Financial Highlights
· Turnover of £7.9m (H1 2017: £7.8m)
· Gross profit £4.1m (H1 2017: £4.3m)
· Gross margin 51.7% (H1 2017: 54.8%)
· Profit before tax of £1.1m (H1 2017: £1.4m)
· EPS of 1.50 pence (H1 2017: 1.84 pence)
· Interim dividend increased to 0.95p per share (H1 2017: 0.90p)
· Cash balance (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m)
Operational Highlights
· Sales into the defence sector continue to be strong and now account for 59% of H1 Group turnover
· Global customer base continues to expand with exports generating 88% of Group revenues (H1 2017: 84%)
· Investment in R&D during the period matched 2017 levels at £1.2m
· Several new boards and board variants have been launched in 2018 along with the roll out of the enhanced security package
Michael Collins, Chairman of Concurrent Technologies Plc, commented:
“The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future.”
CHAIRMAN'S STATEMENT
Financial Summary
I am pleased to report a good performance for the first-half of 2018, with strong sales, profit before tax and investment in the first six months.
Revenue for the period was £7.9m (H1 2017: £7.8m), gross margin was slightly lower at 51.7% mainly due to a change in the sales mix of products (H1 2017: 54.8%) and gross profit was £4.1m (H1 2017: £4.3m). The unaudited profit before tax for the same period was £1.1m (H1 2017: £1.4m) with associated earnings per share of 1.50 pence (H1 2017: 1.84 pence).
The Group's balance sheet remains robust with cash balances (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m) and total equity increased to £19.0m (H1 2017: £18.0m).
Dividend
The Board has declared a first interim dividend of 0.95p per share (H1 2017: 0.90p) – an increase of 5.6%. The total cost of this dividend will amount to £690,826. The ex-dividend date for this interim dividend is 27 September 2018, the record date is 28 September 2018 and the payment date is 12 October 2018.
Review of Operations
The key driver of our turnover continues to be the defence sectors. The United States remains our main market, but we are seeing increasing interest from other areas of the world, particularly the Asian markets.
This success in the defence market will not detract from our continuing commitment to the telecommunications and specialist scientific sectors where the Group continues to develop new innovative products.
The Group continues to expand its engineering capability in the UK, USA and India. Investment in H1 2018 was maintained at £1.2m (H1 2017: £1.2m), which enabled the Group to launch several new products and many variants during the six-month period, including the announcement of a VPX™ product based on Intel Corporation's 8th generation processor. The Group also released its enhanced suite of security packages which are compatible with industry standards.
The Company awaits details of the trade and tariff legislation to be agreed between the UK Government and other countries once the UK has left the European Union (EU). Our current assessment has concluded that, while there may be logistical disruption following the UK's departure, leaving the EU will have little lasting impact on our trading. Most countries, including the USA and those of the European Union, apply a zero-percentage import tariff rating to our products. Current World Trade Organisation (WTO) rules also apply a zero-tariff rating to items we buy and sell.
Future Plans
We will continue to develop our product ranges, in particular focusing on the VPX™ architecture both at board and development system level. To broaden the market appeal of the Group's products we will develop more partnerships with companies offering complementary products.
Our production capabilities are constantly being revised and improved. A faster “pick and place” machine and an enhanced screen printer have been installed and are now both operational. This equipment is used for high-speed, fine-precision placement of surface-mount components onto printed circuit boards. This investment will allow a faster and more flexible response to customer orders as well as addressing the need to accommodate advances in component technologies.
Outlook
The first-half of 2018 has been an exciting one for the Group, with new products, new partnerships and new opportunities. Our specialised product ranges, processes and excellent customer relationships all demonstrate that Concurrent Technologies is well placed for the future.
Michael Collins
Chairman
11th September 2018