Concurrent Technologies PLC
(the “Company”)
Interim Results for the six months ended 30 June 2022
Concurrent Technologies PLC (AIM: CNC), a world leading specialist in high-end embedded computer products for critical applications, announces its interim results for the six months to 30 June 2022 (“H1 2022”).
Financial Performance
Component supply issues have delayed shipping of some of the Company's products, such that a proportion of expected H1 2022 revenues will be recognised in a later period. However, this is a short-term issue and in no way relates to the quality of the underlying business. Demand for the Company's products is higher than ever with a strong H1 order book (£14.2M) and record backlog (£20.3M).
· Revenue of £7.4M (H1 2021: £9.3M) – reduced solely as a result of components supply issues
· Gross profit of £3.7M (H1 2021: £5.1M)
· Gross margin of 50.4% (H1 2021: 54.3%) – reduced as the result of price increases of some components due to high demand and limited supply (-£0.3M against H1 revenue)
· Operating profit of £0.1M (H1 2021: £1.6M) – predominantly driven by revenue/gross margin variance of -£1.4M; net costs increased by c£0.2M, in line with investment strategy
· Profit before tax of £0.0M (H1 2021: £1.6M)
· EPS of 0.75 pence (H1 2021: 2.09 pence)
· Interim dividend suspended for H1 2022 (H1 2021: 1.15 pence per share)
· Cash Balance (including cash deposits) as at 30 June 2022 of £9.3M (31st Dec 2021: £11.8M)
reduced due to lower cashflow from operations of £0.6M, and continued investment of £3M, in line with our strategy
R&D investment will continue into H2 2022 at a similar level as H1 2022
Operational Summary
· Strong order intake of £14.2M as at 30 June 2022, with significant backlog of £20.3M compared to £15.6M backlog as at 30 June 2021, up 30%
· Defence is largest market sector at 76% revenue
· Global customer base is solid with exports generating 90% of revenue
· R&D costs (talent, improved process & analysis, materials) have increased by 50% to £2.4M (H1 2021 £1.6M), in line with stated strategy to enhance the number of product releases per annum and reflect the more complex nature of our offerings
· Three new products launched in H1 2022 and on track to launch eight new products during FY2022 (approx. double previous cadence)
· Component shortages have been exceptionally challenging, causing a significant limitation to our ability to ship product
· Major new order with a Fortune 500 medical company with a $2.3M purchase order in 2022 and similar sized orders anticipated for several years to come
· Experienced leadership team fully in place
· New office opened in Theale to attract and retain talent
· 20% increase in headcount, in line with strategy, to enhance new product delivery and support our path to growth
Miles Adcock, CEO of Concurrent Technologies, commented : “Short term component availability is resulting in constrained performance in FY2022, with limited visibility of exactly when it will ease. However, order intake is strong, and would otherwise reflect in a solid improvement in revenues. Order intake should strengthen further as strategic initiatives take effect in FY2023 and beyond. Post period end, total order intake has further strengthened to £20.8M, producing a current backlog of £24.2M as at 12 September 2022. After more than a full year now leading this business, I am even more confident in our ability to grow and develop a successful global enterprise.”