REG - Concurrent Tech. - Post-Close Trading Update

Concurrent TechnologiesAnnouncement

04/01/2023 07:00

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RNS Number : 5749L  Concurrent Technologies PLC  04 January 2023

This announcement contains inside information as stipulated under the UK
version of the Market Abuse Regulation No 596/2014 which is part of English
Law by virtue of the European (Withdrawal) Act 2018, as amended. On
publication of this announcement via a Regulatory Information Service, this
information is considered to be in the public domain.

 

4 January 2023

Concurrent Technologies Plc

(the 'Company')

 

Post-Close Trading Update

 

Concurrent Technologies Plc (AIM: CNC), a world-leading specialist in the
design and manufacture of high-end embedded computer systems and boards for
critical applications, is pleased to announce an update on trading for the
year ending 31 December 2022 ("FY22").

 

Based on its unaudited management accounts for FY22, the Company expects to
report revenues circa 10% ahead of market expectations* and profit before tax
at least in line with market expectations**.

 

This was achieved despite the global supply chain shortages which extended
lead times throughout the year, delaying manufacture, shipping and revenues.
The Company invested significant cash into holding increased inventory to
react quickly once parts became available, as happened at the end of FY22. To
best manage this recent surge in activity the Company implemented a double
shift throughout Q4, resulting in record revenues in November and December
2022.

 

Cash was depleted throughout the year as a result of the Company's declared
strategy of investing in R&D, systems, and growth of its home markets in
the US and UK. The additional investment in components holdings to mitigate
supply shortages, resulted in a cash low point at the end of FY22, at a value
of circa £4M.

 

With the increased shipping of product in November and December 2022, the
Company anticipates strong cash generation at the start of FY23, with further
episodes of cash generation as components become more available. Whilst
overall supply chains are seeing a degree of recovery, the Company is in many
cases dependent on some very specific components, and hence FY23 forecasts
remain prudently cautious.

 

The Company intends to continue its strategy to invest in growth during FY23,
and this includes efforts to make acquisitions that align with a strategy of
owning more of the technology building blocks in embedded systems, in addition
to single board computers.

 

FY22 has seen excellent strategic progress. The Company now sells systems
products and has received its first purchase orders accordingly. It has also
qualified a manufacturing partner in the USA and is therefore capable of
selling domestic product in America. In addition, the Company's accelerated
R&D efforts are resulting in increased demand for evaluation boards which
is the route to being designed into latter production phases that typically
last several years.

 

Following a record order intake in FY21 of £25M, the Company is proud to
announce order intake for FY22 in excess of £31M, an increase of over 25%.
The FY22 closing backlog was also very strong, in excess of £26M. These
figures indicate that, as supply chains ease, the Company has potential for
significant revenue growth.  A further cause for optimism is that the Company
expects to run double shifts throughout Q1 FY23, maintaining its increased
capacity.

 

The Board previously confirmed a policy of paying dividends from profit
generated during the year. Accordingly, the Board does not currently propose
to pay a dividend in respect of FY22, with cash instead being used to fund
further investment across the business, including in component holdings to
mitigate the impact of any potential further restrictions. However, the Board
is still committed to the capital discipline of paying a dividend when future
profits allow.

 

Chief Executive Officer Miles Adcock said "Whilst the prolonged components
shortages have frustratingly slowed down revenue generation, it is clear that
our strategy is yielding growth potential. The fact that we have our highest
ever backlog, following a record order intake, gives us real optimism for
short to mid-term performance growth as supply chains improve.  In addition,
our longer-term strategies are exciting our customers and colleagues, so it is
all to play for."

*Consensus revenue expectations for 2022 are £16m

**Consensus profit before tax expectations for 2022 are £0.1m

 

Enquiries:

Concurrent Technologies Plc

Miles Adcock,
CEO
+44 (0)1206 752626

Kim Garrod, CFO

 

SEC Newgate (Financial PR)

Bob
Huxford
+44 (0)20 3757 6880

Isabelle
Smurfit
+44 (0)20 3757 6880

Harry
Handyside
concurrent@secnewgate.co.uk (mailto:concurrent@secnewgate.co.uk)

 

Cenkos Securities Plc (NOMAD)

Neil
McDonald
+44 (0)131 220 9771

Peter
Lynch
+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 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.

All trademarks, registered trademarks and trade names used in this
announcement are the property of their respective owners.

 

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