Concurrent Technologies Plc
(the “Company” or the “Group”)
Interim Results for the six months ended 30 June 2021
Concurrent Technologies Plc (AIM: CNC), a world leading specialist in the design and manufacture of high-end embedded computer boards for critical applications, announces interim results for the six months to 30 June 2021, reflecting a positive trading period with strong sales, profit before tax and investment.
Financial Highlights
· Revenue of £9.3m (H1 2020: £9.2m)
· Gross profit of £5.1m (H1 2020: £4.9m)
· Gross margin of 54.3% (H1 2020: 52.9%)
· Group operating profit of £1.6m (H1 2020: £1.2m)
· Profit before tax of £1.5m (H1 2020: £1.2m)
· EPS of 2.09 pence (H1 2020: 1.62 pence)
· Interim dividend increased to 1.15p per share (H1 2020: 1.10p)
· Cash balance (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m)
Operational Highlights
· Largest market sector is defence at 71% of revenue
· Record order book achieved during the period of £15.9m (H1 2020: £13.9m)
· Global customer base remains solid with exports generating 91% of revenue (H1 2020: 96%)
· R&D cost during the period was £1.6m (H1 2020: £1.8m)
· Component shortages being managed, although challenges remain across the global supply chain
Mark Cubitt, Chairman of Concurrent Technologies Plc, commented: “Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet, and a record order book ensuring the pipeline of future profitability. There remains uncertainty on the timing of some shipments in Q4 2021 and into 2022, driven by component availability, which may slip revenues into 2022 but there is no evidence yet of cancellations from customers. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability.”
Enquiries:
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Concurrent Technologies Plc Jonathan Martin, CFO |
+44 (0)1206 752626 |
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SEC Newgate (Financial PR) Isabelle Smurfit |
+44 (0)20 7653 9848 |
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Cenkos Securities Plc (NOMAD) Peter Lynch |
+44 (0)131 220 9771 +44 (0)131 220 9772 |
About Concurrent Technologies Plc
Concurrent Technologies Plc develops and manufactures high-end embedded computer products for use in a wide range of high-performance, long-life cycle applications within the telecommunications, defence, security, telemetry, scientific and aerospace markets, including applications within extremely harsh environments. The processor products feature Intel® processors, including the latest 11th generation embedded Intel® Core™, Intel® Xeon® and Intel Atom® processors. The products are designed to be compliant with industry specifications and support many of today's leading embedded Operating Systems. The products are sold world-wide.
For more information on Concurrent Technologies Plc and its products please visit www.gocct.com.
All trademarks, registered trademarks and trade names used in this announcement are the property of their respective owners.
CHAIRMAN'S STATEMENT
I am pleased to announce the trading performance has continued on from the strong results reported for 2020, with solid sales in the first half of 2021 and a growing order book, despite the challenging worldwide supply chain disruption.
The end of the first half also saw the beginning of the smooth transition from Jane Annear to Miles Adcock as CEO. Jane has been extremely helpful and supportive during this period which typifies the commitment, professionalism and drive, that she demonstrated throughout her career with Concurrent and which has brought the Company to its current strong position.
It is with great sadness that I learnt Clive Mannering-Thomson had passed away in August after a brief illness. Clive was a long serving member of the Concurrent Board and true gentleman and our thoughts are with his family and friends at this difficult time.
CHIEF EXECUTIVE'S REVIEW
Financial Summary
The Company continued to trade and operate in a largely normal fashion during the first half of 2021 with production, sales and development maintained at typical operational levels. Revenue for the period was similar at £9.3m (H1 2020: £9.2m) while gross margin increased to 54.3% (H1 2020: 52.9%). Consequently, gross profit increased to £5.1m (H1 2020: £4.9m). The unaudited profit before tax (PBT) for the period was £1.6m (H1 2020: £1.2m). The associated earnings per share (EPS) were 2.09 p (H1 2020: 1.62p).
The balance sheet remains very strong, with no debt and cash balances (including cash deposits) at 30 June 2021 of £12.4m (H1 2020: £10.0m).
Dividend
Given the strong cash position and the robust balance sheet, the Board has declared an interim dividend of 1.15p per share (H1 2020: 1.10p) – an increase of 4.5%. The total cost of this dividend will amount to £843,680. The ex-dividend date for this interim dividend is 16 September 2021, the record date is 17 September 2021 and the payment date is 1 October 2021.
Review of Operations
As an essential defence supplier, production at the Company's Colchester headquarters continued uninterrupted during each lockdown period and the Company has not applied for support under any Government COVID-19 initiatives. Our preparations for Brexit led to minimal impact on the business and no impact on sales to our customers.
The unprecedented worldwide supply chain shortages are a major risk to all companies and Concurrent is no exception. During 2021 we have so far managed the disruption and protected the supply of goods to our customers, but the situation is deteriorating and is expected to last well into 2022. This may lead to some revenue slipping from 2021 to 2022 but to date we have seen no evidence of program or platform cancellations from our customers. Rather, we have seen growing support from our customer base, leading to a record order book of £15.9m at the period end.
Sales within the defence market increased to £6.6m (H1 2020: £6.3m) representing 71% (H1 2020: 68%) of revenue and exports were 91% (H1 2020: 96%). While defence is still our primary target market, we do see myriad opportunities in the telecoms and other sectors which are being pursued with vigour.
During 2021 we have also seen the final closure of the Concurrent office in India as planned and the subsequent expansion and re-alignment of engineering capabilities in the UK. This has resulted in an overall decrease in R&D spend in H1 2021 to £1.6m (H1 2020: £1.8m) as expected, and this reduction has not had a detrimental impact on output from the function.
Through extensive co-operation, development and testing work Intel have elevated us to Titanium partner status thus strengthening our ties with our leading technology supplier. Launches and deployment of the new 3U CompactPCI and AMC boards has continued, along with the development of our software products.
Future Plans
The current leadership team is being revitalised with the introduction of an HR Director and a Quality & Business Improvement Director. Recruitment for these positions will be completed during the second half of the year. Along with these new appointments there will be some changes in the internal reporting structure which will allow the organisation to increase its capacity to manage new projects and develop the business.
The new team will revise the medium and long-term strategic plan focusing on product lead times and revenue growth.
Outlook
Even in the face of unprecedented worldwide supply chain disruption, the first half performance has been robust with sales at 2020 levels, improved margins, a strengthened balance sheet and a record order book ensuring the pipeline of future profitability. The Board believe the changes in management structure and leadership team will leave the Company well placed to leverage its reputation in the market for future growth and improved profitability.
Dr Miles Adcock
CEO
7 September 2021