Interim Results

RNS Number : 4920L

Concurrent Technologies PLC

05 September 2012

 



5 September 2012

CONCURRENT TECHNOLOGIES PLC

Interim Results for the six months ended 30 June 2012

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 interim results for the six months to 30 June 2012.

Highlights:

·      Profit before tax £1,038,605 (H1 2011: £1,132,234)

·      Earnings per share for the period 1.46p (H1 2011: 1.45p)

·      Interim dividend increased by 8.3% to 0.65p per share (H1 2011: 0.60p)

·      Turnover £6,067,169 (H1 2011: £6,870,601)

·      Gross Margin higher at 54.0% (H1 2011: 51.7%)

·      Net cash and cash equivalents £5.0m (H1 2011: £5.4m), no borrowings

Operational Highlights:

·      Strong performance in defence and telecommunications sectors

·      Launch of 11 new products in the period

·      New R&D facility in Reading, Berkshire, UK

·      Signs of increasing demand in new geographies, such as India and South Korea

Michael Collins, Chairman, commented:

"Sales growth for the full year is broadly in line with market expectations despite market conditions in sectors other than defence not currently improving as much as we expected earlier in 2012. We have, however, a good order book and continue to look forward to a satisfactory trading performance in the remainder of this year. As far as the future beyond that is concerned, we remain positive about sales into defence applications in particular and are seeing increased demand in parts of the world whose markets are comparatively new to us, such as India and South Korea. At this stage, we expect our continuing increasing investment in new product development to underpin a satisfactory financial performance in 2012."

5 September 2012

Enquiries:

Concurrent Technologies Plc
Glen Fawcett, Managing Director                         [phone]

Newgate Threadneedle (Financial PR)
Caroline Evans-Jones, Guy McDougall                 [phone]

Cenkos Securities plc (NOMAD)
Ken Fleming                                                      [phone]

Beth McKiernan                                                 [phone]

CHAIRMAN'S STATEMENT

 

Financial Summary

I am able to report a satisfactory start to the year with an unaudited pre-tax profit for the first half of this year of £1,038,605 (H1 2011: £1,132,234) with associated earnings per share at 1.46p (H1 2011: 1.45p). Turnover for the first half of 2012 was £6,067,169 (H1 2011: £6,870,601) and gross margin was higher at 54.0% (H1 2011: 51.7%).

The half year ended with our cash balances (including cash deposits) at £4,990,026 (H1 2011: £5,361,053), notwithstanding that we have continued  to increase R&D expenditure during the first half of 2012 and paid, in that period, another increased dividend.

Dividend

The Board has declared a first interim dividend of 0.65p per share (H1 2011: 0.60p), an increase of 8.3%. The total cost of this dividend will amount to £464,298. The ex-dividend date for the interim dividend is 12 September 2012, the record date is 14 September 2012 and the payment date is 28 September 2012.

Review of Operations

Our sales performance during the first half of 2012 was steady, with orders from our customers in the defence and telecommunications sectors continuing strongly, and demand from our customers in the transport sector rising. In other smaller value sectors, such as the industrial sector, sales and new orders have declined. Sales to UK customers have grown which means that the proportion of sales for export has fallen slightly to 72.1% (H1 2011: 78.1%) of total sales revenue.

Since the beginning of this financial year, we have released 11 new increasingly higher performance products, including 6 new computer boards using the very latest 3rd generation Intel^® Core™ i7 quad-core processors, 2 development systems to assist customers with their VPX™ and MicroTCA^® application development, and a board security package designed to deliver secure embedded solutions into applications where protecting critical technologies and data is essential. These new products offer customers upgrade paths to enhanced processing and graphic capabilities of our boards and also widen our product range into development systems. For the first time, we are now offering our FIN-S "middleware" product for applications that need to exploit the significant network bandwidth of our products.

The Company has used its authority to buy back a number of its own shares in the first half of 2012 and the Directors will continue to do this when they consider it to be appropriate.

Future Plans

We expect to continue our programme of controlled expansion by increasing our engineering design teams both in the UK and abroad. We have very recently established a design facility near Reading, Berkshire, U.K. As a key supplier of Intel^® based technology to many major international companies, 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 for complex, high technology, low to medium volume and high margin applications. We are further enhancing the capabilities of these products with new and complementary software packages.

Although we remain positive as to the potential of value enhancing acquisition opportunities and continually watch out for them, we are currently concentrating on internal growth where we see clear opportunities to grow the business into new market areas without needing to take high levels of risk.

Outlook

Sales growth for the full year is broadly in line with market expectations despite market conditions in sectors other than defence not currently improving as much as we expected earlier in 2012. We have, however, a good order book and continue to look forward to a satisfactory trading performance in the remainder of this year. As far as the future beyond that is concerned, we remain positive about sales into defence applications in particular and are seeing increased demand in parts of the world whose markets are comparatively new to us, such as India and South Korea. At this stage, we expect our continuing increasing investment in new product development to underpin a satisfactory financial performance in 2012.

Michael Collins

Chairman

4 September 2012

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

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

unaudited interim results to 30 June 2012

	Note	Six months ended 30/06/12		Six months ended 30/06/11		Year ended 31/12/11
		£		£		£
CONTINUING OPERATIONS
Revenue		6,067,169		6,870,601		13,807,669
Cost of sales		2,791,051		3,316,497		6,615,546
Gross profit		3,276,118		3,554,104		7,192,123
Net operating expenses		2,264,497		2,447,336		4,534,006
Group operating profit		1,011,621		1,106,768		2,658,117
Finance income		26,984		25,466		52,215
Profit before tax		1,038,605		1,132,234		2,710,332
Tax		(7,546)		96,609		119,113
Profit for the period		1,046,151		1,035,625		2,591,219
Other Comprehensive Income
Exchange differences on translating foreign operations		(55,332)		(71,964)		(49,416)
Tax relating to components of other comprehensive income		-		-		-
Other Comprehensive Income for the period, net of tax		(55,332)		(71,964)		(49,416)
Total Comprehensive Income for the period		990,819		963,661		2,541,803
Profit for the period attributable to:
Equity holders of the parent		1,046,151		1,035,625		2,591,219
Total Comprehensive Income attributable to:
Equity holders of the parent		990,819		963,661		2,541,803
Earnings per share
Basic earnings per share	4	1.46p		1.45p		3.63p
Diluted earnings per share	4	1.45p		1.44p		3.59p

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2012

		As at		As at		As at
		30/06/12		30/06/11		31/12/11
ASSETS		£		£		£
Non-current assets
Property, plant and equipment		430,438		512,547		479,867
Intangible assets		5,810,405		4,820,055		5,378,992
Deferred tax assets		158,251		272,074		207,081
Other financial assets		1,000,000		-		1,000,000
		7,399,094		5,604,676		7,065,940
Current assets
Inventories		3,212,019		2,722,724		2,626,660
Trade and other receivables		2,504,371		2,473,891		2,390,377
Current tax assets		148,350		61,693		115,841
Other financial assets		1,000,000		2,000,000		1,000,000
Cash and cash equivalents		2,990,026		3,361,053		3,594,131
		9,854,766		10,619,361		9,727,009
Total assets		17,253,860		16,224,037		16,792,949
LIABILITIES
Non-current liabilities
Deferred tax liabilities		1,373,669		1,293,205		1,387,772
Long term provisions		42,726		55,434		36,880
		1,416,395		1,348,639		1,424,652
Current liabilities
Trade and other payables		1,932,911		2,292,766		1,698,571
Short term provisions		41,956		63,956		46,110
Current tax liabilities		1,346		22,466		0
		1,976,213		2,379,188		1,744,681
Total liabilities		3,392,608		3,727,827		3,169,333
Net assets		13,861,252		12,496,210		13,623,616
EQUITY
Capital and reserves
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
Cumulative translation reserve		125,540		158,324		180,872
Profit and loss account		9,345,919		7,948,093		9,052,951
Equity attributable to equity holders of the parent		13,861,252		12,496,210		13,623,616
Total equity		13,861,252		12,496,210		13,623,616

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2012

		Six months ended 30/06/12		Six months ended 30/06/11		Year ended 31/12/11
		£		£		£
Cash flows from operating activities
Profit before tax for the period		1,038,605		1,132,234		2,710,332
Adjustments for:
Finance income		(26,984)		(25,466)		(52,215)
Depreciation		101,564		97,364		213,742
Amortisation		601,502		451,716		988,972
Impairment loss		-		-		256,098
Loss on disposal of property, plant and equipment		4,789		12,481		1,438
Share-based payment		6,259		9,044		16,156
Exchange differences		(49,790)		(30,114)		(22,949)
(Increase) in inventories		(585,359)		(233,358)		(137,294)
(Increase)/decrease in trade and other receivables		(113,994)		662,444		745,958
Increase/(decrease) in trade and other payables		236,032		256,379		(374,216)
Cash generated from operations		1,212,624		2,332,724		4,346,022
Tax received/(paid)		(14,443)		(44,312)		(18,394)
Net cash generated from operating activities		1,198,181		2,288,412		4,327,628
Cash flows from investing activities
Interest received		26,984		25,466		52,215
Purchases of property, plant and equipment		(65,353)		(65,090)		(160,615)
Purchases of intangible assets		(1,034,167)		(778,038)		(2,134,233)
Net cash used in investing activities		(1,072,536)		(817,662)		(2,242,633)
Cash flows from financing activities
Equity dividends paid		(714,755)		(678,528)		(1,107,380)
Sale/(Purchase) of treasury shares		(19,134)		11,407		16,935
Net cash used in financing activities		(733,889)		(667,121)		(1,090,445)
Effects of exchange rate changes on cash and cash equivalents		4,139		(35,447)		6,710
Net increase/(decrease) in cash		(604,105)		768,182		1,001,260
Cash at beginning of period		3,594,131		2,592,871		2,592,871
Cash at the end of the period		2,990,026		3,361,053		3,594,131

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2012

	Share capital		Share Premium		Capital redemption reserve		Cumulative translation reserve		Profit and loss account		Total equity
	£		£		£		£		£		£
Balance at 1 January 2011	727,000		3,405,817		256,976		230,288		7,507,817		12,127,898
Profit for the period	-		-		-		-		1,035,625		1,035,625
Exchange differences on translating foreign operations	-		-		-		(71,964)		-		(71,964)
Total recognised comprehensive income for the period	-		-		-		(71,964)		1,035,625		963,661
Share-based payment	-		-		-		-		9,044		9,044
Deferred tax on share based payment	-		-		-		-		62,728		62,728
Dividends paid	-		-		-		-		(678,528)		(678,528)
Sale of treasury shares	-		-		-		-		11,407		11,407
Balance at 30 June 2011	727,000		3,405,817		256,976		158,324		7,948,093		12,496,210
Profit for the period	-		-		-		-		1,555,594		1,555,594
Exchange differences on translating foreign operations	-		-		-		22,548		-		22,548
Total recognised comprehensive income for the period	-		-		-		22,548		1,555,594		1,578,142
Share-based payment	-		-		-		-		7,112		7,112
Deferred tax on share based payment	-		-		-		-		(34,524)		(34,524)
Dividends paid	-		-		-		-		(428,852)		(428,852)
Sale of  treasury shares	-		-		-		-		5,528		5,528
Balance at 31 December 2011	727,000		3,405,817		256,976		180,872		9,052,951		13,623,616
Profit for the period	-		-		-		-		1,046,151		1,046,151
Exchange differences on translating foreign operations	-		-		-		(55,332)		-		(55,332)
Total recognised comprehensive income for the period	-		-		-		(55,332)		1,046,151		991,819
Share-based payment	-		-		-		-		6,259		6,259
Deferred tax on share based payment	-		-		-		-		(25,553)		(25,553)
Dividends paid	-		-		-		-		(714,755)		(714,755)
Purchase of  treasury shares	-		-		-		-		(19,134)		(19,134)
Balance at 30 June 2012	727,000		3,405,817		256,976		125,540		9,345,919		13,861,252

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 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 31 August 2012. The information relating to the six months ended 30 June 2012 and 30 June 2011 is unaudited and does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2011, prepared under adopted IFRS (International Financial Reporting Standards), have been reported on by the Group's auditors and delivered to the Registrar of Companies. The auditors' report in accordance with Chapter 3 of Part 16 of the Companies Act 2006 in relation to those accounts was unqualified.
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 2012. 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 2011, which have been prepared in accordance with IFRSs. The accounting policies applied and methods of computation are consistent with those of the annual financial statements for the year ended 31 December 2011, as described in those financial statements with the exception of a change in an accounting estimate; this estimate, which relates to inventory, increased the carrying amount of inventory by £227,976 as compared to the accounting estimate previously applied. 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 2012 that would be expected to have a material impact on the results or financial position of the Group.
2.2	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 ended 30/06/12		Six months ended 30/06/11		Year ended 31/12/11
			£		£		£
	Profit attributable to ordinary equity holders		1,046,151		1,035,625		2,591,219
			Six months ended 30/06/12		Six months ended 30/06/11		Year ended 31/12/11
			No		No		No
	Weighted average number of ordinary shares for basic earnings per share		71,469,006		71,437,245		71,456,525
	Adjustment for share options		539,623		588,738		622,231
	Weighted average number of ordinary shares for diluted earnings per share		72,008,629		72,025,983		72,078,756

5.	Copies of this report will be sent to shareholders and are available at the Company's Registered Office.

 

END

 

 

IR USOVRUKAKRAR