CONCURRENT TECHNOLOGIES PLC
Interim results for the six months ended 30 June 2005
Strengthening customer base
Growing profitability
Concurrent Technologies Plc, which manufactures high end embedded computer
products for critical applications in the defence, transportation,
communications and industrial markets, announces interim results for the six
months period to 30 June 2005.
KEY POINTS
* Turnover up 55% to �4.6m (2004: �3.0m)
* Profit before tax �503k (2004: loss �131k)
* Net cash: �1.88m, zero borrowings
* Interim dividend maintained at 0.25p per share
* Substantial investment in product design, development and production paying
off:
*
+ Concurrent viewed increasingly as supplier of choice
+ Better, larger scale new business opportunities
+ Widening of customer base
Michael Collins, Chairman, commented:
"This year has started well and our order book has reached record levels in the
last few months. We are confident at this stage, that further progress will be
achieved in the second half and that this progress will continue into 2006."
5th September 2005
Enquiries
Company Name Tel
Concurrent Glen Fawcett Managing Director 01206 752626
Technologies
Hansard Ben Simons 020 7245 1100
Communications
CHAIRMAN'S STATEMENT
Business Summary
Concurrent Technologies designs, builds and supplies high end embedded computer
products to the defence, communication, transportation and industrial markets.
These computer products are integrated into a variety of applications which
require very high levels of processing power and superior levels of
reliability; applications include military systems, communications, networking,
medical imaging, industrial automation and scientific research.
The main product range includes single and dual processor computer boards using
Intel� and Freescale(tm) (formerly Motorola�) Central Processing Units (CPUs) for
the CompactPCI�, VME and Multibus II architectures. Boards for use in standard
operating conditions and ruggedised versions for use in extreme environments
are produced. In addition to hardware design capability, our engineering teams
undertake a significant amount of software and firmware development to provide
interoperability between products, generate test software both on-board and for
production test purposes, and also provide support for leading embedded and
real-time operating systems.
The largest markets for our products are now defence and communications.
Together these markets in the first half of 2005 accounted for 80% of our sales
by value.
Financial Summary
Conditions in the specialised part of the single board computer market, in
which we operate, continue to be favourable this year. Group turnover for the
first six months of 2005 was �4.6m, up from �3.0m in the same period last year
(an increase of 55%) and from �4.1m in the second half of 2004. The pre-tax
profit for the first 6 months of 2005 was �502,540 (2004: loss �130,896). Gross
margins in the first six months of the year at 43.6% have improved (2004:
41.8%). We expect further improvement as volumes increase and extended
temperature range products (which attract higher margins) start to become a
significant element of the total.
We have continued to control our costs well without reducing expenditure on
product development. Substantially higher activity has used up more working
capital but notwithstanding this we ended the period with cash of �1,883,583
and no borrowings.
Review of Operations
In the early part of 2005 we introduced to the market some exciting new
products designed to meet our customers' high-end computing requirements. Many
of these new products are based on the latest single-processor technology from
Intel� and one of our very latest using dual-processing technology. Our Chicago
design facility introduced the VP754/20x single board computer, designed around
the high speed Freescale(tm) PowerPC� processor operating at 1.4 GHz on a VME
architecture giving real time responsiveness, especially for use in defence,
aerospace and scientific applications. This board features low power usage
characteristics and gives support for multiple fast disk drives and high
resolution graphics. We have also released, in conjunction with our
co-development partner Thales Computers, the VP 315-RC a ruggedised conduction
cooled VME board utilising the Intel� Pentium� M processor which is
complemented by a highly integrated low power chipset from Intel�.
We are looking further to expand our sales and marketing capability,
particularly in the USA and the Far East. In March 2005 we announced that we
had appointed a Business Development Manager in Beijing in cooperation with the
China Britain Business Council. This appointment is to support our existing
distribution channels and increase our profile in this highly progressive
market.
Our boards are becoming increasingly complex and with improving sales, our
production and test facilities have come under increased pressure. We have
responded by installing a new, and much faster, assembly line suitable for
building larger production runs. At the heart of this is a high performance
"pick and place" robotic machine for selecting and mounting electronic devices
onto printed circuit boards, and at the end of the line is a recently installed
automated optical inspection machine which electronically examines the quality
of the connections on our boards.
Future Strategy
We believe we have the right range of products for those niches in the single
board computer market which we decided some years ago to pursue. We are
increasingly chosen by our target customers as the supplier of their choice,
and are being given the opportunity to quote for an increasing number of
opportunities, many of which are also of a larger scale. We believe that our
substantial investment in design and development is starting to pay off. By
continuing to design with advanced CPU technologies, we intend to make our
range of hardware products appeal to an ever increasing market. Simultaneously
we intend to keep increasing our investment in software and firmware
engineering so as to make our hardware operate with more software products and
so make our products even more attractive, and simpler to use, for our
customers. Where possible, we will be using low power devices such as Intel�
Pentium� M processors and their successors.
We continue with our strategy of supporting and expanding all three of our
existing embedded computer technology architectures. The Multibus II
architecture continues to be accepted by our customers, and we will continue to
support it while demand remains satisfactory. Defence and industrial
applications still require VME boards and we believe this will be an important
market for us in the long term. The CompactPCI� architecture, with its 64-bit/
66MHz performance and networking capability, offers extended bandwidth
particularly necessary for communications applications. This will continue to
be a key development area for us. We will also continue to look to enhance our
capabilities to produce complete embedded computer systems.
Outlook
This year has started well and our order book has reached record levels in the
last few months. We are confident at this stage, that further progress will be
achieved in the second half and that this progress will continue into 2006.
Dividend
The Board is declaring an interim dividend of 0.25 pence per share (2004:
0.25p) payable on 7 October 2005. The total cost of this interim dividend will
amount to �181,750. The ex-dividend date is 14 September 2005 and the record
date is 16 September 2005.
All trademarks, registered trademarks and trade names used in this report are
the property of their respective owners.
Consolidated Profit and Loss Account
Unaudited Restated Restated
unaudited audited
Note six months six months year ended
30/6/05 30/6/04 31/12/04
� � �
Turnover 4,620,420 2,975,852 7,086,044
Cost of sales 2,606,263 1,731,261 4,052,759
Gross profit 2,014,157 1,244,591 3,033,285
Net operating expenses 1,541,648 1,407,358 2,879,110
Operating profit/(loss) before 472,509 (162,767) 154,175
goodwill amortisation
Amortisation of goodwill 12,307 12,635 25,088
Group operating profit/(loss) 460,202 (175,402) 129,087
Interest receivable 42,338 44,506 85,493
Profit/(loss) on ordinary 502,540 (130,896) 214,580
activities before taxation
Taxation on profit on ordinary 99,596 10,878 1,177
activities
Profit/(loss) for the period 402,944 (141,774) 213,403
Dividend 2 181,750 181,750 363,500
Retained profit/(loss) for the 221,194 (323,524) (150,097)
period
Basic and diluted earnings per 3 0.55p (0.20p) 0.29p
share
Consolidated Balance Sheet
Note Unaudited Restated Restated
30/6/05 unaudited audited 31
30/6/04 /12/04
� � �
FIXED ASSETS
Goodwill 115,442 139,577 120,035
Tangible assets 611,571 462,722 474,382
727,013 602,299 594,417
CURRENT ASSETS
Stocks and work in progress 1,719,438 1,263,408 1,147,782
Debtors 2,353,016 1,555,222 2,190,865
Cash at bank and in hand 1,883,583 2,846,555 2,224,527
5,956,037 5,665,185 5,563,174
CREDITORS:
amounts falling due within one 2 1,335,770 1,318,897 1,117,178
year
NET CURRENT ASSETS 4,620,267 4,346,288 4,445,996
TOTAL ASSETS LESS
CURRENT LIABILITIES 5,347,280 4,948,587 5,040,413
Provision for liabilities and 9,972 20,494 -
charges
NET ASSETS 5,337,308 4,928,093 5,040,413
CAPITAL AND RESERVES
Called up share capital 727,000 727,000 727,000
Share premium account 3,405,817 3,405,817 3,405,817
Capital redemption reserve 256,976 256,976 256,976
Profit and loss account 2 947,515 538,300 650,620
EQUITY SHAREHOLDERS' FUNDS 5,337,308 4,928,093 5,040,413
Consolidated Cash Flow Statement
Unaudited Unaudited Audited
six months six months year ended
30/6/05 30/6/04 31/12/04
� � �
Net cash outflow from operating (14,972) (244,811) (567,333)
activities
Returns on investments and
servicing of finance:
Interest received 42,338 44,506 85,493
Taxation (8,246) (5,434) (20,112)
Capital expenditure and financial
investment:
Payments to acquire tangible fixed (233,760) (14,277) (115,937)
assets
Equity dividends paid (181,750) (181,750) (363,500)
Decrease in cash (396,390) (401,766) (981,389)
Notes to the Interim Results
* The Financial Statements for the six months ended 30 June 2005 were
authorised for issue on 2 September 2005 by the Board of Directors of
Concurrent Technologies Plc.
* The results for the year ended 31 December 2004 are abridged from the
Financial Statements for the year which contain an unqualified audit report
and have been filed with the Registrar of Companies. The results for this
period and for the six months ended 30 June 2004 have been restated
following the adoption of FRS 21 (Events after the balance sheet date) for
the period commencing 1 January 2005, in order to exclude accrued dividends
payable of �181,750. Accordingly the dividends actually paid in the
relevant periods are shown in the Consolidated Profit and Loss Account.
* The Chairman's Statement included within this report declares that the
Board of Directors intends to pay an interim dividend of 0.25 pence per
share amounting to a total cost of �181,750 (2004: 0.25 pence per share, �
181,750). In accordance, however, with FRS 21 this amount has not been
recognised within the results for the six months ended 30 June 2005.
* The taxation charge for the six months ended 30 June 2005 is based on the
estimated effective tax rate for the full year.
* The calculation of earnings per share for the six months ended 30 June 2005
is based on the number of Ordinary Shares in issue of 72,700,012.
Comparative earnings per share for the periods shown are based on the same
number of Ordinary Shares in issue.
In accordance with FRS 22 (Earnings per Share) the diluted earnings per
share amounts are the same as the basic earnings per share amounts.
* On 2 September 2005, the long term loan to Concurrent Technologies Inc was
converted into a capital contribution of �1.36m. The capital contribution
is not repayable by Concurrent Technologies Inc and does not have any
dividend or interest entitlement attaching to it.
* Copies of this report will be sent to shareholders and are available at the
Company's Registered Office.
CONCURRENT TECHNOLOGIES PLC
Interim Results for the six months ended 30th June 2005
END
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