RNS Number : 9051K
Concurrent Technologies PLC
07 September 2021
 

7 September 2021

Concurrent Technologies Plc

(the "Company" or the "Group")

 

Interim Results for the six months ended 30 June 2021

 

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 2021, reflecting a positive trading period with strong sales, profit before tax and investment.

 

Financial Highlights

·    Revenue of £9.3m (H1 2020: £9.2m)

·    Gross profit of £5.1m (H1 2020: £4.9m)

·    Gross margin of 54.3% (H1 2020: 52.9%)

·    Group operating profit of £1.6m (H1 2020: £1.2m)

·    Profit before tax of £1.5m (H1 2020: £1.2m)

·    EPS of 2.09 pence (H1 2020: 1.62 pence)

·    Interim dividend increased to 1.15p per share (H1 2020: 1.10p)

·    Cash balance (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m)

 

Operational Highlights

 

·    Largest market sector is defence at 71% of revenue  

·    Record order book achieved during the period of £15.9m (H1 2020: £13.9m)

·    Global customer base remains solid with exports generating 91% of revenue (H1 2020: 96%)

·    R&D cost during the period was £1.6m (H1 2020: £1.8m)

·    Component shortages being managed, although challenges remain across the global supply chain

 

Mark Cubitt, Chairman of Concurrent Technologies Plc, commented: "Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet, and a record order book ensuring the pipeline of future profitability. There remains uncertainty on the timing of some shipments in Q4 2021 and into 2022, driven by component availability, which may slip revenues into 2022 but there is no evidence yet of cancellations from customers. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability."

 

Enquiries:

Concurrent Technologies Plc
Dr Miles Adcock, Chief Executive

Jonathan Martin, CFO

 

+44 (0)1206 752626

 

 

SEC Newgate (Financial PR)
Bob Huxford

Isabelle Smurfit

 

+44 (0)20 7653 9848
+44 (0)20 3757 3411

 

 

Cenkos Securities Plc (NOMAD)
Neil McDonald

Peter Lynch


+44 (0)131 220 9771

+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 11th generation embedded Intel® Core™, 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

I am pleased to announce the trading performance has continued on from the strong results reported for 2020, with solid sales in the first half of 2021 and a growing order book, despite the challenging worldwide supply chain disruption.

The end of the first half also saw the beginning of the smooth transition from Jane Annear to Miles Adcock as CEO. Jane has been extremely helpful and supportive during this period which typifies the commitment, professionalism and drive, that she demonstrated throughout her career with Concurrent and which has brought the Company to its current strong position.

It is with great sadness that I learnt Clive Mannering-Thomson had passed away in August after a brief illness. Clive was a long serving member of the Concurrent Board and true gentleman and our thoughts are with his family and friends at this difficult time.

CHIEF EXECUTIVE'S REVIEW

 

Financial Summary

 

The Company continued to trade and operate in a largely normal fashion during the first half of 2021 with production, sales and development maintained at typical operational levels. Revenue for the period was similar at £9.3m (H1 2020: £9.2m) while gross margin increased to 54.3% (H1 2020: 52.9%).  Consequently, gross profit increased to £5.1m (H1 2020: £4.9m). The unaudited profit before tax (PBT) for the period was £1.6m (H1 2020: £1.2m). The associated earnings per share (EPS) were 2.09 p (H1 2020: 1.62p).

The balance sheet remains very strong, with no debt and cash balances (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m).

Dividend

 

Given the strong cash position and the robust balance sheet, the Board has declared an interim dividend of 1.15p per share (H1 2020: 1.10p) - an increase of 4.5%. The total cost of this dividend will amount to £843,680. The ex-dividend date for this interim dividend is 16 September 2021, the record date is 17 September 2021 and the payment date is 1 October 2021.

Review of Operations

 

As an essential defence supplier, production at the Company's Colchester headquarters continued uninterrupted during each lockdown period and the Company has not applied for support under any Government COVID-19 initiatives. Our preparations for Brexit led to minimal impact on the business and no impact on sales to our customers.

The unprecedented worldwide supply chain shortages are a major risk to all companies and Concurrent is no exception. During 2021 we have so far managed the disruption and protected the supply of goods to our customers, but the situation is deteriorating and is expected to last well into 2022. This may lead to some revenue slipping from 2021 to 2022 but to date we have seen no evidence of program or platform cancellations from our customers. Rather, we have seen growing support from our customer base, leading to a record order book of £15.9m at the period end.

Sales within the defence market increased to £6.6m (H1 2020: £6.3m) representing 71% (H1 2020: 68%) of revenue and exports were 91% (H1 2020: 96%). While defence is still our primary target market, we do see myriad opportunities in the telecoms and other sectors which are being pursued with vigour.

During 2021 we have also seen the final closure of the Concurrent office in India as planned and the subsequent expansion and re-alignment of engineering capabilities in the UK. This has resulted in an overall decrease in R&D spend in H1 2021 to £1.6m (H1 2020: £1.8m) as expected, and this reduction has not had a detrimental impact on output from the function.

 

Through extensive co-operation, development and testing work Intel have elevated us to Titanium partner status thus strengthening our ties with our leading technology supplier. Launches and deployment of the new 3U CompactPCI and AMC boards has continued, along with the development of our software products.

 

Future Plans

 

The current leadership team is being revitalised with the introduction of an HR Director and a Quality & Business Improvement Director. Recruitment for these positions will be completed during the second half of the year. Along with these new appointments there will be some changes in the internal reporting structure which will allow the organisation to increase its capacity to manage new projects and develop the business.

The new team will revise the medium and long-term strategic plan focusing on product lead times and revenue growth.

 

Outlook

 

Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet and a record order book ensuring the pipeline of future profitability. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability.

 

Dr Miles Adcock

CEO

7 September 2021

 

All companies and product names are trademarks of their respective organisations.



CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

Unaudited interim results to 30 June 2021

 


Note

Six months ended

30/06/21


Six months ended

30/06/20


Year ended 31/12/20



£


£


£

CONTINUING OPERATIONS







Revenue


    9,315,839


    9,191,045


  21,141,294

Cost of sales


    4,255,669


    4,325,867


    9,780,750

Gross profit


    5,060,170


    4,865,178


Net operating expenses


    3,439,699


    3,627,665


    8,444,962

Group operating profit


    1,620,471


    1,237,513


    2,915,582

Finance costs


        (32,233)


        (40,035)


        (83,985)

Finance income


           3,696


         23,171


         16,480

Profit before tax


    1,591,934


    1,220,649


    2,848,077

Tax


         56,559


         25,858


         98,167

Profit for the period


    1,535,375


    1,194,791


    2,749,910







Other Comprehensive Income







Exchange differences on translating foreign operations


       (19,626)


       419,634


      (283,681)

Tax relating to components of other comprehensive income


                  -


                  -


                  -

Other Comprehensive Income for the period, net of tax


       (19,626)


       419,634


      (283,681)

Total Comprehensive Income for the period


    1,515,749


    1,614,425


    2,466,229







Profit for the period attributable to:







Equity holders of the parent


    1,535,375


    1,194,791


    2,749,910







Total Comprehensive Income attributable to:







Equity holders of the parent


    1,515,749


    1,614,425


    2,466,229








Earnings per share







Basic earnings per share

4

2.09p


1.62p


3.75p








Diluted earnings per share

4

2.09p


1.62p


3.74p

 




CONDENSED CONSOLIDATED BALANCE SHEET

Unaudited interim results to 30 June 2021

 



As at


As at


As at



30/06/21


30/06/20


31/12/20

ASSETS


£


£


£

Non-current assets







Property, plant and equipment


    1,735,125


    1,683,186


    1,734,965

Intangible assets


    7,333,105


    7,917,503


    7,205,581

Deferred tax assets


         88,455


       100,930


       134,775



    9,156,685


    9,701,619


    9,075,321

Current assets







Inventories


    6,619,081


    6,546,821


    5,533,574

Trade and other receivables


    2,614,711


    3,132,765


    2,356,157

Current tax assets


       351,104


       334,082


       305,113

Cash and cash equivalents


  12,386,445


  10,034,786


  11,765,974



  21,971,341


  20,048,454


  19,960,818








Total assets


  31,128,026


  29,750,073


  29,036,139








LIABILITIES







Non-current liabilities







Deferred tax liabilities


    1,638,947


    1,537,532


    1,571,830

Trade and other payables


       518,919


       529,953


       704,800

Long term provisions


         18,256


         14,964


         16,162



    2,176,122


    1,552,496


    2,292,792

Current liabilities







Trade and other payables


    5,913,855


    5,410,722


    4,143,522

Short term provisions


         18,256


         15,382


         16,354

Current tax liabilities


         33,190       


                -  


         26,504  



    5,965,301


    5,426,104


    4,186,380








Total liabilities


    8,141,423


    6,978,600


    6,479,172








Net assets


  22,986,603


  22,771,473


  22,556,967








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


      (140,919)


       582,022


      (121,293)

Profit and loss account


  18,432,441


  17,494,370


  17,983,179

Equity attributable to equity holders of the parent


  22,986,603


  22,771,473


  22,556,967








Total equity


  22,986,603


  22,771,473


  22,556,967



CONDENSED CONSOLIDATED CASH FLOW STATEMENT

Unaudited interim results to 30 June 2021

 



Six months ended

30/06/21


Six months ended

30/06/20


Year ended 31/12/20



£


£


£

Cash flows from operating activities







Profit before tax for the period


    1,591,934


    1,220,649


    2,848,077

Adjustments for:

           






Finance income       


          (3,696)


        (23,171)


       (16,480)

Finance costs


         32,233


         40,035


         83,985

Depreciation       


         84,757


       142,154


       282,563

Amortisation       


       606,453


       888,299


    1,793,628

Impairment loss       


       150,000


       125,000


       888,579

Loss on disposal of property, plant and equipment


         28,778 


                -  


                -  

Share-based payment       


         16,339 


                - 


          6,991

Exchange differences       


        (16,762)


       467,772


     (300,568)

(Increase)/decrease in inventories       


   (1,085,507)


   (1,448,914)


     (435,667)

(Increase)/decrease in trade and other receivables       


      (258,554)


      (428,805)


       347,803

Increase/(decrease) in trade and other payables       


    1,645,319


       493,329


         (9,354)

Cash generated from operations


    2,791,294


    1,476,348


    5,489,557

Tax received/(paid)


        (21,110)


          (1,209)


         40,535

Net cash generated from operating activities


    2,770,184


    1,475,139


    5,530,092








Cash flows from investing activities







Interest received


          3,696


        23,171


         16,480

Cash released from/(placed on) deposit


                -  


                -   


                -  

Purchases of property, plant and equipment


     (115,045)


     (182,469)


     (385,964)

Proceeds from sale of property, plant and equipment


                -  


                -  


                -  

Purchases of intangible assets


     (883,983)


     (939,585)


   (1,896,659)

Net cash used in investing activities


     (995,332)


  (1,098,883)


   (2,266,143)








Cash flows from financing activities







Equity dividends paid


  (1,063,769)


  (1,054,561)


   (1,864,968)

Repayment of leasing liabilities


       (56,871)


(50,648)


      (108,195)

Interest paid


       (32,233)


(40,035)


        (83,985)

Sale of treasury shares


                -  


    368,550


         47,529

Net cash used in financing activities


  (1,152,873)


    (776,694)


   (2,009,619)








Effects of exchange rate changes on cash and cash equivalents


         (1,508)


       (52,678)


         23,742








Net increase/(decrease) in cash


       620,471


      (453,116)


    1,278,072

Cash at beginning of period


  11,765,974


  10,487,902


  10,487,902

Cash at the end of the period


  12,386,445


  10,034,786


  11,765,974

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Unaudited interim results to 30 June 2021

 


Share

capital

Share

Premium

Capital

redemption

reserve

Cumulative

translation

reserve

Profit

and loss

account

Total

equity


£

£

£

£

£

£








Balance at 1 January 2020

739,000

3,699,105

256,976

162,388

17,027,245

21,884,714








Profit for the period

-  

-  

-  

-  

1,194,791

1,194,791

Exchange differences on translating foreign operations

-  

-  

-  

419,634

-  

419,634

Total recognised comprehensive income for the period

-  

-  

-  

419,634

1,194,791

1,614,425








Share-based payment

-  

-  

-  

-  

-  

-  

Deferred tax on share-based payment

-  

-  

-  

-  

(41,655)

(41,655)

Dividends paid

-  

-  

-  

-  

(1,054,561)

(1,054,561)

Sale of treasury shares

-  

-  

-  

-  

368,550 

368,550

Balance at 30 June 2020

739,000

3,699,105

256,976

582,022

17,494,370

22,771,473








Profit for the period

-  

-  

-  

-  

1,555,119

1,555,119

Exchange differences on translating foreign operations

-  

-  

-  

(703,315)

-  

(703,315)

Total recognised comprehensive income for the period

-  

-  

-  

(703,315)

1,555,119

851,804








Share-based payment

-  

-  

-  

-  

6,991 

   6,991  

Deferred tax on share-based payment

-  

-  

-  

-  

58,127

58,127

Dividends paid

-  

-  

-  

-  

(810,407)

(810,407)

Sale of treasury shares

-  

-  

-  

-  

(321,021)

(321,021)

Balance at 31 December 2020

739,000

3,699,105

256,976

(121,293)

17,983,179

22,556,967








Profit for the period

-  

-  

-  

-  

1,535,375

1,535,375

Exchange differences on translating foreign operations

-  

-  

-  

(19,626)

-  

(19,626)

Total recognised comprehensive income for the period

-  

-  

-  

(19,626)

1,535,375

1,515,749








Share-based payment

-  

-  

-  

-  

16,339 

16,339  

Deferred tax on share-based payment

-  

-  

-  

-  

(38,683)

(38,683)

Dividends paid

-  

-  

-  

-  

(1,063,769)

(1,063,769)

Sale of treasury shares

-  

-  

-  

-  

Balance at 30 June 2021

739,000

3,699,105

256,976

(140,919)

18,432,441

22,986,603

 

 

NOTES TO THE INTERIM REPORT

 

1.

General information

 


The principal activity of the Group is 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, telecommunications, aerospace, transport, scientific and industrial 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 6 September, 2021.

 

The information relating to the six months ended 30 June 2020 and 30 June 2020 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 2020, 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 2021. 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 2020, 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 2020, 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 2021 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 ended

30/06/21


Six months ended

30/06/20


Year ended 31/12/20




£


£


£










Profit attributable to ordinary equity holders


1,535,375


1,194,791


2,749,910












Six months ended

30/06/21


Six months ended

30/06/20


Year ended 31/12/20




No


No


No


Weighted average number of ordinary

shares for basic earnings per share


73,363,490


73,673,490


72,523,722


Adjustment for share options


-


195,579


311,651


Weighted average number of ordinary  shares for diluted earnings per share


73,363,490


73,869,069


73,565,372


 

 









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.





 

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Anonymous (not verified) Interim Results 32103461 A Tue, 09/07/2021 - 07:00 LSE RNS Results and Trading Reports CNC