Last checked at 18 Sep 2017 07:00
18 September 2017
Concurrent Technologies Plc
(the "Company" or the "Group")
Interim Results for the six months ended 30 June 2017
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 2017.
Financial Highlights
· Turnover of £7.8m (H1 2016: £9.0m)1
· Gross profit £4.3m (H1 2016: £4.9m)
· Gross margin maintained at 54.8% (H1 2016: 54.8%)
· Profit before tax of £1.4m (H1 2016: £1.5m)
· EPS of 1.84 pence (H1 2016: 2.12 pence)
· Interim dividend increased by 12.5% to 0.90p per share (H1 2016: 0.80p)
· Cash balance (including cash deposits) at 30 June 2017 of £7.9m (H1 2016: £8.2m)
1. H1 2016 turnover was inflated by an exceptional sale
Operational Highlights
· Defence related sales, in particular from US customers, now account for more than half of the Group revenues and continue to drive the business
· Expanding global customer base with exports generating 84% of Group revenues (H1 2016: 81%)
· £1.2m invested into R&D during the period, resulting in strong pipeline of future product releases
· Release of two new rugged conduction-cooled boards, plus the launch of new range of Intel® Xeon® boards during the period
Michael Collins, Chairman of Concurrent Technologies Plc, commented:
"After a solid performance in the first-half of the year we have started the second-half with an expanding list of customers, many new opportunities and a strong balance sheet. The outlook for the future remains positive."
Enquiries:
Concurrent Technologies PlcGlen Fawcett, CEO |
+44 (0)1206 752 626 |
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|
Newgate (Financial PR)Bob Huxford James Browne | +44 (0)207 653 9850 |
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Cenkos Securities plc (NOMAD)Neil McDonald Nick Tulloch Beth McKiernan | +44 (0)131 220 9771 +44 (0)131 220 9772 +44 (0)131 220 9778
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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 traditionally feature Intel® processors, including the latest generation Intel® Core™ i7 processors, Intel® Xeon® and Intel® Atom™ processors. More recently NVIDIA® Tegra® K1 devices have been added to the product ranges along with complementary switch and I/O boards. 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.cct.co.uk
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 2017, consolidating the strong performances from the last two years.
Revenue for the period was £7.8m (H1 2016: £9.0m), the variance is largely due to an exceptional sale in early 2016 and defence customer delays in H1 2017. Gross profitability was £4.3m (H1 2016: £4.9m). Gross margins were maintained at 54.8% (H1 2016: 54.8%). The unaudited profit before tax for the same period was £1.4m (H1 2016: £1.5m) with associated earnings per share of 1.84 pence (H1 2016: 2.12 pence).
The Group balance sheet has been strengthened with cash balances (including cash deposits) at30 June 2017 of £7.9m (H1 2016: £8.2m) and total equity increased to £18.0m (H1 2016: £16.7m).
Dividend
The Board has declared a first interim dividend of 0.90p per share (H1 2016: 0.80p) - an increase of 12.5%. The total cost of this dividend will amount to £654,466. The ex-dividend date for this interim dividend is 28 September 2017, the record date is 29 September 2017 and the payment date is 13 October 2017.
Review of Operations
Defence related revenues continue to drive the business, in particular from US customers, who now account for more than half of the Group sales. Exports generated 84% of total Group revenues (H1 2016: 81%). During this reporting period, many new customers have been gained.
The Group invested £1.2m during H1 2017 (H1 2016: £1.2m) in research and development for new products and their associated variants. This investment in innovative engineering solutions should help safeguard revenues in future years. Many products have completed exhaustive testing in the first-half of 2017 and the pipeline for future product releases is encouraging.
The Company still awaits confirmation of the trade and tariff legislation to be agreed by the UK Government with other countries. Because most countries, including the USA and those of the European Union, apply a zero-percentage import tariff rating to our products we don't expect our business to be affected. The vote to leave the European Union has had little impact on trading; the main effect has been seen in the difficulty of recruiting non-UK research and development engineers to work in the UK and we wait to see if this is just a temporary situation.
Future Plans
We will continue to expand our product ranges through the development of new boards and systems together with complementary software. In particular, we will focus on our VPX™ products in both ruggedized and non-ruggedized variants. These new products will be designed for our key market sectors of complex, high technology, low to medium volume and high margin applications.
To improve the development process, the Group will this year invest in more development equipment including a sophisticated multi-gigabit per second high-speed analyser. In addition, to provide a more flexible response to customer orders, a faster "pick and place" machine will be acquired in mid-2018. This type of machine is used for high-speed, fine-precision placement of surface-mount components onto printed circuit boards.
Outlook
After a solid performance in the first-half of the year we have started the second-half with an expanding list of customers, many new opportunities and a strong balance sheet. The outlook for the future remains positive.
Michael Collins
Chairman
15th September 2017
All companies and product names are trademarks of their respective organisations.
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
unaudited interim results to 30 June 2017
| Note | Six months ended 30/06/17 |
| Six months ended 30/06/16 |
| Year ended 31/12/16 |
|
| £ |
| £ |
| £ |
CONTINUING OPERATIONS |
|
|
|
|
|
|
Revenue |
| 7,816,472 |
| 8,970,694 |
| 16,423,978 |
Cost of sales |
| 3,536,288 |
| 4,054,125 |
| 7,529,867 |
Gross profit |
| 4,280,184 |
| 4,916,569 |
| 8,894,111 |
Net operating expenses |
| 2,914,116 |
| 3,397,753 |
| 6,040,302 |
Group operating profit |
| 1,366,068 |
| 1,518,816 |
| 2,853,809 |
Finance income |
| 30,375 |
| 26,336 |
| 48,705 |
Profit before tax |
| 1,396,443 |
| 1,545,152 |
| 2,902,514 |
Tax |
| 56,997 |
| 4,824 |
| 72,609 |
Profit for the period |
| 1,339,446 |
| 1,540,328 |
| 2,829,905 |
|
|
|
|
|
|
|
Other Comprehensive Income |
|
|
|
|
|
|
Exchange differences on translating foreign operations |
| (93,622) |
| 223,385 |
| 415,966 |
Tax relating to components of other comprehensive income |
| - |
| - |
| - |
Other Comprehensive Income for the period, net of tax |
| (93,622) |
| 223,385 |
| 415,966 |
Total Comprehensive Income for the period |
| 1,245,824 |
| 1,763,713 |
| 3,245,871 |
|
|
|
|
|
|
|
Profit for the period attributable to: |
|
|
|
|
|
|
Equity holders of the parent |
| 1,339,446 |
| 1,540,328 |
| 2,829,905 |
|
|
|
|
|
|
|
Total Comprehensive Income attributable to: |
|
|
|
|
|
|
Equity holders of the parent |
| 1,245,824 |
| 1,763,713 |
| 3,245,871 |
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
Basic earnings per share | 4 | 1.84p |
| 2.12p |
| 3.90p |
|
|
|
|
|
|
|
Diluted earnings per share | 4 | 1.84p |
| 2.12p |
| 3.90p |
CONDENSED CONSOLIDATED BALANCE SHEET
unaudited interim results to 30 June 2017
|
| As at |
| As at |
| As at |
|
| 30/06/17 |
| 30/06/16 |
| 31/12/16 |
ASSETS |
| £ |
| £ |
| £ |
Non-current assets |
|
|
|
|
|
|
Property, plant and equipment |
| 391,651 |
| 643,786 |
| 414,209 |
Intangible assets |
| 7,369,683 |
| 6,397,135 |
| 6,846,520 |
Deferred tax assets |
| 146,023 |
| 101,361 |
| 112,128 |
|
| 7,907,357 |
| 7,142,282 |
| 7,372,857 |
Current assets |
|
|
|
|
|
|
Inventories |
| 3,334,750 |
| 2,870,131 |
| 3,239,855 |
Trade and other receivables |
| 2,526,923 |
| 2,642,486 |
| 3,327,629 |
Current tax assets |
| 203,710 |
| 163,180 |
| 93,156 |
Other financial assets |
| - |
| - |
| 1,000,000 |
Cash and cash equivalents |
| 7,885,032 |
| 8,179,993 |
| 6,773,083 |
|
| 13,950,415 |
| 13,855,790 |
| 14,433,723 |
|
|
|
|
|
|
|
Total assets |
| 21,857,772 |
| 20,998,072 |
| 21,806,580 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Deferred tax liabilities |
| 1,417,245 |
| 1,280,077 |
| 1,291,468 |
Long term provisions |
| 3,986 |
| 10,398 |
| 6,699 |
|
| 1,421,231 |
| 1,290,475 |
| 1,298,167 |
Current liabilities |
|
|
|
|
|
|
Trade and other payables |
| 2,384,949 |
| 2,938,487 |
| 2,810,655 |
Short term provisions |
| 19,932 |
| 32,712 |
| 23,939 |
Current tax liabilities |
| - |
| 6,735 |
| - |
|
| 2,404,881 |
| 2,977,934 |
| 2,834,594 |
|
|
|
|
|
|
|
Total liabilities |
| 3,826,112 |
| 4,268,409 |
| 4,132,761 |
|
|
|
|
|
|
|
Net assets |
| 18,031,660 |
| 16,729,663 |
| 17,673,819 |
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
Capital and reserves |
|
|
|
|
|
|
Share capital |
| 739,000 |
| 739,000 |
| 739,000 |
Share premium account |
| 3,684,871 |
| 3,693,818 |
| 3,693,818 |
Capital redemption reserve |
| 256,976 |
| 256,976 |
| 256,976 |
Cumulative translation reserve |
| 400,985 |
| 302,026 |
| 494,607 |
Profit and loss account |
| 12,949,828 |
| 11,737,843 |
| 12,489,418 |
Equity attributable to equity holders of the parent |
| 18,031,660 |
| 16,729,663 |
| 17,673,819 |
|
|
|
|
|
|
|
Total equity |
| 18,031,660 |
| 16,729,663 |
| 17,673,819 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
unaudited interim results to 30 June 2017
|
| Six months ended 30/06/17 |
| Six months ended 30/06/16 |
| Year ended 31/12/16 |
|
| £ |
| £ |
| £ |
Cash flows from operating activities |
|
|
|
|
|
|
Profit before tax for the period |
| 1,396,443 |
| 1,545,152 |
| 2,902,514 |
Adjustments for: |
|
|
|
|
|
|
Finance income |
| (30,375) |
| (26,336) |
| (48,705) |
Depreciation |
| 77,624 |
| 98,966 |
| 196,370 |
Amortisation |
| 620,878 |
| 627,065 |
| 1,254,826 |
Impairment loss |
| 31,064 |
| 499,509 |
| 499,509 |
Loss on disposal of property, plant and equipment |
| - |
| - |
| 233,840 |
Share-based payment |
| 13,611 |
| 1,139 |
| 13,585 |
Exchange differences |
| (200,228) |
| 272,299 |
| 76,461 |
(Increase)/decrease in inventories |
| (94,895) |
| 904,154 |
| 534,430 |
(Increase)/decrease in trade and other receivables |
| 800,706 |
| (121,913) |
| (927,530) |
Increase/(decrease) in trade and other payables |
| (432,426) |
| 528,208 |
| 558,815 |
Cash generated from operations |
| 2,182,402 |
| 4,328,243 |
| 5,294,115 |
Tax received/(paid) |
| (32,395) |
| 120,715 |
| 116,142 |
Net cash generated from operating activities |
| 2,150,007 |
| 4,448,958 |
| 5,410,257 |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
Interest received |
| 30,375 |
| 26,336 |
| 48,705 |
Cash released from/(placed on) deposit |
| 1,000,000 |
| 1,000,000 |
| - |
Purchases of property, plant and equipment |
| (56,977) |
| (43,728) |
| (138,181) |
Proceeds from sale of property, plant and equipment |
| - |
| - |
| - |
Purchases of intangible assets |
| (1,175,613) |
| (1,214,874) |
| (2,290,889) |
Net cash used in investing activities |
| (202,215) |
| (232,266) |
| (2,380,365) |
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Equity dividends paid |
| (945,339) |
| (870,942) |
| (1,452,689) |
Sale/(purchase) of treasury shares |
| - |
| 19,800 |
| 51,800 |
Net cash used in financing activities |
| (945,339) |
| (851,142) |
| (1,400,889) |
|
|
|
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents |
| 109,496 |
| (59,372) |
| 270,265 |
|
|
|
|
|
|
|
Net increase/(decrease) in cash |
| 1,111,949 |
| 3,306,178 |
| 1,899,268 |
Cash at beginning of period |
| 6,773,083 |
| 4,873,815 |
| 4,873,815 |
Cash at the end of the period |
| 7,885,032 |
| 8,179,993 |
| 6,773,083 |
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
unaudited interim results to 30 June 2017
| Share capital | Share Premium | Capital redemption reserve | Cumulative translation reserve | Profit and loss account | Total equity |
| £ | £ | £ | £ | £ | £ |
|
|
|
|
|
|
|
Balance at 1 January 2016 | 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 |
|
|
|
|
|
|
|
Profit for the period | - | - | - | - | 1,289,577 | 1,289,577 |
Exchange differences on translating foreign operations | - | - | - | 192,581 | - | 192,581 |
Total recognised comprehensive income for the period | - | - | - | 192,581 | 1,289,577 | 1,482,158 |
|
|
|
|
|
|
|
Share-based payment | - | - | - | - | 12,446 | 12,446 |
Deferred tax on share based payment | - | - | - | - | (701) | (701) |
Dividends paid | - | - | - | - | (581,747) | (581,747) |
Purchase of treasury shares | - | - | - | - | 32,000 | 32,000 |
Balance at 31 December 2016 | 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) |
Sale 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 |
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 15th September, 2017.
The information relating to the six months ended 30 June 2017 and 30 June 2016 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 2016, 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.
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2. | Summary of significant accounting policies
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2.1 | Basis of preparation
|
| These condensed consolidated interim financial statements are for the six months ended 30 June 2017. 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 2016, 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 2016, 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 2017 that would be expected to have a material impact on the results or financial position of the Group.
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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:
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|
|
| Six months ended 30/06/17 |
| Six months ended 30/06/16 |
| Year ended 31/12/16 |
|
|
| £ |
| £ |
| £ |
|
|
|
|
|
|
|
|
| Profit attributable to ordinary equity holders |
| 1,339,446 |
| 1,540,328 |
| 2,829,905 |
|
|
| Six months ended 30/06/17 |
| Six months ended 30/06/16 |
| Year ended 31/12/16 |
|
|
| 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 interim financial statements. | ||||||
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6. | 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.cct.co.uk. | ||||||
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