REG - Concurrent Tech. - Interim Results

Concurrent TechnologiesAnnouncement

10/09/2019 07:05

RNS Number : 7247L
Concurrent Technologies PLC
10 September 2019
 


This announcement contains inside information
10 September 2019
Concurrent Technologies Plc
(the "Company" or the "Group")
 
Interim Results for the six months ended 30 June 2019
 
Concurrent Technologies Plc (AIM: CNC), a world leading specialist in the design and manufacture of high-end embedded computer boards for critical applications, announces interim results for the six months to 30 June 2019, reflecting a positive trading period with strong sales, profit before tax and investment.
 
Financial Highlights

 
·    Turnover of £9.5m (H1 2018: £7.9m)
·    Gross profit of £4.9m (H1 2018: £4.1m)
·    Gross margin of 51.7% (H1 2018: 51.7%)
·    Group operating profit of £1.6m (H1 2018: £1.1m)
·    Profit before tax of £2.7m (H1 2018: £1.1m) - including other, non-recurring income of £1.0m
·    EPS of 3.31 pence (H1 2018: 1.50 pence)
·    Adjusted EPS on continuing activities of 2.21 pence (H1 2018: 1.50 pence)*
·    Interim dividend increased to 1.05p per share (H1 2018: 0.95p)
·    Cash balance (including cash deposits) at 30 June 2019 of £10.0m (H1 2018: £7.8m)
*      Adjusted results are prepared to provide a more comparable indication of the Group's core business performance by removing the impact of certain items including exceptional items (material and non-recurring).
 
Operational Highlights
 
·    Sales increased across all sectors, with defence still the largest individual sector, accounting for 58% of Group turnover during the period  
·    Increased order intake resulting in record order book
·    Global customer base continues to expand with exports generating 90% of Group revenues (H1 2018: 88%)
·    Investment in R&D during the period increased to £1.4m (H1 2018: £1.2m)
·    Committed to further investment in UK manufacturing facility
·    Two additional senior managers appointed to expand skills and experience
 
Michael Collins, Chairman of Concurrent Technologies Plc, commented: "The operational performance during the first half of the year has been strong with excellent sales, good cost control and successful recruitment into the senior management team."
 
"Whilst the turnover of the first half may not reach the same level in the second half, the increased order intake has resulted in a new record order book, the majority of which is expected to ship within the next 12 months. As such, the Board is confident that the Company will deliver a successful performance for the full financial year."
 
Enquiries:




Concurrent Technologies Plc

Jane Annear, Managing Director


 
+44 (0)1206 752626




 


 




Newgate (Financial PR)

Bob Huxford
Fiona Norman


 
+44 (0)20 7653 9848

+44 (0)20 3757 6885




 


 




Cenkos Securities Plc (NOMAD)

Neil McDonald
Peter Lynch




+44 (0)131 220 9771
+44 (0)131 220 9772




 
 
About Concurrent Technologies Plc
 
Concurrent Technologies Plc develops and manufactures high-end embedded computer products for use in a wide range of high performance, long life cycle applications within the telecommunications, defence, security, telemetry, scientific and aerospace markets, including applications within extremely harsh environments. The processor products feature Intel® processors, including the latest 9th generation Intel® Core™ processors, Intel® Xeon® and Intel® Atom™ processors. The products are designed to be compliant with industry specifications and support many of today's leading embedded Operating Systems. The products are sold world-wide.
 
For more information on Concurrent Technologies Plc and its products please visit www.gocct.com.
 
All trademarks, registered trademarks and trade names used in this announcement are the property of their respective owners.
 
 
CHAIRMAN'S STATEMENT
The first half of 2019 has been a sad one for Concurrent, with the unexpected and sudden death of its MD, Glen Fawcett. Glen helped start the Company in the 1980's and worked tirelessly to build it into the vibrant and exciting company it is today. He is, and will be, greatly missed both professionally and personally.
 
Jane Annear was confirmed as Managing Director in May, having previously held the position of Commercial Director. Jane's appointment provides the Company with continuity and stability and she is already overseeing the introduction of new skills through the recruitment of additional senior personnel to broaden the management team.
 
Financial Summary
 
In respect of trading, the first half of 2019 has been extremely positive with strong sales, profit before tax and investment in the first six months of the year.
 
Revenue for the period was £9.5m (H1 2018: £7.9m), gross margin remained consistently high at 51.7% (H1 2018: 51.7%) and gross profit was £4.9m (H1 2018: £4.1m). The unaudited profit before tax (PBT) for the period was £2.7m (H1 2018: £1.1m), with associated earnings per share (EPS) of 3.31 pence (H1 2018: 1.50 pence). These PBT and EPS figures include non-recurring receipts of £1m; adjusting for this, the H1 2019 PBT of the continuing operations is £1.7m with an associated EPS of 2.21 pence.
 
The Group's balance sheet remains strong, with cash balances (including cash deposits) at 30 June 2019 of £10.0m (H1 2018: £7.8m). These balances have been enhanced by the proceeds of a key man insurance policy. Total equity increased to £21.5m (H1 2018: £19.1m).
 
Dividend
 
The Board has declared a first interim dividend of 1.05p per share (H1 2018: 0.95p) - an increase of 10.5%. The total cost of this dividend will amount to £763,544. The ex-dividend date for this interim dividend is 26 September 2019, the record date is 27 September 2019 and the payment date is 11 October 2019.
 
Review of Operations
 
The operational performance during the first half of the year has been strong, with excellent sales, good cost control and successful recruitment into the senior management team.
 
The Group has seen sales increase in all market sectors during 2019, with the defence sector remaining our largest individual market and revenue generator, accounting for 58% of all sales revenues so far in 2019.  Our telecommunications revenue has also been buoyant with an increase of over a third from H1 2018. It should be noted that the Group has benefited from some non-recurring sales programmes which have boosted the half-yearly sales revenue.
 
Several hardware and software product announcements have been made during 2019 and the development of new products and services remains a key focus of the management team. To further drive this expanding pipeline of new products the Group invested £1.4m in R&D during the first half of the year (H1 2018: £1.2m).
 
A Chief Technology Officer (CTO) has been recruited with the remit to develop and widen the Group's product range by introducing new technologies, some of which are targeted for applications such as Artificial Intelligence (AI) and Deep Learning. The CTO works closely with our existing engineering teams based in the UK and overseas.
 
Additionally, a Director of Sales has joined the management team with responsibility for all sales outside of North America. This key appointment brings particular knowledge of software and solution sales within the Defence market sectors, building on our existing expertise of hardware products. 
 
These new additions to the management team bring a wealth of industry experience and will help position the Company to take advantage of the opportunities in the marketplace.  
 
The Company still awaits details of the trade and tariff regime which will apply if the UK leaves the European Union (EU). The Company has long established exporting procedures and systems in place for our sales to Asia and North America, and we expect to apply the same processes for sales into the EU if necessary. Current World Trade Organisation (WTO) rules apply a zero-tariff rating to most of the items we buy and sell and our current assessment has concluded that, while there may be limited logistical disruption following the UK's departure and some negative sentiment directed towards the UK, leaving the EU should have little lasting impact on our trading.
 
Future Plans
 
Our engineering teams will continue to develop new hardware designs based on Intel processors in addition to developing complementary products to enhance the overall capabilities and functionality of our current range. Work is also continuing on the development of AI compatible rugged solutions, for which marketing is already underway. In addition, we will continue to increase our support for firmware and software products to facilitate the use of our hardware. This strategy is expected to particularly benefit users of our VPX and MicroTCA ranges which are increasingly sold as system level solutions.
Support for our ranges of VME and CPCI product lines will continue, through long term manufacturing of established products and the development of new boards to provide suitable upgrade paths for both new and existing customers.
 
As part of the continual improvement to operations and manufacturing, we have ordered a new Automatic Optical Inspection machine with enhanced 3D inspection and Foreign Object Debris (FOD) detection capability and a new high speed component surface mount machine. This additional equipment will complement the upgrade to the main production line which was introduced in 2018. These new machines are expected to be installed before the end of 2019, providing improved capabilities and increased capacity, as well as further future-proofing the Group's manufacturing facilities in the UK.
 
Outlook
The recruitment of additional senior personnel has enhanced the management team and introduced new skills and experience which will benefit the Group going forward. Whilst the turnover of the first half may not reach the same level in the second half, the increased order intake has resulted in a new record order book, the majority of which is expected to ship within the next 12 months. As such, the Board is confident that the Company will deliver a successful performance for the full financial year.
 
Michael Collins
Chairman
9 September 2019
 
All companies and product names are trademarks of their respective organisations.
 
 
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Unaudited interim results to 30 June 2019
 




 


Note


Six months ended
30/06/19


 


Six months ended
30/06/18


 


Year ended 31/12/18




 


 


£


 


£


 


£




CONTINUING OPERATIONS


 


 


 


 


 


 




Revenue


 


    9,539,922


 


    7,879,517


 


  16,624,151




Cost of sales


 


    4,608,129


 


    3,802,942


 


    7,950,636




Gross profit


 


    4,931,793


 


    4,076,575


 


    8,673,515




Net operating expenses


 


    3,313,078


 


    3,020,677


 


    5,788,094




Group operating profit


 


    1,618,715


 


    1,055,898


 


    2,885,421




Other Income


5


    1,000,000


 


                  -


 


                  -




Finance income


 


         38,082


 


         37,101


 


         88,326




Profit before tax


 


    2,656,797


 


    1,092,999


 


    2,973,747




Tax


 


       248,898


 


           3,630


 


           5,886




Profit for the period


 


    2,407,899


 


    1,089,369


 


    2,967,861




 


 


 


 


 


 


 




Other Comprehensive Income


 


 


 


 


 


 




Exchange differences on translating foreign operations


 


         16,596


 


       244,712


 


         43,903 




Tax relating to components of other comprehensive income


 


                  -


 


                  -


 


                  -




Other Comprehensive Income for the period, net of tax


 


         16,596


 


       244,712


 


         43,903




Total Comprehensive Income for the period


 


    2,424,495


 


    1,334,081


 


    3,011,764




 


 


 


 


 


 


 




Profit for the period attributable to:


 


 


 


 


 


 




Equity holders of the parent


 


    2,407,899


 


    1,089,369


 


    2,967,861




 


 


 


 


 


 


 




Total Comprehensive Income attributable to:


 


 


 


 


 


 




Equity holders of the parent


 


    2,424,495


 


    1,334,081


 


    3,011,764




 


 


 


 


 


 


 




Earnings per share


 


 


 


 


 


 




Basic earnings per share


4


3.31p


 


1.50p


 


4.08p




 


 


 


 


 


 


 




Diluted earnings per share


4


3.31p


 


1.50p


 


4.08p




 
 
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited interim results to 30 June 2019
 




 


 


As at


 


As at


 


As at




 


 


30/06/19


 


30/06/18


 


31/12/18




ASSETS


 


£


 


£


 


£




Non-current assets


 


 


 


 


 


 




Property, plant and equipment


 


       672,988


 


       449,860


 


       704,969




Intangible assets


 


    8,089,260


 


    7,801,410


 


    7,990,759




Deferred tax assets


 


       140,984


 


       178,299


 


       120,385




 


 


    8,903,232


 


    8,429,569


 


    8,816,113




Current assets


 


 


 


 


 


 




Inventories


 


    4,913,969


 


    3,759,675


 


    4,096,576




Trade and other receivables


 


    2,907,389


 


    3,445,776


 


    3,352,581




Current tax assets


 


       101,621


 


       434,576


 


       316,428




Other financial assets


 


       999,315


 


 3,410,970  


 


                -  




Cash and cash equivalents


 


    9,031,044


 


    4,434,291


 


    7,679,352




 


 


  17,953,338


 


  15,485,288


 


  15,444,937




 


 


 


 


 


 


 




Total assets


 


  26,856,570


 


  23,914,857


 


  24,261,050




 


 


 


 


 


 


 




LIABILITIES


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 




Deferred tax liabilities


 


    1,457,296


 


    1,553,918


 


    1,448,012




Long term provisions


 


         14,794


 


           3,059


 


           8,183




 


 


    1,472,090


 


    1,556,977


 


    1,456,195




Current liabilities


 


 


 


 


 


 




Trade and other payables


 


    3,827,836


 


    3,258,958


 


    2,802,852




Short term provisions


 


         15,170


 


         21,410


 


           8,688




Current tax liabilities


 


         14,588


 


         25,211


 


                -  




 


 


    3,857,594


 


    3,305,579


 


    2,811,540




 


 


 


 


 


 


 




Total liabilities


 


    5,329,684


 


    4,862,556


 


    4,267,735




 


 


 


 


 


 


 




Net assets


 


  21,526,886


 


  19,052,301


 


  19,993,315




 


 


 


 


 


 


 




EQUITY


 


 


 


 


 


 




Capital and reserves


 


 


 


 


 


 




Share capital


 


       739,000


 


       739,000


 


       739,000




Share premium account


 


    3,699,105


 


    3,699,105


 


    3,699,105




Capital redemption reserve


 


       256,976


 


       256,976


 


       256,976




Cumulative translation reserve


 


       365,956


 


       550,169


 


       349,360




Profit and loss account


 


  16,465,849


 


  13,807,051


 


  14,948,874




Equity attributable to equity holders of the parent


 


  21,526,886


 


  19,052,301


 


  19,993,315




 


 


 


 


 


 


 




Total equity


 


  21,526,886


 


  19,052,301


 


  19,993,315




 
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited interim results to 30 June 2019
 




 


 


Six months ended
30/06/19


 


Six months ended
30/06/18


 


Year ended 31/12/18




 


 


£


 


£


 


£




Cash flows from operating activities


 


 


 


 


 


 




Profit before tax for the period


 


    2,656,797


 


    1,092,999


 


    2,973,747




Adjustments for:


           


 


 


 


 


 




Finance income       


 


        (38,082)


 


        (37,101)


 


        (88,326)




Depreciation       


 


       108,085


 


       103,174


 


       219,455




Amortisation       


 


       909,491


 


       756,545


 


    1,542,749




Impairment loss       


 


       350,000


 


         63,223


 


       303,030




Loss on disposal of property, plant and equipment


 


                -  


 


                -  


 


          (1,000)




Share-based payment       


 


         82,421


 


        (77,595)


 


        (77,595)




Exchange differences       


 


         20,619


 


       202,262


 


         56,016   




(Increase)/decrease in inventories       


 


      (817,393)


 


      (536,875)


 


      (873,776)




(Increase)/decrease in trade and other receivables       


 


       445,192


 


      (708,092)


 


      (612,246)




Increase/(decrease) in trade and other payables       


 


    1,038,077


 


       761,192


 


       466,383




Cash generated from operations


 


    4,755,207


 


    1,619,732


 


    3,908,437




Tax received/(paid)


 


       (27,415)


 


         (8,851)


 


     (183,524)




Net cash generated from operating activities


 


    4,727,792


 


    1,610,881


 


    3,724,913




 


 


 


 


 


 


 




Cash flows from investing activities


 


 


 


 


 


 




Interest received


 


        38,082


 


        37,101


 


         88,326




Cash released from/(placed on) deposit


 


     (999,315)


 


     (909,131)


 


    2,502,281 




Purchases of property, plant and equipment


 


       (75,403)


 


       (72,930)


 


      (442,280)




Proceeds from sale of property, plant and equipment


 


                -  


 


                -  


 


           1,000 




Purchases of intangible assets


 


  (1,357,983)


 


  (1,223,668)


 


   (2,438,917)




Net cash used in investing activities


 


  (2,394,619)


 


  (2,168,628)


 


      (289,590)




 


 


 


 


 


 


 




Cash flows from financing activities


 


 


 


 


 


 




Equity dividends paid


 


     (981.698)


 


     (945,339)


 


   (1,636,163)




Sale of treasury shares


 


    4,950


 


                 -  


 


                 -




Net cash used in financing activities


 


     (976,748)


 


     (945,339)


 


   (1,636,163)




 


 


 


 


 


 


 




Effects of exchange rate changes on cash and cash equivalents


 


         (4,733)


 


         10,674


 


        (12,112)




 


 


 


 


 


 


 




Net increase/(decrease) in cash


 


    1,351,692


 


   (1,458,013)


 


    1,787,048 




Cash at beginning of period


 


    7,679,352


 


    5,892,304


 


    5,892,304




Cash at the end of the period


 


    9,031,044


 


    4,434,291


 


    7,679,352




 


 


 


 


 


 


 




 
 
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited interim results to 30 June 2019
 




 


Share
capital


Share
Premium


Capital
redemption
reserve


Cumulative
translation
reserve


Profit
and loss
account


Total
equity




 


£


£


£


£


£


£




 


 


 


 


 


 


 




Balance at 1 January 2018


739,000


3,699,105


256,976


305,457


13,715,512


18,716,050




 


 


 


 


 


 


 




Profit for the period


-  


-  


-  


-  


1,089,369


1,089,369




Exchange differences on translating foreign operations


-  


-  


-  


244,712


-  


244,712




Total recognised comprehensive income for the period


-  


-  


-  


244,712


1,089,369


1,334,081




 


 


 


 


 


 


 




Share-based payment


-  


-  


-  


-  


(77,595)


(77,595)




Deferred tax on share-based payment


-  


-  


-  


-  


25,104


25,104




Dividends paid


-  


-  


-  


-  


(945,339)


(945,339)




Sale of treasury shares


-  


-  


-  


-  


- 


- 




Balance at 30 June 2018


739,000


3,699,105


256,976


550,169


13,807,051


19,052,301




 


 


 


 


 


 


 




Profit for the period


-  


-  


-  


-  


1,878,492


1,878,492




Exchange differences on translating foreign operations


-  


-  


-  


(200,809)


-  


(200,809)




Total recognised comprehensive income for the period


-  


-  


-  


(200,809)


1,878,492


1,677,683




 


 


 


 


 


 


 




Share-based payment


-  


-  


-  


-  


-  


-  




Deferred tax on share-based payment


-  


-  


-  


-  


(45,845)


(45,845)




Dividends paid


-  


-  


-  


-  


(690,824)


(690,824)




Sale of treasury shares


-  


-  


-  


-  


- 


- 




Balance at 31 December 2018


739,000


3,699,105


256,976


349,360


14,948,874


19,993,315




 


 


 


 


 


 


 




Profit for the period


-  


-  


-  


-  


2,407,899


2,407,899




Exchange differences on translating foreign operations


-  


-  


-  


16,596


-  


16,596




Total recognised comprehensive income for the period


-  


-  


-  


16,596


2,407,899


2,424,495




 


 


 


 


 


 


 




Share-based payment


-  


-  


-  


-  


82,421


82,421




Deferred tax on share-based payment


-  


-  


-  


-  


3,403


3,403




Dividends paid


-  


-  


-  


-  


(981,698)


(981,698)




Sale of treasury shares


-  


-  


-  


-  


4,950


4,950




Balance at 30 June 2019


739,000


3,699,105


256,976


365,956


16,465,849


21,526,886




 
 
NOTES TO THE INTERIM REPORT
 




1.


General information
 




 


The principal activity of Concurrent Technologies Plc and its subsidiaries ("the Group") is the design, development, manufacture and marketing of single board computers for system integrators and original equipment manufacturers.
 
Concurrent Technologies Plc ("the Company") is the Group's ultimate parent company.  It is incorporated and domiciled in Great Britain. Concurrent Technologies Plc shares are listed on the Alternative Investment Market of the London Stock Exchange.
 
The Group's condensed consolidated interim financial statements are presented in pounds sterling (£), which is also the functional currency of the parent company.
 
These condensed consolidated interim financial statements, which are unaudited, have been approved for issue by the Board of Directors on 9 September, 2019.
 
The information relating to the six months ended 30 June 2019 and 30 June 2018 is unaudited and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2018, prepared in accordance with IFRSs (International Financial Reporting Standards) as adopted by the European Union, have been reported on by the Group's auditors and delivered to the Registrar of Companies. The auditors' report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.
 




2.


Summary of significant accounting policies
 




2.1


Basis of preparation
 




 


These condensed consolidated interim financial statements are for the six months ended 30 June 2019. They have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2018, which have been prepared in accordance with adopted IFRSs.
 
The accounting policies applied and methods of computation are consistent with those of the annual financial statements for the year ended 31 December 2018, as described in those financial statements. The accounting policies have been consistently applied to all the periods presented.
 
There are no new IFRSs or IFRIC interpretations that are effective for the first time for the financial period beginning on or after 1 January 2019 that would be expected to have a material impact on the results or financial position of the Group.
 
 




2.2


Going Concern
 




 


The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, a period of not less than 12 months from the date of this report. Accordingly, they continue to adopt the going concern basis in preparing these condensed financial statements.
 




2.3


Taxation
 




 


Current tax expense is recognised in these condensed consolidated interim financial statements based on estimated effective tax rates for the full year.
 




3.


Segmental reporting
 




 


The Directors consider that the Group is engaged in a single segment of business, being design, manufacture and supply of high-end embedded computer products, and that therefore the Company has only a single operating segment. The key measure of performance used by the Board to assess the Group's performance is the Group's profit before tax, as calculated under IFRS, and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained in the condensed consolidated interim financial statements.




 




4.


Earnings per share
 




 


Basic earnings per share is calculated by dividing the profit attributable to ordinary equity holders for the period by the weighted average number of ordinary shares outstanding during the period.
 
Diluted earnings per share is calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all contracted dilutive potential ordinary shares. The Company only has one category of dilutive potential ordinary shares, namely share options.
 
The inputs to the earnings per share calculation are shown below:
 




 


 


 
 


Six months ended
30/06/19


 


Six months ended
30/06/18


 


Year ended 31/12/18




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




 


Profit attributable to ordinary equity holders


 


2,407,899


 


1,089,369


 


2,967,891




 


 


 


 


 


 


 


 




 


 


 


Six months ended
30/06/19


 


Six months ended
30/06/18


 


Year ended 31/12/18




 


 


 


No


 


No


 


No




 


Weighted average number of ordinary
shares for basic earnings per share


 


72,728,490


 


72,718,490


 


72,718,490




 


Adjustment for share options


 


-


 


2,457


 


2,457




 


Weighted average number of ordinary  shares for diluted earnings per share


 


72,728,490


 


72,720,947


 


72,720,947




 


 
 


 


 


 


 


 


 




5.
 
 


Other Income
 
Other income relates exclusively to a claim made against a key man insurance policy. The receipt during the period is a non-recurring item and represents full and final settlement of the claim.
 
 




6.


Post reporting date events
 
There were no material events subsequent to the end of the interim reporting period that have
not been reflected in these condensed interim financial statements.




 


 




7.


Shareholder Communication


A copy of these condensed interim financial statements is available from the Company's Registered Office at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, UK and from the Company's website at www.gocct.com.




 




This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR UKUNRKSAKRAR