Half-yearly Report
CONCURRENT TECHNOLOGIES PLC
Interim results for the six months ended 30 June 2008
Concurrent Technologies Plc, ("Concurrent" or the "Company") which manufactures
high-end embedded computer products for critical applications in the defence,
telecommunications and industrial markets, announces interim results for the
six months ended 30 June 2008.
Financial Highlights
* Profit before tax up 45% to £1,213,534 (H1 2007: £835,198)
* Sales up 15% £5.48m (£4.76m in the first half of 2007)
* Gross margins improved to 54%, compared to 47% in 2007
* Cash and cash equivalents of £3.91m, no borrowings
* Earnings per share for the period increased by 48% to 1.27p
Operating Highlights
* 6 product launches since the start of the financial year
* Continued demand from the defence and telecommunications industries, which
have not been affected by economic downturn
* Engineering design facility fully operational in Bangalore, India
* Focus is now on recruiting suitable talent both in the UK and India to keep
up with sales demand
Michael Collins, Chairman, commented:
"The excellent performance seen in the first half is continuing and our healthy
order book gives us confidence for the remainder of the year."
"Our sales team is unearthing new leads throughout Europe and more evidently,
in the USA. Business growth is predicated upon our ability to convert this
abundance of opportunity into revenue, which in turn depends upon our ability
to grow our engineering team quickly enough to satisfy customer demand. Our
facility in Bangalore, India goes some way to address this issue."
"Regardless of the widely reported economic downturn, I am pleased that the
Company has remained insulated from this gloom thus far largely due to our
focus on the defence and telecommunications sectors, both of which have proven
resilient and where demand for innovation continues to be high."
4 September 2008
Enquiries:
Concurrent Technologies Plc 01206 752 626
Glen Fawcett, Managing Director
Haggie Financial LLP 020 7417 8989
Nicholas Nelson/Kathy Boate
Nominated Adviser: 0845 213 1120
Brewin Dolphin Investment Banking
Alan Stewart/Neil McDonald
CONCURRENT TECHNOLOGIES PLC
CHAIRMAN'S STATEMENT
Financial Summary
I am pleased to report a 45% increase in unaudited pre-tax profit for the first
half of this year to £1,213,534 with earnings per share rising by 48% to 1.27p.
This excellent performance was, in the main, due to continuing strong demand
from our defence customers together with an overall improvement in operating
margin. Sales in the period were £5.48m compared with £4.76m in the first half
of 2007.
Gross margins improved to 54% compared to 47%, resulting from improved sales of
our high margin Multibus II products during the period. However, we do not
expect a continuation of this high level of Multibus II sales in the future as
this technology has been superseded by newer and superior bus architectures,
which we continue to focus on.
We ended the half year with net cash and cash equivalents of £3.91m, a small
decrease over the same period in 2007 (£4.26m) given our investment, during the
period, into our new design subsidiary in Bangalore, India, and the delivery at
the end of the period of a significant order.
The Company has used its authority in the first half of 2008 to buy back its
own shares and the Directors will continue to do this when they consider it
appropriate.
Business Summary
The Company designs, builds and supplies high-end embedded computer products
for the defence, telecommunication, aerospace, transportation, scientific and
industrial markets. These high performance products are based on Intel® long
life cycle components, and cover a range of central processing unit ("CPU")
boards and computer systems, which include single and dual processor boards,
many using dual-core processors. Designed for the CompactPCI®, VME, AMC
(Advanced Mezzanine Card) and Multibus II open architecture standards, a common
feature of Concurrent's products are components that require a low level of
electrical power.
Our products deliver very high levels of reliability with substantial
processing power, making them ideal for applications in military systems,
communications, networking, industrial automation and scientific research.
Furthermore we develop rugged versions of many of our products for use in harsh
and wide temperature environments.
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, in addition to help driving new sales following
product launches featuring performance upgrades. We also generate software for
both on-board and production test purposes, while also providing support for
leading embedded and real-time operating systems.
Review of Operations
During the first half of 2008 the Company continued to market its products
primarily to the defence and telecommunication industries, where innovative
products continue to see high demand.
In addition to new processor boards, we have now introduced boards which use
multi-channel switches operating at gigabit data transfer rates that can be
used in high-speed switched fabric VME and CompactPCI® systems.
This year we have released six new products, including more boards designed
according to the 3U CompactPCI® standard, which is experiencing increased
demand. 3U CompactPCI® products are smaller than our traditional 6U CompactPCI®
products and are becoming widely used in applications within industrial
control, transportation and more recently in defence. In addition, we continued
to extend our family of single slot VME single board computers as well as
introducing more high performance 6U CompactPCI® boards.
Our product development plans are well on their way as the engineering design
facility in Bangalore, India is now operational and will aid the design
capacity of the Company, as well as provide a base in which to help drive new
sales.
Future Plans
We maintain an active policy of exploring value enhancing acquisition
opportunities as they arise, but our current emphasis is on internal organic
growth where we continue to see ample opportunity to grow the business, while
we continue to pursue new sales in our existing market regions.
We strongly believe that continuing to expand our range of products is key to
our future success, with a particular focus on the CompactPCI® bus
architecture, including the newer smaller sized 3U version, together with the
VME and AMC architectures. We will continue to design products for complex,
high technology, low to medium volume and high margin applications, along with
producing versions targeted for use in harsh environments.
Our biggest challenge is to expand our engineering resources to keep up with
sales demand. Our priority continues to be the swift expansion of our
engineering capability both here and abroad. Thus we continue with our policy
of recruiting design engineers in the UK and also in India where our plans to
build a significant design capability is proceeding on schedule, and we hope to
update shareholders as further progress is made.
Dividend
The Board has declared an interim dividend of 0.45 pence per share (2007
interim: 0.40 pence). The total cost of this dividend will amount to £322,286.
The ex-dividend date for the interim dividend is 17 September 2008, the record
date is 19 September 2008 and the payment date is 3 October 2008.
Outlook
The excellent performance seen in the first half is continuing and our healthy
order book gives us confidence for the remainder of the year.
Our sales team is unearthing new leads throughout Europe and more evidently, in
the USA. Business growth is predicated upon our ability to convert this
abundance of opportunity into revenue, which in turn depends upon our ability
to grow our engineering team quickly enough to satisfy customer demand. Our
facility in Bangalore, India goes some way to address this issue.
Regardless of the widely reported economic downturn, I am pleased that the
Company has remained insulated from this gloom thus far largely due to our
focus on the defence and telecommunications sectors, both of which have proven
resilient and where demand for innovation continues to be high.
Michael Collins
Chairman
3 September 2008
All companies and product names are trademarks of their respective
organisation.
CONCURRENT TECHNOLOGIES PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
Note Six months Six Year
months
ended ended ended
30/06/08 30/06/07 31/12/07
£ £ £
CONTINUING OPERATIONS
Revenue 5,480,801 4,756,967 10,565,278
Cost of sales 2,494,707 2,530,813 5,346,961
Gross profit 2,986,094 2,226,154 5,218,317
Net operating expenses 1,862,057 1,497,937 2,986,864
Group operating profit 1,124,037 728,217 2,231,453
Finance income 89,497 106,981 201,520
Profit before tax 1,213,534 835,198 2,432,973
Tax 302,485 216,443 541,919
Profit for the period 911,049 618,755 1,891,054
Attributable to:
Equity holders of the parent 911,049 618,755 1,891,054
Basic earnings per share 4 1.27p 0.86p 2.62p
Diluted earnings per share 4 1.26p 0.85p 2.60p
CONCURRENT TECHNOLOGIES PLC
CONDENSED CONSOLIDATED BALANCE SHEET
At 30 June At 30 June At 31
2008 2007 December
2007
ASSETS £ £ £
Non-current assets
Property, plant and equipment 556,168 475,577 468,074
Intangible assets 1,509,543 656,701 1,209,480
Deferred tax assets 82,160 106,020 89,698
2,147,871 1,238,298 1,767,252
Current assets
Inventories 1,780,425 1,561,751 1,097,133
Trade and other receivables 3,268,081 1,769,116 2,104,733
Cash and cash equivalents 3,913,747 4,255,556 4,797,233
8,962,253 7,586,423 7,999,099
Total assets 11,110,124 8,824,721 9,766,351
LIABILITIES
Non-current liabilities
Deferred tax liabilities 435,028 132,257 331,371
Long term provisions 25,421 14,802 26,243
460,449 147,059 357,614
Current liabilities
Trade and other payables 2,128,842 1,567,008 1,516,090
Short term provisions 33,312 45,323 34,390
Current tax liabilities 396,900 36,284 103,957
2,559,054 1,648,615 1,654,437
Total liabilities 3,019,503 1,795,674 2,012,051
Net assets 8,090,621 7,029,047 7,754,300
EQUITY
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 (184,787) (197,656) (182,972)
Profit and loss account 3,885,615 2,836,910 3,547,479
Equity attributable to equity 8,090,621 7,029,047 7,754,300
holders of parent
Total equity 8,090,621 7,029,047 7,754,300
CONCURRENT TECHNOLOGIES PLC
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
Six months Six Year
months
ended ended ended
30/06/08 30/06/07 31/12/07
£ £ £
Cash flows from operating activities
Profit for the period 911,049 618,755 1,891,054
Adjustments for:
Finance income (89,497) (106,981) (201,520)
Tax 302,485 216,443 541,919
Depreciation 69,547 60,426 123,508
Amortisation 155,617 22,605 64,443
(Profit)/loss on disposal of fixed - (306) -
assets
Share-based payment 7,275 12,876 15,597
Exchange differences (1,815) (28,398) (16,909)
(Increase)/decrease in inventories (683,292) (282,286) 182,332
Decrease/(increase) in trade and other (1,163,348) 278,338 (57,279)
receivables
(Decrease)/increase in trade and other 610,852 (61,897) (112,307)
payables
Cash generated from operations 118,873 729,575 2,430,838
Tax (paid)/refunded 95,177 (306,875) (407,426)
Net cash generated from operating 214,050 422,700 2,023,412
activities
Cash flows from investing activities
Interest received 89,497 106,981 201,520
Purchases of property, plant and (157,641) (69,056) (124,376)
equipment (PPE)
Purchases of intangible assets (9,063) (45,955) (101,005)
Proceeds from sale of PPE - 306 -
Payment in respect of development (446,617) (502,427) (1,041,685)
costs
Net cash used in investing activities (523,824) (510,151) (1,065,546)
Cash flows from financing activities
Equity dividends paid (573,712) (470,015) (758,091)
Purchase of treasury shares - - (215,564)
Net cash used in financing activities (573,712) (470,015) (973,655)
Net (decrease)/increase in cash (883,486) (557,466) (15,789)
Cash at beginning of the period 4,797,233 4,813,022 4,813,022
Cash at the end of the period 3,913,747 4,255,556 4,797,233
CONCURRENT TECHNOLOGIES PLC
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 3
September 2008.
The information relating to the six months ended 30 June 2008 and 30
June 2007 is unaudited and does not constitute statutory accounts within
the meaning of section 240 of the Companies Act 1985. The statutory
accounts for the year ended 31 December 2007, prepared under adopted
IFRS, have been reported on by the Group's auditors and delivered to the
Registrar of Companies. The auditors' report was unqualified and did not
contain a statement under section 237 (2) or (3) of the Companies Act
1985.
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 2008. 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 2007, which have been
prepared in accordance with IFRSs.
Except as described below, the accounting policies applied are
consistent with those of the annual financial statements for the year
ended 31 December 2007, as described in those financial statements.
At the date of authorisation of these financial statements, the
following standards and interpretations which have not been applied in
these financial statements were in issue but have not yet come into
effect:
* IAS 1 Presentation of Financial Statements (revised 2007) (effective
1 January 2009)
* IAS 27 Consolidated and Separate Financial Statements (Revised 2008)
(effective 1 July 2009)
* Amendment to IFRS 2 Share-based Payment - Vesting Conditions and
Cancellations (effective 1 January 2009)
* IFRS 8 Operating Segments (effective 1 January 2009)
The Directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the
financial statements of the Group except for additional disclosures.
The accounting policies have been consistently applied to all the
periods presented.
2.2 Taxation
Current tax expense is recognised in these condensed consolidated interim
financial statements based on the estimated effective tax rate for the
full year.
3. Segmental reporting
Based on risks and returns, the Directors consider that the primary
reporting format is by business segment. The Directors consider that
there is only one business segment being design, manufacture and supply
of high-end embedded computer products. The disclosures for the primary
segment have already been provided in these financial statements.
The historical and anticipated performance of the Group is reported to
the Board of Concurrent Technologies Plc as a single entity and thus the
directors consider that there are no additional segments required to be
disclosed.
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 Year
ended ended 30/ ended
06/07
30/06/08 31/12/07
£
£ £
Profit attributable to ordinary 911,049 618,755 1,891,054
equity holders
Six months Six months Year
ended ended 30/ ended
06/07
30/06/08 31/12/07
No No No
Weighted average number of ordinary 71,714,012 72,310,012 72,193,691
shares for
basic earnings per share
Adjustment for share options 365,684 675,940 623,064
Weighted average number of ordinary 72,079,696 72,985,952 72,816,755
shares for
diluted earnings per share
5. Copies of this report will be sent to shareholders and are available at
the Company's Registered Office.
Tuesday, 14th May 2024
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