Harvest Technology’s team persevered amid ‘adversities’ in 2022, says CEO Peter Ekmark

Harvest Technology plc CEO Peter Ekmark on Thursday stated that the technology solutions group’s team worked through a number of “adversities” both on macroeconomic and microeconomic levels during 2022.

His comments came after the publication of the group’s audited financial statements for 2022, which saw it register €2.1 million in pre-tax profit, nearly half of the previous year’s €4 million. This came despite it registering €16.3 million in revenue, representing a 3.4 per cent rise from the previous year’s €15.7 million. On the other hand, Harvest Technology’s cost of sales surged by 28.4 per cent up to €10 million (2021: €7.8), while administrative expenses also increased from €4 million to €4.2 million.

The group’s total assets contracted to €21.2 million (2021: €22.6 million), while total equity marginally expanded by 1.5 per cent to €13.6 million. Its Board of Directors announced that it resolved to distribute a dividend of €113,903, equivalent to €0.005 per share, resulting in an aggregate net dividend for 2022 of €797,322, equivalent to €0.035 per share. Shareholders on the company’s register as at 24th April 2023 shall be entitled to receive their respective share of the dividend, and payment will be made on or around 5th May 2023.

The group’s drop in performance was anticipated at the end of 2022, with it attributing the “decline” to challenges that Harvest Technology and its subsidiaries faced during the year, including regulatory changes, the war in Ukraine, supply chain issues, and rising inflation. This was also not aided by changes in the regulation of online gaming across various jurisdictions, which have had a negative impact on its payment processing services segment, Apco Limited. Additionally, Apco Limited and another subsidiary, PTL Limited, were particularly affected by “delays in the awards of several multi-million Euro contracts” over the second half of 2022, which were initially expected to start last year, yet will instead commence in 2023.

Also commenting on the performance, Harvest Technology Chairman Keith Busuttil remarked that 2022 was “challenging both on a macro and micro level”. He stated that the group managed to remain profitable despite facing “new global headwinds”, business challenges for ApcoPay and management changes that included the appointment of Mr Ekmark as CEO.

He explained that such management changes were “necessary to expand the range and quality” of the group’s services, as well as to “ensure business continuity” and develop its internationalisation strategy.

Mr Busuttil added that payment gateway ApcoPay is currently undergoing “significant investment” to upgrade its system to a cloud-based one that will allow the business to “scale significantly, but more importantly, offer new features and products which are required by clients particularly in the iGaming sector”. However, he also acknowledged that this is a “highly demanding” task as it requires Harvest Technology to maintain two payment gateways in parallel temporarily, which requires “additional labour resources and operating costs”. It is set to be operation in the second half of 2023 once all existing clients and independent certifications are migrated.

He also stated that Apco’s key investment is currently in new products and services in electrical vehicle (EV) and unmanned aerial vehicle (UAV) markets, where it has already been awarded contracts “in excess of €1 million”.

“Our key goal is to create sustainable value for our shareholders by diversifying the product offerings and improving operational efficiency to meet the ongoing market challenges. We remain committed to leveraging our strengths and driving long-term growth in the rapidly changing technology sector,” he concluded.

Mr Ekmark noted that his contribution to past year’s performance was “minimal” given he only joined last October, and therefore stated that the people at Harvest Technology and its subsidiaries deserve “full credit” for it.

“Notwithstanding the continued adversities faced by the group during 2022, it is worth recognising that the team at Harvest Technology persevered and pushed to deliver value to our customers and tangible results to the group,” he explained.

He said that Apco Systems’ transaction value processed by the payment gateway decreased “marginally” over 2022, primarily due to the aforementioned increase in “regulatory scrutiny and additional licensing requirements” in the online gaming sector. Mr Ekmark also acknowledged that the company benefitted from an “extraordinary revenue spike in e-commerce” during 2021, mainly because of the COVID-19 pandemic, an instance which did not recur in 2022.

Additionally, the group established a new subsidiary in Greece during 2022, ApcoPay Greece S.A., in order to offer payment gateway services there.

“We also assembled a team of sales representatives who worked to expand our market presence in Greece. Despite these efforts, we did not achieve significant turnover. We still believe that there are opportunities to exploit, and we are currently reassessing our strategy for the Greece initiative to determine the best way forward,” Mr Ekmark explained.

He also made reference to a project that PTL was awarded late in 2021 by the Ministry of Finance, Economic Planning and Development in Mauritius, which is has progressed “positively” during 2022, and is expected to be completed in 2023. This was coupled with the company establishing a new subsidiary in Mauritius, PTLtech (Mauritius) Limited, “with the aim of further expanding its presence on the African continent” after the “successful” implementation of previous projects.

Mr Ekmark stated that “expanding into new areas and increasing revenue streams” remain the “key priorities” for Harvest Technology. He concluded that its financial stability also positions it “strongly for potential investments”, and the Board of Directors is “actively assessing acquisitions” to support its international growth.

Harvest Technology is a highly diversified group of technology-based companies that deliver systems and software engineering, security solutions and services, e-commerce platforms, electronic payment solutions, and a number of other services. It is comprised of PTL Ltd, Apco Ltd, Apco Systems Ltd, Ipsyon Ltd, and also has a minority investment in Thought3D Ltd.