TIDMCNC
RNS Number : 7247L
Concurrent Technologies PLC
10 September 2019
This announcement contains inside information
10 September 2019
Concurrent Technologies Plc
(the "Company" or the "Group")
Interim Results for the six months ended 30 June 2019
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 2019, reflecting a positive
trading period with strong sales, profit before tax and
investment.
Financial Highlights
-- Turnover of GBP9.5m (H1 2018: GBP7.9m)
-- Gross profit of GBP4.9m (H1 2018: GBP4.1m)
-- Gross margin of 51.7% (H1 2018: 51.7%)
-- Group operating profit of GBP1.6m (H1 2018: GBP1.1m)
-- Profit before tax of GBP2.7m (H1 2018: GBP1.1m) - including
other, non-recurring income of GBP1.0m
-- EPS of 3.31 pence (H1 2018: 1.50 pence)
-- Adjusted EPS on continuing activities of 2.21 pence (H1 2018: 1.50 pence)(*)
-- Interim dividend increased to 1.05p per share (H1 2018: 0.95p)
-- Cash balance (including cash deposits) at 30 June 2019 of GBP10.0m (H1 2018: GBP7.8m)
(*) Adjusted results are prepared to provide a more comparable
indication of the Group's core business performance by removing the
impact of certain items including exceptional items (material and
non-recurring).
Operational Highlights
-- Sales increased across all sectors, with defence still the
largest individual sector, accounting for 58% of Group turnover
during the period
-- Increased order intake resulting in record order book
-- Global customer base continues to expand with exports
generating 90% of Group revenues (H1 2018: 88%)
-- Investment in R&D during the period increased to GBP1.4m (H1 2018: GBP1.2m)
-- Committed to further investment in UK manufacturing facility
-- Two additional senior managers appointed to expand skills and experience
Michael Collins, Chairman of Concurrent Technologies Plc,
commented: "The operational performance during the first half of
the year has been strong with excellent sales, good cost control
and successful recruitment into the senior management team."
"Whilst the turnover of the first half may not reach the same
level in the second half, the increased order intake has resulted
in a new record order book, the majority of which is expected to
ship within the next 12 months. As such, the Board is confident
that the Company will deliver a successful performance for the full
financial year."
Enquiries:
Concurrent Technologies Plc
Jane Annear, Managing Director +44 (0)1206 752626
Newgate (Financial PR)
Bob Huxford +44 (0)20 7653 9848
Fiona Norman +44 (0)20 3757 6885
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(R) processors,
including the latest 9th generation Intel(R) Core(TM) processors,
Intel(R) Xeon(R) and Intel(R) Atom(TM) 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
The first half of 2019 has been a sad one for Concurrent, with
the unexpected and sudden death of its MD, Glen Fawcett. Glen
helped start the Company in the 1980's and worked tirelessly to
build it into the vibrant and exciting company it is today. He is,
and will be, greatly missed both professionally and personally.
Jane Annear was confirmed as Managing Director in May, having
previously held the position of Commercial Director. Jane's
appointment provides the Company with continuity and stability and
she is already overseeing the introduction of new skills through
the recruitment of additional senior personnel to broaden the
management team.
Financial Summary
In respect of trading, the first half of 2019 has been extremely
positive with strong sales, profit before tax and investment in the
first six months of the year.
Revenue for the period was GBP9.5m (H1 2018: GBP7.9m), gross
margin remained consistently high at 51.7% (H1 2018: 51.7%) and
gross profit was GBP4.9m (H1 2018: GBP4.1m). The unaudited profit
before tax (PBT) for the period was GBP2.7m (H1 2018: GBP1.1m),
with associated earnings per share (EPS) of 3.31 pence (H1 2018:
1.50 pence). These PBT and EPS figures include non-recurring
receipts of GBP1m; adjusting for this, the H1 2019 PBT of the
continuing operations is GBP1.7m with an associated EPS of 2.21
pence.
The Group's balance sheet remains strong, with cash balances
(including cash deposits) at 30 June 2019 of GBP10.0m (H1 2018:
GBP7.8m). These balances have been enhanced by the proceeds of a
key man insurance policy. Total equity increased to GBP21.5m (H1
2018: GBP19.1m).
Dividend
The Board has declared a first interim dividend of 1.05p per
share (H1 2018: 0.95p) - an increase of 10.5%. The total cost of
this dividend will amount to GBP763,544. The ex-dividend date for
this interim dividend is 26 September 2019, the record date is 27
September 2019 and the payment date is 11 October 2019.
Review of Operations
The operational performance during the first half of the year
has been strong, with excellent sales, good cost control and
successful recruitment into the senior management team.
The Group has seen sales increase in all market sectors during
2019, with the defence sector remaining our largest individual
market and revenue generator, accounting for 58% of all sales
revenues so far in 2019. Our telecommunications revenue has also
been buoyant with an increase of over a third from H1 2018. It
should be noted that the Group has benefited from some
non-recurring sales programmes which have boosted the half-yearly
sales revenue.
Several hardware and software product announcements have been
made during 2019 and the development of new products and services
remains a key focus of the management team. To further drive this
expanding pipeline of new products the Group invested GBP1.4m in
R&D during the first half of the year (H1 2018: GBP1.2m).
A Chief Technology Officer (CTO) has been recruited with the
remit to develop and widen the Group's product range by introducing
new technologies, some of which are targeted for applications such
as Artificial Intelligence (AI) and Deep Learning. The CTO works
closely with our existing engineering teams based in the UK and
overseas.
Additionally, a Director of Sales has joined the management team
with responsibility for all sales outside of North America. This
key appointment brings particular knowledge of software and
solution sales within the Defence market sectors, building on our
existing expertise of hardware products.
These new additions to the management team bring a wealth of
industry experience and will help position the Company to take
advantage of the opportunities in the marketplace.
The Company still awaits details of the trade and tariff regime
which will apply if the UK leaves the European Union (EU). The
Company has long established exporting procedures and systems in
place for our sales to Asia and North America, and we expect to
apply the same processes for sales into the EU if necessary.
Current World Trade Organisation (WTO) rules apply a zero-tariff
rating to most of the items we buy and sell and our current
assessment has concluded that, while there may be limited
logistical disruption following the UK's departure and some
negative sentiment directed towards the UK, leaving the EU should
have little lasting impact on our trading.
Future Plans
Our engineering teams will continue to develop new hardware
designs based on Intel processors in addition to developing
complementary products to enhance the overall capabilities and
functionality of our current range. Work is also continuing on the
development of AI compatible rugged solutions, for which marketing
is already underway. In addition, we will continue to increase our
support for firmware and software products to facilitate the use of
our hardware. This strategy is expected to particularly benefit
users of our VPX and MicroTCA ranges which are increasingly sold as
system level solutions.
Support for our ranges of VME and CPCI product lines will
continue, through long term manufacturing of established products
and the development of new boards to provide suitable upgrade paths
for both new and existing customers.
As part of the continual improvement to operations and
manufacturing, we have ordered a new Automatic Optical Inspection
machine with enhanced 3D inspection and Foreign Object Debris (FOD)
detection capability and a new high speed component surface mount
machine. This additional equipment will complement the upgrade to
the main production line which was introduced in 2018. These new
machines are expected to be installed before the end of 2019,
providing improved capabilities and increased capacity, as well as
further future-proofing the Group's manufacturing facilities in the
UK.
Outlook
The recruitment of additional senior personnel has enhanced the
management team and introduced new skills and experience which will
benefit the Group going forward. Whilst the turnover of the first
half may not reach the same level in the second half, the increased
order intake has resulted in a new record order book, the majority
of which is expected to ship within the next 12 months. As such,
the Board is confident that the Company will deliver a successful
performance for the full financial year.
Michael Collins
Chairman
9 September 2019
All companies and product names are trademarks of their
respective organisations.
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Unaudited interim results to 30 June 2019
Six months Six months
ended ended Year ended
Note 30/06/19 30/06/18 31/12/18
GBP GBP GBP
CONTINUING OPERATIONS
Revenue 9,539,922 7,879,517 16,624,151
Cost of sales 4,608,129 3,802,942 7,950,636
======================================== ==== ================== ================== ==================
Gross profit 4,931,793 4,076,575 8,673,515
Net operating expenses 3,313,078 3,020,677 5,788,094
Group operating profit 1,618,715 1,055,898 2,885,421
Other Income 5 1,000,000 - -
Finance income 38,082 37,101 88,326
======================================== ==== ================== ================== ==================
Profit before tax 2,656,797 1,092,999 2,973,747
Tax 248,898 3,630 5,886
======================================== ==== ================== ================== ==================
Profit for the period 2,407,899 1,089,369 2,967,861
======================================== ==== ================== ================== ==================
Other Comprehensive Income
Exchange differences on translating
foreign operations 16,596 244,712 43,903
Tax relating to components of other - - -
comprehensive income
======================================== ==== ================== ================== ==================
Other Comprehensive Income for
the period, net of tax 16,596 244,712 43,903
======================================== ==== ================== ================== ==================
Total Comprehensive Income for
the period 2,424,495 1,334,081 3,011,764
======================================== ==== ================== ================== ==================
Profit for the period attributable
to:
======================================== ==== ================== ================== ==================
Equity holders of the parent 2,407,899 1,089,369 2,967,861
======================================== ==== ================== ================== ==================
Total Comprehensive Income attributable
to:
======================================== ==== ================== ================== ==================
Equity holders of the parent 2,424,495 1,334,081 3,011,764
======================================== ==== ================== ================== ==================
Earnings per share
Basic earnings per share 4 3.31p 1.50p 4.08p
Diluted earnings per share 4 3.31p 1.50p 4.08p
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited interim results to 30 June 2019
As at As at As at
30/06/19 30/06/18 31/12/18
ASSETS GBP GBP GBP
Non-current assets
Property, plant and equipment 672,988 449,860 704,969
Intangible assets 8,089,260 7,801,410 7,990,759
Deferred tax assets 140,984 178,299 120,385
8,903,232 8,429,569 8,816,113
Current assets
Inventories 4,913,969 3,759,675 4,096,576
Trade and other receivables 2,907,389 3,445,776 3,352,581
Current tax assets 101,621 434,576 316,428
Other financial assets 999,315 3,410,970 -
Cash and cash equivalents 9,031,044 4,434,291 7,679,352
======================================= ============== =============== ================
17,953,338 15,485,288 15,444,937
Total assets 26,856,570 23,914,857 24,261,050
======================================= ============== =============== ================
LIABILITIES
Non-current liabilities
Deferred tax liabilities 1,457,296 1,553,918 1,448,012
Long term provisions 14,794 3,059 8,183
======================================= ============== =============== ================
1,472,090 1,556,977 1,456,195
Current liabilities
Trade and other payables 3,827,836 3,258,958 2,802,852
Short term provisions 15,170 21,410 8,688
Current tax liabilities 14,588 25,211 -
======================================= ============== =============== ================
3,857,594 3,305,579 2,811,540
Total liabilities 5,329,684 4,862,556 4,267,735
======================================= ============== =============== ================
Net assets 21,526,886 19,052,301 19,993,315
======================================= ============== =============== ================
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 365,956 550,169 349,360
Profit and loss account 16,465,849 13,807,051 14,948,874
======================================= ============== =============== ================
Equity attributable to equity holders
of the parent 21,526,886 19,052,301 19,993,315
Total equity 21,526,886 19,052,301 19,993,315
======================================= ============== =============== ================
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Unaudited interim results to 30 June 2019
Six months Six months
ended ended Year ended
30/06/19 30/06/18 31/12/18
GBP GBP GBP
Cash flows from operating activities
Profit before tax for the period 2,656,797 1,092,999 2,973,747
Adjustments for:
Finance income (38,082) (37,101) (88,326)
Depreciation 108,085 103,174 219,455
Amortisation 909,491 756,545 1,542,749
Impairment loss 350,000 63,223 303,030
Loss on disposal of property,
plant and equipment - - (1,000)
Share-based payment 82,421 (77,595) (77,595)
Exchange differences 20,619 202,262 56,016
(Increase)/decrease in inventories (817,393) (536,875) (873,776)
(Increase)/decrease in trade and
other receivables 445,192 (708,092) (612,246)
Increase/(decrease) in trade and
other payables 1,038,077 761,192 466,383
======================================= ================ ================= =================
Cash generated from operations 4,755,207 1,619,732 3,908,437
Tax received/(paid) (27,415) (8,851) (183,524)
======================================= ================ ================= =================
Net cash generated from operating
activities 4,727,792 1,610,881 3,724,913
======================================= ================ ================= =================
Cash flows from investing activities
Interest received 38,082 37,101 88,326
Cash released from/(placed on)
deposit (999,315) (909,131) 2,502,281
Purchases of property, plant and
equipment (75,403) (72,930) (442,280)
Proceeds from sale of property,
plant and equipment - - 1,000
Purchases of intangible assets (1,357,983) (1,223,668) (2,438,917)
======================================= ================ ================= =================
Net cash used in investing activities (2,394,619) (2,168,628) (289,590)
======================================= ================ ================= =================
Cash flows from financing activities
Equity dividends paid (981.698) (945,339) (1,636,163)
Sale of treasury shares 4,950 - -
Net cash used in financing activities (976,748) (945,339) (1,636,163)
======================================= ================ ================= =================
Effects of exchange rate changes
on cash and cash equivalents (4,733) 10,674 (12,112)
Net increase/(decrease) in cash 1,351,692 (1,458,013) 1,787,048
Cash at beginning of period 7,679,352 5,892,304 5,892,304
======================================= ================ ================= =================
Cash at the end of the period 9,031,044 4,434,291 7,679,352
======================================= ================ ================= =================
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Unaudited interim results to 30 June 2019
Capital Cumulative Profit
Share Share redemption translation and loss Total
capital Premium reserve reserve account equity
GBP GBP GBP GBP GBP GBP
Balance at 1 January
2018 739,000 3,699,105 256,976 305,457 13,715,512 18,716,050
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)
Sale of treasury shares - - - - - -
Balance at 30 June 2018 739,000 3,699,105 256,976 550,169 13,807,051 19,052,301
=============================== ======== ========= =========== ============ ========== ==========
Profit for the period - - - - 1,878,492 1,878,492
Exchange differences
on translating foreign
operations - - - (200,809) - (200,809)
=============================== ======== ========= =========== ============ ========== ==========
Total recognised comprehensive
income for the period - - - (200,809) 1,878,492 1,677,683
Share-based payment - - - - - -
Deferred tax on share-based
payment - - - - (45,845) (45,845)
Dividends paid - - - - (690,824) (690,824)
Sale of treasury shares - - - - - -
Balance at 31 December
2018 739,000 3,699,105 256,976 349,360 14,948,874 19,993,315
=============================== ======== ========= =========== ============ ========== ==========
Profit for the period - - - - 2,407,899 2,407,899
Exchange differences
on translating foreign
operations - - - 16,596 - 16,596
=============================== ======== ========= =========== ============ ========== ==========
Total recognised comprehensive
income for the period - - - 16,596 2,407,899 2,424,495
Share-based payment - - - - 82,421 82,421
Deferred tax on share-based
payment - - - - 3,403 3,403
Dividends paid - - - - (981,698) (981,698)
Sale of treasury shares - - - - 4,950 4,950
Balance at 30 June 2019 739,000 3,699,105 256,976 365,956 16,465,849 21,526,886
=============================== ======== ========= =========== ============ ========== ==========
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 (GBP), 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 9 September, 2019.
The information relating to the six months ended 30 June 2019
and 30 June 2018 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
2018, 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 2019. 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 2018, 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 2018, 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 2019 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 Six months
ended ended Year ended
30/06/19 30/06/18 31/12/18
GBP GBP GBP
Profit attributable to ordinary
equity holders 2,407,899 1,089,369 2,967,891
==================================== ============ ============ ===========
Six months Six months
ended ended Year ended
30/06/19 30/06/18 31/12/18
N(o) N(o) N(o)
Weighted average number of
ordinary
shares for basic earnings
per share 72,728,490 72,718,490 72,718,490
Adjustment for share options - 2,457 2,457
==================================== ============ ============ ===========
Weighted average number of
ordinary shares for diluted
earnings per share 72,728,490 72,720,947 72,720,947
==================================== ============ ============ ===========
5. Other Income
Other income relates exclusively to a claim made against a
key man insurance policy. The receipt during the period is
a non-recurring item and represents full and final settlement
of the claim.
6. 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.
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.
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 or visit www.rns.com.
END
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