Harvest Technology plc - Interim Results

On 5 August 2022, Harvest Technology plc published its interim financial statements covering the six-month period ended 30 June 2022.

Revenues increased by 5.2% to €8.29 million as the strong growth recorded by the ‘Retail & IT Solutions’ segment (+21.8% to €6.12 million) outweighed the decline in the ‘Payment Processing Services’ arm (-24.2% to €2.64 million). In this respect, Harvest explained that the higher level of sales of hardware was boosted by new contract wins. On the other hand, the payment processing segment was negatively impacted by increased regulatory and additional licensing requirements mandated on the operators in online gaming.

On the expenditure side, total operating costs increased by 21.4% to €7.17 million (H1 2021: €5.90 million) largely driven by higher cost of sales. In view of the sharper increase in operating costs than in revenues, operating profit dropped by 43% to €1.12 million whilst the operating profit margin eased to 13.5% compared to 25% in the first half of 2021. Excluding depreciation and amortisation charges, EBITDA dropped by 43% to €1.35 million (H1 2021: €2.34 million) whilst the EBITDA margin eased to 16% from 30% in H1 2021.

After taking into account net finance costs of €0.02 million, Harvest recorded a pre-tax profit of €1.11 million compared to €1.93 million in H1 2021. Overall, Harvest recorded a 42% decline in net profit to €0.72 million which, in turn, translates into an annualised return on average equity of 10.9%.

The Statement of Financial Position shows that total assets dropped by 8.8% (-€1.98 million) to €20.6 million when compared to the position as at 31 December 2021. On the other hand, total liabilities dropped by 24.4% (-€2.25 million) to €6.97 million. As a result, the company’s equity base expanded by 2% to €13.7 million compared to €13.4 million as at the end of 2021.

Dividend

The Board of Directors of Harvest Technology resolved to distribute a net interim dividend of €0.02 per share (H1 2021: €0.024 per share) which translates into a payout ratio of 63.1%. The dividend will be paid by not later than Wednesday 31 August 2022 to all shareholders as at close of trading on Wednesday 17 August 2022.

Outlook

In their commentary, the Directors explained that the Group is expected to achieve its updated forecasts notwithstanding that the projected performance may be impacted by ongoing challenges including increased scrutiny from a regulatory perspective, additional licencing requirements, higher operating costs, and delays due to supply chain issues. Meanwhile, the Group continues to invest in the further expansion of its payment processing business in Greece, as well as the internationalisation of its IT Services arm.