TIDMTRT
RNS Number : 1160E
Transense Technologies PLC
07 February 2018
7 February 2018
Transense Technologies plc
("Transense", the "Company" or the "Group")
Interim results for six months ended 31 December 2017
Transense Technologies plc (AIM: TRT), the provider of sensor
systems for the transportation and industrial markets, report the
results for the six months ended 31 December 2017.
Highlights:
-- Translogik revenues (iTrack & probes) up 96% to GBP1.02m (Dec 2016: GBP0.52m)
-- Group revenues of GBP1.07m (Dec 2016: GBP1.04m)
-- iTrack II opex rental model adopted at Glencore & BHP mines
-- Translogik probe revenues gaining momentum
-- Net loss before taxation for the period of GBP0.92m (Dec 2016: GBP0.95m)
-- Operating cash outflow before movements in working capital GBP0.72m (Dec 2016: GBP0.80m)
-- Net cash at end of period of GBP1.33m (Jun 2017: GBP2.52m)
Executive Chairman of Transense Technologies, David Ford,
said:
"During the first half of the financial year, Translogik has
achieved significant market traction for both tyre probes and the
iTrack II system for mine haul trucks. The progress made is not yet
fully evident in these financial results, however buying decisions
made by major customers during the period give rise to greater
visibility of future earning streams than the Company has ever been
able to achieve previously."
"Our relationship with GE continues to deepen, and interest in
SAW technology is spreading throughout their operating divisions
and central technical group. Furthermore, we continue to develop
potential applications in other sectors, including automotive and
marine, with positive results."
"We believe that we are well placed to increase our share of a
growing market for Tyre Pressure Monitoring Systems in large mine
haul trucks as adoption rates increase, although we recognise that
decision timescales continue to extend further than previously
envisaged. Meanwhile, in the on road commercial fleet market, we
believe that the specification of our range of tyre tread depth
probes by leading tyre producers will continue to generate
additional pull through of end user demand, and we remain confident
of further growth in this segment of our business."
For further information please visit www.transense.co.uk or
contact:
Transense Technologies plc Tel: +44 1869 238380
Graham Storey, Chief Executive
finnCap (Nomad and Joint Broker) Tel: +44 20 7220
Ed Frisby, Giles Rolls (Corporate 0500
Finance)
Tony Quirke, Abigail Wayne (Sales
& Broking)
Beaufort Securities (Joint Broker) Tel: +44 20 7382
Elliot Hance (Corporate Broking) 8300
About Transense Technologies
Based in Oxfordshire, UK, Transense has developed
patent-protected sensor systems and supporting technology for use
in a variety of diverse high growth markets. Transense's Surface
Acoustic Wave (SAW), wireless, battery-less, sensor systems offer
significant advantages over legacy wireless sensor systems.
Transense is targeting the transport and mining industries, and the
global torque, temperature and pressure sensing markets, via its
trading divisions, Translogik and SAWSense.
Transense's shares are admitted to trading on AIM, a market
operated by the London Stock Exchange (AIM: "TRT").
www.transense.co.uk
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014
Transense Technologies plc
Chairman's statement
The business strategy of the Group is to develop innovative
sensing solutions across a range of applications, which are
commercialised either through the launch of products and services
to customers or by forming strategic alliances with partner
organisations. Value is realised through a combination of
commercial income, royalties, licensing income and capital gains on
disposals.
During the first half of the financial year, Translogik has
achieved significant market traction for both tyre probes and the
iTrack II system for mine haul trucks. The progress made is not yet
fully evident in these financial results, however buying decisions
made by major customers during the period give rise to visibility
of future earning streams greater than the Group has ever
experienced.
Financial results
Revenues for the six months were marginally ahead of the prior
year at GBP1.07m (Dec 2016: GBP1.04m). Revenues generated by
Translogik from the sale of tyre probes and the sales and rental of
the iTrack system increased by 96% to GBP1.02m (Dec 2016: GBP0.52m)
demonstrating significantly increased market penetration. Revenues
generated by SAWSense stood at GBP0.05m compared with GBP0.53m in
the equivalent period last year (which included the initial licence
fee receivable from GE of GBP0.38m).
Operating expenses reduced by 6% to GBP1.52m (Dec 2016:
GBP1.61m) and the net loss before taxation from continuing
operations was GBP0.92m (Dec 2016: GBP0.95m). The total
comprehensive loss for the period was GBP0.92m (Dec 2016: GBP0.97m)
and earnings per share amounted to a loss of 9.70 pence per share
(Dec 2016: 10.30 pence).
Financial position and cash flow
Operating cash outflow before movements in working capital was
GBP0.72m (Dec 2016: GBP0.80m). Net cash used in operations for the
period was GBP0.88m (Dec 2016: GBP0.15m). Offering iTrack II to
customers on a rental basis results in a short term cash outlay and
requires investment in the initial months of each lease. The net
investment in fixed assets for such contracts in the period
amounted to GBP0.17m, however these will transition to be net cash
generative in future periods. We have also continued to invest in
development during the period, and expenditure supporting further
features and benefits in the iTrack II system amounting to GBP0.10m
has been capitalised in H1.
Taking into account the increased level of Translogik revenue
including the growing rental business the directors expect to see
the lower levels of cash consumption experienced in Q2 to continue
into the second half of the year.
The Company closed the period with net cash and cash equivalents
of GBP1.33m (30 June 2017: GBP2.52m). After careful consideration,
the directors consider that the going concern basis continues to be
appropriate for the preparation of these financial statements.
Operational review
SAWSense
SAWSense is a leader in the development of Surface Acoustic Wave
("SAW") wireless, battery-less, sensor systems that offer
significant advantages over legacy systems in common use. The
business continues to be involved in several live projects in
conjunction with major global industrial companies.
In July 2016, SAWSense entered into a significant licensing
agreement with General Electric Company (GE) for the use of our
patented, wireless, passive SAW technology in certain specific
torque applications. The Company received a license fee of GBP0.58m
in the previous financial year. In addition to the fee, GE are
likely to pay to Transense a perpetual sales royalty in respect of
unit sales upon final contract and agreement of commercialisation,
although this is not scheduled to take place for several years.
Our relationship with GE continues to deepen. GE have recently
appointed their torque sensor production sub-contractor for this
project, and interest in SAW technology is spreading throughout
their operating divisions and central technical group. Sensing is a
key component of GE strategy as part of their offering for the
Internet of Things, and we consider that we are well placed to
identify further applications and opportunities in due course.
Previous collaboration with a major European group for the use
of our technology in high value capital equipment has not
progressed as we had hoped, although it still has the potential to
bear fruit in the future. Application trials in low volume did
provide proof of technical concept, however the customer has not
yet determined an approach to monetise the technology in commercial
use.
We continue to develop potential applications in other sectors
with positive results. In the automotive field, work is now
progressing with Ford Motor Company and our Electronic Power
Assisted Steering ("EPAS") project is progressing with another OEM.
Our relationship with McLaren also remains encouraging, with two
new applications under consideration. We have recently expanded
into providing sensors for the Indy Lights series and are also
providing instrumented shafts for an R&D road car project.
Further projects are at the initial discussion stage.
In addition, we have received encouraging feedback on a
significant marine application, where our customer has conducted a
successful evaluation over a twelve month period and is beginning
to work on system industrialisation.
Translogik
Translogik has developed a range of products and services for
tyre pressure and temperature monitoring of mining haul trucks
marketed under the name iTrack. The division also markets a range
of tread depth probes and associated monitoring systems for use in
the passenger car, bus, truck and OTR sectors.
Translogik - iTrack
The reaction from mine owners, operators and tyre service
providers since the launch of the iTrack II system at MINExpo 2016
has been very encouraging. Following feedback from the many trials
in progress, the Board remains of the opinion that our system is
the most technologically advanced mining truck tyre pressure
monitoring system ("TPMS") available, offering specific benefits in
cost savings and operating efficiency that are not delivered by
competitors in the market to the same degree.
Our system has been selected by large mines owned by both
Glencore and BHP after showing positive trial results, and there
are early indications that wider adoption may be feasible in future
without need for mine specific trials on each site. The success of
our product launch, and the major steps forward offered by our
technology, have energised the major tyre producers in this field
to re-evaluate their own proprietary TPMS capabilities. Whilst this
could cause further delays in the adoption of iTrack II it could
also present Translogik with opportunities to work more closely
with selected partners.
We continue to deliver iTrack II on a rental model, which
enables users to recognise the monthly cost in operating overheads,
alongside the substantial savings in tyre operating costs and the
productivity gains that are evident when in use. Revenues in the
period derived from operating lease rentals increased from 8% of
revenues in the first half of the prior year to 25% in the current
period. As operating lease rentals can typically extend over a
three year period or longer, the sustainability of these revenues
into the future is increasing visibility and providing longer term
certainty of cash flows.
We currently estimate that TPMS has been adopted on only c.
10-15% of mine haul trucks in operation globally. We anticipate
that adoption rates will increase significantly in coming years,
driven by both more stringent safety requirements, and by
recognition of the productivity improvements offered by real-time
data analytics. We believe that we are well placed to increase our
share of a growing market, although we recognise that decision
timescales have extended further than previously envisaged.
Translogik - probes
Our range of tyre tread depth probes is compatible with the tyre
management systems of a number of the world's leading tyre
producers; in the first six months of our financial year we sold
probes to Continental, Michelin, Bridgestone, and Goodyear. Most
recently, Goodyear have specified our probe for use in conjunction
with their proprietary tyre management system, Goodyear Tire Optix,
which was launched to the US market in January 2018.
Revenues from the sale of probes in the first half of the year
exceeded GBP0.54m, which represented a significant increase
compared with the same period last year. In the on road commercial
fleet market we believe that the specification of our range will
continue to generate additional pull through of end user demand,
and we remain confident of further growth in this segment of our
business.
Outlook and prospects
We are closely engaged with a select number of the world's
leading companies, which are capable of generating very substantial
growth in future. Significant progress has been made in building
sustainable revenue streams and improving visibility of future
earnings. The net cash consumption requirements of the business are
reducing, and with strong margins the potential returns are high
once revenues are built to a level that exceeds operating
costs.
The directors consider that the technology and IP under the
Company's ownership, together with the vast applications expertise
and experience developed over many years, has a substantial value.
With Translogik revenues building and commercial traction
increasing, we continue to view the future with cautious
optimism.
David M Ford
Chairman
7 February 2018
Transense Technologies
plc
Condensed Consolidated Statement of Comprehensive
Income
Half year Full
to Half year to Year
31 Dec 30 Jun
17 31 Dec 16 17
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
-------------------------- ------------ ------------- ----------
Continuing operations
Revenue 1,074 1,040 2,003
Cost of sales (474) (395) (865)
------------ ------------- ----------
Gross profit 600 645 1,138
Administrative expenses (1,522) (1,607) (3,318)
Operating loss (922) (962) (2,180)
Financial income - 15 23
------------ ------------- ----------
Loss before taxation (922) (947) (2,157)
Taxation - (20) (4)
Loss from continuing
operations (922) (967) (2,161)
Discontinued operations
Loss from discontinued
operation - (5) (5)
Loss for the year (922) (972) (2,166)
------------ ------------- ----------
Other comprehensive
income:
Exchange difference
on translating foreign
operations 1 - 21
Other comprehensive
income for the year 1 - 21
Total comprehensive
income for the year
attributable to the
equity holders of the
parent (921) (972) (2,145)
============ ============= ==========
Transense Technologies
plc
Condensed Consolidated Statement of Financial
Position
31 Dec 31 Dec 30 Jun
17 16* 17
(Unaudited) (Unaudited) (Audited)
------------------------------- ------------ ------------ ----------
GBP'000 GBP'000 GBP'000
Non current assets
Property, plant and
equipment 387 284 258
Intangible assets 940 919 938
Trade lease receivables 3 181 59
1,330 1,384 1,255
------------ ------------ ----------
Current assets
Inventory 842 788 985
Corporation tax receivable - - -
Trade and other receivables 917 1,169 702
Cash and cash equivalents 1,326 3,310 2,520
------------ ------------ ----------
3,085 5,267 4,207
------------ ------------ ----------
Total assets 4,415 6,651 5,462
------------ ------------ ----------
Current liabilities
Trade and other payables (352) (586) (511)
Current tax liabilities (67) (54) (47)
Provisions (100) (100) (100)
------------ ------------ ----------
Total liabilities (519) (740) (658)
------------ ------------ ----------
Net assets 3,896 5,911 4,804
------------ ------------ ----------
Capital and reserves
Share capital 4,775 4,724 4,766
Share premium 26 - 22
Translation reserve 22 (15) 21
Accumulated reserve/(deficit) (927) 1,202 (5)
Shareholders' funds 3,896 5,911 4,804
------------ ------------ ----------
*Restated, see note 1
Transense Technologies plc
Condensed Consolidated Statement of Changes in
Equity (Unaudited)
Issued
share Share premium Translation Accumulated Total
capital account Reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July
2016 11,546 17,218 - (21,841) 6,923
Loss for the period - - - (2,166) (2,166)
Shares issued
and share premium 43 22 - - 65
Share reorganisation (6,823) (17,218) - 24,041 -
Costs of share
reorganisation - - - (39) (39)
Currency movement
on subsidiary
reserves - - 21 - 21
Balance at 30
June 2017 4,766 22 21 (5) 4,804
Loss for the period - - - (922) (922)
Translation of
foreign entity - - 1 - 1
Shares issued
and share premium 9 4 - - 13
Balance at 31
December 2017 4,775 26 22 (927) 3,896
--------- -------------- ------------ ------------ --------
Transense Technologies plc
Condensed Consolidated Statement
of Cash Flows
Half Half Full
year year year
to to to
31 Dec 31 Dec 30 Jun
17 16 17
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
(Loss) for the period (922) (947) (2,157)
Adjustments for
Financial income - (15) (23)
Depreciation of property,
plant and equipment 69 58 118
Amortisation and impairment
of intangible assets 130 114 238
Cost of capital restructure - - (39)
Loss on discontinued operation - (5) (5)
Unrealised currency translation
gain 1 - 21
------------ ------------ ----------
Operating cash flows before
movements in working capital (722) (795) (1,847)
------------ ------------ ----------
Change in receivables (215) 775 1,040
Change in payables (139) 32 (50)
Change in inventories 143 (217) (414)
Change in trade lease receivables 56 324
------------ ------------ ----------
Cash used in operations (877) (205) (947)
Taxation recovered/(paid) - 51 70
------------ ------------ ----------
Net cash used in operations (877) (154) (877)
------------ ------------ ----------
Cash flows from investing
activities
Interest received - 15 23
Acquisition of property,
plant & equipment (198) (27) (63)
Acquisition of intangible
assets (132) (138) (282)
Net cash used in investing
activities (330) (150) (322)
------------ ------------ ----------
Cash flows from financing
activities
Proceeds from issue of equity
share capital 13 - 65
Capital restructure costs - (40) -
Net cash used for financing
activities 13 (40) 65
------------ ------------ ----------
Net (decrease)/increase in
cash and cash equivalents (1,194) (344) (1,134)
Cash and cash equivalents
at beginning of period 2,520 3,654 3,654
Cash and cash equivalents
at end of period 1,326 3,310 2,520
------------ ------------ ----------
Notes to the Interim results for the six months to 31 December
2017
1 Accounting Policies
The Condensed Consolidated Financial Statements for the half
yearly report for the 6 months ended 31 December 2017 have been
prepared using accounting policies and methods of computation
consistent with those set in Transense Technologies plc's Annual
Report and Financial Statements for the year ended 30 June
2017.
The Condensed Consolidated Statement of Financial Position in
these Condensed Consolidated Financial Statements includes a
restatement in relation to current liabilities at 31 December 2016,
re classifying a credit balance as a Provision rather than as
previously included within Trade and other payables.
2 Reporting Entity
Transense Technologies plc. ("the Company") is a company
incorporated in the United Kingdom under the Companies Act 2006.
These condensed consolidated interim financial statements of the
Company as at and for the six months ended 30 December 2017
comprises the Company and its subsidiaries (together referred to as
"the Group" and individually as "Group entities"). These condensed
consolidated interim financial statements are presented in pounds
sterling, rounded to the nearest thousand.
The consolidated financial statements of the Group are available
upon request from the Company's registered office or at
www.transense.co.uk
These condensed consolidated interim financial statements are
unaudited.
3 Earnings per share
31 December 31 December 30 June
2017 2016 2017
------------ ------------ ----------
Shares Shares Shares
------------ ------------ ----------
Weighted average number
of shares
Issued at start of period 9,532,435 9,446,289 9,446,289
Effect of shares issued
in period 803 - 37,526
Weighted average number
of shares at end of period 9,533,238 9,446,289 9,483,815
----------------------------- ------------ ------------ ----------
Basic Earnings per share (9.70p) (10.30p) (22.78p)
----------------------------- ------------ ------------ ----------
Basic Earnings per share
excluding license fee and
discontinued operations (9.70p) (10.24p) (22.84p)
----------------------------- ------------ ------------ ----------
4 Revenue
Revenue Half year Half year Full year
to to to
31 Dec 31 Dec 30 Jun
17 16 17
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
------------------------- ------------ ------------ ----------
Chile 307 330 659
------------------------- ------------ ------------ ----------
United Kingdom & Europe 225 180 313
------------------------- ------------ ------------ ----------
Australia 182 84 104
------------------------- ------------ ------------ ----------
North America 159 394 703
------------------------- ------------ ------------ ----------
Rest of the World 201 52 224
Total 1,074 1,040 2,003
------------------------- ------------ ------------ ----------
5 Going Concern
The interim financial information has been prepared on a going
concern basis, which assumes that the Company will have adequate
resources to continue in operational existence for the foreseeable
future.
6 Corporation tax and Deferred tax
The Company is entitled to a Corporation Tax credit in respect
of expenditure on Research and Development. No deferred tax asset
is recognised in these financial statements in respect of trading
losses to date.
7 Consolidated Accounts
These accounts reflect the trading of IntelliSAW inc as
discontinued operations following the disposal of the business on
20 October 2015.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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