02 September 2015
CONCURRENT TECHNOLOGIES PLC
Interim Results for the six months ended 30 June 2015
Concurrent Technologies Plc (the "Company"), 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 2015.
Financial Highlights:
· Turnover up 72% to £9.6m (H1 2014: £5.6m)
· Profit before tax £1.6m (H1 2014: £0.4m)
· Earnings per share for the period 2.06p (H1 2014: 0.56p)
· Interim dividend 0.70p per share (H1 2014: 0.65p)
· Net cash, including cash deposits £5.7m (H1 2014: £4.8m); no borrowings
Operational Highlights:
· Further increased investment in R&D
· Release of four new high performance products
· Investment in new manufacturing equipment to increase capacity
Michael Collins, Chairman, commented:
"Our order book is robust, our cash position remains strong and, while our second half performance is not expected to match the first half, we look forward to a satisfactory outcome for the remainder of this year. Continued investment in the Group's diverse and expanding product range and customer base should continue to deliver solid results in the future."
Enquiries:
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Concurrent Technologies Plc |
+44 (0)1206 752 626 |
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Newgate (Financial PR) Robyn McConnachie |
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Cenkos Securities plc (NOMAD) Nick Tulloch |
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CHAIRMAN'S STATEMENT
I am delighted to report an excellent start to 2015 with results significantly ahead of our earlier expectations. The Group turnover was 72% higher than the same period last year at £9.60m (H1 2014: £5.57m), with increases across all our markets together with an improved gross margin of 48.7% (H1 2014: 48.0%). The unaudited profit before tax for the six months to 30 June 2015 was £1.61m (H1 2014: £0.42m) with associated earnings per share of 2.06 pence (H1 2014: 0.56 pence).
At the end of the period, we had a sound balance sheet with a healthy cash position of £5.70m (H1 2014: £4.85m), notwithstanding an increase in working capital of £0.80m due to increased sales volumes (H1 2014: reduction of £0.46m), increased R&D expenditure and enhanced dividend payments during the first half of 2015.
Review of Operations
Our turnover during the first half of 2015 improved compared to H1 2014. Sales into telecommunication applications have grown by 91%, due mainly to continued sales of AMC architecture computers for test equipment. Defence related revenues have improved by 50% and sales associated with scientific applications, particularly for physics research projects, have increased by 136%.
Investment in R&D has increased with all three teams in the UK, India and USA now operational. Total expenditure on R&D of £1.60m for H1 2015 compares with £1.34m for H1 2014 - an increase of 19%.
New products released during this first half of the year include four new high performance embedded computers, with long life-cycle devices and featuring the latest technology including low power Intel® Atom™ processors and 4th generation Intel® Core™ processors. These provide long term upgrade paths across our product architectures. We have also released further accessory boards to augment the functionality of our main products.
Manufacturing capacity and throughput were increased during the period by the acquisition of an additional fast electronic component placement machine.
Future Plans
Continual investment in R&D is critical to ensure a constant expansion of our range of advanced technology products and thereby enhance our competitive position. Our products are used in a wide range of increasingly sophisticated, high-reliability computer systems and our objective remains to design more innovative products for complex, high technology, low to medium volume and high margin applications. 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. We will continue to develop the capabilities of these products with new and complementary software and firmware packages. These will provide high-speed data transfer, ease of integration and security which will further enhance our product portfolio.
Dividend
The Board has declared an interim dividend of 0.70p per share (H1 2014: 0.65p) - an increase of 7.7%. The total cost of this dividend will amount to £508,203. The ex-dividend date for the interim dividend is 10 September 2015, the record date is 11 September 2015 and the payment date is 18 September 2015.
Outlook
Our order book is robust, our cash position remains strong and, while our second half performance is not expected to match the first half, we look forward to a satisfactory outcome for the remainder of this year. Continued investment in the Group's diverse and expanding product range and customer base should continue to deliver solid results in the future.
Michael Collins
Chairman
01 September 2015
All companies and product names are trademarks of their respective organisations.
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
unaudited interim results to 30 June 2015
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|
Note |
Six months ended 30/06/15 |
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Six months ended 30/06/14 |
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Year ended 31/12/14 |
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£ |
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£ |
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£ |
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CONTINUING OPERATIONS |
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Revenue |
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9,595,467 |
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5,574,557 |
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12,806,315 |
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Cost of sales |
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4,923,619 |
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2,899,117 |
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6,247,748 |
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Gross profit |
|
4,671,848 |
|
2,675,440 |
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6,558,567 |
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Net operating expenses |
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3,078,775 |
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2,286,611 |
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4,892,800 |
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Group operating profit |
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1,593,073 |
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388,829 |
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1,665,767 |
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Finance income |
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17,224 |
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35,509 |
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58,079 |
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Profit before tax |
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1,610,297 |
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424,338 |
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1,723,846 |
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Tax |
|
112,420 |
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24,923 |
|
76,148 |
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Profit for the period |
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1,497,877 |
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399,415 |
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1,647,698 |
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|
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Other Comprehensive Income |
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|
|
|
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Exchange differences on translating foreign operations |
|
79,535 |
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(29,037) |
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90,539 |
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Tax relating to components of other comprehensive income |
|
- |
|
- |
|
- |
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Other Comprehensive Income for the period, net of tax |
|
79,535 |
|
(29,037) |
|
90,539 |
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Total Comprehensive Income for the period |
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1,577,412 |
|
370,378 |
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1,738,237 |
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|
|
|
|
|
|
|
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Profit for the period attributable to: |
|
|
|
|
|
|
|
Equity holders of the parent |
|
1,497,877 |
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399,415 |
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1,647,698 |
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|
|
|
|
|
|
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Total Comprehensive Income attributable to: |
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|
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|
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Equity holders of the parent |
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1,577,412 |
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370,378 |
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1,738,237 |
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|
|
|
|
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Earnings per share |
|
|
|
|
|
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Basic earnings per share |
4 |
2.06p |
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0.56p |
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2.28p |
|
|
|
|
|
|
|
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Diluted earnings per share |
4 |
2.06p |
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0.55p |
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2.28p |
CONDENSED CONSOLIDATED BALANCE SHEET
unaudited interim results to 30 June 2015
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As at |
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As at |
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As at |
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30/06/15 |
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30/06/14 |
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31/12/14 |
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ASSETS |
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£ |
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£ |
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£ |
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Non-current assets |
|
|
|
|
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Property, plant and equipment |
|
695,632 |
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609,986 |
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608,044 |
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Intangible assets |
|
6,026,976 |
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5,845,981 |
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6,018,931 |
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Deferred tax assets |
|
105,398 |
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82,813 |
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73,440 |
|
|
|
6,828,006 |
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6,538,780 |
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6,700,415 |
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Current assets |
|
|
|
|
|
|
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Inventories |
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4,184,343 |
|
2,536,345 |
|
2,699,658 |
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Trade and other receivables |
|
3,095,560 |
|
2,210,893 |
|
2,790,426 |
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Current tax assets |
|
75,565 |
|
284,726 |
|
307,912 |
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Other financial assets |
|
- |
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2,585,066 |
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- |
|
Cash and cash equivalents |
|
5,700,287 |
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2,261,771 |
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5,624,505 |
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|
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13,055,755 |
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9,878,801 |
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11,422,501 |
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|
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Total assets |
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19,883,761 |
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16,417,581 |
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18,122,916 |
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LIABILITIES |
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Non-current liabilities |
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Deferred tax liabilities |
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1,283,929 |
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1,257,824 |
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1,279,852 |
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Long term provisions |
|
10,981 |
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10,009 |
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7,314 |
|
|
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1,294,910 |
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1,267,833 |
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1,287,166 |
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Current liabilities |
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|
|
|
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Trade and other payables |
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3,488,379 |
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1,708,720 |
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2,500,524 |
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Short term provisions |
|
33,726 |
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36,813 |
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33,922 |
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Current tax liabilities |
|
3,072 |
|
2,998 |
|
665 |
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3,525,177 |
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1,748,531 |
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2,535,111 |
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|
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Total liabilities |
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4,820,087 |
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3,016,364 |
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3,822,277 |
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|
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Net assets |
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15,063,674 |
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13,401,217 |
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14,300,639 |
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|
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EQUITY |
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|
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Capital and reserves |
|
|
|
|
|
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Share capital |
|
739,000 |
|
739,000 |
|
739,000 |
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Share premium account |
|
3,693,818 |
|
3,693,818 |
|
3,693,818 |
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Capital redemption reserve |
|
256,976 |
|
256,976 |
|
256,976 |
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Cumulative translation reserve |
|
95,258 |
|
(103,853) |
|
15,723 |
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Profit and loss account |
|
10,278,622 |
|
8,815,276 |
|
9,595,122 |
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Equity attributable to equity holders of the parent |
|
15,063,674 |
|
13,401,217 |
|
14,300,639 |
|
|
|
|
|
|
|
|
|
Total equity |
|
15,063,674 |
|
13,401,217 |
|
14,300,639 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
unaudited interim results to 30 June 2015
|
|
|
Six months ended 30/06/15 |
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Six months ended 30/06/14 |
|
Year ended 31/12/14 |
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|
|
£ |
|
£ |
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£ |
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Cash flows from operating activities |
|
|
|
|
|
|
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Profit before tax for the period |
|
1,610,297 |
|
424,338 |
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1,723,846 |
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Adjustments for: |
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|
|
|
|
|
|
Finance income |
|
(17,224) |
|
(35,509) |
|
(58,079) |
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Depreciation |
|
106,821 |
|
85,070 |
|
178,059 |
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Amortisation |
|
638,198 |
|
588,056 |
|
1,160,940 |
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Impairment loss |
|
505,727 |
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- |
|
450,000 |
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Share-based payment |
|
9,787 |
|
2,814 |
|
6,279 |
|
Exchange differences |
|
94,681 |
|
15,635 |
|
29,060 |
|
(Increase)/decrease in inventories |
|
(1,484,685) |
|
14,211 |
|
(149,102) |
|
(Increase)/decrease in trade and other receivables |
|
(305,134) |
|
663,461 |
|
83,928 |
|
Increase/(decrease) in trade and other payables |
|
991,326 |
|
(222,390) |
|
563,828 |
|
Cash generated from operations |
|
2,149,794 |
|
1,535,686 |
|
3,988,759 |
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Tax received/(paid) |
|
105,193 |
|
45,628 |
|
284 |
|
Net cash generated from operating activities |
|
2,254,987 |
|
1,581,314 |
|
3,989,043 |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
Interest received |
|
17,224 |
|
35,509 |
|
58,079 |
|
Cash placed on deposit |
|
- |
|
- |
|
2,602,689 |
|
Purchases of property, plant and equipment |
|
(195,398) |
|
(217,066) |
|
(303,816) |
|
Purchases of intangible assets |
|
(1,152,257) |
|
(966,532) |
|
(2,161,809) |
|
Net cash used in investing activities |
|
(1,330,431) |
|
(1,148,089) |
|
195,143 |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
Equity dividends paid |
|
(834,904) |
|
(785,404) |
|
(1,257,305) |
|
Cash received from share issue |
|
- |
|
300,001 |
|
300,001 |
|
Net cash used in financing activities |
|
(834,904) |
|
(485,403) |
|
(957,304) |
|
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents |
|
(13,870) |
|
(26,910) |
|
56,764 |
|
|
|
|
|
|
|
|
|
Net increase/(decrease) in cash |
|
75,782 |
|
(79,088) |
|
3,283,646 |
|
Cash at beginning of period |
|
5,624,505 |
|
2,340,859 |
|
2,340,859 |
|
Cash at the end of the period |
|
5,700,287 |
|
2,261,771 |
|
5,624,505 |
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
unaudited interim results to 30 June 2015
|
|
Share capital |
Share Premium |
Capital redemption reserve |
Cumulative translation reserve |
Profit and loss account |
Total equity |
|
|
£ |
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
|
|
|
Balance at 1 January 2014 |
727,000 |
3,405,817 |
256,976 |
(74,816) |
9,212,552 |
13,527,529 |
|
|
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
- |
399,415 |
399,415 |
|
Exchange differences on translating foreign operations |
- |
- |
- |
(29,037) |
- |
(29,037) |
|
Total recognised comprehensive income for the period |
- |
- |
- |
(29,037) |
399,415 |
370,378 |
|
|
|
|
|
|
|
|
|
Share-based payment |
- |
- |
- |
- |
2,814 |
2,814 |
|
Deferred tax on share based payment |
- |
- |
- |
- |
(14,101) |
(14,101) |
|
Dividends paid |
- |
- |
- |
- |
(785,404) |
(785,404) |
|
Issue of Ordinary shares |
12,000 |
288,001 |
- |
- |
- |
300,001 |
|
Balance at 30 June 2014 |
739,000 |
3,693,818 |
256,976 |
(103,853) |
8,815,276 |
13,401,217 |
|
|
|
|
|
|
|
|
|
Profit for the period |
- |
- |
- |
- |
1,248,283 |
1,248,283 |
|
Exchange differences on translating foreign operations |
- |
- |
- |
119,576 |
- |
119,576 |
|
Total recognised comprehensive income for the period |
- |
- |
- |
119,576 |
1,248,283 |
1,367,859 |
|
|
|
|
|
|
|
|
|
Share-based payment |
- |
- |
- |
- |
3,465 |
3,465 |
|
Deferred tax on share based payment |
- |
- |
- |
- |
(1) |
(1) |
|
Dividends paid |
- |
- |
- |
- |
(471,901) |
(471,901) |
|
Balance at 31 December 2014 |
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 |
NOTES TO THE INTERIM REPORT
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1. |
General information
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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 1 September 2015.
The information relating to the six months ended 30 June 2015 and 30 June 2014 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 2014, prepared under adopted IFRS (International Financial Reporting Standards), have been reported on by the Group's auditors and delivered to the Registrar of Companies. The auditors' report in accordance with Chapter 3 of Part 16 of the Companies Act 2006 in relation to those accounts was unqualified.
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2. |
Summary of significant accounting policies
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2.1 |
Basis of preparation
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These condensed consolidated interim financial statements are for the six months ended 30 June 2015. 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 2014, which have been prepared in accordance with IFRSs.
The accounting policies applied and methods of computation are consistent with those of the annual financial statements for the year ended 31 December 2014, 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 01 January 2015 that would be expected to have a material impact on the results or financial position of the Group.
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2.2 |
Taxation
|
||||||
|
|
Current tax expense is recognised in these condensed consolidated interim financial statements based on estimated effective tax rates for the full year.
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3. |
Segmental reporting
|
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|
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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.
|
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|
4. |
Earnings per share
|
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|
|
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:
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|
|
|
|
Six months ended 30/06/15 |
|
Six months ended 30/06/14 |
|
Year ended 31/12/14 |
|
|
|
|
£ |
|
£ |
|
£ |
|
|
|
|
|
|
|
|
|
|
|
Profit attributable to ordinary equity holders |
|
1,497,877 |
|
399,415 |
|
1,647,698 |
|
|
|
|
Six months ended 30/06/15 |
|
Six months ended 30/06/14 |
|
Year ended 31/12/14 |
|
|
|
|
No |
|
No |
|
No |
|
|
Weighted average number of ordinary shares for basic earnings per share |
|
72,600,490 |
|
71,950,766 |
|
72,278,298 |
|
|
Adjustment for share options |
|
7,872 |
|
22,337 |
|
11,992 |
|
|
Weighted average number of ordinary shares for diluted earnings per share |
|
72,608,362 |
|
71,973,103 |
|
72,290,290 |
|
|
|
|
|
|
|
|
|
|
|
|
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|
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. |
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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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