APC Technology swings to operating profit amid costly restructure

14th Dec 2016 12:27

(ShareCast News) - Specialist electronic components and systems, lighting technologies and connectivity products company APC Technology Group announced its preliminary results for the year to 31 August on Wednesday, with revenue from continuing operations of £17.9m, down from £22.8m.The AIM-traded firm's gross profit, before exceptional and non-recurring expenses, increased to £6.4m from £6.0m, while its gross margin before exceptional and non-recurring expenses, improved to 35.8% from 26.3%.It posted a £0.3m operating profit before exceptional and non-recurring expenses, compared to a £1.4m loss in the prior year.Headcount within the continuing business was reduced by 22%, from 116 to 91, while more than £2m of annualised cost savings were achieved through supply chain restructuring, headcount reduction, office consolidation, and improved procurement practices across the business.Two fund raises were completed in the period, resulting in £2.4m in new equity for the group.Net debt at year-end was £3.2m, £2.7m of which relates to amount owed under the group's £6m invoice finance facility with ABN Commercial Finance which has been extended to 31 December 2017.APC recorded a post-tax loss of £12.9m, widening from £5.8m, with £12.8m of it attributable to exceptional and non-recurring expenses of £3m and discontinued operations of £9.8m incurred in the restructuring of the group, discontinuance of non-core activities, and the write-off of goodwill and other intangible assets.The cash impact of loss was £4.6m, of which £4.2m related to exceptional and non-recurring expenses of £2.2m and losses sustained in discontinued operations of £2.0m."The year to 31 August was a year of restructuring for the group and necessitated many hard decisions with all but core activities terminated or sold," said chief executive Richard Hodgson."While this resulted in a significant write-off of past costs, with a large proportion of that write-off being non cash, it establishes a solid profitable base upon which to build for the future."Hodgson said APC has strength in the stability that its core electronic component business brings and also some established growth drivers in its lighting technologies and connected products and systems."I am very pleased with the solid start we have made to this new financial year, with the restructuring behind us and with a realigned business focused on our core competency of design, specification, and distribution of specialist technologies."This is a business that we have historically done well and which has proven to be profitable and cash-generative."