1st Sep 2011 07:00
1 September 2011
CONCURRENT TECHNOLOGIES PLC
Interim Results for the six months ended 30 June 2011
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 2011.
Highlights:
·; Profit before tax £1,132,234 (H1 2010: £1,004,649)
·; Turnover £6,870,601 (H1 2010: £5,412,725)
·; Earnings per share for the period 1.45p (H1 2010: 1.08p)
·; Gross Margins 52%, in line with 2010 full year results
·; Net cash and cash equivalents £5.4m (H1 2010: £4.6m), no borrowings
·; Interim dividend of 0.60 pence per share (0.55 pence) an increase of 9%.
·; Strong Order book, 7% up in comparison to the same time in 2010
Michael Collins, Chairman, commented:
"As anticipated when reporting on our 2010 performance, trading conditions in the defence sector remain good and we are also pleased to note that the recovery in economic conditions within our other markets continues with improved demand during this first half of 2011.
We continue into the second half of the year with a strong order book and, at this stage, expect our 2011 financial performance to be satisfactory, taking into account our continuing increasing investment in new product development."
31 August 2011
Enquiries:
Concurrent Technologies PlcGlen Fawcett, Managing Director +44 (0)1206 752 626
Hansard Communications (Financial PR)
Nicholas Nelson/Guy McDougall +44 (0)207 245 1100
Cenkos Securities plc (NOMAD)Ken Fleming +44 (0)131 220 9778
Beth McKiernan +44 (0)131 220 6939
CONCURRENT TECHNOLOGIES PLC
CHAIRMAN'S STATEMENT
Financial Summary
The first half of the year has started well, continuing the strong close to the 2010 year. Turnover has increased by 27% over the first half of 2011 to £6,870,601 (H1 2010: £5,412,725). Gross Margins were slightly down at 51.7% (53.7%) due mainly to the weakening of the US dollar during the period. The unaudited pre-tax profit for the first half of this year has increased by 13% to £1,132,234 (H1 2010: £1,004,649) with earnings per share rising 34% to 1.45 pence (H1 2010: 1.08p).
Our balance sheet position has also continued to improve with cash (including cash deposits) up 18% to £5,361,053 from £4,592,869 at the end of 2010, after another increased dividend payment and further increases in R&D expenditure during the first half of 2011. Net Assets have increased by 10% from £11,381,669 at the end of 2010 to £12,496,210 at the end of June 2011.
Dividend
The Board has declared an interim dividend of 0.60p per share (0.55p) an increase of 9%. The total cost of this dividend will amount to £428,853. The ex-dividend date for the interim dividend is 7 September 2011, the record date is 9 September 2011 and the payment date is 23 September 2011.
Review of Operations
Sales to our customers in the defence sector have increased during the first half of 2011, but demand from our customers in the telecommunication and other industries has also risen. Sales of our CompactPCI® products have continued to grow as have sales of our newer products using the VPX bus architecture. We are delighted to report that exports have held up well during the period at 78% of total sales revenue.
We continue to design and develop increasingly higher performance products, now using the very latest quad-core or dual-core 2nd generation Intel® Core™ processors launched by Intel® in early January 2011. These processors offer enhanced processing and graphic capabilities, resulting in virtually doubling the graphics performance of all previous generations of our boards and the versions we use are particularly aimed at the defence and security markets.
Future Plans
Although we remain positive on potential value enhancing acquisition opportunities, 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. We are continuing to expand our engineering capability both here and abroad, and we have significantly stepped up our policy of recruiting design engineers both in the UK and in our development facility in Bangalore, India. These resources will enable the Company to develop the more sophisticated ruggedized versions of our products faster. As you would expect, we will also continue to pursue new sales in our existing markets, where we have potentially strong new business in the pipeline.
We strongly believe that a key factor in our future success lies in continuing to expand our range of products, with a particular focus on CompactPCI®, VME, VPX and AMC bus architectures, and rapidly applying the latest technologies from Intel®. Our main objective is to design more innovative 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.
We have recently invested in our own CNC (Computer Numerical Control) milling machine. This will enhance our mechanical and thermal engineering design capability, especially in relation to our environmentally superior products. This will be commissioned during the second half of this year.
Outlook
As anticipated when reporting on our 2010 performance, trading conditions in the defence sector remain good and we are also pleased to note that the recovery in economic conditions within our other markets continues with improved demand during this first half of 2011.
We continue into the second half of the year with a strong order book and, at this stage, expect our 2011 financial performance to be satisfactory, taking into account our continuing increasing investment in new product development.
Michael Collins
Chairman
31 August 2011
All companies and product names are trademarks of their respective organisation.
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
unaudited interim results to 30 June 2011
| Note | Six months ended 30/06/11 | Six months ended 30/06/10 | Year ended 31/12/10 | ||
| £ | £ | £ | |||
CONTINUING OPERATIONS | ||||||
Revenue | 6,870,601 | 5,412,725 | 12,639,754 | |||
Cost of sales | 3,316,497 | 2,504,806 | 6,211,615 | |||
Gross profit | 3,554,104 | 2,907,919 | 6,428,139 | |||
Net operating expenses | 2,447,336 | 1,931,076 | 4,160,061 | |||
Group operating profit | 1,106,768 | 976,843 | 2,268,078 | |||
Finance income | 25,466 | 27,806 | 55,444 | |||
Profit before tax | 1,132,234 | 1,004,649 | 2,323,522 | |||
Tax | 96,609 | 230,527 | 293,361 | |||
Profit for the period |
| 1,035,625 | 774,122 | 2,030,161 | ||
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Other Comprehensive Income |
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Exchange differences on translating foreign operations |
| (71,964) | 185,438 | 104,379 | ||
Tax relating to components of other comprehensive income |
| - | - | - | ||
Other Comprehensive Income for the period, net of tax |
| (71,964) | 185,438 | 104,379 | ||
Total Comprehensive Income for the period |
| 963,661 | 959,560 | 2,134,540 | ||
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Profit for the period attributable to: |
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Equity holders of the parent |
| 1,035,625 | 774,122 | 2,030,161 | ||
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Total Comprehensive Income attributable to: |
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Equity holders of the parent |
| 963,661 | 959,560 | 2,134,540 | ||
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Earnings per share |
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Basic earnings per share | 4 | 1.45p | 1.08p | 2.84p | ||
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Diluted earnings per share | 4 | 1.44p | 1.07p | 2.82p |
CONDENSED CONSOLIDATED BALANCE SHEET
unaudited interim results to 30 June 2011
| As at |
| As at | As at | ||
| 30/06/11 |
| 30/06/10 | 31/12/10 | ||
ASSETS | £ |
| £ | £ | ||
Non-current assets |
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Property, plant and equipment | 512,547 |
| 579,968 | 562,792 | ||
Intangible assets | 4,820,055 |
| 4,177,654 | 4,494,646 | ||
Deferred tax assets | 272,074 |
| 219,305 | 202,112 | ||
Other financial assets | - |
| 1,000,000 | - | ||
| 5,604,676 |
| 5,976,927 | 5,259,550 | ||
Current assets |
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Inventories | 2,722,724 |
| 2,298,186 | 2,489,366 | ||
Trade and other receivables | 2,473,891 |
| 2,316,927 | 3,136,335 | ||
Current tax assets | 61,693 |
| 233,431 | 75,919 | ||
Other financial assets | 2,000,000 |
| 1,000,000 | 2,000,000 | ||
Cash and cash equivalents | 3,361,053 |
| 2,550,648 | 2,592,871 | ||
| 10,619,361 |
| 8,399,192 | 10,294,491 | ||
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Total assets | 16,224,037 |
| 14,376,119 | 15,554,041 | ||
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LIABILITIES |
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Non-current liabilities |
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Deferred tax liabilities | 1,293,205 |
| 1,219,564 | 1,264,554 | ||
Long term provisions | 55,434 |
| 48,159 | 55,569 | ||
| 1,348,639 |
| 1,267,723 | 1,320,123 | ||
Current liabilities |
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Trade and other payables | 2,292,766 |
| 1,630,059 | 2,041,748 | ||
Short term provisions | 63,956 |
| 44,754 | 58,460 | ||
Current tax liabilities | 22,466 |
| 51,914 | 5,812 | ||
| 2,379,188 |
| 1,726,727 | 2,106,020 | ||
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Total liabilities | 3,727,827 |
| 2,994,450 | 3,426,143 | ||
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Net assets | 12,496,210 |
| 11,381,669 | 12,127,898 | ||
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EQUITY |
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Capital and reserves |
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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 | 158,324 |
| 311,347 | 230,288 | ||
Profit and loss account | 7,948,093 |
| 6,680,529 | 7,507,817 | ||
Equity attributable to equity holders of the parent | 12,496,210 |
| 11,381,669 | 12,127,898 | ||
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Total equity | 12,496,210 |
| 11,381,669 | 12,127,898 |
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
unaudited interim results to 30 June 2011
Six months ended 30/06/11 | Six months ended 30/06/10 | Year ended 31/12/10 | ||||
£ | £ | £ | ||||
Cash flows from operating activities | ||||||
Profit before tax for the period | 1,132,234 | 1,004,649 | 2,323,522 | |||
Adjustments for: |
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Finance income | (25,466) | (27,806) | (55,444) | |||
Depreciation | 97,364 | 105,679 | 214,968 | |||
Amortisation | 451,716 | 366,930 | 748,439 | |||
Impairment loss | - | 54,066 | 203,103 | |||
Loss on disposal of property, plant and equipment | 12,481 | - | 1,343 | |||
Share-based payment | 9,044 | 11,016 | 22,895 | |||
Exchange differences | (30,114) | 46,869 | 30,140 | |||
(Increase) in inventories | (233,358) | (241,452) | (432,632) | |||
(Increase)/decrease in trade and other receivables | 662,444 | 27,950 | (791,458) | |||
Increase/(decrease) in trade and other payables | 256,379 | (115,740) | 317,065 | |||
Cash generated from operations | 2,332,724 | 1,232,161 | 2,581,941 | |||
Tax received/(paid) | (44,312) | 19,011 | 109,758 | |||
Net cash generated from operating activities | 2,288,412 | 1,251,172 | 2,691,699 | |||
Cash flows from investing activities | ||||||
Interest received | 25,466 | 27,806 | 55,444 | |||
Purchases of property, plant and equipment | (65,090) | (80,557) | (174,846) | |||
Purchases of intangible assets | (778,038) | (1,040,692) | (1,888,628) | |||
Net cash used in investing activities | (817,662) | (1,093,443) | (2,008,030) | |||
Cash flows from financing activities | ||||||
Equity dividends paid | (678,528) | (643,491) | (1,036,733) | |||
Purchase of treasury shares | 11,407 | - | (27,376) | |||
Net cash used in financing activities | (667,121) | (643,491) | (1,064,109) | |||
Effects of exchange rate changes on cash and cash equivalents | (35,447) | 121,753 | 58,654 | |||
Net increase/(decrease) in cash | 768,182 | (364,009) | (321,786) | |||
Cash at beginning of period | 2,592,871 | 2,914,657 | 2,914,657 | |||
Cash at the end of the period | 3,361,053 | 2,550,648 | 2,592,871 | |||
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
unaudited interim results to 30 June 2011
Share capital | Share Premium | Capital redemption reserve | Cumulative translation reserve | Profit and loss account | Total equity | ||||||
| £ | £ | £ | £ | £ | £ | |||||
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Balance at 1 January 2010 | 727,000 | 3,405,817 | 256,976 | 125,909 | 6,526,027 | 11,041,729 | |||||
Profit for the period | - | - | - | - | 774,122 | 774,122 | |||||
Exchange differences on translating foreign operations | - | - | - | 185,438 | - | 185,438 | |||||
Total recognised comprehensive income for the period | - | - | - | 185,438 | 774,122 | 959,560 | |||||
Share-based payment | - | - | - | - | 11,016 | 11,016 | |||||
Deferred tax on share based payment | - | - | - | - | 12,855 | 12,855 | |||||
Dividends paid | - | - | - | - | (643,491) | (643,491) | |||||
Purchase of treasury shares | |||||||||||
Balance at 30 June 2010 | 727,000 | 3,405,817 | 256,976 | 311,347 | 6,680,529 | 11,381,669 | |||||
Profit for the period | - | - | - | - | 1,256,039 | 1,256,039 | |||||
Exchange differences on translating foreign operations | - | - | - | (81,059) | - | (81,059) | |||||
Total recognised comprehensive income for the period | - | - | - | (81,059) | 1,256,039 | 1,174,980 | |||||
Share-based payment | - | - | - | - | 11,879 | 11,879 | |||||
Deferred tax on share based payment | - | - | - | - | (20,012) | (20,012) | |||||
Dividends paid | - | - | - | - | (393,242) | (393,242) | |||||
Purchase of treasury shares | - | - | - | - | (27,376) | (27,376) | |||||
Balance at 31 December 2010 | 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) | |||||
Purchase 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 | |||||
NOTES TO THE INTERIM REPORT
1. | General information
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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 31 August 2011.
The information relating to the six months ended 30 June 2011 and 30 June 2010 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 2010, 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.
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2. | Summary of significant accounting policies
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2.1 | Basis of preparation
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These condensed consolidated interim financial statements are for the six months ended 30 June 2011. 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 2010, 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 2010, as described in those financial statements. The accounting policies have been consistently applied to all the periods presented.
A number of new standards, amendments to standards and interpretations have become effective since the beginning of the financial year but these have no material effect on the results or financial position of the Group.
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2.2 | Taxation
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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
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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.
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4. | Earnings per share
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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 30/06/11 | Six months ended 30/06/10 | Year ended 31/12/10 | ||||||||||
£ | £ | £ | |||||||||||
Profit attributable to ordinary equity holders | 1,035,625 | 774,122 | 2,030,161 | ||||||||||
Six months ended 30/06/11 | Six months ended 30/06/10 | Year ended 31/12/10 | |||||||||||
No | No | No | |||||||||||
Weighted average number of ordinary shares for basic earnings per share | 71,437,245 | 71,499,012 | 71,498,039 | ||||||||||
Adjustment for share options | 588,738 | 565,440 | 505,238 | ||||||||||
Weighted average number of ordinary shares for diluted earnings per share | 72,025,983 | 72,064,452 | 72,003,277 | ||||||||||
5. | Copies of this report will be sent to shareholders and are available at the Company's Registered Office. |
Related Shares:
Concurrent Technologies