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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Concurrent Technologies Plc | LSE:CNC | London | Ordinary Share | GB0002183191 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -2.50 | -1.85% | 132.50 | 132.00 | 133.00 | 134.50 | 132.50 | 134.50 | 108,220 | 11:22:42 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Printed Circuit Boards | 31.66M | 3.87M | 0.0452 | 29.31 | 115.61M |
From Dec 2022 to Dec 2024
TIDMCNC
RNS Number : 4777E
Concurrent Technologies PLC
30 June 2023
30 June 2023
Concurrent Technologies Plc
("Concurrent" or the "Company" or the "Group")
Results for the year ended 31 December 2022 and Announcement of Annual General Meeting
Concurrent Technologies Plc (AIM: CNC), a world leading specialist in high-end embedded computer products for critical applications, is pleased to announce its results for the year to 31 December 2022 ("FY22").
Financial Highlights
The global components shortage continued to constrain financial performance, with management focused on supply chain management to deliver:
-- Revenue for the year slightly ahead of market expectations at GBP18.3m (2021: GBP20.5m) -- Gross profit at GBP8.9m (2021: GBP11.4m) -- Gross margin at 48.6% (2021: 55.9%) -- EBITDA at GBP2.1m (2021 restated: GBP4.9m) -- Profit before Tax at GBP0.4m (2021 restated: Profit GBP3.5m) -- Profit after Tax at GBP1m (2021 restated: GBP2.8m) -- EPS decreased to 1.35p (2021 restated: 3.84p) -- Cash in the business at year end GBP4.5m (2021: GBP11.8m)
-- Deliberate use of cash for (i) increased component inventory to mitigate supply chain issues, and (ii) increased cost base to create more products and grow the business.
-- Reverting to cash generative as revenues improve in line with component availability and associated unwinding of inventory holdings.
-- Prior Period Adjustment to 2020 closing reserves (opening 2021) reduced by GBP1m (closing 2021 by GBP1.1m)
Operational Highlights
-- 80% of order intake was for "new" and "current" products, whereas in the year to 31 December 2021 ("FY21") 80% was for "last time buy" or "end of life" products. This is a profound and necessary transformation, validating the need to focus on enhanced product development and sales improvement.
-- Eight new products launched.
-- Achieved record order intake of GBP31.5m, surpassing the prior year of GBP25.2m by 25%, providing excellent revenue visibility for the future as the availability of components continues to improve.
-- Received initial purchase orders for Systems.
Prior Period Adjustments
-- Having thoroughly reviewed the application of accounting policies with the FY22 audit team it has been identified that historically the Company has over-capitalised development costs. The effect of this has resulted in adjustments to capitalisation, amortisation and impairment, ultimately affecting the Net Book Value of the development assets on the balance sheet. This has also affected tax and retained earnings, which has resulted in a 2020 restatement of GBP1.1m.
-- The effect of the revised capitalisation has had a minimal effect on 2021 (+GBP10k to retained earnings), and 2020 had a positive impact of GBP0.2m.
-- Other Prior Period Adjustments are: leases (understated by an extension) GBP0.1m; Dilapidations which have been missed previously GBP0.1m; EPS restated due to incorrect share options previously included; Financial Instruments note due to erroneous information previously.
Post Period Highlights
-- Performance in the period to 30 June 2023 ("H1 FY23") is commensurate with current market expectations and continues to be limited by key component shortages, which are easing as the year progresses.
-- Supply chain improvement is evident as the business transitions into H2 FY23, strengthening confidence in reducing lead times to customers, and correspondingly improved shipping volumes, albeit supply chain constraints remain the largest risk to performance for the remainder of the year.
-- Significant achievements delivered in line with the business strategy in H1 FY23:
-- Execution of a reseller agreement with Alpha Data Parallel Systems Ltd, enabling the inclusion of their FPGA (Field Programable Gate Array) cards alongside Concurrent Technologies SBS (Single Board Computer). Together with the provision of GPGPU (General Purpose Graphical Processing Until) enabled by the prior reseller agreement with Eizo Rugged, the Company can now offer a full range of processing solutions within custom and COTS systems, enabling access to larger markets and opportunity to more completely fulfil customer requirements;
-- Launch of the Hermes high-performance processor Plug In Card, enabling the Company to continue to deliver leading-edge products to the market, demonstrating the focus on releasing new products;
-- Execution of a new distribution agreement with CoC-e, who have deep TSN (Time Sensitive Networking) capability. TSN will now be a differentiating technical capability in the Company's portfolio; and
-- Successfully winning the first Systems win in excess of GBP1 million in value since the launch of the revised business strategy.
-- Order intake expected to be at least in line with prior year, and therefore the Company will transition into growth as component supply further improves.
The Company further confirms that its Annual General Meeting (AGM) will be held on Thursday 24(th) August 2023 at the Company's offices at Building 1230 (Second Floor), Waterside Drive, Arlington Business Park, Theale, Berkshire, RG7 4SA at 2:00 p.m. The Notice of General Meeting will be posted in due course. Shareholders are encouraged to send in their votes using proxy cards in advance of the AGM.
Miles Adcock, CEO of Concurrent Technologies Plc, commented: "2022 was a tough year for the global electronics sector due to severe constraints on components availability. We entered the year with a confident strategy for medium to long term growth, and maintained our focus on targeted investment, partnership, and transformation. I am proud that we did what we said we would do, whether launching eight new products, initiating a systems business, or partnering to enable us to manufacture in the USA. As a result, we are anticipating a third record year for order intake in 2023.
The initial progress of our strategy can be seen in the quanta of order intake, but also that it now contains products and systems hitherto not part of our portfolio. Additionally, a healthy portion of our order intake is 'design wins', whereby we benefit from main production revenue in future years. Our approach to, and appetite for, securing much larger design wins is building us a solid base for year-on-year growth. The audit has been a long process this year, and we have demonstrably resolved unfortunate historic issues that have existed for some time. Our CFO, Kim Garrod, has done a great deal to position us for transparent and well-governed execution in her first year, and we look forward with confidence."
Enquiries:
Concurrent Technologies Plc
Miles Adcock, CEO +44 (0)1206 752626
Kim Garrod, CFO +44 (0)1206 752626
SEC Newgate (Financial PR)
Bob Huxford +44 (0)20 3757 6880
Alice Cho concurrent@secnewgate.co.uk
Cenkos Securities Plc (NOMAD)
Neil McDonald +44 (0)131 220 9771
Peter Lynch +44 (0)131 220 9772
Extracts from the Strategic Report
Hot Features
Premium
Financial 2022 2021 (Restated)
Highlights Revenue GBP18.3m GBP20.5m
========= ================
Gross Profit GBP8.88m GBP11.43m
========= ================
EBITDA GBP2.1m GBP4.9m
========= ================
Profit before tax GBP0.4m GBP3.5m
========= ================
Earnings per share 1.35p 3.84p
========= ================
Dividend per share 0p 2.55p
========= ================
Cash GBP4.5m GBP11.8m
========= ================
Total Assets GBP32.6m GBP29.8m
========= ================
Shareholders' Funds GBP23.2m GBP22.7m
========= ================
The business generated Revenue for the year of GBP18.27m (2021:
GBP20.45m). This converted into Gross Profit of GBP8.88m (2021:
GBP11.43m) whilst the gross margin reduced to 48.6% (2021:
55.9%) reflecting the increased cost of components, created
through the challenges of component supply. We issue a revised
price book every 6 months (since 2022, previously once a year)
to adapt our pricing accordingly. We expect prices to start
to stabilise again as supply becomes more available.
Profit before tax was GBP0.38m (2021 restated: GBP3.45m).
Earnings per share was 1.35 pence (2021 restated: 3.84 pence),
EBITDA (measured as Operating Profit plus Depreciation and
Amortisation) for the Group in 2022 was GBP2.11m (2021 restated:
GBP4.94m). The performance was significantly lower than 2021
as a result of the constraint on our revenue created by the
component supply challenges. We continued to invest in R&D,
talented people and our strategy throughout 2022, and this,
plus reduced gross profit impacted profitability. However,
our backlog is at record levels with a substantial increase
in 2022 order intake. Therefore, revenue will increase once
supply constraints are reduced.
Long-term commitment to R&D continues, spending GBP4.8m in
2022 (2021: GBP3.5m), of which GBP3.7m was capitalised (2021
restated: GBP1.8m). Following full review of all projects,
two projects totalling GBP0.24m have been impaired. Both were
partially impaired in 2020, however on further review in 2022,
a lack of future revenue stream to provide any returns to
the Group became clear and full impairment was undertaken.
A further GBP0.09m was also impaired across several small
projects where future returns were not apparent. These products
are all older products and all costs now impaired refer to
historical costs.
The tax credit in 2022 of GBP0.6m (2021: tax charge GBP0.6m)
is largely the result of our significant investment in R&D.
The Group continues to benefit from R&D tax credits in the
UK and does not anticipate being in a UK cash tax paying position
whilst this incentive continues.
The Group continues to have no debt and its cash balances
at the year-end were GBP4.5m (2021: GBP11.8m). The reduction
in cash is a factor of reduced receipts from revenue and increased
investment in line with strategy. We are confident of improvement
in our cash flow in 2023 as stock unwinds (significant investment
in 2022 to de-risk component challenges), and cash receipts
improve from less constrained revenue. Stock grew considerably
in 2022, with a closing balance of GBP10m (2021: GBP6.4m),
this was as a mitigation against the component challenges,
and has enabled us to be in a better position to deliver revenue
in 2023. This should unwind to a normal level in 2023.
Dividend The Board has agreed no dividend will be paid in 2022, due
to the constrained performance of the business, with a low
profit performance and a significantly reduced cash balance.
Operational During 2022 the Company started shipping several new rugged
Highlights plug-in card products that were based on the latest standards
before competitive alternatives. This enabled the Company
to capitalise on the need for next generation products in,
especially, our home UK and USA markets. To augment our plug
in card products, the Company introduced rugged system level
products that are suitable for deployment in response to a
need from key customers that are looking for application ready
platforms.
Concurrent Technologies Plc continues as an Intel Titanium
Partner during the year, providing the highest level of insight
and product development opportunity.
Future Plans The new financial year of 2023 started with a healthy backlog
and Outlook of GBP26.7M reflecting in part the long-term sales pipeline
the Group enjoys but also in part the willingness of our customers
to order further in advance to provide the maximum opportunity
to manage the supply chain to meet delivery times.
The Group will maintain its policy of investing in R&D to
expand its current range of advanced technology products broadening
out to include deployable systems and integration of third-party
products to complement the hardware and software already developed
internally.
The Board sees opportunities to grow the business organically
by broadening the range of both hardware, software and systems
products within its existing core markets of defence and telecommunications.
In addition, the Board continues to look to recruit key individuals
and skills for both succession and organic growth as well
as for worldwide acquisition opportunities which would assist
the Group in introducing new skills and technologies complementary
and adjacent to its current product ranges. This is with the
aim of increasing the Group's potential share of the total
available market.
Improved product development timescales and cadence, alongside
the introduction of increased production capacity, and development
of system capability, leads the Board to believe the Group
is well positioned to deliver material growth in its main
markets over the coming years. Short term uncertainty in supply
chains will disrupt production in 2023, but the medium-term
outlook is strong, with some good progress milestones achieved
in 2022.
Prior Year We have made certain prior year restatements within the accounts.
Restatement 1) As a result of over capitalisation in previous years an
adjustment has been made to 2021 retained earnings of a GBP1.1m
reduction, representing the reduction in capitalisation of
GBP2.1m with a resulting reduction in accumulated amortisation
of GBP0.7m and an overcharge to the P&L for impairment of
GBP0.3m, resulting in a GBP1.1m reduction in total net book
value (reduction as at 31/12/20 GBP1.1m, with only a minimal
change in 2021).
2) An adjustment to increase the lease right of use asset
and liabilities of GBP0.2m and depreciation of GBP0.1m to
correct the prior position to account for the extension of
the Colchester office lease and correct charges. The impact
to the 2021 profit is a reduction of GBP23k.
3) A dilapidation provision for the Colchester office has
been added, this has increased the PPE asset value and increased
the provisions within the account. The P&L impact in 2021
is an additional charge of GBP0.02m.
4) An adjustment to the weighted average of shares for EPS
has been made. This is a result of certain share options being
included in the calculation incorrectly.
5) Financial instruments have been restated as the total financial
liabilities at amortised cost figure was found to be erroneous,
as it contained items that it should not have contained and
also missed balances that should have been included..
Consolidated Statement of Comprehensive Income
For the year ended 31 December
2022
Year to Year to
31 December 31 December
2022 2021
(restated)
GBP GBP
Revenue 18,274,771 20,450,453
Cost of sales (9,397,449) (9,016,878)
---------------- ---------------
Gross profit 8,877,322 11,433,575
Administrative expenses (8,390,682) (7,896,155)
Operating profit 486,640 3,537,420
Finance costs (104,505) (84,746)
Finance income 546 1,880
Profit before tax 382,681 3,454,554
Tax 604,344 (638,421)
---------------- ---------------
Profit for the year 987,025 2,816,133
================ ===============
Other Comprehensive Income
Amounts which may be reclassified to profit
or loss
Exchange differences on translating foreign
operations 69,463 23,894
Other Comprehensive Income for the year, net
of tax 69,463 23,894
Total Comprehensive Income for the year 1,056,488 2,840,027
================ ===============
Profit for the period attributable to:
---------------- ---------------
Equity holders of the parent 987,025 2,816,133
================ ===============
Total Comprehensive Income attributable to:
---------------- ---------------
Equity holders of the parent 1,056,488 2,840,027
================ ===============
Earnings per share
Basic earnings per share 1.35p 3.84p
Diluted earnings per share 1.35p 3.84p
Consolidated Balance Sheet
For the year ended 31 December
2022
31 December 31 December 31 December
2022 2021 2020
Restated Restated
GBP GBP GBP
ASSETS
Non-current assets
Intangible assets 8,807,290 6,621,166 6,124,291
Property, plant and equipment 2,685,107 1,618,463 1,922,991
Deferred tax assets 350,753 24,139 112,532
11,843,150 8,263,768 8,159,814
Current assets
Inventories 10,090,437 6,425,436 5,533,574
Trade and other receivables 5,439,912 2,988,633 2,356,157
Current tax assets 762,545 258,622 232,988
Cash and cash equivalents 4,512,720 11,839,758 11,765,974
20,805,614 21,512,449 19,888,693
Total assets 32,648,764 29,776,217 28,048,507
------------ ------------ ------------
LIABILITIES
Non-current liabilities
Deferred tax liabilities 2,126,588 1,873,249 1,236,321
Trade and other payables 1,257,820 805,481 909,101
Long term provisions 304,336 223,940 213,792
3,688,744 2,902,670 2,359,214
Current liabilities
Trade and other payables 5,765,262 4,169,672 3,832,367
Short term provisions 18,256 19,300 16,354
Current tax liabilities - 4,817 26,504
5,783,518 4,193,789 3,875,225
Total liabilities 9,472,262 7,096,459 6,234,439
------------ ------------ ------------
Net assets 23,176,502 22,679,758 21,814,068
============ ============ ============
EQUITY
Capital and reserves
Share capital 739,000 739,000 739,000
Share premium account 3,699,105 3,699,105 3,699,105
Capital redemption reserve 256,976 256,976 256,976
Cumulative translation
reserve (27,936) (97,399) (121,293)
Profit and loss account 18,509,357 18,082,076 17,240,280
Equity attributable to
equity holders of the parent 23,176,502 22,679,758 21,814,068
------------ ------------ ------------
Total equity 23,176,502 22,679,758 21,814,068
============ ============ ============
Consolidated Cash Flow Statement
Year to Year to
31 December 31 December
2022 2021
(restated)
GBP GBP
Cash flows from operating activities
Profit before tax for the period 382,681 3,454,554
Adjustments for:
Finance income (546) (1,880)
Finance costs 104,505 84,746
Depreciation 422,047 294,132
Amortisation 1,197,972 1,111,300
Impairment loss 327,526 509,955
Loss on disposal of property, plant and
equipment (PPE) - 27,401
Share-based payment 219,363 12,963
Exchange differences 82,384 46,623
(Increase) in inventories (3,665,001) (891,862)
(Increase) in trade and other receivables (2,451,279) (632,476)
Increase in trade and other payables 2,222,123 354,297
----------- -----------
Cash generated from operations (1,158,225) 4,369,753
Tax received / (paid) 267,884 (40,274)
----------- -----------
Net cash generated from operating activities (890,341) 4,329,479
----------- -----------
Cash flows from investing activities
Interest received 546 1,880
Purchases of property, plant and equipment
(PPE) (1,480,394) (185,878)
Sale of property, plant and equipment (PPE) - 1,500
Capitalisation of development costs and purchases
of intangible assets (3,711,617) (1,950,245)
----------- -----------
Net cash used in investing activities (5,191,465) (2,132,743)
Cash flows from financing activities
Equity dividends paid (1,027,088) (1,907,447)
Repayment of leasing liabilities (94,842) (107,519)
Interest paid (104,505) (84,746)
Sale of treasury shares 2,425 -
----------- -----------
Net cash used in financing activities (1,224,010) (2,099,712)
Effects of exchange rate changes on cash and
cash equivalents (21,222) (23,240)
Net (decrease)/increase in cash (7,327,038) 73,784
Cash at beginning of period 11,839,758 11,765,974
----------- -----------
Cash at the end of the period 4,512,720 11,839,758
=========== ===========
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
Profit
Capital Cumulative and loss Total
Share Share Redemption Translation account Equity
capital premium reserve reserve (restated) (restated)
GBP GBP GBP GBP GBP GBP
Balance at 1
January 2021 (as
previously stated) 739,000 3,699,105 256,976 (121,293) 18,271,819 22,845,607
Impact of prior
period adjustments - - - - (1,031,539) (1,031,539)
Balance at 1
January 2021 (restated) 739,000 3,699,105 256,976 (121,293) 17,240,280 21,814,068
Profit for the
period (restated) - - - - 2,816,133 2,816,133
Exchange differences
on translating
foreign operations - - - 23,894 - 23,894
--------- ---------- ------------ ------------- ------------ ------------
Total comprehensive
income for the
period (restated) - - - 23,894 2,816,133 2,840,027
Share-based payment - - - - 12,963 12,963
Deferred tax on
share based payment - - - - (79,852) (79,852)
Dividends paid - - - - (1,907,447) (1,907,447)
Balance at 31
December 2021
(restated) 739,000 3,699,105 256,976 (97,399) 18,082,077 22,679,759
========= ========== ============ ============= ============ ============
As at 31 December
2021 (reported) 739,000 3,699,105 256,976 (97,399) 19,142,917 23,740,599
Prior year adjustment - - - - (1,060,841) (1,060,841)
Balance at 31
December 2021
(restated) 739,000 3,699,105 256,976 (97,399) 18,082,076 22,679,758
Profit for the
period - - - - 987,025 987,025
Exchange differences
on translating
foreign operations - - - 69,463 - 69,463
--------- ---------- ------------ ------------- ------------ ------------
Total comprehensive
income for the
period - - - 69,463 987,025 1,056,488
Share-based payment - - - - 219,363 219,363
Deferred tax on
share based payment - - - - 245,555 245,555
Dividends paid - - - - (1,027,088) (1,027,088)
Sale/Purchase
of treasury shares - - - - 2,425 2,425
Balance at 31
December 2022 739,000 3,699,105 256,976 (27,936) 18,509,357 23,176,502
========= ========== ============ ============= ============ ============
NOTES
1. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the 'Group'). The financial information set out in these preliminary results has been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. The accounting policies adopted in this results announcement have been consistently applied to all the years presented.
2. The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2022 or 2021, but is derived from those accounts. Statutory accounts for 2021 have been delivered to the Registrar of Companies and those for 2022 are being delivered today. The auditors have reported on 2022 accounts; their report includes a qualified opinion and did not contain statements under section 498(2) or (3) of the Companies Act 2006.
3. The calculation of basic earnings per share is based on the weighted average number of Ordinary Shares in issue during 2022 of 73,363,490 (2021 restated: 73,363,490) after adjustment for treasury shares on the profit after tax for 2022 of GBP987,025 (2021 restated: GBP2,816,133). The calculation of diluted earnings per share is the same as for basic earnings per share.
4. The AGM will be held on Thursday 24 August 2023, at the Company's offices at Building 1230 (Second Floor), Waterside Drive, Arlington Business Park, Theale, Berkshire, RG7 4SA.
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.gocct.com.
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