REG - Concurrent Tech. - Interim Results

Concurrent TechnologiesAnnouncement

12/09/2018 07:05

RNS Number : 4749A
Concurrent Technologies PLC
12 September 2018
 


12 September 2018
Concurrent Technologies Plc
(the "Company" or the "Group")
 
Interim Results for the six months ended 30 June 2018
 
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 2018.
 
Financial Highlights

 
·    Turnover of £7.9m (H1 2017: £7.8m)
·    Gross profit £4.1m (H1 2017: £4.3m)
·    Gross margin 51.7% (H1 2017: 54.8%)
·    Profit before tax of £1.1m (H1 2017: £1.4m)
·    EPS of 1.50 pence (H1 2017: 1.84 pence)
·    Interim dividend increased to 0.95p per share (H1 2017: 0.90p)
·    Cash balance (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m)
 
 
Operational Highlights
 
·     Sales into the defence sector continue to be strong and now account for 59% of H1 Group turnover
·     Global customer base continues to expand with exports generating 88% of Group revenues (H1 2017: 84%)
·     Investment in R&D during the period matched 2017 levels at £1.2m
·     Several new boards and board variants have been launched in 2018 along with the roll out of the enhanced security package
 
 
Michael Collins, Chairman of Concurrent Technologies Plc, commented:
 
"The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future."
 
 
Enquiries:




Concurrent Technologies Plc

Glen Fawcett, CEO


 
+44 (0)1206 752626




 


 




Newgate (Financial PR)

Bob Huxford
Imogen Humphreys


 
+44 (0)20 7653 9848

+44 (0)20 7653 9840




 


 




Cenkos Securities Plc (NOMAD)

Neil McDonald
Beth McKiernan




+44 (0)131 220 9771
+44 (0)131 220 9778




 
 
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 8th 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
Financial Summary
 
I am pleased to report a good performance for the first-half of 2018, with strong sales, profit before tax and investment in the first six months.
 
Revenue for the period was £7.9m (H1 2017: £7.8m), gross margin was slightly lower at 51.7% mainly due to a change in the sales mix of products (H1 2017: 54.8%) and gross profit was £4.1m (H1 2017: £4.3m). The unaudited profit before tax for the same period was £1.1m (H1 2017: £1.4m) with associated earnings per share of 1.50 pence (H1 2017: 1.84 pence).
 
The Group's balance sheet remains robust with cash balances (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m) and total equity increased to £19.0m (H1 2017: £18.0m).
 
Dividend
The Board has declared a first interim dividend of 0.95p per share (H1 2017: 0.90p) - an increase of 5.6%. The total cost of this dividend will amount to £690,826. The ex-dividend date for this interim dividend is 27 September 2018, the record date is 28 September 2018 and the payment date is 12 October 2018.
 
Review of Operations
The key driver of our turnover continues to be the defence sectors. The United States remains our main market, but we are seeing increasing interest from other areas of the world, particularly the Asian markets.
 
This success in the defence market will not detract from our continuing commitment to the telecommunications and specialist scientific sectors where the Group continues to develop new innovative products.
 
The Group continues to expand its engineering capability in the UK, USA and India. Investment in H1 2018 was maintained at £1.2m (H1 2017: £1.2m), which enabled the Group to launch several new products and many variants during the six-month period, including the announcement of a VPX™ product based on Intel Corporation's 8th generation processor. The Group also released its enhanced suite of security packages which are compatible with industry standards.
 
The Company awaits details of the trade and tariff legislation to be agreed between the UK Government and other countries once the UK has left the European Union (EU). Our current assessment has concluded that, while there may be logistical disruption following the UK's departure, leaving the EU will have little lasting impact on our trading. Most countries, including the USA and those of the European Union, apply a zero-percentage import tariff rating to our products. Current World Trade Organisation (WTO) rules also apply a zero-tariff rating to items we buy and sell.
 
Future Plans
We will continue to develop our product ranges, in particular focusing on the VPX™ architecture both at board and development system level. To broaden the market appeal of the Group's products we will develop more partnerships with companies offering complementary products.
 
Our production capabilities are constantly being revised and improved. A faster "pick and place" machine and an enhanced screen printer have been installed and are now both operational. This equipment is used for high-speed, fine-precision placement of surface-mount components onto printed circuit boards. This investment will allow a faster and more flexible response to customer orders as well as addressing the need to accommodate advances in component technologies.
 
Outlook
The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future.
 
 
Michael Collins
Chairman
 
11th September 2018
 
All companies and product names are trademarks of their respective organisations.
 
 
 
 
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
unaudited interim results to 30 June 2018
 




 


Note


Six months ended
30/06/18


 


Six months ended
30/06/17


 


Year ended 31/12/17




 


 


£


 


£


 


£




CONTINUING OPERATIONS


 


 


 


 


 


 




Revenue


 


    7,879,517


 


    7,816,472


 


  16,222,732




Cost of sales


 


    3,802,942


 


    3,536,288


 


    7,231,876




Gross profit


 


    4,076,575


 


    4,280,184


 


    8,990,856




Net operating expenses


 


    3,020,677


 


    2,914,116


 


    6,086,516




Group operating profit


 


    1,055,898


 


    1,366,068


 


    2,904,340




Finance income


 


         37,101


 


         30,375


 


         65,117




Profit before tax


 


    1,092,999


 


    1,396,443


 


    2,969,457




Tax


 


           3,630


 


         56,997


 


       213,836




Profit for the period


 


    1,089,369


 


    1,339,446


 


    2,755,621




 


 


 


 


 


 


 




Other Comprehensive Income


 


 


 


 


 


 




Exchange differences on translating foreign operations


 


       244,712


 


       (93,622)


 


      (189,150)




Tax relating to components of other comprehensive income


 


                  -


 


                  -


 


                  -




Other Comprehensive Income for the period, net of tax


 


       244,712


 


       (93,622)


 


      (189,150)




Total Comprehensive Income for the period


 


    1,334,081


 


    1,245,824


 


    2,566,471




 


 


 


 


 


 


 




Profit for the period attributable to:


 


 


 


 


 


 




Equity holders of the parent


 


    1,089,369


 


    1,339,446


 


    2,755,621




 


 


 


 


 


 


 




Total Comprehensive Income attributable to:


 


 


 


 


 


 




Equity holders of the parent


 


    1,334,081


 


    1,245,824


 


    2,566,471




 


 


 


 


 


 


 




Earnings per share


 


 


 


 


 


 




Basic earnings per share


4


1.50p


 


1.84p


 


3.79p




 


 


 


 


 


 


 




Diluted earnings per share


4


1.50p


 


1.84p


 


3.79p




 
 
CONDENSED CONSOLIDATED BALANCE SHEET
unaudited interim results to 30 June 2018
 




 


 


As at


 


As at


 


As at




 


 


30/06/18


 


30/06/17


 


31/12/17




ASSETS


 


£


 


£


 


£




Non-current assets


 


 


 


 


 


 




Property, plant and equipment


 


       449,860


 


       391,651


 


       482,254




Intangible assets


 


    7,801,410


 


    7,369,683


 


    7,397,512




Deferred tax assets


 


       178,299


 


       146,023


 


       170,495




 


 


    8,429,569


 


    7,907,357


 


    8,050,261




Current assets


 


 


 


 


 


 




Inventories


 


    3,759,675


 


    3,334,750


 


    3,222,800




Trade and other receivables


 


    3,445,776


 


    2,526,923


 


    2,740,335




Current tax assets


 


       434,576


 


       203,710


 


       135,224




Other financial assets


 


    3,410,970               


 


                -  


 


    2,502,281




Cash and cash equivalents


 


    4,399,892


 


    7,885,032


 


    5,892,304




 


 


  15,450,889


 


  13,950,415


 


  14,492,944




 


 


 


 


 


 


 




Total assets


 


  23,880,458


 


  21,857,772


 


  22,543,205




 


 


 


 


 


 


 




LIABILITIES


 


 


 


 


 


 




Non-current liabilities


 


 


 


 


 


 




Deferred tax liabilities


 


    1,553,918


 


    1,417,245


 


    1,473,815




Long term provisions


 


           3,059


 


           3,986


 


           4,097




 


 


    1,556,977


 


    1,421,231


 


    1,477,912




Current liabilities


 


 


 


 


 


 




Trade and other payables


 


    3,258,958


 


    2,384,949


 


    2,332,599




Short term provisions


 


         21,410


 


         19,932


 


         16,644




Current tax liabilities


 


         25,211


 


                -  


 


                -  




 


 


    3,305,579


 


    2,404,881


 


    2,349,243




 


 


 


 


 


 


 




Total liabilities


 


    4,862,556


 


    3,826,112


 


    3,827,155




 


 


 


 


 


 


 




Net assets


 


  19,017,902


 


  18,031,660


 


  18,716,050




 


 


 


 


 


 


 




EQUITY


 


 


 


 


 


 




Capital and reserves


 


 


 


 


 


 




Share capital


 


       739,000


 


       739,000


 


       739,000




Share premium account


 


    3,699,105


 


    3,684,871


 


    3,699,105




Capital redemption reserve


 


       256,976


 


       256,976


 


       256,976




Cumulative translation reserve


 


       550,169


 


       400,985


 


       305,457




Profit and loss account


 


  13,772,652


 


  12,949,828


 


  13,715,512




Equity attributable to equity holders of the parent


 


  19,017,902


 


  18,031,660


 


  18,716,050




 


 


 


 


 


 


 




Total equity


 


  19,017,902


 


  18,031,660


 


  18,716,050




 
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
unaudited interim results to 30 June 2018
 




 


 


Six months ended
30/06/18


 


Six months ended
30/06/17


 


Year ended 31/12/17




 


 


£


 


£


 


£




Cash flows from operating activities


 


 


 


 


 


 




Profit before tax for the period


 


    1,092,999


 


    1,396,443


 


    2,969,457




Adjustments for:


           


 


 


 


 


 




Finance income       


 


        (37,101)


 


        (30,375)


 


        (65,117)




Depreciation       


 


       103,174


 


         77,624


 


       194,529




Amortisation       


 


       756,545


 


       620,878


 


    1,294,457




Impairment loss       


 


         63,223


 


         31,064


 


       286,888




Loss on disposal of property, plant and equipment


 


                -  


 


                -  


 


          (3,750)




Share-based payment       


 


        (77,595)


 


         13,611


 


         27,448




Exchange differences       


 


       202,262


 


     (200,228)


 


      (110,755)   




(Increase)/decrease in inventories       


 


      (536,875)


 


       (94,895)


 


         17,055




(Increase)/decrease in trade and other receivables       


 


      (708,092)


 


       800,706


 


       587,294




Increase/(decrease) in trade and other payables       


 


       761,192


 


     (432,426)


 


      (487,953)




Cash generated from operations


 


    1,619,732


 


    2,182,402


 


    4,709,553




Tax received/(paid)


 


          (8,851)


 


        (32,395)


 


       (83,808)




Net cash generated from operating activities


 


    1,610,881


 


    2,150,007


 


    4,625,745




 


 


 


 


 


 


 




Cash flows from investing activities


 


 


 


 


 


 




Interest received


 


        37,101


 


         30,375


 


         65,117




Cash released from/(placed on) deposit


 


     (909,131)


 


    1,000,000


 


    1,502,281)  




Purchases of property, plant and equipment


 


       (72,930)


 


       (56,977)


 


      (267,855)




Proceeds from sale of property, plant and equipment


 


                -  


 


                -  


 


           3,750 




Purchases of intangible assets


 


  (1,223,668)


 


  (1,175,613)


 


   (2,133,046)




Net cash used in investing activities


 


  (2,168,628)


 


     (202,215)


 


   (3,834,315)




 


 


 


 


 


 


 




Cash flows from financing activities


 


 


 


 


 


 




Equity dividends paid


 


     (945,339)


 


     (945,339)


 


   (1,599,804)




Sale/(purchase) of treasury shares


 


                 -  


 


                 -  


 


                 -




Net cash used in financing activities


 


     (945,339)


 


     (945,339)


 


   (1,599,804)




 


 


 


 


 


 


 




Effects of exchange rate changes on cash and cash equivalents


 


         10,674


 


       109,496


 


        (72,405)




 


 


 


 


 


 


 




Net increase/(decrease) in cash


 


   (1,492,412)


 


    1,111,949


 


      (880,779)




Cash at beginning of period


 


    5,892,304


 


    6,773,083


 


    6,773,083




Cash at the end of the period


 


    4,399,892


 


    7,885,032


 


    5,892,304




 


 


 


 


 


 


 




 
 
 
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
unaudited interim results to 30 June 2018
 




 


Share
capital


Share
Premium


Capital
redemption
reserve


Cumulative
translation
reserve


Profit
and loss
account


Total
equity




 


£


£


£


£


£


£




 


 


 


 


 


 


 




Balance at 1 January 2017


739,000


3,693,818


256,976


494,607


12,489,418


17,673,819




 


 


 


 


 


 


 




Profit for the period


-  


-  


-  


-  


1,339,446


1,339,446




Exchange differences on translating foreign operations


-  


-  


-  


(93,622)


-  


(93,622)




Total recognised comprehensive income for the period


-  


-  


-  


(93,622)


1,339,446


1,245,824




 


 


 


 


 


 


 




Share-based payment


-  


-  


-  


-  


13,611


13,611




Deferred tax on share-based payment


-  


-  


-  


-  


43,274


43,274




Dividends paid


-  


-  


-  


-  


(945,339)


(945,339)




Transfer of treasury shares


-  


(8,947)


-  


-  


9,418


471




Balance at 30 June 2017


739,000


3,684,871


256,976


400,985


12,949,828


18,031,660




 


 


 


 


 


 


 




Profit for the period


-  


-  


-  


-  


1,416,175


1,416,175




Exchange differences on translating foreign operations


-  


-  


-  


(95,528)


-  


(95,528)




Total recognised comprehensive income for the period


-  


-  


-  


(95,528)


1,416,175


1,320,647




 


 


 


 


 


 


 




Share-based payment


-  


-  


-  


-  


13,837


13,837




Deferred tax on share-based payment


-  


-  


-  


-  


4,842


4,842




Dividends paid


-  


-  


-  


-  


(654,465)


(654,465)




Transfer of treasury shares


-  


14,234  


-  


-  


(14,705)


(471)




Balance at 31 December 2017


739,000


3,699,105


256,976


305,457


13,715,512


18,716,050




 
Adjustment for IFRS 15
 


-  


-  


-  


-  


(34,399)


(34,399)




Balance at 01 January 2018


739,000


3,699,105


256,976


305,457


13,681,113


18,681,651




 


 


 


 


 


 


 




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)




Transfer of treasury shares


-  


-  


-  


-  


-


-




Balance at 30 June 2018


739,000


3,699,105


256,976


550,169


13,772,652


19,017,902




 
 
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 11th September, 2018.
 
The information relating to the six months ended 30 June 2018 and 30 June 2017 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 2017, 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 2018. 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 2017, which have been prepared in accordance with adopted IFRSs.
 
The Group applies, for the first time, IFRS 15 Revenue from Contracts with Customers, that require adjustments to the amounts recognised in the financial statements. As required by IAS 34, the nature and effect of these changes are disclosed below in the section entitled Warranty Obligations.
 
The Group also applies IFRS 9 Financial Instruments for the first time in 2018 but this does not have an impact on the interim condensed consolidated financial statements of the Group.
 
All other accounting policies applied and methods of computation are consistent with those of the annual financial statements for the year ended 31 December 2017, as described in those financial statements.
 
Warranty Obligations
 
IFRS 15 has been produced in order to bring into line the principles that a business applies when reporting the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle of IFRS 15 dictates that a business recognises revenue to clearly show the transfer of contracted goods/services to customers in the amount that mirrors the consideration that the business is entitled to. Under IFRS 15 there are 5 steps to recognising revenue.
 
The Directors have considered these 5 steps and sale of goods where the risks and rewards of ownership are transferred at the point of invoice IFRS 15 has no impact, this is the case for most Company sales.
 
The Group offers extended warranties on its products. As the customer has the option of purchasing the additional warranty separately, this is a service-type warranty and is accounted for as a separate performance obligation. Deferred revenue is recognised (as opposed to revenue being recorded) over the period of the extended warranty.
 
The Directors have opted to adopt the modified retrospective method of transition and have applied IFRS 15 to those contracts that are not completed as at 1st January 2018, the impact on the Profit and loss account is £34,399.
 
 




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
30/06/18


 


Six months ended
30/06/17


 


Year ended 31/12/17




 


 


 


£


 


£


 


£




 


 


 


 


 


 


 


 




 


Profit attributable to ordinary equity holders


 


1,089,369


 


1,339,446


 


2,755,621




 


 


 


 


 


 


 


 




 


 


 


Six months ended
30/06/18


 


Six months ended
30/06/17


 


Year ended 31/12/17




 


 


 


No


 


No


 


No




 


Weighted average number of ordinary
shares for basic earnings per share


 


72,718,490


 


72,604,009


 


72,635,976




 


Adjustment for share options


 


2,457


 


481


 


2,457




 


Weighted average number of ordinary  shares for diluted earnings per share


 


72,720,947


 


72,604,490


 


72,638,433




 


 


 


 


 


 


 


 




 


 




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 condensed interim financial statements.




 


 




6.


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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