Business
Final results for the year ended 31 December 2023
Final results for the year ended 31 December 2023.
About this update from Concurrent Technologies Plc
[{"type":"text","content":"\n \n \n 1 May 2024 \n \n \n Concurrent Technologies Plc \n (the \"Company\" or the \"Group\") \n \n Full year results for the year ended 31 December 2023 \n \n Solid year of growth providing confidence in updated strategy \n \n Concurrent Technologies Plc (AIM: CNC), a designer and manufacturer of leading-edge computer products, systems and mission critical solutions used in high-performance markets by some of the world's major OEMs, is pleased to announce its results for the year ended 31 December 2023. \n \n Financial highlights \n \n \n \n \n \n \n \n \n 2023 \n \n \n 2022 \n \n \n % change \n \n \n \n \n Revenue \n \n \n £31.7m \n \n \n £18.3m \n \n \n 73% \n \n \n \n \n Gross profit \n \n \n £15.6m \n \n \n £8.9m \n \n \n 49% \n \n \n \n \n Profit before tax & exceptionals \n \n \n £3.7m \n \n \n £0.4m \n \n \n 959% \n \n \n \n \n Earnings per share \n \n \n 4.98p \n \n \n 1.35p \n \n \n - \n \n \n \n \n Dividend per share \n \n \n 1.0p \n \n \n 0p \n \n \n - \n \n \n \n \n EBITDA \n \n \n £6.0m \n \n \n £2.1m \n \n \n - \n \n \n \n \n Order intake \n \n \n £28.2m \n \n \n £31.5m \n \n \n \n \n \n \n \n Closing Cash \n \n \n £11.12m \n \n \n £4.51m \n \n \n 146% \n \n \n \n \n Investment in R&D \n \n \n £3.80m \n \n \n £3.69m \n \n \n 3% \n \n \n \n \n Total assets \n \n \n £47.8m \n \n \n £32.6m \n \n \n 48% \n \n \n \n \n \n \n \n \n \n · \n \n \n Strong financial performance in FY23, achieving revenues of £31.7m and profit before tax of £3.7m (excluding exceptional costs), notwithstanding a significant investment in the cost base throughout the year to accelerate future growth. \n \n \n \n \n · \n \n \n Gross profit margin increased to 49.4% (FY22 48.5%) reflecting easing components challenges and operational efficiency gains. \n \n \n \n \n · \n \n \n EBITDA more than doubled to £6.0m (FY22 £2.1m). \n \n \n \n \n · \n \n \n Cash generative with closing net cash balance at £11.12m. \n \n \n \n \n · \n \n \n Increasingly optimised R&D investment in line with stated strategy to improve the cadence and time to market of products that offer the very latest technology. \n \n \n \n \n \n Dividend \n \n \n \n \n \n · \n \n \n The Board will propose, at the Annual General Meeting to be held on 20 June 2024, a final dividend of 1 pence per Ordinary Share in the Company. Subject to the approval of shareholders, the final dividend will be paid on 12 July 2024 to shareholders on the register on 28 June 2024. \n \n \n \n \n · \n \n \n Further details of the Annual General Meeting will be announced in due course. \n \n \n \n \n \n Operational highlights \n \n \n \n \n \n · \n \n \n Worked closely with suppliers and customers to successfully manage the supply chain issues that previously impacted performance and the Board is pleased to report that these factors eased as the year progressed. \n \n \n \n \n · \n \n \n Continued to transition the business towards a culture and go-to-market strategy that is positioned to scale. \n \n \n \n \n · \n \n \n Increased headcount by c.18%, with key hires in product strategy, engineering, commercial, and finance. \n \n \n \n \n \n Systems division \n \n \n \n \n \n · \n \n \n Secured first substantial systems contract at £1.27m in June 2023 with a UK FTSE 250 company in the defence sector. \n \n \n \n \n · \n \n \n Successful acquisition of Phillips Aerospace in the US enabling the Company to move further into the development of systems, providing a platform for future growth. \n \n \n \n \n \n Boards division \n \n \n \n \n \n · \n \n \n Secured eight major design wins, representing an expected lifetime value to the business of at least £100m, to be realised from 2026 onwards, in the UK and a significant majority in the US, the world's largest market. \n \n \n \n \n · \n \n \n £5m of orders from the UK, a five-fold increase on typical prior volumes. \n \n \n \n \n · \n \n \n Introduction of numerous new processes, practices, and state-of-the-art tools to enhance design efficiency and quality in FY24 across the Group's key markets. \n \n \n \n \n \n Outlook \n \n \n \n \n \n · \n \n \n Strategic focus remains on developing and designing boards and systems at pace for a range of applications to deliver on the Group's short-term financial targets and the longer-term lifetime value. \n \n \n \n \n · \n \n \n Demand for the Group's product remain high, and the Company is developing a pipeline of opportunities which include, COTs (commercial off the shelf), MOTs (Modified off the shelf) and Systems. \n \n \n \n \n · \n \n \n The Group entered FY24 with good momentum evidenced by the $1.57m contract win with a major global US Prime Contractor and new VME board launched, Rhea. \n \n \n \n \n · \n \n \n Trading in the first four months of the year is in line with market expectations, providing confidence in delivering another year of profitable growth. \n \n \n \n \n \n \n Miles Adcock, CEO of Concurrent Technologies, commented : \" We achieved remarkable success in FY23, putting in place the building blocks that will enable us to deliver long-term, sustainable growth. This is driven by significant design-in wins and strategic investment in the Systems division, including the acquisition of Phillips Aerospace. \n \n \"During the year, there was a step change in how the Group invests in marketing, sales, and partnerships to expand our market opportunities. Looking ahead, we will remain focused on leveraging the knowledge and the long-standing relationships the leadership team has developed to invest in a measured way to design boards and systems for a range of applications. As a Board we are confident in the Group's ability to continue building momentum and deliver results for FY24 in line with market expectations.\" \n \n Enquiries: \n \n \n \n \n \n Concurrent Technologies Plc \nMiles Adcock - CEO \n Kim Garrod - CFO \n \n \n \n \n +44 (0)1206 752626 \n \n \n \n \n Alma Strategic Communications \nJosh Royston \n Hannah Campbell \n \n \n \n+44 (0)20 3405 0205 \n \n \n \n \n \n \nCavendish Capital Markets Limited (NOMAD) \nNeil McDonald \n Peter Lynch \n \n \n \n \n+44 (0)131 220 9771 \n +44 (0)131 220 9772 \n \n \n \n \n \n About Concurrent Technologies Plc \n Concurrent Technologies Plc develops and manufactures high-end embedded Plug In Cards and Systems 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 generation embedded Intel ® Core™ processors, 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. \n For more information on Concurrent Technologies Plc and its products please visit www.gocct.com . \n All trademarks, registered trademarks and trade names used in this announcement are the property of their respective owners. \n \n Chairman's statement \n \n Overview \n FY23 was another step in the transformation of Concurrent Technologies into a high-growth business by leveraging our design heritage and market leadership position through the continued investment in our culture, people, sales and marketing and, more broadly, driving a step change in our go-to-market strategy. \n \n In the year, we delivered both record revenues and profit, underpinned by the successful execution of the Group's refreshed strategy. We are focused on developing a broader range of products and systems, in addition to our boards business, both organically and through acquisition. This positions the business for long-term growth, and this year has solidified our view that we now have the right strategic focus and people in place to achieve our ambitions. \n \n The year in review \n The first half of the year saw a recovery in trading thanks to the increased customer demand for the Group's products and the team's incredible effort in navigating the previous component shortage issues. This momentum continued into the second half of the year and, for FY23, the Company delivered record revenues and profitability. \n \n Cash balances remain strong, buoyed by the raising of £6.8m through the placing of new ordinary shares to new and existing shareholders in August to partly fund the acquisition of Phillips Aerospace, leaving us in a strong position to invest in the systems business further. On behalf of the Board, I would like to thank all investors who participated in the oversubscribed placing. \n \n Execution against strategy \n Throughout the year, Concurrent Technologies achieved significant milestones in line with its strategic objectives. We secured eight substantial design wins, underscoring the excellence of our products and engineering capabilities. These wins will ramp up in the coming years in line with our customers' programmes, but they provide long-term, multi-year revenue visibility, which supports the investment plans in our R&D roadmap. \n \n Additionally, we released several new cutting-edge products in the year that have enriched our portfolio. We remain committed to investing in our product portfolio and capabilities and we are optimistic about the opportunities in FY24 to expand into new markets and deepen our presence within our home markets. \n \n Our end markets remain robust, and we have not only deepened several key relationships with existing customers and partners in the year but, importantly, we are now seeing the opportunity to engage with new customers, servicing a range of projects and geographies, and expect to have the opportunity to bid on larger programmes we were not historically considered for. \n \n The acquisition of Phillips Aerospace in September 2023 marked a significant milestone for the business and has supported our strategic goal of adding both systems capability and US-based manufacturing. We welcome our new Phillips Aerospace colleagues to the Group and recognise the additional talent and skills they bring to our ever-more expert team. The early impact of the acquisition has been positive, and we believe it will significantly improve the Company's capability to design and manufacture rugged systems utilising its existing plug-in cards. \n \n Board \n Post-period end, we further strengthened our Board with the appointment of Issy Urquhart as an independent Non-Executive Director to the Company. Issy is an experienced commercial human resources (HR) director with over 30 years' experience working with global technology and financial services businesses in both the public and private sectors. She has joined the Group at a particularly exciting time, and we are already benefiting from her guidance in driving people and change management strategies across our transatlantic operations. \n \n Dividend \n With the return to profitability, a 1.0p dividend has been proposed for shareholder approval at the annual general meeting (AGM) which, if passed, will amount to £862,000 paid in early July 2024. Going forward, the Board anticipates dividends will increase in line with profits, with an appropriate level of cover maintained to enable investment for future growth. \n \n Outlook for FY24 \n In FY24 our strategic focus will remain on developing and designing boards and systems at pace for a range of applications. The year will also see us continue our investment in systems and onboarding new programmes to deliver on our short-term financial targets. Alongside this, a combination of our product leadership and a drive to expand our presence in our focus sectors should deliver a significant increase in multi-year contracts in the medium term. \n \n Mark Cubitt \n Chairman \n \n \n CEO's statement \n Overview \n FY23 was an outstanding year both financially and operationally. As the headwinds of the global components shortages subsided during the year, the underlying progress in order intake and execution has been reflected in the Group's results, particularly in the second half. Solid progress was also made on our strategic priorities, including the acquisition of Phillips Aerospace in the US, and a material increase in our 'major design wins' that underpin a real step up in revenues in future years as our customers ramp up production and reach their own planned delivery volumes. With a significant investment in additional managerial, technical and sales professionals, we now have an excellent team in place to take the business forward for a period of growth. It is clear the revised strategy and associated transformation are coming together and, as a Board, we are extremely excited about the Group's future. \n \n Financial performance \n FY23 was a record year for the Group, achieving revenues of £31.7m (FY22: £18.3m) and profit before tax (excluding exceptional costs of £0.2m, related to the acquisition of Phillips Aerospace) of £3.7m, notwithstanding a significant investment in the cost base throughout the year to accelerate future growth. The strength of our order intake over the preceding 24 months enabled this significant investment in product development to facilitate new customers and design wins. We also worked closely with suppliers and customers to successfully manage the supply chain issues that previously impacted performance and we are pleased to report that these factors eased as the year progressed. Our gross margin has now stabilised, with a slight improvement on FY22. We do believe FY24 should be predominantly unhindered by the issues of the last two years regarding component availability and resulting price pressures. \n \n On 6 September 2023, the Company completed the acquisition of Phillips Aerospace for $3.3m (£2.8m) through a combination of $1.1m (£0.8m) cash, the issue of equity of $1.5m (£1.3m) to the owners of Phillips Aerospace and a further $0.8m (£0.7m) cash in repayment of outstanding loans balances within Phillips Aerospace. Simultaneously, the Company raised £6.8m through the issue of fresh equity to broaden our product offering and strengthen the balance sheet to drive further growth. \n Investing for growth amid supply chain shortages inevitably impacted cash. Having started the year at £4.5m, the first half of FY23 experienced a net outflow of £1.5m to a cash balance low of £3m in June. As shipments, and hence invoicing, strengthened, the business reverted to being cash generative, with a year-end cash balance of £11.12m. Q4 was our most productive period, for which only some of the associated customer invoices were paid in 2023, with £5.4m of FY23 revenue to be collected as cash in Q1 FY24, as per our payment terms with customers. \n \n In-year order intake of £28.2m remains strong, despite c.£8m of a small number of large orders slipping into FY24. In all cases, these are opportunities we are down-selected for (i.e. we already secured the design win), but the customers' programme of work experienced delays vs expectations. Positively, this had little detrimental impact on in-year revenue. While we expect order intake to continue to build in FY24 and FY25, it is in subsequent years that we will experience the material benefit of the design wins secured in FY23. This focus on design wins is a large investment in time and activity, since they are typically larger and more strategic business-winning campaigns. While they yield little immediate business benefit, the impact on the medium-to-long-term business is transformative in terms of scale. We intend to ever-increase the number of design wins secured each year. We expect the design wins secured in FY23 to yield a significant lifetime value of at least £100m to be realised from FY26 onwards. \n \n Having already doubled the capacity of our Colchester, UK-based factory, we are planning to enhance both internal and external capacity to accommodate this growth, and indeed any major binary upside opportunities that will require a further capacity increase. \n \n Delivery against strategy \n With a year-on-year increase in revenue of over 70%, it is clear our revised strategy and focus on creating a sustainable, high-growth business is delivering the intended results. The Company now comprises two divisions: a Boards division and a nascent Systems division, which we expect to represent an increasing percentage of Group sales in the coming years. The refreshed sales team is core to delivering the Company's strategy, and the level of order intake and revenue delivery in FY23 are evidence of their capability. \n \n Boards division \n This is our long-standing business that designs and manufactures computer boards, where we have substantial expertise and a reputation for quality and collaboration. During FY23, we continued to transition the business towards having a culture and go-to-market strategy that is positioned to scale. The strategy here is simple: to provide the right product to market as quickly as possible, with a refreshed focus on customer engagement utilising talented engineers and sales professionals. We have now created a team, cost base and sales strategy capable of delivering c.£40m per annum, before any other material investment is required. \n \n As demonstrated by the revenue performance during FY23 H2, the business has already made material progress and is now positioned to deliver much higher volumes thanks to the investment we have made in expanding the capacity in our Colchester factory. Much of our business in boards is secured via 'design wins', whereby a customer designs us into their own programme, and we can then plan for purchase orders in future years as they reach their own production volumes, typically two to three years after the initial design win. A 'major design win' is one with the potential to achieve peak volumes of >£1m per annum for several consecutive years. Historically, the Company may have secured one or two major design wins per annum. In FY23, we secured eight major design wins, which is an extremely positive leading indicator for future growth, representing a lifetime value to the business of at least £100m. Every region is important to us, but the UK and US are our home markets in which we have a material presence operationally. I am pleased to confirm that we won over £5m of orders from the UK in FY23, a five-fold increase on typical prior volumes. \n \n The boards division has been through significant transformation in all aspects during the year and is now fit to focus on execution in FY24 across our key markets. We are exploring options for additional internal and external capacity in line with our anticipated continued order intake growth in the medium term. \n \n Concurrent Technologies is a Titanium member of the Intel® Partner Alliance, meaning we get direct support from Intel® with allocated resources. In addition, our applications for early access to future silicon are given priority over Gold members and we've been successful in all our recent applications. We also have access to Intel®'s 'Market Development Funds' programme, which allows us to claim a percentage of our marketing costs back if we explicitly promote that we're using Intel® devices. Having our products on the Intel® Partner Showcase enables Intel® salespeople globally to search for our products easily. \n \n Systems division \n Since I joined the Company in 2021, we have explored ways to enter the systems market and move up the value chain by supplying whole systems rather than single boards, enabling us to generate substantially higher revenues and open up new market opportunities. We have made excellent progress this year; the systems line of business now includes the acquired Phillips Aerospace in the US in addition to the capability in the UK business, which will be moved out of the boards line of business going forward. This means that from FY24 we will report the top-level financials of both boards and systems individually. This is to give increased transparency and also recognises that each will have different characteristics financially. For example, average sell prices for systems are typically higher, but gross margins are less than for boards because there is more third-party content. Systems will also often include upfront funding from customers for the design of their customer solution. While we do not currently have a business unit structure (with the exception of the acquired business), this will likely be implemented as revenue from systems grows, in order to provide the necessary, dedicated focus and resources on this business. \n \n In the first half of FY23, we won a £1.27m contract for a UK-based system, providing validation of our proposition and capability. The addition of Phillips Aerospace provides a further platform for the Systems division to be a core part of our future growth. Previously, Phillips Aerospace had designed and manufactured our initial standard products for systems, meaning both teams had a successful history of working together and integration post-acquisition was seamless. We have welcomed a highly capable team into the Group, who provide the credibility needed to win and deliver systems solutions that complement our existing boards business. The Board has been encouraged by the level of motivation and integration that the Phillips Aerospace senior management team has shown, contributing significantly to the technical and managerial community within the Group. Revenue contribution by the Phillips Aerospace business since the completion of the acquisition is approximately £0.8m, slightly stronger than we had expected based on the prior annual performance. The Board expects this to increase significantly as systems contracts are secured in the future. \n \n Acquisitive growth \n In the medium term, we believe there are a range of opportunities to expand our capability, customer list and market penetration through acquisition. The acquisition of Phillips Aerospace is a good example of our acquisition criteria: a business we knew well; a business that had long-standing customer relationships; and an opportunity for us to add new product expertise, additional major customers, appropriate necessary accreditations and strengthening of our position in our chosen home markets. We are excited by our opportunity to significantly scale Concurrent Technologies organically over the next few years, but we have a clear target to participate in industry consolidation and add to our growth and offering by acquiring leading businesses where possible. \n \n R&D \n We continue to focus on investing in R&D in line with our strategy to improve the cadence and time to market of our products that offer the very latest technology. \n \n At the same time that Intel® launched i ts Raptor Lake-P processor for the embedded market, we announced Hermes, our latest flagship board based on the VPX standard for critical defence applications at the edge. This was our first card based on Intel®'s hybrid architecture consisting of six performance and eight efficient cores, allowing our customers to scale their performance to fit their power and thermal envelope. \n \n In Q3, to meet a key customer need, we shipped a new variant of one of our popular boards with double the amount of memory. We were able to react extremely quickly to secure a critical long-term design win with this variant against strong competition, demonstrating that our robust processes and revitalised culture are succeeding. \n \n We also announced a rugged board to the CompactPCI standard that is still widely used for industrial and defence applications. This was deliberately backwards compatible with legacy cards to secure design wins where programs are undergoing a technology transition extending the life span. \n \n In Q4, we announced our highest-performance processor board, using 'Air Flow Through' technology. This and our first Air Flow Through card, a novel technology for a cooling board that was announced in FY22, are being integrated by the end customers and, having learned a lot by designing boards, we are looking to offer integrated Air Flow Through systems in the future. \n \n To interconnect our processor boards with systems, we introduced a high-performance dual enclave switch. This supports separate 100Gb Ethernet data and 10Gb Ethernet control connections to each board. Having physical data and control separation is critical in many defence applications to ensure security between the two enclaves. \n \n Post-period end, we announced the launch of the Rhea VME single-board computer, which coincided with the launch of Intel®'s latest Atom processor, to harness this very latest technology for customers looking for a simple, cost-effective upgrade. \n \n The product portfolio strengthens with continued investment in R&D and sales, enabling a strong pipeline of opportunities, and conversion of these, to underpin future revenue growth. \n \n Partnerships \n As part of our strategy to develop a broader range of products and services, securing and maintaining partnerships is critical for expanding the size and markets available to us. \n \n In H1 FY23, we signed a distribution agreement with SoC-e, an internationally recognised provider of advanced equipment for real-time and deterministic Ethernet networking for critical sectors, to enhance our product offering. The collaboration enables us to enhance our leading range of solutions and systems to our home and global markets with the addition of time-sensitive networking capability, which we are starting to see as a requirement for future combat platforms. We also secured a key partnership agreement with Alpha Data to act as a reseller of i ts field programmable gate array- (FPGA) based boards and modules. \n \n In H2 FY23, we showcased our defence-related products at the DSEI Exhibition, Europe's largest defence and aerospace show. We worked with partners like Alpha Data and SoC-e to demonstrate our integration capability by showing products like Helios, our new rugged vision computer. \n \n Markets \n Defence is the dominant target market for the Group, now accounting for 85% of our board revenue. Industrial (6%), medical (5%) and scientific (4%) are our other important domains. \n \n People and ESG \n In recent years, we have assembled a Board and Leadership Team with experience in transforming businesses and growing sales globally, and our success in FY23 is due to the efforts of this driven, refreshed team. During the year, we increased headcount by 17.8%. Attracting and retaining talent is core to our strategy, and I am delighted that in November 2023 we were awarded Gold status by the 5% Club, recognising that more than 5% of our workforce is engaged in 'earn & learn' learning programmes. \n \n Culture change \n We believe that culture is what you do and how you behave and that it drives business performance, so we have taken deliberate and active action partnering with Coode Associates to create the company culture that is right for us. Our target culture includes a renewed focus on output, collaboration, empowerment and growth, which in turn has positively impacted our productivity and output. \n We will continue to instil this through the business, led by our Leadership Team who, on a daily basis, demonstrate and represent our culture. We have invested heavily in our leadership capability to lead our culture and will continue to do so at all levels. \n \n ESG \n We are continuing with our significant transformation to deliver more products faster to market through operational excellence and refined governance. Our key focus for ESG is our people and therefore we have largely invested our time and energy in making sure that we have an attractive reward and benefits offering and providing a developmental place to work. \n \n Outlook \n We have achieved remarkable success in FY23, marked by a record financial performance, and have put in place the building blocks that will enable us to deliver long-term, sustainable growth. This is driven by significant design-in wins and strategic investment in the Systems divisions, including the acquisition of Phillips Aerospace. \n \n During the year, there was a step change in how the Group invests in marketing, sales and partnerships to expand our market opportunities. Looking ahead, we will remain focused on leveraging the knowledge and the long-standing relationships the Leadership Team has developed to invest in a measured way to design boards and systems for a range of applications. FY24 will be about balancing our investment and mobilising to win and deliver systems to achieve our short-term financial targets. \n \n Miles Adcock \n Chief Executive Officer \n \n CFO's Statement \n The Group delivered a strong financial performance in the FY23, with a significant growth in revenue and profit before tax (adjusted for exceptional items), resulting in a solid cash position. \n Financial KPIs \n \n \n \n \n \n \n \n \n 2023 \n \n \n 2022 \n \n \n 2021 \n \n \n \n \n Revenue \n \n \n £31.7m \n \n \n £18.3m \n \n \n £20.5m \n \n \n \n \n % change vs previous year \n \n \n 73% \n \n \n -10% \n \n \n -3% \n \n \n \n \n Gross profit \n \n \n £15.6m \n \n \n £8.88m \n \n \n £11.4m \n \n \n \n \n % gross margin \n \n \n 49% \n \n \n 49% \n \n \n 56% \n \n \n \n \n Profit before tax & exceptionals \n \n \n £3.7m \n \n \n £0.4m \n \n \n £3.5m \n \n \n \n \n % change vs previous year \n \n \n 959% \n \n \n -89% \n \n \n 25% \n \n \n \n \n Earnings per share \n \n \n 4.98p \n \n \n 1.35p \n \n \n 3.84p \n \n \n \n \n Proposed dividend per share \n \n \n 1p \n \n \n 0p \n \n \n 2.55p \n \n \n \n \n EBITDA* \n \n \n £6.0m \n \n \n £2.1m \n \n \n £4.9m \n \n \n \n \n Closing cash \n \n \n £11.12m \n \n \n £4.51m \n \n \n £11.84m \n \n \n \n \n % change vs previous year \n \n \n 146% \n \n \n -62% \n \n \n 5% \n \n \n \n \n Investment in R&D \n \n \n £3.8m \n \n \n £3.69m \n \n \n £1.82m \n \n \n \n \n % change vs previous year \n \n \n 3% \n \n \n 103% \n \n \n 50% \n \n \n \n \n Total assets \n \n \n £47.8m \n \n \n £32.6m \n \n \n £29.8m \n \n \n \n \n Shareholders' funds \n \n \n £35.0m \n \n \n £23.2m \n \n \n £22.7m \n \n \n \n \n *EBITDA is defined as operating profit excluding finance costs, taxation, depreciation and amortisation. \n Revenue \n The Company generates sales through products and associated services. A minimal amount of revenue (c.£1.1m) is included in FY23 for system sales (including sales for the acquisition of Phillips Aerospace from 6 September 2023). FY23 saw a record year for revenue, despite being constrained in the first half of the year due to component shortages. \n \n Geographical split of revenue \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to \n \n \n \n \n \n Year to \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n \n \n \n £ \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n United States \n \n \n \n \n \n 13,060,691 \n \n \n \n \n \n 6,564,816 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Malaysia \n \n \n \n \n \n 392,850 \n \n \n \n \n \n 3,047,798 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Germany \n \n \n \n \n \n 6,450,372 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n United Kingdom \n \n \n \n \n \n 2,148,568 \n \n \n \n \n \n 1,167,266 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other Europe \n \n \n \n \n \n 4,178,401 \n \n \n \n \n \n 4,003,849 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Rest of the World \n \n \n \n \n \n 5,425,434 \n \n \n \n \n \n 3,491,042 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31,656,316 \n \n \n \n \n \n 18,274,771 \n \n \n \n \n \n The geographical split of revenue is quite different in FY23 versus the prior year. FY22 was driven by component availability and, therefore, what we were able to ship to customers. FY23 still had an element of this but it was less extreme, with H2 being relatively unconstrained by component availability. We have one customer in Malaysia, and the profile is simply reflective of its schedule. Germany has represented a significant growth area due to timing of programs (orders in FY22 and FY23), with higher production and development volume creating revenue in FY23. A key point to note is the growth in the UK and US, both our home markets, where we have been concentrating our business development activities. An important element of our strategy has been to reduce our reliance on one customer, which was a feature of the past business, and this strategy is clearly working, as evidenced by the table below. \n \n % Revenue by top customers \n \n \n \n Revenue by market \n \n \n \n \n \n Defence \n \n \n £26,758,184 \n \n \n 85% \n \n \n \n \n Industrial and scientific \n \n \n £3,169,680 \n \n \n 10% \n \n \n \n \n Medical, communications and other \n \n \n £1,728,452 \n \n \n 5% \n \n \n \n \n Total \n \n \n £31,656,316 \n \n \n \n \n \n \n \n \n Gross profit \n Gross profit increased by 76% to £15.64m (FY22: £8.88m), reflecting the significant increase in revenue. Our gross profit margin of 49.4% (FY22: 48.6%) is reflective of the improving components situation and more efficient delivery. \n Profit \n Profit before tax (excluding exceptionals) increased by 959% to £3.7m (FY22: £0.4m). This is a result of the record revenues achieved in FY23. EBITDA (measured as operating profit plus depreciation and amortisation) increased by 184% to £6.0m (FY22: £2.1m). Amortisation of our products was up by 23% to £1.35m, reflecting the new product portfolio starting to be released into the profit-and-loss account. Depreciation is also significantly up by 91%, of which 17% reflects the investment in new machinery and the improved offices of Theale, Reading and the remainder is the effect of bringing in the acquisition balances. The new products and the new facility are both key elements in the growth strategy of the Group and will enable the realisation of exceptional further growth. \n \n Earnings per share (EPS) was 4.98p (FY22: 1.35p). This reflects the increased weighted average number of ordinary shares in FY23 generated by the equity raise completed in August 2023. On the previous basis, the EPS would have been 5.0p. \n Cost base \n It has been necessary to improve the cost base of the business; it has significantly increased with FY23 at £12.2m (FY22: £8.3m). This reflects the investment needed in the business to prepare and be ready for growth. This will be achieved through our new ways of working (e.g. business development, systems, design wins, product development). \n \n The Group continues to pursue the strategy, investing in R&D, developing new products and securing talented people to deliver and drive the business. Through FY23, the business has started to see the results of that investment. \n \n \n \n \n As per the table above, a major part of the cost increase has been the investment in people, with salaries increasing by £2.1m. Headcount has increased by 23, from 129 to 152 (including 12 from the acquisition of Phillips) from 31 December 2022, and has increased from 109 at the beginning of FY22. \n Bonuses and commission have also risen in FY23, due to excellent performance and a change to the commission scheme (to simplify and pay on order performance), which generated a one-off catch-up in FY23 of c.£0.3m. \n \n Foreign exchange rates also had a significant impact on the FY23 accounts, with a swing in rates causing a negative effect against FY22. All other costs were relatively flat. \n \n Tax \n The Group has undertaken a full tax review and computation, in accordance with UK tax regulations. Due to having significant R&D investment, we remain in a tax credit position for FY23. \n \n Cash flow \n The business has a healthy cash balance of £11.1m, with £5.6m generated from normal operations (a strong increase from FY22 at -£0.9m). Revenue was strong in Q4, meaning trade debtors going out of FY23 were high at £5.4m. The business was cash generative in FY23; this is a reversal of the difficult position in FY22 (due to components availability), which saw a decrease of £7.3m. \n \n Statement of financial position \n Inventory at the close of FY23 was £11.96m (FY22: £10.09m). This was driven by the management of parts throughout the challenging period due to the components crisis, where the business chose to invest cash in increasing inventory based on market availability to enable the delivery of products. This is now followed by a period of growth and, therefore, inventory holding will revert to 'normal' levels based on a higher-revenue business. These two drivers will continue to play out throughout FY24. The business reviews inventory regularly and provides for obsolescence and slow-moving inventory accordingly, which totalled £1.26m in FY23 (FY22: £0.7m). \n \n Inventory is a key factor in enabling the business to deliver most efficiently and effectively, with careful management contributing to the reduction in lead times in getting products to customers. \n \n Trade payables have increased to £5.7m (FY22: £2.98m). This is predominantly due to the purchase of an end-of-life component that is used across many of the products. This component was delivered in FY23; however, payment terms were agreed that enable payment in April FY24. \n \n Acquisition \n On 5 September 2023, Concurrent Technologies Group completed the acquisition of Phillips Aerospace in California, USA. \n \n The acquisition aims to underpin and execute the systems strategy of the business. It provides a footprint, capability, accreditations and credibility that will support the drive for systems revenue going forward. \n \n Phillips Aerospace was purchased for $3.3m (£2.8m), split between cash at $1.1m (£0.8m), equity of $1.5m (£1.3m), and repayment of outstanding loan balances within Phillips Aerospace of $0.8m (£0.7m). A detailed summary of the transaction is set out in Note 27 to the financial statements. \n \n Two of the owners (the third was a silent partner) remain with the business and are fully committed to driving the systems strategy forward with the business. \n \n The fair value of the assets acquired has been considered under IFRS 3 and a purchase price allocation exercise has been undertaken and reflected in Note 27 of the accounts. \n \n In the period since the business has been owned by Concurrent Technologies, it delivered £0.8m revenue and contributed £0.2m profit to the Group. \n \n Kim Garrod \n Chief Financial Officer \n \n Consolidated statement of comprehensive income for the year ended 31 December 2023 \n \n \n \n \n \n \n For the year ended 31 December 2023 \n \n \n \n Note \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Year to \n \n \n \n \n \n Year to \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n \n \n \n £ \n \n \n \n \n Revenue \n \n \n 3 \n \n \n \n \n \n 31,656,316 \n \n \n \n \n \n 18,274,771 \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n \n \n (16,018,368) \n \n \n \n \n \n (9,397,449) \n \n \n \n \n Gross profit \n \n \n \n \n \n \n \n \n 15,637,948 \n \n \n \n \n \n 8,877,322 \n \n \n \n \n Administrative expenses \n \n \n \n \n \n \n \n \n (11,951,314) \n \n \n \n \n \n (8,390,682) \n \n \n \n \n Group operating profit \n \n \n 4 \n \n \n \n \n \n 3,686,634 \n \n \n \n \n \n 486,640 \n \n \n \n \n Finance expense \n \n \n \n \n \n \n \n \n (86,010) \n \n \n \n \n \n (104,505) \n \n \n \n \n Finance income \n \n \n 5 \n \n \n \n \n \n 68,145 \n \n \n \n \n \n 546 \n \n \n \n \n Exceptional acquisition expenses \n \n \n 27 \n \n \n \n \n \n (195,881) \n \n \n \n \n \n - \n \n \n \n \n Profit before tax \n \n \n \n \n \n \n \n \n 3,472,888 \n \n \n \n \n \n 382,681 \n \n \n \n \n Tax credit \n \n \n 6 \n \n \n \n \n \n 400,248 \n \n \n \n \n \n 604,344 \n \n \n \n \n Profit for the year \n \n \n \n \n \n \n \n \n 3,873,136 \n \n \n \n \n \n 987,025 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive income \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Exchange (losses)/gains) on translating foreign operations \n \n \n \n \n \n \n \n \n (101,340) \n \n \n \n \n \n 69,463 \n \n \n \n \n Other comprehensive income for the year, net of tax \n \n \n \n \n \n \n \n \n (101,340) \n \n \n \n \n \n 69,463 \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n \n \n \n 3,771,796 \n \n \n \n \n \n 1,056,488 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the period attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity holders of the Parent \n \n \n \n \n \n \n \n \n 3,873,136 \n \n \n \n \n \n 987,025 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income attributable to: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity holders of the Parent \n \n \n \n \n \n \n \n \n 3,771,796 \n \n \n \n \n \n 1,056,488 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Earnings per share \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic earnings per share \n \n \n 8 \n \n \n \n \n \n 4.98p \n \n \n \n \n \n 1.35p \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Diluted earnings per share \n \n \n 8 \n \n \n \n \n \n 4.85p \n \n \n \n \n \n 1.35p \n \n \n \n \n \n \n All operations were continuing within the year. \n \n This statement should be read in conjunction with accompanying notes \n \n \n \n \n Consolidated Statement of Financial Position for the year ended 31 December 2023 \n \n \n \n \n \n For the year ended 31 December 2023 \n \n \n \n \n \n \n \n \n 31 December \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n £ \n \n \n \n \n ASSETS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n 11 \n \n \n \n \n \n 2,465,883 \n \n \n 2,685,107 \n \n \n \n \n Intangible assets \n \n \n 12 \n \n \n \n \n \n 13,914,398 \n \n \n 8,807,290 \n \n \n \n \n Deferred tax assets \n \n \n 13 \n \n \n \n \n \n 432,642 \n \n \n 350,753 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 16,812,923 \n \n \n 11,843,150 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 15 \n \n \n \n \n \n 11,958,500 \n \n \n 10,090,437 \n \n \n \n \n Trade and other receivables \n \n \n 16 \n \n \n \n \n \n 6,442,827 \n \n \n 5,439,912 \n \n \n \n \n Current tax assets \n \n \n 6 \n \n \n \n \n \n 1,492,621 \n \n \n 762,545 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n 11,118,728 \n \n \n 4,512,720 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31,012,676 \n \n \n 20,805,614 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n 47,825,599 \n \n \n 32,648,764 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LIABILITIES \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deferred tax liabilities \n \n \n 13 \n \n \n \n \n \n 2,094,095 \n \n \n 2,126,588 \n \n \n \n \n Trade and other payables \n \n \n 17 \n \n \n \n \n \n 695,273 \n \n \n 1,257,820 \n \n \n \n \n Provisions \n \n \n 19 \n \n \n \n \n \n 315,135 \n \n \n 304,336 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 3,104,503 \n \n \n 3,688,744 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 17 \n \n \n \n \n \n 9,666,412 \n \n \n 5,765,262 \n \n \n \n \n Provisions \n \n \n 19 \n \n \n \n \n \n 18,256 \n \n \n 18,256 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 9,684,668 \n \n \n 5,783,518 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n 12,789,171 \n \n \n 9,472,262 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n 35,036,428 \n \n \n 23,176,502 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EQUITY \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital and reserves \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n 21 \n \n \n \n \n \n 861,692 \n \n \n 739,000 \n \n \n \n \n Share premium account \n \n \n 21 \n \n \n \n \n \n 9,950,231 \n \n \n 3,699,105 \n \n \n \n \n Merger reserve \n \n \n 21 \n \n \n \n \n \n 1,283,457 \n \n \n - \n \n \n \n \n Capital redemption reserve \n \n \n 21 \n \n \n \n \n \n 256,976 \n \n \n 256,976 \n \n \n \n \n Cumulative translation reserve \n \n \n 21 \n \n \n \n \n \n (129,276) \n \n \n (27,936) \n \n \n \n \n Profit-and-loss account \n \n \n \n \n \n \n \n \n 22,813,348 \n \n \n 18,509,357 \n \n \n \n \n Equity attributable to equity holders of the Parent \n \n \n \n \n \n \n \n \n 35,036,428 \n \n \n 23,176,502 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n 35,036,428 \n \n \n 23,176,502 \n \n \n \n \n \n \n \n This statement should be read in conjunction with accompanying notes. \n \n \n Company Statement of Financial Position for the year ended 31 December 2023 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n \n \n \n £ \n \n \n \n \n ASSETS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n 11 \n \n \n \n \n \n 2,374,209 \n \n \n \n \n \n 2,628,501 \n \n \n \n \n Intangible assets \n \n \n 12 \n \n \n \n \n \n 11,217,904 \n \n \n \n \n \n 8,807,290 \n \n \n \n \n Deferred tax assets \n \n \n 13 \n \n \n \n \n \n 432,642 \n \n \n \n \n \n 350,753 \n \n \n \n \n Investments \n \n \n 14 \n \n \n \n \n \n 1,572,640 \n \n \n \n \n \n 1,446,952 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 15,597,395 \n \n \n \n \n \n 13,233,496 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 15 \n \n \n \n \n \n 11,754,564 \n \n \n \n \n \n 10,090,437 \n \n \n \n \n Trade and other receivables \n \n \n 16 \n \n \n \n \n \n 8,534,995 \n \n \n \n \n \n 5,870,077 \n \n \n \n \n Current tax assets \n \n \n 6 \n \n \n \n \n \n 1,434,921 \n \n \n \n \n \n 703,087 \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n \n \n 9,111,243 \n \n \n \n \n \n 1,704,517 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 30,835,723 \n \n \n \n \n \n 18,368,118 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total assets \n \n \n \n \n \n \n \n \n 46,433,118 \n \n \n \n \n \n 31,601,614 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LIABILITIES \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Deferred tax liabilities \n \n \n 13 \n \n \n \n \n \n 1,834,823 \n \n \n \n \n \n 2,178,634 \n \n \n \n \n Trade and other payables \n \n \n 17 \n \n \n \n \n \n 677,607 \n \n \n \n \n \n 1,211,405 \n \n \n \n \n Provisions \n \n \n 19 \n \n \n \n \n \n 315,135 \n \n \n \n \n \n 304,336 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2,827,565 \n \n \n \n \n \n 3,694,375 \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 17 \n \n \n \n \n \n 8,890,046 \n \n \n \n \n \n 5,171,306 \n \n \n \n \n Provisions \n \n \n 19 \n \n \n \n \n \n 18,256 \n \n \n \n \n \n 18,256 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 8,908,302 \n \n \n \n \n \n 5,189,562 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n \n \n 11,735,867 \n \n \n \n \n \n 8,883,937 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n \n \n 34,697,251 \n \n \n \n \n \n 22,717,677 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EQUITY \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital and reserves \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n 21 \n \n \n \n \n \n 861,692 \n \n \n \n \n \n 739,000 \n \n \n \n \n Share premium account \n \n \n 21 \n \n \n \n \n \n 9,950,231 \n \n \n \n \n \n 3,699,105 \n \n \n \n \n Merger reserve \n \n \n 21 \n \n \n \n \n \n 1,283,457 \n \n \n \n \n \n - \n \n \n \n \n Capital redemption reserve \n \n \n 21 \n \n \n \n \n \n 256,976 \n \n \n \n \n \n 256,976 \n \n \n \n \n Profit-and-loss account \n \n \n 21 \n \n \n \n \n \n 22,344,895 \n \n \n \n \n \n 18,022,596 \n \n \n \n \n Equity attributable to equity holders of the Parent \n \n \n \n \n \n \n \n \n 34,697,251 \n \n \n \n \n \n 22,717,677 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n \n \n 34,697,251 \n \n \n \n \n \n 22,717,677 \n \n \n \n \n \n \n \n This statement should be read in conjunction with accompanying notes . \n \n \n \n Consolidated Cash Flow Statement for the year ended 31 December 2023 \n \n \n \n \n \n For the year ended 31 December 2023 \n \n \n \n \n \n \n \n \n Year to \n \n \n \n \n \n Year to \n \n \n \n \n \n \n \n \n \n \n \n \n \n 31 December \n \n \n \n \n \n 31 December \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n \n \n \n £ \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax for the period \n \n \n \n \n \n \n \n \n 3,472,888 \n \n \n \n \n \n 382,681 \n \n \n \n \n Adjustments for: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Finance income \n \n \n \n \n \n \n \n \n (68,145) \n \n \n \n \n \n (546) \n \n \n \n \n Finance expense \n \n \n \n \n \n \n \n \n 86,010 \n \n \n \n \n \n 104,505 \n \n \n \n \n Depreciation \n \n \n \n \n \n \n \n \n 806,236 \n \n \n \n \n \n 422,047 \n \n \n \n \n Amortisation \n \n \n \n \n \n \n \n \n 1,509,167 \n \n \n \n \n \n 1,197,972 \n \n \n \n \n Impairment loss \n \n \n \n \n \n \n \n \n 31,557 \n \n \n \n \n \n 327,526 \n \n \n \n \n Share-based payment \n \n \n \n \n \n \n \n \n 430,854 \n \n \n \n \n \n 219,363 \n \n \n \n \n Exchange differences \n \n \n \n \n \n \n \n \n (145,706) \n \n \n \n \n \n 82,384 \n \n \n \n \n Increase in inventories \n \n \n \n \n \n \n \n \n (1,868,063) \n \n \n \n \n \n (3,665,001) \n \n \n \n \n Increase in trade and other receivables \n \n \n \n \n \n \n \n \n (1,029,033) \n \n \n \n \n \n (2,451,279) \n \n \n \n \n Increase in trade and other payables \n \n \n \n \n \n \n \n \n 2,853,322 \n \n \n \n \n \n 2,222,123 \n \n \n \n \n Cash generated/(used in) from operations \n \n \n \n \n \n \n \n \n 6,079,087 \n \n \n \n \n \n (1,158,225) \n \n \n \n \n Tax received/(paid) \n \n \n \n \n \n \n \n \n (444,210) \n \n \n \n \n \n 267,884 \n \n \n \n \n Net cash generated/(used in) from operating activities \n \n \n \n \n \n \n \n \n 5,634,877 \n \n \n \n \n \n (890,341) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n \n 68,145 \n \n \n \n \n \n 546 \n \n \n \n \n Purchases of property, plant and equipment (PPE) \n \n \n \n \n \n \n \n \n (495,973) \n \n \n \n \n \n (1,480,394) \n \n \n \n \n Payment of acquisition of subsidiary net of cash acquired \n \n \n \n \n \n \n \n \n (685,767) \n \n \n \n \n \n - \n \n \n \n \n Capitalisation of development costs and purchases of intangible assets \n \n \n \n \n \n \n \n \n (3,977,839) \n \n \n \n \n \n (3,711,617) \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n \n \n \n (5,091,434) \n \n \n \n \n \n (5,191,465) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity dividends paid \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n (1,027,088) \n \n \n \n \n Repayment of leasing liabilities \n \n \n \n \n \n \n \n \n (215,209) \n \n \n \n \n \n (94,842) \n \n \n \n \n Interest paid \n \n \n \n \n \n \n \n \n (86,010) \n \n \n \n \n \n (104,505) \n \n \n \n \n Issue of ordinary shares net of issue costs \n \n \n \n \n \n \n \n \n 6,355,741 \n \n \n \n \n \n - \n \n \n \n \n Sale of treasury shares \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n 2,425 \n \n \n \n \n Net cash generated/(used) in financing activities \n \n \n \n \n \n \n \n \n 6,054,522 \n \n \n \n \n \n (1,224,010) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Effects of exchange-rate changes on cash and cash equivalents \n \n \n \n \n \n \n \n \n 8,043 \n \n \n \n \n \n (21,222) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net increase/(decrease) in cash \n \n \n \n \n \n \n \n \n 6,606,008 \n \n \n \n \n \n (7,327,038) \n \n \n \n \n Cash at beginning of period \n \n \n \n \n \n \n \n \n 4,512,720 \n \n \n \n \n \n 11,839,758 \n \n \n \n \n Cash at the end of the period \n \n \n \n \n \n \n \n \n 11,118,728 \n \n \n \n \n \n 4,512,720 \n \n \n \n \n \n This statement should be read in conjunction with accompanying notes. \n \n Consolidated Statement of Changes in Equity for the year ended 31 December 2023 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital \n \n \n Cumulative \n \n \n Profit- \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share \n \n \n Share \n \n \n Merger \n \n \n redemption \n \n \n translation \n \n \n and-loss \n \n \n Total \n \n \n \n \n \n \n \n \n \n \n capital \n \n \n premium \n \n \n reserve \n \n \n reserve \n \n \n reserve \n \n \n account \n \n \n equity \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n Balance at 1 January 2022 \n \n \n \n \n \n 739,000 \n \n \n 3,699,105 \n \n \n - \n \n \n 256,976 \n \n \n (97,399) \n \n \n 18,082,077 \n \n \n 22,679,759 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the period \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 987,025 \n \n \n 987,025 \n \n \n \n \n Exchange differences on translating foreign operations \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 69,463 \n \n \n - \n \n \n 69,463 \n \n \n \n \n Total comprehensive income for the period (restated) \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 69,463 \n \n \n 987,025 \n \n \n 1,056,488 \n \n \n \n \n Share-based payment \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 219,363 \n \n \n 219,363 \n \n \n \n \n Deferred tax on share-based payment \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 245,555 \n \n \n 245,555 \n \n \n \n \n Dividends paid \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,027,088) \n \n \n (1,027,088) \n \n \n \n \n Sale/purchase of treasury shares \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2,425 \n \n \n 2,425 \n \n \n \n \n Issue of ordinary shares \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Balance at 31 December 2022 \n \n \n \n \n \n 739,000 \n \n \n 3,699,105 \n \n \n - \n \n \n 256,976 \n \n \n (27,936) \n \n \n 18,509,357 \n \n \n 23,176,502 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit for the period \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 3,873,136 \n \n \n 3,873,136 \n \n \n \n \n Exchange differences on translating foreign operations \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (101,340) \n \n \n - \n \n \n (101,340) \n \n \n \n \n Total comprehensive income for the period \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (101,340) \n \n \n 3,873,136 \n \n \n 3,771,796 \n \n \n \n \n Share-based payment \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 430,854 \n \n \n 430,854 \n \n \n \n \n Deferred tax on share-based payment \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Dividends paid \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0 \n \n \n 0 \n \n \n \n \n Sale/purchase of treasury shares \n \n \n \n \n \n - \n \n \n - \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Merger reserve \n \n \n \n \n \n 18,077 \n \n \n \n \n \n 1,283,457 \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,301,534 \n \n \n \n \n Shares issued during the year \n \n \n \n \n \n 104,615 \n \n \n 6,251,126 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 6,355,741 \n \n \n \n \n Balance at 31 December 2023 \n \n \n \n \n \n 861,692 \n \n \n 9,950,231 \n \n \n 1,283,457 \n \n \n 256,976 \n \n \n (129,276) \n \n \n 22,813,347 \n \n \n 35,036,427 \n \n \n \n \n \n This statement should be read in conjunction with accompanying notes. \n \n \n \n Company Statement of Changes in Equity for the year ended 31 December 2023 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital \n \n \n Profit- \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Share \n \n \n Share \n \n \n Merger \n \n \n redemption \n \n \n and-loss \n \n \n Total \n \n \n \n \n \n \n \n \n \n \n \n \n \n capital \n \n \n premium \n \n \n reserve \n \n \n reserve \n \n \n account \n \n \n equity \n \n \n \n \n \n \n \n \n \n \n \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n £ \n \n \n \n \n Balance at 1 January 2022 \n \n \n \n \n \n \n \n \n 739,000 \n \n \n 3,699,105 \n \n \n - \n \n \n 256,976 \n \n \n 17,493,403 \n \n \n 22,188,484 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total profit and comprehensive income for the period \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1,086,851 \n \n \n 1,086,851 \n \n \n \n \n Share-based payment \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 221,450 \n \n \n 221,450 \n \n \n \n \n Deferred tax on share-based payment \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 245,555 \n \n \n 245,555 \n \n \n \n \n Dividends paid \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1,027,088) \n \n \n (1,027,088) \n \n \n \n \n Sale/purchase of treasury shares \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 2,425 \n \n \n 2,425 \n \n \n \n \n Issue of ordinary shares \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Balance at 31 December 2022 \n \n \n \n \n \n \n \n \n 739,000 \n \n \n 3,699,105 \n \n \n - \n \n \n 256,976 \n \n \n 18,022,596 \n \n \n 22,717,677 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total profit and comprehensive income for the period \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 3,632,774 \n \n \n 3,632,774 \n \n \n \n \n Share-based payment \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 430,854 \n \n \n 430,854 \n \n \n \n \n Deferred tax on share-based payment \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Dividends received \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 258,670 \n \n \n 258,670 \n \n \n \n \n Sale/purchase of treasury shares \n \n \n \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Merger reserve \n \n \n \n \n \n \n \n \n 18,077 \n \n \n \n \n \n 1,283,457 \n \n \n - \n \n \n - \n \n \n 1,301,534 \n \n \n \n \n Shares issued during the year \n \n \n \n \n \n \n \n \n 104,615 \n \n \n 6,251,126 \n \n \n - \n \n \n - \n \n \n - \n \n \n 6,355,741 \n \n \n \n \n Balance at 31 December 2023 \n \n \n \n \n \n \n \n \n 861,692 \n \n \n 9,950,231 \n \n \n 1,283,457 \n \n \n 256,976 \n \n \n 22,344,894 \n \n \n 34,697,250 \n \n \n \n \n \n This statement should be read in conjunction with accompanying notes. \n \n \n \n Notes to the Financial Statements \n \n \n \n \n \n \n \n Note 1 \n \n \n GENERAL INFORMATION \n \n \n \n \n \n \n \n The principal activity of Concurrent Technologies plc ('the Company') and its subsidiaries (together 'the Group') is the design, development, manufacture and marketing of single-board computers for system integrators and original equipment manufacturers. \n \n On 6 September 2023, the Group acquired 100% of the voting shares of Phillips Aerospace Limited. Please refer to Note 27 for further details. \n \n \n \n \n \n \n \n \n Concurrent Technologies plc is the Group's ultimate Parent Company. It is incorporated and domiciled in the United Kingdom. Concurrent Technologies plc's shares are listed on the Alternative Investment Market of the London Stock Exchange. \n \n \n \n \n \n \n \n \n The Group's financial statements are presented in pounds sterling (£), which is also the functional currency of the Parent Company. They have been approved for issue by the Board of Directors on 30 April 2024. \n \n \n \n \n \n Note 2 \n \n \n SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES \n \n \n \n \n \n \n \n \n \n \n Basis of preparation \n \n \n \n These financial statements are for the year ended 31 December 2023. They have been prepared in accordance with UK-adopted international accounting standards and with the requirements of the Companies Act 2006. These financial statements have been prepared under the historical cost convention. \n \n New and amended IFRS accounting standards that are effective for the current year \n \n In the current year, the Company has applied a number of amendments to IFRS accounting standards issued by the International Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. \n \n · IAS 1: Classifications of Liabilities as Current or Non-Current (effective for periods commencing on or after 1 January 2023) \n · IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies (effective for periods commencing on or after 1 January 2023) \n · IAS 8: Definition of Accounting Estimates (effective for periods commencing on or after 1 January 2023) \n · IAS 12: Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (effective for periods commencing on or after 1 January 2023) \n \n \n New and revised IFRS accounting standards in issue but not yet effective \n \n Certain standards, amendments to and interpretations of published standards have been published that are mandatory for the Group's accounting years beginning on or after 1 January 2024, or later years, and which the Group has decided not to adopt early: \n \n · IFRS 7 and IAS 7: Supplier Finance Arrangements (effective for periods commencing on or after 1 January 2024) \n · IAS 1: Non-Current Liabilities with Covenants (effective for periods commencing on or after 1 January 2024) \n \n None of the above listed changes are anticipated to have a material impact on the Group's financial statements. \n \n \n \n \n \n \n \n \n Changes in significant accounting policies \n \n There have been no changes in the year to significant accounting policies in the period. \n \n \n \n \n \n \n \n \n The Parent Company has relied on the exemption conferred by Section 408 of the Companies Act 2006 in not publishing its own profit-and-loss account. The Parent Company retained profit for the year was £3,632,774 (2022: £1,086,850). \n \n \n \n \n \n \n \n \n The policies set out below have been consistently applied to all the years presented, except where stated. \n \n \n \n \n \n Basis of presentation \n \n \n \n The consolidated financial statements are presented in accordance with IAS 1: Presentation of Financial Statements. The Group has elected to present the 'Income Statement' and 'Statement of Other Comprehensive Income' in one statement. \n \n The basis of presentation is the UK-adopted international accounting standards to FRS 101 for the Parent Company information. This has been prepared using the adapted format of the balance sheet. Disclosure exemptions taken include no cash flow statement for the Company, reduced disclosures for financial instruments, financial risk management, related party transactions, share-based payment, key management personnel and other relevant exemptions. \n \n \n \n \n \n \n \n \n \n Note 2 \n \n \n SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) \n \n \n \n \n \n \n \n \n \n Going concern \n \n \n The Directors have reviewed the approved budget and projections sensitised for different scenarios through to December 2025, considering general and specific market conditions, status of suppliers, liquidity and funding requirements and the needs of subsidiary companies. \n \n The Directors have assessed the viability of the Group using extreme assumptions to reverse stress test the cash forecast. Assumptions include extreme reduction in sales, decrease in gross margin and a reduction in stock levels (as anticipated in 2024 to reduce working capital). Additionally, within these scenarios we have excluded any potential beneficial impacts such as tighter management of working capital and cost reduction measures. These have been excluded to retain headroom in the forecast and to provide a worst expected case scenario. The forecast cash balances within the Group show that there is no borrowing requirement or going concern issues, enabling the Directors to be confident the Group will be able to meet its obligations. \n \n \n \n \n \n Basis of consolidation \n \n \n The consolidated financial statements incorporate the financial statements of the Company and its subsidiary undertakings. A subsidiary is a company controlled directly by the Group. Control is achieved where the Group has the power over the investee, rights to variable returns and the ability to use the power to affect the investee's returns. \n \n The acquisition method views a business combination from the perspective of the combining entity that is identified as the acquirer. The acquirer recognises the assets acquired and liabilities and contingent liabilities assumed, including those not previously recognised by the acquiree, where recognition criteria are met. Measurement of these items is generally at fair value at acquisition date. The measurement of the acquirer's assets and liabilities is not affected by the transaction, nor are any additional assets or liabilities of the acquirer recognised as a result of the transaction, because they are not the subjects of the transaction. All subsidiaries are 100% wholly owned and are fully controlled by the Group. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. \n \n \n \n \n \n Revenue recognition \n \n \n Revenue is recognised by the Group using the five-step process outlined in IFRS 15: \n · Identification of a contract with a customer \n · Identification of the performance obligations \n · Determination of the transaction price \n · Allocation of the transaction price to the performance obligations \n · Recognise revenue when the performance obligations are satisfied \n \n \n \n \n \n \n \n \n The Group's principal source of revenue is from the sale of single-board computers and associated products (which could include software products that are required by the customer to be added to the boards sold - for example, security software). Revenue from the sale of products, including any added software (this is so interlinked with the single-board computer that they are considered one performance obligation under IFRS 15) is recognised when the Group satisfies its performance obligations by transferring the promised goods to its customers. Control is considered to transfer, at the point in time when the customer takes undisputed responsibility for the goods. This depends on the terms and conditions of sale with the customer. There are three main terms for delivery: 1) The Group are responsible for the goods until delivered at the stated delivery address under the contract; 2) Free on board contract terms means the goods remain the Group's responsibility until they are placed onboard the vehicle for shipping, with export duty being the Group's responsibility as well. The customer is responsible post this point; 3) Ex-works contract terms, where the customer is responsible from the point the goods leave the factory or appropriate site, often under control of the customer's defined shipping arrangement. \n \n The Group provides a basic warranty on its products but does offer customers the opportunity to purchase an extended warranty of one, two or three years for their boards. As the customer has the option of purchasing the additional warranty separately, this is accounted for as a separate performance obligation under IFRS 15 where the Group will repair or replace faulty boards at no additional charge to the customer. Contract liabilities on these extended warranties are recognised and released to income over the warranty period until the performance obligation is satisfied. During the 12 months to 31 December 2023, £28,235 was released to profit and loss. \n \n \n \n \n \n \n \n \n Revenue recognised for systems contracts, under IFRS 15, was £1.1m (including Phillips Aerospace) for 2023 financial statements. Systems revenue will continue into 2024 and beyond. Revenue will normally be recognised over time, in accordance with IFRS 15, based on the stage of completion of the relevant performance obligations, and will be dependent on the conditions of each specific contract. \n \n \n \n \n \n \n \n \n \n Revenue recognition (continued) \n \n \n For our single-board business, invoices are raised on despatch and payment terms are usually 30 days from date of invoice. For the systems business, payment terms will be based on negotiations and could include pro-forma and 30-day payment terms, but will be subject to negotiated positions. \n \n \n \n \n \n Cost of sales \n \n \n Cost of sales consists of external purchases and stock used on delivering specific contracts, plus the direct workforce (predominantly manufacturing) related to the fulfilment of the specific contracts and direct ancillary costs such as shipping. \n \n \n \n \n \n Administrative expenses \n \n Exceptional items \n \n \n \n This includes all non-direct costs (e.g. general overheads such as rent, rates, sales and indirect functions.) This also includes non-direct engineering expenses. \n \n This is made up of costs incurred a...
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