12th Sep 2006 07:00
CONCURRENT TECHNOLOGIES PLCInterim results for the six months ended 30 June 2006Concurrent Technologies Plc, which manufactures high-end embedded computerproducts for critical applications in the defence, transportation,communications and industrial markets, announces interim results for the sixmonths ended 30 June 2006.Financial Highlights * Turnover up 26% to ‚£5.8m (H1 2005: ‚£4.6m) * Pre-tax profit up 93% at ‚£940k (H1 2005: ‚£487k) * Cash of ‚£4.3m, no borrowings * Interim dividend of 0.35 pence per share (2005: 0.25 pence) Operating Highlights * Continued product launches focussing on higher margin, higher volume * Continued expansion of sales and marketing capability in the USA and China * Design centre to be opened near Cambridge, UK * Key alliances with Intel‚® leading to additional sales and marketing benefits * Focus on recruitment of design engineers, thereby increasing flow of new product launches Michael Collins, Chairman, commented:"We have experienced a strong start to the year and a continuation of the trendwitnessed in 2005. Indeed, our order book has reached record levels which webelieve is sustainable and well within the operating capacity of the company.""The introduction of new products based on the latest dual core processorswill, we believe, ensure that our strong industry position is maintained,attracting new business from both existing and new customers."12 September 2006EnquiriesConcurrent Technologies Plc 01206 752626 Glen Fawcett, Managing Director Nexus Financial Ltd 020 7451 7068 Nicholas Nelson [email protected] Kathy Boate CHAIRMAN'S STATEMENTBusiness SummaryConcurrent Technologies designs, builds and supplies high-end embedded computerproducts to the defence, communication, transportation and industrial markets.These computer products are integrated into a variety of applications whichrequire very high levels of processing power and superior levels ofreliability; applications include military systems, communications, networking,medical imaging, industrial automation and scientific research.The main product range includes single processor (now with dual as well assingle cores) and dual processor computer boards using Intel‚® CentralProcessing Units (CPUs) for the CompactPCI‚®, VME, AMC and Multibus IIarchitectures. Boards for use in standard operating conditions form themajority of our product range, with ruggedised versions for use in extremeenvironments. In addition to hardware design capability, our engineering teamsundertake a significant amount of software and firmware development to provideinteroperability between products, generate test software both on-board and forproduction test purposes, and also provide support for leading embedded andreal-time operating systems.The largest markets for our products are now communications and defence.Together these markets in the first half of 2006 accounted for 82% of our salesby value.Financial SummaryConditions in the specialised part of the single board computer market in whichwe operate, have remained favourable resulting in excellent turnover andprofits growth as set out below: 6 months 6 months 12 months to to to 30 June 30 June 31 Dec 2006 2005 2005 Turnover ‚£5,830k +26% ‚£4,620k ‚£10,679k Profit before Tax ‚£940k +93% ‚£487k ‚£1,421k We expect further improvements in turnover and profits in the coming years asvolumes rise and as extended temperature range products (which attract highermargins) form an increasing element of the total.We have continued to control our costs well without reducing expenditure onproduct development. Substantially higher activity has used up more workingcapital but notwithstanding this we ended the period with cash of ‚£4.3 millionand no borrowings.Review of OperationsIn the first half of 2006 we introduced to the market some exciting newproducts designed to meet our customers' high-end computing requirements. Theexpansion of the business has created new opportunities and at the same timeresults in new challenges. At this time last year we were focused on increasingour sales capability. We have continued to do this in 2006, especially in theUSA and China. Increased sales effort has resulted in a strong order book.However, to capitalise on our increased market share we now need to increasethe flow of new product launches and so wish to recruit more design engineers.We have started a number of recruitment initiatives that will be developed overthe coming months.During the last 12 months the company has migrated the majority of its boardproducts to be compliant with a new European Union based environmental standard(known as RoHS, for Restriction of Hazardous Substances) which dramaticallyreduces the amount of lead used in our products.The most significant product launch this year so far has been the introductionof the VX 405/04x family of single board computers. This range features newIntel‚® dual core processors which combine high performance with low powerconsumption. We are targeting these products at existing customers who wish toupgrade, and to wholly new customers being drawn to us from our competitors.Applications will be within the defence, security, telemetry, industrialcontrol, scientific and aerospace markets. Extended temperature versions ofthese boards will be available for use in harsher environments.During this year we have increased our involvement with the Intel‚®Communications Alliance, of which we are already a member, and this has alreadystarted to yield sales and marketing benefits globally.Future StrategyWe will continue to expand our range of computers targeted primarily at theCompactPCI‚® bus architecture, including the newer smaller sized 3U version, andVME architectures where market indications are that we will see good growth inthe short and medium terms. We are also now supporting a new architecturecalled Advanced Mezzanine Card ("AMC") which will be directed to manyapplications including those that will be based on ATCA‚® (AdvancedTelecommunications Computing Architecture) and MicroTCA¢â€ž¢ - a new high speedserial bus system. We will continue to avoid low-tech/high-volume applicationswhere competition is stiffer and profit margins are low. In many of our newproducts we will be using low power devices containing two processing coreswithin a single device. We aim to work with customers who have specialisedrequirements and those whose applications are in harsh operating environments.To further expand our product range to encompass dual processors and theinevitable arrival of multi-core processors we are expanding our capability todesign hardware and develop the related software and firmware. In the comingweeks our design capability will be further expanded when we open a designcentre near to Cambridge, UK.During the last few weeks we have expanded our North America sales andmarketing capability by appointing a very experienced person to oversee allaspects of our sales, marketing and customer support. This appointment shouldbe of great benefit to the company in the future.The Company has taken the authority in recent General Meetings to buy inshares. In light of our substantial cash reserves and the continuing growth ofthe business, your Board will be monitoring opportunities to utilise thisfacility over the coming months.OutlookWe have experienced a strong start to the year and a continuation of the trendwitnessed in 2005. Indeed, our order book has reached record levels which iswell within the operating capacity of the company.The introduction of new products based on the latest dual core processors will,we believe, ensure that our strong industry position is maintained, attractingnew business from both existing and new customers.DividendThe Board is declaring an interim dividend of 0.35 pence per share (2005:0.25p) payable on 20 October 2006. The total cost of this interim dividend willamount to ‚£254,450. The ex-dividend date is 20 September 2006 and the recorddate is 22 September 2006.Michael CollinsChairman11th September 2006All trademarks, registered trademarks and trade names used in this report arethe property of their respective owners. CONSOLIDATED PROFIT AND LOSS ACCOUNT Unaudited Restated Restated unaudited - note 2 six months six months year ended 30/06/06 30/06/05 31/12/05 ‚£ ‚£ ‚£ Turnover 5,829,566 4,620,420 10,678,675 Cost of sales 3,217,770 2,606,263 5,781,965 Gross profit 2,611,796 2,014,157 4,896,710 Net operating expenses 1,759,143 1,569,947 3,577,112 Group operating profit 852,653 444,210 1,319,598 Interest receivable 86,966 42,338 101,497 Profit on ordinary activities 939,619 486,548 1,421,095 before taxation Taxation on profit on 232,241 99,596 294,390 ordinary activities Profit for the period 707,378 386,952 1,126,705 Basic earnings per share 0.97p 0.53p 1.55p Diluted earnings per share 0.97p 0.53p 1.55p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES Unaudited Restated Restated - note unaudited 2 six months six months year ended 30/06/06 30/06/05 31/12/05 ‚£ ‚£ ‚£ Profit for the financial year 707,378 386,952 1,126,705 Currency translation (90,776) 75,701 128,907 differences on foreign currency net investments Total recognised gains 616,602 462,653 1,255,612 relating to the year CONSOLIDATED BALANCE SHEET Unaudited Unaudited Audited 30/06/06 30/06/05 31/12/05 FIXED ASSETS ‚£ ‚£ ‚£ Goodwill - 115,442 - Tangible assets 598,561 611,571 543,678 598,561 727,013 543,678 CURRENT ASSETS Stocks and work in progress 1,390,274 1,719,438 1,501,554 Debtors 1,925,919 2,353,016 1,832,303 Cash at bank and in hand 4,296,070 1,883,583 3,978,139 7,612,263 5,956,037 7,311,996 CREDITORS: Amounts falling due within 1,929,495 1,335,770 1,852,977 one year NET CURRENT ASSETS 5,682,768 4,620,267 5,459,019 TOTAL ASSETS LESS CURRENT 6,281,329 5,347,280 6,002,697 LIABILITIES Provision for liabilities and 47,669 9,972 38,180 charges NET ASSETS 6,233,660 5,337,308 5,964,517 CAPITAL AND RESERVES Called up 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 Profit and loss account 1,843,867 947,515 1,574,724 EQUITY SHAREHOLDERS' FUNDS 6,233,660 5,337,308 5,964,517 CONSOLIDATED CASH FLOW STATEMENT Unaudited Unaudited Audited six months six months year ended 30/06/06 30/06/05 31/12/05 ‚£ ‚£ ‚£ Net cash inflow/(outflow) from 821,295 (14,972) 2,125,605 operating activities Returns on investments and servicing of finance: Interest received 86,966 42,338 101,497 Taxation 2,395 (8,246) 81,458 Capital expenditure and financial investment: Payments to acquire tangible (143,216) (233,760) (288,048) fixed assets Equity dividends paid (363,500) (181,750) (363,500) Increase/(decrease) in cash 403,940 (396,390) 1,657,012 NOTES TO THE INTERIM REPORT * The Financial Statements for the six months ended 30 June 2006 were authorised for issue on 11 September 2006 by the Board of Directors of Concurrent Technologies Plc. * The results for the year ended 31 December 2005 are abridged from the Financial Statements for the year which contain an unqualified audit report and have been filed with the Registrar of Companies. The results for this period and for the six months ended 30 June 2005 have been restated following the adoption of FRS 20 (Share-based payment) for the period commencing 1 January 2006. The effect of the adoption of FRS 20 has been to reduce reported profit for the year ended 31 December 2005 by ‚£31,992 and to reduce reported profit for the period ended 30 June 2005 by ‚£15,992. The charge to the Profit and Loss account for the period ended 30 June 2006 in respect of the adoption of FRS 20 was ‚£16,041. * The Chairman's Statement included within this report declares that the Board of Directors intends to pay an interim dividend of 0.35 pence per share amounting to a total cost of ‚£254,450 (2005: 0.25 pence per share, ‚£ 181,750). In accordance with FRS 21 (Events after the balance sheet date), this amount has not been recognised within the results for the six months ended 30 June 2006. * The taxation charge for the six months ended 30 June 2006 is based on the estimated effective tax rate for the full year. * The calculation of basic earnings per share for the six months ended 30 June 2006 is based on the number of Ordinary Shares in issue of 72,700,012 together with 1,423 Ordinary Shares in respect of performance related employee share options which have vested. Comparative basic earnings per share for the periods shown are based on the number of Ordinary Shares in issue of 72,700,012. The calculation of diluted earnings per share incorporates the following number of Ordinary Shares in respect of performance related employee share options: six months ended 30 June 2006 - 52,736, six months ended 30 June 2005 - nil, year ended 31 December 2005 - 2,921. Comparative earnings per share for the periods shown have been restated as a result of the adoption of FRS 20 referred to in note 2 above. * Copies of this report will be sent to shareholders and are available at the Company's Registered Office. ENDCONCURRENT TECHNOLOGIES PLCRelated Shares:
Concurrent Technologies