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:

Concurrent Technologies PLC
Glen Fawcett, CEO- +44 (0)1206 752626
Newgate (Financial PR)
Tim Thompson – +44 (0)20 7653 9850
Robyn McConnachie – +44 (0)20 7653 9850
Cenkos Securities Plc (NOMAD)
Neil Mcdonald – +44 (0)131 220 9771
Nick Tulloch – +44 (0)131 220 9772

 

CHAIRMAN’S STATEMENT

Financial Summary

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

Note Six months

ended

30/06/15

  Six months

ended

30/06/14

  Year ended

31/12/14

  £   £   £
CONTINUING OPERATIONS  
Revenue   9,595,467 5,574,557 12,806,315
Cost of sales   4,923,619 2,899,117 6,247,748
Gross profit   4,671,848 2,675,440 6,558,567
Net operating expenses   3,078,775 2,286,611 4,892,800
Group operating profit   1,593,073 388,829 1,665,767
Finance income   17,224 35,509 58,079
Profit before tax   1,610,297 424,338 1,723,846
Tax   112,420 24,923 76,148
Profit for the period 1,497,877 399,415 1,647,698
Other Comprehensive Income
Exchange differences on translating foreign operations 79,535 (29,037) 90,539
Tax relating to components of other comprehensive income
Other Comprehensive Income for the period, net of tax 79,535 (29,037) 90,539
Total Comprehensive Income for the period 1,577,412 370,378 1,738,237
Profit for the period attributable to:
Equity holders of the parent 1,497,877 399,415 1,647,698
Total Comprehensive Income attributable to:
Equity holders of the parent 1,577,412 370,378 1,738,237
Earnings per share
Basic earnings per share 4 2.06p 0.56p 2.28p
Diluted earnings per share 4 2.06p 0.55p 2.28p

 

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2015

    As at 

30/06/15

As at

30/06/14

  As at 

31/12/14

ASSETS   £ £   £
Non-current assets  
Property, plant and equipment   695,632 609,986 608,044
Intangible assets   6,026,976 5,845,981 6,018,931
Deferred tax assets   105,398 82,813 73,440
  6,828,006 6,538,780 6,700,415
Current assets  
Inventories   4,184,343 2,536,345 2,699,658
Trade and other receivables   3,095,560 2,210,893 2,790,426
Current tax assets   75,565 284,726 307,912
Other financial assets   2,585,066
Cash and cash equivalents   5,700,287 2,261,771 5,624,505
  13,055,755 9,878,801 11,422,501
   
Total assets   19,883,761 16,417,581 18,122,916
 
LIABILITIES  
Non-current liabilities  
Deferred tax liabilities   1,283,929 1,257,824 1,279,852
Long term provisions   10,981 10,009 7,314
  1,294,910 1,267,833 1,287,166
Current liabilities  
Trade and other payables   3,488,379 1,708,720 2,500,524
Short term provisions   33,726 36,813 33,922
Current tax liabilities 3,072 2,998 665
  3,525,177 1,748,531 2,535,111
   
Total liabilities   4,820,087 3,016,364 3,822,277
 
Net assets   15,063,674 13,401,217 14,300,639
 
EQUITY  
Capital and reserves  
Share capital    739,000  739,000  739,000
Share premium account   3,693,818 3,693,818 3,693,818
Capital redemption reserve    256,976  256,976 256,976
Cumulative translation reserve   95,258 (103,853) 15,723
Profit and loss account   10,278,622 8,815,276 9,595,122
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

  Six months ended

30/06/14

  Year ended

31/12/14

    £ £   £
Cash flows from operating activities    
Profit before tax for the period   1,610,297 424,338 1,723,846
Adjustments for:            
Finance income   (17,224) (35,509) (58,079)
Depreciation   106,821 85,070 178,059
Amortisation   638,198 588,056 1,160,940
Impairment loss   505,727 450,000
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
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

 

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 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.

 

Summary of significant accounting policies

 

Basis of preparation

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.

 

Taxation

Current tax expense is recognised in these condensed consolidated interim financial statements based on estimated effective tax rates for the full year.

 

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.

 

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

30/06/15

  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

 

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.

 

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.gocct.com.