations provision relates to a potential liability in connection with a previous office.

19. Deferred tax

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £
At 1 July	318,000	471,000	56,000	55,000
Effect of change in tax rate	78,000	–	16,000	–
Effect of movement in temporary differences	(68,000)	(153,000)	(4,000)	1,000

At 30 June	328,000	318,000	68,000	56,000

The deferred tax asset has been recognised in relation to forecast taxable profits which are considered probable.

Losses to offset against future trading profits at 30 June 2023 amounted to approximately £8,000,000 (2022: £8,300,000).

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

20. Share capital

The Company has authorised share capital of 16,000,000 Ordinary shares of £0.125 each.

Company Allotted and fully paid:	Shares of 12.5p each	Share Capital £	Share Premium £
As at 1 July 2022	13,372,811	1,671,601	115,761
As at 30 June 2023	13,372,811	1,671,601	115,761

Share options

Under the Company’s approved 2002 Share Option Scheme, certain Directors and employees held options at 30 June 2023 for unissued Ordinary Shares of 12.5 pence each as follows:

Share options	At 1 July 2022	Granted	Exercised	Lapsed	At 30 June 2023	Exercise price	Normal exercise period


Employees:	100,000	–	–	–	100,000	64.50 pence	25 Apr 20 – 24 Apr 27
	50,000	–	–	–	50,000	110.00 pence	30 Jun 21 – 29 Jun 28
	32,000	–	–	(12,000)	20,000	196.00 pence	30- Jun 22 – 27 Sep 29
	75,000	–	–	(32,000)	43,000	164.50 pence	30 Jun 23 – 2 Oct 30
	73,500	–	–	(6,000)	67,500	130.50 pence	30 Jun 24 – 11 Oct 31
	–	70,000	–	–	70,000	76.50 pence	30 Jun 25 – 21 Oct 32
Directors:

Geoff Wicks	30,000	–	–	–	30,000	164.50 pence	30 Jun 23 – 2 Oct 30

Matthew Jeffs	100,000	–	–	–	100,000	110.00 pence	30 Jun 21 – 29 Jun 28
	50,000	–	–	(50,000)	–	164.50 pence	30 Jun 23 – 2 Oct 30
	50,000	–	–	–	50,000	130.50 pence	30 Jun 24 – 11 Oct 31
	–	50,000	–	–	50,000	76.50 pence	30 Jun 25 – 21 Oct 32

Total	560,500	120,000	–	(100,000)	580,500

Weighted average exercise price	126.4 pence	76.5 pence	–	166.6 pence	109.2 pence

The number of options exercisable at 30 June 2023 was 343,000 (at 30 June 2022: 282,000), these had a weighted average exercise price of 113.3 pence (2022: 103.6 pence).

The weighted average share price as at the exercise date of the shares exercised in the year was nil pence (2022: 64.5 pence) and of the shares were forfeited in the year was 166.2 pence (2022: 122.3).

The highest price of the Company’s shares during the year was 85.5 pence, the lowest price was 63.5 pence and the price at the year-end was 64.5 pence.

The weighted average remaining contractual life of share options outstanding at 30 June 2023 was 7 years (2022: 7 years).

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

20. Share capital (continued)

Share-based payments

Options issued date	Exercisable from	Dependent on the Company’s compound annual rate of growth in fully diluted earnings¹ for the three financial years ending
November 2018	30 June 2021	30 June 2021
September 2019	30 June 2022	30 June 2022
October 2020	30 June 2023	30 June 2023
October 2021	30 June 2024	30 June 2024
October 2022	30 June 2025	30 June 2025

The Options will vest 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.

Any Ordinary Shares arising from the vesting of Options must be held for a period of two years after vesting.

¹ 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.

² 70,000 options issued in September 2019 lapsed on 30 June 2022 as compound annual earnings growth targets for the financial years ended 30 June 2020, 2021 and 2022 were not achieved.

³ 70,000 options issued in October 2020 lapsed on 30 June 2023 as compound annual earnings growth targets for the financial years ended 30 June 2021, 2022 and 2023 were not achieved.

The fair value of options is valued using the Black-Scholes pricing model. An expense of £97,328 (2022: £116,612) has been recognised in the year in respect of share options granted. The cumulative share option reserve at 30 June 2023 is £279,455 (2022: £270,805).

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

20. Share capital (continued)

The inputs into the Black-Scholes pricing model are as follows:

Directors & Employees
Grant date	25 Apr 2017	29 Nov 2018	27 Sep 2019	2 Oct 2020	11 Oct 2021	21 Oct 2022
Exercise price	64.5 pence	110.0 pence	196.0 pence	164.5 pence	130.5 pence	76.5 pence
Expected life	10 years	10 years	10 years	10 years	10 years	10 years
Expected volatility	50%	50%	50%	49%	45%	44%
Risk free rate of interest	0.5%	0.75%	0.75%	0.00%	0.60%	3.69%
Dividend yield	Nil	Nil	Nil	0.01%	0.01%	0.04%
Fair value of option	36.7 pence	57.0 pence	115.0 pence	91.92 pence	70.03 pence	45.47 pence

Volatility has been estimated based on the historic volatility over a period equal to the expected term from the grant date.

21. Reserves

Details of the movements in reserves are set out in the Statement of Changes in Equity. A description of each reserve is set out below.

Share capital reserve

This is used to record the aggregate nominal amount of the Company’s shares on issue.

Share premium account

This is used to record the aggregate amount or value of premiums paid when the Company’s shares are issued at a premium, net of issue costs, less amounts cancelled by court order.

Share option reserve

This relates to the fair value of options granted which has been charged to the income statement over the vesting period of the options, less amounts transferred to retained earnings.

Retained earnings

This relates to accumulated profits and losses together with distributable reserves arising from capital reductions, less amounts distributed to shareholders.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

22. Net cash generated from operations – Group

	2023	2022
	£	£

Operating profit and exceptional items before tax	915,210	758,272

Depreciation charge	150,377	153,594

Non cash share option charges	97,328	116,612

Lease interest paid	(6,471)	(13,550)

Other interest paid	(20)	(60)

(Increase) / decrease in trade and other receivables	(9,425)	126,624

Decrease in trade and other payables	(265,577)	(31,884)

(Increase) in provisions	20,000	–


Cash generated from operations	901,422	1,109,608

Net cash generated from operations – Company

	2023	2022
	£	£

Operating profit	284,772	265,860

Non cash share option charges	45,673	116,612

Increase in trade and other receivables	(469,614)	(59,270)

Increase in trade and other payables	9,191	6,873


Cash (used in) / generated from operations	(129,978)	330,075

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

23. Related party transactions

Group

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are disclosed in this part of the note.

Key management compensation

The financial statements include the following amounts in respect of services provided to the Group:

Company

Transactions between the Parent Company and its subsidiaries during the year were as follows:

Management charges payable by subsidiaries £546,676 (2022: £536,216).

The amounts due from/to subsidiaries at the balance sheet date were as follows:

	2023 £	2022 £

Amount due from subsidiaries	7,415,999	7,098,581

Less: Provision for impairment	(3,594,521)	(3,788,180)
Amount due from subsidiaries – net	3,821,478	3,310,401

During the year a provision of £193,659 was released (2022: £176,491) in respect of balances due from subsidiaries.

	2023 £	2022 £

Amount due to subsidiaries	546,676	536,216
	546,676	536,216

24. Dividends

A final dividend of 3.5 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2022: 3.25 pence).

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

25. Financial instruments

Credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	Group 2023 £	Group 2022 £	Company 2023 £	Company 2022 £
Trade receivables	136,250	196,541	–	–

Cash and cash equivalents	6,411,241	6,026,468	518,678	1,074,294

Amounts owed by group undertakings	–	–	3,821,378	3,310,401
	6,547,491	6,223,009	4,340,056	4,384,695

Interest rate risk

The Group has interest bearing assets and no interest-bearing liabilities. Interest bearing assets comprise only cash and cash equivalents, which earn interest at a variable rate.

The Group has not entered into any derivative transactions during the period under review.

The Group does not have any borrowings.

The Group’s cash and cash equivalents earned interest at variable rates, between 3.65% below bank base rate and 0.25% below bank base rate and at fixed/variable rates of between 2.53% below bank base rate and 1.15% below bank base rate (2022: 1.20% below bank base rate and 0.2% above bank base rate and at fixed/variable rates of below 0.06%).

Liquidity risk

The Group has no short-term debt finance. The Group monitors its levels of working capital to ensure that it can meet its liabilities as they fall due.

The Group’s financial liabilities comprise trade payables and other payables, provisions and accruals, excluding deferred income, with a carrying value equal to the gross cash flows payable of £438,845 (2022: £568,496) all of which are payable within 6 months.

Notes to the Financial Statements

For the year ended 30 June 2023 (continued)

25. Financial instruments (continued)

Market risk and sensitivity analysis

Equity price risk

The Directors do not consider themselves exposed to material equity price risk due to the nature of the Group’s operations.

Foreign currency exchange risk

The Directors do not consider themselves exposed to material foreign currency risk due to the nature of the Group’s operations. All invoices are raised in sterling.

Interest rate risk

The Group is exposed to interest rate risk as a result of positive cash balances, denominated in sterling, which earn interest at variable and fixed rates. As at 30 June 2023, if bank base rate had increased by 0.5% with all other variables held constant, post-tax profit would have been £32,056 (2022: £30,132) higher and equity would have been £32,056 (2022: £30,132) higher. Conversely, if bank base rate had fallen 0.5% with all other variables held constant, post-tax profit would have been £32,056 (2022: £30,132) lower and equity would have been £32,056 (2022: £30,132) lower.

26. Capital risk management

The Group defines capital as being share capital plus reserves. The Board of Directors continually monitors the level of capital.

The Group is not subject to any externally imposed capital requirements.

27. Ultimate controlling party

There is no ultimate controlling party.

28. Subsequent events

The Company has reached agreement on terms for a new lease agreement on the office at 11- 21 Paul Street, London, EC2A 4JU. The lease is for a five year term an on similar financial terms as the current lease which expires in December 2023. As at the date of signing this report the new lease agreement has not yet been signed as we wait for final documentation to be received from the Land Registry Office.

29. Copies of these statements

2023 Trading Update

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 for the year ended 30 June 2023 turnover is expected to be in line with market expectations and adjusted EBITDA and adjusted profit before tax is expected to be ahead of market expectations by approx. 31% and 49% respectively through a combination of lower than anticipated staff related costs arising from lower variable costs and delayed hires. These are expected to be once off savings in the year to 30 June 2023. Expectations for the current financial year therefore remain unchanged.

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 2023 are expected to be announced in early September 2023 and the Board look forward to updating shareholders with further details at that time.

Enquiries:

Arcontech Group plc 020 7256 2300

Geoff Wicks, Chairman and Non-Executive Director

Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker 020 7220 0500

Carl Holmes/George Dollemore

Harriet Ward (ECM)

About Arcontech

Our clients include Global Tier 1 and Tier 2 financial market participants along with key market regulators.

For more information about us and what we can do for you, please visit: www.Arcontech.com

Appointment of consultant in Singapore

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Appointment of consultant in Singapore

Arcontech Group Plc (LSE: ARC), a global provider of financial market-data infrastructure and display solutions, is pleased to announce the appointment of Stuart Roberts, owner of Sprada Pte Ltd, in a consulting capacity for Singapore with immediate effect..

In this role, Stuart will identify and represent Arcontech to prospective clients whilst also serving as a local point of contact in Singapore. Given his depth of knowledge Stuart will also work with Arcontech to develop its offerings and identify new product opportunities.

Matthew Jeffs, CEO of Arcontech commented: “Stuart brings a broad and deep range of current and historical industry knowledge, all of which is critical to properly meet existing and prospective customer needs. Having spent the majority of his career as a market-data consumer, Stuart’s knowledge of our domain is second to none. I’m very much looking forward to Stuart helping to expand our presence in Singapore”.

Stuart Roberts commented: “I’m excited to represent Arcontech in Singapore, where their products can provide clients with a great deal of added value and flexibility whilst also securing significant cost savings. Arcontech’s products are well proven and highly regarded in multiple global Tier 1 institutions and I look forward to helping make the same benefits available to the Singaporean financial community” said.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore Harriet Ward (ECM)

About Arcontech

Our clients include Global Tier 1 and Tier 2 financial market participants along with key market regulators.

For more information about us and what we can do for you, please visit: www.Arcontech.com

About Sprada Pte Ltd

With many years of market data experience Stuart owns and runs his own Singapore based market data consultancy, Sprada Pte Ltd. He has worked for a number of global and regional financial institutions, most recently DBS Bank and before that Citi and Schroders.

Director/PDMR Shareholding

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces the following PDMR dealing in Arcontech’s ordinary shares.

Ben Hodges, Chief Financial Officer, has bought 6,766 ordinary shares at a price of 73.89 pence per share. Following this purchase, Ben Hodges has a beneficial interest of 6,766 ordinary shares in the Company representing 0.05% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)
Carl Holmes/George Dollemore (Corporate Finance) Harriet Ward (ECM)	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	Ben Hodges
2.	Reason for the Notification
a)	Position/status	Chief Financial Officer
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	ARC GB00BDBBJZ03
b)	Nature of the transactions	Purchase of Ordinary Shares
c)	Price(s) and volume(s)	Price(s) Volume(s) 73.89p 6,766
d)	Aggregated information: · Aggregated volumes · Prices	See 4(c) above
e)	Date of the transaction	5 April 2023
f)	Place of the transaction	London Stock Exchange

Director Retirement

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Director Retirement

Louise has been a Non-Executive Director of the Company since 2007 and has been instrumental in steering the Company through its evolution to become a well-regarded financial technology company. The Board is grateful for her tireless work on behalf of the Company and the knowledge and market insights she brought to the development and strategy that has helped to cement Arcontech’s position in the market. The Company would like to thank Louise for her dedication and wish her well for the future.

The Company announced the appointment of Raj Nagavedia to the Board as Non-Executive Director on 26 October 2022. Raj will continue with Louise’s oversight of the finance function of Arcontech and in due course the Company expects to review the Composition of the Board to further strengthen the Company’s markets and marketing strategy.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore Harriet Ward (ECM)

To access more information on the Group please visit: www.arcontech.com

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2022

ARCONTECH GROUP PLC

(“Arcontech” or the “Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2022

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, reports its unaudited results for the six months ended 31 December 2022.

Overview:

Turnover decreased by 6.6% to £1,357,041 (H1 2021: £1,452,498) due to the effect of contract losses announced during the previous financial year

Profit before tax decreased by 13.2% to £372,414 (H1 2021: £428,924) reflecting the lower turnover

Our preferred measure of adjusted profit before tax, which excludes the release of accruals unrelated to the underlying business, declined by 13.3% to £367,914 (H1 2021: £424,425)

Recurring revenues represented 100% of total revenues for the period (H1 2021: 98%)

Net cash of £5,908,814 at 31 December 2022, up 5.13% (H1 2021: £5,620,352) after a record dividend payment of £434,616 paid on 24 October 2022

Revenue and profit before tax for the year to 30 June 2023 are expected to be in line with current expectations

Geoff Wicks, Chairman of Arcontech, said:

“Our strategy to support our existing customers to maximise opportunities while building our sales capability to grow our customer base globally, ensures we focus on growth in our core market. We are starting to see small amounts of growth and are confident that this will continue, although this must be balanced against continuing difficult markets for our customers.”

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/George Dollemore Harriet Ward (ECM)

To access more information on the Group please visit: www.arcontech.com

The interim report will only be available to view online enabling the Group to communicate in a more environmentally friendly and cost-effective manner.

Chairman’s Statement

While our results for the first half of this year show a decline in both revenue and profit compared to the same period last year, this is the result of the loss of business in the second half of last year. This impact will continue in the second half of the year given the recurring nature of our revenue. However, we are starting to see some growth with new and existing clients although the market remains difficult with customers seeking to reduce spend and prospects continuing to take time to commit.

We have worked hard at retaining customers and now have a significant proportion of our customer base on longer term contracts. At the same time, we are building a prospect list that gives us confidence of sustainable growth in the future. We have also managed our costs appropriately to ensure continued strong profitability and excellent cash generation.

Revenue was £1,357,041, down 6.6% on the same period last year, due to the loss of two contracts in the second half of 2021/22. Profit before tax (“PBT”) was £372,414, 13.2% lower than the same period last year, reflecting the loss of revenue. Adjusted profit before tax, which is PBT before the release of accruals for administrative costs in respect of prior years, was down 13.3% to £367,914.

We continue to invest in our sales, marketing and support teams which has helped us to retain our excellent customer list and to start to build back some of the business lost in the previous financial year.

Financing

Our balance sheet remains robust with net cash of £5.9 million, £0.3 million higher than at 31 December 2022, and £0.1 million lower than the level at 30 June 2022 after payment to shareholders of a record dividend of £0.4 million. This cash position provides resources for continued investment in sales and products and for small complementary acquisitions.

Dividend

No interim dividend is proposed to be paid in respect of the half year. The Board expects to continue its policy of paying a dividend following the announcement of its full year results.

Outlook

Our strategy to support our existing customers to maximise opportunities while building our sales capability to grow our customer base globally, ensures we focus on growth in our core market. We are starting to see small amounts of growth and are confident that this will continue although this must be balanced against continuing difficult markets for our customers.

Geoff Wicks

Chairman and Non-Executive Director

GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2022	2021	2022
		(unaudited) £	(unaudited) £	(audited) £

Revenue		1,357,041	1,452,498	2,757,795

Administrative costs		(995,636)	(1,021,879)	(1,999,523)

Operating profit	4	361,405	430,619	758,272

Finance income		15,840	6,521	13,911

Finance costs		(4,831)	(8,216)	(13,610)

Profit before taxation		372,414	428,924	758,573

Taxation	6	–	–	(148,007)
Profit for the period after tax		372,414	428,924	610,566

Total comprehensive income		372,414	428,924	610,566

Profit per share (basic)		2.78p	3.21p	4.57p

*Adjusted Profit per share (basic)**		2.75p	3.18p	4.50p

Profit per share (diluted)		2.77p	3.20p	4.56p

*Adjusted Profit per share (diluted)**		2.74p	3.16p	4.49p

All of the results relate to continuing operations and there was no other comprehensive income in the period.

* Before release of accruals for administrative costs in respect of prior years.

GROUP BALANCE SHEET

	Note	31 December 2022	31 December 2021	30 June 2022
		(unaudited) £	(unaudited) £	(audited) £
Non-current assets
Goodwill		1,715,153	1,715,153	1,715,153
Property, plant and equipment		4,420	7,489	6,545
Right of use asset	12	146,303	292,606	219,455
Deferred tax asset		318,000	471,000	318,000
Trade and other receivables		141,750	141,750	141,750

Total non-current assets		2,325,626	2,627,998	2,400,903

Current assets
Trade and other receivables	9	1,584,539	322,885	348,686
Cash and cash equivalents		5,908,814	5,620,352	6,026,468

Total current assets		7,493,353	5,943,237	6,375,154

Current liabilities
Trade and other payables	10	(891,203)	(553,435)	(630,644)
Deferred income		(1,854,240)	(1,017,829)	(978,236)
Lease liabilities	12	(118,994)	(151,948)	(148,450)

Total current liabilities		(2,864,437)	(1,723,212)	(1,757,330)

Non-current liabilities
Lease liabilities	12	–	(118,994)	(47,403)

Total non-current liabilities		–	(118,994)	(47,403)

Net current assets		4,628,916	4,220,025	4,617,824

Net assets		6,954,542	6,729,029	6,971,324

Equity
Share capital		1,671,601	1,671,601	1,671,601
Share premium account		115,761	115,761	115,761
Share option reserve		306,440	290,713	270,825
Retained earnings		4,860,740	4,650,954	4,913,137

		6,954,542	6,729,029	6,971,324

GROUP CASH FLOW STATEMENT

	Note	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
		2022	2021	2022
		(unaudited) £	(unaudited) £	(audited) £
Cash generated from operating activities	11	383,087	630,439	1,109,608

Tax paid	6	(4,993)	–	(2,642)

Net cash generated from operating activities		378,094	630,439	1,106,966

Investing activities

Interest received		15,840	6,521	13,911
Purchases of plant and equipment		(114)	(527)	(2,688)

Net cash generated from investing activities		15,726	5,994	11,223

Financing activities

Proceeds from the exercise of options		–	29,024	29,025

Dividends paid		(434,616)	(367,202)	(367,752)

Payment of lease liabilities		(76,859)	(73,360)	(148,450)

Net cash used in financing activities		(511,475)	(411,538)	(487,177)
Net (decrease) / increase in cash and cash equivalents		(117,655)	224,895	631,012

Cash and cash equivalents at beginning of period		6,026,469	5,395,457	5,395,457

Cash and cash equivalents at end of period		5,908,814	5,620,352	6,026,469

GROUP STATEMENT OF CHANGES IN EQUITY

	Share capital	Share premium	Share-based payments reserve	Retained earnings	Total
	£	£	£	£	£
At 1 July 2021	1,665,977	92,360	271,207	4,553,329	6,582,873
Profit for the period	–	–	–	428,924	428,924
Total comprehensive income for the period	–	–	–	428,924	428,924
Exercise of options[1]	5,624	23,401	–	–	29,025
Transfer between reserves	–	–	(35,904)	35,904	–
Dividends paid	–	–	–	(367,202)	(367,202)
Share-based payments	–	–	55,409	–	55,409
Total transactions with owners	5,624	23,401	19,505	(331,298)	(282,768)
At 31 December 2021	1,671,601	115,761	290,712	4,650,955	6,729,029
Profit for the period	–	–	–	181,642	181,642
Total comprehensive income for the period	–	–	–	181,642	181,642
Transfer between reserves	–	–	(81,090)	81,090	–
Dividends paid	–	–	–	(550)	(550)
Share-based payments	–	–	61,203	–	61,203
Total transactions with owners	–	–	(19,887)	80,540	60,653
At 30 June 2022	1,671,601	115,761	270,825	4,913,137	6,971,324
Profit for the period	–	–	–	372,414	372,414
Total comprehensive income for the period	–	–	–	372,414	372,414
Transfer between reserves	–	–	(9,805)	9,805	–
Dividends paid	–	–	–	(434,616)	(434,616)
Share-based payments	–	–	45,420	–	45,420
Total transactions with owners	–	–	35,615	(424,811)	(389,196)
At 31 December 2022	1,671,601	115,761	306,440	4,860,740	6,954,542

NOTES TO THE FINANCIAL INFORMATION

The figures for the six months ended 31 December 2022, and 31 December 2021, are unaudited and do not constitute statutory accounts. The accounting policies adopted are consistent with those applied by the Group in the preparation of the annual consolidated financial statements for the year ended 30 June 2022. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in 2022, but these do not have a material impact on the interim condensed consolidated financial statements of the Group.
The financial information for the year ended 30 June 2022 set out in this interim report does not comprise the Group’s statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2022, which were prepared in accordance with UK-adopted international accounting standards, have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.
Copies of this statement are available from the Company Secretary at the Company’s registered office at 1^st Floor 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
Operating profit is stated after release of accruals for administrative expenses in respect of prior years of £4,500 (31 December 2021: £4,500; 30 June 2022: £9,000).
Earnings per share have been calculated based on the profit after tax and the weighted average number of shares in issue during the half year ended 31 December 2022 of 13,372,811 (31 December 2021: 13,355,719 30 June 2022: 13,364,195).

The number of dilutive shares under option at 31 December 2022 was 18,612 (31 December 2021: 62,727; 30 June 2022: 25,145). 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 the average market price during the period, based upon the issue price of the outstanding share options including future charges to be recognised under the share-based payment arrangements.

Taxation is based on the unaudited results and provision has been estimated at the rate applicable to the Company at the time of this statement and expected to be applied to the total annual earnings. No corporation tax has been charged in the period as any liability has been offset against tax losses brought forward from prior years. The tax paid represents the cash payment of tax liability from the preceding income tax year.
A final dividend in respect of the year ended 30 June 2022 of 3.25 pence per share (2021: 2.75 pence per share) was paid on 24 October 2022.
The Directors have elected not to apply IAS 34 Interim financial reporting.

Trade and other receivables

	31 December 2022 £ (unaudited)	31 December 2021 £ (unaudited)	30 June 2022 £ (audited)
Due within one year:

Trade and other receivables	1,468,165	209,800	196,541

Prepayments and accrued income	116,374	113,085	152,145
	1,584,539	322,885	348,686

Trade and other payables

	31 December 2022 £ (unaudited)	31 December 2021 £ (unaudited)	30 June 2022 £ (audited)

Trade payables	33,078	45,063	77,772

Other tax and social security payable	319,265	64,548	62,148

Other payables and accruals	538,860	443,824	490,724
	891,203	553,435	630,644

Cash generated from operations

	Six months ended 31 December	Six months ended 31 December	Year ended 30 June
	2022	2021	2022
	(unaudited) £	(unaudited) £	(audited) £

Operating profit	361,405	430,619	758,272

Depreciation charge	75,390	77,337	153,594

Non-cash share option charges	45,420	55,410	116,612

Lease interest paid	(4,141)	(7,640)	(13,550)

Other interest paid	(690)	(576)	(60)
(Increase)/decrease in trade and other receivables	(1,240,846)	147,432	126,624

Increase/(decrease) in trade and other payables	1,146,549	(72,143)	(31,884)


Cash generated from operations	383,087	630,439	1,109,608

12. Leases

As a lessee, under IFRS 16 the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

	Right of use asset £	Lease liability £	Income statement £
As at 1 July 2022	219,455	(195,853)	–

Depreciation	(73,152)	–	(73,152)
Interest	–	(4,141)	(4,141)
Lease payments	–	81,000	–


Carrying value at 31 December 2022	146,303	(118,994)	(77,293)

	Right of use asset £	Lease liability £	Income statement £
As at 1 July 2021	365,758	(344,303)	–

Depreciation	(73,152)	–	(73,152)
Interest	–	(7,640)	(7,640)
Lease payments	–	81,000	–


Carrying value at 31 December 2021	292,606	(270,943)	(80,792)

Arcontech Interim Results for the six months ended 31 December 2022

Appointment of Non-Executive Director

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Appointment of Non-Executive Director

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, is pleased to announce the appointment of Raj Nagevadia as Non-Executive Director, effective on 26 October 2022.

Raj is the current Chief Financial Officer (CFO) of Bfinance, a financial services consultancy, and holds a wealth of experience in financial managerial roles across the technology sector, primarily as a CFO. Prior to Bfinance, Raj was CFO of SecureData Europe, a cyber security management service, where he oversaw a broad range of acquisitions. Before this, Raj was CFO of NetNames (formerly Group NBT), the AIM quoted internet services provider, for over 10 years. Here, Raj managed the company’s acquisition strategy as well as aiding in the sale of the Company to Hg Capital in 2011.

Enquiries:
Arcontech Group plc
Geoff Wicks, Chairman and Non-Executive Director	07713 214484
Matthew Jeffs, Chief Executive	020 7256 2300

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes / George Dollemore (Corporate Finance)Harriet Ward (ECM)

To access more information on the Group please visit: www.arcontech.com

The following information on Rajesh Prabhudas Nagevadia, aged 58, is provided in accordance with Rule 17 and Schedule 2, Paragraph (g) of the AIM Rules for Companies:

Mr. Nagevadia holds or has held the following directorships/partnerships in the past five years:

Current Directorships/Partnerships	Former Directorships/Partnerships
Bfinance Group Holdings Limited	None

There is no further information to be disclosed pursuant to Schedule 2, Paragraph (g) of the AIM Rules for Companies.

Grant of Options

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Grant of Options

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that on 21 October 2022 it granted a total of 120,000 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), Ben Hodges (Finance Director) and Darren Lewis (Head of Development).

The Options have been granted at a price of 76.5p pence per Ordinary Share, being the closing mid-market price of an Ordinary Share on 20 October 2022. They will be exercisable from 30 June 2025.

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 2025, 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

Any Ordinary Shares arising from the vesting of performance based Options must be held for a period of two years.

Ben Hodges has been granted 5,000 Options that are not subject to performance criteria. The 50,000 Options granted to non-PDMR employees are also not subject to performance criteria.

Following this grant, there are a total of 666,500 options outstanding, representing approximately 5.0% of the current issued share capital of the Company.

Further detail is set out in the PDMR disclosure tables below.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)
Carl Holmes/George Dollemore (corporate finance)Harriet Ward (ECM)	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	Options over Ordinary Shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Grant of Options over Ordinary Shares
c)	Price(s) and volume(s)	Price(s)Volume(s)76.5p50,000
d)	Aggregated information:· Aggregated volumes· Prices	See 4(c) above
e)	Date of the transaction	21 October 2022
f)	Place of the transaction	Off market transaction

1.	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	Options over Ordinary Shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Grant of Options over Ordinary Shares
c)	Price(s) and volume(s)	Price(s)Volume(s)76.5p20,000
d)	Aggregated information:· Aggregated volumes· Prices	See 4(c) above
e)	Date of the transaction	21 October 2022
f)	Place of the transaction	Off market transaction

1.	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	Options over Ordinary Shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Grant of Options over Ordinary Shares
c)	Price(s) and volume(s)	Price(s)Volume(s)76.5p5,000
d)	Aggregated information:· Aggregated volumes· Prices	See 4(c) above
e)	Date of the transaction	21 October 2022
f)	Place of the transaction	Off market transaction

Posting of Annual Report & Notice of AGM

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Report and accounts for the Year Ended 30 June 2022

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Notice of Annual General Meeting 17 October 2022

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Preliminary Results for the year ended 30 June 2022

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Final Results for the year ended 30 June 2022

Financial Highlights:

· Turnover was £2,757,795 (2021: £2,988,842)

· Profit before tax was £758,573 (2021: £1,036,314)

· Cash balances up 11.7% to £6,026,468 as at 30 June 2022 (30 June 2021: £5,395,457)

· Fully diluted earnings per share of 4.56p (2021: 7.79p)

· Final dividend increased 18% to 3.25 pence per share (2021: 2.75 pence per share)

Operational Highlights:

· Turnover and profit impacted by earlier announced contract losses

· Continued investment in sales and new product development

· Greater level of engagement from both existing customers and new prospects

· Sales team has built a strong pipeline of near and mid-term prospects

· Continued cash generation and robust balance sheet and high proportion of recurring revenue

Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of Arcontech said:

“Several years of inactivity at many of our clients and prospects has created pent up demand which is demonstrated by our robust pipeline. Although conditions remain uncertain, as economies globally face well documented challenges, we are confident that we can convert some of the current interest to orders and start to build back the revenue we lost during the pandemic”.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Tim HarperHarriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Chairman’s Statement

The market for our products continued to experience challenges through 2021/2022. Customers generally were streamlining operations to manage costs and we have done well to maintain most of our customer base. As previously reported we lost two customers and this impacted the second half of the year and will have an impact on our results for 2022/2023 as well. However, we have closed some new sales towards the end of last year and we are well placed to make up some of the lost revenue during the current year.

Turnover was £2,757,795 (2021: £2,988,842) down by £231,047 on last year as a result of the customer losses. Profit before taxation was £758,573 (2021: £1,036,314) reflecting the lower second half revenue. Over 90% of our revenue is recurring and average contract periods have increased over the last year so while revenue has reduced, it has increased in resilience and quality. Statutory earnings per share for the year to 30 June 2022 were 4.57p (2021: 7.88p).

Through the pandemic it was difficult to visit our customer base in the UK and internationally with many of our usual contacts working from home. Budgets were tightly controlled across the board with new projects put on hold and some consolidation taking place. While this has impacted our business we remain in good shape, with a strong balance sheet, and able to take advantage of opportunities as the market improves.

We have used this period to strengthen our sales and marketing team and have worked hard to maintain a high level of customer support. Our product line has been upgraded and work is continuing on additions to products with some early-stage work on extensions to our product range for new areas of the market.

Our recurring revenue base enables us to have confidence to continue with our strategy to grow our core business and to expand into new market areas. We have made good progress with a number of prospective customers over the year but recognise that lead times are longer than before the pandemic. In recent months we have seen signs of improvement in the market with new projects being discussed with existing customers and prospective new customers.

Financing

Cash balances were £6,026,469 (2021: £5,395,457) at the period end, an increase of 11.7%. This strong balance sheet allows the Company to invest in both organic growth and to identify complementary acquisitions.

Dividend

I am pleased to announce that subject to approval at the Annual General Meeting we intend to pay a dividend of 3.25p per share for the year ended 30 June 2022 (2021: 2.75 pence) an increase of 18.2%, to those shareholders on the register as at the close of business on 30 September 2022 with a dividend payment date of 24 October 2022.

Employees

Through the difficult period of the pandemic, we have retained most of our staff and where necessary we have been able to replace leavers with candidates of a high calibre. Staff are back in the office for most of the week but we continue to operate a hybrid working environment to allow greater flexibility.

Outlook

Several years of inactivity at many of our clients and prospects has created pent up demand which is demonstrated by our robust pipeline. Although conditions remain uncertain, as economies globally face well documented challenges, we are confident that we can convert some of the current interest to orders and start to build back the revenue we lost during the pandemic.

Geoff Wicks

Chairman and Non-Executive Director

Chief Executive’s Review

The 2021/22 financial year was challenging reflecting the impact Covid had on our customer landscape and we performed well to deliver revenues and profit before tax in line with market expectations.

Our pipeline is growing and prospects along with existing clients are beginning to engage. We have also managed to extend the length of contracts with some of our larger clients to multi-year terms, reflecting their confidence and satisfaction in our products and service.

The year has further seen us continue to improve and build out our software solutions to meet client needs and to differentiate us from the competition. Our tick history server, which is a development of our desktop product, is close to being ready for alpha testing as is our permissioning system. The tick history server which stores pricing data so that it can be used for other purposes, will allow us to address new markets, currently occupied by two dominant providers, whilst our permissioning system which ensures users only receive data they are licensed for allows us to replace incumbent platforms wholesale whilst targeting a wider range of prospects.

At the request of a client we have also built additional feed handlers to enable direct delivery of data by content creators, in this instance, for two of the largest inter-dealer brokers. These are currently in User Acceptance Testing at the client and add to the direct feeds we will be able to integrate to all clients. This is a good example of how closely we work with our clients and highlights the bespoke service we are able to provide.

The website and marketing materials have also been refreshed to better reflect what we do. This is a work in progress and we have more improvements planned.

We continue to grow our cash resources which enables us to proactively look for suitable acquisitions. At the same time we are researching alternative products linked to the services we already provide to create additional paths for organic growth. We are in very early-stage discussions with several clients in this regard.

Our staff are a key asset to the Company and have continued to provide exemplary service and support to our clients. I would like to express my thanks for their continued commitment.

During the year we made changes to our sales personnel which has enabled us to focus on new markets. We are also adding to our support team to provide desktop support along with the technical support we have provided to date.

With clients returning to the office and travel restrictions largely over we are seeing encouraging signs from existing clients and prospects alike. As a result we are cautiously optimistic for the year ahead and beyond.

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 2022.

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 on pages 2 to 3.

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:

Financial KPIs:

Revenue £2,757,795 (2021: £2,988,842; 2020: £2,955,314) Measurement:

Revenue from sales made to all customers (excluding intra-group sales which eliminate on consolidation)

Performance:

Loss of two customers during the year impacted sales in the second half of the year

Adjusted profit £601,566 (2021: £959,110; 2020: £1,131,203) Measurement:

Profit after tax and before release of accruals for administrative costs in respect of prior years . This is an alternative, non-IFRS performance measure, that is considered relevant as it provides a more accurate reflection of trading performance than net profit after tax. The adjusted profit is Net profit after tax less the amount of accruals for administrative costs released as disclosed in the footnote to the Income Statement

Performance:

Decrease reflects the loss of two customers. However costs continued to be controlled tightly

Cash £6,026,469 (2021: £5,395,457; 2020: £5,006,969) 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) 4.57p (2021: 7.88; 2020: 9.22p) Measurement:

Earnings after tax divided by the weighted average number of shares

Performance:

Decrease due to the loss of two customers during the year

Earnings per share (diluted) 4.56p (2021: 7.79p; 2020: 9.03p) Measurement:

Earnings after tax divided by the fully diluted number of shares

Performance:

Decrease due to the loss of two customers during the year

Strategic Report (continued)

Non-financial KPIs:

Staff retention rate (net) 87% (2021: 93%; 2020: 91%) 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

Risk area	Nature	Mitigation

Competition	Loss of business due to existing competition	Ongoing investment in research and development
	Or new entrants into the market	Responding to the changing needs of clients to remain competitive

Loss of key personnel	Inability to execute business plan due to the risk of losing key personnel	Employee share option scheme in place

Covid-19 pandemic	Inability to execute business plan due to staff absence. Difficulty in winning new business due to potential customers being hard to engage with due to remote working	The Directors and employees returned to the office on a hybrid basis, but maintain strict health and safety protocols in order to protect staff.
		At present the Company believes that there should be no significant material disruption to its work

Brexit	Business made difficult due to increased regulations between the UK and Europe caused by 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;

· The desirability of the Company maintaining a reputation for high standards of business conduct; and

· Consider the impact of the Company’s operations on the community and the environment.

Section 172(1) Companies Act 2006

Strategic Report (continued)

The Board ensures that the requirements are met, and the interests of stakeholders are considered as referred to elsewhere in this report and through a combination of the following:

· A rolling agenda of matters to be considered by the Board through the year, which includes an annual strategy review meeting, where the strategic options for the following year are developed;

· At each board meeting, to receive and discuss a will report on customers, employees and other colleagues, and investors;

· Standing agenda points and papers;

· A review of certain of these topics through the Audit Committee and the Remuneration Committee agenda items referred to in this report; and

· Detailed consideration is given to of any of these factors where they are relevant to any major decisions taken by the Board during the year.

The application of the s172 requirements can be demonstrated in relation to some of the key decisions made during the year to 30 June 2022:

· 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;

· Implementing a new hybrid location working format for staff as working environments continue to evolve post Covid-19, while 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 2022, 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:

· All Directors attended the 2021 AGM to answer questions and receive additional feedback from investors;

· The outcome of the AGM is published on the Company’s corporate website;

· The Board receives regular updates on the views of shareholders through briefings and reports from the executive directors, and the Company’s brokers;

· 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;

· Monitored company culture and engaged with employees on efforts to continuously improve company culture and morale; and

· A range of corporate information (including all Company announcements) is also available to shareholders, investors and the public on the Company’s corporate website: www.arcontech.com.

Approved on behalf of the board on 9 September 2022 by:

Matthew Jeffs
Chief Executive

Group Income Statement and Statement of Comprehensive Income

For the year ended 30 June 2022

	Note	2022	2021
		£	£

Revenue	3	2,757,795	2,988,842

Administrative costs		(1,999,523)	(1,945,481)

Operating profit	4	758,272	1,043,361
Net finance income / (expense)	5	301	(7,047)

Profit before taxation		758,573	1,036,314

Taxation	9	(148,007)	10,796
Profit for the year after tax		610,566	1,047,110
Total comprehensive income for the year		610,566	1,047,110
Earnings per share (basic)	10	4.57p	7.88p
*Adjusted Earnings per share (basic)**	10	4.50p	7.22p
Earnings per share (diluted)	10	4.56p	7.79p

Adjusted* Earnings per share (diluted)

4.49p

7.14p

*Adjusted to exclude the release of accruals for administrative costs of £9,000 (2021: £88,000) in respect of prior years. This is a non-IFRS alternative performance measure that the Board considers to be a more accurate indicator of underlying trading performance. This measure has been adopted as a KPI and is disclosed in the Strategic Report on page 4.

All of the results relate to continuing operations.

There was no Other Comprehensive Income other than Profit for the year after tax for the year under review.

The notes on pages 32 to 56 form part of these financial statements

Statement of Changes in Equity

For the year ended 30 June 2022

Group:

	Sharecapital	Sharepremium	Share option reserve	Retainedearnings	Totalequity
	£	£	£	£	£
Balance at 30 June 2020	1,651,314	56,381	188,639	3,806,514	5,702,848
Profit for the year	–	–	–	1,047,110	1,047,110
Total comprehensive income for the year	–	–	–	1,047,110	1,047,110

Dividend paid	–	–	–	(333,594)	(333,594)

Exercise of options	14,663	35,979	–	–	50,642
Share-based payments	–	–	115,866	–	115,866

Transfer between reserves	–	–	(33,298)	33,298	–
Balance at 30 June 2021	1,665,977	92,360	271,207	4,553,329	6,582,873

Profit for the year	–	–	–	610,566	610,566
Total comprehensive income for the year	–	–	–	610,566	610,566

Dividend paid	–	–	–	(367,752)	(367,752)

Exercise of options	5,624	23,401	–	–	29,025

Share-based payments	–	–	116,612	–	116,612

Transfer between reserves	–	–	(116,994)	116,994	–
Balance at 30 June 2022	1,671,601	115,761	270,825	4,913,137	6,971,324

Company:

	Sharecapital	Sharepremium	Share option reserve	Retainedearnings	Totalequity
	£	£	£	£	£
Balance at 30 June 2020	1,651,314	56,381	188,639	4,450,302	6,346,636

Profit for the year	–	–	–	181,744	181,744
Total comprehensive expense for the year	–	–	–	181,744	181,744

Dividend paid	–	–	–	(333,594)	(333,594)

Exercise of options	14,663	35,979	–	–	50,642
Share-based payments	–	–	115,866	–	115,866
Transfer between reserves	–	–	(33,298)	33,298	–
Balance at 30 June 2021	1,665,977	92,360	271,207	4,331,751	6,361,295

Profit for the year	–	–	–	273,286	273,286
Total comprehensive income for the year	–	–	–	273,286	273,286

Dividend paid	–	–	–	(367,752)	(367,752)

Exercise of options	5,624	23,401	–	–	29,025

Share-based payments	–	–	116,612	–	116,612

Transfer between reserves	–	–	(116,994)	116,994	–
Balance as at 30 June 2022	1,671,601	115,761	270,825	4,354,279	6,412,466

The notes on pages 32 to 56 form part of these financial statements.

Statements of Financial Position

Registered number: 04062416

As at 30 June 2022

		Group 2022 £	Group 2021£	Company 2022 £	Company 2021£
	Note
Non-current assets

Goodwill	11	1,715,153	1,715,153	–	–
Property, plant and equipment	12	6,545	11,147	–	–
Right of use asset	17	219,455	365,758	–	–
Investments in subsidiaries	13	–	–	2,017,471	2,017,471
Deferred tax asset	18	318,000	471,000	56,000	55,000
Trade and other receivables	14	141,750	141,750	–	–

Total non-current assets		2,400,903	2,704,809	2,073,471	2,072,471

Current assets

Trade and other receivables	14	348,686	470,317	3,322,737	3,263,467
Cash and cash equivalents	15	6,026,468	5,395,457	1,074,294	1,077,741

Total current assets		6,375,154	5,865,774	4,397,031	4,341,208

Current liabilities

Trade and other payables	16	(1,608,880)	(1,643,407)	(58,036)	(52,384)
Lease liabilities	17	(148,450)	(148,450)	–	–

Total current liabilities		(1,757,330)	(1,791,857)	(58,036)	(52,384)

Non-current liabilities

Lease liabilities	17	(47,403)	(195,853)	–	–

Total Non-current liabilities		(47,403)	(195,853)	–	–

Net current assets		4,617,824	4,073,917	4,338,995	4,288,824
Net assets		6,971,324	6,582,873	6,412,466	6,361,295

Equity

Called up share capital	19	1,671,601	1,665,977	1,671,601	1,665,977
Share premium account	20	115,761	92,360	115,760	92,360
Share option reserve	20	270,825	271,207	270,825	271,207
Retained earnings	20	4,913,137	4,553,329	4,354,279	4,331,751
		6,971,324	6,582,873	6,412,466	6,361,295

As permitted by s408 of the Companies Act 2006, the Company has not presented its own income statement. The parent Company profit for the year was £273,286 (2021: £181,744).

Approved on behalf of the board on 9 September by:

Matthew Jeffs
Chief Executive

The notes on pages 32 to 56 form part of these financial statements.

Group Statement of Cash Flows

For the year ended 30 June 2022

	Note	2022	2021
		£	£

Cash generated from operations	21	1,109,608	809,559

Tax paid		(2,642)	(8,204)

Net cash generated from operating activities		1,106,966	801,355
Investing activities

Interest received		13,911	13,260

Purchases of plant and equipment		(2,688)	(1,482)

Net cash generated from investing activities		11,223	11,778

Financing activities

Proceeds from the issue of shares		29,025	50,642

Dividend paid		(367,752)	(333,594)

Payment of lease liabilities		(148,450)	(141,693)

Net cash used in financing activities		(487,177)	(424,645)
Net increase in cash and cash equivalents		631,012	388,488

Cash and cash equivalents at beginning of year		5,395,457	5,006,969
Cash and cash equivalents at end of year	15	6,026,469	5,395,457

For the year to 30 June 2022, the Group had no debt, and there were no material non-cash transactions.

The notes on pages 32 to 56 form part of these financial statements.

Company Statement of Cash Flows

For the year ended 30 June 2022

	Note	2022	2021
		£	£
Net cash generated by operating activities	21	330,075	210,920

Tax paid		(1,221)	(3,319)

Net cash generated from operating activities		328,854	207,601
Investing activities

Interest received		6,426	6,392

Net cash generated from investing activities		6,426	6,392

Financing activities

Proceeds from the issue of shares		29,025	50,642
Dividend paid		(367,752)	(333,594)

Net cash used in financing activities		(338,727)	(282,952)
Net decrease in cash and cash equivalents		(3,447)	(68,959)

Cash and cash equivalents at beginning of year		1,077,741	1,146,700
Cash and cash equivalents at end of year	15	1,074,294	1,077,741

The notes on pages 32 to 56 form part of these financial statements.

Notes to the Financial Statements

For the year ended 30 June 2022

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the period covered by these financial statements except where changes have been noted below.

Reporting entity

Principal Activity

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.

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006.

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. As at 30 June 2022 all assets and liabilities are recorded at amortised cost, and there were no assets or liabilities recorded at fair value.

Going Concern

On the basis of current projections and having regard to the Group’s existing cash reserves, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have projected cash flow out twelve months from the date of signing this report. Revenue projection has been based on recurring revenue streams from existing customers and a forecast for new revenue from additional sales that the Directors feel is achievable, and in line with average new business generation pre-Covid-19. The Group has a highly stable cost base which has been reviewed to incorporate the impact of additional costs for revenue generation activities such as industry trade shows. The Directors have stress tested the cash flow projections assuming no new revenue generation and an increase in costs of up to 15%, given the current inflationary environment. Under this scenario given expected cash generation from operations and existing cash balances, the Group will have sufficient resources to continue trading for well in excess of the next twelve months. Accordingly, the Directors have adopted the going concern basis in the preparation of the financial statements.

Changes in accounting policies and disclosures

a) New and amended Standards and Interpretations adopted by the Group and Company

The International Accounting Standards Board (IASB) issued various amendments and revisions to International Financial Reporting Standards and IFRIC interpretations. The amendments and revisions were applicable for the period year 30 June 2022 but did not result in any material changes to the financial statements of the Group.

b) New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 July 2022

Standard	Impact on initial application	Effective date
IAS 1 (Amendments)	Classification of Liabilities as Current or Non-Current	TBC
IAS 1 (Amendments)	Disclosure of Accounting Policies	TBC
IAS 1 (Amendments)	Definition of Accounting Estimates	TBC
IFRS 17 (Amendments)	Initial Application of IFRS 17 and IFRS 9 – Comparative Information	TBC

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 30 June 2022. Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

· Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).

· Exposure, or rights, to variable returns from its involvement with the investee

· The ability to use its power over the investee to affect its returns.

· The contractual arrangement with the other vote holders of the investee.

· Rights arising from other contractual arrangements.

· The Group’s voting rights and potential voting rights.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations and goodwill

Revenue recognition

Contracts with customers do not contain a financing component.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Revenue recognition (continued)

The group recognises revenue when it satisfies a performance obligation by transferring a promised service to the customer as follows:

In assessing whether a licence is distinct the Group considered the continuing requirement to:–

– optimise functionality;

– optimise performance; and

– provide enhancements to ensure user regulatory compliance.

• Revenue from project work is recognised on satisfactory completion of each project, as this is considered to be the point in time the customer gains control over the results of the project work.

Taxation

The tax charge/(credit) represents the sum of the tax payable/(receivable) and any deferred tax.

Research and development tax credits are recognised when received.

The carrying amount of deferred tax assets is reviewed at each balance sheet date.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Share-based payments

Impairment of tangible and intangible assets

For goodwill, the recoverable amount is estimated at each year end date, based on value in use. The recoverable amount of other assets is the greater of their net selling price and value in use.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, on the following bases:

Leasehold property	– over the period of the lease
Computer equipment	– 33% – 40% on cost
Office furniture and equipment	– 20% – 25% on cost or reducing balance

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

The Group does not hold any investments other than investments in subsidiaries.

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less.

Financial liabilities and equity

Effective interest rate method

(a) Classification

The Group classifies its financial assets in the following measurement categories:

· those to be measured subsequently at fair value (either through OCI or through profit or loss); and

· those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Financial instruments (continued)

(b) Recognition

Debt instruments

(d) Impairment

For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.

Leases

Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

· Fixed payments (including in-substance fixed payments), less any lease incentives receivable;

· Variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;

· Amounts expected to be payable by the Group under residual value guarantees;

· The exercise price of a purchase option if the Group is reasonably certain to exercise that option; and

· Payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

1. Accounting policies (continued)

Leases (continued)

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period.

Right-of-use assets are measured at cost which comprises the following:

· The amount of the initial measurement of the lease liability;

· Any lease payments made at or before the commencement date less any lease incentives received;

· Any initial direct costs; and

· Restoration costs.

Provisions

Research and development

Pension costs and other post-retirement benefits

The Group makes payments to occupational and employees’ personal pension schemes. Contributions payable for the year are charged in the income statement.

Foreign currencies

Segment reporting

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

2. Critical accounting judgments and key sources of estimation uncertainty

Judgements

Determination of performance obligations and satisfaction thereof

Capitalisation of development costs

Estimates

Impairment of non-current assets

Determining whether non-current assets are impaired requires an estimation of the value in use of the cash generating units to which non-current assets have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. The key variables used in cash flow projections are: a timeline of fourteen years (the “time period”); the forecast for the next year which is used as the base for future years; revenue and cost projections for the time period using the average rate of increase / (decrease) achieved over the preceding ten years, No provision for impairment was made in the year to the carrying value of goodwill (see note 11) or investments in subsidiaries (see note 13).

Recognition of deferred tax assets

Share based payment transactions

The Company has made awards of options and over its unissued share capital to certain Directors and employees as part of their remuneration package.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

3. Revenue

An analysis of the Group’s revenue is as follows:

	2022 £	2021 £

Software development, licence fees and project work	2,757,795	2,988,842

All of the Group’s revenue relates to continuing activities.

4. Operating profit for the year is stated after charging/(crediting):

	2022 £	2021 £
Depreciation of plant and equipment (see note 12)	7,291	9,651
Depreciation of leased assets (see note 17)	146,303	146,303
Interest on leased assets (see note 17)	13,550	20,307
Staff costs (see note 8)	1,491,348	1,491,063
Research and development	409,618	506,893
Release of accruals for administrative costs in respect of prior years	(9,000)	(88,000)

5. Finance income and Finance costs:

	2022 £	2021 £
Finance income
Income on cash and cash equivalents	13,911	13,260

Finance costs
Lease interest expense	(13,550)	(20,307)
Other interest expense	(60)	–
Net finance income / (expense)	301	(7,047)

6. Auditor’s remuneration:

	2022 £	2021 £
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts	31,500	29,750
Fees payable to the Group’s auditor for other services:
– audit of the Company’s subsidiaries	7,000	6,000
	38,500	35,750

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

7. Operating segments:

	2022	2021
	£	£
Revenue by segment

Software development and licence fees	2,757,795	2,988,842
External segment revenue	2,757,795	2,988,842

Operating profit by segment

Software development and licence fees	1,193,637	1,468,132

Unallocated overheads	(448,975)	(445,078)
Total operating profit	744,662	1,023,054

Finance income	13,911	13,260
Total profit before tax as reported in the Group income statement	758,573	1,036,314

	2022	2021
	£	£
Segment total of assets
Software development and licence fees	7,541,527	7,337,340

Unallocated assets	4,545,031	4,492,208
	12,086,558	11,829,548

Less intercompany debtors	(3,310,501)	(3,258,968)
Total assets	8,776,057	8,570,580

	2022	2021
	£	£
Segment total of liabilities

Software development and licence fees	5,056,787	5,193,528

Unallocated liabilities	58,447	53,150
	5,115,234	5,246,678

Less intercompany creditors	(3,310,501)	(3,258,968)
Total liabilities	1,804,733	1,987,710

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

7. Operating segments (continued):

	2022	2021
	£	£
Additions of property, plant and equipment assets by segment

Software development and licence fees	2,688	1,482
Total additions	2,688	1,482

	2022	2021
	£	£
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees	7,291	9,651
Total depreciation	7,291	9,651

Non-current assets by country	2022	2021
	£	£
UK	2,400,903	2,704,809
Total non-current assets	2,400,903	2,704,809

Geographical information – External revenue	2022	2021
	£	£
UK	2,013,140	2,065,903
Europe (excluding UK)	581,981	771,541
Africa	40,000	42,500
North America	89,447	83,637
Australia	12,603	11,838
Asia Pacific	20,624	13,423
	2,757,795	2,988,842

During the year there were 4 customers (2021: 3) who accounted for more than 10% of the Group’s revenues as follows:

	2022		2021
	Value of sales £	% of Total		Value of sales£	% of Total

Customer 1	716,386	28%		668,122	22%
Customer 2	520,990	21%		522,149	17%
Customer 3	353,975	14%		375,168	13%
Customer 4	241,556	10%		–	–
	1,832,907	73%		1,565,439	52%

These revenues are attributable to the software development and licence fees segment.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

8. Staff costs:

	2022£	2021£
a) Aggregate staff costs, including Directors’ remuneration
Wages and salaries	1,197,220	1,206,748
Social security costs	153,261	144,131
Pension contributions	24,255	24,318
Share-based payments	116,612	115,866
	1,491,348	1,491,063

b) The average number of employees (including Directors) was:
Sales and administration	7	6
Development and support	7	11
	14	17

	£	£
c) Directors’ emoluments
Short-term employee benefits	231,714	232,352
Pension contributions	5,250	5,250
Share-based payments	57,200	63,030
	294,164	300,632
Social security costs	30,843	49,351
Total Director compensation	325,007	349,983

Directors’ emoluments represent the staff costs of the parent company.

The average number of employees of the parent company is 3 (2021: 3)

The highest paid Director received remuneration of £183,464 (2021: £186,178).

The number of Directors that are members of a defined contribution pension scheme is 1 (2021: 1). Pension contributions paid to a defined contribution scheme in respect of the highest paid Director amounted to £5,250 (2021: £5,250).

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

9. Taxation

	2022	2021
	£	£
Current tax	4,993	(8,204)
Deferred tax	(153,000)	19,000
Total tax charge (credit) for the year	148,007	(10,796)

The difference between the total tax credit shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows:

	2022£	2021£
Profit on ordinary activities before tax	758,573	1,036,314

Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 19 % (2021: 19%)	144,128	196,900

Effects of:

Disallowed expenses	288	97

Temporary differences on deferred tax	796	1,457

Income taxes paid	–	8,204

Research and development tax credits	(4,993)	–

Deferred tax asset movement	153,000	(19,000)

Brought forward losses utilised	(145,212)	(198,454)
Total tax / (credit) for the year	148,007	(10,796)

Factors which may affect future tax charges

At 30 June 2022 the Group has tax losses of approximately £8,300,000 (2021: £8,500,000) to offset against future trading profits.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

10. Earnings per share

	2022	2021
	£	£
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders	610,566	1,047,110
	610,566	1,047,110

	No.	No.
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	13,364,195	13,290,672

Number of dilutive shares under option	25,145	143,168
Weighted average number of ordinary shares for the purposes of dilutive earnings per share	13,389,340	13,433,840

11. Goodwill

	2022	2021
	£	£
Cost and net book amount

At 1 July 2021 and at 30 June 2022	1,715,153	1,715,153

	2022	2021
	£	£
Arcontech Limited	1,715,153	1,715,153
	1,715,153	1,715,153

Cashflow forecasts are based on the latest financial budgets and extrapolate the cashflows for the next five years based on an estimated growth in revenue representing an average rate of 4% (2021: 5%) per annum, after which the UK long-term growth rate of 1.8% is applied. The Directors consider that this rate is appropriate, given the current sales pipeline. Fluctuation in revenue is the most sensitive of assumptions. Should revenue fall by more than an average of 5% per annum then this could result in the value of goodwill being impaired.

As the Group does not have any borrowings, the rate used to discount all the forecast cash flows is 8.8% (2021: 8.8%), which represents the Group’s cost of capital.

Goodwill on the purchase of Arcontech Limited is attributable to the operating synergies that have arisen as a result of the combination.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

12. Property, plant and equipment – Group

	Leasehold Property	Office furniture & equipment	Total
Cost	£	£	£

At 1 July 2020	26,199	142,218	168,417

Additions	–	1,482	1,482

At 1 July 2021	26,199	143,700	169,899

Additions	–	2,688	2,688

Disposals	–	(40,447)	(40,447)

At 30 June 2022	26,199	105,941	132,140
Depreciation

At 1 July 2020	20,597	128,504	149,101

Charge for the year	1,461	8,190	9,651

At 1 July 2021	22,058	136,694	158,752

Charge for the year	1,462	5,829	7,291

Disposals	–	(40,447)	(40,447)

At 30 June 2022	23,520	102,076	125,596
Net book amount at 30 June 2022	2,679	3,865	6,544
Net book amount at 30 June 2021	4,141	7,008	11,147

13. Investment in subsidiaries

	2022	2021
Carrying amount	£	£

At 1 July 2021	2,017,471	2,017,471


At 30 June 2022	2,017,471	2,017,471

Details of the investments in which the Group and the Company holds 20% or _m_o_r_{e of the nominal value of any class of share capital are listed below. The Goodwill recognised in Note 11 is in connection with investments made in subsidiaries:}

	Country of Incorporation	Address	Nature of business	Ordinarysharesheld
Arcontech Solutions Limited	England	11-21 Paul Street, London EC2A 4JU	Dormant	100%
Cognita Technologies Limited	England	11-21 Paul Street, London EC2A 4JU	Software development	100%
Arcontech Limited	England	11-21 Paul Street, London EC2A 4JU	Software development and consultancy	100%

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

14. Trade and other receivables

	Group 2022 £	Group 2021£	Company 2022 £	Company 2021 £
Due within one year:

Trade and other receivables	196,541	330,740	–	–

Amounts owed by group undertakings	–	–	3,310,401	3,258,868

Prepayments and accrued income	152,145	139,577	12,336	4,599
	348,686	470,317	3,322,737	3,263,467


	Group 2022 £	Group 2021£	Company 2022 £	Company 2021 £
Due after more than one year:

Other receivables	141,750	141,750	–	–
	141,750	141,750	–	–

As at 30 June 2022, trade receivables of £Nil were impaired (2021: £Nil) and during the year an impairment charge relating to trade receivables of £Nil (2021: £Nil) was recognised. As at 30 June 2022 trade receivables of £nil (2021: £100,469) were past due but not impaired. The ageing analysis of these trade receivables is as follows:

	Group 2022 £	Group 2021£	Company 2022 £	Company 2021 £

Up to 3 months past due	–	100,469	–	–

3 to 6 months past due	–	–	–	–
	–	100,469	–	–

15. Cash and cash equivalents

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

16. Trade and other payables

	Group 2022 £	Group 2021 £	Company 2022 £	Company 2021 £

Trade payables	77,772	52,881	3,849	4,155

Amounts owed to group undertakings	–	–	100	100

Other tax and social security payable	62,148	113,083	7,843	8,844

Other payables and accruals*	490,724	388,137	46,244	39,285

Deferred income	978,236	1,089,306	–	–
	1,608,880	1,643,407	58,036	52,384

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

Trade payables and other payables and accruals constitute the financial liabilities within the category “Financial liabilities at amortised cost” with a total value of £568,496 (2021: £441,018).

*Other payables and Accruals includes a provision for dilapidations for the Office premises of £50,000 (2021: £50,000). Refer to note 1 for the Accounting Policy for Provisions.

17. Leases

Under IFRS 16, the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

As at 30 June 2022	Lease liability£	Right of use asset£	Income statement£
Carrying value at 30 June 2021	(344,303)	365,758	–

Depreciation	–	(146,303)	(146,303)
Interest	(13,550)	–	(13,550)
Lease payments	162,000	–	–


Carrying value at 30 June 2022	(195,853)	219,455	(159,853)

Reconciliation of lease liabilities	Operating cash flow£	Financing cash flow£	Non-cash £	Total £
As at 1 July 2021	–	–	–	344,303
Cash flows:
Interest paid	(13,550)	–	–	(13,550)
Liability reduction	–	(148,450)	–	(148,450)
Non-cash changes:
Interest expense	–	–	13,550	13,550
As at 30 June 2022	(13,550)	(148,450)	13,550	(195,853)

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

17. Leases (continued)

As at 30 June 2021	Lease liability£	Right of use asset£	Income statement£
Carrying value at 30 June 2020	(485,996)	512,061	–

Depreciation	–	(146,303)	(146,303)
Interest	(20,307)	–	(20,307)
Lease payments	162,000	–	–


Carrying value at 30 June 2021	(344,303)	365,758	(166,610)

Reconciliation of lease liabilities	Operating cash flow£	Financing cash flow£	Non-cash £	Total £
As at 1 July 2020	–	–	–	485,996
Cash flows:
Interest paid	(20,307)	–	–	(20,307)
Liability reduction	–	(141,693)	–	(141,693)
Non-cash changes:
Interest expense	–	–	20,307	20,307
As at 30 June 2021	(20,307)	(141,693)	20,307	(344,303)

Contractual maturity analysis of lease liabilities as at 30 June 2022
	Less than3 months£	3 – 12Months£	1 – 5Year£	Longer than5 years£	Total£
Lease liabilities	40,500	121,500	40,500	–	202,500

18. Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using the tax rate of 17% which came into effect from 1 April 2020. The movement on the deferred tax account is as shown below:

	Group 2022 £	Group 2021 £	Company 2022 £	Company 2021 £
At 1 July	471,000	452,000	55,000	151,000
Tax credit (de-recognised)/ recognised in group income statement	(153,000)	19,000	1,000	(96,000)

At 30 June	318,000	471,000	56,000	55,000

The deferred tax asset has been recognised in relation to forecast taxable profits which are considered probable.

Losses to offset against future trading profits at 30 June 2022 amounted to approximately £8,300,000 (2021: £8,500,000).

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

19. Share capital

CompanyAllotted and fully paid:	Sharesof 12.5p each	Share Capital £	Share Premium£
As at 1 July 2021	13,327,811	1,665,976	92,360
September 2021 – Exercise of options at 64.5p	45,000	5,625	23,401
As at 30 June 2022	13,372,811	1,671,601	115,761

Share options

Under the Company’s approved 2002 Share Option Scheme, certain Directors and employees held options at 30 June 2022 for unissued Ordinary Shares of 12.5 pence each as follows:

Share options	At 1 July 2021	Granted	Exercised	Lapsed	At 30 June 2022	Exercise price	Normal exercise period


Employees:	125,000	–	(25,000)	–	100,000	64.50 pence	25 Apr 20 – 24 Apr 27
	50,000	–	–	–	50,000	110.00 pence	30 Jun 21 – 29 Jun 28
	55,000	–	–	(23,000)	32,000	196.00 pence	30- Jun 22 – 27 Sep 29
	75,000	–	–	–	75,000	164.50 pence	30 Jun 23 – 2 Oct 30
	–	73,500	–	–	73,500	130.50 pence	30 Jun 24 – 11 Oct 31
Directors:

Richard Last	24,762	–	–	(24,762)	–	64.50 pence	25 Apr 20 – 24 Apr 27

Geoff Wicks	30,000	–	–	–	30,000	164.50 pence	30 Jun 23 – 2 Oct 30

Louise Barton	40,000	–	–	(40,000)	–	23.75 pence	1 Sep 17 – 31 Aug 21

	20,000	–	(20,000)	–	–	64.50 pence	25 Apr 20 – 24 Apr 27

Matthew Jeffs	100,000	–	–	–	100,000	110.00 pence	30 Jun 21 – 29 Jun 28
	50,000	–	–	(50,000)	–	196.00 pence	30- Jun 22 – 27 Sep 29
	50,000	–	–	–	50,000	164.50 pence	30 Jun 23 – 2 Oct 30
	–	50,000	–	–	50,000	130.50 pence	30 Jun 24 – 11 Oct 31

Total	619,762	123,500	(45,000)	(137,762)	560,500

Weighted average exercise price	120.2 pence	130.5 pence	64.5 pence	122.3 pence	126.4 pence

The number of options exercisable at 30 June 2022 was 282,000 (at 30 June 2021: 359,762), these had a weighted average exercise price of 103.6 pence (2021: 78.9 pence).

The weighted average share price as at the exercise date of the shares exercised in the year was 64.5 pence (2021: 43.2 pence) and of the shares were forfeited in the year was 122.3 pence (2021: 196.0).

The highest price of the Company’s shares during the year was 175.0 pence, the lowest price was 72.0 pence and the price at the year-end was 73.5 pence.

The weighted average remaining contractual life of share options outstanding at 30 June 2022 was 7 years (2021: 7 years).

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

19. Share capital (continued)

Share-based payments

The options issued in November 2018, September 2019**, October 2020 and in October 2021 will be exercisable from 30 June 2021, 30 June 2022, 30 June 2023 and 30 June 2024 respectively, dependent on the Company’s compound annual rate of growth in fully diluted earnings* for the three financial years ending 30 June 2022, 2023, and 2024, respectively.

Options issued date	Exercisable from	Dependent on the Company’s compound annual rate of growth in fully diluted earnings* for the three financial years ending
November 2018	30 June 2021	30 June 2021
October 2020	30 June 2023	30 June 2023
October 2021	30 June 2024	30 June 2024

The Options will vest 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.

Any Ordinary Shares arising from the vesting of Options must be held for a period of two years after vesting.

* 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.

** 70,000 options issued in September 2019 lapsed on 30 June 2022 as compound annual earnings growth targets for the financial years ended 30 June 2020, 2021 and 2022 were not achieved.

The fair value of options is valued using the Black-Scholes pricing model. An expense of £116,612 (2021: £115,866) has been recognised in the period in respect of share options granted. The cumulative share option reserve at 30 June 2022 is £270,805 (2021: £271,207).

The inputs into the Black-Scholes pricing model are as follows:

Directors & Employees
Grant date	25 Apr 2017	29 Nov 2018	27 Sep 2019	2 Oct 2020	11 Oct 2021
Exercise price	64.5 pence	110.0 pence	196.0 pence	164.5 pence	130.5 pence
Expected life	10 years	10 years	10 years	10 years	10 years
Expected volatility	50%	50%	50%	49%	45%
Risk free rate of interest	0.5%	0.75%	0.75%	0.00%	0.60%
Dividend yield	Nil	Nil	Nil	0.01%	0.01%
Fair value of option	36.7 pence	57.0 pence	115.0 pence	91.92 pence	70.03 pence

Volatility has been estimated based on the historic volatility over a period equal to the expected term from the grant date.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

20. Reserves

Details of the movements in reserves are set out in the Statement of Changes in Equity. A description of each reserve is set out below.

Share capital reserve

This is used to record the aggregate nominal amount of the Company’s shares on issue.

Share premium account

This is used to record the aggregate amount or value of premiums paid when the Company’s shares are issued at a premium, net of issue costs, less amounts cancelled by court order.

Share option reserve

This relates to the fair value of options granted which has been charged to the income statement over the vesting period of the options, less amounts transferred to retained earnings.

Retained earnings

This relates to accumulated profits and losses together with distributable reserves arising from capital reductions, less amounts distributed to shareholders.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

21. Net cash generated from operations – Group

	2022	2021
	£	£

Operating profit	758,272	1,043,361

Depreciation charge	153,594	155,954

Non cash share option charges	116,612	115,867

Lease interest paid	(13,550)	(20,307)

Other interest paid	(60)	–

Decrease/(increase) in trade and other receivables	126,624	(277,686)

Decrease in trade and other payables	(31,884)	(207,630)


Cash generated from operations	1,109,608	809,559

Net cash generated from operations – Company

	2022	2021
	£	£

Operating profit	265,860	274,671

Non cash share option charges	116,612	115,867

Increase in trade and other receivables	(59,270)	(82,057)

Increase/(decrease) in trade and other payables	6,873	(97,561)


Cash generated from operations	330,075	210,920

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

22. Related party transactions

Group

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are disclosed in this part of the note.

Key management compensation

Key management are those persons having authority and responsibility for planning, controlling and directing the activities of the Group. In the opinion of the Board, the Group’s key management are the Directors of Arcontech Group PLC. Information regarding their compensation is given in notes 8 and 19 for each of the categories specified in IAS 24 Related Party Disclosures. All emoluments given in notes 8 and 19 relate to short-term employee benefits and there are no post-employment or other long-term benefits.

The financial statements include the following amounts in respect of services provided to the Group:

Company

Transactions between the Parent Company and its subsidiaries during the year were as follows:

Management charges payable by subsidiaries £536,216 (2021: £534,094).

The amounts due from/to subsidiaries at the balance sheet date were as follows:

	2022 £	2021 £

Amount due from subsidiaries	7,098,581	7,223,539

Less: Provision for impairment	(3,788,180)	(3,964,671)
Amount due from subsidiaries – net	3,310,401	3,258,868

During the year a provision of £176,491 was released (2021: £185,654) in respect of balances due from subsidiaries.

	2022 £	2021 £

Amount due to subsidiaries	536,216	534,094
	536,216	534,094

23. Dividends

A final dividend of 3.25 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2021: 2.75 pence).

24. Material non-cash transactions

There were no material non-cash transactions during the period.

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

25. Financial instruments

Credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	Group 2022 £	Group 2021 £	Company 2022 £	Company 2021£
Trade receivables	196,541	330,740	–	–

Cash and cash equivalents	6,026,468	5,395,457	1,074,294	1,077,741

Amounts owed by group undertakings	–	–	3,310,401	3,258,868
	6,223,009	5,726,197	4,384,695	4,336,609

Interest rate risk

The Group has interest bearing assets and no interest-bearing liabilities. Interest bearing assets comprise only cash and cash equivalents, which earn interest at a variable rate.

The Group has not entered into any derivative transactions during the period under review.

The Group does not have any borrowings.

The Group’s cash and cash equivalents earned interest at variable rates, between 1.20% below bank base rate and 0.2% below bank base rate and at fixed/variable rates of between 0.06% below (2021: 0.15% below bank base rate and 0.5% above bank base rate and at fixed/variable rates of between 0.25% and 1.50%).

Liquidity risk

The Group has no short-term debt finance. The Group monitors its levels of working capital to ensure that it can meet its liabilities as they fall due.

The Group’s only financial _li_ab_ili_t_i_e_{s comprise trade payables and other payables and accruals, excluding deferred income, with a carrying value equal to the gross cash flows payable of £568,496 (2021: £441,018) all of which are payable within 6 months.}

Notes to the Financial Statements

For the year ended 30 June 2022 (continued)

25. Financial instruments (continued)

Market risk and sensitivity analysis

Equity price risk

The Directors do not consider themselves exposed to material equity price risk due to the nature of the Group’s operations.

Foreign currency exchange risk

The Directors do not consider themselves exposed to material foreign currency risk due to the nature of the Group’s operations. All invoices are raised in sterling.

Interest rate risk

The Group is exposed to interest rate risk as a result of positive cash balances, denominated in sterling, which earn interest at variable and fixed rates. As at 30 June 2022, if bank base rate had increased by 0.5% with all other variables held constant, post-tax profit would have been £30,132 (2021: £26,977) higher and equity would have been £30,132 (2021: £26,977) higher. Conversely, if bank base rate had fallen 0.5% with all other variables held constant, post-tax profit would have been £30,132 (2021: £26,977) lower and equity would have been £30,132 (2021: £26,977) lower.

26. Capital risk management

The Group defines capital as being share capital plus reserves. The Board of Directors continually monitors the level of capital.

The Group is not subject to any externally imposed capital requirements.

27. Ultimate controlling party

There is no ultimate controlling party.

28. Copies of these statements

Notice of Results 2022

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 2022 are expected to be announced on 12 September 2022 and the Board looks forward to updating shareholders with further details at that time.

Enquiries:
Arcontech Group plc
Geoff Wicks, 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/Tim Harper (Corporate Finance)Harriet Ward (ECM)

To access more information on the Group please visit: www.arcontech.com

Arcontech – Director Notification June 2022

ARCONTECH
GROUP PLC

(“Arcontech”
or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services
for real-time financial market data processing and trading, announces the
following Director/PDMR dealing in Arcontech’s ordinary shares.

Matthew Jeffs, Chief Executive Officer, has bought 10,000 ordinary
shares at a price of 73.99 pence per share. Following this purchase, Matthew
Jeffs has a beneficial interest of 935,000 ordinary shares in the Company
representing 7.0% of the issued share capital.

Louise Barton, Non-Executive Director, has bought 15,000
ordinary shares in Arcontech at a price of 73.84 pence per share. Following
this purchase, Louise Barton has a beneficial interest of 1,121,416 ordinary
shares in the Company representing 8.39% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the
Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)
Carl Holmes/Tim Harper (Corporate Finance) Harriet Ward (ECM)	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 Officer
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	ARC GB00BDBBJZ03
b)	Nature of the transactions	Purchase of Ordinary Shares
c)	Price(s) and volume(s)	Price(s) Volume(s) 73.99p 10,000
d)	Aggregated information: Aggregated volumesPrices	See 4(c) above
e)	Date of the transaction	28 June 2022
f)	Place of the transaction	London Stock Exchange

1.	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Louise Barton
2.	Reason for the Notification
a)	Position/status	Non-Executive 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	Ordinary Shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Purchase of Ordinary Shares
c)	Price(s) and volume(s)	Price(s) Volume(s) 73.84p 15,000
d)	Aggregated information: Aggregated volumesPrices	See 4(c) above
e)	Date of the transaction	28 June 2022
f)	Place of the transaction	London Stock Exchange

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

ARCONTECH GROUP PLC

(“Arcontech” or the “Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2021

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, reports its unaudited results for the six months ended 31 December 2021.

Overview:

· Turnover decreased by 3.9% to £1,451,298 (H1 2020: £1,542,816) due to the challenging trading environment

· Profit before tax decreased by 15.3% to £428,924 (H1 2020: £506,237) reflecting higher investment in sales and lower exceptional profit

· Our preferred measure of profit before tax which excludes the release of accruals unrelated to the underlying business declined by 8.2% to £424,425 (H1 2020: £462,238)

· Recurring revenues represented 98% of total revenues for the period (H1 2020: 97%).

· Net cash of £5,620,352 at 31 December 2021, up 12.5% (H1 2020: £4,997,822)

· Profit before tax for the year to 30 June 2022 is expected to be in line with revised market expectations

Geoff Wicks, Chairman of Arcontech, said:

“The Board is confident that we remain well placed to return to growth as the market returns to pre-pandemic normality. Our desktop products and our server-side business are well embedded in our customer base, our business remains robust with good profitability and we believe the work our sales team is doing will produce future growth.”

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Tim Harper

To access more information on the Group please visit: www.arcontech.com

The interim report will only be available to view online enabling the Group to communicate in a more environmentally friendly and cost-effective manner.

Chairman’s Statement

Although the pandemic which has overshadowed our performance for nearly two years remains a significant drag on our short-term growth we continue to have a robust and profitable business with a high proportion of recurring revenue (98%) and a strong balance sheet. As reported in November 2021, we lost two contracts where customers were reducing their spend, which will impact our financial performance both in this and the next financial year.

We retain a very impressive customer list and continue to build a strong list of potential new customers. However, the market remains challenging with few of our customers growing or making changes in areas of their businesses that we serve. Our investment in building our sales team will continue as we believe that there is strong pent-up demand which will be available to us once markets return to normal, allowing for face-face sales activities.

Revenue was £1.48 million, down 3.9% from £1.54 million in the comparative six month period, reported profit before tax (“PBT”) was £0.43 million, 15.6% lower than the same period last year reflecting the loss of revenue, our continuing investment in sales capability and lower exceptional profit. Our preferred measure of PBT, adjusted to exclude the release of accruals for administrative costs in respect of prior years was down 8.2% to £0.42 million. These costs are not related to the underlying business and amounted to £4,500 (H1 2020: £44,000).

Financing

Our balance sheet remains very robust with net cash of £5.6 million, £0.6 million higher than at 31 December 2020, and £0.2 million higher than the level at 30 June 2021 providing resources for continued investment in sales and products and a small complementary acquisition.

Dividend

No interim dividend is proposed to be paid in respect of the half year (2020: nil). The Board expects to continue its policy of paying a dividend following the announcement of its full year results.

Outlook

We believe our strategy to support our existing customers to maximise opportunities while building our sales capability to grow our customer base globally remains the right way to proceed. Our desktop products and our server-side business are well embedded in our customer base and we expect growth as their businesses return to pre-pandemic normality.

Geoff Wicks

Chairman and Non-Executive Director

GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

	Note	Six months ended 31December	Six months ended 31December	Year ended30 June
		2021	2020	2021
		(unaudited)£	(unaudited)£	(audited)£

Revenue		1,452,498	1,542,816	2,988,842

Administrative costs		(1,021,879)	(1,034,043)	(1,945,481)

Operating profit	4	430,619	508,773	1,043,361

Finance income		6,521	8,442	13,260

Finance costs		(8,216)	(10,978)	(20,307)

Profit before taxation		428,924	506,237	1,036,314

Taxation	6	–	–	10,796

Profit for the period after tax		428,924	506,237	1,047,110

Total comprehensive income		428,924	506,237	1,047,110

Profit per share (basic)		3.21p	3.82p	7.88p

*Adjusted Profit per share (basic)**		3.18p	3.49p	7.22p

Profit per share (diluted)		3.20p	3.76p	7.79p

*Adjusted Profit per share (diluted)**		3.16p	3.43p	7.14p

All of the results relate to continuing operations and there was no other comprehensive income in the period.

* Before release of accruals for administrative costs in respect of prior years.

GROUP BALANCE SHEET

	Note	31 December 2021	31 December 2020	30 June2021
		(unaudited)£	(unaudited)£	(audited)£
Non-current assets
Goodwill		1,715,153	1,715,153	1,715,153
Property, plant and equipment		7,489	15,697	11,147
Right of use asset	10	292,606	438,908	365,758
Deferred tax asset		471,000	452,000	471,000
Trade and other receivables		141,750	141,750	141,750

Total non-current assets		2,627,998	2,763,508	2,704,809

Current assets
Trade and other receivables		322,885	759,655	470,317
Cash and cash equivalents		5,620,352	4,997,822	5,395,457

Total current assets		5,943,237	5,757,477	5,865,774

Current liabilities
Trade and other payables		(553,435)	(643,512)	(554,101)
Deferred income		(1,017,829)	(1,483,908)	(1,089,306)
Lease liabilities	10	(151,948)	(162,000)	(148,450)

Total current liabilities		(1,723,212)	(2,289,420)	(1,791,857)

Non-current liabilities
Lease liabilities	10	(118,994)	(253,974)	(195,853)

Total non-current liabilities		(118,994)	(253,974)	(195,853)

Net current assets		4,220,025	3,468,057	4,073,917

Net assets		6,729,029	5,977,591	6,582,873

Equity
Share capital		1,671,601	1,661,314	1,651,314
Share premium account		115,760	65,381	92,360
Shares to be issued		–	31,642	–
Share option reserve		290,713	206,797	271,207
Retained earnings		4,650,955	4,012,457	4,553,329

		6,729,029	5,977,591	6,582,873

GROUP CASH FLOW STATEMENT

	Note	Six months ended 31December	Six months ended 31December	Year ended30 June
		2021	2020	2021
		(unaudited)£	(unaudited)£	(audited)£
Cash generated from operating activities	9	630,439	336,866	809,559

Tax recovered	6	–	–	(8,204)

Net cash generated from operating activities		630,439	336,866	801,355

Investing activities

Interest received		6,521	8,442	13,260
Purchases of plant and equipment		(527)	(1,482)	(1,482)

Net cash generated from investing activities		5,994	6,960	11,778

Financing activities

Proceeds from the exercise of options		29,024	50,642	50,642

Dividends paid		(367,202)	(333,594)	(333,594)

Payment of lease liabilities		(73,360)	(70,021)	(141,693)

Net cash used in financing activities		(411,538)	(352,973)	(424,645)
Net (decrease) / increase in cash and cash equivalents		224,895	(9,147)	388,488

Cash and cash equivalents at beginning of period		5,395,457	5,006,969	5,006,969

Cash and cash equivalents at end of period		5,620,352	4,997,822	5,395,457

GROUP STATEMENT OF CHANGES IN EQUITY

	Sharecapital	Sharepremium	Shares to be issued	Share-based payments reserve	Retainedearnings	Total
	£	£	£	£	£	£
At 1 July 2020	1,651,314	56,381	–	188,639	3,806,514	5,702,848
Profit for the period	–	–	–	–	506,237	506,237
Total comprehensive income for the period	–	–	–	–	506,237	506,237
Exercise of options	10,000	9,000	31,642	–	–	50,642
Transfer between reserves	–	–	–	(33,300)	33,300	–
Dividends paid	–	–	–	–	(333,594)	(333,594)
Share-based payments	–	–	–	51,458	–	51,458
Total transactions with owners	10,000	9,000	31,642	18,158	(300,294)	(231,494)
At 31 December 2020	1,661,314	65,381	31,642¹	206,797	4,012,457	5,977,591
Profit for the period	–	–	–	–	540,872	540,872
Total comprehensive income for the period	–	–	–	–	540,872	540,872
Exercise of options	4,663	26,979	(31,642)	–	–	–
Share-based payments	–	–	–	64,410	–	64,410
Total transactions with owners	4,663	26,979	(31,642)	64,410	–	64,410
At 30 June 2021	1,665,977	92,360	–	271,207	4,553,329	6,582,873
Profit for the period	–	–	–	–	428,924	428,924
Total comprehensive income for the period	–	–	–	–	428,924	428,924
Exercise of options	5,624	23,400	–	–	–	29,024
Transfer between reserves	–	–	–	(35,904)	35,904	–
Dividends paid	–	–	–	–	(367,202)	(367,202)
Share-based payments	–	–	–	55,410	–	55,410
Total transactions with owners	5,624	23,400		19,506	(331,298)	(282,768)
At 31 December 2021	1,671,601	115,760	–	290,713	4,650,955	6,729,029

NOTES TO THE FINANCIAL INFORMATION

1. The figures for the six months ended 31 December 2021 and 31 December 2020 are unaudited and do not constitute statutory accounts. The accounting policies adopted are consistent with those applied by the Group in the preparation of the annual consolidated financial statements for the year ended 30 June 2021. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. Several amendments and interpretations apply for the first time in 2021, but these do not have a material impact on the interim condensed consolidated financial statements of the Group.

2. The financial information for the year ended 30 June 2021 set out in this interim report does not comprise the Group’s statutory accounts as defined in section 434 of the Companies Act 2006. The statutory accounts for the year ended 30 June 2021, which were prepared under international accounting standards in conformity with the requirements of the Companies Act 2006, have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under either Section 498(2) or Section 498(3) of the Companies Act 2006 and did not include references to any matters to which the auditor drew attention by way of emphasis.

3. Copies of this statement are available from the Company Secretary at the Company’s registered office at 1^st Floor 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.

4. Operating profit is stated after release of accruals for administrative expenses in respect of prior years of £4,500 (31 December 2020: £44,000; 30 June 2021: £88,000).

5. Earnings per share have been calculated based on the profit after tax and the weighted average number of shares in issue during the half year ended 31 December 2021 of 13,355,719 (31 December 2020: 13,259,206; 30 June 2021: 13,290,672).

The number of dilutive shares under option at 31 December 2021 was 62,727 (31 December 2020: 214,217; 30 June 2021: 143,168). 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 the average market price during the period, based upon the issue price of the outstanding share options including future charges to be recognised under the share-based payment arrangements.

6. Taxation is based on the unaudited results and provision has been estimated at the rate applicable to the Company at the time of this statement and expected to be applied to the total annual earnings. No corporation tax has been charged in the period as any liability has been offset against tax losses brought forward from prior years. The tax credit represents the cash recovery of Research & Development tax credits.

7. A final dividend in respect of the year ended 30 June 2021 of 2.75 pence per share (2020: 2.50 pence per share) was paid on 8 October 2021.

8. The Directors have elected not to apply IAS 34 Interim financial reporting.

9. Cash generated from operations

	Six months ended 31December	Six months ended 31December	Year ended30 June
	2021	2020	2021
	(unaudited)£	(unaudited)£	(audited)£

Operating profit	430,619	508,773	1,043,361

Depreciation charge	77,337	78,254	155,954

Non-cash share option charges	55,410	51,457	115,867

Lease interest paid	(8,216)	(10,978)	(20,307)
Decrease/(increase) in trade and other receivables	147,432	(567,023)	(277,686)

(Decrease)/increase in trade and other payables	(72,143)	276,383	(207,630)


Cash generated from operations	630,439	336,866	809,559

10. Leases

As a lessee, under IFRS 16 the Group recognises right-of-use assets and lease liabilities for all leases on its balance sheet. The only lease applicable under IFRS 16 is the Group’s office.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

	Right of use asset£	Prepayments £	Lease liability£	Income statement£
As at 1 July 2021	365,758	–	(344,303)	–

Depreciation	(73,152)	–	–	(73,152)
Interest	–	–	(7,640)	(7,640)
Lease payments	–	–	81,000	–


Carrying value at 31 December 2021	292,606	–	(270,943)	(80,792)

	Right of use asset£	Prepayments £	Lease liability£	Income statement£
As at 1 July 2020	512,061	–	(485,996)	–

Depreciation	(73,153)	–	–	(73,153)
Interest	–	–	(10,978)	(10,978)
Lease payments	–	–	81,000	–


Carrying value at 31 December 2020	438,908	–	(415,974)	(84,131)

¹ At 31 December 2020 £31,642 had been received from an optionholder as subscription funds to acquire 37,301 Ordinary Shares in the Company. The shares were issued post reporting date on 25 January 2021.

Arcontech Interim Results for the six months ended 31 December 2021

Arcontech – Trading Update November 21

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Trading Update

Arcontech
(AIM: ARC), the provider of products and services for real-time
financial market data processing and trading, announces that its trading
performance has regrettably fallen below
current
market expectations due to one customer reducing its market data spend
with the Company, and notification from another customer that it will
not be renewing its contract
from the start of second half of 2022. The two changes are unrelated
and do not involve customers with Arcontech’s core MVCS server-side
solution. They instead reflect one customer greatly scaling back its
market data team and market data requirements, and
a second choosing not to renew its contract for one Arcontech product
because it is switching to use a solution included in a legacy, bundled
contract.

The
Company is consequently revising its year end market guidance to
reflect this net reduction of revenue. The reductions will take effect
at the beginning of the second half of Arcontech’s
financial year and consequently will negatively impact revenue by
annualised c.£300K, half of which will impact in the current financial
year.

However,
notwithstanding the above the Company senses an overall improvement in
the business outlook which until now has seen growth affected by Covid.
Its clients are now renewing interest
in new business projects and the Company’s sales pipeline continues to
be healthy. The increasing opportunities to travel and cement new
relationships also bode well for the future and our ability to recover
lost ground. During the last year Arcontech has
improved its offerings to provide more value and the quality of its
solutions together with its ability to help reduce spend, positions the
Company well to absorb any lost business and resume growth as the
pipeline matures. Arcontech continues to be fully
confident in the strength of the business and is working to leverage
its cash reserves, when the opportunity arises.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)
Carl Holmes/Tim Harper	020 7220 0500

To access more information on the Group please visit: www.arcontech.com

The
information contained within this announcement is deemed by the Company
to constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the
publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.

Result of Annual General Meeting

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Result of Annual General Meeting

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, 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

Director/PDMR Shareholding

ARCONTECH GROUP PLC

(“Arcontech” or the “Company”)

Director/PDMR Shareholding

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and trading, announces that Louise Barton, Non-Executive Director, has bought 15,000 ordinary shares in Arcontech at a price of 74.5 pence per share. Following this purchase, Louise Barton has a beneficial interest of 1,106,416 ordinary shares in the Company representing 8.27% of the issued share capital.

Further information is disclosed below pursuant to Article 19(3) of the Market Abuse Regulation.

Enquiries:
Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)
Carl Holmes/Tim Harper	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	Louise Barton
2.	Reason for the Notification
a)	Position/status	Non-Executive 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	Ordinary Shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transactions	Purchase of Ordinary Shares
c)	Price(s) and volume(s)	Price(s)Volume(s)74.5p15,000
d)	Aggregated information:· Aggregated volumes· Prices	See 4(c) above
e)	Date of the transaction	17 January 2022
f)	Place of the transaction	London Stock Exchange

Exercise of Options

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Exercise of Options

Arcontech (AIM: ARC), the provider of products and services for real-time financial market data processing and
trading, announces
the exercise of share options by an employee of the Company over 20,000
new ordinary shares of 12.5 pence each in the capital of the Company
(“Ordinary Shares”) at an exercise price
of 64.5 pence per share.

Application
has been made to the London Stock Exchange for the 20,000 new Ordinary
Shares to be admitted to trading on AIM and admission
is expected to occur on or around 8.00am 14 September 2021. The new
Ordinary Shares will rank pari passu with the existing Ordinary Shares
in issue.

Total Voting Rights

For
the purpose of the Disclosure Guidance and Transparency Rules,
following the above issue of equity, the issued share capital
of the Company will comprise 13,372,811 Ordinary Shares. The above
figure may be used by shareholders 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
Company, under the Disclosure Guidance and Transparency Rules.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Tim Harper Harriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

ARCONTECH GROUP PLC NOTICE OF ANNUAL GENERAL MEETING

If you will be attending the Annual General Meeting, please ensure you bring proof of identity and share ownership.

Please click here to view details

Arcontech Group PLC Annual Report 2021

Please click here to view details

Exercise of Options and PDMR Shareholding

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Exercise of Options and PDMR Shareholding

Arcontech
(AIM: ARC), the provider of products and services for real-time financial
market data processing and trading, announces the exercise of share
options by employees of the Company over 25,000 new ordinary shares of 12.5
pence each in the capital of the Company (“Ordinary Shares”) at an
exercise price of 64.5 pence per share.

Of these, Louise Barton, Non-Executive
Director, exercised 20,000 ordinary shares in Arcontech at the exercise price.
Following this purchase, Louise Barton has a beneficial interest of 1,091,416 ordinary
shares in the Company representing 8.2% of the issued share capital.

Application has been made to the
London Stock Exchange for the 25,000 new Ordinary Shares to be admitted to
trading on AIM and admission is expected to occur on or around 8.00am 10 September
2021. The new Ordinary Shares will rank pari passu with the existing Ordinary
Shares in issue.

Total Voting Rights

For the purpose of the Disclosure
Guidance and Transparency Rules, following the above issue of equity, the
issued share capital of the Company will comprise 13,352,811 Ordinary Shares.
The above figure may be used by shareholders 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 Company, under the
Disclosure Guidance and Transparency Rules.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Tim Harper Harriet Ward – 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.

1.	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Louise Barton
2.	Reason for the Notification
a)	Position/status	Non-Executive 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	Ordinary shares of £0.125
Identification code	ARC GB00BDBBJZ03
b)	Nature of the transaction	Exercise of Options
c)	Price(s) and volume(s)	Price(s) Volume(s) 64.5p 20,000
d)	Aggregated information: ·Aggregated volume ·Price	N/A – single transaction
e)	Date of the transaction(s)	6 September 2021
f)	Place of the transaction	London Stock Exchange (AIM)

Preliminary results for the year ending 30 June 2021

ARCONTECH GROUP PLC

(“Arcontech”, the “Company” or the “Group”)

Final Results for the year ended 30 June 2021

Financial Highlights:

· Turnover increased by 1.1% to £2,988,842 (2020: £2,955,314)

· Profit before tax was £1,036,314 (2020: £1,040,969) – broadly flat on the previous year as expected

· Cash balances up 7.8% to £5,395,457 as at 30 June 2021 (30 June 2020: £5,006,969)

· Fully diluted earnings per share of 7.88p (2020: 9.22p restated)

· Final dividend increased 10% to 2.75 pence per share (2020: 2.5 pence per share)

Operational Highlights:

· Net sales impacted by pandemic

· Increased investment in sales and new product development

· Sales team has built a strong pipeline of near and mid-term prospects

· Continued cash generation and robust balance sheet and high proportion of recurring revenue

Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of Arcontech said:

“The future for our market remains uncertain and it may be some time until it returns to previous levels of activity. We continue to work towards future sales and already have a high level of pent up demand with the strongest list of prospective new customers for a long time. However, due to the impact of Covid on net new sales in the 2020/21 financial year, this year’s profit is expected to be flat or lower, as any pick up in revenue will not be fully reflected in our results until 2022/23. As the market comes out of this difficult period we are confident we will return to growth given the flexibility provided by our strong balance sheet and the strength of our customer relationships and product profile”.

Enquiries:

Arcontech Group plc	020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive

finnCap Ltd (Nomad & Broker)	020 7220 0500
Carl Holmes/Tim HarperHarriet Ward – ECM

To access more information on the Group please visit: www.arcontech.com

Chairman’s Statement

Following my first full year as Chairman I am pleased to be able to report that Arcontech has come through the pandemic so far in good shape. The Company closed the year with revenue and profit as expected in line with last year’s performance. Profit before taxation was £1,036,314 (2020: £1,040,969) flat on last year. These figures include accruals no longer required which are unrelated to the underlying business amounting to £88,000 (2020: £86,500). After adjusting for release of these accruals, profit before taxation is £948,314 (2020: £954,469). This was achieved at the same time as maintaining our focus and investment on growing our sales and marketing capability, which will stand us in good stead as markets return to more normal conditions.

Turnover was £2,988,842 (2020: £2,955,314) up by £33,528 on last year. Our customers continue to be cautious and new projects have largely been shelved. During this period of inertia in the market our focus has been on maintaining a high level of service to our current customer base while continuing to build our list of potential customers. Our recurring revenue base of around 93% provides stability and visibility of earnings and has allowed us to continue with our growth strategy with confidence.

Our cost base has been managed to good effect although we have not reduced staff numbers nor did we furlough any staff as we continue to build relationships in the market and to make improvements to our products. Sales cycles have always been long for the Company and more recently decision making in our market segment is largely being postponed, although interest in our products and services is still growing.

Statutory earnings per share for the year to 30 June 2021 was 7.88p (2020: 9.22p), with the decline in earnings largely reflecting the lower tax credit. At 30 June 2021 the Group has tax losses of approximately £8,500,000 (2020: £8,900,000) to offset against future trading profits.

Financing

Cash balances were £5,395,457 (2020: £5,006,969) at the end of the year, an increase of 7.8%, providing a robust balance sheet overall. This is a reflection of the close attention paid to the management of our cost base and allows us to have confidence to continue with our progressive dividend policy and to continue to look at ways to grow the business through means other than organically.

Dividend

I am pleased to announce that, subject to approval at the Annual General Meeting, we intend to pay a dividend of 2.75 pence per share for the year ended 30 June 2021 (30 June 2020: 2.5 pence), an increase of 10%, to those shareholders on the register as at the close of business on 10 September 2021 with an ex-dividend date of 9 September 2021.

Employees

Our first thoughts through this trying period have been for the safety and well-being of our staff. We are fortunate that they have all been able to work from home and productivity has remained high. I am pleased that our staff have performed well during this period and I would like to thank them for all their hard work adapting to new working practices and technologies.

Outlook

The future for our market remains uncertain and it may be some time until it returns to previous levels of activity. We continue to work towards future sales and already have a high level of pent up demand, with the strongest list of prospective new customers for a long time. However, due to the impact of Covid on net new sales in the 2020/21 financial year, this year’s profit is expected to be flat or lower, as any pick up in revenue will not be fully reflected in our results until 2022/23. As the market comes out of this difficult period we are confident we will return to growth given the flexibility provided by our strong balance sheet and the strength of our customer relationships and product profile.

Geoff Wicks

Chairman

Chief Executive’s Review

I am pleased to report that despite a year of uncertainty and caution that we have achieved our strategic and financial goals and at the same time, positioned the Company for continued stability and growth as normality returns to the market.

Cost control remained paramount within the context of investing in sales and despite the full year’s impact of the two additional salesmen, statutory profit before tax remained broadly unchanged at £1,036,314 (2020: £1,040,969), equally, our preferred measure of profit before tax which excludes accruals unrelated to the underlying business, at £948,314 (£954,469).

In terms of business development, we won a brand new Tier 1 bank client, added new business with an existing Tier 1 bank to upgrade their system and integrate it with their in-house data feed but regrettably, lost a regional client whose requirements have changed. The number of end users for our desktop software solution and Excelerator numbers remained stable.

Development work for the year consisted of adding functionality in response to specific requests from existing clients, completing our newly developed alerting and monitoring capabilities to make them production ready and implementing the upgrade to our Unix system interface to the in-house system for one of our Tier 1 clients.

We also made significant progress developing two new offerings for existing and potential clients in the form of a data permissioning system and a tick history database. The new permissioning system rounds out our offering for a market-data platform so that we can offer wholesale replacement rather than select components, whilst the tick history database will enable us to address a related business case that operates in parallel with the areas we currently address.

The new software along with our existing systems are completely compatible with any deployment situation or combination of situations a client requires: on-premise, data centre co-location or with any cloud provider.

During the year our sales team has been focused on uncovering new opportunities. We have as a result identified and qualified prospects across 6 countries in which we do not currently have a presence. With an initial online relationship established we look forward to strengthening ties with face-to-face visits when possible. I should also note that the existing opportunities that were in our pipeline before the pandemic remain and as confirmed by the clients and prospective clients, have simply been deferred.

For existing clients our exceptional support continues to be a differentiator. We have helped several clients with projects initiated before the pandemic and continue to do so. At the same time we have helped with and resolved the usual day to day issues and queries for clients who are, in the main, also facing similar challenges of remote working and restricted travel and the Board and I are grateful to them.

Given the strength of our balance sheet we are taking a more proactive approach to potential opportunities in the market. We believe that there may be potential beneficial acquisitions to explore as a result of current market conditions.

In the new financial year we are continuing to support our clients and we expect to gain from the armoury of new product functionality, two new product solutions and the expanded lead base. However, face-to-face contact is still difficult with prospects outside of the U.K. which continues to hamper the winning of new business. We expect this to change as vaccination programs roll out across the world, international travel resumes and clients return to offices.

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 2021.

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 on pages 2 to 3.

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:

Financial KPIs:

Revenue £2,988,842 (2020: £2,955,314; 2019: £2,841,362) 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

Adjusted profit £959,110 (2020: £1,131,203; 2019: £835,248) 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

Cash £5,395,457 (2020: £5,006,969; 2019: £4,063,484) 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) 7.88p (2020: 9.22; 2019: 7.51p) Measurement:

Earnings after tax divided by the weighted average number of shares

Performance:

Continued growth

Earnings per share (diluted) 7.79p (2020: 9.03p; 2019: 7.42p) Measurement:

Earnings after tax divided by the fully diluted number of shares

Performance:

Continued growth

Non-financial KPIs:

Staff retention rate (net) 93% (2020: 91%; 2019: 100%) 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

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 application of the s172 requirements can be demonstrated in relation to some of the key decisions made during the year to 30 June 2021:

· 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 2021, 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 2020 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;

· Monitored company culture and engaged with employees on efforts to continuously improve company culture and morale.

Approved on behalf of the board on 31 August 2021 by:

Matthew Jeffs
Chief Executive

Group Income Statement and Statement of Comprehensive Income

For the year ended 30 June 2021

	Note	2021	2020
		£	£

Revenue	3	2,988,842	2,955,314

Administrative costs		(1,945,481)	(1,917,502)

Operating profit	4	1,043,361	1,037,812
Net finance (expense) / income	5	(7,047)	3,157

Profit before taxation		1,036,314	1,040,969

Taxation	9	10,796	176,734
Profit for the year after tax		1,047,110	1,217,703
Total comprehensive income for the year		1,047,110	1,217,703
Earnings per share (basic)	10	7.88p	9.22p
*Adjusted Earnings per share (basic)**	10	7.22p	8.56p
Earnings per share (diluted)	10	7..79p	9.03p

Adjusted* Earnings per share (diluted)

7.14p

8.39p

*Adjusted to exclude the release of accruals for administrative costs of £88,000 (2020: £86,500) in respect of prior years.

All of the results relate to continuing operations.

Statement of Changes in Equity
For the year ended 30 June 2021

Group:

	Sharecapital	Sharepremium	Share option reserve	Retainedearnings	Totalequity
	£	£	£	£	£
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

Profit for the year	–	–	–	1,047,110	1,047,110
Total comprehensive income for the year	–	–	–	1,047,110	1,047,110

Dividend paid	–	–	–	(333,594)	(333,594)

Exercise of options	14,663	35,979	–	–	50,642

Share-based payments	–	–	115,866	–	115,866

Transfer between reserves	–	–	(33,298)	33,298	–
Balance at 30 June 2021	1,665,977	92,360	271,207	4,553,329	6,582,873

Company:

	Sharecapital	Sharepremium	Share option reserve	Retainedearnings	Totalequity
	£	£	£	£	£
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 expense 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 at 30 June 2020	1,651,314	56,381	188,639	4,450,302	6,346,636

Profit for the year	–	–	–	181,744	181,744
Total comprehensive income for the year	–	–	–	181,744	181,744

Dividend paid	–	–	–	(333,594)	(333,594)

Exercise of options	14,663	35,979	–	–	50,642

Share-based payments	–	–	115,866	–	115,866

Transfer between reserves	–	–	(33,298)	33,298	–
Balance as at 30 June 2021	1,665,977	92,360	271,207	4,331,751	6,361,295

Balance Sheet

As at 30 June 2021

Registered number: 04062416

		Group 2021 £	Group 2020£	Company 2021 £	Company 2020£
	Note
Non-current assets

Goodwill	11	1,715,153	1,715,153	–	–
Property, plant and equipment	12	11,147	19,316	–	–
Right of use asset	17	365,758	512,061	–	–
Investments in subsidiaries	13	–	–	2,017,471	2,017,471
Deferred tax asset	18	471,000	452,000	55,000	151,000
Trade and other receivables	14	141,750	141,750	–	–

Total non-current assets		2,704,809	2,840,280	2,072,471	2,168,471

Current assets

Trade and other receivables	14	470,317	192,632	3,263,467	3,181,410
Cash and cash equivalents	15	5,395,457	5,006,969	1,077,741	1,146,700

Total current assets		5,865,774	5,199,601	4,341,208	4,328,110

Current liabilities

Trade and other payables	16	(1,643,407)	(1,851,037)	(52,384)	(149,945)
Lease liabilities	17	(148,450)	(141,693)	–	–

Total current liabilities		(1,791,857)	(1,992,730)	(52,384)	(149,945)

Non-current liabilities

Lease liabilities	17	(195,853)	(344,303)	–	–

Total Non-current liabilities		(195,853)	(344,303)	–	–

Net current assets		4,073,917	3,206,871	4,288,824	4,178,165
Net assets		6,582,873	5,702,848	6,361,295	6,346,636

Equity

Called up share capital	19	1,665,977	1,651,314	1,665,977	1,651,314
Share premium account	20	92,360	56,381	92,360	56,381
Share option reserve	20	271,207	188,639	271,207	188,639
Retained earnings	20	4,553,329	3,806,514	4,331,751	4,450,302
		6,582,873	5,702,848	6,361,295	6,346,636

As permitted by s408 of the Companies Act 2006, the Company has not presented its own income statement. The parent Company profit for the year was £181,744 (2020: £326,348).

Approved on behalf of the board on 31 August by:

Matthew Jeffs
Chief Executive

Group Cash Flow Statement

For the year ended 30 June 2021

	Note	2021	2020
		£	£

Cash generated from operations	22	809,559	1,315,421

Tax (paid)/recovered		(8,204)	9,734

Net cash generated from operating activities		801,355	1,325,155
Investing activities

Interest received		13,260	29,914

Purchases of plant and equipment		(1,482)	(12,750)

Net cash generated from investing activities		11,778	17,164

Financing activities

Proceeds from the issue of shares		50,642	–

Dividend paid		(333,594)	(263,591)

Payment of lease liabilities		(141,693)	(135,243)

Net cash used in financing activities		(424,645)	(398,834)
Net increase in cash and cash equivalents		388,488	943,485

Cash and cash equivalents at beginning of year		5,006,969	4,063,484
Cash and cash equivalents at end of year	15	5,395,457	5,006,969

Notes to the Financial Statements

For the year ended 30 June 2021

1. Accounting policies

The principal accounting policies are summarised below. They have all been applied consistently throughout the period covered by these financial statements except where changes have been noted below.

Reporting entity

Arcontech Group PLC (“the Company”) is a company incorporated in England and Wales. The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (together referred to as “the Group”).

Basis of preparation

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.

Going Concern

On the basis of current projections and having regard to the Group’s existing cash reserves, the Directors consider that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have taken into account of downside conditions considered reasonably possible in changes in trading performance due to the impact of Covid-19. The Board has monitored business conditions caused by the Covid-19 pandemic and assessed its impact on the Group’s performance over the last twelve months. The Group has been able to maintain its ability operate successfully with no major detrimental impact to performance being experienced. Although the board achnowledges that further virus waves could have a material impact on trading performance, the board notes the cushion provided by the strong net cash position and the ability to cut costs. Accordingly, the Directors have adopted the going concern basis in the preparation of the financial statements.

Changes in accounting policies and disclosures

a) New and amended Standards and Interpretations adopted by the Group and Company

No standards or Interpretations that came into effect for the first time for the financial year beginning 1 July 2020 have had an impact on the Group.

b) New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 July 2020

At the date of approval of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not been adopted by the UK):

– Amendments to References to Conceptual Framework in IFRS Standards – effective from 1 January 2020

– Definition of Material (Amendments to IAS 1 and IAS 8) – effective from 1 January 2020

– Amendments to IFRS 9, IAS 39 and IFRS 17: Interest Rate Benchmark Reform – effective from 1 January 2020

– Amendment to IFRS 3 Business Combinations – effective 1 January 2020

– Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current – effective 1 January 2023*

– Amendments to IFRS 3: Business Combinations – Reference to the Conceptual Framework – effective 1 January 2022*

– Amendments to IFRS 9, IAS 3, IFRS 7, IFRS 4 and IFRS 16: Interest Rate Benchmark Reform – Phase 2 – effective from 1 January 2021

– Amendments to IAS 16: Property, Plant & Equipment – effective 1 January 2022*

– Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022*

– Annual Improvements to IFRS Standards 2018-2020 Cycle – effective 1 January 2022*

– Amendments to IAS 1: Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies – effective 1 January 2023*

– Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors – Definition of Accounting Estimates – effective 1 January 2023*

– Amendments to IFRS 16: Leases – Covid-19-Related Rent Concessions beyond 30 June 2021 – effective 1 April 2021

– Amendments to IAS 12: Income Taxes – Deferred Tax related to Assets and Liabilities arising from a Single Transaction – effective 1 January 2023*

*subject to UK endorsement

The new and amended Standards and Interpretations which are in issue but not yet mandatorily effective is not expected to be material.

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) prepared to 30 June 2021. Subsidiaries are entities controlled by the Group. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if, and only if, the Group has:

· Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).

· Exposure, or rights, to variable returns from its involvement with the investee

· The ability to use its power over the investee to affect its returns.

· The contractual arrangement with the other vote holders of the investee.

· Rights arising from other contractual arrangements.

· The Group’s voting rights and potential voting rights.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Business combinations and goodwill

Revenue recognition

Contracts with customers do not contain a financing component.

The group recognises revenue when it satisfies a performance obligation by transferring a promised service to the customer as follows:

In assessing whether a licence is distinct the Group considered the continuing requirement to:–

– optimise functionality;

– optimise performance; and

– provide enhancements to ensure user regulatory compliance.

• Revenue from project work is recognised on satisfactory completion of each project, as this is considered to be the point in time the customer gains control over the results of the project work.

Taxation

The tax charge/(credit) represents the sum of the tax payable/(receivable) and any deferred tax.

Research and development tax credits are recognised when received.

The carrying amount of deferred tax assets is reviewed at each balance sheet date.

Share-based payments

The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non- market based vesting conditions) at the date of grant. Fair value is measured by the use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. A cancellation of a share award by the Group or an employee is treated consistently, resulting in an acceleration of the remaining charge within the consolidated income statement in the year of cancellation.

Impairment of tangible and intangible assets

For goodwill, the recoverable amount is estimated at each year end date, based on value in use. The recoverable amount of other assets is the greater of their net selling price and value in use.

For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

A cash generating unit is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, on the following bases:

Leasehold property	– over the period of the lease
Computer equipment	– 33% – 40% on cost
Office furniture and equipment	– 20% – 25% on cost or reducing balance

Investments in subsidiaries

Investments in subsidiaries are stated at cost less any provision for impairment.

Financial instruments

Financial assets and financial liabilities are recognised in the statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets

The Group does not hold any investments other than investments in subsidiaries.

Cash and cash equivalents

Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less.

Financial liabilities and equity

Effective interest rate method

(a) Classification

The Group classifies its financial assets in the following measurement categories:

· those to be measured subsequently at fair value (either through OCI or through profit or loss); and

· those to be measured at amortised cost.

The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.

(b) Recognition

Debt instruments

(d) Impairment

From 1 January 2018, the Group assesses, on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortised cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk.