5th Sep 2012 07:00
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 PlcGlen Fawcett, Managing Director +44 (0)1206 752 626
Newgate Threadneedle (Financial PR)Caroline Evans-Jones, Guy McDougall +44 (0)207 653 9850
Cenkos Securities plc (NOMAD)Ken Fleming +44 (0)131 220 9778
Beth McKiernan +44 (0)131 220 6939
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.
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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.
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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. |
Related Shares:
Concurrent Technologies