26 August 2016

 CONCURRENT TECHNOLOGIES PLC

(the “Company”)

 

Interim Results for the six months ended 30 June 2016

 

 

Concurrent Technologies Plc (AIM: CNC), 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 2016.

 

Financial Highlights:

  • Turnover for period £9.0m (H1 2015: £9.6m)
  • Improvement in Gross Margins to 54.8% (H1 2015: 48.7%)
  • Profit before tax £1.5m (H1 2015: £1.6m)
  • Earnings per share for the period 2.12p (H1 2015: 2.06p)
  • Interim dividend declared 0.80p per share (H1 2015: 0.70p), an increase of 14.3%
  • Net cash, including cash deposits £8.2m (H1 2015: £5.7m); no borrowings

 

Operational Highlights:

  • Exports increased to 81% of total revenues
  • Continued high level of investment in R&D
  • Introduction of development platforms

 

Michael Collins, Chairman, commented:

“After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive.”

 

Enquiries:

 

Concurrent Technologies PLC

Glen Fawcett, CEO-

       +44 (0)1206 752626

Newgate (Financial PR)

Bob Huxford –

           +44 (0)20 7653 9850

Helena Bogle –

+44 (0)20 7653 9850

Cenkos Securities Plc (NOMAD)

Neil Mcdonald –

       +44 (0)131 220 9771

Nick Tulloch-

+44 (0)131 220 9772

Beth McKiernan –

         +44 (0)131 220 9778

 

 

CHAIRMAN’S STATEMENT

Financial Summary

I am very pleased to report an excellent start to 2016, continuing the strong performance seen at the end of 2015. EBITDA for the six months to 30 June 2016 was £2.2m (H1 2015: £2.3m). The unaudited profit before tax for the same period was £1.5m (H1 2015: £1.6m) with associated earnings per share of 2.12 pence (H1 2015: 2.06 pence). Group Revenues at £9.0m (H1 2015: £9.6m) were slightly below the exceptional performance of the first half of last year. Gross Margins were much improved at 54.8% (H1 2015: 48.7%).

The Group balance sheet is also stronger and our cash balances (including cash deposits) at 30 June 2016 were £8.2m (H1 2015: £5.7m), despite the increased dividend payment made during the period and R&D expenditure having been maintained at the same levels as the first half of 2015 (£1.6m).

 

Dividend

The Board has declared a first interim dividend of 0.80p per share (H1 2015: 0.70p) – an increase of 14.3%. The total cost of this dividend will amount to £580,948. The ex-dividend date for the interim dividend is 15 September 2016, the record date is 16 September 2016 and the payment date is 30 September 2016.

 

 

Review of Operations

Defence related revenues increased significantly during the first six months compared to the first half of 2015. Revenues were generated from all regions but predominantly from the US. Sales related to industrial applications have also improved during the period due mainly to demand from overseas customers. Exports have increased to 81% of total Group revenues (H1 2015: 52%)

We have continued to extend our VPX™ product range by offering development platforms which provide our customers with a quick start to assist them in the development of their systems.

The majority of the Company’s world-wide transactions are conducted in sterling and in US dollars and so, following the recent sharp decline in the value of sterling against the US dollar, the Company conducted an additional review of its financial risk and trading plans. The review confirmed that the Company’s exposure to exchange risk in the short to medium term is still mitigated to a large extent by the ability to offset receipts from sales against payments for purchases in the same currency. We can also expect to benefit from dollar denominated exports to the USA in the short term.

 

Future Plans

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, particularly for military applications and we continue to recruit engineers in our design facilities in the UK, US and India, to enable the Company to develop more sophisticated ruggedized versions of our products.

Complementary software and firmware packages continue to be developed to provide high-speed data transfer, ease of integration and security which further enhance our product portfolio. We will maintain our strategy of designing more innovative products for complex, high technology, low to medium volume and high margin applications.

 

Outlook

After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive.

Michael Collins

Chairman

25 August 2016

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

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

unaudited interim results to 30 June 2016

 

Note Six months ended

30/06/16

  Six months ended

30/06/15

  Year ended

31/12/15

  £   £   £
CONTINUING OPERATIONS  
Revenue   8,970,694 9,595,467 17,073,829
Cost of sales   4,054,125 4,923,619 8,437,564
Gross profit   4,916,569 4,671,848 8,636,265
Net operating expenses   3,397,753 3,078,775 5,945,140
Group operating profit   1,518,816 1,593,073 2,691,125
Finance income   26,336 17,224 42,292
Profit before tax   1,545,152 1,610,297 2,733,417
Tax   4,824 112,420 (21,351)
Profit for the period 1,540,328 1,497,877 2,754,768
Other Comprehensive Income
Exchange differences on translating foreign operations 223,385 79,535 62,918
Tax relating to components of other comprehensive income
Other Comprehensive Income for the period, net of tax 223,385 79,535 62,918
Total Comprehensive Income for the period 1,763,713 1,577,412 2,817,686
Profit for the period attributable to:
Equity holders of the parent 1,540,328 1,497,877 2,754,768
Total Comprehensive Income attributable to:
Equity holders of the parent 1,763,713 1,577,412 2,817,686
Earnings per share
Basic earnings per share 4 2.12p 2.06p 3.79p
Diluted earnings per share 4 2.12p 2.06p 3.79p

 

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2016

 

  As at 

30/06/16

As at 

30/06/15

As at 

31/12/15

ASSETS £ £   £
Non-current assets
Property, plant and equipment 643,786 695,632 690,357
Intangible assets 6,397,135 6,026,976 6,307,044
Deferred tax assets 101,361 105,398 129,647
7,142,282 6,828,006 7,127,048
Current assets
Inventories 2,870,131 4,184,343 3,774,285
Trade and other receivables 2,642,486 3,095,560 2,520,573
Current tax assets 163,180 75,565 284,419
Other financial assets 1,000,000
Cash and cash equivalents 8,179,993 5,700,287 4,873,815
13,855,790 13,055,755 12,452,092
 
Total assets 20,998,072 19,883,761 19,580,140
LIABILITIES
Non-current liabilities
Deferred tax liabilities 1,280,077 1,283,929 1,305,237
Long term provisions 10,398 10,981 9,968
1,290,475 1,294,910 1,315,205
Current liabilities
Trade and other payables 2,938,487 3,488,379 2,411,524
Short term provisions 32,712 33,726 31,897
Current tax liabilities 6,735 3,072
2,977,934 3,525,177 2,443,421
 
Total liabilities 4,268,409 4,820,087 3,758,626
Net assets 16,729,663 15,063,674 15,821,514
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 302,026 95,258 78,641
Profit and loss account 11,737,843 10,278,622 11,053,079
Equity attributable to equity holders of the parent 16,729,663 15,063,674 15,821,514
Total equity 16,729,663 15,063,674 15,821,514

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2016

  Six months ended

30/06/16

  Six months ended

30/06/15

  Year ended

31/12/15

  £ £   £
Cash flows from operating activities  
Profit before tax for the period 1,545,152 1,610,297 2,733,417
Adjustments for:
Finance income (26,336) (17,224) (42,292)
Depreciation 98,966 106,821 224,778
Amortisation 627,065 638,198 1,254,083
Impairment loss 499,509 505,727 690,201
Loss on disposal of property, plant and equipment (1,334)
Share-based payment 1,139 9,787 26,192
Exchange differences 272,299 94,681 86,711
(Increase)/decrease in inventories 904,154 (1,484,685) (1,074,627)
(Increase)/decrease in trade and other receivables (121,913) (305,134) 269,853
Increase/(decrease) in trade and other payables 528,208 991,326 (88,371)
Cash generated from operations 4,328,243 2,149,794 4,078,611
Tax received/(paid) 120,715 105,193 48,956
Net cash generated from operating activities 4,448,958 2,254,987 4,127,567
Cash flows from investing activities
Interest received 26,336 17,224 42,292
Cash placed on deposit 1,000,000 (1,000,000)
Purchases of property, plant and equipment (PPE) (43,728) (195,398) (305,874)
Proceeds from sale of PPE 1,500
Purchases of intangible assets (1,214,874) (1,152,257) (2,231,637)
Net cash used in investing activities (232,266) (1,330,431) (3,493,719)
       
Cash flows from financing activities
Equity dividends paid (870,942) (834,904) (1,343,141)
Sale/(Purchase) of treasury shares 19,800 (15,461)
Net cash used in financing activities (851,142) (834,904) (1,358,602)
Effects of exchange rate changes on cash and cash equivalents (59,372) (13,870) (25,936)
Net increase/(decrease) in cash 3,306,178 75,782 (750,690)
Cash at beginning of period 4,873,815 5,624,505 5,624,505
Cash at the end of the period 8,179,993 5,700,287 4,873,815

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2016

Share

capital

Share

Premium

Capital

redemption

reserve

Cumulative

translation

reserve

Profit

and loss

account

Total

equity

£ £ £ £ £ £
Balance at 1 January 2015 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
 
Profit for the period 1,256,891 1,256,891
Exchange differences on translating foreign operations (16,617) (16,617)
Total recognised comprehensive income for the period (16,617) 1,256,891 1,240,274
Share-based payment 16,405 16,405
Deferred tax on share based payment 24,859 24,859
Dividends paid (508,237) (508,237)
Purchase of treasury shares (15,461) (15,461)
Balance at 31 December 2015 739,000 3,693,818 256,976 78,641 11,053,079 15,821,514
 
Profit for the period 1,540,328 1,540,328
Exchange differences on translating foreign operations 223,385 223,385
Total recognised comprehensive income for the period 223,385 1,540,328 1,763,713
Share-based payment 1,139 1,139
Deferred tax on share based payment (5,561) (5,561)
Dividends paid (870,942) (870,942)
Sale of treasury shares 19,800 19,800
Balance at 30 June 2016 739,000 3,693,818 256,976 302,026 11,737,843 16,729,663

 

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 25 August 2016.

The information relating to the six months ended 30 June 2016 and 30 June 2015 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 2015, 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.

 

 

Summary of significant accounting policies

Basis of preparation

 

These condensed consolidated interim financial statements are for the six months ended 30 June 2016. 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 2015, 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 2015, 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 2016 that would be expected to have a material impact on the results or financial position of the Group.

 

 

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.

 

 

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

30/06/16

Six months

ended

30/06/15

Year ended

31/12/15

  £   £   £
Profit attributable to ordinary equity holders 1,540,328 1,497,877 2,754,768
           
  Six months

ended

30/06/16

  Six months

ended

30/06/15

  Year ended

31/12/15

  No   No   No
Weighted average number of ordinary

shares for basic earnings per share

72,604,009 72,600,490 72,594,150
Adjustment for share options 481 7,872
Weighted average number of ordinary  shares for diluted earnings per share 72,604,490 72,608,362 72,594,150

 

 

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.