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Concurrent Tech. (CNC)

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Tuesday 26 August, 2014

Concurrent Tech.

Half Yearly Report

RNS Number : 8998P
Concurrent Technologies PLC
26 August 2014
 



26 August 2014

 

CONCURRENT TECHNOLOGIES PLC

Interim Results for the six months ended 30 June 2014

Highlights:

·      Turnover £5.6m (H1 2013: £5.3m)

·      Profit before tax £0.4m (H1 2013: £0.4m)

·      Earnings per share for the period 0.56p (H1 2013: 0.66p)

·      Interim dividend 0.65p per share (H1 2013: 0.65p)

·      Net cash, including cash deposits £4.8m (H1 2013: £5.3m); no borrowings

Operational Highlights:

·      Release of four new products

·      Increased investment in R&D and creation of engineering facility in the USA

·      Investment in new X-ray equipment for manufacturing

Michael Collins, Chairman, commented:

"Our order book is good and our cash position remains strong. With the introduction by the UK Government of the more flexible licensing system, we can now focus on restoring customer confidence in those areas affected. How long it will take to recover from the effects of UK export licensing regulations, and what their full impact might be, remains difficult to assess at this time, but the Board is confident that the resolution of the major export licensing issues, together with the diversity of the Company's product range and customer base, will generate sound results."

 

Enquiries:

 

Concurrent Technologies Plc
Glen Fawcett, Managing Director

 

+44 (0)1206 752 626



Newgate Threadneedle (Financial PR)
Caroline Forde

Robyn McConnachie


+44 (0)207 653 9850



Cenkos Securities plc (NOMAD)
Neil McDonald

Beth McKiernan


+44 (0)131 220 9771
+44 (0)131 220 9778

 

CHAIRMAN'S STATEMENT

 

Financial Summary

 

Given the backdrop of continuing export licence problems for customers in many markets, I am pleased to report a satisfactory start to 2014. The Group achieved a profit before tax for the six months to 30 June 2014 of £424,338 (H1 2013: £370,528) with associated earnings per share of 0.56 pence (H1 2013: 0.66 pence). Turnover for the period was £5,574,557 (H1 2013: £5,319,772), with a significant increase in sales into telecommunications applications. Our cash balances (including cash deposits) at 30 June 2014 remain healthy at £4,846,837 (H1 2013: £5,331,742) even after paying an increased dividend after the year end, and continued investment in R&D at a slightly increased level compared to the first half of 2013.

 

Review of Operations

 

Turnover during the first half of 2014 was in line with expectations although exports have fallen to 54% of turnover (H1 2013: 72%) which was expected due to the application of UK Government export control regulations to our advanced technology products incorporating encryption technology. As a consequence of these export controls, the Board has determined that a further write down in the value of certain designs may be required; the exact amount will be finalised at the year end and incorporated into the results for the full year ending 31 December 2014.

 

Throughout the second half of 2013 and the first half of 2014, the Company has been working closely with BIS (Department for Business, Innovation and Skills) which has been reviewing the current system of controls. In mid-July 2014, we were notified that BIS had published a generally applicable export licence that substantially decontrols the exporting of encryption products of the type that the Company produces. This licence will considerably simplify the exporting of affected products to key markets outside of the EU and USA.

 

We have continued to invest in the development of our expanding product ranges and we have released four new products during the first half of this financial year. Two of these are based on the AMC architecture and a further two feature the Intel® Atom™ processor. The latter products are low power computers specifically targeted to offer excellent performance per Watt and are based on the VME and CompactPCI® bus architectures. These single board computers are suitable for applications in our usual markets and support a range of industry standard operating systems.

 

The Group has implemented its plan to establish an engineering facility in Massachusetts, USA, and US engineers are already augmenting the UK and Indian engineering teams.

 

We have also invested in new X-ray equipment in our manufacturing facility, which is able to perform 3D scanning and make sectional images. This has substantially improved our ability to see inside ever smaller and more complex components and parts of our products to identify faults and ensure the highest quality of manufacture.

 

The executive directors exercised their share options 8th April 2014, resulting in an issue of 1.2m shares and an inflow of £300,000 cash.

 

Future Plans

 

Our strategy is to continue to expand our range by developing products for the VPX™, VME, AMC and CompactPCI® bus architectures in complex, high technology, low to medium volume and high margin applications. Many versions of these products will be designed for use in harsh environments. The continuing development of new and complementary software packages to provide high-speed data transfer, ease of integration and security will further enhance our product portfolio. We will also continue to recruit in the USA to build up our engineering team there.

 

Dividend

 

The Board has declared a first interim dividend that will be maintained at the same level as that for last year, namely, 0.65p per share (H1 2013: 0.65p). The total cost of this dividend will amount to £471,903. The ex-dividend date for the interim dividend is 10 September 2014, the record date is 12 September 2014 and the payment date is 26 September 2014.

 

Outlook

 

Our order book is good and our cash position remains strong. With the introduction by the UK Government of the more flexible licensing system, we can now focus on restoring customer confidence in those areas affected. How long it will take to recover from the effects of UK export licensing regulations, and what their full impact might be, remains difficult to assess at this time, but the Board is confident that the resolution of the major export licensing issues, together with the diversity of the Company's product range and customer base, will generate sound results.

 

Michael Collins

Chairman

 

22 August 2014

 

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

 

 

CONDENSED CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

unaudited interim results to 30 June 2014

 


Note

Six months ended

30/06/14


Six months ended

30/06/13


Year ended 31/12/13



£


£


£

CONTINUING OPERATIONS







Revenue


5,574,557


5,319,772


11,859,180

Cost of sales


2,899,117


2,611,202


5,857,094

Gross profit


2,675,440


2,708,570


6,002,086

Net operating expenses


2,286,611


2,369,420


5,614,290

Group operating profit


388,829


339,150


387,796

Finance income


35,509


31,378


66,133

Profit before tax


424,338


370,528


453,929

Tax


24,923


(102,822)


(275,688)

Profit for the period


399,415


473,350


729,617








Other Comprehensive Income







Exchange differences on translating foreign operations


(29,037)


127,433


(124,637)

Tax relating to components of other comprehensive income


-   


-   


-   

Other Comprehensive Income for the period, net of tax


(29,037)


127,433


(124,637)

Total Comprehensive Income for the period


370,378


600,783


604,980








Profit for the period attributable to:







Equity holders of the parent


399,415


473,350


729,617








Total Comprehensive Income attributable to:







Equity holders of the parent


370,378


600,783


604,980








Earnings per share







Basic earnings per share

4

0.56p


0.66p


1.02p








Diluted earnings per share

4

0.55p


0.66p


1.01p

 

 

CONDENSED CONSOLIDATED BALANCE SHEET

unaudited interim results to 30 June 2014

 



As at


As at


As at



30/06/14


30/06/13


31/12/13

ASSETS


£


£


£

Non-current assets







Property, plant and equipment


609,986


393,125


478,131

Intangible assets


5,845,981


6,262,359


5,467,503

Deferred tax assets


82,813


190,303


108,396

Other financial assets


-   


1,000,000


-   



6,538,780


7,845,787


6,054,030

Current assets







Inventories


2,536,345


2,828,830


2,550,556

Trade and other receivables


2,210,893


2,092,746


2,874,354

Current tax assets


284,726


186,933


247,240

Other financial assets


2,585,066


   1,000,000


2,602,689

Cash and cash equivalents


2,261,771


3,331,742


2,340,859



9,878,801


9,440,251


10,615,698








Total assets


16,417,581


17,286,038


16,669,728








LIABILITIES







Non-current liabilities







Deferred tax liabilities


1,257,824


1,315,342


1,164,267

Long term provisions


10,009


-   


10,009



1,267,833


1,315,342


1,174,276

Current liabilities







Trade and other payables


1,708,720


1,751,526


1,931,110

Short term provisions


36,813


39,746


36,813

Current tax liabilities


2,998


26,196


-



1,748,531


1,817,468


1,967,923








Total liabilities


3,016,364


3,132,810


3,142,199








Net assets


13,401,217


14,153,228


13,527,529








EQUITY







Capital and reserves







Share capital


 739,000


 727,000


727,000

Share premium account


3,693,818


3,405,817


3,405,817

Capital redemption reserve


 256,976


 256,976


256,976

Cumulative translation reserve


(103,853)


177,254


(74,816)

Profit and loss account


8,815,276


9,586,181


9,212,552

Equity attributable to equity holders of the parent


13,401,217


14,153,228


13,527,529








Total equity


13,401,217


14,153,228


13,527,529

 

 

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

unaudited interim results to 30 June 2014

 



Six months ended

30/06/14


Six months ended

30/06/13


 

Year ended 31/12/13



£


£


£

Cash flows from operating activities







Profit before tax for the period


424,338


370,528


453,929

Adjustments for:

           






Finance income       


(35,509)


(31,378)


(66,133)

Depreciation       


85,070


84,320


169,259

Amortisation       


588,056


687,446


1,363,530

Impairment loss       


-   


-   


842,783

Loss on disposal of property, plant and equipment


-   


-   


-   

Share-based payment       


2,814


5,553


(94,726)

Exchange differences       


15,635


69,188


(74,551)

(Increase)/decrease in inventories       


14,211


138,860


417,134

(Increase)/decrease in trade and other receivables       


663,461


1,181,919


400,311

Increase/(decrease) in trade and other payables       


(222,390)


239,771


426,431

Cash generated from operations


1,535,685


2,746,207


3,837,967

Tax received/(paid)


45,628


(30,154)


(61,654)

Net cash generated from operating activities


1,581,313


2,716,053


3,776,313








Cash flows from investing activities







Interest received


35,509


31,378


66,133

Cash placed on deposit


-   


-   


(602,689)

Purchases of property, plant and equipment


(217,066)


(40,676)


(225,505)

Purchases of intangible assets


(966,532)


(1,001,051)


(1,726,312)

Net cash used in investing activities


(1,148,088)


(1,010,349)


(2,488,373)








Cash flows from financing activities







Equity dividends paid


(785,404)


(750,123)


(1,214,420)

Cash received from share issue


300,000


-   


-   

Purchase of treasury shares


-   


-   


(16,625)

Net cash used in financing activities


(485,404)


(750,123)


(1,231,045)








Effects of exchange rate changes on cash and cash equivalents


(26,909)


59,233


(32,964)








Net increase/(decrease) in cash


(79,088)


1,014,814


23,931

Cash at beginning of period


2,340,859


2,316,928


2,316,928

Cash at the end of the period


2,261,771


3,331,742


2,340,859








 

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

unaudited interim results to 30 June 2014

 


Share

capital

Share

Premium

Capital

redemption

reserve

Cumulative

translation

reserve

Profit

and loss

account

Total

equity

 

£

£

£

£

£

£

 

 

 

 




Balance at 1 January 2013

727,000

3,405,817

256,976

49,821

9,862,012

14,301,626








Profit for the period

-  

-  

-  

-  

473,350

473,350

Exchange differences on translating foreign operations

-  

-  

-  

127,433

-  

127,433

Total recognised comprehensive income for the period

-  

-  

-  

127,433

473,350

600,783








Share-based payment

-  

-  

-  

-  

5,553

5,553

Deferred tax on share based payment

-  

-  

-  

-  

(4,611)

(4,611)

Dividends paid

-  

-  

-  

-  

(750,123)

(750,123)

Sale of treasury shares

-  

-  

-  

-  

-   

-   

Balance at 30 June 2013

727,000

3,405,817

256,976

177,254

9,586,181

14,153,228








Profit for the period

-  

-  

-  

-  

256,267

256,267

Exchange differences on translating foreign operations

-  

-  

-  

(252,070)

-  

(252,070)

Total recognised comprehensive income for the period

-  

-  

-  

(252,070)

256,267

4,197








Share-based payment

-  

-  

-  

-  

(100,279)

(100,279)

Deferred tax on share based payment

-  

-  

-  

-  

(48,695)

(48,695)

Dividends paid

-  

-  

-  

-  

(464,297)

(464,297)

Purchase of  treasury shares

-  

-  

-  

-  

(16,625)

(16,625)

Balance at 31 December 2013

727,000

3,405,817

256,976

(74,816)

9,212,552

13,527,529








Profit for the period

-  

-  

-  

-  

399,415

399,415

Exchange differences on translating foreign operations

-  

-  

-  

(29,037)

-  

(29,037)

Total recognised comprehensive income for the period

-  

-  

-  

(29,037)

399,415

370,378








Share-based payment

-  

-  

-  

-  

2,814

2,814

Deferred tax on share based payment

-  

-  

-  

-  

(14,101)

(14,101)

Dividends paid

-  

-  

-  

-  

(785,404)

(785,404)

Issue of ordinary shares

12,000

288,001

-  

-  

-  

300,001

Purchase of  treasury shares

-  

-  

-  

-  

-   

-   

Balance at 30 June 2014

739,000

3,693,818

256,976

(103,853)

8,815,276

13,401,217

 

 

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 ("the Company") 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 26 August 2014.

 

The information relating to the six months ended 30 June 2014 and 30 June 2013 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 2013, 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 2014. 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 2013, 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 2013, as described in those financial statements. 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 2014 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

30/06/14


Six months ended

30/06/13


Year ended 31/12/13




£


£


£










Profit attributable to ordinary equity holders


399,415


473,350


729,617




Six months ended

30/06/14


Six months ended

30/06/13


Year ended 31/12/13




No


No


No


Weighted average number of ordinary

shares for basic earnings per share


71,950,766


71,440,490


71,430,298


Adjustment for share options


22,337


653,499


593,207


Weighted average number of ordinary  shares for diluted earnings per share


71,973,103


72,093,989


72,023,505













5.

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



 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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