TIDMTRT
RNS Number : 1422N
Transense Technologies PLC
28 September 2021
The information communicated in this announcement is inside
information for the purposes of Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended .
Transense Technologies plc
("Transense", or the "Company")
Final results for the year ended 30 June 2021
& Investor Presentation
Transense Technologies plc (AIM: TRT), the provider of
specialist sensor systems, reports final results for the year ended
30 June 2021 in line with recently upgraded market expectations.
The business model has been substantially de-risked and the Company
reports progress in all three of its current business streams:
Financial highlights:
-- Revenues from continuing operations up threefold to GBP1.77m (2020: GBP0.60m)
-- iTrack Royalty Income annualised run rate up 97% in USD terms from initial annual rate
-- Gross margin increased to 78.3% (2020: 55.1%)
-- Loss before taxation from continuing operations of GBP0.16m (2020: GBP1.27m)
-- Profit for the year of GBP0.16m (2020: loss of GBP2.54m)
-- Earnings per share of 0.96 pence (2020: loss of 15.6 pence)
-- Cash and cash equivalents at year end of GBP1.05m (2020: GBP1.19m)
-- Distributable reserves at year end of GBP0.63m (2020: deficit of GBP5.90m)
-- Corporation tax losses available for future offset of GBP23m (2020: GBP23m)
Executive Chairman of Transense, Nigel Rogers, said:
"We are pleased with the progress made this year in building
firm foundations for future success. With royalty income from
iTrack gathering momentum, and new products in Translogik driving
increased market penetration in tyre probes, the Company has
delivered strong revenue growth.
"The additional management focus on the commercialisation of our
patented SAW technology is now yielding tangible opportunities, as
we better understand the applications in which SAW torque
measurement techniques can offer our customers unique and effective
solutions. As we enter a period of rapid technological change
driven by increased connectivity and the need for sustainable
energy and transportation, there are exciting opportunities
ahead.
"With a strong balance sheet and cash position, the Company is
well placed to embark on a controlled programme of investment to
further develop its engineering and operational capabilities
Furthermore, with a demonstrable track record of success in
building enduring partnerships, the directors believe that the
Company can work collaboratively to bring its technology to new
markets more effectively.
"Trading since the period end is well ahead of prior year, and
the directors continue to be optimistic about the outlook and
prospects for the Company."
Investor Presentation: 4pm, Wednesday 29 September 2021
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 Wednesday 29 September
2021. The presentation will be hosted through the digital 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
About Transense
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 automotive, aerospace, industrial,
green energy, rail and marine.
The Group'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 2021
I am pleased to report on considerable progress made at
Transense following the transformational changes brought about by
the licensing of our iTrack technology and the disposal of the
iTrack operational business to Bridgestone Corporation in June
2020. In many respects this represented a fresh start for the
Company, and has given us the opportunity to build firm foundations
for future growth.
Financial overview
Revenue from continuing operations increased almost threefold
over the prior year, which taken together with a net performance
just above breakeven resulted in Transense closing the year in line
with the upgraded expectations set at the time of our interim
results release in February 2021. This favourable outcome, coupled
with improved prospects, has enabled the Company to begin to
recognise deferred tax assets in respect of prior years' losses. In
consequence, earnings per share and distributable reserves at the
end of the year each exceeded expectations.
Cash generation from operations was broadly in line with
profits, and the closing net cash position provides ample headroom
to meet the future needs of the business.
Strategic overview
The overarching strategy of the Company is to develop innovative
solutions for niche applications, using our range of technologies.
These are guided through early stage commercial startup, achieving
realisation by forging relationships with market leading partners
as customers, licensees or acquirers.
This business model led to the successful exit from our iTrack
business with an associated licence to Bridgestone Corporation in
June 2020. The growth in royalties achieved in the first year
confirms our view that this transaction structure optimises our
return on the investment madein iTrack, whilst substantially
de-risking the continuing business model.
The commercialisation of our Translogik range of hand-held tyre
measurement tools has been accelerated by the launch of the modular
TLGX range during the year, generating strong revenue growth and
upgrades in our expectations. This business segment delivers
healthy gross margins and, with a lean overhead structure, it is
both profitable and cash generative. We are committed to continued
development of this business stream, working closely with a number
of major customers to refine the product road map and further
increase market penetration through integration into their fleet
tyre management systems.
Our patented Surface Acoustic Wave (SAW) technology is well
proven in meeting the demanding requirements of low volume high
reliability applications. Renewed commercial focus has been aimed
towards new market sectors, where our technology satisfies unmet
needs that provides customers with technical superiority and in
turn giving them a competitive advantage. In order to broaden our
commercial reach, the Company has sought input from a select group
of experienced industrialists covering a broad range of market
sectors by forming a Commercial Advisory Panel (which we refer to
as the "SAWCAP"). This initiative has proved invaluable allowing us
to gain insights into differentiation and the benefits of our
technology over alternative techniques, targeting our approach to
sales and marketing, and enabling access at a senior level to
commercial networks through the SAWCAP's relationships and
knowledge.
The industrial landscape is entering a period of rapid
technological change, driven by real-time connectivity (Internet of
things, 5G etc) and the recognition that climate change demands
behavioural changes now, rather than in future. Governments in
developed economies are keen to invest in infrastructure as they
plan for the aftermath of the global pandemic, and find sustainable
solutions to the challenges presented in energy, transport and food
production. This opens up exciting opportunities for companies with
enabling technologies. The directors believe that our SAW
technology can provide meaningful data for enhanced control,
efficiency, safety and maintenance routines which offer substantial
benefits to users in such fields.
Business Review
Royalty income from iTrack technology
This is the first full year of royalty income since the
inception of the ten year licence of iTrack technology to ATMS
Limited, a subsidiary of Bridgestone Corporation ("Bridgestone"),
on 24 June 2020. Royalty income is generated by reference to the
number and classification of vehicles upon which iTrack is
deployed. In the year ended 30 June 2021, this royalty income
amounted to GBP0.83m, whilst the Sterling equivalent of the
annualised rate of royalty increased by 76% from GBP0.64m at
inception to a year end rate of GBP1.12m. Royalties are designated
in US dollars, and the rate of growth is based on the volume
increase, which, excluding the effects of foreign exchange
fluctuations was 97%.
iTrack system capabilities continue to be enhanced under
Bridgestone ownership as it becomes further embedded into their
mining solutions business and, as referenced in their mid-term
update in May 2021, a number of global long term contracts have
been committed and are in the roll out stage. This process is
expected to accelerate following completion of Bridgestone's
proposed acquisition of Otraco International PTY Limited, a leader
in tyre management solutions with an extensive service network in
key markets such as Australia, Chile and South Africa and with many
years experience of working with iTrack technology in Latin
America.
This business segment now bears no cash costs, with the only
overhead being the amortisation of intangible development costs
relating to iTrack in prior years. Accordingly, the segmental
operating result was a profit of GBP0.79m compared with a loss from
the discontinued operational business of GBP1.38m in the prior
year.
Translogik tyre inspection probes
Revenues from Translogik probes increased by 50% to GBP0.76m
(2020: GBP0.51m), and this segment generated a trading profit of
GBP0.27m (2020: GBP0.12m), which was comfortably above the annual
budget.
Last year we reported that our product range was expanded in May
2020 to include the TLGX Series, being a modular range of four new
probes offering a broad variety of features at competitive prices.
These have been developed primarily for system integrators and OEM
fleet management systems, and offer longer life using a lithium
battery, a USB charging facility and a greater range of usage,
including the reading of RFID tags and tyre pressure sensors. These
new products generated more than 27% of the total sales value
during the year.
In the second half of the financial year, a number of major tyre
OEMs and fleet management software providers undertook trials of
the new range. This process temporarily diminished demand for the
first generation probe, as the customers evaluated the benefits of
switching to the new TLGX range. By the end of the year, and into
the current trading year, it has become evident that these trials
were successful with the switch to the new range being well
underway. This has also prompted commercial discussions to secure
mutual longer term commitment and the prospect of further
customisation of our products to customers' fleet management
solutions.
Surface Acoustic Wave technology (SAW)
Revenues generated by SAW almost doubled to GBP0.18m (2020:
GBP0.09m) supplemented by grant income of GBP0.05m (2020:
GBP0.12m). The net loss attributable to this segment was virtually
unchanged at GBP0.53m (2020: GBP0.58m). As the only part of the
business that requires some bespoke business premises, the
allocation of the cost of running these premises is allocated to
the SAW segment along with other associated costs. The R & D
tax credit relating to FY20 is evenly split between work on SAW
projects and the development of iTrack prior to the licence being
granted. The introduction of the R & D tax credit for the
current year is solely relating to SAW.
Although our technology is well advanced from an engineering
standpoint, commercialisation for higher volume applications
remains at a relatively early stage. More than half of revenue was
derived from providing components and engineering support for
projects expected to mature in future years, with the remainder
from ongoing activities, primarily motorsport. Revenue during the
year also included chargeable engineering support on behalf of
first tier suppliers to GE's Improved Turbine Engine Program
("ITEP"), which is scheduled to execute the First Engine To Test
(FETT) by the end of this calendar year. FETT will be the next
critical milestone for the programme which is planned to provide
the next-generation turbine engine power to the chosen Future
Attack Reconnaissance Aircraft (FARA) aircraft and the enduring
Apache and Black Hawk fleets.
With new management in place in our SAW business, buttressed by
the resources and expertise of SAWCAP, the commercial activities
and profile of the Company have been re-invigorated. There has been
meaningful engagement with multiple well known international
companies across a broad range of target sectors, providing
opportunities to showcase our capabilities and gain valuable
feedback on potential applications. These have deepened our
understanding, not only of the unique benefits of SAW technology,
but also of some technical and commercial barriers in certain
markets, especially in relatively heavy engineering such as wind
turbines.
This additional applications experience is now assisting greatly
in better targeting our sales and marketing efforts. On 14
September we announced that the Company has entered a Joint
Collaboration Agreement ("JCA")with McLaren Applied Limited which
builds on from the previous agreement that has been in force since
2011. The JCA sets out a shared objective of developing non-contact
torque products for specific motorsport applications and target
customers in other sectors using our SAW technology. The new
agreement is initially for five years and will continue development
of the Transense Torque Measurement System using SAW technology,
extending McLaren Applied exclusivity in elite motorsport
drivetrain applications in exchange for minimum target revenues on
an annual basis over a five year period.
Although elite motorsport is a market with limited potential in
absolute terms, McLaren anticipate significant growth in the
adoption of SAW technology for torque sensing. This will apply at
theregulatory body level as a control sensor both for rules
compliance and for performance optimisation in accredited race
series, which is how it has been used for many years in a
regulatory role for the IndyCar series. SAW technology lends itself
to motorsport applications in particular because of the low mass of
the applications components, coupled with the frequency, accuracy
and reliability of measurement. This is a valuable proving ground
for our technology and showcases our capabilities in a premium and
highly regulated environment.
A significant target sector where SAW technology offers true
competitive advantages is in the growing aerospace sector. The fast
responses, small size and mass of the SAW sensor together with
digital outputs from our electronics is aptly suited to build upon
the rigorous testing and implementation from the GE ITEP into other
programmes and other types of power units. Such areas of growth in
the aerospace sector are with the revolutionary hybrid electrical
engines for regional commercial aircraft. During the year, we
engaged on a confidential technology transfer program with a major
participant in this field to explore the use of SAW torque
measurement technology. There is also initial interest in our
capabilities from companies in the fast-growing Advanced Air
Mobility sector which uses multiple electric power units for
vertical lift rotors.
In addition, we have gained interest from the agricultural
sector where again the suitability of SAW technology for medium
volume, high value units has a value in improving agricultural
machines with many rotating parts to gain competitive advantages
over rivals in providing easier to use plant that has greater up
time use.
In view of these opportunities, there is sufficient confidence
in the outlook to justify further modest investment in people and
equipment to continuing building our engineering and operational
capabilities. In recent weeks we have expanded the engineering team
with three key additional members. In addition, evaluation of
potential capital expenditure in the region of GBP0.15m is ongoing
to facilitate increased test and production volumes to meet
potential demand.
Overall, we are satisfied both with progress during the year and
the pipeline of potential opportunities. We continue to pursue a
short term objective of SAW being financially self-sufficient as a
contributor to the Company's financial results, whilst seeking
applications that can deliver further substantial streams of
licensing income over the long term.
Board, governance and investor relations
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 scale of the Company and the
relatively low risk profile of its operations.
Accordingly, the Board is satisfied that the overall board
structure and balance of independent input into board decision
making is appropriate to the circumstances. In particular, the
directors are all shareholders whose interests are well aligned
with shareholders as a whole. Furthermore, the involvement of
highly qualified and experienced independent advisers via SAWCAP
provides an additional layer of scrutiny and oversight over the
commercial activities of the Company.
There have also been significant efforts to improve our investor
relations programme for private and retail shareholders, including
frequent engagement via online investor presentations. This has
been supplemented by a major redesign of the Company's website (
www.transense.com ) and associated social media platforms. The
directors actively encourage regular engagement with all
shareholders, and details of how investors can engage are set out
on the website.
The Board fully recognise the importance of Enviromental, Social
& Governance (ESG) issues and have introduced a new statement
in this report to emphasise how our technology is supporting the
environment, and how we operate in a collaborative and ethical
manner seeking to apply high moral standards in accordance with the
QCA code referred to above.
Distribution policy
In December 2020 the shareholders approved a resolution to
reduce the capital of the Company, which was subsequently approved
by the Court resulting in the availability of distributable
reserves. At 30 June 2021, the total reserves available for
distribution amounted to GBP0.63m.
The directors are committed to delivering sustainable
improvement in investment returns to shareholders in the form of
both income and capital growth. As the net income and prospects of
the Company continue to build momentum, the Board will maintain
dialogue with shareholders, and seek to optimise the balance
between dividends, share buybacks and reinvestment in the business.
As a component of overall policy, it is anticipated that
commencement of progressive dividend payments will be considered in
respect of the financial year ending 30 June 2023.
Current trading and prospects
There has been a further increase in royalty income in the
period since the year end to 31 August 2021 such that the
annualised rate at constant currency had increased by 8% to
US$1.67m since inception, with the Sterling equivalent up by 9% to
GBP1.21m. Revenues from Translogik tyre inspection probes and SAW
were also substantially higher. Overall, the total revenues for the
first two months of the current year were 98% ahead of the
corresponding period last year.
There is a groundswell of momentum behind the potential for
growth in royalty income, and the positive market response to new
products for Translogik indicating the likelihood of further
success.
The recent agreement relating to the use of our technology in
motorsport applications underpins an element of short term revenue
for SAW, with further potential in off-road vehicles, agriculture
and aerospace in the development pipeline, and GE ITEP production
on the horizon.
Accordingly, the directors continue to be optimistic about the
outlook and future prospects for the Company.
Nigel Rogers
Executive Chairman
Financial Review
Results for the year
Revenues for the year from continuing operations increased
nearly threefold to GBP1.77m (2020: GBP0.60m). Royalty income from
iTrack was GBP0.83m for the first year of the new licence agreement
and will increase in line with the growth in the installed base.In
the previous year revenues of GBP1.47m were generated from users of
the iTracksystem and accounted for as part of discontinued
activities in 2020 following the sale of the iTrack operating
business in June 2020.
Gross margin was78.3% of revenues from continuing operations
(2020: 55.1%).
Administrative expenses wereGBP1.59m (2020: GBP1.70m). In 2020
there were increased amortisation costs and a one-off impairment
charge relating to intangible SAW patent assets. The net loss
before taxation from continuing operations was GBP0.16m (2020:
GBP1.27m).
The total comprehensive profit for the yearwas GBP0.16m (2020:
loss of GBP2.45m), reflecting the restructured business and licence
income in FY21 (2020: loss on discontinued activities of GBP1.45m)
and an R&D tax credit of GBP0.27m for the first time including
the current years credit GBP0.06m and a deferred tax credit of
GBP0.05m (2020: R & D Tax Credit GBP0.18m).
The Earnings per share (EPS) are set out below (in Pence):
2021 2020
EPS (profit/(loss) from continuing operations) 0.96 (6.7)
EPS (total profit/(loss)) 0.96 (15.6)
Taxation
The Company has UK tax losses available to carry forward at 30
June 2021 of approximately GBP23m, subject to HMRC agreement.
Certain elements of development expenditure undertaken by the
Company are eligible for enhanced research and development tax
relief which generally relates to salary costs of technical staff.
In the year R&D tax credits are recognised on an accruals basis
and not as in previous years on a cash basis, as the track record
on claims has now removed some of the uncertainty.
Cash flow and financial position
Net cash used in operations decreased to GBP0.25m following the
sale of the iTrack operational business (2020: GBP1.86m, which
includes the cash resources absorbed by iTrack operating activities
during the year of GBP1.33m up to the date of the transfer of the
business to AMTS on 24 June 2020). During the prior year, the
Company received the benefit of interest-free working capital loans
from Bridgestone of GBP1.59m, GBP0.61m of which was repaid in June
on completion of the transfer, and the remaining balance was
settled in September 2020 out of the consideration monies. Included
in the opening creditors were GBP0.32m relating to the discontinued
operations that were settled by Transense in the year.
The Company closed the year with net cash and cash equivalents
of GBP1.05m (2020: GBP1.19m). The completion Balance Sheet relating
to the iTrack business was agreed between the Company and ATMS on
10 September 2020, at which time the balance of the consideration
monies was settled, together with the settlement of the Bridgestone
loan and the payment of related fees.
The forward looking cash flow forecasts based on the anticipated
level of activity indicates that the Group should have sufficient
funds available for the foreseeable future.
Going Concern
The financial statements have been prepared on the going concern
basis.
The Group meets its day to day working capital requirements
through existing cash reserves and does not currently have an
overdraft facility. The Directors have prepared cash flow forecasts
for the period to 30 June 2023. These forecasts indicate that the
Group should continue to be able to operate within its current cash
resources for this period.
Melvyn Segal
Finance Director
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2021
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
Continuing
operations
Revenue 1,773 603
Cost of sales (385) (271)
---------------------------------------------- ----------------------------------------------
Gross profit 1,388 332
Administrative
expenses (1,581) (1,703)
---------------------------------------------- ----------------------------------------------
Operating loss (193) (1,371)
Financial income - 5
Financial expense (12) (17)
Other income 48 118
---------------------------------------------- ----------------------------------------------
Loss before
taxation (157) (1,265)
Taxation 313 175
---------------------------------------------- ----------------------------------------------
Profit/(loss)for
the year from
continuing
operations 156 (1,090)
---------------------------------------------- ----------------------------------------------
Discontinued
operations
Loss for the year
from discontinued
operations - (1,452)
---------------------------------------------- ----------------------------------------------
Profit/(loss)and
total
comprehensive
income/(loss) for
the
yearattributable
to the equity
holders of the
parent 156 (2,542)
============================================== ==============================================
Basic and fully
diluted
profit/(loss) per
share (pence)
From continuing
operations 0.96 (6.68)
============================================== ==============================================
From total
profit/(loss) for
the year 0.96 (15.59)
============================================== ==============================================
Consolidated Balance Sheet
At 30 June 2021
30 June 30 June
2021 2021 2020 2020
GBP'000 GBP'000 GBP'000 GBP'000
Non current assets
Property, plant and
equipment 211 290
Intangible assets 770 844
Deferred tax 47 -
---------------------------------------------- ----------------------------------------------
1,028 1,134
Current assets
Inventories 73 63
Corporation tax 60 175
Trade and other
receivables 564 1,677
Cash and cash
equivalents 1,046 1,193
---------------------------------------------- ----------------------------------------------
1,743 3,108
---------------------------------------------- ----------------------------------------------
Total assets 2,771 4,242
Current liabilities
Trade and other
payables (260) (854)
Borrowings - (976)
Lease liabilities (65) (61)
---------------------------------------------- ----------------------------------------------
(325) (1,891)
Non current liabilities
Lease liabilities (104) (168)
---------------------------------------------- ----------------------------------------------
Total liabilities (429) (2,059)
---------------------------------------------- ----------------------------------------------
Net assets 2,342 2,183
============================================== ==============================================
Equity
Issued share capital 1,631 5,451
Share premium - 2,591
Share based payments 82 41
Retained
earnings/(accumulated
loss) 629 (5,900)
---------------------------------------------- ----------------------------------------------
Total equity 2,342 2,183
============================================== ==============================================
Consolidated Statement of Changes in Equity
Share Share Translation reserve Share based payments Retained earnings Total
capital premium equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1
July 2019 5,451 2,591 23 41 (3,358) 4,748
Comprehensive
income for the
year:
Loss for the
year - - - - (2,542) (2,542)
- - - -
Translation
reserve
recycled on
disposal - - (23) - - (23)
------------------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30
June 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
========================================= ============================================== ============================================== ============================================== ============================================== ==============================================
Consolidated Cash Flow Statement
For the year ended 30 June 2021
Year ended Year ended
30 June 30
2021 June
2020
GBP'000 GBP'000
Profit/(loss) from
operations 156 (2,542)
Adjustments for:
Taxation (313) (171)
Loss on disposal of
trade and assets - 72
Net financial expense 12 9
Share based payment 41 -
Depreciation 85 538
Loss on disposal of
fixed assets - 18
Impairment of - -
investments
Amortisation and
impairment of
intangible
assets 121 504
---------------------------------------------- ----------------------------------------------
Operating cash flows
before movements
in working capital 102 (1,572)
(Iincrease) in
receivables (124) (177)
(Decrease)/increase in
payables (594) 477
(Increase) in
inventories (10) (582)
---------------------------------------------- ----------------------------------------------
Cash used in operations (626) (1,854)
Taxation
received/(paid) 381 (4)
---------------------------------------------- ----------------------------------------------
Net cash used in
operations (245) (1,858)
---------------------------------------------- ----------------------------------------------
Investing activities
Interest received - 8
Acquisitions of
property, plant and
equipment (6) (764)
Acquisitions of
intangible assets (47) (513)
Investment in - -
subsidiary
Proceeds from disposal
of trade and
assets (net of cash
disposed of) 1,237 772
---------------------------------------------- ----------------------------------------------
Net cash generated
from/(used in)
investing
activities 1,184 (497)
---------------------------------------------- ----------------------------------------------
Financing activities
Capital reduction
expenses (38) -
Loans advanced - 1,585
Loans repaid (976) (609)
Interest paid (12) (17)
Payment of lease
liabilities (60) (58)
---------------------------------------------- ----------------------------------------------
Net cash (used in)/from
financing activities (1,086) 901
---------------------------------------------- ----------------------------------------------
Net (decrease)in cash
and cash equivalents (147) (1,454)
Cash and equivalents at
the beginning
of year 1,193 2,647
---------------------------------------------- ----------------------------------------------
Cash and equivalents at
the end of year 1,046 1,193
============================================== ==============================================
NOTES RELATING TO THE GROUP FINANCIAL STATEMENTS
BASIS OF PREPARATION
The group financial statements have been prepared and approved
by the Directors in accordance with the International Financial
Reporting Standards (IFRS) as adopted by the United Kingdom and
with those parts of the Companies Act 2006 applicable to companies
reporting under adopted IFRS.
1 SEGMENT INFORMATION
The Group had three reportable segments being the unique trading
divisions, SAW and Translogik, which make use of technology
developed by the Group to measure and record temperature, pressure
and torque, and the iTrack royalty activity in respect of income
from licensed technology. In prior year financial statement
disclosures, the Translogik segment included the material iTrack
results. A decision was made to sell the iTrack trade to
Bridgestone and enter into a licence agreement to receive future
royalties. As a consequence of the focus on the impact of this,
Translogik now includes only continuing activity and the continuing
royalty income and discontinued iTrack activity have been shown as
separate segments. The revenues include royalties, engineering
support and sale of product in relation to this technology.
Revenue and EBITDA are the Group's key focus and in turn is the
main performance measure adopted by management.
The tables below set out the Group'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 Year ended Year ended
30 June 2021 30 June 2021 30 June 2020 30 June 2020
Continuing Discontinued Continuing Discontinued
GBP'000 GBP'000 GBP'000 GBP'000
North
America 1,150 - 282 235
South
America 244 - 83 793
Australia 28 - 5 479
UK and
Europe 83 - 148 -
Rest of
the World 268 - 85 201
---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
1,773 - 603 1,708
============================================= ============================================= ============================================= =============================================
Segments
Translogik SAW iTrack royalties Unallocated Total
GBP'000 GBP'000 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
====================== ====================== ====================== ====================== ======================
EBITDA
reconciliation GBP'000
Operating loss (193)
Other income 48
Depreciation
and
amortisation 206
-------------------------------
EBITDA 61
======================
Translogik SAW Discontinued Unallocated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Year ended 30
June 2020
Sales 510 93 1,708 - 2,311
===================== ===================== ===================== ===================== ====================
Gross profit 249 83 1,380 - 1,712
Overheads (121) (783) (2,759) (799) (4,462)
----------------------------- ------------------------------ ------------------------------ ------------------------------ -----------------------------
Operating
profit/(loss) 128 (700) (1,379) (799) (2,750)
Other income - 118 - - 118
Net financial
expense - - 3 (12) (9)
Loss on
disposal - - (72) - (72)
Taxation - - (4) 175 171
------------------------------- ------------------------------- ------------------------------- ------------------------------- -------------------------------
Profit/(loss)
for the year 128 (582) (1,452) (636) (2,542)
====================== ====================== ====================== ====================== ======================
EBITDA Discontinued Continuing Total
reconciliation GBP'000 GBP'000 GBP'000
Operating loss (1,379) (1,371) (2,750)
Other income 118 118
Depreciation,
amortisation
and impairment 470 572 1,042
------------------------------- ------------------------------- -------------------------------
EBITDA (909) (681) (1,590)
====================== ====================== ======================
During the year ended 30 June 2021 there was 1 customer ( 2020 :
2) whose turnover accounted for more than 10% of the Group's total
continuing revenue as follows:
Year ended 30 June 2021 Revenue Percentage
GBP'000 of total
Customer A 915 52
Customer B 200 11
Year ended 30 June 2020 Revenue Percentage
GBP000 of total
Customer B 93 15
Customer C 66 11
Discontinued revenue in FY20 included Bridgestone as a customer,
who have now acquired the iTrack business and from which all the
royalty income now arises within continuing revenue.
2 TAXATION
Recognised in the statement of comprehensive income in respect
of continuing operations
Year ended Year ended
30 June 30 June 2020
2021
GBP'000 GBP'000
Current tax credit
Current year (60) -
Adjustment for
previous year (206) (175)
Deferred tax credit
Current year (47) -
---------------------------------------------- ----------------------------------------------
Tax credit in
Statement of
Comprehensive Income (313) (175)
============================================= =============================================
Reconciliation of effective tax rate
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
Loss before tax
from continuing
operations (157) (1,265)
============================================= =============================================
Tax calculated at
the average
standard UK
corporation tax
rate of 19.00%
(2020: 19:00%) (30) (240)
Expenses not
deductible for tax
purposes 8 2
Additional
deduction for R&D
expenditure (38) (145)
Current year losses
for which no
deferred
tax asset was
recognised - 383
Recognition of
deferred tax in
respect of
prior year losses (47) -
Prior year
adjustment (206) (175)
---------------------------------------------- ----------------------------------------------
Total tax credit (313) (175)
============================================= =============================================
Deferred tax assets
are
Recognised - in
respect of tax
losses 47 -
Unrecognised - in
respect of tax
losses and
other timing
differences 5,670 4,416
============================================= =============================================
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 GBP23.1m (2020: GBP23.2m), which are
available for offset against future profits of the same trade.
There is no expiry date for tax losses. An appropriate asset will
be recognised when the Group can demonstrate a reasonable
expectation of sufficient taxable profits to utilise the temporary
differences.
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. The effective
tax rate used to calculate the current tax for the year ended 30
June 2021 was 19.00% (2020: 19.00%).Unrecognised deferred tax
balances at 30 June 2021 have been calculated using a rate of 25%
(2020: 19%) as this was the substantively enacted rate at the year
end dates.
3 EARNINGS PER SHARE
Year ended Year ended
30 June 30 June
2021 2020
Number Number
Weighted average number of shares - basic 16,307,282 16,307,282
Share option adjustment 30,206 -
------------------------------ ------------------------------
Weighted average number of shares - diluted 16,337,488 16,307,282
====================== ======================
Basic loss per share is calculated by dividing the lossby the
weighted average number of ordinary shares in issue during the year
of 16,307,282 ( 2020 : 16,307,282). Unexercised options and
warrants over the ordinary shares results in a highly immaterial
number of dilutive shares included in the calculation of diluted
loss per share as the exercise price of most options exceeds the
average share price during the year.
Year ended Year ended
30 June 30 June
2021 2020
GBP'000 GBP'000
Proft/(loss) from continuing operations 156 (1,090)
Loss from discontinued operations - (1,452)
------------------------------ ------------------------------
156 (2,542)
------------------------------ ------------------------------
Basic profit/(loss) per share from continuing
operations 0.96 (6.68)
Basic loss per share from discontinued operations - (8.91)
------------------------------ ------------------------------
Basic profit/(loss) per share 0.96 (15.59)
====================== ======================
There are 1,435,085 share options and 130,458 warrantsin place
at 30 June 2021 (1,544,085 share options and 226,850 warrants at 30
June 2020).
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 2021 or 30 June 2020 but are derived
from those Financial Statements. Statutory Financial Statements for
2020 have been delivered to the Registrar of Companies and those
for 2021 will be delivered following the Company's AGM. The
auditors Cooper Parry Group Limited have reported on the 2020and
2021 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
Authority to act as a Primary Information Provider in the United
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END
FR LDLLLFKLXBBD
(END) Dow Jones Newswires
September 28, 2021 02:00 ET (06:00 GMT)
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