REG - Concurrent Tech. - Interim Results

Concurrent TechnologiesAnnouncement

07/09/2021 07:00

RNS Number : 9051K
  
Concurrent Technologies PLC
  
07 September 2021
  
 

7 September 2021
Concurrent Technologies Plc
(the "Company" or the "Group")
 
Interim Results for the six months ended 30 June 2021
 
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 2021, reflecting a positive trading period with strong sales, profit before tax and investment.
 
Financial Highlights



·    Revenue of £9.3m (H1 2020: £9.2m)
·    Gross profit of £5.1m (H1 2020: £4.9m)
·    Gross margin of 54.3% (H1 2020: 52.9%)
·    Group operating profit of £1.6m (H1 2020: £1.2m)
·    Profit before tax of £1.5m (H1 2020: £1.2m) 
·    EPS of 2.09 pence (H1 2020: 1.62 pence)
·    Interim dividend increased to 1.15p per share (H1 2020: 1.10p)
·    Cash balance (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m)
 
Operational Highlights
 
·    Largest market sector is defence at 71% of revenue  
·    Record order book achieved during the period of £15.9m (H1 2020: £13.9m)
·    Global customer base remains solid with exports generating 91% of revenue (H1 2020: 96%)
·    R&D cost during the period was £1.6m (H1 2020: £1.8m) 
·    Component shortages being managed, although challenges remain across the global supply chain
 
Mark Cubitt, Chairman of Concurrent Technologies Plc, commented: "Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet, and a record order book ensuring the pipeline of future profitability. There remains uncertainty on the timing of some shipments in Q4 2021 and into 2022, driven by component availability, which may slip revenues into 2022 but there is no evidence yet of cancellations from customers. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability."
 
Enquiries:



Concurrent Technologies Plc
 Dr Miles Adcock, Chief Executive
Jonathan Martin, CFO


 
+44 (0)1206 752626




 


 




SEC Newgate (Financial PR)
 Bob Huxford
Isabelle Smurfit


 
+44 (0)20 7653 9848
+44 (0)20 3757 3411




 


 




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 11th generation embedded Intel® Core™, 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
I am pleased to announce the trading performance has continued on from the strong results reported for 2020, with solid sales in the first half of 2021 and a growing order book, despite the challenging worldwide supply chain disruption.
The end of the first half also saw the beginning of the smooth transition from Jane Annear to Miles Adcock as CEO. Jane has been extremely helpful and supportive during this period which typifies the commitment, professionalism and drive, that she demonstrated throughout her career with Concurrent and which has brought the Company to its current strong position.
It is with great sadness that I learnt Clive Mannering-Thomson had passed away in August after a brief illness. Clive was a long serving member of the Concurrent Board and true gentleman and our thoughts are with his family and friends at this difficult time.
CHIEF EXECUTIVE'S REVIEW
 
Financial Summary
 
The Company continued to trade and operate in a largely normal fashion during the first half of 2021 with production, sales and development maintained at typical operational levels. Revenue for the period was similar at £9.3m (H1 2020: £9.2m) while gross margin increased to 54.3% (H1 2020: 52.9%).  Consequently, gross profit increased to £5.1m (H1 2020: £4.9m). The unaudited profit before tax (PBT) for the period was £1.6m (H1 2020: £1.2m). The associated earnings per share (EPS) were 2.09 p (H1 2020: 1.62p).
The balance sheet remains very strong, with no debt and cash balances (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m).
Dividend
 
Given the strong cash position and the robust balance sheet, the Board has declared an interim dividend of 1.15p per share (H1 2020: 1.10p) - an increase of 4.5%. The total cost of this dividend will amount to £843,680. The ex-dividend date for this interim dividend is 16 September 2021, the record date is 17 September 2021 and the payment date is 1 October 2021.
Review of Operations
 
As an essential defence supplier, production at the Company's Colchester headquarters continued uninterrupted during each lockdown period and the Company has not applied for support under any Government COVID-19 initiatives. Our preparations for Brexit led to minimal impact on the business and no impact on sales to our customers.
The unprecedented worldwide supply chain shortages are a major risk to all companies and Concurrent is no exception. During 2021 we have so far managed the disruption and protected the supply of goods to our customers, but the situation is deteriorating and is expected to last well into 2022. This may lead to some revenue slipping from 2021 to 2022 but to date we have seen no evidence of program or platform cancellations from our customers. Rather, we have seen growing support from our customer base, leading to a record order book of £15.9m at the period end.
Sales within the defence market increased to £6.6m (H1 2020: £6.3m) representing 71% (H1 2020: 68%) of revenue and exports were 91% (H1 2020: 96%). While defence is still our primary target market, we do see myriad opportunities in the telecoms and other sectors which are being pursued with vigour.
During 2021 we have also seen the final closure of the Concurrent office in India as planned and the subsequent expansion and re-alignment of engineering capabilities in the UK. This has resulted in an overall decrease in R&D spend in H1 2021 to £1.6m (H1 2020: £1.8m) as expected, and this reduction has not had a detrimental impact on output from the function. 
 
Through extensive co-operation, development and testing work Intel have elevated us to Titanium partner status thus strengthening our ties with our leading technology supplier. Launches and deployment of the new 3U CompactPCI and AMC boards has continued, along with the development of our software products.
 
Future Plans
 
The current leadership team is being revitalised with the introduction of an HR Director and a Quality & Business Improvement Director. Recruitment for these positions will be completed during the second half of the year. Along with these new appointments there will be some changes in the internal reporting structure which will allow the organisation to increase its capacity to manage new projects and develop the business.
The new team will revise the medium and long-term strategic plan focusing on product lead times and revenue growth.
 
Outlook
 
Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet and a record order book ensuring the pipeline of future profitability. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability.
 
Dr Miles Adcock
CEO
7 September 2021
 
All companies and product names are trademarks of their respective organisations.




CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Unaudited interim results to 30 June 2021
 







Note


Six months ended
30/06/21






Six months ended
30/06/20






Year ended 31/12/20












£






£






£




CONTINUING OPERATIONS




























Revenue






    9,315,839 






    9,191,045 






  21,141,294 




Cost of sales






    4,255,669 






    4,325,867 






    9,780,750 




Gross profit






    5,060,170 






    4,865,178 






  11,360,544 




Net operating expenses






    3,439,699 






    3,627,665 






    8,444,962




Group operating profit






    1,620,471 






    1,237,513 






    2,915,582 




Finance costs






        (32,233)






        (40,035)






        (83,985) 




Finance income






           3,696 






         23,171 






         16,480 




Profit before tax






    1,591,934






    1,220,649






    2,848,077 




Tax






         56,559 






         25,858 






         98,167




Profit for the period






    1,535,375 






    1,194,791 






    2,749,910 


































Other Comprehensive Income




























Exchange differences on translating foreign operations






       (19,626)






       419,634






      (283,681)




Tax relating to components of other comprehensive income






                  - 






                  - 






                  - 




Other Comprehensive Income for the period, net of tax






       (19,626)






       419,634






      (283,681) 




Total Comprehensive Income for the period






    1,515,749 






    1,614,425 






    2,466,229 


































Profit for the period attributable to:




























Equity holders of the parent






    1,535,375 






    1,194,791 






    2,749,910 


































Total Comprehensive Income attributable to:




























Equity holders of the parent






    1,515,749 






    1,614,425 






    2,466,229 


































Earnings per share




























Basic earnings per share


4


2.09p






1.62p






3.75p


































Diluted earnings per share


4


2.09p






1.62p






3.74p



 





CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited interim results to 30 June 2021
 











As at






As at






As at












30/06/21






30/06/20






31/12/20




ASSETS






£ 






£ 






£ 




Non-current assets




























Property, plant and equipment






    1,735,125 






    1,683,186 






    1,734,965 




Intangible assets






    7,333,105 






    7,917,503 






    7,205,581 




Deferred tax assets






         88,455 






       100,930 






       134,775 












    9,156,685 






    9,701,619 






    9,075,321 




Current assets




























Inventories






    6,619,081 






    6,546,821 






    5,533,574




Trade and other receivables






    2,614,711 






    3,132,765 






    2,356,157 




Current tax assets






       351,104 






       334,082 






       305,113 




Cash and cash equivalents






  12,386,445 






  10,034,786 






  11,765,974 












  21,971,341 






  20,048,454 






  19,960,818 


































Total assets






  31,128,026 






  29,750,073 






  29,036,139


































LIABILITIES




























Non-current liabilities




























Deferred tax liabilities






    1,638,947 






    1,537,532 






    1,571,830 




Trade and other payables






       518,919 






       529,953






       704,800 




Long term provisions






         18,256






         14,964






         16,162 












    2,176,122 






    1,552,496 






    2,292,792 




Current liabilities




























Trade and other payables






    5,913,855 






    5,410,722 






    4,143,522 




Short term provisions






         18,256 






         15,382 






         16,354




Current tax liabilities






         33,190        






                -   






         26,504   












    5,965,301 






    5,426,104 






    4,186,380 


































Total liabilities






    8,141,423 






    6,978,600 






    6,479,172 


































Net assets






  22,986,603 






  22,771,473 






  22,556,967 


































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






      (140,919) 






       582,022 






      (121,293) 




Profit and loss account






  18,432,441 






  17,494,370 






  17,983,179 




Equity attributable to equity holders of the parent






  22,986,603 






  22,771,473 






  22,556,967 


































Total equity






  22,986,603 






  22,771,473 






  22,556,967 







CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited interim results to 30 June 2021
 











Six months ended
30/06/21






Six months ended
30/06/20






Year ended 31/12/20












£






£






£




Cash flows from operating activities




























Profit before tax for the period






    1,591,934 






    1,220,649 






    2,848,077 




Adjustments for:


            
























Finance income        






          (3,696)






        (23,171)






       (16,480)




Finance costs






         32,233 






         40,035 






         83,985 




Depreciation        






         84,757 






       142,154 






       282,563 




Amortisation        






       606,453 






       888,299 






    1,793,628 




Impairment loss        






       150,000






       125,000






       888,579 




Loss on disposal of property, plant and equipment






         28,778  






                -   






                -   




Share-based payment        






         16,339  






                -  






          6,991 




Exchange differences        






        (16,762)






       467,772






     (300,568)




(Increase)/decrease in inventories        






   (1,085,507)






   (1,448,914)






     (435,667)




(Increase)/decrease in trade and other receivables        






      (258,554)






      (428,805)






       347,803 




Increase/(decrease) in trade and other payables        






    1,645,319






       493,329






         (9,354)




Cash generated from operations






    2,791,294 






    1,476,348 






    5,489,557 




Tax received/(paid)






        (21,110)






          (1,209)






         40,535 




Net cash generated from operating activities






    2,770,184 






    1,475,139 






    5,530,092 


































Cash flows from investing activities




























Interest received






          3,696 






        23,171






         16,480 




Cash released from/(placed on) deposit






                -   






                -    






                -   




Purchases of property, plant and equipment






     (115,045)






     (182,469)






     (385,964)




Proceeds from sale of property, plant and equipment






                -   






                -   






                -   




Purchases of intangible assets






     (883,983)






     (939,585)






   (1,896,659)




Net cash used in investing activities






     (995,332)






  (1,098,883)






   (2,266,143)


































Cash flows from financing activities




























Equity dividends paid






  (1,063,769)






  (1,054,561)






   (1,864,968)




Repayment of leasing liabilities






       (56,871)






(50,648)






      (108,195)




Interest paid






       (32,233)






(40,035)






        (83,985)




Sale of treasury shares






                -   






    368,550






         47,529 




Net cash used in financing activities






  (1,152,873)






    (776,694)






   (2,009,619)


































Effects of exchange rate changes on cash and cash equivalents






         (1,508)






       (52,678)






         23,742 


































Net increase/(decrease) in cash






       620,471 






      (453,116) 






    1,278,072 




Cash at beginning of period






  11,765,974 






  10,487,902 






  10,487,902 




Cash at the end of the period






  12,386,445 






  10,034,786 






  11,765,974 



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited interim results to 30 June 2021
 







Share
capital


Share
Premium


Capital
redemption
reserve


Cumulative
translation
reserve


Profit
and loss
account


Total
equity








£


£


£


£


£


£


































Balance at 1 January 2020


739,000


3,699,105


256,976


162,388


17,027,245


21,884,714


































Profit for the period


-   


-   


-   


-   


1,194,791


1,194,791




Exchange differences on translating foreign operations


-   


-   


-   


419,634


-   


419,634




Total recognised comprehensive income for the period


-   


-   


-   


419,634


1,194,791


1,614,425


































Share-based payment


-   


-   


-   


-   


-   


-   




Deferred tax on share-based payment


-   


-   


-   


-   


(41,655)


(41,655)




Dividends paid


-   


-   


-   


-   


(1,054,561)


(1,054,561)




Sale of treasury shares


-   


-   


-   


-   


368,550  


368,550 




Balance at 30 June 2020


739,000


3,699,105


256,976


582,022


17,494,370


22,771,473


































Profit for the period


-   


-   


-   


-   


1,555,119


1,555,119




Exchange differences on translating foreign operations


-   


-   


-   


(703,315)


-   


(703,315)




Total recognised comprehensive income for the period


-   


-   


-   


(703,315)


1,555,119


851,804


































Share-based payment


-   


-   


-   


-   


6,991  


   6,991   




Deferred tax on share-based payment


-   


-   


-   


-   


58,127


58,127




Dividends paid


-   


-   


-   


-   


(810,407)


(810,407)




Sale of treasury shares


-   


-   


-   


-   


(321,021)


(321,021)




Balance at 31 December 2020


739,000


3,699,105


256,976


(121,293)


17,983,179


22,556,967


































Profit for the period


-   


-   


-   


-   


1,535,375


1,535,375




Exchange differences on translating foreign operations


-   


-   


-   


(19,626)


-   


(19,626)




Total recognised comprehensive income for the period


-   


-   


-   


(19,626)


1,535,375


1,515,749


































Share-based payment


-   


-   


-   


-   


16,339  


16,339   




Deferred tax on share-based payment


-   


-   


-   


-   


(38,683)


(38,683)




Dividends paid


-   


-   


-   


-   


(1,063,769)


(1,063,769)




Sale of treasury shares


-   


-   


-   


-   


-  


-  




Balance at 30 June 2021


739,000


3,699,105


256,976


(140,919)


18,432,441


22,986,603



 
 
NOTES TO THE INTERIM REPORT
 



1.


General information
 








The principal activity of the Group is design, manufacture and supply of innovative high-end embedded single board computers and complementary accessories aimed at a wide base of customers within the defence, telecommunications, aerospace, transport, scientific and industrial markets.
 
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 6 September, 2021.
 
The information relating to the six months ended 30 June 2020 and 30 June 2020 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 2020, 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 2021. 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 2020, 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 2020, 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 2021 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
30/06/21






Six months ended
30/06/20






Year ended 31/12/20
















£






£






£










































Profit attributable to ordinary equity holders






1,535,375






1,194,791






2,749,910


















































Six months ended
30/06/21






Six months ended
30/06/20






Year ended 31/12/20
















No






No






No








Weighted average number of ordinary 
shares for basic earnings per share






73,363,490






73,673,490






72,523,722








Adjustment for share options






-






195,579






311,651








Weighted average number of ordinary  shares for diluted earnings per share






73,363,490






73,869,069






73,565,372








 
 






































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.























 

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