REG - Tan Delta Systems - Full year results for 12 months ended 31 Dec 2024
12/05/2025 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250512:nRSL1604Ia&default-theme=true
RNS Number : 1604I Tan Delta Systems PLC 12 May 2025
Tan Delta Systems PLC
("Tan Delta" or the "Company")
Full year results for the twelve months ended 31 December 2024
Tan Delta Systems plc (AIM:TAND), a leading provider of intelligent monitoring
and maintenance systems for commercial and industrial equipment announces its
audited results for the twelve months ended 31 December 2024.
FINANCIAL HEADLINES
· Revenue of £1.22m, down 16% (2023: £1.46m)
· Gross margin increased to 62.1% (2023: 59.6%)
· Loss before tax of £1.17m (2023: £1.05m adjusted*)
· Cash of £3.08m as at 31 December 2024 of (31 December 2023: £4.55m)
CUSTOMER HEADLINES
· Increased pipeline to £35million (31 December 2023: £2.5 million)
· 20 active trials underway
· 2 new distributor agreements signed in the Middle East
· Working in partnership with four of the world's leading engine
manufacturers
OPERTIONAL HEADLINES
· Continued product development to ensure our products are easier to
install and commission
· Advancements made into value added services using data generated from
our sensors
· Development underway of a sensor for water based fluids. Project
co-funded by a major engine OEM
· Sensors approved by accredited organisation during the year
SENIOR MANAGEMENT CHANGES
· Joy Alvarez appointed to the board as Non-Executive Director on 9
April 2024
· John Higginbottom appointed to the board as CFO/COO on 5 July 2024
Steve Johnson, former CFO resigned from the Company on 4 July 2024
*Adjustments relate to IPO costs and share option charge
SIMON TUCKER, CHAIRMAN OF TAN DELTA, COMMENTED:
"With minimal marketing, the company enjoys significant interest in its real
time oil analysis based equipment monitoring solutions. The business enjoys a
fundamental base for its position in the market which is its unique core
technology and, after several years supplying small numbers to some notable
entities such as SHELL, all important credibility. It has developed a focused
pipeline of sales opportunities where and is now supporting multiple
evaluations that range from the world's largest online retailer who operates
hundreds of thousands of gearboxes, to operators of power generators across
the middle east. The opportunity is very significant. By their nature the
decision and planning to adopt Tan Delta and integrate it into their
maintenance and operating plans are significant and long term commitments
which require careful planning which takes time to come to fruition and a
conversion into sale contracts that realise a customer with repeat sales for
many years into the future. This is the reason for the build-up of the sales
pipeline and the relatively slow conversion. Given the significant size of
some of our opportunities, anyone of which is transformational for the
business, the Board has actively guided the management team to focus on these
to minimise closure times, before seeking to expand further, and we expect to
start to see this happening in the near future."
For enquiries, please contact:
Tan Delta Systems plc +44 845 094 8710
Chris Greenwood, CEO
John Higginbottom, CFO
Zeus (Nominated Adviser and Broker) +44 203 829 5000
David Foreman, James Hornigold, Ed Beddows (Investment Banking)
Nick Searle (Sales)
CHIEF EXECUTIVE'S STATEMENT
Introduction
2024 was a year of strategic groundwork for Tan Delta. Revenue did not meet
our initial growth expectations, down 16% to £1.22 million (2023: £1.46
million). This variance was driven primarily by the extended timelines
required to mature high-value customer opportunities, reflecting both the
complexity and potential scale of our pipeline. We now have over 20 active
trials and a commercial pipeline exceeding £35 million, a tenfold increase
from the end of 2023. Our challenge has not been a lack of opportunity - in
fact, the scale and quality of engagements in our pipeline continue to grow.
Conversion of trials to order and the time that takes has been frustrating at
times and we have taken numerous steps in our customer engagement processes to
standardise our approach to planning and executing trials to address this from
which we are already seeing very early positive signs. Much of this is linked
to the larger size and scale opportunities now being seen. The key is
strategic focus: prioritising the right opportunities where our technology can
deliver the greatest impact and applying greater commercial discipline to
accelerate conversion. Throughout 2024, we refined our sales processes to
sharpen this focus, aligning more closely around defined success criteria and
ROI delivery. These steps are already improving visibility into near-term
revenue potential, while building a stronger foundation for long-term
scalability.
We expanded our production and supply chain capacity to support a fivefold
increase in output, appointed a dedicated production manager, and made key
hires across engineering, quality, and operations. A dedicated salesperson in
the Middle East was recruited in the first half of the year. This will better
enable us to respond as trial projects mature into scaled rollouts.
Commercially, we signed two new distribution agreements in the Middle East and
grew our regional pipeline from zero to over £14 million. We also deepened
traction with OEMs, now working in active collaboration with four of the
world's seven major engine manufacturers. These partnerships, alongside our
increased focus on pilot program success criteria and ROI delivery, are
strengthening our path to scaled adoption.
Tan Delta's mission and unique value proposition remains clear: To deploy our
unique oil sensing technology and related analytics which has been
independently and practically proven to deliver unparalleled sensitivity,
accuracy and actionable insight enabling an increasingly diverse global market
to reduce their total cost of ownership of critical assets through the safe
reduction in oil usage and maintenance costs whilst the continuous real time
monitoring prevents unplanned downtime and unnecessary breakdowns. All of
which has a positive impact on the environment through a reduced carbon
footprint.
Financial Summary
Revenue for the year ended 31 December 2024 was lower than the prior year at
£1.22 million (2023: £1.46 million). Our pipeline continues to grow, and we
are expecting conversions to flow naturally from that growth through a more
normalised sales cycle. To build customer confidence, we have conducted
multiple trials of our technology, many of which have exceeded expectations in
terms of performance and insights gained. However, often these trials evolve
becoming more extensive than anticipated resulting in extended timelines as
customers consider the application and benefits of our systems across their
equipment portfolio.
A prior year adjustment was made to the financial statements to correct an
over expense to the share option reserve in the previous year. A
reconciliation of this adjustment can be found in Note 24.
Gross profit margin of 6.12% was achieved (2023: 59.6%), which is in line with
our expectations with the improvement primarily due to the specific mix of
products sold. We anticipate being able to sustain this level of margin. Our
product delivers excellent value and payback to our customers, which in turn
means that we believe our product can sustain price increases in line with
inflation.
Overheads increased on the prior year, slowly growing resources commensurate
with customer and product development activity. Investing wisely ensures we
can support business opportunities until conversion and the associated cash
generation - whereupon we will permit further growth for the next phase of
growth.
At the end of the year, cash and cash equivalents stood at £3.08 million
(£4.55 million in 2023). Inventory increased by £0.37 million during the
year to £0.73 million as we increased production to meet expected increases
in sales. This increase in inventory provides the ability to deliver against
increased customer demand alongside scaling manufacturing volumes to align not
only with our revenue goals, but with our confidence of conversion of our
rapidly growing sales pipeline.
Operations Summary
In terms of operations our target for this year was to rationalise and
simplify our supply chain and associated systems and to further enhance our
customer support function to continually improve the assistance given to
existing and potential customers.
Our systems are in the process of being upgraded to enable us to react to
future demand and provide a seamless interface for our customers, and we have
also appointed a new quality manager.
We invested in product development primarily around our integral data
analytics and online platform to deliver simpler, more meaningful insights, as
well as enhancing our solutions to make sure that they are easy to install and
integrate ensuring that we maintain our market leading sensor and associated
product portfolio. As part of this, we have appointed a new hardware engineer
and technical author.
We have also bolstered our operations team by recruitment in the key areas of
production and logistics to enable us to quickly react to the expected
increases in demand. Other key hires include a new Chief Finance Officer/Chief
Operating Officer who brings a wealth of both financial and operational
experience, focusing mainly on our day-to-day operations to free up time for
critical business development activities whilst retaining financial oversight.
Sales and Marketing
We have seen growing traction in the market, with opportunities and sales
during the period spanning several regions and sectors. Around 75% of
commercial sales to date have been concentrated in the power generation,
industrial equipment and mining sectors with early adoption also emerging in
marine, O&G and rail.
Geographically, our solutions are now in use across the UK, Europe, North
& South America, Asia and the Middle East, validating the global
applicability of our technology. While revenue during the period was below
expectations, driven primarily by longer-than-anticipated trial-to-conversion
cycles, our commercial momentum continues to build. Our active sales pipeline
has grown significantly from £2.5 million at the end of 2023 to over £35
million driven by increased demand for predictive maintenance and
sustainability-led asset monitoring. The pipeline is well diversified: over
60% relates to the power generation and equipment rental sectors, with the
remainder split across marine, oil & gas, logistics, water utilities, and
OEM partnerships.
Whilst the continued growth in pipeline has been encouraging the actual
revenue of £1.22 million was lower than previous year. Conversion of this
pipeline is now almost exclusively dependent on customer trials whilst as a
board we are constantly exploring ways to circumvent this, currently we have
to accept that trials are necessary for all significant opportunities and need
to be factored into the timeline for conversion.
We currently have over 20 active trials, including engagements with a global
logistics firm monitoring tens of thousands of assets, two Middle East rental
companies (each with over 2,000 fleet assets), and a UK utility trial
monitoring critical gearboxes with potential to scale. Additionally, we are
collaborating with several major engine OEMs on multiple projects across
marine and power generation applications. These trials typically follow a
6-month to 18- month cycle from initial commercial discussions to installation
and conversion, depending on the complexity of integration, length of trial
required and the required ROI demonstration.
A key driver of purchasing decisions across segments remains our proven
ability to reduce operational costs and unplanned downtime. In one example,
our solution demonstrated potential savings exceeding $3,500 per asset per
year, a compelling figure for fleet-based operators. Post-period end, we
initiated integration discussions with three of the world's largest asset
monitoring solution providers, which could enable significant scale and new
market access through established ecosystems.
As our pipeline continues to expand, we are evolving our go-to-market
strategy. We have deliberately narrowed our focus to a few high-potential
market segments, where we are aligning sales, marketing, and product efforts.
This approach is designed to drive deeper market penetration, improve brand
awareness, and more effectively educate customers on the distinct ROI and
reliability advantages of our sensor technology. To support this focus, we
have engaged a new marketing agency to help refine our positioning and
outreach. Upcoming activities include launching a refreshed website and
customer portal, releasing new customer-endorsed case studies, coordinating
social media campaigns, and presenting white papers at leading industry events
in the UK, North America, and Europe. These efforts are designed to support
the conversion of our growing pipeline into repeatable and scalable revenue.
Products
We have continued product development targeted at ensuring that our products
are easier to install and commission. Beyond hardware, we are advancing into
value-added services by leveraging the vast amount of real-time data our
sensors generate. Through our newly developed advanced AI analytics,
predictive maintenance capabilities, and a cloud-based platform, we aim to
enable the transition from a sensor provider to a data-driven solutions
business. This strategic shift enables us to offer enhanced operational
insights to customers, driving efficiency, reducing downtime, and unlocking
recurring revenue streams through subscription-based services. We have
delivered an architecture which allows the flexible deployment of our
analytics so that our solution can easily adapt to any current customer
ecosystem or IT security demands. Customer demand for this type of solution
is growing and allows us to become a Key Strategic Partner to our customers.
We are progressing well with the development of a new sensor for water-based
fluids such as coolant, driven by demand from a major engine OEM who has
co-funded the project. This product deepens our value in the engine market
segment and once validated, will form part of a multi-sensor solution on each
asset. Launch is targeted for Q2 2025.
During last year we also tasked TUV (a global organisation that offers
solutions for quality, safety and sustainability) with undertaking a series of
independent tests to verify the performance of our sensors when looking at
overall oil degradation, particulate contamination and fuel dilution. This was
successfully concluded with TUV producing both a summary and detailed test
report, with an overall conclusion reached by TUV, "During wear metal
sensitivity, fuel dilution and end of life tracking testing, the Tan Delta
OQSxG2 oil quality sensor was shown to be a very precise and repeatable
instrument".
Market and Outlook
Our core sensing technology and analytics continue to be the gold standard for
innovative predictive maintenance, based on real-time oil condition, this
combined with the fact that all equipment operators want to get more from
their assets for less, puts us in a unique position to disrupt the various
huge global industrial and commercial markets who can directly benefit from
this approach. This is further evidenced by the continued growth in our
pipeline, the sheer number of active trials underway (many nearing completion)
and the growing number of strategic engagements we have with global OEMs. We
remain focused on conversion of the large opportunities and work on these in
early 2025 has been continuing.
Summary
In final summary, as always, I would like to convey my very sincere thanks to
all of our stakeholders, in particular our excellent staff, our shareholders,
our board and key suppliers. Without their continued support, dedication and
patience we would not have the opportunity to continue our journey towards
sustainable growth and realisation of commercial success.
STRATEGIC REPORT
The directors present their strategic report for the year ending 31 December
2024.
Business Review
The principal activity of Tan Delta is the development and supply of oil
condition monitoring equipment into a diverse range of global market
delivering services that enable operators of rotating equipment, from trucks
and ships to generators and wind turbines, to reduce oil consumption,
maintenance costs, breakdowns and carbon footprint.
The Key Performance Indicators (KPIs) used by the board to monitor performance
are revenue growth, gross profit margin, adjusted profit margin and cash
conversion. These measures are in line with the Company's strategic objectives
of delivering profitable growth which in turn drive shareholder value.
Market Review
The addressable market for Oil Condition Monitoring Equipment is significant.
We estimate that there are millions of assets with moving parts (rotating
equipment) worldwide, from trucks or ships to generators or wind turbines. The
desire of equipment operators to achieve greater reliability, operating cost
reduction and efficiency has created a $200 billion global sensor market which
is anticipated to reach approximately $500 billion by 2032 with an expected
Compound Annual Growth Rate (CAGR) of 8.4% from 2023 to 2032.
Tan Delta has strategically targeted key sectors, including Power Generation,
Mining, Commercial Marine, Agriculture, and Transportation. Our product
offering is continuously refined to address the specific needs and challenges
of these markets, delivering clear and compelling value propositions that
drive the adoption of our sensing technology.
Financial Review
Whilst revenue for the year fell by 16% (2024: £1.22 million, 2023: £1.46
million), the Company saw a significant improvement in convertible pipeline
opportunities. Although conversion in 2024 was lower than anticipated the
opportunities still exist and we remain focused on order acquisition in 2025.
Revenues:
Revenue in the year was generated by sales of oil condition monitoring
equipment from a wide range of customers and sectors.
We saw a decrease in revenue achieved in the UK due to a slower than expected
roll out with a number of customers. Europe and Rest of the World revenue was
consistent with 2023, although many of the higher value opportunities are in
the Middle East.
Gross profit:
Gross profit margin improved from 60% in 2023 to 62%, whilst ensuring that our
product offering has an attractive return for our customers. Inflation on
supply was reduced compared to previous years, any future cost pressure can be
passed on through pricing and mitigated by good supply chain management.
Operating expenses:
Operating expenses grew as we deployed the capital raised at the prior year
IPO into sales, marketing, and product development teams. There have also been
incremental costs as a full year of additional costs related to the listing
have been incurred. We have grown the team in order to support our growth
strategy and in line with our plans. We have continued to invest in growing
the Company's sales and marketing activities alongside developing our product
offering.
Loss/profit before tax:
Loss before tax was £1.17 million in 2024 (2023: £1.05 million adjusted loss
before tax). During the year, operating expenses increased because of
investments in sales, marketing, and product development alongside incremental
costs of being a plc. Prior year costs included £0.7million of IPO costs
whereas in the current year there are no IPO costs.
Finance income and expenses:
Cash reserves were invested in interest earning bank accounts generating
interest income of £0.17 million. (2023: £0.04 million)
Interest expense was accounted for on the right of use asset as per IFRS 16.
Cash:
The year-end cash balance for 2024 was £3.08 million (2023: £4.55 million).
Accounting policies:
The financial information has been prepared consistently in accordance with
the UK adopted International Accounting Standards.
Use Of Non-GAAP Financial Performance Measures
This Annual Report and Financial Statements include disclosures and analysis
that feature metrics not defined by generally accepted accounting principles
('GAAP') under UK-adopted IFRS. We consider this information, alongside
comparable GAAP measures, beneficial to investors. Management utilises these
financial metrics, in conjunction with the most directly comparable GAAP
measures, to assess our operational performance. It's important not to view
non-GAAP measures independently or as replacements for financial data
presented in accordance with GAAP.
In the following table we provide a reconciliation of non-GAAP measures:
Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
Adjusted operating profit or (loss) before tax
Reported operating profit or (loss) (1,337,051) (1,079,201)
Non-underlying items:
IPO costs (658,975)
Share Option Costs (36,905) (19,091)
Adjusted operating profit or (loss) (1,300,146) (401,135)
Adjusted profit or loss before tax
Reported profit or (loss) (1,173,402) (1,049,500)
Non-underlying items:
IPO costs (658,975)
Share Option Costs (36,905) (19,091)
Adjusted profit or (loss) (1,136,497) (371,434)
A prior year adjustment was made to the financial statements to correct an
over expense to the share option reserve in the previous year. Share option
costs had been recognised incorrectly for the full year instead of recognising
share option charges for five months since they were issued in August 2023.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED
31 DECEMBER 2024
Note Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Revenue 4 1,215,328 1,457,344
Cost of sales (460,990) (588,034)
Gross profit 754,338 869,310
Administrative expenses 5 (2,091,389) (1,948,511)
(Loss) Profit from operations
Adjusting items 6 (36,905) (678,066)
Excluding adjusting items (1,300,146) (401,135)
(Loss) / Profit from operations (1,337,051) (1,079,201)
Interest expense 7 (2,612) (6,414)
Interest Income 8 166,261 36,115
(Loss) / Profit before tax
Adjusting items (36,905) (678,066)
Excluding adjusting items (1,136,497) (371,434)
(Loss) /Profit before tax (1,173,402) (1,049,500)
Taxation 9 5,682 7,215
(Loss) / Profit for the period attributable to equity holders of the Company (1,167,720) (1,042,285)
Other comprehensive income
Total other comprehensive income - -
Total comprehensive (loss) / profit for the period attributable to equity (1,167,720) (1,042,285)
holders of the Company
Basic and diluted earnings per share (£) 10 (0.02) (0.02)
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024
Note Restated
As at As at
31-Dec-24 31-Dec-23
£ £
Non-current assets
Intangible assets 11 111,928 143,836
Right of use asset 12 66,922 93,690
Property, plant and equipment 13 73,923 55,680
252,773 293,206
Current assets
Inventories 14 733,136 365,326
Trade and other receivables 15 309,619 274,643
Cash and cash equivalents 16 3,083,552 4,555,003
4,126,307 5,194,972
Total assets 4,379,080 5,488,178
Current liabilities
Trade and other payables 17 514,936 465,832
Short term borrowings 18 - -
Short term lease liability 18 28,221 27,388
543,157 493,220
Non-current liabilities
Long term borrowings 18 - -
Long term lease liability 18 43,949 72,169
43,949 72,169
Total liabilities 587,106 565,389
Net assets 3,791,974 4,922,789
Equity attributable to equity holders of the Company
Ordinary share capital 19 73,224 73,224
Share premium account 20 5,426,204 5,426,204
Other reserves 21 55,994 19,089
Retained earnings 20 (1,763,448) (595,728)
Total equity 3,791,974 4,922,789
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2024
Note Share capital Share premium account Restated Other reserves Restated Restated Total equity
Retained earnings / losses
£ £ £ £ £
Balance at 1 January 2023 452 1,564,692 - (1,068,436) 496,708
Share issue on IPO 23,074 5,426,203 - - 5,449,277
Bonus issue of shares 49,698 (49,698) - - -
Cancellation of share premium - (1,514,993) - 1,514,993 -
Share option costs - - 76,907 - 76,907
Share option costs adjustment 24 (57,818) (57,818)
Comprehensive income:
Loss for the period - - (1,042,285) (1,042,285)
Balance at 31 December 2023 73,224 5,426,204 19,089 (595,728) 4,922,789
Note Share capital Share premium account Other reserves Retained earnings / losses Total equity
£ £ £ £ £
Balance at 1 January 2024 73,224 5,426,204 19,089 (595,728) 4,922,789
Ordinary share capital - - - - -
Comprehensive income: -
Loss for the period - - - (1,167,720) (1,167,720)
Share option costs - - 36,905 - 36,905
Balance at 31 December 2024 73,224 5,426,204 55,994 (1,763,448) 3,791,974
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2024
Note Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Cash flows from operating activities
Loss before Tax (1,173,402) (1,049,500)
Adjustments for non-cash/non-operating items:
Depreciation 25,231 24,219
Amortisation of intangible assets 51,911 20,274
Amortisation of right of use assets 26,769 26,769
Taxation 5,682 7,215
Tax paid / received
- -
Share Options Costs 36,905 19,087
Loss on disposal of plant and equipment 5,854
-
Interest income (166,261) (36,115)
Interest expense 2,612 6,414
Operating cash flows before movements in working capital (1,190,554) (975,783)
Increase in inventories (367,803) (125,195)
(Increase) / decrease in trade and other receivables (34,974) 44,532
Increase in trade and other payables 49,096 98,654
Net cash used in operating activities (1,544,235) (957,792)
Cash flows from investing activities
Investments in Property & Equipment (43,473) (21,756)
Investments in Intangible assets (20,003) (42,836)
Net cash from / (used in) investing activities 63,476 (64,592)
Cash flows from financing activities
Repayment of debt - (64,347)
Repayment of lease (30,000) (30,000)
Proceeds from investments in Bank 166,261 36,115
Issuance of equity - 5,449,278
Net cash from / (used in) financing activities 136,261 5,391,046
Net (decrease) / increase in cash and cash equivalents (1,471,451) 4,368,662
Cash and cash equivalents at the beginning of the period 4,555,003 186,341
Cash and cash equivalents at the end of the period 16 3,083,552 4,555,003
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2024
4. Revenue from contract customers
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
United Kingdom 385,068 688,545
Europe 391,350 314,597
Rest of the World 438,910 454,202
1,215,328 1,457,344
Segmental reporting
The Chief Operating Decision Maker ("CODM") has been identified as the
directors. The CODM reviews the Company's internal reporting in order to
assess performance and allocate resources. The CODM has determined that there
is one single operating segment, the manufacture and sale of oil sensors.
5. Administrative expenses by nature
Included in Administrative expenses is auditors' fees of £59,631 (2024) and
£58,355 (2023). The auditors were also paid £150,000 in 2023 relating to
reporting accountant work (non-audit services) (2024: £nil). Employee
benefits and expenses (including directors) were £1,261,265 in 2024 (2023:
£733,070). During the year ended 31 December 2024, the Company capitalised
staff costs of £20,003 (2023: £42,836). This amount has been included within
intangibles in the statement of financial position. Research and development
expenditure recognised as an expense in 2024 is £25,757 (2023: £3,461).
Directors' remuneration
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Directors' emoluments
Salaries and benefits 329,397 179,405
Pension contributions 12,385 6,111
341,782 185,516
In FY 24 the highest paid director received £146,684 (2023: £115,774). There
was no compensation for loss of office for the directors that resigned during
the year.
In FY 23 the Company granted 1,253,745 share options in line with the
disclosures made in the companies Admission document to two Executive
directors. The options have an exercise price of 26p. Steve Johnson's shares
(250,749) were cancelled on 5 July 2024.
Number of shares granted as at 1 January 2024 Awards lapsed /surrendered /cancelled in the year Number of awards over shares at 31 December 2024
Executive directors
Chris Greenwood 1,002,996 - 1,002,996
Steve Johnson 250,749 250,749 -
Total 1,253,745 250,749 1,002,996
Total remuneration inclusive of directors
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Salaries and benefits 1,238,078 754,028
Pension contributions 43,190 21,878
Total remuneration 1,281,268 775,906
Less: capitalised product development costs 20,003 42,836
1,261,265 733,070
Average number of employees (including directors)
12 months ended 12 months ended
31-Dec-24 31-Dec-23
Employees (including directors) 15 11
6. Adjusting items
Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
IPO costs - 658,975
Share Option Costs 36,905 19,089
36,905 678,064
A prior year adjustment was made to the financial statements to correct an
over expense to the share option reserve in the previous year. Share option
costs had been recognised incorrectly for the full year (£76 907) instead of
recognising share option charges for five months (£19 089) since they were
issued in August 2023.
This results in the loss for the year 31 December 2023 decreasing by £57,818,
with the closing balance of the share option reserve also decreasing by this
amount to a revised closing balance of £19,089.
7. Interest expense
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Interest on bank loans - 2,993
Interest on finance leases 2,612 3,421
2,612 6,414
8. Interest income
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Interest Income 166,261 36,115
8. Interest income
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Interest Income 166,261 36,115
9. Taxation
Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
Normal taxation:
- current year charge 5,682 7,215
- prior year charge - -
Charge to the statement of comprehensive income 5,682 7,215
The total charge for the year can be reconciled to the accounting profit as
follows:
Loss / Profit before taxation (1,173,402) (1,049,500)
Tax calculated at tax rate of 25% (2023: 23.52%) 293,351 246,846
Non-deductible expenses & Allowances
IPO Costs - (154,995)
Share option costs (9,226) (18,088)
Share option costs adjustment - 13,601
Professional fees (37) (28)
IFRS Adoption :IFRS 16 - (56,856)
Fixed asset differences 4,684 (1,891)
R&D expenditure 6,568 7,619
Trading losses (281,062) (21,227)
Employer pension (74) (372)
Surrender of tax losses for R&D tax credit refund (8,522) (8,783)
Tax rate change - 1,389
5,682 7,215
In 2024 Tan Delta used 25% (2023:23.52%) as the corporate effective tax rate.
The Company was not liable for corporation tax during the past two years due
to taxable losses being sustained in each of the years reported. A deferred
tax asset has not been recognised in respect of such losses due to uncertainty
of future profit streams. The Company will recognise a deferred tax asset when
there is clear visibility of profits. Accumulated tax losses carried forward
were £2.2m (31 Dec 20223 : £1.1m).
10. Earnings per share
Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ per share £ per share
Earnings per share are as follows:
Basic and diluted earnings per share (0.02) (0.02)
The calculations of basic and diluted earnings per share are based upon:
(Loss) / Profit for the period attributable to the owners (1,167,720) (1,042,285)
Number Number
Weighted average number of ordinary shares 73,223,800 58,802,550
The calculation of basic earnings per share is based on the results
attributable to ordinary shareholders divided by the number of ordinary shares
outstanding as if the bonus issue and share split had occurred at the
beginning of the earliest period presented. The earnings per share
calculations for the period and prior period presented are based on the new
number of shares.
The number of shares in issue at the end of the period is used as the
denominator in calculating basic earnings per share. As the Company is loss
making the effect of instruments that convert into ordinary shares is
considered anti-dilutive, hence there is no difference between the diluted and
non-diluted loss per share.
During the period ended 31 December 2023, the Company completed a 110 for 1
bonus share issue and a subdivision of shares. The Company also issued
23,074,000 as part of the IPO process on 18 August 2023. Prior to the bonus
issue there were 451,800 shares at £0.001, after the bonus issue and shares
issued at IPO there are 73,223,800 shares at £0.001.
11. Intangible assets
Intangible assets
£
2024
Cost
Beginning of the year 164,110
Additions 20,003
Disposals -
End of the year 184,113
Accumulated amortisation
Beginning of the year (20,274)
Amortisation (51,911)
Disposals -
End of the year (72,185)
Carrying amount End of the year 111,928
Intangible assets
2023
Cost
Beginning of the year 121,274
Additions 42,836
Disposals -
End of the year
164,110
Accumulated amortisation
Beginning of the year -
Amortisation (20,274)
Disposals -
End of the year (20,274)
Carrying amount End of the year 143,836
Intangible assets comprise the costs incurred during the development of Tan
Delta Systems products and software. They are amortised on a straight-line
basis over their estimated useful lives from the date they are available for
use.
An amortisation period of three years has been adopted based on the expected
period of commercial advantage of the technology. Useful lives are
reconsidered if circumstances relating to the asset change or if there is an
indication that the initial estimate requires revision.
12. Right of use asset
Right of use asset
£
2024
Cost
Beginning of the year 200,764
Additions -
Disposals -
End of the year 200,764
Accumulated amortisation
Beginning of the year (107,074)
Amortisation (26,768)
Disposals -
End of the year (133,842)
Carrying amount End of the year 66,922
Right of use asset
£
2023
Cost
Beginning of the year 200,764
Additions -
Disposals -
End of the year 200,764
Accumulated amortisation
Beginning of the year (80,305)
Amortisation (26,769)
Disposals -
End of the year (107,074)
Carrying amount End of the year 93,690
The Company leases one property for commercial use with a lease term of 10
years (remaining lease term is 2 years and 5 months). All lease payments, in
substance, are fixed over the term and are capitalised as part of the
right-of-use asset. All expected future cash out flows are reflected within
the measurement of the lease liabilities at each year end.
13. Property, plant and equipment
Plant and machinery Office equipment Furniture and fixtures Tenants Improvements Total
£ £ £ £ £
2024
Cost
Beginning of the year 67,847 17,933 8,561 10,966 105,307
Additions 17,392 25,920 162 - 43,474
Disposals - - - - -
End of the year 85,239 43,853 8,723 10,966 148,781
Accumulated depreciation
Beginning of the year (31,762) (5,577) (3,792) (8,496) (49,627)
Depreciation (12,982) (8,883) (1,173) (2,193) (25,231)
Disposals - - - - -
End of the year (44,744) (14,460) (4,964) (10,689) (74,858)
Carrying amount End of the year 40,495 29,393 3,758 277 73,923
Plant and machinery Office equipment Furniture and fixtures Tenants Improvements Total
£ £ £ £ £
2023
Cost
Beginning of the year 59,954 22,806 6,745 10,966 100,471
Additions 8,962 9,477 3,316 - 21,755
Disposals (1,069) (14,350) (1,500) - (16,919)
End of the year 67,847 17,933 8,561 10,966 105,307
Accumulated depreciation
Beginning of the year (16,505) (11,006) (2,987) (5,975) (36,473)
Depreciation (15,890) (4,007) (1,801) (2,521) (24,219)
Disposals 633 9,436 996 - 11,065
End of the year (31,762) (5,577) (3,792) (8,496) (49,627)
Carrying amount End of the year 36,085 12,356 4,769 2,470 55,680
Subsequent to 1 January 2023, property, plant and equipment are depreciated
using the straight-line method and also reassessed for useful estimated life.
Prior to that assets were depreciated using the reducing balance method. Tan
Delta adopted a comprehensive change, that is both new and old assets are
depreciated using the straight-line method prospectively. The change from
reducing balance to straight line method resulted in a depreciation charge
increase of £12,239 in 2023.
14. Inventories
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Raw Materials 369,547 164,302
Finished goods 371,692 207,928
Total 741,239 372,230
Less : Provision (8,103) (6,904)
733,136 365,326
The cost of inventories recognised as an expense in the year ended 31 December
2024 amounted to £360,554 (2023: £432,833). This is included in cost of
sales in the statement of profit or loss and comprehensive income. During the
year ended 31 December 2024, the Company wrote off a total stock value of
£nil (2023: £nil).
15. Trade and other receivables
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Amounts falling due within one year:
Trade receivables 187,978 144,381
Other receivables 83,987 87,006
Tax recoverable 12,897 7,215
Prepayments 24,757 36,041
309,619 274,643
Refer Note 21 to the financial statements for further details on expected
credit losses.
16. Cash and cash equivalents
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Cash at banks 3,083,552 4,555,003
Included in cash and cash equivalents are balances held either in instant
access accounts or in accounts where funds can be accessed when giving the
bank thirty-two days' notice. These balances have accordingly been classified
as cash and cash equivalents.
17. Trade and other payables
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Trade payables 380,324 305,150
Other payables 30,778 21,099
Other Taxation and social security 29,789 24,740
Accruals 64,414 90,905
Deferred Income 9,631 23,938
514,936 465,832
18. Borrowings and liabilities
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Current:
Bank loans - -
Lease liability 28,221 27,388
28,221 27,388
Non-current:
Bank loans - -
Lease liability 43,949 72,169
43,949 72,169
18. Borrowings and liabilities
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Current:
Bank loans - -
Lease liability 28,221 27,388
28,221 27,388
Non-current:
Bank loans - -
Lease liability 43,949 72,169
43,949 72,169
19. Share capital
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Allotted, called up and fully paid
Opening share capital (73,224) (452)
Bonus Issue - (49,698)
Ordinary shares of 23,074,000 @ £0.001 each - (23,074)
Total (73,224) (73,224)
Called up share capital represents the nominal value of shares that have been
issued. All classes of shares have full voting, dividends, and capital
distribution rights.
On 1 June 2023, the ordinary shares were subdivided from £0.01 to £0.001
(45,180 shares to 451,800 shares). Subsequently a bonus issue was made for all
the shareholders holding 451,800 shares at that date. The bonus issue
offered 110 ordinary shares for every 1 ordinary share in issue, with a
nominal value of £0.001 per share. This increased the number of ordinary
shares in issue by 49,698,000 to 50,149,800.
On 18 August 2023 the Company issued 23,074,000 at £0.001 per share
increasing the total number of shares in issue to 73,223,800.
20. Share Premium
In anticipation of re-registering the Company as a public limited Company, at
a general meeting of the Company 1on 1 June 2023, it was resolved that the
Company would reduce its share premium account by £1.52m by crediting the
Profit and Loss Account.
Share premium account
This represents the excess value recognised from the issue of ordinary shares
above nominal value.
21. Share Based Payments
When the Company listed on Aim in Augst 2023 it instituted an EMI share
options scheme. The Company granted 1,253,745 share options in line with the
disclosures made in the companies Admission document. The options have an
exercise price of 26p. These options are granted in five equal tranches and
will vest annually over five years. The fair value of each option granted was
estimated on the grant date using the Black Scholes option pricing model with
the following assumptions:
Tranche 1 2 3 4 5
1. Stock Price 0.26 0.26 0.26 0.26 0.26
2. Exercise Price 0.26 0.26 0.26 0.26 0.26
3. Expected Term (years) 5.5 6 6.5 7 7.5
4. Volatility (annualised %) 45% 45% 43% 44% 44%
5. Dividend Yield * - - - - -
6. Risk-Free Interest Rate * 4.70% 4.70% 4.70% 4.70% 4.70%
Fair Value 0.12 0.13 0.13 0.13 0.14
On 5 July 2024 250,749 shares granted to Steve Johnson were cancelled.
Number of shares granted as at 1 January 2024 Number of shares granted in the year Awards lapsed /surrendered /cancelled in the year Awards exercised in the year Number of awards over shares at 31 December 2024 Expiry date
Executive directors
Chris Greenwood 1,002,996 - - - 1,002,996 31/12/2028
Steve Johnson 250,749 - (250,749) - -
Total 1,253,745 - (250,749) - 1,002,996
Other reserve
This represents the cumulative fair value of share options charged to the
statement of comprehensive income net of the transfers to the profit and loss
reserve on exercised and cancelled/lapsed options.
Restated
12 months ended 12 months ended
31-Dec-24 31-Dec-23
Share option charges for share based payments £ £
Opening Balance 19,089 -
Share option costs 36,905 19,089
Closing balance 55,994 19,089
22. Financial instruments and risk management
The Company has exposure to the following risks from its use of financial
instruments;
· Market risk
· Liquidity risk
· Credit risk
· Foreign exchange risk
This note presents information about the Company's exposure to each of the
above risks, objectives, policies and processes for measuring and managing
risk as well as the Company's management of capital. The Board of directors
has the overall responsibility for the establishment and oversight of the
Company`s risk management framework.
The table below sets out the Company's classification of financial assets and
liabilities in the statement of financial position. There were no financial
assets and liabilities in the following category in 2024 and 2023 financial
periods;
· Financial assets and liabilities at fair value through profit
and loss.
The category has therefore been excluded from the tables below:
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Categories of financial instruments
Financial assets
Receivables and cash 3,393,171 4,829,646
Financial liabilities
Payables 587,106 565,389
Financial liabilities at amortised cost Financial assets at amortised cost Total carrying value Fair value
2024 Note £ £ £ £
Assets - 3,393,171 3,393,171 3,393,171
Trade and other receivables 14 - 309,619 309,619 309,619
Bank balance and cash 15 - 3,083,552 3,083,552 3,083,552
Liabilities 587,106 - 587,106 587,106
Trade and other payables 16 514,936 - 514,936 514,936
Borrowings & leases 17 72,170 - 72,170 72,170
2023
Assets - 4,829,646 4,829,646 4,829,646
Trade and other receivables 14 - 274,643 274,643 274,643
Bank balance and cash 15 - 4,555,003 4,555,003 4,555,003
Liabilities 565,389 - 565,389 565,389
Trade and other payables 16 465,832 - 465,832 465,832
Borrowings & leases 17 99,557 - 99,557 99,557
The estimated net fair values as at 31 December 2024 have been determined
using available market information as outlined below. This value is indicative
of the amounts the Company could realise in the normal course of business.
The fair value of receivables, bank balances, and payables approximate their
carrying amount due to the short-term maturities of these instruments. The
fair value of finance lease liabilities is not significantly different to
their carrying values, as the carrying values approximate their fair values.
Financial assets and liabilities disclosures require the measurement of fair
values which differ from the carrying values of these financial assets and
liabilities. The Company uses valuation techniques that are appropriate in the
circumstances and for which sufficient data is available to measure fair
value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
The valuation of the Company's financial instruments is based on market
observables whereby the owned assets and owed liabilities are similar to, but
not the same as, those traded in an active market. In this case, the fair
values of the financial instruments reported requires the
use of inputs that are unobservable in the market. As such the fair value
hierarchy of the entity's financial instruments is a level 3.
Fair value hierarchy
All financial instruments measured at fair value must be classified into one
of the levels below:
· Level 1: Quoted prices in active markets;
· Level 2: Level 1 quoted prices are not available, but fair value
is based on observable market data; and
· Level 3: Inputs that are not based on observable market data.
Market risk
Market risk is the risk that changes in market prices such as interest rates
will affect the Company's income or expenses. The objective of market risk
management is to manage and control market risk exposures within acceptable
parameters while optimising the return on risk.
Interest rate risk management
Interest rate risk is the risk that the value of the financial instrument will
fluctuate due to changes in market interest rates. The Company is exposed to
fluctuations in interest rates (i.e. cash flow interest rate risk) on its bank
balances and finance leases. It does not at present hedge its exposure to
adverse interest rate movements.
At the reporting date the interest rate profile of the Company's
interest-bearing financial instruments was:
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Variable rate instruments
Asset
Bank balance and cash 3,083,552 4,555,003
Liability
Borrowings & leases 72,170 99,557
Cash flow sensitivity analysis for variable rate instruments:
A change of 100 basis points in interest rates at the reporting date would
have increased/ (decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables in particular foreign
currency rates remain constant:
Variable rate instruments (Decrease) / increase in equity and profit or loss
100bp increase 100bp decrease
£ £
2024
Asset
Bank balance and cash 30,836 (30,836)
Liability
Borrowings & leases 722 (722)
2023
Asset
Bank balance and cash 45,550 (45,550)
Liability
Borrowings & leases 996 (996)
Liquidity risk
Liquidity risk arises when there are insufficient liquid assets (cash and
readily convertible securities) available to meet financial obligations. There
were no material changes in the exposure to liquidity risk and its objectives,
policies and processes for managing and measuring the risk during the current
financial year.
The Company's approach to managing liquidity is to ensure as far as possible
that it will always have sufficient liquidity to meet its liabilities when due
under both normal and stressed conditions without incurring unacceptable
losses or risking damage to the Company's reputation.
The Company ensures that it has sufficient cash on demand to meet expected
operational expenses in the short-term including the servicing of financial
obligations this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted such as natural disasters.
The following liquid resources are available:
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Trade and other receivables 309,619 274,643
Bank balance and cash 3,083,552 4,555,003
Total 3,393,171 4,829,646
The table below analyses the Company's financial liabilities which will be
settled on a gross basis into relevant maturity groupings based on the
remaining period at the statement of financial position date to the
contractual maturity date. The amounts disclosed in the table below are the
contractual undiscounted cash flows.
Carrying Contractual 0-12 months 1-3 years
Amount cash flows
2024 Note £ £ £ £
Trade and other payables 16 514,936 514,936 514,936 -
Borrowings & leases 17 72,170 75,000 30,000 45,000
Total 587,106 589,936 544,936 45,000
2023
Trade and other payables 16 465,832 465,832 465,832 -
Borrowings & leases 17 99,557 105,000 30,000 75,000
Total 565,389 570,832 495,832 75,000
Credit risk
This risk represents the risk that the borrower or counterparty fails to meet
an obligation when it falls due. The exposures may arise, for instance from
deterioration in the borrower's financial position, from a reduction in the
value of securities held as collateral and from entering into contracts under
which counterparties have an obligation to repay. In order to minimise the
risk, the Company endeavours only to deal with companies which are
demonstrably creditworthy and this, together with the aggregate financial
exposure, is continuously monitored.
IFRS 9 requires the use of forward-looking information to recognise expected
credit losses - the 'expected credit loss model'. Recognition of credit losses
is not dependent on the Company first identifying a credit loss event, instead
the Company considers a broader range of information when assessing credit
risk and measuring expected credit losses, including past events, current
economic conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the instrument.
When the Company becomes aware of a financial asset that is irrecoverable, the
Company writes off the financial asset through the profit and loss. The
Company considers its maximum exposure per class to be as followed:
12 months ended 12 months ended
31-Dec-24 31-Dec-23
£ £
Trade and other receivables 309,619 274,643
Bank balance and cash 3,083,552 4,555,003
Total 3,393,171 4,829,646
Cash and cash equivalents
The Company determines appropriate internal credit limits for each
counterparty. In determining these limits, the Company considers the
counterparty's credit rating established by an accredited ratings agency and
performs internal risk assessments.
The Company holds its cash balances in financial institutions with a rating of
A+ and BBB+.
Given these credit ratings, management does not expect any counterparty to
fail to meet its obligations. While cash and cash equivalents are subject to
the impairment requirements of IFRS9, no impairment losses were identified.
Exposure at Default (EAD) Probability of possible defaults (PD) Loss given default (LGD) Expected credit losses (ECL)
2024 £ £
Cash & Cash equivalents 3,083,552 0% 0% -
Exposure at Default (EAD) Probability of possible defaults (PD) Loss given default (LGD) Expected credit losses (ECL)
2023 £ £
Cash & Cash equivalents 4,555,003 0% 0% -
Trade receivables
The Company has adopted a simplified approach for determining expected credit
losses which considers the lifetime of assets. These are the expected
shortfalls in contractual cash flows, considering the potential for default at
any point during the life of the financial instrument. The expected credit
losses are calculated based on the probable defaults which are considered on
the historic payment trends of the customer, external indicators and
forward-looking information to calculate the expected credit losses using a
provision matrix. The Company assesses impairment regularly of trade
receivables on a collective basis as they possess shared credit risk
characteristics based on grouping debt by days overdue. On that basis the
expected credit loss allowance was determined to be immaterial.
The ageing of trade receivables and credit loss allowances at the reporting
date were:
Exposure at Default (EAD) Probability of possible defaults (PD) Loss given default (LGD) Expected credit losses (ECL)
2024 £ £
Current 74,659 0% 0% -
1 - 30 days 49,378 0% 0% -
31 - 60 days 9,197 0% 0% -
Over 61 days 54,744 0% 0% -
Total 187,978 -
Exposure at Default (EAD) Probability of possible defaults (PD) Loss given default (LGD) Expected credit losses (ECL)
2023 £ £
Current 82,519 0% 0% -
1 - 30 days 37,540 0% 0% -
31 - 60 days 9,048 0% 0% -
Over 61 days 15,274 0% 0% -
Total 144,381 -
Foreign exchange risk
Foreign exchange risk arises when the Company enters into transactions in a
currency other than its functional currency. The Company's policy is, where
possible, to settle liabilities denominated in a currency other than its
functional currency with cash already denominated in that currency.
23. Related Party transactions
During the year, the key management personnel remuneration
included within staff costs are as follows:
12 months ended 12 months ended
31-Dec-24 31-Dec-23
Key management personnel compensation £ £
(Directors' remuneration)
Short-term employee benefits 341,782 185,516
Post-employment benefits - -
Termination benefits - -
Equity compensation benefits - -
Total 341,782 185,516
Key management personnel are considered to be the directors
of Tan Delta Systems plc.
24. Prior year adjustment
A prior year adjustment was made to the financial statements to correct an
over expense to the share option reserve in the previous year. Share option
costs had been recognised incorrectly for the full year (£76,907) instead of
recognising share option charges for five months (£19,089) since they were
issued in August 2023.
This has therefore impacted the following lines of the financial statements:
2023 c/f balance Adjustment Restated 2023 c/f balance
Admin expenditure (2,006,329) 57,818 (1,948,511)
Other reserves 76,907 (57,818) 19,089
25. Events after reporting period
No adjusting or significant non-adjusting events have occurred between
reporting date and the date of authorisation.
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 Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR BCGDUGDGDGUCRecent news on Tan Delta Systems
See all newsREG - Tan Delta Systems - Posting of Annual Report and Notice of AGM
AnnouncementREG - Tan Delta Systems - Holding(s) in Company
AnnouncementREG - Tan Delta Systems - Holding(s) in Company
AnnouncementREG - Tan Delta Systems - Full year results for 12 months ended 31 Dec 2024
AnnouncementREG - Tan Delta Systems - Trading update
Announcement