Interim Results

RNS Number : 3932N

Concurrent Technologies PLC

01 September 2011

 

1 September 2011

CONCURRENT TECHNOLOGIES PLC

Interim Results for the six months ended 30 June 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 interim results for the six months to 30 June 2011.

Highlights:

·      Profit before tax £1,132,234 (H1 2010: £1,004,649)

·      Turnover £6,870,601 (H1 2010: £5,412,725)

·      Earnings per share for the period 1.45p (H1 2010: 1.08p)

·      Gross Margins 52%, in line with 2010 full year results

·      Net cash and cash equivalents £5.4m (H1 2010: £4.6m), no borrowings

·      Interim dividend of 0.60 pence per share (0.55 pence) an increase of 9%.

·      Strong Order book, 7% up in comparison to the same time in 2010

Michael Collins, Chairman, commented:

"As anticipated when reporting on our 2010 performance, trading conditions in the defence sector remain good and we are also pleased to note that the recovery in economic conditions within our other markets continues with improved demand during this first half of 2011.

We continue into the second half of the year with a strong order book and, at this stage, expect our 2011 financial performance to be satisfactory, taking into account our continuing increasing investment in new product development."

31 August 2011

Enquiries:

Concurrent Technologies Plc
Glen Fawcett, Managing Director                         [phone]

Hansard Communications (Financial PR)

Nicholas Nelson/Guy McDougall                         [phone]

Cenkos Securities plc (NOMAD)
Ken Fleming                                                      [phone]

Beth McKiernan                                                 [phone]

CONCURRENT TECHNOLOGIES PLC

CHAIRMAN'S STATEMENT

 

Financial Summary

The first half of the year has started well, continuing the strong close to the 2010 year. Turnover has increased by 27% over the first half of 2011 to £6,870,601 (H1 2010: £5,412,725). Gross Margins were slightly down at 51.7% (53.7%) due mainly to the weakening of the US dollar during the period. The unaudited pre-tax profit for the first half of this year has increased by 13% to £1,132,234 (H1 2010: £1,004,649) with earnings per share rising 34% to 1.45 pence (H1 2010: 1.08p).

Our balance sheet position has also continued to improve with cash (including cash deposits) up 18% to £5,361,053 from £4,592,869 at the end of 2010, after another increased dividend payment and further increases in R&D expenditure during the first half of 2011. Net Assets have increased by 10% from £11,381,669 at the end of 2010 to £12,496,210 at the end of June 2011.

Dividend

The Board has declared an interim dividend of 0.60p per share (0.55p) an increase of 9%. The total cost of this dividend will amount to £428,853. The ex-dividend date for the interim dividend is 7 September 2011, the record date is 9 September 2011 and the payment date is 23 September 2011.

Review of Operations

Sales to our customers in the defence sector have increased during the first half of 2011, but demand from our customers in the telecommunication and other industries has also risen. Sales of our CompactPCI^® products have continued to grow as have sales of our newer products using the VPX bus architecture. We are delighted to report that exports have held up well during the period at 78% of total sales revenue.

We continue to design and develop increasingly higher performance products, now using the very latest quad-core or dual-core 2nd generation Intel^® Core™ processors launched by Intel^® in early January 2011. These processors offer enhanced processing and graphic capabilities, resulting in virtually doubling the graphics performance of all previous generations of our boards and the versions we use are particularly aimed at the defence and security markets.

Future Plans

Although we remain positive on potential value enhancing acquisition opportunities, 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.  We are continuing to expand our engineering capability both here and abroad, and we have significantly stepped up our policy of recruiting design engineers both in the UK and in our development facility in Bangalore, India. These resources will enable the Company to develop the more sophisticated ruggedized versions of our products faster. As you would expect, we will also continue to pursue new sales in our existing markets, where we have potentially strong new business in the pipeline.

We strongly believe that a key factor in our future success lies in continuing to expand our range of products, with a particular focus on CompactPCI^®, VME, VPX and AMC bus architectures, and rapidly applying the latest technologies from Intel^®. Our main objective is to design more innovative products for complex, high technology, low to medium volume and high margin applications, along with producing versions targeted for use in harsh environments, including military applications.

We have recently invested in our own CNC (Computer Numerical Control) milling machine. This will enhance our mechanical and thermal engineering design capability, especially in relation to our environmentally superior products. This will be commissioned during the second half of this year.

Outlook

As anticipated when reporting on our 2010 performance, trading conditions in the defence sector remain good and we are also pleased to note that the recovery in economic conditions within our other markets continues with improved demand during this first half of 2011.

We continue into the second half of the year with a strong order book and, at this stage, expect our 2011 financial performance to be satisfactory, taking into account our continuing increasing investment in new product development.

Michael Collins

Chairman

31 August 2011

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

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

unaudited interim results to 30 June 2011

	Note	Six months ended 30/06/11		Six months ended 30/06/10		Year ended 31/12/10
		£		£		£
CONTINUING OPERATIONS
Revenue		6,870,601		5,412,725		12,639,754
Cost of sales		3,316,497		2,504,806		6,211,615
Gross profit		3,554,104		2,907,919		6,428,139
Net operating expenses		2,447,336		1,931,076		4,160,061
Group operating profit		1,106,768		976,843		2,268,078
Finance income		25,466		27,806		55,444
Profit before tax		1,132,234		1,004,649		2,323,522
Tax		96,609		230,527		293,361
Profit for the period		1,035,625		774,122		2,030,161
Other Comprehensive Income
Exchange differences on translating foreign operations		(71,964)		185,438		104,379
Tax relating to components of other comprehensive income		-		-		-
Other Comprehensive Income for the period, net of tax		(71,964)		185,438		104,379
Total Comprehensive Income for the period		963,661		959,560		2,134,540
Profit for the period attributable to:
Equity holders of the parent		1,035,625		774,122		2,030,161
Total Comprehensive Income attributable to:
Equity holders of the parent		963,661		959,560		2,134,540
Earnings per share
Basic earnings per share	4	1.45p		1.08p		2.84p
Diluted earnings per share	4	1.44p		1.07p		2.82p

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2011

		As at		As at		As at
		30/06/11		30/06/10		31/12/10
ASSETS		£		£		£
Non-current assets
Property, plant and equipment		512,547		579,968		562,792
Intangible assets		4,820,055		4,177,654		4,494,646
Deferred tax assets		272,074		219,305		202,112
Other financial assets		-		1,000,000		-
		5,604,676		5,976,927		5,259,550
Current assets
Inventories		2,722,724		2,298,186		2,489,366
Trade and other receivables		2,473,891		2,316,927		3,136,335
Current tax assets		61,693		233,431		75,919
Other financial assets		2,000,000		1,000,000		2,000,000
Cash and cash equivalents		3,361,053		2,550,648		2,592,871
		10,619,361		8,399,192		10,294,491
Total assets		16,224,037		14,376,119		15,554,041
LIABILITIES
Non-current liabilities
Deferred tax liabilities		1,293,205		1,219,564		1,264,554
Long term provisions		55,434		48,159		55,569
		1,348,639		1,267,723		1,320,123
Current liabilities
Trade and other payables		2,292,766		1,630,059		2,041,748
Short term provisions		63,956		44,754		58,460
Current tax liabilities		22,466		51,914		5,812
		2,379,188		1,726,727		2,106,020
Total liabilities		3,727,827		2,994,450		3,426,143
Net assets		12,496,210		11,381,669		12,127,898
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		158,324		311,347		230,288
Profit and loss account		7,948,093		6,680,529		7,507,817
Equity attributable to equity holders of the parent		12,496,210		11,381,669		12,127,898
Total equity		12,496,210		11,381,669		12,127,898

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2011

		Six months ended 30/06/11		Six months ended 30/06/10		Year ended 31/12/10
		£		£		£
Cash flows from operating activities
Profit before tax for the period		1,132,234		1,004,649		2,323,522
Adjustments for:
Finance income		(25,466)		(27,806)		(55,444)
Depreciation		97,364		105,679		214,968
Amortisation		451,716		366,930		748,439
Impairment loss		-		54,066		203,103
Loss on disposal of property, plant and equipment		12,481		-		1,343
Share-based payment		9,044		11,016		22,895
Exchange differences		(30,114)		46,869		30,140
(Increase) in inventories		(233,358)		(241,452)		(432,632)
(Increase)/decrease in trade and other receivables		662,444		27,950		(791,458)
Increase/(decrease) in trade and other payables		256,379		(115,740)		317,065
Cash generated from operations		2,332,724		1,232,161		2,581,941
Tax received/(paid)		(44,312)		19,011		109,758
Net cash generated from operating activities		2,288,412		1,251,172		2,691,699
Cash flows from investing activities
Interest received		25,466		27,806		55,444
Purchases of property, plant and equipment		(65,090)		(80,557)		(174,846)
Purchases of intangible assets		(778,038)		(1,040,692)		(1,888,628)
Net cash used in investing activities		(817,662)		(1,093,443)		(2,008,030)
Cash flows from financing activities
Equity dividends paid		(678,528)		(643,491)		(1,036,733)
Purchase of treasury shares		11,407		-		(27,376)
Net cash used in financing activities		(667,121)		(643,491)		(1,064,109)
Effects of exchange rate changes on cash and cash equivalents		(35,447)		121,753		58,654
Net increase/(decrease) in cash		768,182		(364,009)		(321,786)
Cash at beginning of period		2,592,871		2,914,657		2,914,657
Cash at the end of the period		3,361,053		2,550,648		2,592,871

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2011

	Share capital		Share Premium		Capital redemption reserve		Cumulative translation reserve		Profit and loss account		Total 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	-		-		-		-		774,122		774,122
Exchange differences on translating foreign operations	-		-		-		185,438		-		185,438
Total recognised comprehensive income for the period	-		-		-		185,438		774,122		959,560
Share-based payment	-		-		-		-		11,016		11,016
Deferred tax on share based payment	-		-		-		-		12,855		12,855
Dividends paid	-		-		-		-		(643,491)		(643,491)
Purchase of treasury shares
Balance at 30 June 2010	727,000		3,405,817		256,976		311,347		6,680,529		11,381,669
Profit for the period	-		-		-		-		1,256,039		1,256,039
Exchange differences on translating foreign operations	-		-		-		(81,059)		-		(81,059)
Total recognised comprehensive income for the period	-		-		-		(81,059)		1,256,039		1,174,980
Share-based payment	-		-		-		-		11,879		11,879
Deferred tax on share based payment	-		-		-		-		(20,012)		(20,012)
Dividends paid	-		-		-		-		(393,242)		(393,242)
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	-		-		-		-		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)
Purchase 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

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's 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 2011. The information relating to the six months ended 30 June 2011 and 30 June 2010 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 2010, 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 2011. 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 2010, 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 2010, as described in those financial statements. The accounting policies have been consistently applied to all the periods presented. A number of new standards, amendments to standards and interpretations have become effective since the beginning of the financial year but these have no material effect 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 30/06/11		Six months ended 30/06/10		Year ended 31/12/10
									£		£		£
	Profit attributable to ordinary equity holders								1,035,625		774,122		2,030,161
									Six months ended 30/06/11		Six months ended 30/06/10		Year ended 31/12/10
									No		No		No
	Weighted average number of ordinary shares for basic earnings per share								71,437,245		71,499,012		71,498,039
	Adjustment for share options								588,738		565,440		505,238
	Weighted average number of ordinary shares for diluted earnings per share								72,025,983		72,064,452		72,003,277

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

 

END

 

 

IR UAABRAKAWOAR