REG - Concurrent Tech. - Interim Results <Origin Href="QuoteRef">CNCT.L</Origin>

Concurrent TechnologiesAnnouncement

26/08/2016 07:05

RNS Number : 1759I
Concurrent Technologies PLC
26 August 2016
26 August 2016
CONCURRENT TECHNOLOGIES PLC
(the "Company")
Interim Results for the six months ended 30 June 2016
Concurrent Technologies Plc (AIM: CNC), a world leading specialist in the design and manufacture of high-end embedded computer products, for critical applications in the defence, aerospace, transportation, telecommunications, scientific and industrial markets, announces interim results for the six months to 30 June 2016. 
Financial Highlights:
 Turnover for period 9.0m (H1 2015: 9.6m)
 Improvement in Gross Margins to 54.8% (H1 2015: 48.7%)
 Profit before tax 1.5m (H1 2015: 1.6m)
 Earnings per share for the period 2.12p (H1 2015: 2.06p)
 Interim dividend declared 0.80p per share (H1 2015: 0.70p), an increase of 14.3%
 Net cash, including cash deposits 8.2m (H1 2015: 5.7m);no borrowings
Operational Highlights:
 Exports increased to 81% of total revenues
 Continued high level of investment in R&D
 Introduction of development platforms
Michael Collins, Chairman, commented:
"After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive."
Enquiries:
Concurrent Technologies Plc
Glen Fawcett, CEO
+44 (0)1206 752 626
Newgate (Financial PR)
Bob Huxford
Helena Bogle

+44 (0)20 7653 9850
Cenkos Securities plc (NOMAD)
Neil McDonald
Nick Tulloch/Beth McKiernan

+44 (0)131 220 9771
+44 (0)131 220 9772/8
CHAIRMAN'S STATEMENT
Financial Summary
I am very pleased to report an excellent start to 2016, continuing the strong performance seen at the end of 2015. EBITDA for the six months to 30 June 2016 was 2.2m (H1 2015: 2.3m). The unaudited profit before tax for the same period was 1.5m (H1 2015: 1.6m) with associated earnings per share of 2.12 pence (H1 2015: 2.06 pence). Group Revenues at 9.0m (H1 2015: 9.6m) were slightly below the exceptional performance of the first half of last year. Gross Margins were much improved at 54.8% (H1 2015: 48.7%).
The Group balance sheet is also stronger and our cash balances (including cash deposits) at 30 June 2016 were 8.2m (H1 2015: 5.7m), despite the increased dividend payment made during the period and R&D expenditure having been maintained at the same levels as the first half of 2015 (1.6m).
Dividend
The Board has declared a first interim dividend of 0.80p per share (H1 2015: 0.70p) - an increase of 14.3%. The total cost of this dividend will amount to 580,948. The ex-dividend date for the interim dividend is 15 September 2016, the record date is 16 September 2016 and the payment date is 30 September 2016.
Review of Operations
Defence related revenues increased significantly during the first six months compared to the first half of 2015. Revenues were generated from all regions but predominantly from the US. Sales related to industrial applications have also improved during the period due mainly to demand from overseas customers. Exports have increased to 81% of total Group revenues (H1 2015: 52%)
We have continued to extend our VPX product range by offering development platforms which provide our customers with a quick start to assist them in the development of their systems.
The majority of the Company's world-wide transactions are conducted in sterling and in US dollars and so, following the recent sharp decline in the value of sterling against the US dollar, the Company conducted an additional review of its financial risk and trading plans. The review confirmed that the Company's exposure to exchange risk in the short to medium term is still mitigated to a large extent by the ability to offset receipts from sales against payments for purchases in the same currency. We can also expect to benefit from dollar denominated exports to the USA in the short term. 
Future Plans
We will continue to expand our range by developing products for the VPX, VME, AMC and CompactPCI bus architectures. Many versions of these products will be designed for use in harsh environments, particularly for military applications and we continue to recruit engineers in our design facilities in the UK, US and India, to enable the Company to develop more sophisticated ruggedized versions of our products. 
Complementary software and firmware packages continue to be developed to provide high-speed data transfer, ease of integration and security which further enhance our product portfolio. We will maintain our strategy of designing more innovative products for complex, high technology, low to medium volume and high margin applications.
Outlook
After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive.
Michael Collins
Chairman
25 August 2016
All companies and product names are trademarks of their respective organisations.
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
unaudited interim results to 30 June 2016
Note
Six months ended
30/06/16
Six months ended
30/06/15
Year ended 31/12/15
CONTINUING OPERATIONS
Revenue
8,970,694
9,595,467
17,073,829
Cost of sales
4,054,125
4,923,619
8,437,564
Gross profit
4,916,569
4,671,848
8,636,265
Net operating expenses
3,397,753
3,078,775
5,945,140
Group operating profit
1,518,816
1,593,073
2,691,125
Finance income
26,336
17,224
42,292
Profit before tax
1,545,152
1,610,297
2,733,417
Tax
4,824
112,420
(21,351)
Profit for the period
1,540,328
1,497,877
2,754,768
Other Comprehensive Income
Exchange differences on translating foreign operations
223,385
79,535
62,918
Tax relating to components of other comprehensive income
- 
- 
- 
Other Comprehensive Income for the period, net of tax
223,385
79,535
62,918
Total Comprehensive Income for the period
1,763,713
1,577,412
2,817,686
Profit for the period attributable to:
Equity holders of the parent
1,540,328
1,497,877
2,754,768
Total Comprehensive Income attributable to:
Equity holders of the parent
1,763,713
1,577,412
2,817,686
Earnings per share
Basic earnings per share
4
2.12p
2.06p
3.79p
Diluted earnings per share
4
2.12p
2.06p
3.79p
CONDENSED CONSOLIDATED BALANCE SHEET
unaudited interim results to 30 June 2016
As at
As at
As at
30/06/16
30/06/15
31/12/15
ASSETS
 
 
 
Non-current assets
Property, plant and equipment
643,786
695,632
690,357
Intangible assets
6,397,135
6,026,976
6,307,044
Deferred tax assets
101,361
105,398
129,647
7,142,282
6,828,006
7,127,048
Current assets
Inventories
2,870,131
4,184,343
3,774,285
Trade and other receivables
2,642,486
3,095,560
2,520,573
Current tax assets
163,180
75,565
284,419
Other financial assets
- 
- 
1,000,000
Cash and cash equivalents
8,179,993
5,700,287
4,873,815
13,855,790
13,055,755
12,452,092
Total assets
20,998,072
19,883,761
19,580,140
LIABILITIES
Non-current liabilities
Deferred tax liabilities
1,280,077
1,283,929
1,305,237
Long term provisions
10,398
10,981
9,968
1,290,475
1,294,910
1,315,205
Current liabilities
Trade and other payables
2,938,487
3,488,379
2,411,524
Short term provisions
32,712
33,726
31,897
Current tax liabilities
6,735
3,072
- 
2,977,934
3,525,177
2,443,421
Total liabilities
4,268,409
4,820,087
3,758,626
Net assets
16,729,663
15,063,674
15,821,514
EQUITY
Capital and reserves
Share capital
739,000 
739,000 
739,000 
Share premium account
3,693,818
3,693,818
3,693,818
Capital redemption reserve
256,976 
256,976 
256,976 
Cumulative translation reserve
302,026
95,258
78,641
Profit and loss account
11,737,843
10,278,622
11,053,079
Equity attributable to equity holders of the parent
16,729,663
15,063,674
15,821,514
Total equity
16,729,663
15,063,674
15,821,514
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
unaudited interim results to 30 June 2016
Six months ended
30/06/16
Six months ended
30/06/15
Year ended 31/12/15
Cash flows from operating activities
Profit before tax for the period
1,545,152
1,610,297
2,733,417
Adjustments for:
 
Finance income 
(26,336)
(17,224)
(42,292)
Depreciation 
98,966
106,821
224,778
Amortisation 
627,065
638,198
1,254,083
Impairment loss 
499,509
505,727
690,201
Loss on disposal of property, plant and equipment
- 
- 
(1,334)
Share-based payment 
1,139
9,787
26,192
Exchange differences 
272,299
94,681
86,711
(Increase)/decrease in inventories 
904,154
(1,484,685)
(1,074,627)
(Increase)/decrease in trade and other receivables 
(121,913)
(305,134)
269,853
Increase/(decrease) in trade and other payables 
528,208
991,326
(88,371)
Cash generated from operations
4,328,243
2,149,794
4,078,611
Tax received/(paid)
120,715
105,193
48,956
Net cash generated from operating activities
4,448,958
2,254,987
4,127,567
Cash flows from investing activities
Interest received
26,336
17,224
42,292
Cash placed on deposit
1,000,000
- 
(1,000,000)
Purchases of property, plant and equipment (PPE)
(43,728)
(195,398)
(305,874)
Proceeds from sale of PPE
1,500
Purchases of intangible assets
(1,214,874)
(1,152,257)
(2,231,637)
Net cash used in investing activities
(232,266)
(1,330,431)
(3,493,719)
Cash flows from financing activities
Equity dividends paid
(870,942)
(834,904)
(1,343,141)
Sale/(Purchase) of treasury shares
19,800
- 
(15,461)
Net cash used in financing activities
(851,142)
(834,904)
(1,358,602)
Effects of exchange rate changes on cash and cash equivalents
(59,372)
(13,870)
(25,936)
Net increase/(decrease) in cash
3,306,178
75,782
(750,690)
Cash at beginning of period
4,873,815
5,624,505
5,624,505
Cash at the end of the period
8,179,993
5,700,287
4,873,815
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
unaudited interim results to 30 June 2016
Share
capital
Share
Premium
Capital
redemption
reserve
Cumulative
translation
reserve
Profit
and loss
account
Total
equity
Balance at 1 January 2015
739,000
3,693,818
256,976
15,723
9,595,122
14,300,639
Profit for the period
- 
- 
- 
- 
1,497,877
1,497,877
Exchange differences on translating foreign operations
- 
- 
- 
79,535
- 
79,535
Total recognised comprehensive income for the period
- 
- 
- 
79,535
1,497,877
1,577,412
Share-based payment
- 
- 
- 
- 
9,787
9,787
Deferred tax on share based payment
- 
- 
- 
- 
10,740
10,740
Dividends paid
- 
- 
- 
- 
(834,904)
(834,904)
Balance at 30 June 2015
739,000
3,693,818
256,976
95,258
10,278,622
15,063,674
Profit for the period
- 
- 
- 
- 
1,256,891
1,256,891
Exchange differences on translating foreign operations
- 
- 
- 
(16,617)
- 
(16,617)
Total recognised comprehensive income for the period
- 
- 
- 
(16,617)
1,256,891
1,240,274
Share-based payment
- 
- 
- 
- 
16,405
16,405
Deferred tax on share based payment
- 
- 
- 
- 
24,859
24,859
Dividends paid
- 
- 
- 
- 
(508,237)
(508,237)
Purchase of treasury shares
- 
- 
- 
- 
(15,461)
(15,461)
Balance at 31 December 2015
739,000
3,693,818
256,976
78,641
11,053,079
15,821,514
Profit for the period
- 
- 
- 
- 
1,540,328
1,540,328
Exchange differences on translating foreign operations
- 
- 
- 
223,385
- 
223,385
Total recognised comprehensive income for the period
- 
- 
- 
223,385
1,540,328
1,763,713
Share-based payment
- 
- 
- 
- 
1,139
1,139
Deferred tax on share based payment
- 
- 
- 
- 
(5,561)
(5,561)
Dividends paid
- 
- 
- 
- 
(870,942)
(870,942)
Sale of treasury shares
- 
- 
- 
- 
19,800
19,800
Balance at 30 June 2016
739,000
3,693,818
256,976
302,026
11,737,843
16,729,663
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 25 August 2016.
The information relating to the six months ended 30 June 2016 and 30 June 2015 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 2015, 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 2016. 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 2015, 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 2015, 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 2016 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, share options.
The inputs to the earnings per share calculation are shown below:
Six months ended
30/06/16
Six months ended
30/06/15
Year ended 31/12/15
Profit attributable to ordinary equity holders
1,540,328
1,497,877
2,754,768
Six months ended
30/06/16
Six months ended
30/06/15
Year ended 31/12/15
No
No
No
Weighted average number of ordinary 
shares for basic earnings per share
72,604,009
72,600,490
72,594,150
Adjustment for share options
481
7,872
-
Weighted average number of ordinary shares for diluted earnings per share
72,604,490
72,608,362
72,594,150
5.
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 interim financial statements.
6.
Shareholder Communication
A copy of this interim statement 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.cct.co.uk.

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