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Concurrent Technologies PLC  -  CNC   

Interim Results

Released 07:00 12-Sep-2018

RNS Number : 4749A
Concurrent Technologies PLC
12 September 2018
 

12 September 2018

Concurrent Technologies Plc

(the "Company" or the "Group")

 

Interim Results for the six months ended 30 June 2018

 

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 2018.

 

Financial Highlights
 

·    Turnover of £7.9m (H1 2017: £7.8m)

·    Gross profit £4.1m (H1 2017: £4.3m)

·    Gross margin 51.7% (H1 2017: 54.8%)

·    Profit before tax of £1.1m (H1 2017: £1.4m)

·    EPS of 1.50 pence (H1 2017: 1.84 pence)

·    Interim dividend increased to 0.95p per share (H1 2017: 0.90p)

·    Cash balance (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m)

 

 

Operational Highlights

 

·     Sales into the defence sector continue to be strong and now account for 59% of H1 Group turnover

·     Global customer base continues to expand with exports generating 88% of Group revenues (H1 2017: 84%)

·     Investment in R&D during the period matched 2017 levels at £1.2m

·     Several new boards and board variants have been launched in 2018 along with the roll out of the enhanced security package

 

 

Michael Collins, Chairman of Concurrent Technologies Plc, commented:

 

"The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future."

 

 

Enquiries:

Concurrent Technologies Plc
Glen Fawcett, CEO

 

+44 (0)1206 752626

 

 

Newgate (Financial PR)
Bob Huxford

Imogen Humphreys

 

+44 (0)20 7653 9848
+44 (0)20 7653 9840

 

 

Cenkos Securities Plc (NOMAD)
Neil McDonald

Beth McKiernan


+44 (0)131 220 9771

+44 (0)131 220 9778

 

 

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 8th generation 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.

 

 

CHAIRMAN'S STATEMENT

Financial Summary

 

I am pleased to report a good performance for the first-half of 2018, with strong sales, profit before tax and investment in the first six months.

 

Revenue for the period was £7.9m (H1 2017: £7.8m), gross margin was slightly lower at 51.7% mainly due to a change in the sales mix of products (H1 2017: 54.8%) and gross profit was £4.1m (H1 2017: £4.3m). The unaudited profit before tax for the same period was £1.1m (H1 2017: £1.4m) with associated earnings per share of 1.50 pence (H1 2017: 1.84 pence).

 

The Group's balance sheet remains robust with cash balances (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m) and total equity increased to £19.0m (H1 2017: £18.0m).

 

Dividend

The Board has declared a first interim dividend of 0.95p per share (H1 2017: 0.90p) - an increase of 5.6%. The total cost of this dividend will amount to £690,826. The ex-dividend date for this interim dividend is 27 September 2018, the record date is 28 September 2018 and the payment date is 12 October 2018.

 

Review of Operations

The key driver of our turnover continues to be the defence sectors. The United States remains our main market, but we are seeing increasing interest from other areas of the world, particularly the Asian markets.

 

This success in the defence market will not detract from our continuing commitment to the telecommunications and specialist scientific sectors where the Group continues to develop new innovative products.

 

The Group continues to expand its engineering capability in the UK, USA and India. Investment in H1 2018 was maintained at £1.2m (H1 2017: £1.2m), which enabled the Group to launch several new products and many variants during the six-month period, including the announcement of a VPX™ product based on Intel Corporation's 8th generation processor. The Group also released its enhanced suite of security packages which are compatible with industry standards.

 

The Company awaits details of the trade and tariff legislation to be agreed between the UK Government and other countries once the UK has left the European Union (EU). Our current assessment has concluded that, while there may be logistical disruption following the UK's departure, leaving the EU will have little lasting impact on our trading. Most countries, including the USA and those of the European Union, apply a zero-percentage import tariff rating to our products. Current World Trade Organisation (WTO) rules also apply a zero-tariff rating to items we buy and sell.

 

Future Plans

We will continue to develop our product ranges, in particular focusing on the VPX™ architecture both at board and development system level. To broaden the market appeal of the Group's products we will develop more partnerships with companies offering complementary products.

 

Our production capabilities are constantly being revised and improved. A faster "pick and place" machine and an enhanced screen printer have been installed and are now both operational. This equipment is used for high-speed, fine-precision placement of surface-mount components onto printed circuit boards. This investment will allow a faster and more flexible response to customer orders as well as addressing the need to accommodate advances in component technologies.

 

Outlook

The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future.

 

 

Michael Collins

Chairman

 

11th September 2018

 

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

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

unaudited interim results to 30 June 2018

 

 

Note

Six months ended

30/06/18

 

Six months ended

30/06/17

 

Year ended 31/12/17

 

 

£

 

£

 

£

CONTINUING OPERATIONS

 

 

 

 

 

 

Revenue

 

    7,879,517

 

    7,816,472

 

  16,222,732

Cost of sales

 

    3,802,942

 

    3,536,288

 

    7,231,876

Gross profit

 

    4,076,575

 

    4,280,184

 

    8,990,856

Net operating expenses

 

    3,020,677

 

    2,914,116

 

    6,086,516

Group operating profit

 

    1,055,898

 

    1,366,068

 

    2,904,340

Finance income

 

         37,101

 

         30,375

 

         65,117

Profit before tax

 

    1,092,999

 

    1,396,443

 

    2,969,457

Tax

 

           3,630

 

         56,997

 

       213,836

Profit for the period

 

    1,089,369

 

    1,339,446

 

    2,755,621

 

 

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

 

 

Exchange differences on translating foreign operations

 

       244,712

 

       (93,622)

 

      (189,150)

Tax relating to components of other comprehensive income

 

                  -

 

                  -

 

                  -

Other Comprehensive Income for the period, net of tax

 

       244,712

 

       (93,622)

 

      (189,150)

Total Comprehensive Income for the period

 

    1,334,081

 

    1,245,824

 

    2,566,471

 

 

 

 

 

 

 

Profit for the period attributable to:

 

 

 

 

 

 

Equity holders of the parent

 

    1,089,369

 

    1,339,446

 

    2,755,621

 

 

 

 

 

 

 

Total Comprehensive Income attributable to:

 

 

 

 

 

 

Equity holders of the parent

 

    1,334,081

 

    1,245,824

 

    2,566,471

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

Basic earnings per share

4

1.50p

 

1.84p

 

3.79p

 

 

 

 

 

 

 

Diluted earnings per share

4

1.50p

 

1.84p

 

3.79p

 

 

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2018

 

 

 

As at

 

As at

 

As at

 

 

30/06/18

 

30/06/17

 

31/12/17

ASSETS

 

£

 

£

 

£

Non-current assets

 

 

 

 

 

 

Property, plant and equipment

 

       449,860

 

       391,651

 

       482,254

Intangible assets

 

    7,801,410

 

    7,369,683

 

    7,397,512

Deferred tax assets

 

       178,299

 

       146,023

 

       170,495

 

 

    8,429,569

 

    7,907,357

 

    8,050,261

Current assets

 

 

 

 

 

 

Inventories

 

    3,759,675

 

    3,334,750

 

    3,222,800

Trade and other receivables

 

    3,445,776

 

    2,526,923

 

    2,740,335

Current tax assets

 

       434,576

 

       203,710

 

       135,224

Other financial assets

 

    3,410,970               

 

                -  

 

    2,502,281

Cash and cash equivalents

 

    4,399,892

 

    7,885,032

 

    5,892,304

 

 

  15,450,889

 

  13,950,415

 

  14,492,944

 

 

 

 

 

 

 

Total assets

 

  23,880,458

 

  21,857,772

 

  22,543,205

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Deferred tax liabilities

 

    1,553,918

 

    1,417,245

 

    1,473,815

Long term provisions

 

           3,059

 

           3,986

 

           4,097

 

 

    1,556,977

 

    1,421,231

 

    1,477,912

Current liabilities

 

 

 

 

 

 

Trade and other payables

 

    3,258,958

 

    2,384,949

 

    2,332,599

Short term provisions

 

         21,410

 

         19,932

 

         16,644

Current tax liabilities

 

         25,211

 

                -  

 

                -  

 

 

    3,305,579

 

    2,404,881

 

    2,349,243

 

 

 

 

 

 

 

Total liabilities

 

    4,862,556

 

    3,826,112

 

    3,827,155

 

 

 

 

 

 

 

Net assets

 

  19,017,902

 

  18,031,660

 

  18,716,050

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

Capital and reserves

 

 

 

 

 

 

Share capital

 

       739,000

 

       739,000

 

       739,000

Share premium account

 

    3,699,105

 

    3,684,871

 

    3,699,105

Capital redemption reserve

 

       256,976

 

       256,976

 

       256,976

Cumulative translation reserve

 

       550,169

 

       400,985

 

       305,457

Profit and loss account

 

  13,772,652

 

  12,949,828

 

  13,715,512

Equity attributable to equity holders of the parent

 

  19,017,902

 

  18,031,660

 

  18,716,050

 

 

 

 

 

 

 

Total equity

 

  19,017,902

 

  18,031,660

 

  18,716,050

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2018

 

 

 

Six months ended

30/06/18

 

Six months ended

30/06/17

 

Year ended 31/12/17

 

 

£

 

£

 

£

Cash flows from operating activities

 

 

 

 

 

 

Profit before tax for the period

 

    1,092,999

 

    1,396,443

 

    2,969,457

Adjustments for:

           

 

 

 

 

 

Finance income       

 

        (37,101)

 

        (30,375)

 

        (65,117)

Depreciation       

 

       103,174

 

         77,624

 

       194,529

Amortisation       

 

       756,545

 

       620,878

 

    1,294,457

Impairment loss       

 

         63,223

 

         31,064

 

       286,888

Loss on disposal of property, plant and equipment

 

                -  

 

                -  

 

          (3,750)

Share-based payment       

 

        (77,595)

 

         13,611

 

         27,448

Exchange differences       

 

       202,262

 

     (200,228)

 

      (110,755)   

(Increase)/decrease in inventories       

 

      (536,875)

 

       (94,895)

 

         17,055

(Increase)/decrease in trade and other receivables       

 

      (708,092)

 

       800,706

 

       587,294

Increase/(decrease) in trade and other payables       

 

       761,192

 

     (432,426)

 

      (487,953)

Cash generated from operations

 

    1,619,732

 

    2,182,402

 

    4,709,553

Tax received/(paid)

 

          (8,851)

 

        (32,395)

 

       (83,808)

Net cash generated from operating activities

 

    1,610,881

 

    2,150,007

 

    4,625,745

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Interest received

 

        37,101

 

         30,375

 

         65,117

Cash released from/(placed on) deposit

 

     (909,131)

 

    1,000,000

 

    1,502,281)  

Purchases of property, plant and equipment

 

       (72,930)

 

       (56,977)

 

      (267,855)

Proceeds from sale of property, plant and equipment

 

                -  

 

                -  

 

           3,750 

Purchases of intangible assets

 

  (1,223,668)

 

  (1,175,613)

 

   (2,133,046)

Net cash used in investing activities

 

  (2,168,628)

 

     (202,215)

 

   (3,834,315)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Equity dividends paid

 

     (945,339)

 

     (945,339)

 

   (1,599,804)

Sale/(purchase) of treasury shares

 

                 -  

 

                 -  

 

                 -

Net cash used in financing activities

 

     (945,339)

 

     (945,339)

 

   (1,599,804)

 

 

 

 

 

 

 

Effects of exchange rate changes on cash and cash equivalents

 

         10,674

 

       109,496

 

        (72,405)

 

 

 

 

 

 

 

Net increase/(decrease) in cash

 

   (1,492,412)

 

    1,111,949

 

      (880,779)

Cash at beginning of period

 

    5,892,304

 

    6,773,083

 

    6,773,083

Cash at the end of the period

 

    4,399,892

 

    7,885,032

 

    5,892,304

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2018

 

 

Share

capital

Share

Premium

Capital

redemption

reserve

Cumulative

translation

reserve

Profit

and loss

account

Total

equity

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Balance at 1 January 2017

739,000

3,693,818

256,976

494,607

12,489,418

17,673,819

 

 

 

 

 

 

 

Profit for the period

-  

-  

-  

-  

1,339,446

1,339,446

Exchange differences on translating foreign operations

-  

-  

-  

(93,622)

-  

(93,622)

Total recognised comprehensive income for the period

-  

-  

-  

(93,622)

1,339,446

1,245,824

 

 

 

 

 

 

 

Share-based payment

-  

-  

-  

-  

13,611

13,611

Deferred tax on share-based payment

-  

-  

-  

-  

43,274

43,274

Dividends paid

-  

-  

-  

-  

(945,339)

(945,339)

Transfer of treasury shares

-  

(8,947)

-  

-  

9,418

471

Balance at 30 June 2017

739,000

3,684,871

256,976

400,985

12,949,828

18,031,660

 

 

 

 

 

 

 

Profit for the period

-  

-  

-  

-  

1,416,175

1,416,175

Exchange differences on translating foreign operations

-  

-  

-  

(95,528)

-  

(95,528)

Total recognised comprehensive income for the period

-  

-  

-  

(95,528)

1,416,175

1,320,647

 

 

 

 

 

 

 

Share-based payment

-  

-  

-  

-  

13,837

13,837

Deferred tax on share-based payment

-  

-  

-  

-  

4,842

4,842

Dividends paid

-  

-  

-  

-  

(654,465)

(654,465)

Transfer of treasury shares

-  

14,234  

-  

-  

(14,705)

(471)

Balance at 31 December 2017

739,000

3,699,105

256,976

305,457

13,715,512

18,716,050

 

Adjustment for IFRS 15

 

-  

-  

-  

-  

(34,399)

(34,399)

Balance at 01 January 2018

739,000

3,699,105

256,976

305,457

13,681,113

18,681,651

 

 

 

 

 

 

 

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)

Transfer of treasury shares

-  

-  

-  

-  

-

-

Balance at 30 June 2018

739,000

3,699,105

256,976

550,169

13,772,652

19,017,902

 

 

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 (£), 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 11th September, 2018.

 

The information relating to the six months ended 30 June 2018 and 30 June 2017 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 2017, 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 2018. 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 2017, which have been prepared in accordance with adopted IFRSs.

 

The Group applies, for the first time, IFRS 15 Revenue from Contracts with Customers, that require adjustments to the amounts recognised in the financial statements. As required by IAS 34, the nature and effect of these changes are disclosed below in the section entitled Warranty Obligations.

 

The Group also applies IFRS 9 Financial Instruments for the first time in 2018 but this does not have an impact on the interim condensed consolidated financial statements of the Group.

 

All other accounting policies applied and methods of computation are consistent with those of the annual financial statements for the year ended 31 December 2017, as described in those financial statements.

 

Warranty Obligations

 

IFRS 15 has been produced in order to bring into line the principles that a business applies when reporting the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. The core principle of IFRS 15 dictates that a business recognises revenue to clearly show the transfer of contracted goods/services to customers in the amount that mirrors the consideration that the business is entitled to. Under IFRS 15 there are 5 steps to recognising revenue.

 

The Directors have considered these 5 steps and sale of goods where the risks and rewards of ownership are transferred at the point of invoice IFRS 15 has no impact, this is the case for most Company sales.

 

The Group offers extended warranties on its products. As the customer has the option of purchasing the additional warranty separately, this is a service-type warranty and is accounted for as a separate performance obligation. Deferred revenue is recognised (as opposed to revenue being recorded) over the period of the extended warranty.

 

The Directors have opted to adopt the modified retrospective method of transition and have applied IFRS 15 to those contracts that are not completed as at 1st January 2018, the impact on the Profit and loss account is £34,399.

 

 

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, share options.

 

The inputs to the earnings per share calculation are shown below:

 

 

 

 

 

Six months ended

30/06/18

 

Six months ended

30/06/17

 

Year ended 31/12/17

 

 

 

£

 

£

 

£

 

 

 

 

 

 

 

 

 

Profit attributable to ordinary equity holders

 

1,089,369

 

1,339,446

 

2,755,621

 

 

 

 

 

 

 

 

 

 

 

Six months ended

30/06/18

 

Six months ended

30/06/17

 

Year ended 31/12/17

 

 

 

No

 

No

 

No

 

Weighted average number of ordinary

shares for basic earnings per share

 

72,718,490

 

72,604,009

 

72,635,976

 

Adjustment for share options

 

2,457

 

481

 

2,457

 

Weighted average number of ordinary  shares for diluted earnings per share

 

72,720,947

 

72,604,490

 

72,638,433

 

 

 

 

 

 

 

 

 

 

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 condensed interim financial statements.

 

 

6.

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.
 
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