Results for the year ended 31 December 2018

4 April 2019

Concurrent Technologies Plc

Results for the year ended 31 December 2018

Concurrent Technologies Plc (AIM: CNC), a world leading specialist in the design and manufacture of high-end embedded computer boards for critical applications, announces results for the year to 31 December 2018.

Financial Highlights
 

·     Revenue for the year increased to £16.6m (2017: £16.2m)

·     Gross profit was £8.7m (2017: £9.0m)

·     Gross margin was 52.2% (2017: 55.4%)

·     EBITDA increased by 5.8% to £4.6m (2017: £4.4m)

·     Profit before tax was £3.0m (2017: £3.0m)

·     Profit after tax increased to £3.0m (2017: £2.8)

·     Dividend increased by 4.5% to 2.30 pence per share for the year (2017: 2.20 pence)

·     Cash in business plus deposits was robust at £7.7m (2017: £8.4m)

Operational Highlights

·     During 2018, the Group introduced several new high performance embedded computer boards and accessory modules.  These included products based on the 8^th generation Intel^® Xeon^® processor for use in  VME,  CompactPCI^® and OpenVPX™ architectures.   As required by many applications, these new products offer support for enhanced security features and most are suitable for both commercial and harsh environments.   

·     Support for additional 3^rd party software and hardware products and systems was announced to broaden the Group's product range.  

·   The Group's UK manufacturing line was updated through the addition of a new pick-and-place machine providing additional production capacity and capability.

Michael Collins, Chairman of Concurrent Technologies Plc, commented:

"The new fiscal year of 2019 has started with a very strong order book giving the Board confidence in the Group's performance for the first half of 2019 and for the year as a whole. New and existing customers continue to require increasing levels of processing performance and additional product features including, in particular, increased security capabilities and encrypted storage.

The Group has and will continue to invest in experienced technical personnel and it is currently recruiting additional senior staff into newly created roles to help broaden its expertise of new technologies and methodologies required for continued growth.  This investment will ensure that the Group has the capabilities to design the products required for next generation projects.  By investing in new skills and expertise, the Group will be able to support our existing customer base with viable upgrade paths, while also providing products suitable for new applications such as Artificial Intelligence and Deep Learning within the vision and surveillance markets, among others."

Enquiries:

Extracts from the Strategic Report

Review of Operations

The Group achieved Revenue for the year of £16.62m (2017: £16.22m). The Gross Profit was £8.67m (2017: £8.99m) while the gross margin was 52.2% (2017: 55.4%).

Profit before tax was £2.97m (2017: £2.97m) and earnings per share increased to 4.08 pence (2017: 3.79 pence) due to a lower tax charge. EBITDA (measured as Operating Profit plus Depreciation and Amortisation) for the Group in 2018 also increased to £4.65m (2017: £4.39m).

The Group continued its long-term commitment to R&D by investing £3.31m in 2018 (2017: £3.19m), of which £2.44m was capitalised (2017: £2.13m). 

A further investment of £250,000 was made within manufacturing to install a new surface mount production line during 2018.  This surface mount investment both increases production capacity and provides a degree of future proofing as this line can 'place' significantly smaller components than the existing production facilities.

The Group continues to have no borrowings and again paid increased dividends during the year. Its cash balances plus short to medium term cash deposits at the year-end were £7.68m (2017: £8.39m).

Operational Highlights 

During 2018, the Group introduced several new high performance embedded computer boards and accessory modules.  These included products based on the 8^th generation Intel^® Xeon^® processor for use in  VME,  CompactPCI^® and OpenVPX™ architectures.   As required by many applications, these new products offer support for enhanced security features and most are suitable for both commercial and harsh environments.  In addition, support for additional 3^rd party software and hardware products and systems was announced to broaden the Group's product range.   The Group's UK manufacturing line was updated through the addition of a new pick-and-place machine providing additional production capacity and capability.

Future Plans and Outlook

The new fiscal year of 2019 has started with a very strong order book giving the Board confidence in the Group's performance for the first half of 2019 and for the year as a whole.   New and existing customers continue to require increasing levels of processing performance and additional product features including, in particular, increased security capabilities and encrypted storage.

The Group will maintain its policy of investing in R&D to expand the Group's current range of advanced technology products with a particular focus on the OpenVPX™ bus architecture. In addition to boards and associated software the Group will increase its range of development systems, using both its own products and complementary products from third party partners.  These ready to use development systems enable customers to reduce their product development times by focussing on their own areas of expertise to develop specialised applications.

The Group has and will continue to invest in experienced technical personnel and it is currently recruiting additional senior staff into newly created roles to help broaden its expertise of new technologies and methodologies required for continued growth.  This investment will ensure that the Group has the capabilities to design the products required for next generation projects.  Our current markets continue to demand the latest technologies to provide additional processing and networking performance, which also creates a requirement for improved and more complex cooling techniques, especially for harsh environments.  By investing in new skills and expertise, the Group will be able to support our existing customer base with viable upgrade paths, while also providing products suitable for new applications such as Artificial Intelligence and Deep Learning within the vision and surveillance markets, among others.

The Board continues to look for worldwide acquisition opportunities but sees many opportunities to grow the business organically into new market areas by widening our product ranges and further developing relationships with key hardware and software partners.

Dividend

The Board has declared a second interim dividend of 1.35 pence per share (2017: 1.30 pence) which when added to the first interim dividend of 0.95 pence per share (2017: 0.90 pence) will make a total of 2.30 pence per share for the year (2017: 2.20 pence). This is an increase of 4.5% on dividends paid for 2017. The total cost of this second interim dividend amounted to £981,700. As in previous years, the Directors do not intend to recommend a final dividend.

Annual General Meeting

The Annual General Meeting of Concurrent Technologies Plc will be held at the Company's offices at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, on 21 May 2019 at 2:30pm.

All trademarks, registered trademarks and trade names used in this announcement are the property of their respective owners.

Consolidated Statement of Comprehensive Income

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Equity

NOTES

1.  The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the 'Group'). The financial information set out in these preliminary results has been prepared in accordance with International Financial Reporting Standards ('IFRSs') as adopted by European Union. The accounting policies, except for IFRS 9 and IFRS 15, adopted in this results announcement have been consistently applied to all the years presented and are consistent with the policies used in the preparation of the statutory accounts for the period ended 31 December 2017. The Directors have opted to adopt the modified retrospective method of transition and have applied IFRS 15 to those contracts that are not completed as at 1st January 2018, the impact on the Profit and loss account is £34,399.The consolidated financial information is presented in sterling (£), which is the Company's functional and the Group's presentation currency.

2.  The financial information set out above does not constitute the Group's statutory accounts for the years ended 31 December 2018 or 2017, but is derived from those accounts. Statutory accounts for 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered following the Annual General Meeting. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not contain statements under section 498(2) or (3) of the Companies Act 2006 in respect of 2017 or 2018 and (iii) did not draw attention to any matters by way of emphasis.

3.  The calculation of basic earnings per share is based on the weighted average number of Ordinary Shares in issue during 2018 of 72,718,490 (2017: 72,718,490) after adjustment for treasury shares on the profit after tax for 2018 of £2,967,861 (2017: £2,755,621). The calculation of diluted earnings per share incorporates 2,457 Ordinary Shares (2017: 3,504) in respect of performance related employee share options. The profit after tax is the same as for basic earnings per share.

4.  The Annual General Meeting of Concurrent Technologies Plc will be held at the Company's offices at 4 Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, on 21 May 2019 at 2:30pm.

Copies of the Annual Report will be sent to Shareholders and will also be available from the Company's Registered Office: 4, Gilberd Court, Newcomen Way, Colchester, Essex, CO4 9WN, UK, and on the Company's website: www.gocct.com.