Interim result for the six months ended 31 December 2024

ARCONTECH GROUP PLC

(“Arcontech” or the “Group”)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2024

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

Overview:

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

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

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

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

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

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

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

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

Geoff Wicks, Chairman of Arcontech, said:

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

Enquiries:

Arcontech Group plc 020 7256 2300
Geoff Wicks, Chairman and Non-Executive Director  
Matthew Jeffs, Chief Executive  
   
Cavendish Capital Markets Ltd (Nomad & Broker) 020 7220 0500
Carl Holmes/Rory Sale (Corporate Finance) Harriet Ward (Corporate Broking)  
   

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

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

Chairman’s Statement

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

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

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

Financing

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

Dividend

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

Outlook

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

Geoff Wicks

Chairman and Non-Executive Director

GROUP INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

    Note Six months ended 31  December   Six months ended 31  December   Year ended   30 June
      2024   2023   2024
      (unaudited) £   (unaudited) £   (audited) £
               
Revenue     1,511,346   1,448,804   2,910,232
               
Administrative costs     (1,109,882)   (1,039,456)   (2,040,541)
               
Operating profit   4 401,464   409,348   869,691
               
Finance income     139,066   126,055   247,903
               
Finance costs   12 (22,364)   3,387   (18,635)
               
               
Profit before taxation     518,166   538,790   1,098,959
               
Taxation   6 –   –   (31,302)
  Profit for the period after tax     518,166   538,790     1,067,657
               
Total comprehensive income     518,166   538,790   1,067,657
               
Profit per share (basic)     3.87p   4.03p   7.98p
               
Adjusted* Profit per share (basic)     3.70p   4.00p   7.80p
               
Profit per share (diluted)     3.85p   4.02p   7.96p
               
Adjusted* Profit per share (diluted)     3.68p   3.99p   7.78p

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

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

GROUP BALANCE SHEET

      Note   31 December 2024     31 December 2023     30 June 2024
    (unaudited) £   (unaudited) £   (audited) £
Non-current assets            
Goodwill   1,715,153   1,715,153   1,715,153
Property, plant and equipment   10,220   6,325   5,404
Right of use asset 12 447,279   559,098   503,190
Deferred tax asset   358,000   328,000   358,000
Trade and other receivables 9 141,750   141,750   141,750
             
Total non-current assets   2,672,402   2,750,326   2,723,497
             
Current assets            
Trade and other receivables 9 821,336   1,335,408   677,069
Cash and cash equivalents   7,166,839   5,734,226   7,160,177
             
Total current assets   7,988,175   7,069,634   7,837,246
             
Current liabilities            
Trade and other payables 10 (594,088)   (473,512)   (595,190)
Deferred income   (1,221,194)   (1,013,405)   (1,092,835)
Lease liabilities 12 (114,893)   (68,869)   (110,308)
Provisions   –   (50,000)   –
             
Total current liabilities   (1,930,175)   (1,605,786)   (1,798,333)
             
Non-current liabilities            
Lease liabilities 12 (368,748)   (483,641)   (427,365)
Provisions   (70,000)   (20,000)   (70,000)
             
Total non-current liabilities   (438,748)   (503,641)   (497,365)
             
Net current assets    6,058,000    5,463,848   6,038,913
             
Net assets   8,291,654   7,710,533   8,265,045
Equity            
Share capital   1,671,601   1,671,601   1,671,601
Share premium account   115,761   115,761   115,761
Share option reserve   340,668   305,101   330,746
Retained earnings   6,163,624   5,618,070   6,146,937
             
    8,291,654   7,710,533   8,265,045

GROUP CASH FLOW STATEMENT

    Note Six months ended 31 December   Six months ended 31 December   Year ended   30 June
      2024   2023   2024
      (unaudited) £   (unaudited) £   (audited) £
Cash generated from / (used in) operating activities   11 432,237   (296,937)     1,051,177
               
Tax paid   6 –   –   (15,586)
               
Net cash generated from / (used in) operating activities     432,237   (296,937)     1,035,591
               
Investing activities              
               
Interest received     137,775   126,055   247,903
               
Proceeds on disposal of fixed assets     –   417   417
  Purchases of plant and equipment       (7,840)     (3,471)      (12,055)
               
Net cash generated from investing activities       129,935     123,001              236,265
               
Financing activities              
               
Dividends paid     (501,479)   (468,048)   (468,048)
               
Payment of lease liabilities     (54,031)   (35,031)   (54,872)
               
               
Net cash used in financing activities     (555,510)   (503,079)   (522,920)
    Net increase / (decrease) in cash and cash equivalents         6,662       (677,015)                748,936
               
Cash and cash equivalents at beginning of period       7,160,177     6,411,241            6,411,241
               
Cash and cash equivalents at end of period       7,166,839     5,734,266         7,160,177

GROUP STATEMENT OF CHANGES IN EQUITY

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

NOTES TO THE FINANCIAL INFORMATION

  1. 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.   
  2. 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.
  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 £23,806 (31 December 2023: £4,014; 30 June 2024: £24,603).
  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 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.

  1. 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

  1. Cash generated from operations

    Six months ended 31 December   Six months ended 31 December   Year ended   30 June    
    2024   2023   2024    
    (unaudited) £   (unaudited) £   (audited) £    
                 
Operating profit   401,464   409,348   869,691    
                 
Depreciation charge   58,933   76,688   134,518    
                 
Non-cash share option charges   9,922   25,646   51,291    
                 
Lease interest charge   (21,569)   (476)   (18,435)    
                 
Other interest charge   (795)   (1,141)   (200)    
                 
Profit on disposal of fixed assets   –   (152)   (151)    
  Increase in trade and other receivables   (133,039)   (990,910)       (318,958)    
                 
Increase in trade and other payables   117,321   184,060   333,421    
Cash generated from / (used in) operations     432,237     (296,937)     1,051,177    
               

12. Leases

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

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

  Right of use asset £   Lease liability £   Income statement £
As at 1 July 2024 503,190   (537,672)   –
           
Depreciation (55,911)   –   (55,910)
Interest –   (21,569)   (21,569)
Lease payments –   75,600   –
Carrying value at 31 December 2024 447,279   (483,641)   (77,479)
  Right of use asset £   Lease liability £   Income statement £
As at 1 July 2023 73,152   (40,324)   –
           
Recognition of new lease under IFRS 16 559,803   (552,220)   –
Depreciation (73,857)   –   (73,857)
Liability write-back at expiry –   5,293 1 5,293
Interest –   (765)   (765)
Lease payments –   35,506   –
Carrying value at 31 December 2023 559,098   (552,510)   (69,329)

Contractual maturity analysis of lease liabilities as at 31 December 2024

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