TIDMCNC
RNS Number : 6684U
Concurrent Technologies PLC
27 November 2023
This announcement contains inside information as stipulated
under the UK version of the Market Abuse Regulation No 596/2014
which is part of English Law by virtue of the European (Withdrawal)
Act 2018, as amended. On publication of this announcement via a
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be in the public domain.
27 November 2023
Concurrent Technologies Plc
(the 'Company')
Trading Update
Concurrent Technologies Plc (AIM: CNC), a world-leading
specialist in the design and manufacture of high-end embedded
computer systems and boards for critical applications, is pleased
to announce a trading update for the year ended 31 December 2023
("FY23").
Revenue performance of the Company has continued the trend
established in the first half of the year, with the Board now
expecting to deliver revenue for FY23 ahead of market
expectations*, prior to the contribution of Phillips Aerospace
which was acquired in September 2023. Revenue for the six months to
31 December 2023 ("H2 2023") is expected to be substantially higher
than any prior half-year in the Company's history, driven by the
strength of order intake over the preceding 24 months enabled by
the significant investment in product development undertaken to
facilitate new customers and design wins. Management has worked
closely with suppliers and customers to successfully manage the
supply chain issues that previously impacted performance and is
pleased to report that these factors have continued to ease as the
year has progressed.
Order intake has continued the strong profile demonstrated in
the preceding year, continuing to provide the Board confidence in
the delivery of material revenue growth in the year ended 31
December 2024 ("FY24") and beyond.
Further evidence of the success of the Company's strategy is in
the increasing diversification of its end markets and the
increasing value of single orders. These larger orders include a
previously announced significant Systems order, as well as a number
of larger orders for Single Board Computers with large Defence
Primes as the end customer. The refreshed Sales team is core to
delivering the Company's strategy and the level of order intake and
revenue delivery are evidence of their capability.
Additionally, the Company is establishing a track record for
excellence in relation to design wins in the relevant sectors.
Management categorises a design win as the down selection of a
Concurrent Technologies product by a customer, with purchase orders
to follow once the customer's end-product reaches main production.
Accordingly, once a design win is achieved there is an expectation
that there will be multiple years of repeat orders for the relevant
product. To date in FY23, the Company has won eight major design
wins, outperforming any other year in the Company's history. A
major design win is classified as one that is likely to yield more
than GBP1 million in revenue per annum for multiple years and so
are anticipated to materially impact revenue performance from 2025
onwards, as production levels scale-up. The anticipated lifetime
value of the major design wins secured in FY23 is estimated to be
in excess of GBP100 million, although this amount will be dependent
on future programme production rates and is not currently
contracted. This change in approach is a function of the investment
made in the Company's product development and business development
capability. If this can be replicated year on year this will allow
the Company to develop a substantial long-term pipeline of revenue
opportunities.
The Board are pleased to note that profit contribution has
strengthened quarter-on-quarter throughout FY23, and it is
anticipated that Q4 2023 will be the strongest quarter in an
already record-breaking year. To position the business for the
future, management have continued to invest in the operational
scale of the Company to deliver an increasing level of revenue in
the future years. Accordingly, the profit of the Company as a whole
in FY23 is expected to be in line with current market
expectations**.
Following the completion of the acquisition of Phillips
Aerospace in September 2023, the Systems division is gearing up to
be a core part of this future performance. The Phillips Aerospace
business has already been successfully integrated into the
Company's operations, with key hires in progress and a number of
important process changes being implemented in the governance and
control of that business. Specifically, the Board is delighted by
the level of motivation and integration that the two prior
owner-managers have shown and both have contributed significantly
to the technical and managerial community within Concurrent
Technologies. Pleasingly, revenue contribution by the Phillips
Aerospace business in the short period since the completion of the
acquisition is expected to be approximately GBP500,000, slightly
stronger than may have been expected from prior annual performance.
The Board expects this to increase significantly as Systems
contracts are secured in the future.
This increased level of performance across the Company has been
delivered despite several larger multi-year orders, for which the
Company has already been down selected, moving from the current
year into FY24 due to customer timelines, further strengthening the
conviction of management in the delivery of further growth in
FY24.
Chief Executive Officer Miles Adcock said "The performance of
the team across the Company has been exceptional throughout the
year and, coupled with the continued easing of supply chains, we
have seen revenue run rates almost double when compared to
historical norms. Our success with design wins provides confidence
that order intake moving forward will continue the current level of
strong performance which will position us well to enjoy further
growth through FY24 and beyond.
The Systems business will continue to require focus and
investment to deliver substantial growth, but we are developing the
capabilities required to secure further Systems contracts in future
periods.
Our exciting and evolving business is delivered by brilliant
people. So far this year we have increased headcount by another 10%
as we grow. Attracting and retaining talent is core to our
strategy, and I am delighted that we were recently awarded Gold
status by the 5% Club; recognising that more than 5% of our
workforce is engaged in 'earn & learn' learning
programmes."
Note that the Company will issue a post-close trading update in
early January 2024.
*Consensus revenue expectations for 2023 are GBP27m
**Consensus profit before tax expectations for 2023 are
GBP3.5m
Enquiries:
Concurrent Technologies Plc
Miles Adcock, CEO +44 (0)1206 752626
Kim Garrod, CFO
SEC Newgate (Financial PR)
Bob Huxford +44 (0)20 3757 6880
Alice Cho +44 (0)20 3763 3342
Matthew Elliott concurrent@secnewgate.co.uk
Cavendish Capital Markets Limited (NOMAD and Broker)
Neil McDonald +44 (0)131 220 9771
Peter Lynch +44 (0)131 220 9772
About Concurrent Technologies Plc
Concurrent Technologies Plc develops and manufactures high-end
embedded computer products for use in a wide range of
high-performance, long-life cycle applications within the
telecommunications, defence, security, telemetry, scientific and
aerospace markets, including applications within extremely harsh
environments. The processor products feature Intel (R) processors,
including the latest generation embedded Intel (R) Core(TM)
processors, Intel (R) Xeon (R) and Intel Atom(TM) processors. The
products are designed to be compliant with industry specifications
and support many of today's leading embedded Operating Systems. The
products are sold world-wide.
For more information on Concurrent Technologies Plc and its
products please visit www.gocct.com.
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