Concurrent Technologies Regulatory News (CNC)

5 Sep 2005 06:00

CONCURRENT TECHNOLOGIES PLCInterim results for the six months ended 30 June 2005Strengthening customer baseGrowing profitabilityConcurrent Technologies Plc, which manufactures high end embedded computerproducts for critical applications in the defence, transportation,communications and industrial markets, announces interim results for the sixmonths period to 30 June 2005.KEY POINTS * Turnover up 55% to ‚£4.6m (2004: ‚£3.0m) * Profit before tax ‚£503k (2004: loss ‚£131k) * Net cash: ‚£1.88m, zero borrowings * Interim dividend maintained at 0.25p per share * Substantial investment in product design, development and production paying off: * + Concurrent viewed increasingly as supplier of choice + Better, larger scale new business opportunities + Widening of customer base Michael Collins, Chairman, commented:"This year has started well and our order book has reached record levels in thelast few months. We are confident at this stage, that further progress will beachieved in the second half and that this progress will continue into 2006." 5th September 2005EnquiriesCompany Name Tel Concurrent Glen Fawcett Managing Director 01206 752626 Technologies Hansard Ben Simons 020 7245 1100 Communications CHAIRMAN'S STATEMENTBusiness SummaryConcurrent Technologies designs, builds and supplies high end embedded computerproducts to the defence, communication, transportation and industrial markets.These computer products are integrated into a variety of applications whichrequire very high levels of processing power and superior levels ofreliability; applications include military systems, communications, networking,medical imaging, industrial automation and scientific research.The main product range includes single and dual processor computer boards usingIntel‚® and Freescale¢â€ž¢ (formerly Motorola‚®) Central Processing Units (CPUs) forthe CompactPCI‚®, VME and Multibus II architectures. Boards for use in standardoperating conditions and ruggedised versions for use in extreme environmentsare produced. In addition to hardware design capability, our engineering teamsundertake a significant amount of software and firmware development to provideinteroperability between products, generate test software both on-board and forproduction test purposes, and also provide support for leading embedded andreal-time operating systems.The largest markets for our products are now defence and communications.Together these markets in the first half of 2005 accounted for 80% of our salesby value.Financial SummaryConditions in the specialised part of the single board computer market, inwhich we operate, continue to be favourable this year. Group turnover for thefirst six months of 2005 was ‚£4.6m, up from ‚£3.0m in the same period last year(an increase of 55%) and from ‚£4.1m in the second half of 2004. The pre-taxprofit for the first 6 months of 2005 was ‚£502,540 (2004: loss ‚£130,896). Grossmargins in the first six months of the year at 43.6% have improved (2004:41.8%). We expect further improvement as volumes increase and extendedtemperature range products (which attract higher margins) start to become asignificant element of the total.We have continued to control our costs well without reducing expenditure onproduct development. Substantially higher activity has used up more workingcapital but notwithstanding this we ended the period with cash of ‚£1,883,583and no borrowings.Review of OperationsIn the early part of 2005 we introduced to the market some exciting newproducts designed to meet our customers' high-end computing requirements. Manyof these new products are based on the latest single-processor technology fromIntel‚® and one of our very latest using dual-processing technology. Our Chicagodesign facility introduced the VP754/20x single board computer, designed aroundthe high speed Freescale¢â€ž¢ PowerPC‚® processor operating at 1.4 GHz on a VMEarchitecture giving real time responsiveness, especially for use in defence,aerospace and scientific applications. This board features low power usagecharacteristics and gives support for multiple fast disk drives and highresolution graphics. We have also released, in conjunction with ourco-development partner Thales Computers, the VP 315-RC a ruggedised conductioncooled VME board utilising the Intel‚® Pentium‚® M processor which iscomplemented by a highly integrated low power chipset from Intel‚®.We are looking further to expand our sales and marketing capability,particularly in the USA and the Far East. In March 2005 we announced that wehad appointed a Business Development Manager in Beijing in cooperation with theChina Britain Business Council. This appointment is to support our existingdistribution channels and increase our profile in this highly progressivemarket.Our boards are becoming increasingly complex and with improving sales, ourproduction and test facilities have come under increased pressure. We haveresponded by installing a new, and much faster, assembly line suitable forbuilding larger production runs. At the heart of this is a high performance"pick and place" robotic machine for selecting and mounting electronic devicesonto printed circuit boards, and at the end of the line is a recently installedautomated optical inspection machine which electronically examines the qualityof the connections on our boards.Future StrategyWe believe we have the right range of products for those niches in the singleboard computer market which we decided some years ago to pursue. We areincreasingly chosen by our target customers as the supplier of their choice,and are being given the opportunity to quote for an increasing number ofopportunities, many of which are also of a larger scale. We believe that oursubstantial investment in design and development is starting to pay off. Bycontinuing to design with advanced CPU technologies, we intend to make ourrange of hardware products appeal to an ever increasing market. Simultaneouslywe intend to keep increasing our investment in software and firmwareengineering so as to make our hardware operate with more software products andso make our products even more attractive, and simpler to use, for ourcustomers. Where possible, we will be using low power devices such as Intel‚®Pentium‚® M processors and their successors.We continue with our strategy of supporting and expanding all three of ourexisting embedded computer technology architectures. The Multibus IIarchitecture continues to be accepted by our customers, and we will continue tosupport it while demand remains satisfactory. Defence and industrialapplications still require VME boards and we believe this will be an importantmarket for us in the long term. The CompactPCI‚® architecture, with its 64-bit/66MHz performance and networking capability, offers extended bandwidthparticularly necessary for communications applications. This will continue tobe a key development area for us. We will also continue to look to enhance ourcapabilities to produce complete embedded computer systems.OutlookThis year has started well and our order book has reached record levels in thelast few months. We are confident at this stage, that further progress will beachieved in the second half and that this progress will continue into 2006.DividendThe Board is declaring an interim dividend of 0.25 pence per share (2004:0.25p) payable on 7 October 2005. The total cost of this interim dividend willamount to ‚£181,750. The ex-dividend date is 14 September 2005 and the recorddate is 16 September 2005.All trademarks, registered trademarks and trade names used in this report arethe property of their respective owners.Consolidated Profit and Loss Account Unaudited Restated Restated unaudited audited Note six months six months year ended 30/6/05 30/6/04 31/12/04 ‚£ ‚£ ‚£ Turnover 4,620,420 2,975,852 7,086,044 Cost of sales 2,606,263 1,731,261 4,052,759 Gross profit 2,014,157 1,244,591 3,033,285 Net operating expenses 1,541,648 1,407,358 2,879,110 Operating profit/(loss) before 472,509 (162,767) 154,175goodwill amortisation Amortisation of goodwill 12,307 12,635 25,088 Group operating profit/(loss) 460,202 (175,402) 129,087 Interest receivable 42,338 44,506 85,493 Profit/(loss) on ordinary 502,540 (130,896) 214,580activities before taxation Taxation on profit on ordinary 99,596 10,878 1,177activities Profit/(loss) for the period 402,944 (141,774) 213,403 Dividend 2 181,750 181,750 363,500 Retained profit/(loss) for the 221,194 (323,524) (150,097)period Basic and diluted earnings per 3 0.55p (0.20p) 0.29pshare Consolidated Balance Sheet Note Unaudited Restated Restated 30/6/05 unaudited audited 31 30/6/04 /12/04 ‚£ ‚£ ‚£ FIXED ASSETS Goodwill 115,442 139,577 120,035 Tangible assets 611,571 462,722 474,382 727,013 602,299 594,417 CURRENT ASSETS Stocks and work in progress 1,719,438 1,263,408 1,147,782 Debtors 2,353,016 1,555,222 2,190,865 Cash at bank and in hand 1,883,583 2,846,555 2,224,527 5,956,037 5,665,185 5,563,174 CREDITORS: amounts falling due within one 2 1,335,770 1,318,897 1,117,178year NET CURRENT ASSETS 4,620,267 4,346,288 4,445,996 TOTAL ASSETS LESS CURRENT LIABILITIES 5,347,280 4,948,587 5,040,413 Provision for liabilities and 9,972 20,494 -charges NET ASSETS 5,337,308 4,928,093 5,040,413 CAPITAL AND RESERVES Called up share capital 727,000 727,000 727,000 Share premium account 3,405,817 3,405,817 3,405,817 Capital redemption reserve 256,976 256,976 256,976 Profit and loss account 2 947,515 538,300 650,620 EQUITY SHAREHOLDERS' FUNDS 5,337,308 4,928,093 5,040,413 Consolidated Cash Flow Statement Unaudited Unaudited Audited six months six months year ended 30/6/05 30/6/04 31/12/04 ‚£ ‚£ ‚£ Net cash outflow from operating (14,972) (244,811) (567,333)activities Returns on investments and servicing of finance: Interest received 42,338 44,506 85,493 Taxation (8,246) (5,434) (20,112) Capital expenditure and financial investment: Payments to acquire tangible fixed (233,760) (14,277) (115,937)assets Equity dividends paid (181,750) (181,750) (363,500) Decrease in cash (396,390) (401,766) (981,389)Notes to the Interim Results * The Financial Statements for the six months ended 30 June 2005 were authorised for issue on 2 September 2005 by the Board of Directors of Concurrent Technologies Plc. * The results for the year ended 31 December 2004 are abridged from the Financial Statements for the year which contain an unqualified audit report and have been filed with the Registrar of Companies. The results for this period and for the six months ended 30 June 2004 have been restated following the adoption of FRS 21 (Events after the balance sheet date) for the period commencing 1 January 2005, in order to exclude accrued dividends payable of ‚£181,750. Accordingly the dividends actually paid in the relevant periods are shown in the Consolidated Profit and Loss Account. * The Chairman's Statement included within this report declares that the Board of Directors intends to pay an interim dividend of 0.25 pence per share amounting to a total cost of ‚£181,750 (2004: 0.25 pence per share, ‚£ 181,750). In accordance, however, with FRS 21 this amount has not been recognised within the results for the six months ended 30 June 2005. * The taxation charge for the six months ended 30 June 2005 is based on the estimated effective tax rate for the full year. * The calculation of earnings per share for the six months ended 30 June 2005 is based on the number of Ordinary Shares in issue of 72,700,012. Comparative earnings per share for the periods shown are based on the same number of Ordinary Shares in issue. In accordance with FRS 22 (Earnings per Share) the diluted earnings per share amounts are the same as the basic earnings per share amounts. * On 2 September 2005, the long term loan to Concurrent Technologies Inc was converted into a capital contribution of ‚£1.36m. The capital contribution is not repayable by Concurrent Technologies Inc and does not have any dividend or interest entitlement attaching to it. * Copies of this report will be sent to shareholders and are available at the Company's Registered Office. CONCURRENT TECHNOLOGIES PLC Interim Results for the six months ended 30th June 2005ENDCONCURRENT TECHNOLOGIES PLC