TIDMTRT
RNS Number : 7056Q
Transense Technologies PLC
02 March 2016
2 March 2016
Transense Technologies Plc
("Transense" or "the Company")
Interim results for six months ended 31 December 2015
Transense Technologies Plc (AIM: TRT), the provider of sensor
systems for the transportation and industrial markets, is pleased
to report positive results for the six months ended 31 December
2015.
The Group has achieved commercial progress in each of its
continuing business activities, although revenue growth has been
constrained by tough market conditions in the mining sector. The
sale of the intelliSAW division (with associated licensing income)
in October 2015 has both transformed the financial position of the
Group and validated the high value potential for our core
technology across a wide range of major global applications in the
longer term.
Highlights:
-- Adjusted revenues* up 33% to GBP1.04m (Dec 2014: GBP0.78m)
-- Adjusted loss* from continuing operations of GBP0.62m (Dec 2014 loss of GBP1.15m)
-- Sale of intelliSAW division to Emerson for GBP2.96m
(including associated licence income of GBP2.74m) in October
2015
-- Net profit for the period of GBP1.70m (Dec 2014 loss of GBP1.72m)
-- Net cash generated from operations of GBP1.43m (Dec 2014: GBP1.43m net cash consumed)
-- Net cash at end of period of GBP4.56m (Jun 2015: GBP0.47m)
-- Further engagement with world class partners in commercialising SAW technology
-- Increased penetration of iTrack system in tough market conditions
* from continuing operations and adjusted to exclude licence fee
income associated with the disposal of intelliSAW.
Executive Chairman of Transense Technologies, David Ford,
said:
"The sale of the IntelliSAW division to Emerson last October
increased the resources available to the Company. More importantly,
this transaction has signalled to the industrial marketplace that
SAW (Surface Acoustic Wave) sensing is not only a mature
technology, but also a valuable one.
Reasonable progress has been made in commercialising products
and services sold through our Translogik division, although this
has been constrained to an extent by ongoing difficulties
experienced by our customers in the mining sector.
We continue to be optimistic about prospects for each of our
current business streams, although our approach to the short-term
outlook is more cautious whilst these conditions prevail."
For further information please visit www.transense.co.uk or
contact:
Transense Technologies Tel: 01869 238380
Plc
Graham Storey, Chief Executive
finnCap Tel: 020 7220 0500
Ed Frisby, Giles Rolls
(Corporate Finance)
Tony Quirke, Alice Lane
(Corporate Broking)
IFC Advisory Tel: 020 3053 8671
Tim Metcalfe, Graham Herring,
Heather Armstrong
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
Transense Technologies Plc
Chairman's statement
The financial results for the six months ended 31 December 2015
show that reasonable progress has been made in commercialising
products and services sold through our Translogik division,
although this has been constrained to an extent by ongoing
difficulties experienced by our customers in the mining sector.
The sale of the IntelliSAW division to Emerson last October
increased the resources available to the Company. More importantly,
this transaction has signalled to the industrial marketplace that
SAW (Surface Acoustic Wave) sensing is not only a mature
technology, but also a valuable one. SAWSense has seen an increase
in the number of live projects in conjunction with major global
industrial companies, building confidence in the prospects of these
leading to successful commercialisation in the longer term.
Financial results
Revenues for the six months increased to GBP3.77m (Dec 2014 :
GBP0.78m) and included a one-off license fee received from Emerson
for use of the intellectual property required by IntelliSAW.
Excluding the effects of this license fee, the adjusted revenue was
GBP1.04m, representing an increase of 33%.
The adjusted net loss before taxation from continuing
operations, also excluding the license fee, was GBP0.61m, an
improvement of 47% compared with the corresponding period (Dec
2014: GBP1.15m). Total comprehensive income for the period was
GBP1.70m (Dec 2014: loss of GBP1.72m) and earnings were 0.38 pence
per share and adjusted to exclude IntelliSAW a loss of 0.13 pence,
(Dec 2014: loss of 0.39 pence).
Financial position and cash flow
Net cash generated from operations was GBP1.43m (Dec 2014:
GBP1.43m used by operations). This includes net cash received in
respect of the license fee of GBP2.45m. The balance of the license
fee of GBP0.26m is held in Escrow until the first anniversary of
the transaction in October 2016 and is reflected in the Company's
Balance Sheet under other receivables.
Taken together with the proceeds of the issue of equity of
GBP2.46m earlier in the period, the company is now in a strong
financial position with net cash and cash equivalents at the end of
the period of GBP4.56m (30 June 2015: GBP0.47m).
As at 31 December 2015 Shareholders' funds totalled GBP7.53m
which included an accumulated deficit in reserves of GBP21.24m. The
board is considering the steps that may be taken to eliminate this
deficit, and will provide further information in due course.
Strategy
The business strategy of the Group is to develop innovative
sensing solutions across a range of applications, which are
commercialised either through 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.
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. It has
engaged with a select group of world class companies to develop
applications to full commercialisation; a process that is ongoing
and can take many years to bring to realisation.
Technical and commercial activities are continuing to move
ahead. The signing of a Memorandum of Understating (MOU) in May
2015 with GE, a provider of products to the global Power and Water,
Oil and Gas, Energy Management, Aviation, Healthcare, and
Transportation industries, has provided a catalyst for new
developments and an excellent working relationship is developing
between the respective technical teams, bringing together
SAWSense's SAW technology expertise with GE's proficiency in
large-scale production and product delivery. The transfer of
technology continues with the qualification and industrialisation
process ongoing between several sites and locations. We are
increasingly positive about the commercial prospects of this
collaboration and have already seen both a deepening and widening
of the potential adoption of our technology in GE applications.
We are also working with another major global partner, based in
Europe, which following the transfer from their R & D
facilities has placed orders for initial low volume production.
Projects continue with major US automotive OEMs for both new
project developments and repeat evaluation orders following
successful initial technology trials. Motorsport continues to
provide a modest revenue stream via the sale of product and
provision of royalties, and the division overall is moving towards
a point whereby customer funded projects will cover attributable
costs.
Translogik
Translogik has developed and markets a range of products and
services for tyre pressure and temperature monitoring of mining
haul vehicles under the name, iTrack. The division also markets a
range of probes and associated monitoring systems for use in
passenger car, bus and truck sectors. Our short-term aim is to
generate revenues and margins in this business sufficient to enable
the Group to be profitable and self-sustaining.
Translogik - iTrack
It is evident that the mining sector has come under increasingly
severe financial pressure in recent months as a result of
unprecedented reductions in the prices of most major commodities.
Our customers, amongst the largest global players in this field,
are suffering abnormally high levels of volatility, uncertainty and
cost cutting.
Our products and services to this sector are proven to reduce
operating costs and increase productivity. In field trials, we have
a consistent track record of outperforming alternative providers,
with regard to product features, support services and reliability.
We have been able to offer more flexible financing terms such as
operating lease rentals, to facilitate buying decisions to be made
more easily. Despite these benefits, there is an inevitable adverse
effect as current market conditions extend the decision making
cycle.
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Until global conditions improve, we have continued to focus on
our key target markets in Chile and Australia, and we have deepened
our presence in these regions. In Chile, we now have three
full-time staff based in Antofagasta, both to support the live
iTrack systems and new sales efforts both in Chile, and in the
wider South American market. They all have previous experience of
working within the Chilean mining industry, understand the needs of
our customers and are able to deliver considerable value to mine
operators through regular meetings where insights gained through
the system can be used to drive efficiency gains and cost savings.
The increasing amount of live data that is being gathered and
analysed provides a compelling body of evidence regarding the
commercial value of the system. Specific studies carried out by
Translogik Chile, have allowed mine vehicles to operate faster
within the existing operating constraints of the tyres, which is a
major benefit to operators in the current cost-conscious economic
climate.
In Australia, several trials are continuing and commencing
shortly, and we now have a full-time employee, with many years'
experience managing the tyres of large mining vehicle fleets,
running our new dedicated iTrack control room. This is a new
service that provides live support for our iTrack fleets, and
allows us to offer real-time alerts and communications on
individual vehicle performance.
The Board continues to monitor developments closely, but is
maintaining a cautious stance towards increasing our footprint
further until there are clear signs of improved conditions. Whilst
this may be viewed as a short-term setback, we continue to have
confidence in our offering and our channel partners, and in the
medium to longer-term prospects.
Translogik - probes
In December 2015, we announced an agreement with Continental
Reifen Deutschland GmbH, to supply its ContiTrade unit with the new
iOS compatible version of our TL-G1 Tyre Inspection Probe.
Deployment has commenced, with further orders anticipated in due
course.
The tyre inspection probes will be used as part of ContiTrade's
tyre management system, "FleetFox". This customer-focused system
provides accurate, real-time information on tyre pressure, tread
depth and overall tyre condition, including any potential damage,
to provide recommendations on optimal usage and estimates for
remaining tyre life and anticipated replacement dates.
With several major tyre companies now employing Translogik tyre
inspection probes within the new breed of electronic diagnostic
reporting systems, it is becoming recognised as an industry
standard.
Our probe offerings, while continuing to sell steadily, have not
yet achieved the market traction that we were anticipating. We have
established channel relationships with major players in the various
regional marketplaces and are well positioned to benefit when end
user adoption starts to accelerate.
Outlook
We continue to make solid progress in developing valuable
intellectual property, and moving from application towards
commercial success. The rate of conversion to revenue has been
somewhat constrained, especially in the current unprecedented
climate in mining; one of our key sectors in which short-term
success has been beckoning.
The realisation of our investment in IntelliSAW has demonstrated
the inherent worth of our core technology, and provided the
additional financial resources to take the business forward.
We continue to be optimistic about prospects for each of our
current business streams, although our approach to the short-term
outlook is more cautious whilst these conditions prevail.
David M Ford
Chairman
2 March 2016
Transense Technologies
plc
Condensed Consolidated Statement of Comprehensive
Income
Half year Half year Full
to to Year
31 Dec 31 Dec 30 Jun
15 14 15
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------ ----------
Continuing operations
Revenue 3,777 777 1,248
Cost of sales (368) (267) (409)
------------ ------------ ----------
Gross profit 3,409 510 839
Administrative expenses (1,318) (1,709) (3,040)
Operating profit/(loss) 2,091 (1,199) (2,201)
Financial income 28 41 74
------------ ------------ ----------
Profit/(loss) before taxation 2,119 (1,158) (2,127)
Taxation 20 4 48
Profit/loss from continuing
operations 2,139 (1,154) (2,079)
Discontinued operations
Loss from discontinued
operation (473) (565) (1,041)
Sale of goodwill from
disposal of discontinued
operation 32 - -
Total comprehensive income
for the period 1,698 (1,719) (3,120)
------------ ------------ ----------
Transense Technologies
plc
Condensed Consolidated Statement of
Financial Position
31 Dec 31 Dec 30 Jun
15 14 15
(Unaudited) (Unaudited) (Audited)
----------------------------- ------------ ------------ ----------
GBP'000 GBP'000 GBP'000
Non current assets
Property, plant and
equipment 273 258 316
Intangible assets 741 852 806
1,014 1,110 1,122
------------ ------------ ----------
Current assets
Inventory 500 762 584
Corporation tax receivable 68 141 45
Trade and other receivables 1,830 1,852 1,323
Cash and cash equivalents 4,560 1,526 472
------------ ------------ ----------
6,958 4,281 2,424
Assets held for sale - - 307
------------ ------------ ----------
6,958 4,281 2,731
------------ ------------ ----------
Total assets 7,972 5,391 3,853
------------ ------------ ----------
Current liabilities
Trade and other payables (397) (590) (418)
Current tax liabilities (46) (41) (48)
------------ ------------ ----------
(443) (631) (466)
Liabilities held
for sale - - (79)
------------ ------------ ----------
Total liabilities (443) (631) (545)
------------ ------------ ----------
Net assets 7,529 4,760 3,308
------------ ------------ ----------
Capital and reserves
Share capital 11,546 9,779 9,779
Share premium 17,219 16,523 16,523
Accumulated deficit (21,236) (21,542) (22,994)
Shareholders' funds 7,529 4,760 3,308
------------ ------------ ----------
Transense Technologies
plc
Condensed Consolidated Statement
of Changes in Equity (Unaudited)
Issued Shares
share Share premium to be Accumulated Total
capital account issued deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July
2014 9,724 16,329 249 (19,882) 6,420
Loss for the period - - - (3,120) (3,120)
Transfer between
reserves 55 194 (249) - -
Share based transactions - - - 8 8
Balance at 30
June 2015 9,779 16,523 - (22,994) 3,308
Profit/(loss)
for the period - - 1,698 1,698
Shares issued
and share premium 1,767 696 - - 2,463
Share based transactions - - - 60 60
Balance at 31
December 2015 11,546 17,219 - (21,236) 7,529
--------- -------------- -------- ------------ --------
Transense Technologies plc
Condensed Consolidated Statement
of Cash Flows
Half Half Full
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