Breaking Records and Building Momentum

Peter Kemp

Hello and welcome to “Tech & Markets Unpacked" brought to you by Emperor in association with Flint Digital. I’m Peter Kemp, and I’m joined by the ever-insightful Louisa Lally. Louisa, how are you doing today?

Louisa Lally

I’m very well, Peter, thank you. Excited to dig into Concurrent Technologies’ annual report—there’s a lot to unpack, isn’t there?

Peter Kemp

Absolutely. I mean, you look at these numbers and it’s hard not to be impressed. Revenue up 27% to just over £40 million, profit before tax up 40%—that’s £5.2 million. And the US market, that’s now 45% of their revenue. That’s a big shift for a UK-based company, don’t you think?

Louisa Lally

It really is. And it’s not just the headline numbers, Peter. The underlying story is all about demand from the defence sector. They’ve secured 22 new design wins this year, including that massive $6 million contract with a US defence prime. That’s their largest ever, and it’s going to start contributing from 2027. It’s a real sign of momentum.

Peter Kemp

Yeah, and you know, it reminds me—bit of a tangent here—back in the early 2000s, I was working with a telecoms firm that suddenly landed a string of big contracts. The mood in the office just changed overnight. Everyone was buzzing, but there was also this sense of, “How long can this last?” I wonder if Concurrent’s management is thinking the same thing. Are we at the start of a new cycle, or is this just a peak?

Louisa Lally

That’s a good point. Market cycles can be brutal, especially in tech. But what’s interesting here is how diversified their pipeline is becoming. Yes, defence is 87% of revenue, but they’re also growing in Europe and Asia. And the operational gearing—they’re investing in R&D, manufacturing, people—so it’s not just a lucky streak. There’s a strategy behind it.

Peter Kemp

True, and the gross profit margin is holding up at nearly 50%. That’s not easy when you’re scaling up. I mean, I might be wrong, but usually you see margins get squeezed as companies chase growth. Here, they’re actually getting more efficient. And the cash position—up 23% to £13.7 million. That’s a nice cushion for whatever comes next.

Louisa Lally

And don’t forget, they’re still investing heavily—£1.1 million in product development, higher staffing costs, all to support this growth. It’s a balancing act, but so far, they seem to be pulling it off. I think the real test will be how they handle the next couple of years, especially as those big contracts start to deliver.

Peter Kemp

Yeah, and with 54% of revenue coming from their top 10 customers, there’s always a bit of risk if one of those relationships wobbles. But for now, it’s a record year, and the momentum looks real.

Louisa Lally

So, let’s talk about what’s actually driving this growth. The product side is fascinating—Rhea, Magni, TR MDx/6sd-RCR, Hermod II. These aren’t just incremental updates; they’re designed for rugged, high-performance environments. Defence, aerospace, even some industrial applications. It’s all about reliability under pressure.

Peter Kemp

Yeah, and I love that they’re not just making boards anymore. The move into systems—especially after acquiring Phillips Aerospace last year—means they’re climbing up the value chain. Phillips brought in new expertise, customer relationships, and a foothold in North America. That’s a textbook example of a smart acquisition, isn’t it?

Louisa Lally

It really is. And the partnerships—Parry Labs, Eizo Rugged, and that fast-growing US defence prime—those are opening up new market segments. It’s not just about selling a product, it’s about being part of a bigger solution. Actually, it reminds me of my work with a listed company a few years ago. We found that the best investor relations outcomes came from genuine partnerships, not just transactional relationships. It’s the same in tech—collaboration drives value.

Peter Kemp

That’s a great analogy, Louisa. And you can see it in how Concurrent is positioning itself. They’re not just a supplier, they’re a partner. The launch of Hermod II, for example, lets them occupy more of the system within their own technology. That’s a big deal for customers who want integrated solutions, not just components.

Louisa Lally

And the early signs from the Systems business are promising. There’s a $3.7 million design-win in Asia, a new VP of Systems in LA, and they’ve doubled the team in that region. It’s all about building capability and credibility. Plus, the new facility planned for 2026 in the US shows they’re serious about scaling up.

Peter Kemp

Yeah, and I think the real trick will be keeping that innovative edge as they grow. It’s easy to get bogged down in process and lose the spark. But so far, the mix of new products, smart partnerships, and targeted acquisitions seems to be working. They’re staying ahead of the curve, which is what you want to see in this sector.

Louisa Lally

Now, let’s shift gears a bit and talk about sustainability and risk. This year, Concurrent published its first carbon footprint report for UK operations. They’re looking at energy efficiency, renewable electricity, sustainable packaging—the whole ESG package. And they’re not just ticking boxes; there’s a real focus on employee wellbeing and diversity too.

Peter Kemp

Yeah, and that’s become so important for investors. I mean, a decade ago, ESG was a bit of a side note. Now, it’s front and centre. I remember when tech companies were seen as a bit reckless on the sustainability front, but that’s really shifted. Investors want to see companies taking responsibility, not just chasing profit.

Louisa Lally

Exactly. And it’s not just about the environment. Governance and risk management are getting a lot of attention. Concurrent’s restructured into Products and Systems business units, which helps them manage contractual and commercial risks more effectively. They’re also keeping a close eye on things like customer dependency, foreign exchange, and regulatory compliance. It’s a lot to juggle, but it’s essential for long-term success.

Peter Kemp

And the Board seems pretty hands-on—regular meetings, performance reviews, succession planning. They’re following the QCA Corporate Governance Code, which is good to see. I always say, strong governance is like the scaffolding that lets you build higher without everything collapsing. Terrible analogy, but you get my point.

Louisa Lally

No, I like it! And I think the market does too. Focusing on sustainability and governance has really changed how investors perceive tech companies. It’s not just about the next big contract, it’s about building a business that lasts. Concurrent’s got a strong cash position, a clear growth strategy, and now, a credible ESG story. That’s a powerful combination.

Peter Kemp

So, as we look ahead, it’ll be interesting to see how they balance growth with sustainability, and how those big contracts play out over the next few years. I think we’ll be hearing a lot more from Concurrent as they chase that £100 million revenue milestone.

Louisa Lally

Absolutely. And that’s all we’ve got time for today. Thanks for joining us on “Tech & Markets Unpacked.” Peter, always a pleasure.

Peter Kemp

Likewise, Louisa. Thanks everyone for listening, and we’ll see you next time for more insights into the world of tech and markets. Goodbye!

Louisa Lally

Goodbye!