LONDON (Alliance News) - Concurrent Technologies PLC Tuesday posted higher pretax profit and revenue for the first half of 2014, but warned it plans to write down the value of certain designs due to export controls imposed by the UK government.
Concurrent develops and manufactures high-end embedded computer products for use in the telecommunications, defence, security, telemetry, scientific and aerospace markets.
The company posted a pretax profit of GBP424,338 for the six months to June 30, up from GBP370,528 in the first half of 2013, boosted by an uptick in revenue.
However, the company reported lower net profit for the first half, after last year's results benefited from a significant tax gain.
Revenue in the period rose to GBP5.6 million from GBP5.3 million a year earlier, driven by a significant increase in sales into telecommunications applications. It said as expected exports have fallen to represent 54% of revenue, compared with 72% last year, due to the application of UK government-imposed export control regulations on its advanced technology products.
"As a consequence of these export controls, the board has determined that a further write down in the value of certain designs may be required," the company said in a statement.
The company left its dividend unchanged at 0.65 pence per share, but said its order book is good, whilst its cash position remains strong.
"Given the backdrop of continuing export licence problems for customers in many markets, I am pleased to report a satisfactory start to 2014," said Chairman Michael Collins in a statement.
Concurrent noted that the UK government recently relaxed the export regulations covering its products, which contains its encryption technology, so that they are in line with those of the US.
"With the introduction by the UK government of the more flexible licensing system, we can now focus on restoring customer confidence in those areas affected," Collins said. "How long it will take to recover from the effects of UK export licensing regulations, and what their full impact might be, remains difficult to assess at this time, but the board is confident that the resolution of the major export licensing issues, together with the diversity of the company's product range and customer base, will generate sound results."
Concurrent continued to invest in the develop and expand its product ranges during the first half, having released four new products.
The company also implemented its plan to establish an engineering facility in the US state of Massachusetts.
Concurrent Technologies shares were down 4.6% Tuesday morning at 42.00 pence.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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Concurrent Technologies (CNC)