Last checked at 12 Sep 2018 07:00
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 PlcGlen Fawcett, CEO |
+44 (0)1206 752626 |
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|
Newgate (Financial PR)Bob Huxford Imogen Humphreys |
+44 (0)20 7653 9848+44 (0)20 7653 9840 |
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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. | ||||||
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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. | ||||||
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