Concurrent Technologies plc (LON:CNC) Chief Executive Officer Miles Adcock caught up with DirectorsTalk for an exclusive interview to discuss their new contract win with a FTSE 250 company.
Q1: Miles, this sounds like big news, can you explain for us what it is that Concurrent Technologies have actually won?
A1: It’s an existing, quite large defence installation in the UK, I can’t tell you exactly what it is, and it has a series of embedded systems within it that are obsolete and it’s a facility that needs upgrading.
We entered competition to secure a win for the provision of 50 custom systems, and they’re custom because they have to interface exactly into existing infrastructure.
Within each system is one of our high-end single board computers, a dedicated card for timing, it’s very important for all 50 computers in this system are precisely synchronised, and a dedicated card for comms, as this installation collects data from all these computers, analyses it and then shares it back out across the customer.
Q2: Obviously winning a contract with a FTSE 250 company sounds like a lot of work, what led up to you to winning the contract?
A2: The customer initially approached the market, contacted us directly as well as we think other people with the opportunity to upgrade their system and replace these obsolete embedded systems.
We engaged in that very proactively, lent into it I would say quite hard, in a good way, and through that we secured a de-risking programme, that’s quite normal with these custom system type opportunities. The customer will spend some money with the vendor de-risking, doing initial design work in order to validate that our solution will solve their challenge.
That’s very different to our historical nearly four decades experience of selling boards, where typically a customer will say ‘do you have a board like this?’ and we would say yes or no. In this situation, the customer says, ‘can you help me solve my challenge, and what will it look like?’.
Q3: Why is this such an important win for you?
A3: It’s a real big step forward.
So, we publicly declared that we would enter this embedded systems market, not just the provision of our very successful plug-in cards, our single board computers, but those cards then go into systems.
Until this point, those systems have always been provided by other people and that does two things. It means we are not having the intimate conversation with the customer community around what challenges are they trying to solve, but it also means if that systems provider has their own card solution for example, that’s an opportunity that we don’t get to participate in. So, by becoming a provider of systems as well as cards, these systems are much higher value than a single card but it also gives our cards’ business across the market.
By winning quite a significant piece of work with a reputable large UK company, I see that very much as a big proof point for the successful initial stages of this systems strategy that we’ve so publicly declared.
Q4: Do you think we can expect more contracts like this to come for Concurrent Technologies?
A4: Yes, absolutely, no question, we are managing quite an active pipeline of opportunities.
Now, switching on a business like this is not an overnight activity, sales cycles are very long, I talked about the de-risking programme we worked on, that was a many months activity.
So, the answer to your question is yes, and as we enter 2024, we’ll start to see many more opportunities. Over a number of years, I would expect this systems line of business to be at least equal to our existing boards business in size.
