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 15 October 2025 at the offices of the Company at 1st 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, MUFG Corporate Markets, as soon as possible and in any event no later than 10.00am on 13 October 2025.
ARCONTECH GROUP PLC
(Incorporated and registered in England and Wales under company number 4062416)
Registered Office
1st Floor
11-21 Paul Street
London EC2A 4JU
23 September 2025
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 1st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00am on 15 October 2025. 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, MUFG Corporate Markets, must receive your proxy appointment no later than 10.00am on 13 October 2025.
Explanatory notes on all the business to be considered at this year’s AGM can be found on pages 7 to 10.
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://uk.investorcentre.mpms.mufg.com/ or via the Investor Centre app. If you have not already registered for the 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, MUFG Corporate Markets, by emailing shareholderenquiries@cm.mpms.mufg.com 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. MUFG Corporate Markets 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, MUFG Corporate Markets, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, as soon as possible and no later than 10.00am on 13 October 2025.
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 4.00 pence per share for the year ended 30 June 2025 to those shareholders on the register as at the close of business on 3 October 2025, with an ex-dividend date of 2 October 2025. If approved at the AGM, the dividend will be paid on 31 October 2025.
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 15 October 2026 or at the end of the annual general meeting in 2026 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 22 September 2025 (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
23 September 2025
Shares become ex-dividend
2 October 2025
Record date for dividend
3 October 2025
Latest time and date for receipt of Proxy Votes
10.00am on 13 October 2025
Annual general meeting
10.00am on 15 October 2025
Payment of dividend
31 October 2025
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, 1st Floor, 11-21 Paul Street, London EC2A 4JU at 10.00am on 15 October 2025 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 2025 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 4.00 pence per ordinary share in respect of the financial year of the Company ended 30 June 2025, be declared and be paid on 31 October to ordinary shareholders whose names appear in the register of members at the close of business on 3 October 2025.
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 Raj Nagevadia, 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 2026 (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 2026 (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 UK Technical Standards pursuant to Article 5(6) of the UK Market Abuse Regulation; and
(iv) this authority shall expire at the conclusion of the annual general meeting of the Company to be held in 2026, or on 15 October 2026, 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:
1st Floor
11-21 Paul Street
London
………………………………………
EC2A 4JU
Ben Hodges Secretary
23 September 2025
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 4.00 pence per share to shareholders on the register of members at close of business on 3 October 2025.
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. Raj Nagevadia 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 15 October 2026 or at the end of the annual general meeting in 2026 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 22 September 2025 (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 22 September 2025 (being the latest practicable date prior to the publication of this Notice), there were options outstanding to subscribe for 540,500 ordinary shares. If the outstanding options were fully exercised, they would represent 3.88 per cent of the 13,913,311 issued ordinary shares of the Company. If the buy back authority were exercised in full, that percentage would be 4.30 per cent of the reduced share capital of 12,576,030 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 below.
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, MUFG Corporate Markets, on the details set out below.
Shareholders can vote electronically via the Investor Centre, a free app for smartphone and tablet provided by MUFG Corporate Markets (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 Investor Centre via a web browser at: https://uk.investorcentre.mpms.mufg.com/.
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 via www.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 MUFG Corporate Markets (ID RA10) by 10.00 am on 13 October 2025.
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 13 October 2025 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, MUFG Corporate Markets by email at shareholderenquiries@cm.mpms.mufg.com, or you may call 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, MUFG Corporate Markets, PXS 1, Central Square, 29 Wellington Street, Leeds, LS1 4DL, as soon as possible and no later than 10.00am on 13 October 2025.
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 2025, 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 evening.
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 15 October 2025.
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
Jonny Franklin-Adams / Isaac Hooper (Corporate Finance)
Harriet Ward (Corporate Broking)
To access more information on the Group please visit: www.arcontech.com
Final Results for the year ended 30 June 2025
ARCONTECH GROUP PLC
(“Arcontech”, the “Company” or the “Group”)
Final Results for the year ended 30 June 2025
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 2025.
Financial Highlights:
Turnover was £3,106,991 (2024 £2,910,232)
Profit before taxation was £987,390 (2024 £1,098,959) down by £111,569
Recurring revenues represented 94% of total revenues for the period (2024: 99%)
Net cash of £7,395,514 (2024 £7,160,177), an increase of 3.3%
Final dividend increased 6.7% to 4.00 pence per share (2023: 3.75 pence per share)
Operational Highlights:
Addition of a new high-end customer
An increase in consulting income
Enhancement of product functionality to appeal to a potential wider customer base
Enlarged support team to strengthen customer relationships
Active participation in several RFIs (Request for Information) with potential new customers
Number of prospective clients has increased to be the strongest it has been for many years
Commenting on the results, Geoff Wicks, Chairman and Non-Executive Director of Arcontech said:
“Our strategy has served us well and the concentration on our core market has helped to continue to grow and retain our customer base. Our growing sales and support teams are helping to drive growth with customers and is bringing good new prospects. Customer retention and product development will continue to help with further growth in the coming years.”
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
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 2025 Arcontech benefited from its strong sales pipeline and the Company has continued to grow revenue with a new high-end customer and the return of consulting revenue. Even though we have seen some downsizing due to competitive pressure, we have kept our excellent customer base and continued to improve our position in the market.
The market remains challenging with our two main competitors offering enhanced packages and many customers having to review costs. We have strengthened customer relationships with an enlarged support team and also widened the scope of our sales operation with a larger team. This has been a key part of improving our prospective customer list. Lead times remain long and we have a number of new prospects in the throes of testing which gives us confidence for further growth.
Turnover was £3,106,991 (2024: £2,910,232) up 6.8% on last year. Profit before taxation (PBT) was £987,390 (2024: £1,098,959) down 10.1% on last year as a result of higher staffing costs including the annualised cost of a senior customer services hire made part way through the previous financial year, and the strengthening of our development team with the hire of an additional developer. Statutory earnings per share for the year to 30 June 2025 were 7.05p (2024: 7.98p).
The proportion of our recurring revenue remains high at 94%, however one-off revenue related to specific requirements for customers has helped our growth during the year. We do not expect this to continue at the same level as we develop products to include many of these individual requirements. We have also continued to secure our customers on longer term contracts which helps to give even greater visibility for the future.
Financing
Cash balances were £7,395,514 (2024: £7,160,177) at the year end, an increase of 3.3% from prior year. As at the date of signing this report our cash balance is £8,018,154. This strong balance sheet allows the Company to continue to invest in organic growth and to continue to look for relevant acquisitions.
Dividend
I am pleased to announce that subject to approval at the Annual General Meeting we intend to pay a dividend ahead of market expectations of 4.00p per share for the year ended 30 June 2025 (2024: 3.75 pence) an increase of 6.7%, to those shareholders on the register as at the close of business on 3 October 2025 with a dividend payment date of 31 October 2025.
Outlook
Our strategy has served us well and the concentration on our core market has helped continue to grow and retain our customer base. We see no reason to change this. At the same time we continue to build out our products and are more competitive in certain areas of the market than before. We currently have a number of potential customers close to contract and have an excellent prospect list. At the same time we expect some churn as the market is increasingly competitive. Consolidation in the market may provide opportunities for us to acquire one of our smaller competitors.
Geoff Wicks
Chairman and Non-Executive Director
Chief Executive’s Review
The 2024/25 financial year saw further revenue growth of 6.8% as a result of non-recurring development work to enable future earnings from the deployment of recurring revenue solutions. Despite the greater focus on development work, the percentage of recurring revenue remained at over 90%.
Our clients and prospective clients continue to seek alternatives to their existing market data platform solutions and evidencing that, we have received and are participating in several RFIs (Request for Information) which are at various stages. These projects are involved and take time and, although none have yet been confirmed, we are optimistic of winning several new mandates.
As well as working to maintain our existing client base, this year has seen a range of engagements and the conclusion of earlier PoCs (Proof of Concept) that included the continuation of a build out to displace an alternative solution at a global investment bank in New York; the development of a custom solution to integrate Arcontech software with an inhouse market data system for another global investment bank; and the development of a new sophisticated market data publishing system for a new central bank customer. In addition to generating non-recurring revenues from this development work, the work will also contribute to our recurring revenues, solidify our position with those clients and create more opportunities with other existing and prospective clients.
The delivery of complex solutions is invariably not without issue and that Arcontech was able to do so in good time and often with new challenges that were only presented mid-project, is a testament to our abilities and the quality of our solutions and staff.
As a counter to our hard work and successes we did see a slight reduction in desktop user numbers at one client due to competitor action, however, we are confident the impact has been limited as we renewed a multi-year agreement with the same client shortly afterwards.
The year also saw positive results from our support team’s remit to identify opportunities for growth with existing clients where we have strengthened our relationships. Our support team also worked to keep us abreast of client supplier requirements and I am pleased to say Arcontech is now recognised by UKAS as being accredited with ISO 27001 and ISO 22301.
This year has been notable in that our number of prospective clients has increased to be the strongest it has been for many years. Within this the pipeline for existing products remains strong and we are making good progress with the development of an extension to our product range which will allow us to compete more effectively by allowing customers to change their market data platform completely. This has brought interest both from current customers and from new prospects.
The past year also saw us formalise our search for potential acquisitions which yielded some interesting results and for which we continue to evaluate the opportunities with growth potential and fit as the primary considerations.
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 product range, stronger relationships with clients and excellent pipeline, 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 (“the Group”) for the year ended 30 June 2025.
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:
Adjusted EBITDA is EBITDA before the release of accruals for administrative costs in respect of prior years (as disclosed in the footnote to the Income Statement), and share-based payments. This measurement is reconciled as Operating Profit (£778,553), add depreciation (£118,367), subtract accruals release (£47,611) and add share-based payments (£24,774).
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 accruals release for 2023 included a release of £110,000 which was disclosed separately in the Group Statement of Income.
Performance:
Adjusted EBITDA is down year-on-year, reflective of an increase in staff costs and professional fees
Adjusted profit is net profit after tax (£943,430) less the amount of accruals for administrative costs released (£47,611) as disclosed in the footnote to the Income Statement. 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 accruals release for 2023 included a release of £110,000 which was disclosed separately in the Group Statement of Income.
Performance:
Adjusted profit is down year-on-year, reflective of an increase in staff costs and professional fees
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
Environmental, Social and Governance
Arcontech Group plc qualified as a low energy user in the year ending 30 June 2025 and accordingly is not required to disclose energy consumption and Greenhouse Gas emission information in accordance with the Streamline Energy & Carbon Reporting regulations.
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 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 2025:
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 have evolved over recent years, 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 2025, 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 2024 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 9 September 2025 by:
Matthew Jeffs
Chief Executive
Board of Directors
Directors – Executive
Matthew Jeffs (Chief Executive Officer)
Matthew was appointed Chief Executive Officer in April 2013. Matthew spent 10 years with Barclays International, 10 years with Dow Jones and then 6 years with Reuters in a variety of senior roles. In addition to the UK, he has wide experience in the Asia Pacific region, working in Hong Kong, Japan, Korea (where he was country manager for Reuters and country representative for Dow Jones), Thailand and Vietnam. In his most recent role, Matthew was the Managing Director, ICS International at Broadridge Financial Solutions where he was responsible for the overall management of the Global Proxy business with offices in the U.K., U.S., Japan, Australia and India. Matthew has an MBA from Buckinghamshire Business School.
Directors – Non-Executive
Geoff Wicks (Chairman)
Geoff was appointed Non-Executive Director in July 2020, and Chairman and in September 2020. Geoff was most recently Chairman of ULS Technology plc (now Smoove PLC), the provider of online technology platforms for the UK conveyancing and financial intermediary markets. Prior to this, he was CEO of Group NBT plc, a specialist in online brand protection and digital asset management, from 2001 until he led the sale of the business to HGCapital in 2011. He remained part of the Group NBT business, now renamed NetNames, as a non-executive director until 2013. Geoff spent much of his earlier career at Reuters, including heading divisions in the UK, France and Nordic regions and latterly was director of corporate communications. Prior to Reuters, Geoff worked in the banking and insurance industries.
Raj Nagevadia
Raj was appointed Non-Executive Director in 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.
Corporate Governance
Corporate governance report
This Corporate Governance Report forms part of the Directors’ Report.
The Directors recognise the importance of, and are committed to, high standards of corporate governance. Of the two widely recognised formal codes, the directors have decided to adhere to the Quoted Companies Alliance Corporate Governance (“QCA Code”) code. The Group’s compliance with the 2023 version of the code is summarised below and can be found in full on the Group’s website at: https://www.arcontech.com/wp-content/uploads/2025/02/Arcontech-Corporate-Governance_Feb-25.pdf
The working of the Board and its Committees
At 30 June 2025, the Board comprised two Non-Executive Directors, one of whom is the Chairman, and one Executive Director. The Board is responsible to the shareholders for the proper management of the Group. It meets regularly to review financial and non-financial performance. Matters for review by the Board are circulated before the Board Meetings.
All of the Directors are subject to election at the first Annual General Meeting following their appointment and to re-election at least once every three years.
The Chairman and Non-executive Director have other third-party commitments including directorships of other companies. The Company is satisfied that these commitments have no significant impact on their ability to carry out their responsibilities effectively. All Directors have access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that Board procedures are followed, and that applicable rules and regulations are complied with. In addition, the Company Secretary will ensure that the Directors receive appropriate training as necessary. All Directors are supplied with information in a timely manner in a form, and of a quality, appropriate to enable them to discharge their duties.
During the year, certain Directors who were not Committee members attended meetings of the Audit Committee and Remuneration Committee by invitation. These details have not been included in the table.
The Company has a formal process of annual performance evaluation for the Board, its Committees and individual Directors. The Board and its Committees are satisfied that they are operating effectively. A performance evaluation of the Board, its Committees and individual Directors is conducted annually via an internal peer review between Directors.
Corporate Governance (continued)
Corporate governance report (continued)
The review is based on key areas, to include Board composition, information, process, internal control, accountability, CEO and top management and standards of conduct. The areas are scored by all members, reviewed by the Chairman and Company Secretary and compared against the previous evaluation. Lower scores are discussed.
The Company has Directors’ and officers’ liability insurance in place.
Committees
The following committees deal with the Group’s affairs:
Audit Committee
Details of the Audit Committee are given in its Report on pages 11-12.
Remuneration Committee
Details of the Remuneration Committee are given in its Report on pages 13-19. This includes details of the Directors’ remuneration, interest in shares, interest in share options, and service contracts. No Director is involved in decisions about their own remuneration.
Nomination Committee
The Nomination Committee assists the Board in discharging its responsibilities relating to the composition and make-up of the Board and any committees of the Board. It is also responsible for periodically reviewing the Board’s structure and identifying potential candidates to be appointed as Directors or committee members as the need may arise. The Nomination Committee is responsible for evaluating the balance of skills, knowledge and experience and the size, structure and composition of the Board and committees of the Board, retirements and appointments of additional and replacement Directors and committee members and will make appropriate recommendations to the Board on such matters.
The Nomination Committee is chaired by Geoff Wicks. Raj Nagevadia is the other committee member. The Nomination Committee is mandated to meet not less than once a year. There was no meeting of the Nominations Committee for the year under review as the Board made the collective decision that with Non-Executive Director appointments and retirements in 2022 and 2023 respectively, combined with the experience and skill-sets of the existing Directors, that the Board was able to fulfil its duties through to the end of the reporting period with its existing composition. It is the intention of the Nominations Committee to meet during the current reporting period.
Geoff Wicks
Chairman and Non-Executive Director
9 September 2025
Corporate Governance (continued)
Audit Committee report
The Audit Committee is responsible for ensuring that the financial position of the Group is properly monitored. The Audit Committee generally meets twice a year and the Finance Director of the trading subsidiary, appointed to lead the finance function, also attends by invitation. The Committee meets with the Group & Company Independent Auditor (“Auditor”) at least twice during the annual year-end audit and has direct access to the Auditor at any time throughout the year. At 30 June 2025, the members of the Audit Committee were:
Raj Nagevadia (Chairman)
Geoff Wicks
Matthew Jeffs
Objectives and responsibilities
The role of the Audit Committee is to primarily monitor the Group’s financial statements, the effectiveness of financial controls and systems and to oversee the relationship with external auditors.
Activities of the Audit Committee during the year
The Audit Committee focuses on financial reporting and the statutory audit, and the assessment of internal controls. The Committee reviewed the treasury mandate to ensure achieving a market rate of return on existing cash balances, and banking relationships to ensure that appropriate day-to-day banking facilities were in place to support its ability to execute operational activities.
Financial reporting and statutory audit
The Audit Committee reviews the half year and annual financial statements with emphasis on:
the overall truth and fairness of the results and financial position;
the transparency and understandability of the accounts for users;
the appropriateness of the accounting policies;
the resolution of management’s significant accounting judgements or of matters raised by the external auditors;
the quality of the Annual Report as a whole.
The Audit Committee considers that the Annual Report taken as a whole is fair, balanced and understandable.
Accounting policies, practices and judgements
Issue
Action
Accounting policies
The Committee reviewed and discussed the significant accounting policies with management and the external auditor and reached the conclusion that each policy was appropriate to the Group.
Going concern review
The Committee considered the ability of the Group to operate as a Going Concern considering cash flow forecast for the 12 months from the date of signing this report, and milestone achievements. It was determined by the Committee that it was reasonable to expect that the Group has or will have sufficient funds for the next 12 months and that it was appropriate for the Financial Statements to be prepared on a going concern basis.
Corporate Governance (continued)
Audit Committee report (continued)
Issue
Action
Review of audit and non-audit services and fees
The external auditor is not engaged by the Group to carry out any non-audit work in respect of which it might, in the future, be required to express an audit opinion. The Committee reviewed the fees charged for the provision of audit and non-audit services and determined that they were in line with fees charged to companies of similar size and stage of development. The Committee considered and was satisfied the external auditor’s assessment of its own independence.
Internal audit
The Group does not have internal auditors as the Audit Committee considers that it is not yet of a size or complexity to necessitate this.
Raj Nagevadia
Audit Committee Chairman
9 September 2025
Corporate Governance (continued)
Remuneration Committee report
Dear shareholder
I am pleased to introduce the Directors’ Remuneration Report for the year ended 30 June 2025.
The Chairman’s Statement on page 2 provides a summary of the progress the Group has made during the financial year. The Remuneration Committee is committed to structuring executive remuneration that supports the Group’s strategy and performance and to help it grow profitably. The Remuneration Committee is appointed by the Board and comprises the two independent Non-Executive Directors.
Short-term performance is incentivised by an annual bonus scheme based on the achievement of certain financial performance targets. Long-term performance is incentivised by the Group’s Share Option Scheme.
Directors’ Remuneration Policy
This part of the Directors’ Remuneration Report sets out the Group’s remuneration policy.
Policy on Executive Remuneration
The Group’s remuneration policy is designed to ensure that the Company is able to attract, motivate and retain executives and senior management to promote long-term success. The retention of key management and the alignment of management incentives with the creation of shareholder value are key objectives of this policy.
The Remuneration Committee seeks to ensure that salaries are market competitive for similar companies.
Chairman and To attract and retain The Chairman and Details of the fees Not applicable.
Non-Executive Non-Executive Non-Executive currently payable are set
Directors Directors of the Directors’ out in the Annual Report
right calibre. Remuneration on Remuneration. The
comprises fees fees are reviewed
and share options. Periodically taking into
account the time
The Chairman’s fee is commitment and
approved by the Board responsibilities involved
on the recommendation and fees paid by other
of the Non-Executive companies of comparable
Director and Executive size and complexity.
Directors.
Fees for the
Non-Executive Directors
are approved by the Board
on the recommendation
of the Chairman and
Executive Directors.
The Chairman and
Non-Executive Directors
are not involved in any
discussion or decision
about their own
remuneration.
The Chairman and
Non-Executive Directors
are entitled to be
reimbursed for reasonable
expenses.
Alignment of Executive Remuneration and the Market
The Remuneration Committee takes advantage of the availability of various annual AIM Directors’ Remuneration reports as well as available data about similar companies. The Company aims to ensure that Directors’ salaries are set at a level sufficient to ensure there is significant incentive and regard for better than average long-term results.
Consideration of Employee Pay
The Remuneration Committee takes account of pay and conditions of employees throughout the Group when setting pay and benefits for Executive Directors. The Company endeavours to provide competitive remuneration packages for all employees. Employees may be eligible to participate in the Share Option Scheme at the discretion of the Remuneration Committee. The Company does not consult directly with its employees as part of the process for determining Executive pay.
Policy on recruitment
When appointing new Executive Directors, the Remuneration Committee will consider their remuneration by reference to the Remuneration Policy set out in this Report. The Remuneration Committee would not usually expect to pay sign-on payments or compensate new Directors for any variable remuneration forfeited from any employment prior to joining the Board other than in exceptional circumstances, recognising that the Company needs to attract appropriately skilled and experienced individuals.
Corporate Governance (continued)
Remuneration Committee report (continued)
Policy on recruitment (continued)
Salary and annual bonus will be set so as to be competitive with comparable companies and also taking into account the experience, seniority and responsibility of the appointee coming into the new role. New Executive Directors will receive benefits and pension contributions in line with the Company’s existing policy and to participate in the annual bonus scheme on a pro-rated basis for the portion of the financial year for which they are in post.
Policy on Loss of Office
Executive Directors leaving employment from the Group, other than in circumstances of gross misconduct or incompetence, serious dishonesty or wilful neglect of duty (in which cases no amount will be payable), will be entitled to receive salary in accordance with their notice periods and pro-rated annual bonus to the date of leaving. The notice periods and the contractual rights on termination of each Director are set out below. The Company’s Employee Share Option Scheme also provides leaver provisions as follows:
An Executive Director who ceases to be a Director or employee of the Group by reason of death, retirement, ill-health, injury or disability, redundancy or the sale of the company for which they work will be a good leaver. As such they will be permitted to exercise their options. Where the cessation is on any other grounds the awards will lapse on the date of cessation, unless the Remuneration Committee determines at its discretion prior to the date of cessation that the awards shall vest.
Share option awards held by good leavers that are already capable of being exercised at the date of cessation may, at the discretion of the Remuneration Committee, be exercised up to 12 months of the leaving date (depending on the reason for leaving). If the good leaver ceases to be an employee or Director before the end of the third anniversary of the grant of the award it may, at the discretion of the Remuneration Committee, be allowed to vest on the normal vesting date.
External appointments
It is the Board’s policy to allow Executive Directors to accept directorships of other quoted and non-quoted companies provided that they have obtained the consent of the Chairman of the group. Any such directorships must be formally notified to the Board.
Policy on Non-Executive Director Remuneration
The remuneration of the Chairman and the other Non-Executive Director comprises fees that are paid via the payroll. The Non-Executive Directors no longer participate in the Company’s Share Option Scheme. Fees are reviewed annually. The Non-Executive Directors are not involved in any decisions about their own remuneration. No additional fees are payable to the chairmen of the Audit and Remuneration Committees.
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors’ Service Agreements
Executive Directors’ Service Agreements
Matthew Jeffs
Date of service agreement 29 April 2013
Notice period 3 months’ notice given by either party
Basic salary Currently £198,450 reviewed annually
Annual bonus Discretionary performance related
Benefits Participation in the Company’s life
assurance and medical insurance schemes
Share schemes Eligible to participate in Company share
schemes
Pension contributions Currently 3% of basic salary contributed by
the Company into the Company’s
workplace pension scheme
Termination payments The Company has discretion to pay a payment in lieu of notice to terminate the employment forthwith in the event of notice being given
Non-Executive Directors’ Letters of Appointment
The Non-Executive Directors have Letters of Appointment stating that their appointment is for an initial term up until they are required to retire by rotation. The Letters of Appointment provide for termination of the appointment on three months’ notice by either party.
The current Non-Executive Directors’ appointments commenced on the following dates:
Geoff Wicks 20 July 2020
Raj Nagevadia 26 October 2022
Annual Report on Remuneration
Introduction
The Annual Report on Remuneration sets out information about the remuneration of the Directors of the Company for the year ended 30 June 2025.
Remuneration Committee
The Remuneration Committee consisted of the following Directors at 30 June 2025:
Geoff Wicks, Independent Non-Executive Director and Chairman of the Board
Raj Nagevadia (Chairman), Independent Non-Executive Director
Role of the Remuneration Committee
The Remuneration Committee assists the Board in determining the remuneration and benefits package for the Executive Directors.
Activities of the Remuneration Committee during the year
The Remuneration Committee meets whenever it is appropriate. The committee met two times in the current year. In addition to agreeing the remuneration report and reviewing the remuneration of the Executive Directors, the award of share options to Directors and Employees was approved.
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors’ Remuneration
The detailed emoluments of the Executive and Non-Executive Directors are set out below.
Year ended 30 June 2025
Salary/fees
Benefits
Bonus
Pension
Total
Chairman and Non-Executive Directors
Geoff Wicks (Chairman)
32,500
–
–
–
32,500
Raj Nagevadia
25,000
–
–
–
25,000
Total Non-Executive
57,500
–
–
–
57,500
Executive Directors
Matthew Jeffs
198,450
3,406
82,701
5,953
290,510
Total Executives
198,450
3,406
82,701
5,953
290,510
Total Remuneration
255,950
3,406
82,701
5,953
348,010
Analysis of bonuses & pension:
Bonuses Bonuses Paid Total accrued paid as cash as pension
Directors
Matthew Jeffs
Year ended 30 June 2024 77,930 (77,930) – –
Year ended 30 June 2025 82,701 – 5,953 88,654
Year ended 30 June 2024
Salary/fees
Benefits
Bonus
Pension
Total
Chairman and Non-Executive Directors
Geoff Wicks (Chairman)
32,500
–
–
–
32,500
Raj Nagevadia
25,000
–
–
–
25,000
Total Non-Executive
32,500
–
–
–
32,500
Executive Directors
Matthew Jeffs
183,750
3,185
77,930
5,512
270,377
Total Executives
183,750
3,185
77,930
5,512
270,377
Total Remuneration
241,250
3,185
77,930
5,512
327,877
Corporate Governance (continued)
Remuneration Committee report (continued)
Directors’ Remuneration (Continued)
Directors’ share interests
The number of ordinary shares of the Company in which the Directors were beneficially interested at 30 June 2025 was:
Director30 June 202530 June 2024
Geoff Wicks – –
Raj Nagevadia – –
Matthew Jeffs 1,013,000 935,000
Directors’ share options interests
Director At 1 July 2024 Granted Lapsed At 30 June 2025 Exercise Normal exercise
price period
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
There are no performance conditions on the exercise of the options granted prior to 1 July 2018. There were no options granted to directors during the year to 30 June 2025.
* 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.
Raj Nagevadia
Remuneration Committee Chairman
9 September 2025
Directors’ Report
The Directors present their Report and financial statements for the year ended 30 June 2025.
General information
Arcontech Group plc is a public limited company which is listed on the AIM segment of the London Stock Exchange and is incorporated in the United Kingdom.
Results and dividends
Details of the results for the year are given on page 28. The Directors recommend the payment of a final dividend of 4.00 pence per ordinary share (2024: 3.75 pence per share) to be paid on 31 October 2025 to ordinary shareholders on the register on 3 October 2025 £534,912 (2024: £501,480).
Directors
The Directors who have held office during the period from 1 July 2024 to the date of this report are as follows:
Geoff Wicks
Matthew Jeffs
Raj Nagevadia
Refer to page 18 for details of the remuneration paid to each Director for the years to 30 June 2025 and 2024.
Raj Nagevadia, who retires by rotation under Article 106 of the Company’s articles of association and, who being eligible, offers himself to be re-elected as a Director of the Company.
Except as disclosed in note 23 to the financial statements none of the Directors had an interest in any contracts with the Company or its subsidiaries during the year.
Employees
The Directors recognise the importance of good communication with employees to ensure a common awareness of factors affecting the Group. They also recognise their statutory responsibilities. Matters of current concern or interest are discussed with staff on a regular basis.
Internal control
The Directors acknowledge their responsibilities for the Group’s system of internal control. The Board considers major business and financial risks. All strategic decisions are referred to the Board, which meets monthly, for approval. Accepting that no system of control can provide absolute assurance against material misstatement or loss, the Directors believe that the established systems of internal control within the Group are appropriate to the business.
Future developments
Interest in our products is higher than we have seen for some time and we are optimistic that this will drive future revenue growth over the coming years.
Financial risk management
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 risks arising from the Group’s financial instruments are interest rate fluctuations and liquidity risk. Refer to Note 25 for further detail on the Group’s financial instruments and risk exposures. It is the Group’s policy to finance its operations through a mixture of cash and, where appropriate, external finance and to review the projected cash flow requirements of the Group with an acceptable level of risk exposure.
Directors’ Report (continued)
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. Accordingly, the Directors have adopted the going concern basis in the preparation of the financial statements (Refer to Note 1).
Research and Development
The Group continues to make progress in product development, while continuing to keep control of costs. Research and development expenditure is charged to the income statement in the year incurred, unless it meets the capitalisation criteria under IAS 38.
Directors’ and Officers’ Liability Insurance
Directors’ and Officers’ liability insurance is in place at the date of this report. The Board remains satisfied that an appropriate level of cover is in place and a review of cover takes place annually.
Disclosures to auditors
In the case of each of the persons who are Directors at the time when the report is approved, the following applies:
so far as each of the Directors are aware, there is no relevant audit information of which the Company’s auditors are unaware; and
each of the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information.
This information is given and should be interpreted in accordance with the provisions of s418 of the Companies Act 2006.
Independent Auditors
A resolution to re-appoint PKF Littlejohn LLP will be proposed at the annual general meeting.
On behalf of the Board
Matthew Jeffs
Chief Executive
9 September 2025
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, Directors’ Report and the financial statements in accordance with applicable UK law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK-adopted international accounting standards (UK IAS) and as regards the Company financial statements, as applied in accordance with the requirements of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently;
make judgments and accounting estimates that are reasonable and prudent;
state whether they comply with UK-adopted international accounting standards, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that they meet their responsibilities under the AIM rules.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Independent Auditor’s Report to the members of
Arcontech Group PLC
Opinion
We have audited the financial statements of Arcontech Group Plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 30 June 2025 which comprise the Group Income Statement and Statement of Comprehensive Income, the Statements of Changes in Equity, the Statements of Financial Position, the Group and Parent Company Statements of Cash Flows, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international accounting standards and as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006.
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent company’s affairs as at 30 June 2025 and of the group’s profit for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
the parent company financial statements have been properly prepared in accordance with UK-adopted international accounting standards and as applied in accordance with the provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group’s and parent company’s ability to continue to adopt the going concern basis of accounting included a review of: key inputs to the forecast financial information prepared by management for the period up to 30 September 2026; management’s assessment of going concern; and relevant post year end information such as regulatory news announcements, Board minutes, and year to date financial information. We have challenged the applicable assumptions and key estimates and obtained an understanding of the key assumptions used to prepare this information as follows:
Agreeing inputs (including contracted and committed expenditures) to underlying supporting documentation;
Ensuring the calculations applied in the forecast are mathematically accurate;
Comparison of forecasts with recent historical financial information to consider accuracy of forecasting;
Comparing forecasts to actual post year-end cash levels through agreement to bank statements; and
Stress-testing the forecasts to consider the impact of reasonably possible changes to key assumptions such as revenue projections and operational costs.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group’s or parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
1.5% of revenue; performance materiality at 75% 2% of total assets (capped at a level below group materiality); performance materiality at 75%
We consider revenue to be the most significant determinant of the group’s financial position and performance used by shareholders as this drives profitability. The going concern of the group is dependent on its ability to continue to generate profits through revenue growth. We consider assets to be the key determinant of the parent company’s financial position as its underlying value is derived from the recoverability of its investment in the main trading subsidiary, Arcontech Limited. An asset basis for the parent company is considered most appropriate given this entity is not revenue generating but holds key assets including cash and investments in subsidiaries.
Whilst materiality for the group financial statements as a whole was set as £47,000 (2024: £58,200), materiality for the parent company was set at a level of £22,000 (2024: £57,600) and materiality for the main trading company, being the only other material component, was set at a level of £44,000 (2024: £57,600), with performance materiality set at 75% (2024: 75%) for group and both material components, a threshold considered appropriate for a group of this size and inherent risk profile. We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements.
We agreed with the audit committee that we would report to the committee all audit differences identified during the course of our group and parent company audits in excess of £2,000 (2024: £2,910) as well as differences below these thresholds that, in our view, warranted reporting on qualitative grounds, as well as disclosure matters that we identified when assessing the overall presentation of the financial statements.
We applied the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatement. Materiality is reassessed throughout the audit. The materiality threshold for both the group and the parent company has not changed since the audit planning stage.
Our approach to the audit
In designing our audit, we determined materiality and assessed the risk of material misstatement in the financial statements. In particular, we looked at areas requiring the directors to make subjective judgements, for example in respect of assessing the carrying value and recoverability of investments in subsidiaries (including intragroup receivables) at parent company level and goodwill at group level, the valuation of share-based payments, recoverability of deferred tax assets and the consideration of future events that are inherently uncertain. We also addressed the risk of management override of internal controls, including evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.
We considered revenue recognition to be a key audit matter and designed our audit procedures to address the risk of misstatement of revenue, including consideration of key contractual terms within customer agreements and whether recognition is therefore in accordance with IFRS 15 Revenue from Contracts with Customers.
An audit was performed on the financial information of the group’s material components which, for the year ended 30 June 2025, were located in the United Kingdom. All work was performed by PKF Littlejohn LLP in London.
We identified what we considered to be key audit matters in the next section and planned our audit approach accordingly.
Independent Auditor’s Report to the members of
Arcontech Group PLC (continued)
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our scope addressed this matter
Revenue recognition (see Note 1 – Revenue Recognition policy and Note 3)
The group generates sales from the licensing of its proprietary software, which delivers real time market data information tailored to customer requirements, as well as support and maintenance services. Under IFRS 15 Revenue from Contracts with Customers, a key consideration for the Group is whether the performance obligation/s within their licensing arrangements are met at a point in time or over time. As certain revenue streams can be recognised at a point in time whilst others have to be recognised over time, and the identification of the differing contract types and obligations therein is judgemental, there is a risk that revenue is materially misstated and the terms of the contracts with customers including the performance obligations therein have not been appropriately accounted for in accordance with IFRS 15. Given the audit time spent in this area, and the management judgement required in the identification of the differing contract types and obligations therein, revenue recognition is considered to be a key audit matter.
Our work in this area included: Updating our documentation of the systems and controls in place surrounding its material revenue streams, being fees from fixed and floating licences and related support and maintenance services; Performing walkthrough tests to confirm our understanding of the internal control environment in operation surrounding revenue; Reviewing the accounting treatment in respect of revenue recognition in accordance with IFRS 15 by reference to key contractual terms and concluding as to the appropriateness of the accounting treatment; Substantive transactional testing of income recognised in the financial statements, including testing of deferred and accrued income balances; Reviewing post year end receipts to ensure completeness of income recorded in the accounting period; and Review of disclosures surrounding revenue in the financial statements to ensure compliance with IFRS 15.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the group and parent company financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Independent Auditor’s Report to the members of
Arcontech Group PLC (continued)
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Statement of Directors’ Responsibilities, the directors are responsible for the preparation of the group and parent company financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group and parent company financial statements, the directors are responsible for assessing the group and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:
We obtained an understanding of the group and parent company and the sector in which they operate to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management and industry experience. We also selected a specific audit team based on experience with auditing entities within this industry facing similar audit and business risks.
We determined the principal laws and regulations relevant to the group and parent company in this regard to be those arising from:
Independent Auditor’s Report to the members of
Arcontech Group PLC (continued)
Companies Act 2006;
AIM Rules;
UK employment law; and
UK tax laws and regulations.
We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group and parent company with those laws and regulations. These procedures included, but were not limited to:
Making enquiries of management regarding potential instances of non-compliance;
Reviewing Board minutes during the year and post-year end;
Reviewing the legal and professional fee ledger accounts; and
Reviewing Regulatory News Service announcements during the year and post-year end.
We also identified the risks of material misstatement of the financial statements due to fraud. Aside from the non-rebuttable presumption of a risk of fraud arising from management override of controls, we also considered there to be a risk of fraud related to revenue recognition. This has been addressed as described within the Key audit matters section above.
As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to: the testing of journals, reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities.This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone, other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 4HD
9 September 2025
Group Income Statement and Statement of Comprehensive Income
For the year ended 30 June 2025
Note
2025
2024
£
£
Revenue
3
3,106,991
2,910,232
Administrative costs
(2,328,438)
(2,040,541)
Operating profit
4
778,553
869,691
Net finance income
5
208,837
229,268
Profit before taxation
987,390
1,098,959
Taxation
9
(43,960)
(31,302)
Profit for the year after tax
943,430
1,067,657
Total comprehensive income for the year
943,430
1,067,657
Earnings per share (basic)
10
7.05p
7.98p
Adjusted* Earnings per share (basic)
10
6.70p
7.80p
Earnings per share (diluted)
10
7.02p
7.96p
Adjusted* Earnings per share (diluted)
10
6.67p
7.78p
*Adjusted to exclude the release of accruals for administrative costs relating to prior years of £47,611 (2024: £24,603). 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 (2024: nil).
The notes on pages 33 to 59 form part of these financial statements
Statements of Changes in Equity
For the year ended 30 June 2025
Group:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
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
Profit for the year
–
–
–
943,430
943,430
Total comprehensive income for the year
–
–
–
943,430
943,430
Dividend paid
–
–
–
(501,480)
(501,480)
Share-based payments
–
–
24,774
–
24,774
Transfer between reserves
–
–
(31,832)
31,832
–
Balance at 30 June 2025
1,671,601
115,761
323,688
6,620,719
8,731,769
Company:
Share capital
Sharepremium
Share option reserve
Retainedearnings
Total equity
£
£
£
£
£
Balance at 30 June 2023
1,671,601
115,761
279,455
4,312,405
6,379,222
Profit for the year
–
–
–
328,596
328,596
Total comprehensive expense for the year
–
–
–
328,596
328,596
Dividend paid
–
–
–
(468,047)
(468,047)
Share-based payments
–
–
51,291
–
51,291
Balance at 30 June 2024
1,671,601
115,761
330,746
4,172,954
6,291,062
Profit for the year
–
–
–
347,587
347,587
Total comprehensive income for the year
–
–
–
347,587
347,587
Dividend paid
–
–
–
(501,480)
(501,480)
Share-based payments
–
–
24,774
–
24,774
Transfer between reserves
–
–
(31,832)
31,832
–
Balance as at 30 June 2025
1,671,601
115,761
323,688
4,050,893
6,161,943
The notes on pages 33 to 59 form part of these financial statements.
Statements of Financial Position
Registered number: 04062416
As at 30 June 2025
Group 2025 £
Group 2024£
Company 2025 £
Company 2024£
Note
Non-current assets
Goodwill
11
1,715,153
1,715,153
–
–
Property, plant and equipment
12
7,964
5,404
–
–
Right of use asset
17
391,369
503,190
–
–
Investments in subsidiaries
13
–
–
2,017,471
2,017,471
Deferred tax asset
19
336,000
358,000
75,000
71,000
Trade and other receivables
14
141,750
141,750
–
–
Total non-current assets
2,592,236
2,723,497
2,092,471
2,088,471
Current assets
Trade and other receivables
14
833,462
677,069
3,947,914
4,069,236
Cash and cash equivalents
15
7,395,514
7,160,177
293,485
287,606
Total current assets
8,228,976
7,837,246
4,241,399
4,356,842
Current liabilities
Trade and other payables
16
(1,592,079)
(1,688,025)
(171,927)
(154,251)
Lease liabilities
17
(119,668)
(110,308)
–
–
Provisions
18
–
–
–
–
Total current liabilities
(1,711,747)
(1,798,333)
(171,927)
(154,251)
Non-current liabilities
Lease liabilities
17
(307,696)
(427,365)
–
–
Provisions
18
(70,000)
(70,000)
–
–
Total non-current liabilities
(377,696)
(497,365)
–
–
Net current assets
6,517,229
6,038,913
4,069,472
4,202,591
Net assets
8,731,769
8,265,045
6,161,943
6,291,062
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
115,761
115,761
Share option reserve
21
323,688
330,746
323,688
330,746
Retained earnings
21
6,620,719
6,146,937
4,050,893
4,172,954
8,731,769
8,265,045
6,161,943
6,291,062
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 £347,587 (2024: £328,596).
The notes on pages 33 to 59 form part of these financial statements.
Approved on behalf of the board on 9 September 2025 by:
Matthew Jeffs
Chief Executive
Group Statement of Cash Flows
For the year ended 30 June 2025
Note
2025
2024
£
£
Cash generated from operations
22
667,719
1,051,177
Tax paid
(61,304)
(15,586)
Net cash generated from operating activities
606,415
1,035,591
Investing activities
Interest received
5
249,816
247,903
Receipts from the sale of plant and equipment
–
417
Purchases of plant and equipment
(9,107)
(12,055)
Net cash generated from investing activities
240,709
236,265
Financing activities
Dividend paid
(501,480)
(468,048)
Payment of lease liabilities
17
(110,307)
(54,872)
Net cash used in financing activities
(611,787)
(522,920)
Net increase in cash and cash equivalents
235,337
748,936
Cash and cash equivalents at beginning of year
7,160,177
6,411,241
Cash and cash equivalents at end of year
15
7,395,514
7,160,177
For the year to 30 June 2025, 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 2025
Note
2025
2024
£
£
Net cash generated by / (used in) operating activities
22
500,201
227,448
Tax paid
(2,136)
(1,706)
Net cash generated from / (used in) operating activities
498,065
225,742
Investing activities
Interest received
9,294
11,234
Net cash generated from investing activities
9,294
11,234
Financing activities
Dividend paid
(501,480)
(468,048)
Net cash used in financing activities
(501,840)
(468,048)
Net increase / (decrease) in cash and cash equivalents
5,879
(231,072)
Cash and cash equivalents at beginning of year
287,606
518,678
Cash and cash equivalents at end of year
15
293,485
287,606
For the year to 30 June 2025, 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 2025
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 1st 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 2025 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 2025 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)
Non-current liabilities with covenants
1 January 2024
IFRS 16 (Amendments)
Lease liability in a Sale-and-Leaseback
1 January 2024
IAS 7 & IFRS 7 (Amendments)
Supplier Finance Arrangements
1 January 2024
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
Accounting policies (continued)
New and amended Standards and Interpretations issued but not effective for the financial year beginning 1 July 2024
Standard
Impact on initial application
Effective date
IAS 21(Amendments)
The Effects of Changes in Foreign Exchange Rates – Lack of exchangeability
1 January 2025
IFRS 1 (Amendments)
First-time Adoption of International Financial Reporting Standards
1 January 2026
IFRS 7 (Amendments)
Financial Instruments: Disclosures and Amendments to Guidance on Implementing IFRS 7 Financial Instruments: Disclosures
1 January 2026
IFRS 9 (Amendments)
Financial Instruments
1 January 2026
IFRS 10 (Amendments)
Consolidated Financial Statements
1 January 2026
IAS 7 (Amendments)
Statement of Cash Flows
1 January 2026
The impact of 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 2025. 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 2025 (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 movement in 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 value of carried forward tax losses that can be expected to be offset against future profits, recognised as an asset, calculated using the corresponding tax bases used in the computation of taxable profit. 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 2025 (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 fair value less costs to sell, 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 2025 (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 2025 (continued)
1.Accounting policies (continued)
Financial instruments (continued)
(a) Classification
The Group classifies its financial assets as applicable 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.
(c) Measurement
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 2025 (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 (“R&D”)
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. R&D currently being undertaken by the Group is on maintenance and enhancements to its existing products in order to continue to meet the needs of customers, and not new products capable of being sold separately, and thus is not possible to attribute any future economic benefit for work that has been undertaken during the period under review.
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 2025 (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.
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 on maintenance and enhancements to its existing products in order to continue to meet the needs of customers, and having assessed the likelihood of future economic benefit, the Directors have judged it appropriate to not capitalise any development costs as it is not possible to attribute any separate economic benefit to the work undertaken (2024 – £Nil).
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.
Notes to the Financial Statements
For the year ended 30 June 2025 (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 £336,000 (2024 – £358,000) was recognised.
Valuation of share-based payments
Accounting for some equity-settled share-based payment awards requires the use of valuation models to estimate the future share price performance of the Company. These models require the Directors to make assumptions regarding the share price volatility, risk free rate and expected life of awards in order to determine the fair values of the awards at grant dates.
3.Revenue
An analysis of the Group’s revenue is as follows:
2025 £
2024 £
Software development, licence fees and project work
3,106,991
2,910,232
All of the Group’s revenue relates to continuing activities.
4.Operating profit for the year is stated after charging/(crediting):
2025 £
2024 £
Depreciation of plant and equipment (see note 12)
6,546
4,752
Depreciation of leased assets (see note 17)
111,821
129,766
Interest on leased assets (see note 17)
40,891
18,435
Staff costs (see note 8)
1,762,666
1,499,656
Research and development
642,393
521,853
Release of accruals for administrative costs in respect of prior years1
(47,611)
(24,603)
1 the accruals in respect of prior years are in connection with a former business premises.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
5.Finance income and Finance costs:
2025 £
2024 £
Finance income
Interest on cash and cash equivalents
249,816
247,903
Finance costs
Lease interest expense
(40,891)
(18,435)
Other interest expense
(88)
(200)
Net finance income
208,837
229,268
6.Auditor’s remuneration:
2025 £
2024 £
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts
42,875
40,500
Fees payable to the Group’s auditor for other services:
– audit of the Company’s subsidiaries
7,000
7,000
49,875
47,500
Notes to the Financial Statements
For the year ended 30 June 2025 (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.
2025
2024
£
£
Revenue by segment
Software development and licence fees
3,106,991
2,910,232
External segment revenue
3,106,991
2,910,232
Operating profit by segment
Software development and licence fees
1,331,560
1,394,367
Unallocated overheads
(553,007)
(524,676)
Total operating profit
778,553
869,691
Net finance income
208,837
229,268
Total profit before tax as reported in the Group income statement
987,390
1,098,959
2025
2024
£
£
Segment total of assets
Software development and licence fees
10,296,400
10,056,804
Unallocated assets
4,463,398
4,564,942
14,759,798
14,621,746
Less intercompany debtors
(3,938,586)
(4,061,003)
Total assets
10,821,212
10,560,743
2025
2024
£
£
Segment total of liabilities
Software development and licence fees
5,855,411
6,202,071
Unallocated liabilities
172,618
154,630
6,028,029
6,356,701
Less intercompany creditors
(3,938,586)
(4,061,003)
Total liabilities
2,089,443
2,295,698
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
7.Operating segments (continued):
2025
2024
£
£
Additions of property, plant and equipment assets by segment
Software development and licence fees
9,107
12,055
Total additions
9,107
12,055
2025
2024
£
£
Depreciation of property, plant and equipment assets recognised in the period by segment
Software development and licence fees
6,546
4,752
Total depreciation
6,546
4,752
Non-current assets by country
2025
2024
£
£
UK
2,592,236
2,723,497
Total non-current assets
2,592,236
2,723,497
Geographical information – External revenue
2025
2024
£
£
UK
2,108,738
1,958,953
Europe (excluding UK)
535,633
585,263
Africa
45,000
45,000
North America
301,448
287,788
Australasia
96,837
12,604
Asia Pacific
19,335
20,624
3,106,991
2,910,232
During the year there were 4 customers (2024: 5) who accounted for more than 10% of the Group’s revenues as follows:
2025
2024
Value of sales £
% of Total
Value of sales £
% of Total
Customer 1
668,164
22%
668,506
23%
Customer 2
590,442
19%
437,978
15%
Customer 3
505,193
16%
520,990
18%
Customer 4
330,881
10%
337,900
12%
Customer 5
–
–
278,186
10%
2,094,680
67%
2,243,560
78%
These revenues are attributable to the software development and licence fees segment.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
8.Staff costs:
2025£
2024£
a)Aggregate staff costs, including Directors’ remuneration
Wages and salaries
1,512,743
1,267,472
Social security costs
191,794
152,473
Pension contributions
33,355
28,420
Share-based payments
24,774
51,291
1,762,666
1,499,656
b)The average number of employees (including Directors) was:
Sales and administration
7
7
Development and support
11
10
18
17
£
£
c)Directors’ emoluments
Short-term employee benefits
342,057
322,365
Pension contributions
5,953
5,512
Share-based payments
8,268
21,000
356,278
348,877
Social security costs
45,105
40,554
Total Director compensation
401,383
389,431
The average number of employees of the parent company is 3 (2024: 3).
The highest paid Director received remuneration of £290,510 (2024: £270,377).
The number of Directors that are members of a defined contribution pension scheme is 1 (2024: 1). Pension contributions paid to a defined contribution scheme in respect of the highest paid Director amounted to £5,953 (2024: £5,512).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
9.Taxation
2025
2024
£
£
Current tax
(21,960)
(61,302)
Deferred tax
(22,000)
30,000
Total tax charge for the year
43,960
31,302
The tax assessed for the year is lower (2024: lower) than the standard rate of corporation tax in the United Kingdom at 25% (2024: 25%). The differences are explained below:
2025£
2024£
Profit on ordinary activities before tax
987,390
1,098,959
Profit on ordinary activities multiplied by the effective rate of corporation tax in the UK of 25.00% (2024: 25.00%)
246,847
274,740
Effects of:
Disallowed expenses
68
68
Temporary differences on deferred tax
1,962
1,921
Deferred tax asset movement
22,000
(30,000)
Brought forward losses utilised
(226,917)
(215,427)
Total tax charge for the year
43,960
31,302
Factors which may affect future tax charges
At 30 June 2025 the Group has tax losses of approximately £6,700,000 (2024: £7,600,000) to offset against future trading profits.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
10.Earnings per share
2025
2024
£
£
Earnings
Earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders
943,430
1,067,657
less: release of accruals relating to prior years1
(47,611)
(24,603)
Adjusted earnings for the purpose of basic and diluted earnings per share being net profit attributable to equity shareholders
895,819
1,043,054
Earnings per share (basic)
7.05p
7.98p
Adjusted earnings per share (basic)
6.70p
7.80p
Earnings per share (diluted)
7.02p
7.96p
Adjusted earnings per share (diluted)
6.67p
7.78p
1 the accruals in respect of prior years are in connection with a former business premises.
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
63,570
31,620
Weighted average number of ordinary shares for the purposes of dilutive earnings per share
13,436,381
13,404,431
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
2025
2024
£
£
Cost and net book amount
At 1 July 2024 and at 30 June 2025
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:
2025
2024
£
£
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.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
11.Goodwill (continued)
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 3.3% (2024: 3.3%) per annum, after which the UK long-term growth rate of 1.8% is applied for a further eight years. The Directors consider a timeline of fourteen years appropriate given the historical consistency of revenue to date, and that the rate of 3.3% for the first five years 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% (2024: 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.
12.Property, plant and equipment – Group
Leasehold Property
Office furniture & equipment
Total
Cost
£
£
£
At 1 July 2023
26,199
103,365
129,564
Additions
–
4,471
4,471
Disposals
(26,199)
(795)
(26,994)
At 1 July 2024
–
107,041
107,041
Additions
–
9,107
9,107
At 30 June 2025
–
116,148
116,148
Depreciation
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 1 July 2024
–
101,638
101,638
Charge for the year
–
6,546
6,546
At 30 June 2025
–
108,184
108,184
Net book amount at 30 June 2025
–
7,964
7,964
Net book amount at 30 June 2024
–
5,404
5,404
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
13.Investment in subsidiaries
2025
2024
Carrying amount
£
£
At 1 July 2024
2,017,471
2,017,471
At 30 June 2025
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, and given the value of Goodwill recognised in the Consolidated Statement of Financial Position the Directors are satisfied that the carrying amount of the investment in subsidiaries does not require impairment:
Country of Incorporation
Address
Nature of business
Ordinaryshares 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 2025 £
Group 2024£
Company 2025 £
Company 2024 £
Due within one year:
Trade and other receivables
659,197
458,227
–
–
Amounts owed by group undertakings
–
–
3,938,487
4,060,905
Prepayments and accrued income
174,265
218,842
9,427
8,331
Other receivables
–
–
–
–
833,462
677,069
3,947,914
4,069,236
The Directors have reviewed the amounts owing from Group undertakings and given the value of Goodwill recognised in the Consolidated Statement of Financial Position the Directors are satisfied that the carrying value of amounts owing from Group undertakings does not require impairment other than as disclosed in note 23.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
14. Trade and other receivables (continued)
Group 2025 £
Group 2024£
Company 2025 £
Company 2024 £
Due after more than one year:
Other receivables
141,750
141,750
–
–
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 2025, trade receivables of £Nil were impaired (2024: £Nil) and during the year an impairment charge relating to trade receivables of £Nil (2024: £Nil) was recognised. As at 30 June 2025 trade receivables of £90,070 (2024: £214,142) were past due but not impaired as full recovery is expected. The ageing analysis of these trade receivables is as follows:
Group 2025 £
Group 2024£
Company 2025 £
Company 2024 £
Up to 3 months past due
506,714
214,142
–
–
3 to 6 months past due
–
–
–
–
506,714
214,142
–
–
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 2025 £
Group 2024£
Company 2025 £
Company 2024 £
Trade payables
64,882
61,328
3,221
3,437
Amounts owed to group undertakings
–
–
100
100
Other tax and social security payable
75,759
106,899
13,996
12,612
Other payables and accruals
540,921
426,963
154,610
138,102
Deferred income
910,517
1,092,835
–
–
1,592,079
1,688,025
171,927
154,251
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 £605,803 (2024: £488,291) which includes provisions (Refer to note 18).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
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 2025
Lease liability £
Right of use asset £
Income statement £
Carrying value at 30 June 2024
(537,673)
503,190
–
Depreciation
–
(111,821)
(111,821)
Interest
(40,891)
–
(40,891)
Lease payments
151,200
–
–
Carrying value at 30 June 2025
(427,364)
391,369
(152,712)
Reconciliation of lease liabilities
Operating cash flow £
Financing cash flow £
Non-cash £
Total £
As at 1 July 2024
–
–
–
537,673
Cash flows:
Interest paid
(40,891)
–
–
(40,891)
Liability reduction
–
(110,309)
–
(110,309)
Non-cash changes:
Interest expense
–
–
40,891
40,891
As at 30 June 2025
(40,891)
(110,309)
40,891
427,364
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 2025 (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
Contractual maturity analysis of lease liabilities as at 30 June 2025
Less than 3 months £
3 – 12 Months £
1 – 5 Year £
Longer than 5 years £
Total £
Lease liabilities
37,800
81,868
307,696
–
427,364
18.Provisions
Group 2025 £
Group 2024£
Company 2025 £
Company 2024 £
As at 1 July
70,000
70,000
–
–
Increase in provision
–
–
–
–
As at 30 June
70,000
70,000
–
–
Disclosed as:
Current liabilities
–
–
–
–
Non-current liabilities
70,000
70,000
–
–
Provisions consists of dilapidations for the Office premises of £70,000 (2024: £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 non-current liability as at 30 June 2025, as the lease is due to end 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.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
19.Deferred tax
Deferred tax is calculated in full on temporary differences under the liability method using the tax rate of 24.98% which is the effective tax rate of the Group. The movement on the deferred tax account is as shown below:
Group 2025 £
Group 2024£
Company 2025 £
Company 2024 £
At 1 July
358,000
328,000
71,000
68,000
Effect of change in tax rate
–
–
–
–
Effect of movement in temporary differences
(22,000)
30,000
4,000
3,000
At 30 June
336,000
358,000
75,000
71,000
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 2025 amounted to approximately £7,200,000 (2024: £7,600,000).
20. Share capital
The Company has authorised share capital of 16,000,000 Ordinary shares of £0.125 each.
Company Allotted and fully paid:
Sharesof 12.5p each
Share Capital £
Share Premium£
As at 1 July 2024
13,372,811
1,671,601
115,761
As at 30 June 2025
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 2025 for unissued Ordinary Shares of 12.5 pence each as follows:
Share options
At 1 July 2024
Granted
Exercised
Lapsed
At 30 June 2025
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
–
–
(20,000)
50,000
76.50 pence
30 Jun 25 – 21 Oct 32
–
30,000
–
–
30,000
125.50 pence
30 Jun 28 – 4 Dec 34
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
30,000
–
(70,000)
540,500
Weighted average exercise price
109.2 pence
125.5 pence
–
76.50 pence
114.3 pence
The number of options exercisable at 30 June 2025 was 510,500 (at 30 June 2024: 460,500), these had a weighted average exercise price of 113.7 pence (2024: 117.7 pence).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
20. Share capital (continued)
The weighted average share price as at the exercise date of the shares exercised in the year was nil pence (2024: nil pence) and of the shares were forfeited in the year was nil pence (2024: nil pence).
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 127.0 pence, the lowest price was 73.0 pence and the price at the year-end was 89.0 pence.
The weighted average remaining contractual life of share options outstanding at 30 June 2025 was 6 years (2024: 6 years).
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. There were no performance conditions attached to the options granted in December 2024.
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
December 2024
30 June 2028
n/a
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 October 2022 lapsed on 30 June 2025 as compound annual earnings growth targets for the financial years ended 30 June 2023, 2024 and 2025 were not achieved.
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
20. Share capital (continued)
The fair value of options is valued using the Black-Scholes pricing model. An expense of £24,774 (2024: £51,291) has been recognised in the year in respect of share options granted. The cumulative share option reserve at 30 June 2025 is £323,688 (2024: £330,746).
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
Exercise price
64.5 pence
110.0 pence
196.0 pence
164.5 pence
Expected life
10 years
10 years
10 years
10 years
Expected volatility
50%
50%
50%
49%
Risk free rate of interest
0.5%
0.75%
0.75%
0.00%
Dividend yield
Nil
Nil
Nil
0.01%
Fair value of option
36.7 pence
57.0 pence
115.0 pence
91.92 pence
Directors & Employees
Grant date
11 Oct 2021
21 Oct 2022
4 Dec 2024
Exercise price
130.5 pence
76.5 pence
125.5 pence
Expected life
10 years
10 years
10 years
Expected volatility
45%
44%
40%
Risk free rate of interest
0.60%
3.69%
4.23%
Dividend yield
0.01%
0.04%
Nil
Fair value of option
70.03 pence
45.47 pence
72.79 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 2025 (continued)
22.Net cash generated from operations – Group
2025
2024
£
£
Operating profit and exceptional items before tax
778,554
869,691
Depreciation charge
118,367
134,518
Non cash share option charges
24,774
51,291
Profit on disposal of plant and equipment
–
(151)
Lease interest paid
(40,891)
(18,435)
Other interest paid
(88)
(200)
(Increase) in trade and other receivables
(156,394)
(318,958)
(Decrease) / increase in trade and other payables
(56,603)
333,421
Cash generated from operations
667,719
1,051,177
Net cash generated from operations – Company
2025
2024
£
£
Operating profit
336,059
316,497
Non cash share option charges
8,268
21,000
Decrease / (increase) in trade and other receivables
136,062
(196,644)
Increase in trade and other payables
19,812
86,595
Cash generated from operations
500,201
227,448
Notes to the Financial Statements
For the year ended 30 June 2025 (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 £659,803 (2024: £626,698).
The amounts due from/to subsidiaries at the balance sheet date were as follows:
2025 £
2024 £
Amount due from subsidiaries
7,094,968
7,443,477
Less: Provision for impairment
(3,156,382)
(3,382,474)
Amount due from subsidiaries – net
3,938,586
4,061,003
During the year a provision of £226,092 was released (2024: £212,047) in respect of balances due from a subsidiary is not anticipated to have cash reserves that would be required to make repayment.
24.Dividends
A final dividend of 4.00 pence will be proposed at the Annual General Meeting but has not been recognised as it requires approval (2024: 3.75 pence).
Notes to the Financial Statements
For the year ended 30 June 2025 (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 2025 £
Group 2024 £
Company 2025 £
Company 2024£
Trade receivables
659,197
458,227
–
–
Cash and cash equivalents
7,395,514
7,160,177
293,485
287,606
Amounts owed by group undertakings
–
–
3,949,705
4,069,092
8,054,711
7,618,404
4,243,190
4,356,698
The carrying amount of financial liabilities represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Group 2025 £
Group 2024 £
Company 2025 £
Company 2024£
Trade payables
64,882
61,328
3,221
3,437
64,882
61,328
3,221
3,437
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 3.00% below bank base rate and 0.20% below bank base rate. There were no fixed rate deposits held as at reporting date (2024: variable rates of between 4.35% below bank base rate and 0.25% below bank base rate and at fixed/variable rates of of between 1.56% below bank base rate and 0.56% below).
Notes to the Financial Statements
For the year ended 30 June 2025 (continued)
25.Financial instruments (continued)
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 £605,803 (2024: £488,291) all of which are payable within 6 months.
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, receivables maintained in sterling, and all cash balances held 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 2025, if bank base rate had increased by 0.5% with all other variables held constant, post-tax profit would have been £36,978 (2024 £35,801) higher and equity would have been £36,978 (2024: £35,801) higher. Conversely, if bank base rate had fallen 0.5% with all other variables held constant, post-tax profit would have been £36,978 (2024: £35,801) lower and equity would have been £36,978 (2024: £35,801) 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 1st Floor, 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
Arcontech trading update year end 2025
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.
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 for the year ended 30 June 2025 revenue and adjusted EBITDA* are expected to be in line with market expectations. Profit Before Tax is expected to be ahead of market expectations owing to interest income received on bank deposits.
Financial expectations noted above are preliminary and are subject to year-end and financial close and audit review processes.
(* adjusted ebitda is defined as operating profit before depreciation, amortisation, share base payments and releases of historic accruals relating to administrative expenses)
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
Harriet Ward (Corporate Broking) To access more information on the Group please visit: www.arcontech.com
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.
Arcontech Excelerator. A performant, stress-free alternative to migrating to LSEG Workspace Excel Add-in
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
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
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
GROUPCASH FLOW STATEMENT
Note
Six months ended 31December
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
Sharecapital
Sharepremium
Share-option reserve
Retainedearnings
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 1st 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 31December
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
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
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.
Notice of the annual general meeting which has been convened for 10.00am on 9 October 2024 at the offices of the Company at 1st 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
1st 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 1st 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, 1st 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.
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:
1st 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.
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.
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.
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:
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
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
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)
10
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:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
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:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
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 1st 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.
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.
(c) Measurement
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.
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
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%
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:
Sharesof 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 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 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 1st 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
GROUPCASH FLOW STATEMENT
Note
Six months ended 31December
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
Sharecapital
Sharepremium
Share-based payments reserve
Retainedearnings
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 1st 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 31December
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
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
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 / 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
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 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”.
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.
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:
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.
Net retention after adjusting for joiners and leavers during the year
Performance:
Staff morale from our dedicated employees remains strong, reflected in the stable retention rate
Principal risks and uncertainties
The Group’s performance is affected by a number of risks and uncertainties, which the Board monitor on an ongoing basis in order to identify, manage and minimise their possible impact. General risks and uncertainties include changes in economic conditions, interest rate fluctuations and the impact of competition. The Group’s principal risk areas and the action taken to mitigate their outcome are shown below:
Risk area
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
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.
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 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 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.
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 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)
10
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:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
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:
Sharecapital
Sharepremium
Share option reserve
Retainedearnings
Totalequity
£
£
£
£
£
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
Arcontech Group plc (“the Company”) is a company incorporated in England and Wales with a registered address at 1st 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 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.
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 2023 (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 2023 (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 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.
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 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.
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.
(c) Measurement
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 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.
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 2023 (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 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
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 (2022 – £Nil).
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
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 £328,000 (2022 – £318,000) 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:
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:
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.
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
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
2023
2022
£
£
Cost and net book amount
At 1 July 2022 and at 30 June 2023
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:
2023
2022
£
£
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.
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
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 2023 (continued)
13. Investment in subsidiaries (continued)
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%
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
–
–
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 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
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 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
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 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:
Sharesof 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).
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 85.5 pence, the lowest price was 63.5 pence and the price at the year-end was 64.5 pence.
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 £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
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 £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
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 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 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’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. 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
Copies of this statement are available from the Company Secretary at the Company’s registered office at 1st Floor, 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
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)
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
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
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, is to retire from the Board with effect from 7 April 2023 .
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
GROUPCASH FLOW STATEMENT
Note
Six months ended 31December
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
Sharecapital
Sharepremium
Share-based payments reserve
Retainedearnings
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 1st 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 31December
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:
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.
* Fully diluted earnings will be based on: (a) the Company’s pre-tax profit excluding exceptional items and the share option charge and (b) the current UK corporation tax rate of 19%, such that the fully diluted earnings calculation takes no account of R&D and deferred tax credits. For the purposes of the fully diluted earnings calculation, the applied rate of corporation tax will remain constant at 19% irrespective of any current or future changes to corporation tax.
Enquiries:
Arcontech Group plc
020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director
Matthew Jeffs, Chief Executive
finnCap Ltd (Nomad & Broker)
Carl Holmes/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
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Darren Lewis
2.
Reason for the Notification
a)
Position/status
Head of Development
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
Details of the person discharging managerial responsibilities / person closely associated
a)
Name
Ben Hodges
2.
Reason for the Notification
a)
Position/status
Finance Director
b)
Initial notification/Amendment
Initial notification
3.
Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)
Name
Arcontech Group Plc
b)
LEI
213800O7PM9V79TP7523
4.
Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)
Description of the Financial instrument, type of instrument
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
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 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”.
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.
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:
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
Net retention after adjusting for joiners and leavers during the year
Performance:
Staff morale from our dedicated employees remains strong, reflected in the stable retention rate
Principal risks and uncertainties
The Group’s performance is affected by a number of risks and uncertainties, which the Board monitor on an ongoing basis in order to identify, manage and minimise their possible impact. General risks and uncertainties include changes in economic conditions, interest rate fluctuations and the impact of competition. The Group’s principal risk areas and the action taken to mitigate their outcome are shown below:
Risk area
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
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.
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 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 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.
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 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)
10
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
Arcontech Group plc (“the Company”) is a company incorporated in England and Wales with a registered address at 1st 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 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.
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.
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.
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:
• 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.
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.
Notes to the Financial Statements
For the year ended 30 June 2022 (continued)
1. Accounting policies (continued)
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.
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.
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.
(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.
Notes to the Financial Statements
For the year ended 30 June 2022 (continued)
1. Accounting policies (continued)
Financial instruments (continued)
(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.
(c) Measurement
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.
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.
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.
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.
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.
Notes to the Financial Statements
For the year ended 30 June 2022 (continued)
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.
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 (2021 – £Nil).
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
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 £318,000 (2021 – £471,000) 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 19.
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:
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.
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
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
2022
2021
£
£
Cost and net book amount
At 1 July 2021 and at 30 June 2022
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:
2022
2021
£
£
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 8.9% 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 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 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:
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
–
–
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 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
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.
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).
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 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 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 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
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 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 liabilities 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’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 1st Floor, 11-21 Paul Street, London, EC2A 4JU or from the Company’s website at www.arcontech.com.
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
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.
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
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
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
GROUPCASH 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
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 1st 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
(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
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
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
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.
