Concurrent Technologies – Record profits and v strong balance sheet in 2021 results (LON:CNC)

Concurrent Technologies Plc (LON:CNC), a world leading specialist in high-end embedded computer products for critical applications, has announced results for the year to 31 December 2021.

Financial Highlights

· Revenue for the year slightly ahead of market expectations at £20.5m (2020: £21.1m)

· Gross profit steady at £11.4m (2020: £11.4m)

· Gross margin increased to 55.9% (2020: 53.7%)

· EBITDA increased to £5.1m (2020: £5.0m)

· Profit before Tax increased 22% to £3.5m (2020: £2.8m)

· Profit after Tax increased to £2.8m (2020: £2.7m)

· Non-cash deferred tax charge of £0.5m reflecting increase in UK tax to 25%

· EPS increased to 3.88p (2020: 3.75p)

· Dividend maintained at 2.55 pence per share for the year (2020: 2.55 pence)

· Cash in the business steady at £11.8m (2020: £11.8m)

· Prior year restatement in 2019 to increase net assets by £0.3m

Operational Highlights

· New CEO and refreshed Leadership Team.

· Mitigated the impact of restricted supply of components through longstanding beneficial relationships with suppliers, well managed use of stock levels and flexible actions in response to shortage of specific components.

· Upgraded ability to launch new products, at broadly double the frequency and half the lead time, ensuring products are ready concurrently with market need. 

Outlook

· The Group is targeting eight new product releases in 2022. Delivery on this objective has begun, with a Position, Navigation and Timing plug in card announced in January 2022 and a 100 Gigabit Ethernet Processor Plug in Card announced in February 2022, simultaneously with the new Intel chip on which it is based.  

· Strong bookings with order book increased to £16.2m as 31 March 2022 from £13.2m at 31 December 2021.

· Component shortage represents challenge to ship product in 2022, particularly in H1 with order delivery expected to be delayed and revenues recognised over a longer period than during normal market conditions.

Miles Adcock, CEO of Concurrent Technologies Plc, commented: “Having joined Concurrent in June 2021, I have been delighted to find that the potential for growth is very real.  Despite the ongoing headwinds from components shortages, the financial performance of 2021 was excellent, with record profit delivered.  The past year was a period of keen focus on new product development and investing in strategies for growth, an approach that will continue through 2022.  We have also significantly augmented the already excellent team with domain specific expertise, and top talent in broader disciplines. 

“Despite growing demand for our products and an increased order book, we do expect short-term supply challenges will result in delivery of it being more protracted than is normal for the Group. However, we are robustly managing this issue and have a very strong balance sheet and so, rather than damage the business through cost cutting exercises, we will focus on continuing to grow the order book and on creating an even stronger business capable of taking advantage of a number of identified, exciting prospects. We are already seeing increased market interest in our renewed product portfolio, and I am confident in our mid-to-long term profitable growth.”

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