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:

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:

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

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
 

GROUP CASH FLOW STATEMENT

GROUP STATEMENT OF CHANGES IN EQUITY 

NOTES TO THE FINANCIAL INFORMATION

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.

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: