TIDMTRT
RNS Number : 7175A
Transense Technologies PLC
27 September 2022
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 which is part of UK law by
virtue of the European Union (withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now
considered to be in the public domain.
27 September 2022
Transense Technologies plc
("Transense" or the "Company")
Final results for the year ended 30 June 2022
& notice of investor presentation
Transense Technologies plc (AIM: TRT), the provider of
specialist sensor systems, reports another year of strong financial
results. The directors are pleased with the solid progress made in
each of the Company's three business segments, and are confident of
expanding on this in the current financial year. Accordingly, they
propose to invest a portion of internally generated cash flow in a
new GBP650,000 share buy-back programme announced today.
Financial highlights:
-- Revenue up 49% to GBP2.63m (FY21: GBP1.77m)
-- iTrack royalty increased 88% to GBP1.56m (FY21: GBP0.83m)
-- Translogik probe revenue up 16% to GBP0.88m (FY21: GBP0.76m)
-- SAW revenue up 11% to GBP0.20m (FY21: GBP0.18m) with
substantially increased customer engagement
-- Profit before taxation of GBP0.27m (FY21: loss of GBP0.16m)
-- Earnings per share up more than fivefold to 5.36 pence (FY21: 0.96 pence)
-- Cash and cash equivalents at year end of GBP1.06m (FY21: GBP1.05m)
-- Completed share buybacks of GBP0.30m (FY21: GBPNil)
-- Distributable reserves at year end of GBP1.20m (FY21: GBP0.63m)
Executive Chairman of Transense, Nigel Rogers, said:
"The annualised rate of iTrack royalty income now exceeds GBP2m,
which more than covers the fixed overhead costs of the Company, and
Translogik probes revenues are approaching GBP1m per annum with
ample scope for further growth. We are now also achieving real
traction with SAW technology across our target industry sectors,
illustrated most recently with the collaboration with Meggitt in
aerospace, supported by a growing pipeline of new potential
customer engagements.
"The directors are confident that the Company's business model
is resilient, that further increases in profitability and cash flow
are deliverable, and that the long term prospects for the Company
continue to build."
Investor Presentation: 4pm today, Tuesday 27 September 2022
Nigel Rogers (Executive Chairman) and Melvyn Segal (Chief
Financial Officer) will provide a presentation to review the
Company's results and prospects at 4pm on Tuesday 27 September
2022. The presentation will be hosted through the online platform
Investor Meet Company.
To attend the presentation, investors can sign up to Investor
Meet Company for free and select to meet Transense Technologies plc
via the following link:
https://www.investormeetcompany.com/transense-technologies-plc/register-investor
. Investors who have already registered and selected to meet the
Company will automatically be invited to the presentation.
Questions can be submitted before the event to
transense@walbrookpr.com or in real time during the presentation
via the "Ask a Question" function.
For further information please visit www.transense.com or
contact:
Transense Technologies plc Tel: Via Walbrook PR
Nigel Rogers (Executive Chairman)
Melvyn Segal (CFO)
Allenby Capital (Nominated Adviser and Tel: +44 (0)20 3328
Broker) 5656
Jeremy Porter/George Payne (Corporate Finance)
Tony Quirke (Sales& Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933
Tom Cooper/Nick Rome 8780
Transense@walbrookpr.com
Notes to Editors:
Transense is a developer of specialist wireless sensor systems
used to enable real-time data gathering and monitoring. Products
include the patent protected Surface Acoustic Wave (SAW) sensor
technology, used to improve equipment power, performance,
reliability and efficiency; iTrack, Transense 's Tyre Pressure
Monitoring System, licensed to Bridgestone Corporation, the world's
largest tyre producer, under a ten-year deal in June 2020; and a
range of intelligent tyre monitoring equipment under the Translogik
brand. Target sectors include aerospace, electric motors &
drives, industrial machinery and performance automotive.
The Company's strategy is to maximise shareholder value through
the delivery of sustained revenue growth from all three principal
technologies - SAW, iTrack and Translogik probes - through
leveraging excellence in innovation, know-how in commercialising
technologies, industry partnerships and exposure to global growth
markets.
Transense is headquartered in Oxfordshire, UK, and was admitted
to trading on AIM, a market operated by the
London Stock Exchange (AIM: TRT), in 1999. www.transense.com
For further information please contact transense@walbrookpr.com .
Chairman's statement for the year ended 30 June 2022
I am pleased to report another year of strong financial results
and good further progress in the development of each of the
company's three business segments. The latest post year end monthly
iTrack royalty income has an annualised rate of in excess of GBP2m,
Translogik probes revenues are approaching GBP1m per annum with
ample scope for further growth, and increased business development
activities for Surface Acoustic Wave (SAW) sensor technology are
building a pipeline of potential customers in our key target market
sectors.
Business strategy
The business strategy of the Company remains 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.
There are currently three business segments comprising royalty
income from iTrack, Translogik tyre monitoring equipment, and the
commercialisation of Surface Acoustic Wave (SAW) sensor
technology.
Progress in the development of each of these segments during the
year, and plans for the future, are set out in the Operating and
Financial Review. The directors set out mid-term strategic goals
for the Company's businesses in June 2020, immediately following
the completion of the iTrack licence with Bridgestone. Since that
time, financial results have been in line with or ahead of
expectations, and the directors continue to be pleased with
progress.
Financial overview
Growth in revenue, profitability and cash generation were each
delivered at rates consistent with those set in the strategic goals
in June 2020. This resulted in net earnings of 5.36 pence per
share; a fivefold increase on the prior year level of 0.96
pence.
Net cash generation (before financing activities) in the year of
GBP0.30m was re-invested in the purchase of Company shares (which
were put into treasury) under the buy-back programme announced in
February 2022. At the end of the financial year, the Company had
net assets of GBP3.09m (FY21: GBP2.34m), reserves stood at
GBP1.50m, of which GBP1.20m are distributable (FY21: GBP0.63m), and
net cash and cash equivalents of GBP1.06m (FY21: GBP1.05m). The
directors are confident of further progress in the upcoming
financial year and propose to continue to re-invest a portion of
internally generated cash flow in a new share buy-back programme of
GBP0.65m announced today.
Corporate Governance, board structure and composition
The directors are committed to the framework and principles of
the QCA Corporate Governance Code ("the Code") and seek to apply
these wherever this is practicable. Full application of the Code,
with the implications that this may have on board and compliance
costs, is counterbalanced by the scale of the Company and the
relatively low risk profile of its operations.
The three directors who have served throughout the year each
have many years' experience as both executive and non-executive
directors of fully listed and AIM-quoted companies, and recognise
the broader needs of shareholders and other stakeholders in all of
their dealings. During the year the Board was further strengthened
by Nick Hopkins joining as Chief Operating Officer and Ryan Maughan
(in a part time capacity) as Business Development Director. At the
time of their appointment in December 2021 it was also announced
that the Board intends to appoint an additional independent
non-executive director, and this process is currently underway.
The directors maintain constructive dialogue with major
shareholders on the development of the business and associated
governance matters and will continue to ensure that any feedback is
addressed promptly and effectively. Furthermore, there are
opportunities for regular engagement with all shareholders with
full details set out on the Company's website.
Share buyback programme
In February 2022, the Company announced the commencement of a
programme to conduct market purchases of ordinary shares of 10
pence each in the Company up to maximum aggregate purchase value of
GBP0.30m. This programme was completed on 26 May 2022 with the
Company having acquired 434,000 ordinary shares for treasury at an
average price of 70 pence each.
During the financial year the share price fluctuated between
58.0 pence and 122.5 pence and averaged approximately 85 pence. The
directors consider that recent weakness in the share price reflects
macro-economic and stock market driven concerns which are unrelated
to the performance and prospects for the business. Accordingly, the
directors continue to view the Company's shares as undervalued and
have today announced a new programme of market purchases on similar
terms to the previous programme but with a maximum aggregate value
of GBP0.65m, of which GBP0.50m is subject to the renewal of
shareholder approval for such market purchases at the upcoming
Annual General Meeting.
Current trading and outlook
In the first two months of trading since the end of the
financial year the total revenues have increased year on year by
19%.
The royalty income stream from iTrack is proving reliable and
continuing to grow strongly with the post year annualised royalty
run rate now comfortably exceeding the fixed overheads of the whole
Company. In addition, our commercial relationships in Translogik
are continuing to strengthen and offer further growth potential as
fleet managers seek to make cost savings. Finally, we are achieving
real traction with SAW technology across a range of high growth
industry sectors, illustrated most recently with the collaboration
with Meggitt in aerospace, which provide a sound basis for optimism
for the future.
Accordingly, the directors are confident that the Company's
business model is sufficiently resilient to withstand the current
challenging global economic outlook and look to the future with
confidence.
Nigel Rogers
Executive Chairman
27 September 2022
Strategic Report
Operating and Financial Review
Results for the year
Revenues for the year increased by nearly 50% to GBP2.63m (FY21:
GBP1.77m), driven primarily by gathering momentum on royalty income
from iTrack. Gross margin improved to 84.9% of revenue (FY21:
78.3%) amounting to GBP2.23m (FY21: GBP1.39m).
Administrative expenses underwent a planned increase to GBP1.97m
(FY21: GBP1.58m), mainly as a result of additional headcount and
travel to support development of the SAW business. The Earnings
before Interest, Taxation, Depreciation and Amortisation adjusted
for the charge for share-based payments was GBP0.62m (FY21:
GBP0.10m), and the net profit before taxation was GBP0.27m (FY21:
net loss of GBP0.16m).
There was a credit for taxation of GBP0.61m (FY21: GBP0.31m)
arising from the increase in the deferred taxation asset relating
to the use of previous years' tax losses in future. As the Board
has growing confidence in the future profitability, the deferred
taxation asset now reflects a forecast period of two years rather
than the use of one year previously. In total, the Company has UK
tax losses available to carry forward at 30 June 2022 in excess of
GBP22m, which are available for offset against future profits
subject to HMRC agreement, of which approximately GBP2.58m is
currently recognised for deferred taxation purposes (FY21:
GBP0.19m).
The resulting net total comprehensive income attributable to
equity shareholders was GBP0.88m (FY21: GBP0.16m) resulting in
earnings per share of 5.36 pence (FY21: 0.96 pence).
Segmental review
iTrack royalty income
Royalty income from iTrack generated income of GBP1.56m during
the year, representing an increase of 88% over the level in the
first year of the licence to 30 June 2021 (FY21: GBP0.83m). By the
end of the year, the installed base had risen to more than 2.75
times that which prevailed at the outset of the licence, and the
annualised royalty run rate had increased to GBP1.88m, compared
with GBP1.12m at 30 June 2021, and GBP0.64m at inception in June
2020.
Royalty income is denominated in United States Dollars (US$).
The rate of exchange changed adversely in the first year of the
licence as Sterling strengthened against the US$, however in the
year to 30 June 2022 this reversed to close in the Company's
favour. During the year the directors implemented a policy of
hedging forward around 80% of estimated future income by up to one
year to take advantage of this opportunity and achieved an average
rate around USD1.20 to GBP1 which compared very favourably with the
opening rate at the time of the deal being USD1.25 and the peak
rate during the financial year being just under USD1.4. However
since securing these rates the directors note that GBP has fallen
by a further 10% against USD.
Bridgestone Corporation, Japan, continues to indicate that
iTrack is a key strategic component of their mobility solutions
business and expresses confidence in the future growth potential
for this technology.
Translogik tyre monitoring
Our range of tyre monitoring equipment marketed under the
Translogik brand generated revenue of GBP0.88m; an increase of
almost 16% over the prior year (FY21: GBP0.76m), and the segmental
result was up by a third to GBP0.36m (FY21: GBP0.27m).
The modular TLGX range is now firmly established and this has
facilitated the decision to phase out the TL-G1 range which is now
well underway. This process has provided many opportunities to
up-sell products with more sophisticated features, which together
with favourable exchange rates increased gross margins in this
segment from 50.4% of revenue in FY21 to 55.7% in FY22.
The Directors believe that working closely with the leading
global tyre manufacturers has resulted in the Translogik probe
becoming a tool of choice to diagnose mandatory commercial vehicle
tyre safety and condition inspection data for their fleet
management systems, and this has substantially increased sales
opportunities. The technology has been shown to deliver reduced
costs and improved collection of data which helps commercial
vehicle fleets comply with safety inspection regulations and manage
the significant costs of their tyres more effectively, again, key
objectives for the future. As market penetration continues to
build, we are also becoming increasingly aware of opportunities for
additional features and enhanced software compatibility to maintain
leadership in this market sector. This process further cements our
relationships with major tyre manufacturers. The business has
continued to expand beyond these important clients, and has new
relationships in the fleet management arena, including software
developers and manufacturers of complementary hardware
products.
Surface Acoustic Wave (SAW)
SAW generated revenue of GBP0.20m (FY21: GBP0.18m) and operating
overheads for the segment increased slightly from GBP0.92m to
GBP1.14m, reflecting increased headcount adding new senior people
to both business and technical development. Revenue was derived
mainly from low volume production of instrumented shafts either for
motorsport or for customer evaluation projects, whilst increased
headcount was required to manage new business opportunities and
technical support which are yet to deliver revenue.
There is a broad range of potential market applications for SAW
technology which have been explored fully, especially over the past
two years with the support of the commercial advisory panel
(SAWCAP). Our market focus for SAW technology has now settled on
four sectors in which there are applications with clear
differentiated benefits.
Target market sectors for SAW technology:
Aerospace
The measurement of torque is common practice in all types of
aerospace engines, and is used to improve safety, pilot control and
engine reliability. Our SAW technology offers advantages in these
applications due to its accuracy over other technologies. Our
sensor system is robust, and compact in size and weight. Its
ability to measure or compensate for temperature fluctuations, and
immunity from background electromagnetic interference, make it the
ideal choice.
The case for using SAW in aerospace applications was proven in
2016 by the specification of SAW sensor technology under licence
from Transense on the GE ITEP programme to re-engine Apache and
Blackhawk helicopters for the US Army. The First Engine to Test
under this programme was built successfully earlier this year, and
low volume production is planned to commence in 2024/25.
In May 2022, an amending agreement was signed between Transense
and GE Aviation to extend the scope of the field of use of their
licence to encompass work for the Hybrid Electric Altitude Testbed
flight demonstrator (HEAT) Programme. This programme covers the
build of a SAW torque measurement system for evaluation in both
test laboratory and flight test conditions. Although there is no
current intention for this programme to directly enter commercial
production, Transense is involved in the development phase over the
period to 2024 to provide technical know-how, limited supply of
critical components and the provision of calibration services at
agreed commercial rates.
More recently, in September 2022, the Company entered into an
important collaboration with Meggitt SA, the leading designer and
manufacturer of complete condition monitoring, vibration monitoring
and measurement solutions for the aerospace and energy markets.
Under a new Memorandum of Understanding, the Company will support
Meggitt's evaluation of potential future market opportunities in
the aerospace sector. Meggitt has indicated that our SAW technology
has the potential to become a great addition to its Engine Sensing
portfolio as part of its strategy to support global engine OEM
customers. There is a shared aim to enter into a licensing
agreement prior to 31 December 2023 covering one or more fields of
use in aerospace.
Electric Motors and Drives (EMD)
As the market for electrified vehicle powertrain develops
rapidly, the quest to deliver improved efficiency and performance
in electric drive systems is paramount. Maximising vehicle range
for a given battery capacity is a key target of every powertrain
development programme, alongside maintaining and improving the
safety integrity of the powertrain system.
The present state of the art is to use advanced torque
estimation techniques based on electrical current and rotational
speed measurements. Accurate torque measurement is desirable but
has not been possible using competing torque measurement systems.
Using SAW sensors eliminates the need for estimation and gives
reliable torque and temperature measurement from the motor rotor
that can be used to improve both motor efficiency and safety.
In May 2022, the Company secured a place on the Advanced
Propulsion Centre (APC) Technology Developer Accelerator Programme
(TDAP) in a competitive process. Alongside grant funding of up to
GBP0.13m, this programme provides access to advice and support from
the APC and their delivery partners focusing on product
development, market strategy, intellectual property management and
networking. The initial phase of this work is underway and it will
progress through the current financial year. Grant income of
GBP0.02m was recognised in the year ended 30 June 2022, and the
remaining available funding is expected to be realised in the year
to 30 June 2023 and 2024.
EMD also has links into the other sectors with increasing
electrification in aerospace and industrial machinery.
Industrial Machinery (including Off-Highway Vehicles, Heavy
Industrial Engines and Robotics)
Industrial Machinery provides the backbone of many sectors, from
mining and construction to agriculture, materials handling and
logistics. Industrial machines are becoming increasingly complex
with more features and controls and are being developed to do more
work for a given amount of power. There is also a clear drive to
partly or fully automate machinery and deploy more robotics in
industry.
The propulsion systems in off-highway vehicles and other
machines transmit drive forces through a rotating shaft to drive
the wheels or other systems such as hydraulic pumps and gas
turbines. The demanding nature of these heavy-duty applications
means that implementing traditional torque sensor technology is
difficult and it is more common to rely on shaft speed data as an
alternative.
The use of SAW sensing of torque and/or temperature can improve
accuracy, efficiency and power distribution, all of which can also
contribute to the ability to operate such machines remotely or on a
fully autonomous basis. Transense SAW sensor technology is under
ongoing trial by a major producer of agricultural machinery. The
project is progressing on schedule and is expected to strengthen
the business case for the use of SAW in this sector.
The global market for industrial robotics is expanding rapidly
and is accelerated by the advent of lower cost collaborative robots
that are easier and less costly to deploy. These robots have a
position and torque sensing system embedded into every joint to
allow automated control and safe operation, which are generally
reliant on strain gauge or displacement sensors. Whilst these
sensors are low cost and suitable for simple applications, they
lack the robustness required in some harsh environments and can be
susceptible to electromagnetic interference. Furthermore, each of
these existing technologies requires an element of twist or flex in
the robot's joints, which means that the robotic arm will flex in
operation, limiting performance and repeatability, yet increasing
safety and reliability.
Transense SAW sensor technology can provide an improved way to
measure torque, rotation and temperature in a robotic system,
virtually eliminating flex and creating high performing and more
repeatable robots with more compact joints than has been possible
previously.
Motorsport and high-performance vehicles
Transense SAW technology has been in use for several years in
premium motor sport driveline applications to measure delivered
torque in race vehicle drivetrain for monitoring and regulatory
compliance purposes. In September 2021, the Company entered into a
five-year Joint Collaborative Agreement (JCA) with McLaren Applied
Ltd to further develop non-contact torque products for this sector.
Under the JCA. McLaren has exclusive access to the technology for
the premium motor sport market in exchange for meeting minimum
target revenues on an annual basis over five years. Progress under
the JCA has been in line with our initial expectations and a number
of new customer opportunities are in development.
The motorsport market offers limited scale as a consequence of
the relatively low number of vehicles in operation but is a proving
ground for new automotive technology which may subsequently be
adopted in mainstream vehicles. There is strong overlap with EMD as
high volume performance vehicles are increasingly being developed
using electric drivetrain.
Business development activities
In view of the positive indications for the development of
applications in which SAW offers benefits over other methods of
torque measurement, and with clear target market sectors in view,
it became appropriate during the year to inject additional business
development resource. Ryan Maughan joined the Board in a part-time
role as Business Development Director in December 2021, and his
involvement has generated a growing pipeline of potential customer
engagements which can be summarised as follows:
Number of potential customers by sector as at 26 September 2022
(July 2021)
Electric Industrial Performance
Aerospace Motors & Machinery Automotive Total
Drives
Stage 4 - Contracted 1 (1) 0 (0) 0 (0) 1 (1) 2 (2)
------------ ---------- ----------- ------------ --------
Stage 3 - Contract
under negotiation 1 (0) 0 (0) 0 (0) 0 (0) 1 (0)
------------ ---------- ----------- ------------ --------
Stage 2 - In development 1 (0) 1 (0) 1 (1) 0 (1) 3 (2)
------------ ---------- ----------- ------------ --------
Stage 1 - Active enquiry 4 (3) 10 (0) 4 (0) 0 (0) 18 (3)
------------ ---------- ----------- ------------ --------
Total 7 (4) 11 (0) 5 (1) 1 (2) 24 (7)
------------ ---------- ----------- ------------ --------
There is now a healthy and growing pipeline of active customer
engagement, where the minimum requirements for an enquiry to be
considered active are met. These include pre-qualification that the
project is technically feasible, and is known to be supported by
decision makers and budget holders in the customer
organisation.
There will normally be a significant time lag in progressing
enquiries from stage 1 to stage 4, and much more work to be done.
It is also more than likely that timescales can be extended, and
that some will not mature into revenue. Nevertheless, the progress
made in recent months provides indication of future growth
potential, and a number of projects are close to moving from
enquiry stage to some form of paid engineering project, which will
increase the revenue of this segment with no significant additional
costs.
Operations and engineering activities
Nick Hopkins, who joined the Company to lead the SAW business
during the reorganisation phase in 2020, became Chief Operating
Officer and joined the Board in December 2021.
In parallel with the opening up of new commercial opportunities,
resources have been applied in developing the technical and
operational capabilities that will be required to satisfy
increasing customer demand for chargeable development projects,
leading into engineering support for transfer of SAW into
production.
Unlike some alternative torque and temperature sensing devices,
SAW components require a degree of customisation in order to unlock
their unique benefits specific to each application and are
therefore not sold "out of the box". This calls for detailed
application engineering, covering for example the methods for
bonding components to OEM equipment, and calibrating the output
signal for accuracy and repeatability across the temperature
cycle.
To advance our knowledge and experience in these areas, Andy
Bullock joined the Company in July 2022 in the newly created role
of Technical Director. He brought a proven record of leading the
design and development of complex electronic solutions and
associated manufacturing processes. The primary focus is to build
the engineering capability of the business to meet customer demand
for practical support in application of SAW technology, both
in-house for proto-typing, development and pilot production, and
through the provision of technology transfer to potential
licencees.
Working in partnership
It has been an important feature of the Company's business model
to work closely with some of the world's largest and most respected
companies in collaborative partnerships to facilitate market access
that would otherwise challenge the financial resources of a
specialist innovator. This has led to the successful licensing of
SAW technology to GE and Emerson, and the iTrack licence granted to
Bridgestone in 2020.
This approach is maintained in our recent announcement of the
new collaboration with Meggitt in the aerospace sector. The
directors consider that working alongside a company of Meggitt's
stature will expand our capacity to develop customers in this
rapidly changing sector and will continue to support this
partnership approach in other segments where suitable opportunities
arise to increase access to markets, customers, supply chain and/or
engineering and production capabilities.
Prospects for SAW
Taken as a whole, there has been much progress during the year
and clear signs of traction across high value growth markets. The
level and quality of customer engagement has increased
substantially, and the engineering tasks required to enable
customers to apply our technology in a more accessible manner are
underway.
It will remain a time consuming process to convert qualified
enquiries into development projects, and transition these through
to full production, and doubtless not all will mature. The
directors consider, however, that the prospects of future
commercial success for SAW are building .
Financial position and cash flow
The Company's financial position strengthened further during the
year with net assets increasing to GBP3.09m (FY21: GBP2.34m) as a
result of the retention of net profits after taxation. Net
available cash balances amounted to GBP1.06m (FY21: GBP1.05m), and
the final quarter royalty income on iTrack receivable on 31 July
2022 stood at GBP0.47m (FY21: 0.26m).
Net cash generated from operations amounted to GBP0.41m (FY21:
net cash used of GBP0.25m). This was re-invested in capital
expenditure of GBP0.10m (FY21: GBP0.05m) and in the share buy-back
programme during the final quarter of the year totaling GBP0.30m,
leaving net cash balances unchanged over the year.
The directors anticipate that the Company will continue to be
cash generative for the foreseeable future and will accumulate
further cash balances well in excess of the buy-back programme
currently proposed.
Going concern
The Company meets its day to day working capital requirements
through existing cash reserves and does not currently require an
overdraft or other borrowing facility. The directors have prepared
cash flow forecasts for the period to 30 June 2024 which indicate
that there is a reasonable expectation that the Company will
continue to operate within current and future cash resources
throughout this period Accordingly, these financial statements have
been prepared on the going concern basis.
Nigel Rogers Melvyn Segal
Executive Chairman Chief Financial Officer
27 September 2022 27 September 2022
Consolidated Statement of Comprehensive Income
For the year ended 30 June 202
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
Continuing
operations
Revenue 2,632 1,773
Cost of sales (398) (385)
---------------------------------------------- ----------------------------------------------
Gross profit 2,234 1,388
Administrative
expenses (1,970) (1,581)
---------------------------------------------- ----------------------------------------------
Operating loss 264 (193)
Financial expense (12) (12)
Other income 16 48
---------------------------------------------- ----------------------------------------------
Profit/(Loss)
before taxation 268 (157)
Taxation 609 313
---------------------------------------------- ----------------------------------------------
Profit and total
comprehensive
income
for the year
attributable 877 156
To the equity
holders of the
parent ---------------------------------------------- ----------------------------------------------
Basic profit per
share for the
year
(pence) 5.36 0.96
============================================== ==============================================
Diluted profir
per share for
the
year (pence) 5.22 0.96
============================================== ==============================================
Consolidated Balance Sheet
At 30 June 2022
At 30 June At 30 June
2022 2022 2021 2021
GBP'000 GBP'000 GBP'000 GBP'000
Non current assets
Property, plant and
equipment 167 211
Intangible assets 671 770
Deferred tax 645 47
---------------------------------------------- ----------------------------------------------
1,483 1,028
Current assets
Inventories 88 73
Corporation tax - 60
Trade and other
receivables 1,133 564
Cash and cash
equivalents 1,055 1,046
---------------------------------------------- ----------------------------------------------
2,276 1,743
---------------------------------------------- ----------------------------------------------
Total assets 3,759 2,771
Current liabilities
Trade and other
payables (560) (260)
Lease liabilities (65) (65)
---------------------------------------------- ----------------------------------------------
(625) (325)
Non current liabilities
Lease liabilities (42) (104)
---------------------------------------------- ----------------------------------------------
Total liabilities (667) (429)
---------------------------------------------- ----------------------------------------------
Net assets 3,092 2,342
============================================== ==============================================
Equity
Issued share capital 1,644 1,631
Share premium 65 -
Treasury Shares (303)
Share based payments 180 82
Retained
earnings/(accumulated
loss) 1,506 629
---------------------------------------------- ----------------------------------------------
Total equity 3,092 2,342
============================================== ==============================================
Consolidated Statement of Changes in Equity
For the year ended 30 June 2022
Share Share Share Retained Treasury Total
capital premium based earnings Shares Equity
payments
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 July
2020 5,451 2,591 41 (5,900) - 2,183
Comprehensive
income for
the year:
Profit for the
year - - - 156 - 156
Share based
payment - - 41 - - 41
Share capital
reduction (3,820) (2,591) - 6,411 - -
Expenses of
capital
reduction - - - (38) - (38)
------------------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30
June 2021 1,631 - 82 629 - 2,342
------------------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Comprehensive
income for
the year:
Profit for the
year - - - 877 - 877
Share based
payment - - 98 - - 98
Warrants
exercised 13 65 - - - 78
Treasury shares - - - - (303) (303)
------------------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30
June 2022 1,644 65 180 1,506 (303) 3,092
========================================= ============================================== ============================================== ============================================== ============================================== ==============================================
Consolidated Cash Flow Statement
For the year ended 30 June 2022
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
Profit/(loss) from
operations 877 156
Adjustments for:
Taxation (609) (313)
Net financial expense 12 12
Share based payment 98 41
Depreciation 88 85
Amortisation and
impairment of
intangible
assets 155 121
---------------------------------------------- ----------------------------------------------
Operating cash flows
before movements
in working capital 621 102
(Iincrease) in
receivables (569) (124)
Increase/(Decrease) in
payables 300 (594)
(Increase) in
inventories (15) (10)
---------------------------------------------- ----------------------------------------------
Cash generated/(used)
in operations 337 (626)
Taxation received 71 381
---------------------------------------------- ----------------------------------------------
Net cash
generated/(used) in
operations 408 (245)
---------------------------------------------- ----------------------------------------------
Investing activities
Acquisitions of
property, plant and
equipment (44) (6)
Acquisitions of
intangible assets (56) (47)
Proceeds from disposal
of trade and
assets - 1,237
---------------------------------------------- ----------------------------------------------
Net cash (used
in)/generated from
investing
activities (100) 1,184
---------------------------------------------- ----------------------------------------------
Financing activities
Capital reduction
expenses - (38)
Treasury shares (303) -
Warrants exercised 78 -
Loans repaid - (976)
Interest paid (12) (12)
Payment of lease
liabilities (62) (60)
---------------------------------------------- ----------------------------------------------
Net cash used in
financing activities (299) (1,086)
---------------------------------------------- ----------------------------------------------
Net
increase/(decrease)in
cash and
cash equivalents 9 (147)
Cash and equivalents at
the beginning
of year 1,046 1,193
---------------------------------------------- ----------------------------------------------
Cash and equivalents at
the end of
year 1,055 1,046
============================================== ==============================================
NOTES RELATING TO THE COMPANY FINANCIAL STATEMENTS
BASIS OF PREPARATION
Both the Parent Company financial statements and the Company
financial statements have been prepared and approved by the
Directors in accordance with International Financial Reporting
Standards as adopted by the United Kingdom ("Adopted IFRSs") and
those parts of the Companies Act 2006 that are relevant to
companies preparing accounts under IFRS. On publishing the Parent
Company financial statements here together with the Company
financial statements, the Company is taking advantage of the
exemption in s408 of the Companies Act 2006 not to present its
individual statement of comprehensive income and related notes that
form a part of these approved financial statements.
1 SEGMENT INFORMATION
The Company had three reportable segments being the unique
trading divisions, SAW and Translogik, which make use of technology
developed by the Company to measure and record temperature,
pressure and torque, and the iTrack royalty activity in respect of
income from licensed technology.
Revenue and EBITDA are the Company's key focus and in turn is
the main performance measure adopted by management.
The tables below set out the Company's revenue split and
operating segments. These disclose information for continuing
operations and in view of their relative size, information for
discontinued operations. The disposal of iTrack operations will
result in future royalty income replacing direct sales income and
costs.
Revenue
Year ended Year ended
30 June 30 June
2022 2021
Continuing Continuing
GBP'000 GBP'000
North America 323 244
South America 123 83
Australia 41 28
Europe 387 228
UK 92 90
Rest of the World 109 268
---------------------------------------------- ----------------------------------------------
1,075 941
============================================= =============================================
iTrack Royalty 1,557 832
Note: comparatives are restated as they were shown incorrectly
last year.
Segments
Translogik SAW iTrack Unallocated Total
GBP'000 GBP'000 royalties GBP'000 GBP'000
GBP'000
Year ended 30
June
2022
Sales 875 200 1,557 - 2,632
===================== ===================== ===================== ===================== ====================
Gross profit 484 193 1,557 - 2,234
Overheads (126) (1,142) (44) (658) (1,970)
------------------------------ ------------------------------ ----------------------------- ------------------------------ -----------------------------
Operating
profit/(loss) 358 (949) 1,513 (658) 264
Other income - 16 - - 16
Net financial
expense - (12) - - (12)
Taxation - - - 609 609
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Profit/(loss)
for the
year 358 (945) 1,513 (49) 877
========== =========== =========== =========== ===========
EBITDA
reconciliation
Operating loss 264
Other income 16
Depreciation
and
amortisation 243
------------------
EBITDA 523
===========
Note: Adjusted EBITDA (excluding share based payments) 621
Translogik SAW iTrack Unallocated Total
GBP'000 GBP'000 royalties GBP'000 GBP'000
GBP'000
Year ended 30
June
2021
Sales 764 177 832 - 1,773
===================== ===================== ===================== ===================== ====================
Gross profit 385 171 832 - 1,388
Overheads (114) (917) (47) (503) (1,581)
------------------------------ ------------------------------ ----------------------------- ------------------------------ -----------------------------
Operating
profit/(loss) 271 (746) 785 (503) (193)
Other income - 48 - - 48
Net financial
expense - - - (12) (12)
Taxation - 164 102 - 266
Deferred Tax - - - 47 47
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Profit/(loss)
for
the year 271 (534) 887 (468) 156
===================== ===================== ===================== ===================== ====================
During the year ended 30 June 2022 there were 2 customers (2021:
2) whose turnover accounted for more than 10% of the Company's
total continuing revenue as follows:
Year ended 30 June 2022 Revenue Percentage
GBP'000 of total
Customer A 1,557 59
Customer B 339 13
Year ended 30 June 2021 Revenue Percentage
GBP000 of total
Customer A 915 52
Customer B 200 11
2 TAXATION
Recognised in the statement of comprehensive income in respect
of continuing operations
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
Current tax
credit
Current year - (60)
Adjustment for
previous year (11) (206)
Deferred tax
credit
Current year (598) (47)
---------------------------------------------- ----------------------------------------------
Tax credit in
Statement of
Comprehensive
Income (609) (313)
============================================= =============================================
Reconciliation of effective tax rate
Year ended Year ended
30 June 30 June
2021 2021
GBP'000 GBP'000
Profit/(loss)
before tax 268 (157)
============================================= =============================================
Tax calculated at
the average
standard UK
corporation
tax rate of 19.00%
(2021: 19:00%) 51 (30)
Expenses not
deductible for tax
purposes 19 8
Additional
deduction for R&D
expenditure - (38)
Utilisation of
losses brought
forward for which
no deferred tax
asset was
recognised (23) -
Recognition of
deferred tax in
respect of prior
year losses (645) (47)
Prior year
adjustment (11) (206)
---------------------------------------------- ----------------------------------------------
Total tax credit (609) (313)
============================================= =============================================
Corporation tax
receivable - 60
Deferred tax assets
are
Recognised - in
respect of tax
losses 645 47
Unrecognised - in
respect of tax
losses and
other timing
differences 4,900 5,670
============================================= =============================================
The applicable UK corporation tax rate is 19% throughout the
reporting period. The Group has tax losses, subject to agreement by
HM Revenue and Customs, in the sum of GBP 22.8m (2021: GBP23.1m),
which are available for offset against future profits of the same
trade. There is no expiry date for tax losses. An appropriate
deferred tax asset is being recognised as the Group is able to
demonstrate a reasonable expectation of sufficient future taxable
profits arising in order to utilise the losses.
The Finance Act 2020 maintained the rate of UK Corporation Tax
at 19% and in May 2021 the Finance Act 2021 was substantively
enacted with a rate of 25% to apply from April 2023. Recognised and
unrecognised deferred tax balances at 30 June 2022 have been
calculated using a rate of 19% for reversals expected in the period
to April 2023 and 25% for reversals after that date (2021: 25%) as
this was the substantively enacted rate at the year end date. The
recent budget on 23 September 2022, the Chancellor of the Exchequer
announced that the corporation tax rate would not increase to a
maximum of 25% however this has not been enacted as at year end nor
at the time of signing the financial statements.
3 EARNINGS PER SHARE
Year ended Year ended
30 June 30 June
2022 2021
Number Number
Weighted average number of shares - basic 16,365,640 16,307,282
Share option adjustment for potentially dilutive
shares 431,808 30,206
------------------------------ ------------------------------
Weighted average number of shares - diluted 16,797,448 16,337,488
====================== ======================
Basic profit per share is calculated by dividing the profit by
the weighted average number of ordinary shares in issue during the
year of 16,365,640 (2021: 16,307,282). This excludes treasury
shares held by the Company.
Year ended Year ended
30 June 30 June
2022 2021
GBP'000 GBP'000
Proft/(loss) 877 156
------------------------------ ------------------------------
Basic profitper share 5.36 0.96
Diluted profit per share 5.22 0.96
There are 1,594,500 share options and no warrants in place at 30
June 2022 (1,435,085 share options and 130,458 warrants at 30 June
2021).
4 STATUTORY ACCOUNTS
The Financial information set out in this announcement does not
constitute the Company's Consolidated Financial Statements for the
financial years ended 30 June 2022 or 30 June 2021 but are derived
from those Financial Statements. Statutory Financial Statements for
2021 have been delivered to the Registrar of Companies and those
for 2022 will be delivered following the Company's AGM. The
auditors Cooper Parry Group Limited have reported on the 2021 and
2022 financial statements. Their reports were unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their report and did not contain statements under Section 498(2) or
(3) of the Companies Act 2006 in respect of the Financial
Statements for 2020or 2019.
The Statutory accounts are available on the Company's website
and will be posted to shareholders who have requested a copy and
thereafter by request to the Company's registered office.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
FR FQLLLLKLLBBD
(END) Dow Jones Newswires
September 27, 2022 02:02 ET (06:02 GMT)
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