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APC Technology Group

ValueTheMarkets welcomes another article by Riddler

Today I am revisiting a British company which has over 20 years of experience in the electronics and new technology markets which I believe has not only delivered several upbeat trading statements over the last 12-15mths but looks set to make a significant step toward. With greater bottom line improvements during the current financial year, APC Technology Group looks to further international expansion. This confidence was shown clearly in their AGM statement on the 31st January with significant director purchases, recently Mark himself was a buyer, which was followed up by its financial review:

“The first half of 2014 has seen a continuation of the progress made in 2013. The Group is expected to report sales of approximately £12.1m (2013 H1: £9.2m) and to declare a profit before tax of at least £700,000 (2013 H1: £47,000) when it publishes its interim results at the end of May this year”

Having met with the CEO of APC, Mark Robinson, in 2013, I know first-hand the expertise APC offers its chosen markets. In my opinion the move into the green technology sector will provide significant growth over many years as shown by contract wins with Wm Morrisons Supermarket, Network Rail and other sectors presented in their January AGM statement which stated:

“We are also pleased to confirm that a number of relatively high profile customers are now placing regular orders with Minimise Energy, thereby steadily expanding the customer base across different market sectors. Our investment in Invisible Systems Limited has been pivotal in winning new customers”

My belief is that the commitment to energy savings is now being taken seriously by the private and public sectors as firms realise that energy consumption is often one of their largest fixed costs. It’s a fact that awareness of energy, as a spiralling major overhead, is now starting to be recognised with many companies from the largest to the smallest taking their first steps to understand their exposure. To help these companies APC announced a very interesting concept in their March release when they explained that they had:

“…recently established an energy efficiency consulting business, Minimise Solutions Limited, which will help customers develop and then implement an effective energy management strategy. In addition, the Group can confirm that it is in advanced discussions to acquire a majority interest in a small, specialist, funding business with the view to offering customers turnkey financing solutions for energy efficiency projects through a specially created subsidiary, Minimise Finance Limited”

I believe the significance of this has been missed by the market as this development may mean that APC could offer an “in to out” strategy for identifying, then tackling energy waste with quantitative based real time data from within the organisation, allowing them to offer bespoke solutions. I believe this to be the turning point in the way blue chip companies deal with energy efficiency and may allow a shorter “lead time” for customers to place orders for technological solutions as the energy savings and usage would have already been identified.

The next 6mths could prove to be an inflection point for APC thus presents a buying opportunity at 45p-50p into a British company that has delivered consistently impressive results over the last few years, coupled to a strong business model which will no doubt generate continued growth for the long term.

(The author has a long standing position in APC)

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