Harvest Technology plc - Interim Results

On 9 August 2023, Harvest Technology plc published its interim financial statements covering the six-month period ended 30 June 2023.

Revenues decreased by 13.2% to €7.20 million (H1 2022: €8.29 million) reflecting declines in both the Retail & IT Solutions segment (-10.8% to €5.46 million) and the Payment Processing Services arm (-19.7% to €2.1 million). The Retail & IT solutions segment was impacted by the completion of significant projects in 2022 which had increased revenues last year. Meanwhile, the Payment Processing Services segment registered a sharp drop in processing of certain gaming merchants due to changes in regulation.

On the expenditure side, total operating costs decreased by 3.8% to €6.90 million (H1 2022: €7.17 million), due to lower cost of sales. However, in view of the sharper drop in revenue than in operating costs, operating profit slumped by 73.3% to €0.30 million (H1 2022: €1.12 million) whilst the operating profit margin eased to 4.2% compared to 13.5% in the first half of 2022.  Excluding depreciation and amortisation charges, EBITDA practically halved to €0.71 million (H1 2022: €1.35 million).

After accounting for minimal net finance costs and a tax expense of €0.11 million, Harvest recorded a net profit for the period of €0.18 million (H1 2022: €0.72 million) which translates into an annualised return on average equity of 2.7% compared to 10.9% in the corresponding period last year.

The Statement of Financial Position as at 30 June 2023 when compared to the position as at 31 December 2022 shows that total assets dropped by 13.8% (or €2.94 million) to €18.3 million, which includes a cash balance of just under €3 million. Meanwhile, total liabilities decreased by 39.4% (or 3 million) to €4.63 million as the company remained free from borrowings. Shareholders’ funds remained virtually unchanged at €13.7 million.

Outlook

In their commentary, the Directors explained that the Group has an optimistic outlook for the second half of the year, as both APCO Limited and PTL Limited are anticipated to finalise their ongoing projects, which are expected to translate into higher revenue. Moreover, the Group remains committed to investing in further expanding its payment processing business and will launch a new payment platform later this year.

The Board of Directors stated that Harvest is expected to achieve higher revenues in 2023 when compared to the previous year, but the profit before tax is expected at around €1.4 million, which would be around 32% lower than the pre-tax profits of €2.06 million generated in 2022.