Concurrent Technologies PLC Interim Results (1759I)

TIDMCNC

RNS Number : 1759I

Concurrent Technologies PLC

26 August 2016

26 August 2016

CONCURRENT TECHNOLOGIES PLC

(the "Company")

Interim Results for the six months ended 30 June 2016

Concurrent Technologies Plc (AIM: CNC), 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 interim results for the six months to 30 June 2016.

Financial Highlights:

   --      Turnover for period GBP9.0m (H1 2015: GBP9.6m) 
   --      Improvement in Gross Margins to 54.8% (H1 2015: 48.7%) 
   --      Profit before tax GBP1.5m (H1 2015: GBP1.6m) 
   --      Earnings per share for the period 2.12p (H1 2015: 2.06p) 
   --      Interim dividend declared 0.80p per share (H1 2015: 0.70p), an increase of 14.3% 
   --      Net cash, including cash deposits GBP8.2m (H1 2015: GBP5.7m); no borrowings 

Operational Highlights:

   --      Exports increased to 81% of total revenues 
   --      Continued high level of investment in R&D 
   --      Introduction of development platforms 

Michael Collins, Chairman, commented:

"After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive."

Enquiries:

 
Concurrent Technologies Plc 
 Glen Fawcett, CEO                [phone] 
 
Newgate (Financial PR) 
 Bob Huxford 
 Helena Bogle                    [phone] 
 
Cenkos Securities plc (NOMAD) 
 Neil McDonald                   [phone] 
 Nick Tulloch/Beth McKiernan     [phone]/8 
 

CHAIRMAN'S STATEMENT

Financial Summary

I am very pleased to report an excellent start to 2016, continuing the strong performance seen at the end of 2015. EBITDA for the six months to 30 June 2016 was GBP2.2m (H1 2015: GBP2.3m). The unaudited profit before tax for the same period was GBP1.5m (H1 2015: GBP1.6m) with associated earnings per share of 2.12 pence (H1 2015: 2.06 pence). Group Revenues at GBP9.0m (H1 2015: GBP9.6m) were slightly below the exceptional performance of the first half of last year. Gross Margins were much improved at 54.8% (H1 2015: 48.7%).

The Group balance sheet is also stronger and our cash balances (including cash deposits) at 30 June 2016 were GBP8.2m (H1 2015: GBP5.7m), despite the increased dividend payment made during the period and R&D expenditure having been maintained at the same levels as the first half of 2015 (GBP1.6m).

Dividend

The Board has declared a first interim dividend of 0.80p per share (H1 2015: 0.70p) - an increase of 14.3%. The total cost of this dividend will amount to GBP580,948. The ex-dividend date for the interim dividend is 15 September 2016, the record date is 16 September 2016 and the payment date is 30 September 2016.

Review of Operations

Defence related revenues increased significantly during the first six months compared to the first half of 2015. Revenues were generated from all regions but predominantly from the US. Sales related to industrial applications have also improved during the period due mainly to demand from overseas customers. Exports have increased to 81% of total Group revenues (H1 2015: 52%)

We have continued to extend our VPX(TM) product range by offering development platforms which provide our customers with a quick start to assist them in the development of their systems.

The majority of the Company's world-wide transactions are conducted in sterling and in US dollars and so, following the recent sharp decline in the value of sterling against the US dollar, the Company conducted an additional review of its financial risk and trading plans. The review confirmed that the Company's exposure to exchange risk in the short to medium term is still mitigated to a large extent by the ability to offset receipts from sales against payments for purchases in the same currency. We can also expect to benefit from dollar denominated exports to the USA in the short term.

Future Plans

We will continue to expand our range by developing products for the VPX(TM), VME, AMC and CompactPCI(R) bus architectures. Many versions of these products will be designed for use in harsh environments, particularly for military applications and we continue to recruit engineers in our design facilities in the UK, US and India, to enable the Company to develop more sophisticated ruggedized versions of our products.

Complementary software and firmware packages continue to be developed to provide high-speed data transfer, ease of integration and security which further enhance our product portfolio. We will maintain our strategy of designing more innovative products for complex, high technology, low to medium volume and high margin applications.

Outlook

After a strong performance in the first half of the year we have started the second half with a healthy order book and balance sheet. The outlook for the remainder of this year remains positive.

Michael Collins

Chairman

25 August 2016

All companies and product names are trademarks of their respective organisations.

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

unaudited interim results to 30 June 2016

 
                                           Six months  Six months        Year 
                                                ended       ended       ended 
                                     Note    30/06/16    30/06/15    31/12/15 
                                                  GBP         GBP         GBP 
CONTINUING OPERATIONS 
Revenue                                     8,970,694   9,595,467  17,073,829 
Cost of sales                               4,054,125   4,923,619   8,437,564 
-----------------------------------  ----  ----------  ----------  ---------- 
Gross profit                                4,916,569   4,671,848   8,636,265 
Net operating expenses                      3,397,753   3,078,775   5,945,140 
-----------------------------------  ----  ----------  ----------  ---------- 
Group operating profit                      1,518,816   1,593,073   2,691,125 
Finance income                                 26,336      17,224      42,292 
-----------------------------------  ----  ----------  ----------  ---------- 
Profit before tax                           1,545,152   1,610,297   2,733,417 
Tax                                             4,824     112,420    (21,351) 
-----------------------------------  ----  ----------  ----------  ---------- 
Profit for the period                       1,540,328   1,497,877   2,754,768 
-----------------------------------  ----  ----------  ----------  ---------- 
 
Other Comprehensive Income 
Exchange differences on 
 translating foreign operations               223,385      79,535      62,918 
Tax relating to components                          -           -           - 
 of other comprehensive 
 income 
-----------------------------------  ----  ----------  ----------  ---------- 
Other Comprehensive Income 
 for the period, net of 
 tax                                          223,385      79,535      62,918 
-----------------------------------  ----  ----------  ----------  ---------- 
Total Comprehensive Income 
 for the period                             1,763,713   1,577,412   2,817,686 
-----------------------------------  ----  ----------  ----------  ---------- 
 
Profit for the period attributable 
 to: 
-----------------------------------  ----  ----------  ----------  ---------- 
Equity holders of the parent                1,540,328   1,497,877   2,754,768 
-----------------------------------  ----  ----------  ----------  ---------- 
 
Total Comprehensive Income 
 attributable to: 
-----------------------------------  ----  ----------  ----------  ---------- 
Equity holders of the parent                1,763,713   1,577,412   2,817,686 
-----------------------------------  ----  ----------  ----------  ---------- 
 
Earnings per share 
Basic earnings per share              4         2.12p       2.06p       3.79p 
 
Diluted earnings per share            4         2.12p       2.06p       3.79p 
 

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2016

 
                                      As at       As at       As at 
                                   30/06/16    30/06/15    31/12/15 
ASSETS                                  GBP         GBP         GBP 
Non-current assets 
Property, plant and equipment       643,786     695,632     690,357 
Intangible assets                 6,397,135   6,026,976   6,307,044 
Deferred tax assets                 101,361     105,398     129,647 
                                  7,142,282   6,828,006   7,127,048 
Current assets 
Inventories                       2,870,131   4,184,343   3,774,285 
Trade and other receivables       2,642,486   3,095,560   2,520,573 
Current tax assets                  163,180      75,565     284,419 
Other financial assets                    -           -   1,000,000 
Cash and cash equivalents         8,179,993   5,700,287   4,873,815 
-------------------------------  ----------  ----------  ---------- 
                                 13,855,790  13,055,755  12,452,092 
 
Total assets                     20,998,072  19,883,761  19,580,140 
-------------------------------  ----------  ----------  ---------- 
 
LIABILITIES 
Non-current liabilities 
Deferred tax liabilities          1,280,077   1,283,929   1,305,237 
Long term provisions                 10,398      10,981       9,968 
-------------------------------  ----------  ----------  ---------- 
                                  1,290,475   1,294,910   1,315,205 
Current liabilities 
Trade and other payables          2,938,487   3,488,379   2,411,524 
Short term provisions                32,712      33,726      31,897 
Current tax liabilities               6,735       3,072           - 
-------------------------------  ----------  ----------  ---------- 

                                  2,977,934   3,525,177   2,443,421 
 
Total liabilities                 4,268,409   4,820,087   3,758,626 
-------------------------------  ----------  ----------  ---------- 
 
Net assets                       16,729,663  15,063,674  15,821,514 
-------------------------------  ----------  ----------  ---------- 
 
EQUITY 
Capital and reserves 
Share capital                       739,000     739,000     739,000 
Share premium account             3,693,818   3,693,818   3,693,818 
Capital redemption reserve          256,976     256,976     256,976 
Cumulative translation 
 reserve                            302,026      95,258      78,641 
Profit and loss account          11,737,843  10,278,622  11,053,079 
-------------------------------  ----------  ----------  ---------- 
Equity attributable to 
 equity holders of the parent    16,729,663  15,063,674  15,821,514 
 
Total equity                     16,729,663  15,063,674  15,821,514 
-------------------------------  ----------  ----------  ---------- 
 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2016

 
 
                                     Six months   Six months         Year 
                                          ended        ended        ended 
                                       30/06/16     30/06/15     31/12/15 
                                            GBP          GBP          GBP 
Cash flows from operating 
 activities 
Profit before tax for the 
 period                               1,545,152    1,610,297    2,733,417 
Adjustments for: 
   Finance income                      (26,336)     (17,224)     (42,292) 
   Depreciation                          98,966      106,821      224,778 
   Amortisation                         627,065      638,198    1,254,083 
   Impairment loss                      499,509      505,727      690,201 
   Loss on disposal of property, 
    plant and equipment                       -            -      (1,334) 
   Share-based payment                    1,139        9,787       26,192 
   Exchange differences                 272,299       94,681       86,711 
   (Increase)/decrease in 
    inventories                         904,154  (1,484,685)  (1,074,627) 
   (Increase)/decrease in 
    trade and other receivables       (121,913)    (305,134)      269,853 
   Increase/(decrease) in 
    trade and other payables            528,208      991,326     (88,371) 
----------------------------------  -----------  -----------  ----------- 
Cash generated from operations        4,328,243    2,149,794    4,078,611 
Tax received/(paid)                     120,715      105,193       48,956 
----------------------------------  -----------  -----------  ----------- 
Net cash generated from 
 operating activities                 4,448,958    2,254,987    4,127,567 
----------------------------------  -----------  -----------  ----------- 
 
Cash flows from investing 
 activities 
Interest received                        26,336       17,224       42,292 
Cash placed on deposit                1,000,000            -  (1,000,000) 
Purchases of property, 
 plant and equipment (PPE)             (43,728)    (195,398)    (305,874) 
Proceeds from sale of PPE                                           1,500 
Purchases of intangible 
 assets                             (1,214,874)  (1,152,257)  (2,231,637) 
----------------------------------  -----------  -----------  ----------- 
Net cash used in investing 
 activities                           (232,266)  (1,330,431)  (3,493,719) 
----------------------------------  -----------  -----------  ----------- 
 
Cash flows from financing 
 activities 
Equity dividends paid                 (870,942)    (834,904)  (1,343,141) 
Sale/(Purchase) of treasury 
 shares                                  19,800            -     (15,461) 
Net cash used in financing 
 activities                           (851,142)    (834,904)  (1,358,602) 
----------------------------------  -----------  -----------  ----------- 
 
Effects of exchange rate 
 changes on cash and cash 
 equivalents                           (59,372)     (13,870)     (25,936) 
 
Net increase/(decrease) 
 in cash                              3,306,178       75,782    (750,690) 
Cash at beginning of period           4,873,815    5,624,505    5,624,505 
----------------------------------  -----------  -----------  ----------- 
Cash at the end of the 
 period                               8,179,993    5,700,287    4,873,815 
----------------------------------  -----------  -----------  ----------- 
 
 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2016

 
                                                   Capital    Cumulative      Profit 
                             Share      Share   redemption   translation    and loss       Total 
                           capital    Premium      reserve       reserve     account      equity 
                               GBP        GBP          GBP           GBP         GBP         GBP 
 
Balance at 1 January 
 2015                      739,000  3,693,818      256,976        15,723   9,595,122  14,300,639 
 
Profit for the period            -          -            -             -   1,497,877   1,497,877 
Exchange differences 
 on translating foreign 
 operations                      -          -            -        79,535           -      79,535 
------------------------  --------  ---------  -----------  ------------  ----------  ---------- 
Total recognised 
 comprehensive income 
 for the period                  -          -            -        79,535   1,497,877   1,577,412 
 
Share-based payment              -          -            -             -       9,787       9,787 
Deferred tax on 
 share based payment             -          -            -             -      10,740      10,740 
Dividends paid                   -          -            -             -   (834,904)   (834,904) 
Balance at 30 June 
 2015                      739,000  3,693,818      256,976        95,258  10,278,622  15,063,674 
------------------------  --------  ---------  -----------  ------------  ----------  ---------- 
 
Profit for the period            -          -            -             -   1,256,891   1,256,891 
Exchange differences 
 on translating foreign 
 operations                      -          -            -      (16,617)           -    (16,617) 
------------------------  --------  ---------  -----------  ------------  ----------  ---------- 
Total recognised 
 comprehensive income 
 for the period                  -          -            -      (16,617)   1,256,891   1,240,274 
 
Share-based payment              -          -            -             -      16,405      16,405 
Deferred tax on 
 share based payment             -          -            -             -      24,859      24,859 
Dividends paid                   -          -            -             -   (508,237)   (508,237) 
Purchase of treasury 
 shares                          -          -            -             -    (15,461)    (15,461) 
Balance at 31 December 
 2015                      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 
------------------------  --------  ---------  -----------  ------------  ----------  ---------- 
 

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 (GBP), 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 25 August 2016. 
 
       The information relating to the six months 
       ended 30 June 2016 and 30 June 2015 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 2015, 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 2016. 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 2015, 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 2015, 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 
       2016 that would be expected to have a material 
       impact on the results or financial position 
       of the Group. 
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   Six months 
                                           ended        ended   Year ended 
                                        30/06/16     30/06/15     31/12/15 
                                             GBP          GBP          GBP 
 
 Profit attributable 
  to ordinary equity holders           1,540,328    1,497,877    2,754,768 
 -----------------------------  ---  -----------  -----------  ----------- 
                                      Six months   Six months 
                                           ended        ended   Year ended 
                                        30/06/16     30/06/15     31/12/15 
                                            N(o)         N(o)         N(o) 
 Weighted average number 
  of ordinary 
  shares for basic earnings 
  per share                           72,604,009   72,600,490   72,594,150 
 Adjustment for share 
  options                                    481        7,872            - 
 -----------------------------  ---  -----------  -----------  ----------- 
 Weighted average number 
  of ordinary shares for 
  diluted earnings per 
  share                               72,604,490   72,608,362   72,594,150 
 -----------------------------  ---  -----------  -----------  ----------- 
 
 
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. 
 
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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The company news service from the London Stock Exchange

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