Harvest Technology plc recorded €819,910 in pre-tax profit during 2023, a significant drop of 60.3 per cent from the previous year’s figure (2022: €2.1 million), largely a result of delays in contracts and provision charges incurred due to unsuccessful projects.
This was announced in the Malta-based group of technology-based companies’ Annual Report and consolidated financial statements for the financial year ended 31st December 2023, released on Thursday.
Harvest Technology delivers systems and software engineering, security solutions and services, e-commerce platforms, electronic payments solutions, and a number of other services.
During 2023, Harvest Technology registered €14.6 million in revenue, a drop in performance from that of 2022, when the group had brought in €16.3 million. This decrease is mainly attributed to a decline in the sale of goods, with this going down from €6.4 million in 2022, to €4.7 million in 2023.
However, the group managed to also decrease its cost of sales, with this experiencing a sharp 15.4 per cent drop to €8.5 million (2022: €10 million).
The decline in performance is largely a result of two key factors. Firstly, during the year, the group experienced a delay in certain contracts that were expected to be awarded in 2023. These contracts were eventually awarded in 2024, and hence are not accounted for in these financial results.
In addition to this, the group also incurred a provision charge of €534,473 for an unsuccessful project by its subsidiary Apco Limited. During 2022, Apco Limited was awarded a contract through a tender process, and a sub-contractor that was chosen by the company at tender stage for the implementation of the complete solution, failed to deliver the final user acceptance testing requirements set out in the initial contract. As a result, Apco Limited is now seeking to recover all dues in relation to this through appropriate legal channels, Harvest Technology stated.
When considering these factors, together with €5.4 million in total administrative expenses, operating profit for 2023 amounted to €837,947 (2022: €2.1 million).
Finance income for the year came in at €17,561, while finance costs totalled €35,598.
These figures led to a pre-tax profit of €819,910 being registered. Harvest Technology stated that had the aforementioned project been delivered as planned, its pre-tax profit would have been €1.3 million, in line with its targets for the year.
However, Harvest Technology also acknowledged that September 2023 also saw it reach a significant milestone, with one of its subsidiaries Apcopay Limited, launching its payment orchestration platform, Synthesis. During 2023, Apcopay processed €1 billion in payments, 51 per cent more than it did in 2022.
Total assets as at the end of 2023 amounted to €20.6 million, contracting slightly from the €21.2 million reported in the previous year.
In the report, the Board of Directors announced that it has resolved to distribute a final net dividend of €113,906, equivalent to €0.005 per share. All shareholders included in the shareholders’ register of the company as at 26th April 2024 shall be entitled to receive their respective share, with payment set to be made on or around 10th May 2024.
Commenting on the results, Chairman Keith Busuttil acknowledged the challenges posed by macroeconomic headwinds and the delays of key contracts, yet also pointed towards the launch of Synthesis as a significant milestone for the group.
“During the year, the Board embarked on a restructuring plan to focus more management resources and responsibilities at the subsidiary level. These changes were necessary to expand the range and quality of our services, but also to ensure successful completion of new projects and business development,” he added. Mr Busuttil said that this approach allowed Harvest Technology’s Board of Directors to “get closer” to the operations of the subsidiaries as they “continued to develop new growth initiatives.”
He also expressed his satisfaction at the strong growth momentum that Apcopay and its newly-launched Synthesis experienced during the year. Mr Busuttil also acknowledged that Apco Limited experienced “another year of transition as it evolves and broadens its product offering,” while PTL continued to focus on expanding its service offering both locally and internationally.
“In conclusion, 2023 was another year of considerable change and we expect further changes in 2024 as we continue to position the businesses to develop new growth opportunities in an ever-changing technology landscape,” Mr Busuttil affirmed, before thanking the Board of Directors for its “continuous contribution and support” throughout the year.
In addition to its report, Harvest Technology also provided a number of key updates that it plans to take on in 2024.
It said that Apcopay has reported a strong start to 2024, with processed volumes averaging approximately €100 million per month in the first quarter. Throughout the year, Apcopay intends to focus on migrating existing customers to the aforementioned Synthesis platform, while also onboarding new clients.
Within the retail and IT segment, a number of contracts were awarded in 2024’s first quarter, with these expected to be delivered over the course of the year. PTL Limited is actively participating in several tenders, both in Malta and in Mauritius. Simultaneously, Apco Limited is developing its product portfolio through new partnerships in adjacent sectors within the IT infrastructure space.
Harvest Technology remarked that during 2024, the Board of Directors expects a number of other changes within the group as it “continues to develop its diverse businesses in the continuously evolving technology landscape, with a view to creating sustainable value for the company’s shareholders.”
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