Last checked at 26 Mar 2012 07:00
26 March 2012
Concurrent Technologies Plc
Preliminary Results for the year ended 31 December 2011
Concurrent Technologies Plc (the "Company"), 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 preliminary results for the year to 31 December 2011.
Financial Highlights
·; Profit Before Tax increased by 17% to £2,710,332 (2010: £2,323,522)
·; Turnover increased by 9% to £13,807,669 (2010: £12,639,754)
·; Cash in business increased by 39% to £3.59m (2010: £2.59m)
·; EPS increased by 28% to 3.63 pence (2010: 2.84 pence)
·; Gross margin improved to 52.1% (2010: 50.9%)
·; Dividend increased to 1.60 pence per share for the year (2010: 1.50 pence)
Operational Highlights
·; Continued close partnership with Intel
·; Increased investment in R&D
·; Several new products launched, incorporating the latest Intel® processors
·; Further diversification of customer base in strengthening market environment
Outlook
·; Continued focus on innovative, high technology, higher margin products
·; Planned significant increase in new product development
Michael Collins, Chairman, commented:
"These financial results reflect the strengthening trading conditions in all our markets, which resulted in improved demand through the course of the year. We have entered the new financial year with a solid order book and, at this stage, expect our 2012 turnover to demonstrate continued growth. In order to underpin this growth going forward, we plan to make a significant increase in our investment in new product development during this year."
Annual General Meeting
The annual general meeting of Concurrent Technologies Plc will be held in the Chairman's Suite at the Weston Homes Community Stadium, United Way, Colchester, CO4 5UP, on 29 May 2012 at 2.00 p.m.
Enquiries:
Concurrent Technologies PlcGlen Fawcett, Managing Director | +44 (0)1206 752 626 |
Newgate Threadneedle (Financial PR)Guy McDougall/ Caroline Evans-Jones |
+44 (0)20 7653 9842 |
Cenkos Securities plc (NOMAD)Ken FlemingBeth McKiernan |
+44 (0)131 220 6939+44 (0)131 220 9778 |
Chairman's Statement
I am pleased to report that the improved trading conditions experienced at the start of 2011 continued throughout the year. Our expanding product portfolio and concerted sales efforts have resulted in the expansion of our customer base and growth in both revenues and profits.
We have been able to increase both our investment in R&D and our dividend while maintaining a strong balance sheet with an improvement in our cash position. We believe that our continued focus on product development, the expanding market opportunity and secure financial position mean we can look forward to sustained revenue growth.
Financial Summary
The Group achieved a profit before tax for 2011 of £2,710,332 (2010: £2,323,522), an increase of 17% over the previous year. Earnings per share for the year were 3.63 pence (2010: 2.84 pence). The performance improved in the second half of 2011 with profit before tax of £1,578,098, an increase of 39% over the first half (H1 2011: £1,132,234). This result was achieved on sales of £13,807,669, an increase of 9% on last year (2010: £12,639,754). The gross margin for the year was 52.1% compared with 50.9% for 2010.
Our balance sheet continues to be strong with cash up 39% to £3.59m (2010: £2.59m) at the year end, with no borrowings.
Business Summary
The Group is a leading specialist in the design, manufacture and supply of innovative high-end embedded computer products aimed at a wide base of customer types in the defence, telecommunication, aerospace, transportation, scientific and industrial markets. Our products have a long lifecycle which typically provides the Group with high quality sales over many years.
The Group's high performance products are based on Intel® long lifecycle components, and cover a range of central processing unit ("CPU") boards and complementary products compatible with the CompactPCI®, VPX™, VME, AMC and XMC/PMC open architecture standards. Many of the CPUs feature the latest processor platforms from Intel such as the 2nd generation Intel® Core™ processors, six-core Intel® Xeon® processors and the low power Intel® Atom™ processors with some of these boards being designed to be 3rd generation processor ready. A common feature of our newer products is the low level of electrical power required for their very high performance capabilities.
Our products deliver extremely high levels of reliability with substantial processing power, making them ideal for use in projects ranging from high-performance military communications systems to commercial industrial control units. In addition to our commercial range of boards, we develop ruggedized versions of many products in our range to operate at temperatures ranging from -40oC to +85oC, for use in harsh and wide temperature environments, making them very appealing for a variety of demanding applications. Our products also support many of today's leading operating systems including Windows®, Linux®, Solaris™, QNX®, VxWorks®, LynxOS® and more recently INTEGRITY®.
In addition to hardware design capability, our engineering teams undertake a significant amount of software and firmware development to provide interoperability between products, allowing customers to transition smoothly when new updates or designs are available. In this way we continue to see strong customer loyalty and long term relationships, as well as new sales following product launches featuring performance upgrades. We also generate software for both on-board and production test purposes.
Review of Operations
A core strand of our strategy is the investment in R&D to ensure our products remain at the forefront of the embedded computing market. During the year we have launched six new high performance embedded computers, most of which feature the latest 2nd generation Intel® Core™ i7 processors which are particularly suited for use within the defence, telecommunications and homeland security markets where fast data processing and reliability are critical.
We also announced the release of our Green Hills INTEGRITY® real time operating system (RTOS) board support package for our OpenVPX™ products. This combination of high performance processor board and feature rich high reliability RTOS provides a solution that is particularly suited for deployment in environmentally extreme applications in a wide range of markets, where system malfunction would otherwise result in catastrophic failure.
We have continued to develop many environmentally superior products that can operate at extreme temperatures, elevated altitudes and at high shock and vibration levels. With slight variations in operating capacities and format, these products address many different customer needs. Many of the products released by us in 2011 have featured low power consumption, with consequent higher reliability, which continues to be a critical requirement for end users of embedded computer products.
In addition to the hardware, firmware and software products which we have provided for many years, we have also introduced a highly innovative piece of "middleware" which enables users conveniently to unlock the significant network bandwidth of our products so that boards can very easily intercommunicate, and at high data rates. We have recently released this product as our Fabric Interconnect Networking Software (FIN-S) to complement our ranges of boards which employ high speed serial backplane interconnect fabrics. This should ensure that our high performance hardware products can be integrated easily at system level by our customers.
We have continued to respond to the roll-out of new processors by Intel which we believe validates the close relationship we have with the world leader in silicon innovation and computer processing technology. We will continue to be an early adopter of the low power, multi-core processor technology from Intel which we believe maintains our competitiveness within our end markets. This strategy not only extends our range of processor designs featuring the latest processor technology from Intel but also reaffirms our commitment to providing our customers with a long term upgrade path.
The Group's design and engineering team is divided between the UK and India, but all manufacturing and testing takes place in our factory in Colchester, UK. Our sales, marketing and customer support teams operate from the UK and overseas offices including the USA and China. During the year we stepped up our efforts to recruit design engineers both in the UK and India and have increased our headcount in India.
The Group's customer base continues to be well diversified with large, high quality, international businesses in multiple sectors and in many countries.
Future Plans
We operate in an ever changing market place making it critical that we continue to strengthen our competitive position and seek new opportunities. Our alliance with Intel helps to ensure that our position as an early adopter is maintained. This continues to assist us to be at the leading edge of technology within the embedded markets and, to capitalise fully on this, we will continue with our programme of controlled expansion by increasing our engineering design teams.
We are a key supplier of Intel based technology to many major international companies and our products are found in a wide range of ever more sophisticated high-reliability computer systems. Continual investment in R&D is a necessity to ensure a constant expansion of our range of products, with a particular focus on the VPX™, VME, AMC and CompactPCI® bus architectures. We are further enhancing the capabilities of these products with new and complementary software packages.
The Company will continue to use its authority to buy back its own shares when the Directors consider it appropriate.
Dividend
The Board has declared a second interim dividend of 1.00 pence per share (2010: 0.95 pence second interim dividend) which when added to the first interim dividend of 0.60 pence per share will make a total of 1.60 pence per share for the year (2010: 1.50 pence). This will be an increase of 6.7% over dividends paid in 2010. The total cost of this second interim dividend will amount to £714,755. The ex-dividend date for the second interim dividend was 14 March 2012, the record date was 16 March 2012 and the payment date is 2 April 2012. The Directors do not intend to recommend a final dividend.
Outlook
These financial results reflect the strengthening trading conditions in all our markets, which resulted in improved demand through the course of the year. We have entered the new financial year with a solid order book and, at this stage, expect our 2012 turnover to demonstrate continued growth. In order to underpin this growth going forward, we plan to make a significant increase in our investment in new product development during this year.
Corporate Governance
As an AIM listed company Concurrent Technologies Plc is not obliged to comply with the UK Corporate Governance Code. We do however acknowledge the overall importance of the guidelines and apply as many of the principles therein as are appropriate to a company of our size and nature.
Annual General Meeting
The Annual General Meeting this year will be held on 29 May 2012.
Michael Collins
Chairman
23 March 2012
All companies and product names are trademarks of their respective organisations.
Consolidated Statement of Comprehensive Income
Year to | Year to | |||
31 December | 31 December | |||
2011 | 2010 | |||
CONTINUING OPERATIONS | £ | £ | ||
Revenue | 13,807,669 | 12,639,754 | ||
Cost of sales | 6,615,546 | 6,211,615 | ||
Gross profit | 7,192,123 | 6,428,139 | ||
Net operating expenses | 4,534,006 | 4,160,061 | ||
Group operating profit | 2,658,117 | 2,268,078 | ||
Finance income | 52,215 | 55,444 | ||
Profit before tax | 2,710,332 | 2,323,522 | ||
Tax | 119,113 | 293,361 | ||
Profit for the year | 2,591,219 | 2,030,161 | ||
Other Comprehensive Income | ||||
Exchange differences on translating foreign operations | (49,416) | 104,379 | ||
Tax relating to components of other comprehensive income | - | - | ||
Other Comprehensive Income for the year, net of tax | (49,416) | 104,379 | ||
Total Comprehensive Income for the year | 2,541,803 | 2,134,540 | ||
Profit for the period attributable to: | ||||
Equity holders of the parent | 2,591,219 | 2,030,161 | ||
Total Comprehensive Income attributable to: | ||||
Equity holders of the parent | 2,541,803 | 2,134,540 | ||
Earnings per share | ||||
Basic earnings per share | 3.63p | 2.84p | ||
Diluted earnings per share | 3.59p | 2.82p |
Consolidated Balance Sheet
As at | As at | |||
31 December | 31 December | |||
2011 | 2010 | |||
£ | £ | |||
ASSETS | ||||
Non-current assets | ||||
Property, plant and equipment | 479,867 | 562,792 | ||
Intangible assets | 5,378,992 | 4,494,646 | ||
Deferred tax assets | 207,081 | 202,112 | ||
Other financial assets | 1,000,000 | - | ||
7,065,940 | 5,259,550 | |||
Current assets | ||||
Inventories | 2,626,660 | 2,489,366 | ||
Trade and other receivables | 2,390,377 | 3,136,335 | ||
Current tax assets | 115,841 | 75,919 | ||
Other financial assets | 1,000,000 | 2,000,000 | ||
Cash and cash equivalents | 3,594,131 | 2,592,871 | ||
9,727,009 | 10,294,491 | |||
Total assets | 16,792,949 | 15,554,041 | ||
LIABILITIES | ||||
Non-current liabilities | ||||
Deferred tax liabilities | 1,387,772 | 1,264,554 | ||
Long term provisions | 36,880 | 55,569 | ||
1,424,652 | 1,320,123 | |||
Current liabilities | ||||
Trade and other payables | 1,698,571 | 2,041,748 | ||
Short term provisions | 46,110 | 58,460 | ||
Current tax liabilities | - | 5,812 | ||
1,744,681 | 2,106,020 | |||
Total liabilities | 3,169,333 | 3,426,143 | ||
Net assets | 13,623,616 | 12,127,898 | ||
EQUITY | ||||
Capital and reserves | ||||
Share capital | 727,000 | 727,000 | ||
Share premium account | 3,405,817 | 3,405,817 | ||
Capital redemption reserve | 256,976 | 256,976 | ||
Cumulative translation reserve | 180,872 | 230,288 | ||
Profit and loss account | 9,052,951 | 7,507,817 | ||
Equity attributable to equity holders of the parent | 13,623,616 | 12,127,898 | ||
Total equity | 13,623,616 | 12,127,898 |
Consolidated Cash Flow Statement
Year to | Year to | |||
31 December | 31 December | |||
2011 | 2010 | |||
£ | £ | |||
Cash flows from operating activities | ||||
Profit before tax for the period | 2,710,332 | 2,323,522 | ||
Adjustments for: | ||||
Finance income | (52,215) | (55,444) | ||
Depreciation | 213,742 | 214,968 | ||
Amortisation | 988,972 | 748,439 | ||
Impairment loss | 256,098 | 203,103 | ||
Loss on disposal of property, plant and equipment (PPE) | 1,438 | 1,343 | ||
Share-based payment | 16,156 | 22,895 | ||
Exchange differences | (22,949) | 30,140 | ||
(Increase) in inventories | (137,294) | (432,632) | ||
Decrease/(increase) in trade and other receivables | 745,958 | (791,458) | ||
(Decrease)/increase in trade and other payables | (374,216) | 317,065 | ||
Cash generated from operations | 4,346,022 | 2,581,941 | ||
Tax (paid)/received | (18,394) | 109,758 | ||
Net cash generated from operating activities | 4,327,628 | 2,691,699 | ||
Cash flows from investing activities | ||||
Interest received | 52,215 | 55,444 | ||
Purchases of property, plant and equipment (PPE) | (160,615) | (174,846) | ||
Purchases of intangible assets | (2,134,233) | (1,888,628) | ||
Net cash used in investing activities | (2,242,633) | (2,008,030) | ||
Cash flows from financing activities | ||||
Equity dividends paid | (1,107,380) | (1,036,733) | ||
Sale/(Purchase) of treasury shares | 16,935 | (27,376) | ||
Net cash used in financing activities | (1,090,445) | (1,064,109) | ||
Effects of exchange rate changes on cash and cash equivalents | 6,710 | 58,654 | ||
Net increase/(decrease) in cash | 1,001,260 | (321,786) | ||
Cash at beginning of period | 2,592,871 | 2,914,657 | ||
Cash at the end of the period | 3,594,131 | 2,592,871 | ||
Consolidated Statement of Changes in Equity
Capital | Cumulative | Profit | ||||||||||
Share | Share | redemption | translation | and loss | Total | |||||||
capital | premium | reserve | reserve | account | Equity | |||||||
£ | £ | £ | £ | £ | £ | |||||||
Balance at 1 January 2010 | 727,000 | 3,405,817 | 256,976 | 125,909 | 6,526,027 | 11,041,729 | ||||||
Profit for the period | - | - | - | - | 2,030,161 | 2,030,161 | ||||||
Exchange differences on translating foreign operations | - | - | - | 104,379 | - | 104,379 | ||||||
Total comprehensive income for the period | - | - | - | 104,379 | 2,030,161 | 2,134,540 | ||||||
Share-based payment | - | - | - | - | 22,895 | 22,895 | ||||||
Deferred tax on share based payment | - | - | - | - | (7,157) | (7,157) | ||||||
Dividends paid | - | - | - | - | (1,036,733) | (1,036,733) | ||||||
Purchase of treasury shares | - | - | - | - | (27,376) | (27,376) | ||||||
Balance at 31 December 2010 | 727,000 | 3,405,817 | 256,976 | 230,288 | 7,507,817 | 12,127,898 | ||||||
Profit for the period | - | - | - | - | 2,591,219 | 2,591,219 | ||||||
Exchange differences on translating foreign operations | - | - | - | (49,416) | - | (49,416) | ||||||
Total comprehensive income for the period | - | - | - | (49,416) | 2,591,219 | 2,541,803 | ||||||
Share-based payment | - | - | - | - | 16,156 | 16,156 | ||||||
Deferred tax on share based payment | - | - | - | - | 28,204 | 28,204 | ||||||
Dividends paid | - | - | - | - | (1,107,380) | (1,107,380) | ||||||
Sale of treasury shares | - | - | - | - | 16,935 | 16,935 | ||||||
Balance at 31 December 2011 | 727,000 | 3,405,817 | 256,976 | 180,872 | 9,052,951 | 13,623,616 | ||||||
NOTES
1. The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2011 or 2010, but is derived from those accounts. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered following the Annual General Meeting. The auditors have reported on those accounts; their reports were (i) unqualified and (ii) did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of 2010 or 2011.
2. The calculation of basic earnings per share is based on the weighted average number of Ordinary Shares in issue during 2011 of 71,456,525 (2010: 71,498,039) allowing for an adjustment made as a consequence of the Company having purchased at various times during the year nil (2010: 90,000) Ordinary Shares and on the profit after tax for 2011 of £2,591,219 (2010: £2,030,161). The calculation of diluted earnings per share incorporates 622,231 Ordinary Shares (2010: 505,238) in respect of performance related employee share options. The profit after tax is the same as for basic earnings per share.
3. The annual general meeting of Concurrent Technologies Plc will be held in the Chairman's Suite at the Weston Homes Community Stadium, United Way, Colchester, CO4 5UP, on 29 May 2012 at 2.00 p.m.
Copies of the Annual Report will be sent to Shareholders and will also be available from the Company's Registered Office: 4, Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, UK, and on the Company's website: www.cct.co.uk.