Concurrent Technologies (LON:CNC)

CONCURRENT TECHNOLOGIES PLC (CNC.LN) was established in 1985, briefly traded on the OTC market and joined AIM in 1996. The PLC designs and develops a range of high-performance processor boards (Intel based chips), switches, networking, storage and software products for use in embedded and for long life boards. The PLC has a market cap of £54m (£10m of cash, no debt), profitable and has a good dividend record. The PLC last raised funds in 1998. Cenkos is the broker.

HQ is in Colchester with sale support also in Boston, America and Beijing (plus an office in India). The electronic board are made in Colchester being of the highest level of inspection standards for long life cycle (7-10 years) and provide reliable, mission critical functions. The boards are used by many of the world’s leading integrators within the Defence (computers in tanks), Security, Aerospace, Telecommunications, Transportation, Medical and Industrial markets and are designed to be operated in a range of extreme temperatures and environments. The customers are blue chip with long relationships (design, manufacturing to product storage and necessary upgrades). The boards cost between £1800 and £5000 each and either sold direct or via a distributor with orders bespoke.

The MD is Jane Annear ,as Glen Fawcett, the founder & CEO of CNC unexpectantly dies in May. Key man insurance of £1m has been paid out. The interim results were in September and a year end update is due in January, ahead of finals in early April. The investor meeting was a first for Jane as she explained the ‘re arranging of skills’ going on by her, especially the hiring of two key people, a CTO and a well-connected director of sales, ex RAF. General plans for future growth were also discussed.

The PLC revenues in 2018 were £16.6m. The 1H19 (to 30/6) was £9.5m, up 20%. Interim EBITDA was £3.6m, PBT £1.7m (ex £1m key man insurance), adjusted EPS 2.21p (up 107%), dividend 1.05p and no debt with cash of £10m. Total assets were £27m. The FY19 revenue estimate are £17.8m, FY20 is £18.2m with PBT £4m (with £1m added because of the keyman insurance) and £3.2m respectively (no insurance pay-out). 2020 profits will benefit from a current end of life ‘exceptional’ order backlog. 2017 PBT was £3m. Exports were 90% of 1H revenues with defence customers responsible…

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