Final Results

RNS Number : 3922A
Concurrent Technologies PLC
24 March 2017
 

24 March 2017

Concurrent Technologies Plc

Results for the year ended 31 December 2016

Concurrent Technologies Plc (AIM: CNC), a world leading specialist in the design and manufacture of high-end embedded computer boards for critical applications, announces results for the year to 31 December 2016.

Financial Highlights

·     Turnover of £16.4m (2015: £17.1m)

·     Gross profit increased by 3.0% to £8.9m (2015: £8.6m)

·     Gross margin increased to 54.2% (2015: 50.6%)

·     EBITDA increased by 3.2% to £4.3m (2015: £4.2m)

·     Profit before Tax increased by 6.2% to £2.9m (2015: £2.7m)

·     EPS increased by 2.9% to 3.90 pence (2015: 3.79 pence)

·     Dividend increased by 10.5% to 2.10 pence per share for the year (2015: 1.90 pence)

·     Cash in business plus deposits increased by 32.3% to £7.8m (2015: £5.9m)

 

Operational Highlights

 

·      Four new high performance embedded computers were released during 2016, two of which featured new generation Intel® Xeon® processors

·      All architectures for new applications and new customers include low power units and allow for practical upgrade paths for existing long life cycle customers

·      Released further sophisticated high bandwidth switching boards supplementing functionality of main products

 

Michael Collins, Chairman of Concurrent Technologies Plc, commented:

 

"We are currently witnessing numerous opportunities to introduce our highly innovative technology to new and existing customers. To best meet these opportunities our strategy is to continue to invest in R&D to ensure a constant expansion of our advanced product range. 

We continue to look for acquisition options but there is plenty of scope for internal organic growth where we continue to see many opportunities to grow the business into new market areas without taking unacceptable risks.  

Sales and new interest in our products and services arising this year have been encouraging and our current healthy order book gives us confidence in our performance for 2017."

Annual General Meeting

 

The annual general meeting of Concurrent Technologies Plc will be held at the Company's offices at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, on 25 May 2017 at 2:30pm.

 



Enquiries:

 

Concurrent Technologies Plc
Glen Fawcett, CEO

 

+44 (0)1206 752 626



Newgate (Financial PR)
Bob Huxford

James Browne


+44 (0)207 653 9850



Cenkos Securities plc (NOMAD)
Neil McDonald

Nick Tulloch

Beth McKiernan


+44 (0)131 220 9771

+44 (0)131 220 9772

+44 (0)131 220 9778

 

 



Extracts from the Strategic Report

Review of Operations

The Group achieved excellent results in 2016, with sales of £16.42m (2015: £17.07m). The Revenue for 2015 included significant orders from one customer which as anticipated by the Board, were not repeated at such a high level in 2016.

Despite the fall in revenues, gross profit increased to £8.89m (2015: £8.64m). The gross margin for the year increased to 54.2% (2015: 50.6%).

Profit before tax was £2.90m (2015: £2.73m). Earnings per share were 3.90 pence (2015: 3.79 pence).

EBITDA (measured as Operating Profit plus Depreciation and Amortisation) for the Group in 2016 was £4.31m (2015: £4.17m).

The Total Comprehensive Income for the year was £3.25m which included £0.42m of income resulting from exchange differences on translating foreign operations. This substantially arose from a significant devaluation of sterling against other currencies in June 2016.

We continued to increase our investment in R&D from £3.05m in 2015 to £3.39m in 2016, of which £2.27m was capitalised (2015: £2.20m).

The Group continues to have no borrowings. We have again paid increased dividends during the year and our cash balances plus short to medium term cash deposits at the year-end improved to £7.78m (2015: £5.87m).

Operational Highlights 

Four new high performance embedded computers were released during 2016. Two of these, featured the latest technology processors including the new generation Intel® Xeon® processors. As well as providing the latest high performance and low power units across all of our architectures for new applications and new customers, these computer boards also allow for practical upgrade paths for our existing long life cycle customers. In addition to these two main computer boards, we also released further sophisticated high bandwidth switching boards to supplement the functionality of our main products providing, for example, faster and easier network connectivity.

Future Plans

Our core business is resilient and there are many opportunities to introduce our highly innovative technology to new and existing customers.

We will continue our investment in R&D to ensure a constant expansion of our range of advanced technology products and thereby enhance our competitive position. Additional R&D engineers will be recruited in the UK, USA and India to design more 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.

The key to continued success is to expand our range of products, with a particular focus on the VPX bus architecture. In addition to boards and associated software we have recently started to provide development systems based on the VPX and MicroTCA® architectures. These development systems will enable users to reduce their own product development times.

We continue to look for acquisition opportunities but there is plenty of scope for internal organic growth where we continue to see many opportunities to grow the business into new market areas without taking unacceptable risks.

Sales and new opportunities arising this year have been encouraging and our current healthy order book gives us confidence in our performance for the full year.

Dividend

The Board has declared a second interim dividend of 1.30 pence per share (2015: 1.20 pence) which when added to the first interim dividend of 0.80 pence per share (2015: 0.70 pence) will make a total of 2.10 pence per share for the year (2015: 1.90 pence). This is an increase of 10.5% on dividends paid for 2015. The total cost of this second interim dividend will amount to £945,340. As in previous years, the Directors do not intend to recommend a final dividend.



Annual General Meeting

The annual general meeting of Concurrent Technologies Plc will be held at the Company's offices at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, on 25 May 2017 at 2:30pm.

All trademarks, registered trademarks and trade names used in this announcement are the property of their respective owners.

 



Consolidated Statement of Comprehensive Income



Year to


Year to



31 December


31 December



2016


2015

CONTINUING OPERATIONS


£


£

Revenue


16,423,978


17,073,829

Cost of sales


7,529,867


8,437,564

Gross profit


8,894,111


8,636,265

Operating expenses


6,040,302


5,945,140

Group operating profit


2,853,809


2,691,125

Finance income


48,705


42,292

Profit before tax


2,902,514


2,733,417

Tax


72,609


(21,351)

Profit for the year


2,829,905


2,754,768






Other Comprehensive Income





Items that will be reclassified subsequently to profit or loss:





Exchange differences on translating foreign operations


415,966


62,918

Tax relating to components of other comprehensive income


-


-

Other Comprehensive Income for the year, net of tax


415,966


62,918

Total Comprehensive Income for the year


3,245,871


2,817,686






Profit for the period attributable to:





Equity holders of the parent


2,829,905


2,754,768






Total Comprehensive Income attributable to:





Equity holders of the parent


3,245,871


2,817,686






Earnings per share





Basic earnings per share


3.90p


3.79p






Diluted earnings per share


3.90p


3.79p

 



Consolidated Balance Sheet



As at


As at



31 December


31 December



2016


2015



£


£

ASSETS





Non-current assets





Property, plant and equipment


414,209


690,357

Intangible assets


6,846,520


6,307,044

Deferred tax assets


112,128


129,647



7,372,857


7,127,048

Current assets





Inventories


3,239,855


3,774,285

Trade and other receivables


3,327,629


2,520,573

Current tax assets


93,156


284,419

Other financial assets


1,000,000


1,000,000

Cash and cash equivalents


6,773,083


4,873,815



14,433,723


12,453,092






Total assets


21,806,580


19,580,140






LIABILITIES





Non-current liabilities





Deferred tax liabilities


1,291,468


1,305,237

Long term provisions


6,699


9,968



1,298,167


1,315,205

Current liabilities





Trade and other payables


2,810,655


2,411,524

Short term provisions


23,939


31,897

Current tax liabilities


 -  


-  



2,834,594


2,443,421






Total liabilities


4,132,761


3,758,626






Net assets


17,673,819


15,821,514






EQUITY





Capital and reserves





Share capital


739,000


739,000

Share premium account


3,693,818


3,693,818

Capital redemption reserve


256,976


256,976

Cumulative translation reserve


494,607


78,641

Profit and loss account


12,489,418


11,053,079

Equity attributable to equity holders of the parent


17,673,819


15,821,514






Total equity


17,673,819


15,821,514

 



Consolidated Cash Flow Statement



Year to


Year to



31 December


31 December



2016


2015



£


£

Cash flows from operating activities





Profit before tax for the period


2,902,514


2,733,417

Adjustments for:





Finance income       


(48,705)


(42,292)

Depreciation       


196,370


224,778

Amortisation       


1,254,826


1,254,083

Impairment loss       


499,509


690,201

Loss/(profit) on disposal of property, plant and equipment (PPE)


233,840


(1,334)

Share-based payment       


13,585


26,192

Exchange differences       


76,461


86,711

Decrease/(increase) in inventories       


534,430


(1,074,627)

(Increase)/decrease in trade and other receivables       


(927,530)


269,853

Increase/(decrease) in trade and other payables       


558,815


(88,371)

Cash generated from operations


5,294,115


4,078,611

Tax received


116,142


48,956

Net cash generated from operating activities


5,410,257


4,127,567






Cash flows from investing activities





Interest received


48,705


42,292

Cash released from/(placed) on deposit


-


(1,000,000)

Purchases of property, plant and equipment (PPE)


(138,181)


(305,874)

Proceeds from sale of PPE


-


1,500

Capitalisation of development costs and purchases of intangible assets


(2,290,889)


(2,231,637)

Net cash used in investing activities


(2,380,365)


(3,493,719)






Cash flows from financing activities





Equity dividends paid


(1,452,689)


(1,343,141)

Exercise of share options


51,800  


-  

Purchase of treasury shares


-


(15,461)

Net cash used in financing activities


(1,400,889)


(1,358,602)






Effects of exchange rate changes on cash and cash equivalents


270,265


(25,936)






Net increase/(decrease) in cash


1,899,268


(750,690)

Cash at beginning of period


4,873,815


5,624,505

Cash at the end of the period


6,773,083


4,873,815

 

Consolidated Statement of Changes in Equity







Capital


Cumulative


Profit





Share


Share


redemption


translation


and loss


Total



capital


premium


reserve


reserve


account


Equity



£


£


£


£


£


£

Balance at 1 January 2015


     739,000


 3,693,818


     256,976


15,723


9,595,122


14,300,639














Profit for the period


                -  


                -  


                -  


                -  


2,754,768


2,754,768

Exchange differences on translating foreign operations


                -  


                -  


                -  


62,918


                  -  


62,918

Total comprehensive income for the period


                -   


                -  


                -  


62,918


2,754,768


2,817,686

Transactions with owners:













Share-based payment


                -  


                -  


                -  


                -  


26,192


26,192

Deferred tax on share based payment


                -  


                -  


                -  


                -  


35,599


35,599

Dividends paid


                -  


                -  


                -  


                -  


(1,343,141)


(1,343,141)

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


                -  


                -  


                -  


                -  


2,829,905


2,829,905

Exchange differences on translating foreign operations


                -  


                -  


                -  


415,966


                  -  


415,966

Total comprehensive income for the period


                -  


                -  


                -  


415,966


2,829,905


3,245,871

Transactions with owners:













Share-based payment


                -  


                -  


                -  


                -  


13,585


13,585

Deferred tax on share based payment


                -  


                -  


                -  


                -  


(6,262)


(6,262)

Dividends paid


                -  


                -  


                -  


                -  


(1,452,689)


(1,452,689)

Transfer of treasury shares


                -  


                -  


                -  


                -  


51,800


51,800

Balance at 31 December 2016


     739,000


 3,693,818


     256,976


494,607


12,489,418


17,673,819














 

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 Financial Reporting Standards ('IFRSs') as adopted by European Union. The accounting policies adopted in this results announcement have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2015. The consolidated financial information is presented in sterling (£), which is the company's functional and the Group's presentation currency.

 

2.  The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2016 or 2015, but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Annual General Meeting. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of 2015 or 2016 and (iii) did not draw attention to any matters by way of emphasis.

 

3.  The calculation of basic earnings per share is based on the weighted average number of Ordinary Shares in issue during 2016 of 72,635,976 (2015: 72,594,150) allowing for any adjustment made as a consequence of the Company having issued no Ordinary Shares during 2016 (2015: nil) and on the profit after tax for 2016 of £2,829,905 (2015: £2,754,768). The calculation of diluted earnings per share incorporates 2,457 Ordinary Shares (2015: nil) in respect of performance related employee share options. The profit after tax is the same as for basic earnings per share.

 

4.  The annual general meeting of Concurrent Technologies Plc will be held at the Company's offices at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, on 25 May 2017 at 2:30pm.

 

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.cct.co.uk.

 


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