MIDAS SHARE TIPS: Make cash with tech wizards at Concurrent Technologies who help print it
When the Alternative Investment Market was launched on June 19, 1995, there were just ten companies, worth £82million. Today, 25 years later, more than 800 firms are listed on the junior market, with a collective value of more than £100billion.
There have been some spectacular successes along the way but also some notable failures, which have left investors nursing heavy losses.
Siphoning out potential winners can be even more difficult on AIM than on the main market, as regulation is lighter and companies tend to be less mature. But dividends can be a helpful guide, indicating that firms make money and that management recognise the importance of rewarding their shareholders.
In the money: Concurrent Technologies has thrived as its computer skills are used in machines that print banknotes
Concurrent Technologies is one such business. The group makes high-performance computer hardware, used when durability, security and reliability are paramount.
The shares are £1.08, dividends have risen consistently over many years and chief executive Jane Annear said last week that trading remains robust and she is confident about the future.
Concurrent derives around 60 per cent of its sales from the defence industry. The firm’s kit can be found in tanks and fighter planes, surveillance and cyber security equipment, drones and radar stations.
Telecoms is another big market for the business, including testing apparatus for 5G, and Concurrent is also involved in other areas of industry, such as precision machines for printing money.
Proudly British, the company designs and manufactures most of its kit in Colchester, although customers come from all over the world, particularly America.
Concurrent also prides itself on the loyalty and commitment of staff. Annear, 66, was the group’s second employee back in 1985 and became chief executive last year.
Many others have been with the business for years, creating a firm with a distinctive culture and a reputation for top quality goods and service.
Annear took the helm following the sad passing of previous incumbent Glen Fawcett, who led Concurrent for more than three decades.
She did not expect the job but she is ideally suited for it, knowing the company inside-out and keen to retain the best from the past while also creating new areas of growth for the future.
She is accompanied by a new chairman, Mark Cubitt, who took the reins last week, when outgoing chairman Michael Collins retired after 31 years in the job. Many of Concurrent’s customers are longstanding too. The group’s hardware is embedded into their systems and tends to stay there, with new bits added on or replacements made over the years.
Cubitt and Annear are focused on retaining those customers but gradually doing more for them, while moving into other areas, such as Artificial Intelligence (AI).
Concurrent aims always to be one step ahead of the pack so innovation is key and the group invests heavily in research and in recruiting talented engineers.
These efforts are paying off. Concurrent’s order book is strong and, even if Covid-19 affects some sales, there are plenty of long-term opportunities for growth. Brokers expect dividends to carry on rising, from 2.5p for 2019 to 2.55p this year.
Midas verdict: Concurrent has traditionally kept a low stock market profile, not least because many of its customers are in security and defence. But Annear has a clear strategy for growth and several loyal big shareholders. At £1.08, the shares are a buy.