Building mini-computers that run on low power and can withstand temperatures ranging from a bone chilling -40C to a blood boiling 85C has allowed Concurrent Technologies to deliver a solid performance. Managing director Glen Fawcett points out that defence spending is recovering, with the company's second-half profits up 39 per cent on the first half, adding: "Our order book is just ahead of where it was at this stage last year, and we expect our 2012 turnover to demonstrate continued growth."
Concurrent products are used in unmanned military robots, and the defence sector makes up around 60 per cent of sales. The company invested £2.6m in research and development (R&D) and released six new products in 2011, and Mr Fawcett says there are plans to "significantly increase" new product development this year with R&D spend increasing to £3m and nine new product launches planned. With a cash warchest of £5.6m, this should be achievable and analysts estimate it should be earnings-enhancing in the 2013-14 period.
So house broker Cenkos forecast adjusted EPS of 4.3p in 2012, rising to 4.8p the following year (4.5p in 2011).
CONCURRENT TECHNOLOGIES (CNC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 47p | MARKET VALUE: | £34m | |
| TOUCH: | 45-49p | 12-MONTH HIGH: | 51p | LOW: 39p |
| DIVIDEND YIELD: | 3.4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 19p* | NET CASH: | £5.6m** | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 10.6 | 2.43 | 2.62 | 1.2 |
| 2008 | 12.6 | 2.95 | 3.26 | 1.3 |
| 2009 | 12.9 | 2.80 | 3.55 | 1.4 |
| 2010 | 12.6 | 2.32 | 2.84 | 1.5 |
| 2011 | 13.8 | 2.71 | 3.63 | 1.6 |
| % change | +10 | +17 | +28 | +7 |
Ex-div:14 Mar Payment: 2 Apr *Includes intangible assets of £5.4m, or 8p a share **Includes £2m cash on deposit investments. | ||||
