REG - Concurrent Tech. - Interim Results
02/09/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240902:nRSB4133Ca&default-theme=true
RNS Number : 4133C Concurrent Technologies PLC 02 September 2024
2 September 2024
Concurrent Technologies Plc
(the "Company" or the "Group")
Half year results for the six months to 30 June 2024
Record H1 financial performance, delivering good contract momentum
Concurrent Technologies Plc (AIM: CNC), a designer and manufacturer of
leading-edge computer products, systems and mission critical solutions used in
high-performance markets by some of the world's major OEMs, is pleased to
announce its results for the six months to 30 June 2024 ("H1 2024").
Financial highlights
H1 2024 H1 2023 % change
Revenue £16.8m £12.1m +39
Gross profit £8.5m £6.0m +42
Profit before tax £2.3m £1.0m +130
Earnings per share 2.68p 1.54p +74
EBITDA £3.3m £2.1m +57
Order intake £17.8m £14.5m +23
Closing cash £8.9m £3.0m +197
· A record financial performance in the period, achieving a year-on-year revenue
increase of 39% to £16.8m and more than doubling of profit before tax (PBT)
to £2.3m.
· Order intake increased by 23% to £17.8m.
· Strong focus on balancing cost and profitability, delivering EBITDA of £3.3m
from revenue of £16.8m while maintaining investment in R&D, Systems and
go-to-market teams to mobilise the Group for growth in Boards and Systems.
· Cash balance remains strong at £8.9m (HY 2023: £3.0m), post a significant
supplier payment in the period for key Last-Time-Buy components (£3.5m).
Operational highlights
· Continued investment in R&D in line with strategy.
· Formal alignment of the Company's leadership structure to its vision and
ambition has seen it split into leadership teams servicing Products and
Systems and representing a first step in moving to a two-revenue streamed
business.
Products
· Secured eight major design wins across US, UK, Europe and Asia Pacific in the
period, which is equal to amount won in the whole of FY23, creating a
long-term expectation of substantive growth. Since the change in management
and the resulting new strategy, 16 major design wins have been delivered in
total at the end of H1 2024.
· The design wins include the Group's largest ever contract to date of $6m
(including extension), with a major US Defence & Aerospace prime
contractor.
Systems
· Phillips Aerospace had a strong start in its first full year as part of the
Group, successfully merging into the Company's culture and ways of working and
delivering significant progress in the US.
· Strategic investment in key hires, with the appointment of a new Vice
President of Systems, and the planning for a relocation into a new facility in
the Brea region of Los Angeles.
· Two contracts (over $200k in value) secured in the period through Phillips,
with a total value of $518k, where the products are new offerings directly
related to the Group's stated strategy for providing integrated computer
systems.
Outlook
· Momentum built in H1 2024 has continued into H2 2024 with a healthy pipeline
of opportunities across both Products and Systems.
· The eight major design wins in H1 2024 will see their programmes bolstered
over the next two-to-three years, before being delivered over a
seven-to-ten-year period.
· The Board is confident in delivering results for 2024 in line with market
expectations.
Miles Adcock, CEO of Concurrent Technologies, commented: "Demonstrated by the
record financial performance in the period, we are successfully delivering on
the Group's growth strategy that everyone at Concurrent Technologies has
worked hard to implement. The Group has been transformed over the last three
years and the eight major design wins in the period, from across the globe,
reflect the progress that we have made.
"We have entered the second half of the year with good momentum and remain
focused on managing cost and investment to drive substantial growth in the
coming years across our Products and Systems divisions."
Enquiries:
Concurrent Technologies Plc
Miles Adcock - CEO
+44 (0)1206 752626
Kim Garrod - CFO
Alma Strategic Communications +44 (0)20 3405 0205
Josh Royston
Hannah Campbell
Will Merison
Cavendish Capital Markets Limited (NOMAD) +44 (0)131 220 9771
Neil McDonald
+44 (0)131 220 9772
Peter Lynch
About Concurrent Technologies Plc
Concurrent Technologies Plc develops and manufactures high-end embedded Plug
In Cards (PICs) and Systems 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 generation embedded 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 (http://www.gocct.com) .
All trademarks, registered trademarks and trade names used in this
announcement are the property of their respective owners.
CEO's statement
Overview
During the first half, we sustained significant momentum, delivering a record
financial performance. This success aligns with our revised growth strategy
which is aimed at becoming a materially larger business in the coming years.
We achieved revenues of £16.8m, up 39% on H1 2023 (£12.1m), driven by an
increasing number of major design wins and the expansion of our presence in
the Systems market, where we benefitted from a full H1 revenue contribution
from the acquisition of Phillips Aerospace. We received a record order intake
of £17.8m in the half, positioning the Group well to continue executing on
its ambitions and providing the Board with confidence in delivering 2024
results in-line with market expectations.
Strategy update
As announced at the 2023 results, the Group now moves towards having two
divisions - Products and Systems - to align with our growth strategy and
ambition to be the first to market with the latest technology. During the
period, we further formalised our business structure, incorporating the
acquired Phillips Aerospace into Systems and adjusting our leadership teams to
reflect this progress and focus.
Products
Just as significant as a record financial performance, is the continued
success in securing major design wins, which are the foundations for our
future growth. We classify a major design win as any instance where we know
the customer has selected our product to be part of their long-term production
programme and where that programme can achieve more than £1m per annum of
revenue for the Group in future years. These opportunities will typically
take two to three years to ramp up in volume. Historically, such large design
wins were rare for Concurrent Technologies, but we are proud to report that
eight major design wins were secured in H1 2024, the same level secured
throughout the whole of FY23, helping to underpin a roadmap for material
revenue growth in future years. Whilst dominated by customers in the USA, it
is encouraging to note that, within these eight recent wins, there includes
one for the UK, one for Italy, and one for South Korea, and we can expect
typical order sizes for these contracts to increase over time. Importantly, we
secured our single largest contract win to date, worth an initial $4.5m
(growing to $6m with the extension announced in August 24), to supply a major
US Defence & Aerospace prime contractor with multiple standard PICs. This
win is a reflection of Concurrent Technologies now competing for large scale
opportunities, often displacing much larger incumbent competitors from that
customer.
Systems
It has been nearly a year since acquiring Phillips Aerospace, which has now
been merged with our non-US Systems business and where we are already seeing
significant progress. Thanks to the hard work of the Phillips team, alongside
the Sales team, the Group is securing new Systems work in LA and has a growing
pipeline of opportunities.
The Systems business is strategically benefitting from careful investment in
key hires, and tools, and the planning for a relocation into a new facility in
the Brea region of Los Angeles is well underway. Of note, post-period end, we
were pleased to welcome Michael Harden to the Group, joining our Executive
Committee as Vice President of the Systems business in LA. Michael brings a
wealth of experience in the aerospace and defence industries, across sales and
marketing and manufacturing operations, and so is well-equipped to lead the
growth of our Systems business.
The Group's mobilisation effort, combined with the continuing maturation of
our opportunity pipeline, builds confidence in the growth potential of the
business.
R&D
We continued to innovate and expand our product portfolio in the period,
responding to the needs of our customers by launching two new products. Rhea
is a further addition to our VME range of embedded processor boards and has
been launched to harness this very latest technology for customers looking for
a simple, cost-effective upgrade. We have a long track record for delivering
excellent VME boards based on Intel® processors. We estimate the VME board
market is approaching $300m and part of our board strategy is a commitment to
offer VME processor boards to support existing and new VME customers, and Rhea
is a timely proof point. We also launched Magni, a SOSA (open-standard)
aligned, high-performance PIC based on an Intel® processor. Magni complements
our product portfolio and will be useful to ourselves and other systems
integrators with improved scope for flexible design solutions that optimise
for size, weight, and power. This extends the user applications that we can
serve whether as a standalone card or as an integrated system.
Post-period end, we launched a new compute intensive PIC, TR MDx/6sd-RCR, to
meet growing customer demand. The PIC has enhanced features, including a wider
operating temperature range, reduced weight, advanced networking capability,
and secure on-board storage which addresses a crucial demand in the industry,
allowing us to offer a product that is both innovative and highly efficient.
We have a strong pipeline of orders for this product, including from our
largest ever contract win, and we anticipate shipping fully qualified products
within the year to meet growing customer demand.
Board update
In February 2024, we were delighted to welcome Issy Urquhart to the Board as
an Independent Non-Executive Director. Issy brings over 30 years' experience
working with global technology and financial services businesses in both the
public and private sectors, where she's been responsible for implementing
successful people programs and leading extensive business change and culture
initiatives. The Group is already benefitting from her expertise in driving
people and change management strategies across trans-Atlantic operations and,
as a Board, we are confident Issy will be an invaluable guide to the business
as we deliver on our growth strategy and create the right environment for our
people to succeed.
Outlook
We are pleased with the Group's performance in H1 2024, delivering the results
as anticipated. With the game-changing step up in major design wins during the
period, this transformed business is now starting to deliver on the growth for
which the strategy of the last three years was created. That strategy will be
valid for some years yet, and we will continue to hold steady and execute as
planned.
We have entered the second half with good momentum, with a healthy pipeline of
opportunities across both Products and Systems, providing confidence in
achieving results for FY24 in line with market expectations and beyond.
Miles Adcock
Chief Executive Officer
CFO's Statement
We are pleased to report a strong H1 2024 performance on all metrices.
Revenue at a 39% increase on the prior year is an exceptional performance and
in line with our ambitions of growth, and the investment we have made in the
business. Defence remains our strongest market at 82%, with Communications
showing some growth, due to scheduled deliveries to our long-term customer.
Backlog remains strong at c.£24.4m, following a solid order performance in H1
2024.
Gross profit is strong at £8.5m and gross margin continues to improve, with
an additional 1.4 points (to 50.8%) from the 2023 results. We continue to
drive hard on strengthening gross margin through our design teams and
procurement.
PBT has more than doubled against the prior year position. Despite costs
increasing, the record revenue and gross margin is coming through strongly
(the output of the growing investment made in costs), resulting in a 13.6% PBT
margin, moving us towards historical levels of margin performance, in line
with our strategy of profitable growth.
We continue to invest in product development, the heart of our business, to
drive greater design wins and revenue going forward. We continue to drive
efficiency in all that we do to get our products to market early, within costs
and to be significant future revenue generators. Product development costs
were c£2m in period, in line with our planning. EBITDA in period was £3.3m,
with amortisation at c£0.7m.
Cash has increased by c£6m from the end of H1 FY23 but has dropped c£2.2m
from year end. This is due to a significant payment (c£3.5m) for a
Last-Time-Buy purchase we made in FY23. H2 is expected to increase in cash
generation due to normalisation of component purchase (i.e. no one-off large
payment).
We remain on track for a strong year and delivery in line with market
expectations, plus further consolidation of opportunities for our future
years, with strong design wins in both systems and products.
Kim Garrod
Chief Financial Officer
Condensed Consolidated Statement of Comprehensive Income
Unaudited interim results to 30th June 2024
Six months Six months Year
ended ended ended
Note 30/06/24 30/06/23 31/12/23
CONTINUING OPERATIONS £ £ £
Revenue 16,806,040 12,139,625 31,656,316
Cost of sales (8,262,205) (6,100,879) (16,018,368)
Gross profit 8,543,835 6,038,746 15,637,948
Net operating expenses (6,233,895) (5,028,784) (11,951,314)
Group operating profit 2,309,940 1,009,962 3,686,634
Interest Costs (34,271) (52,871) (86,010)
Finance income 33,236 16,405 68,145
Exceptional acquisition expenses (21,000) - (195,881)
Profit before tax 2,287,905 973,496 3,472,888
Tax 11,024 154,441 400,248
Profit for the period 2,298,928 1,127,937 3,873,136
Other Comprehensive Income
Exchange differences on translating foreign operations (63,315) (41,338) (101,340)
Tax relating to components of other comprehensive income - - -
Other Comprehensive Income for the period, net of tax (63,315) (41,338) (101,340)
Total Comprehensive Income for the period 2,235,613 1,086,599 3,771,796
Profit for the period attributable to:
Equity holders of the parent 2,298,928 1,127,937 3,771,796
Total Comprehensive Income attributable to:
Equity holders of the parent 2,235,613 1,086,599 3,771,796
Earnings per share
Basic earnings per share 4 2.68p 1.54p 4.98p
Diluted earnings per share 4 2.55p 1.54p 4.85p
Adjusted earnings per share 2.71p 1.54p 4.85p
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited interim results to 30th June 2024
As at As at As at
30/06/24 30/06/23 31/12/23
ASSETS £ £ £
Non-current assets
Property, plant and equipment 2,538,301 2,528,605 2,465,883
Intangible assets 15,262,421 9,843,724 13,914,398
Deferred tax assets 432,642 321,577 432,642
Other Financial Assets - - -
18,233,364 12,693,906 16,812,923
Current assets
Inventories 10,687,202 11,048,329 11,958,500
Trade and other receivables 7,402,705 5,337,017 6,442,827
Current tax assets 720,963 1,126,010 1,492,621
Other Financial Assets - - -
Cash and cash equivalents 8,948,035 2,976,823 11,118,728
27,758,905 20,488,179 31,012,676
Total assets 45,992,269 33,182,086 47,825,599
LIABILITIES
Non-current liabilities
Deferred tax liabilities 2,096,186 2,311,767 2,094,095
Trade and other payables 577,847 1,118,819 695,273
Long term provisions 315,135 309,735 315,135
2,989,168 3,740,321 3,104,503
Current liabilities
Trade and other payables 5,410,615 5,165,320 9,666,412
Short term provisions 18,256 18,256 18,256
Current tax liabilities - 51,864 -
5,428,871 5,235,440 9,684,668
Total liabilities 8,418,039 8,975,761 12,789,171
Net assets 37,574,230 24,206,325 35,036,428
EQUITY
Capital and reserves
Share capital 861,692 739,000 861,692
Share premium account 9,950,231 3,699,105 9,950,231
Merger reserve 1,283,457 1,283,457
Capital redemption reserve 256,976 256,976 256,976
Cumulative translation reserve (192,591) (69,274) (129,276)
Profit and loss account 25,414,465 19,580,518 22,813,348
Equity attributable to equity holders of the parent 37,574,230 24,206,325 35,036,428
Total equity 37,574,230 24,206,325 35,036,428
Condensed Consolidated Cash Flow Statement
Unaudited interim results to 30th June 2024
Six months Six months Year
ended ended ended
30/06/2024 30/06/2023 31/12/2023
£ £ £
Cash flows from operating activities
Profit before tax for the period 2,287,905 973,496 3,472,888
Adjustments for:
Finance income (33,236) (16,405) (68,145)
Finance costs 34,271 52,871 86,010
Depreciation 307,553 447,858 806,236
Amortisation 658,288 650,862 1,509,167
Impairment loss - - 31,557
Loss on disposal of property, plant and equipment (PPE) - - -
Share-based payment 547,745 155,603 430,854
Exchange differences (90,153) (44,219) (145,706)
(Increase)/decrease in inventories 1,271,298 (957,892) (1,868,063)
(Increase)/decrease in trade and other receivables (959,878) 102,895 (1,029,033)
Increase/(decrease) in trade and other payables (4,228,849) (663,334) 2,853,322
Cash generated from operations (205,056) 701,734 6,079,087
Tax (paid)/received 539,219 (155,183) (444,210)
Net cash generated from operating activities 334,163 546,551 5,634,877
Cash flows from investing activities
Interest received 33,236 16,405 68,145
Cash placed on deposit - - -
Purchases of property, plant and equipment (PPE) (379,243) (235,971) (495,973)
Payment of acquisition of subsidiary net of cash acquired - - (685,767)
Purchases of intangible assets (1,984,911) (1,744,508) (3,977,839)
Net cash used in investing activities (2,330,918) (1,964,074) (5,091,434)
Cash flows from financing activities
Equity dividends paid - - -
Repayment of leasing liabilities (144,374) (70,210) (215,209)
Interest paid (34,271) (52,871) (86,010)
Issue of ordinary shares net of issue costs - - 6,355,741
Purchase of treasury shares - - -
Net cash used in financing activities (178,645) (123,081) 6,054,522
Effects of exchange rate changes on cash and cash equivalents 4,707 4,707 8,043
Net increase/(decrease) in cash (2,170,693) (1,535,897) 6,606,008
Cash at beginning of period 11,118,728 4,512,720 4,512,720
Cash at the end of the period 8,948,035 2,976,823 11,118,728
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Capital Cumulative Profit
Share Share Merger redemption translation and loss Total
capital premium reserve reserve reserve account Equity
£ £ £ £ £ £ £
Balance at 1 January 2023 739,000 3,699,105 256,976 (27,936) 18,509,357 23,176,502
Profit for the period - - - - 1,127,937 1,127,937
Exchange differences on translating foreign operations - - - (41,338) - (41,338)
Total recognised comprehensive income for the period - - - (41,338) 1,127,937 1,086,599
Share-based payment - - - - 155,603 155,603
Deferred tax on share based payment - - - - (212,379) (212,379)
Dividends paid - - - - - -
Sale of treasury shares - - - - - -
Issue of Ordinary shares - - - - - -
Balance at 30 June 2023 739,000 3,699,105 - 256,976 (69,274) 19,580,518 24,206,325
Total recognised comprehensive income for the period - - - - 2,745,199 2,745,199
Exchange differences on translating foreign operations - - - (60,002) - (60,002)
Total recognised comprehensive income for the period - - - (60,002) 2,745,199 2,685,197
Share-based payment - - - - 275,251 275,251
Deferred tax on share based payment - - - - 212,379 212,379
Dividends paid - - - - - -
Sale of treasury shares - - - - - -
Merger reserve 18,077 1,283,457 1,301,534
Shares issued during the year 104,615 6,251,126 6,355,741
Balance at 31 December 2023 861,692 9,950,231 1,283,457 256,976 (129,276) 22,813,347 35,036,427
Total recognised comprehensive income for the period - - - - 2,298,928 2,298,928
Exchange differences on translating foreign operations - - - (63,315) - (63,315)
Total recognised comprehensive income for the period - - - (63,315) 2,298,928 2,235,613
Share-based payment - - - - 547,745 547,745
Deferred tax on share based payment - - - - (245,555) (245,555)
Dividends paid - - - - - -
Issue of ordinary shares - - - - - -
Sale of treasury shares - - - - - -
Balance at 30 June 2024 861,692 9,950,231 1,283,457 256,976 (192,591) 25,414,465 37,574,230
NOTES TO THE INTERIM REPORT
1. General information
The principal activity of the Group is the 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 &
aerospace, telecommunications, medical and other 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 30 August
2024.
The information relating to the six months ended 30 June 2024 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
2023, 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.
2. Summary of significant accounting policies
2.1 Basis of preparation
These condensed consolidated interim financial statements are for the six
months period ended 30 June 2024. They have been prepared in accordance with
IAS 34 "Interim Financial Reporting". They do not include all 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 2023, 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 end 31 December
2023, 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 2024 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 the 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 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 earnings per share calculation
are shown below:
The inputs to the earnings per share calculation are shown below:
Six months Six months Year
ended ended ended
30/06/24 30/06/23 31/12/23
£ £ £
Profit attributable to ordinary equity holders 2,298,928 1,127,937 3,873,136
Six months Six months Year
ended ended ended
30/06/24 30/06/23 31/12/23
N° N° N°
Weighted average number of ordinary shares for basic earnings per share 85,637,714 73,673,490 77,833,759
Adjustment for share options 4,554,202 2,069,974
Weighted average number of ordinary shares for diluted earnings per share 90,191,916 73,673,490 79,903,733
5. 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, UK
CO4 9WN
They are also available 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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UASKRSBUWORRRecent news on Concurrent Technologies
See all newsREG - AIM - AIM Notice - 29/04/2025
AnnouncementREG - Concurrent Tech. - Exercise of Options
AnnouncementREG - Concurrent Tech. - Exercise of Options, Director Dealing and TVR
AnnouncementREG - Concurrent Tech. - Holding(s) in Company
AnnouncementREG - Concurrent Tech. - Final Results for the year ended 31 December 2024
Announcement