Harvest Technology plc - Interim Results

On 3 August 2021, Harvest Technology plc published its interim financial statements covering the six-month period ended 30 June 2021.

Performance Overview 

Total revenues dropped by 12.4% to €7.88 million reflecting the lower amount of turnover generated by both the ‘Payment Processing Services’ arm (-€7.8% to €3.48 million) and the ‘Retail & IT Solutions’ segment (-16.1% to €5.02 million). In this respect, Harvest explained that whilst the scrutiny and governance around payment processing services has been increasing dramatically, APCO Systems still managed to post good results as a result of its diversification strategy and continued on-boarding of new clients and partners. The performance of APCO Limited was sustained through the continued stream of the delivery of EMV cards, the increase in the number of deposit machine sales, as well as additional Fuel Station software implementation. Meanwhile, the project in Mauritius remained a significant contributor to the performance of PTL whilst the revenue generated from the work on the modernisation of the Health Information System stack and the out-sourcing effort at the Malta Police Force provided additional income streams.

On the expenditure side, total operating costs contracted by almost 17% to €5.93 million (H1 2020: €7.14 million). In view of the sharper drop in operating costs than the decline in revenues, the operating profit increased by 4.6% to €1.95 million whilst the operating profit margin improved to 24.7% compared to 20.7% in the first half of 2020. Excluding depreciation and amortisation charges, EBITDA grew by almost 4% to €2.31 million whilst the EBITDA margin climbed to just under 30% from 24.8% in H1 2020.

After taking into account net finance costs of €0.04 million and other non-operating income of €0.03 million, Harvest recorded a pre-tax profit of €1.93 million representing an uplift of 3.7% compared to the figure of €1.87 million in H1 2020. Furthermore, the level of pre-tax profit achieved was also 4% higher than previously anticipated. The tax charge for the period under review increased by 3.3% to €0.69 million. Nonetheless, Harvest still recorded a 3.9% increase in the net profit figure to €1.24 million translating into an annualised return on average equity of 20.7%.

The Statement of Financial Position shows that total assets increased by 3.1% to €21.3 million when compared to the position as at 31 December 2020. On the other hand, total liabilities dropped by 1.7% to €8.41 million as total borrowings contracted by a further 13% to €2.35 million. As a result, the company’s equity base expanded by 6.5% to €12.9 million compared to €12.1 million as at the end of 2020.

Dividend

The Board of Directors of Harvest Technology resolved to distribute an unchanged net interim dividend of €0.024 per share to all shareholders as at close of trading on Thursday 12 August 2021. The payment of the dividend will take place by not later than Tuesday 24 August 2021.

Outlook

In their commentary, the Directors explained that despite the satisfactory performance which was also above expectations, the company’s future performance might be negatively affected due to the effects of the pandemic. Nonetheless, Harvest maintained its upwardly revised target of a pre-tax profit of €4 million for 2021 compared to the projected figure of €3.4 million at the time of the IPO in November 2019.

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Harvest Technology plc – Interim Financial Statements for the six-month period ended 30 June 2021.

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