REG - Transense Technlgy - Final Results & Investor Presentation
25/09/2023 07:00
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RNS Number : 4388N Transense Technologies PLC 25 September 2023
The information communicated within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014 which is part of UK law by virtue of the European Union (withdrawal)
Act 2018. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
25 September 2023
Transense Technologies plc
("Transense" or the "Company")
Final results for the year ended 30 June 2023
& notice of investor presentation
Transense Technologies plc (AIM: TRT), the provider of specialist sensor
systems, announces its final results for the year ended 30 June 2023.
The Board of Transense is pleased to announce substantial increases in revenue
and profitability, and further considerable progress in the development of
commercial pipeline opportunities. The Company has achieved the strategic
objectives set out in 2020, and now sets out commercial and financial goals
for the medium term to 2028.
The directors consider that there are positive market drivers across all key
target market sectors which provide ample opportunity to expand, despite
current uncertain economic conditions, and Transense is investing in
technology, equipment and human resources in order to build strategic and
sustainable long term shareholder value.
Financial highlights:
• Revenue up 34% to £3.53m (FY22: £2.63m)
• iTrack royalty increased 29% to £2.01m (FY22: £1.56m)
• Translogik probe revenue up 17% to £1.03m (FY22: £0.88m)
• SAW revenue up 146% to £0.49m (FY22: £0.20m) with
further substantial increases in activity from prospective customers
• Adjusted profit before taxation of £1.09m (FY22:
£0.27m) *
• Earnings per share up more than 64% to 8.81 pence (FY22:
5.36 pence)
• Cash and cash equivalents at year end of £0.98m (FY22:
£1.06m)
• Completed share buybacks of £0.40m (FY22: £0.30m)
• Distributable reserves at year end of £2.90m (FY22:
£1.20m)
*Before exceptional administrative expenses
Executive Chairman of Transense, Nigel Rogers, said:
"We are pleased to report these results, showing continued growth and our
strategy delivering. We have visibility of several exciting growth
opportunities for Translogik and are now adding an experienced and successful
business development leader with sole focus on the delivery of greater scale
and reach.
"There has been a rapid expansion of market awareness at SAWsense, and an
increasing intensity of funded development projects.
"We now believe that we have built a dynamic leadership group within the
executive team, with the requisite skills, experience and networks to deliver
further step changes in results in coming years."
Investor Presentation: 4pm, Monday 25 September 2023
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 Monday 25 September 2023. The presentation will be hosted through the
online platform Investor Meet Company.
To attend the presentation, investors can sign up to Investor Meet Company for
free and select to meet Transense Technologies plc via the following
link:https://www.investormeetcompany.com/transense-technologies-plc/register-investor
(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
(mailto: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 Broker) Tel: +44 (0)20 3328 5656
Jeremy Porter/George Payne (Corporate Finance)
Tony Quirke/Stefano Aquilino (Sales & Corporate Broking)
Walbrook PR Tel: +44 (0)20 7933 8780
Tom Cooper/Nick Rome Transense@walbrookpr.com
Notes to Editors:
Transense is a developer of specialist wireless sensor systems used to
enable real-time data gathering and monitoring. Products include the
patent protected Surface Acoustic Wave (SAW) sensor technology, used to
improve equipment power, performance, reliability and efficiency; iTrack,
Transense 's Tyre Pressure Monitoring System, licensed to Bridgestone
Corporation, the world's largest tyre producer, under a ten-year deal in June
2020; and a range of intelligent tyre monitoring equipment under the
Translogik brand. Target sectors include aerospace, electric motors &
drives, industrial machinery and performance automotive.
The Company's strategy is to maximise shareholder value through the delivery
of sustained revenue growth from all three principal technologies - SAW,
iTrack and Translogik probes - through leveraging excellence in innovation,
know-how in commercialising technologies, industry partnerships and exposure
to global growth markets.
Transense is headquartered in Oxfordshire, UK, and was admitted to trading on
AIM, a market operated by the London Stock Exchange (AIM: TRT), in
1999. www.transense.com (http://www.transense.com/)
For further information please contact transense@walbrookpr.com
(mailto:transense@walbrookpr.com) .
CHAIRMAN'S STATEMENT
The Company has delivered excellent results with revenues up by one third and
pre tax profits (before exceptional administrative costs) up fourfold. The
potential to continue on this trajectory is underpinned by a healthy pipeline
of new business opportunities, giving the directors confidence in the
prospects for Transense.
Business strategy
The business strategy of the Company remains to develop innovative sensing
solutions across a range of applications, which are commercialised either
through the launch of products and services to customers or by forming
strategic alliances with partner organisations. Value is realised through a
combination of commercial income, royalties, licensing income and capital
gains on disposals.
There are currently two active business segments: Translogik and SAWsense.
Translogik develops and supplies smart, connected tyre monitoring equipment
for the commercial truck and bus market, and SAWsense designs and supplies
advanced sensor solutions for accurate non-contact measurement of torque,
force, pressure and temperature for aerospace, electric motors and drives
(EMD), industrial machinery and high performance automotive sectors. In
addition, the company earns residual royalty income from iTrack, a system
developed by the company for monitoring mining haul tyre performance which was
licenced to Bridgestone Corporation for a ten year period expiring in 2030.
The directors consider that there are positive market drivers across all of
our key target market sectors which provide ample opportunity to expand both
businesses, despite current uncertain economic conditions. We are investing
in technology, equipment and human resources across both active business
segments in order to secure greater access to the target markets and build
strategic and sustainable long term shareholder value.
Results for the year
Revenues for the year increased by 34% to £3.53m (FY22: £2.63m), with
SAWsense up 146% and Translogik up 17%. Royalty income from iTrack increased
by 29%, reflecting an expected improvement in the second half of the year.
Gross margin improved to 87% of revenue (FY22: 85%) amounting to £3.05m
(FY22: £2.23m).
Administrative expenses increased a modest amount to £2.09m (FY22: £1.97m),
before exceptional severance costs of £0.22m. Earnings before Interest,
Taxation, Depreciation and Amortisation (EBITDA) adjusted for the charge for
exceptional costs and share-based payments was £1.40m (FY22: £0.62m), and
the adjusted net profit before taxation (excluding exceptional costs) was
£1.09m (FY22: £0.27m).
There was a credit for taxation of £0.53m (FY22: £0.61m) arising from the
increase in the deferred taxation asset relating to the use of previous years'
tax losses in the future, reflecting a future forecast period of two years
which is in line with the basis adopted in the prior year. In total, the
Company has UK tax losses available to carry forward at 30 June 2023 in excess
of £21m, which are available for offset against future profits subject to
HMRC agreement, of which approximately £4.70m is currently recognised for
deferred taxation purposes (FY22: £2.58m).
The resulting net total comprehensive income attributable to equity
shareholders was £1.40m (FY22: £0.88m) resulting in earnings per share (EPS)
of 8.81 pence (FY22: 5.36 pence).
The adjusted EPS before exceptional administrative costs was 10.20 pence.
The Company's financial position strengthened further during the year with net
assets increasing to £4.19m (FY22: £3.09m) as a result of the retention of
net profits after taxation. Net available cash balances amounted to £0.98m
(FY22: £1.06m), and the final quarter royalty income on iTrack receivable on
31 July 2022 stood at £0.54m (FY22: 0.47m).
Net cash generated from operations amounted to £0.65m (FY22: £0.41m). This
was re-invested in capital expenditure of £0.26m (FY22: £0.10m) and in the
share buy-back programme during the year totaling £0.41m (FY22: £0.30m).
The directors anticipate that the Company will continue to be cash generative
for the foreseeable future and will accumulate further cash balances well in
excess of the ongoing and any proposed new buy-back programme.
Mid-term financial goals 2023-28
Mid-term financial goals for the Company's businesses were last set out in
June 2020, immediately following the completion of the iTrack licence with
Bridgestone. Since that time, financial results have been in line with or
ahead of our expectations.
The directors now consider it an appropriate time to set out new mid-term
goals for the company for the period 2023 to 2028. During this period it is
anticipated that the iTrack licence income will continue to show healthy
growth before reaching a peak in the year ending 30 June 2025. The increase
in the number of installations thereafter is unlikely to fully offset the
reduction in the unit royalty rate, and the annual royalty in the year to 30
June 2026 is expected to reduce to a level comparable with the year ended 30
June 2023.
The directors are confident that prospects in each of the two active business
segments will be such that the Company can maintain the overall level of
profitability and earnings despite any reduction in the level of iTrack
royalty revenues.
Segmental review
Translogik tyre monitoring
Our range of tyre monitoring equipment marketed under the Translogik brand
generated revenue of £1.03m; an increase of almost 17% over the prior year
(FY22: £0.88m), and the segmental result was up by 17% to £0.42m (FY22:
£0.36m).
The road haulage and transport logistics sector continues to experience strong
volume growth yet is also subject to intense competitive pressure to reduce
unit costs and optimise asset utilisation. In parallel, however, operators
are subject to increasing road safety regulations, including the mandatory use
of tyre pressure monitoring systems (TPMS) in the EU from 2024 and the US from
2028. These add to the existing regulations for mandatory vehicle
inspections and digital record keeping, and the increasing adoption of radio
frequency identification tags (RFID) for tyre inventory management.
All of these challenges can be managed efficiently through the use of
Translogik tyre monitoring equipment, which digitises key tyre data to
integrate into a fleet management platform. We have a robust blue chip
customer base of global tyre manufacturers upon which to build, lending
credibility to the effectiveness and reliability of our equipment.
The directors estimate that there is an addressable market for fleet
management tools exceeding US$25m per annum, and this leads us to believe that
Translogik provides the capacity to accelerate segmental revenue in the next
three to five years. Accordingly, we have recently secured the appointment
of a dedicated business development director to lead this activity who has the
breadth of knowledge and established network of contacts to deliver step
change when he takes up this new role shortly.
SAWsense
SAWsense revenues more than doubled to £0.49m (FY22: £0.20m) and with
operating overheads almost unchanged the net loss (before exceptional costs)
for the segment reduced by 33% to £0.55m (FY22: £0.82m). During the year,
changes were implemented to the segmental management structure to better align
the senior team to customer needs, which is now led by Ryan Maughan as
Business Development Director and Andy Bullock as Technical Director.
Our market approach for SAW technology continues to focus on four sectors in
which there are applications with clear differentiated benefits, and we have
made good progress in each during the year.
Target market sectors for SAWsense:
Aerospace
The aerospace sector is undergoing a period of profound change driven by the
need to reduce the environmental impact of air travel, and opportunities to
expand the sector through new and innovative platforms for electrified urban
air mobility (UAM). This has created intense development activity by
established market leaders and new entrants, focused on developing cleaner and
more efficient conventional aircraft, and on the feasibility of new propulsion
systems including all-electric, hybrid electric and hydrogen fuel cell
technology.
In the past twelve months, we have doubled the number of potential customers
with whom we are working to introduce SAW technology into aerospace
applications from seven to fourteen. These include GE Aerospace, to whom we
have granted existing licences, and Parker Meggitt who are subject of a
Memorandum of Understanding signed in September 2022 with the shared intention
of agreeing terms for a licence before the end of 2023. Discussions with
Parker Meggitt are ongoing, and a further update will be provided in due
course. In addition, there are several other potential customers in this
sector whose involvement is covered by confidentiality agreements.
The case for using SAW torque sensing has been proven for helicopter engines,
and there are now live development activities for use in electric actuator
force and torque control, and torque in hybrid generation systems and advanced
open rotor engines. In addition, there are other opportunities to introduce
SAW for use in electric propulsion motors for aerospace applications, as well
as torque, pressure and/or temperature measurement for a variety of other
airframe and propulsion systems.
The aircraft sensor market was estimated to be valued at US$4bn in 2021, with
forecast compound annual growth at a rate of 8% in the period to 2028. The
directors believe that a realistic goal for annual revenue from development,
engineering services and component supply into this sector by SAWsense could
lie in the range US$5-10m by 2030.
Industrial Machinery (including Off-Highway Vehicles and Robotics)
The use of SAW sensing technology for torque and/or temperature can improve
accuracy, efficiency and power distribution in industrial machinery ranging
from robots to agricultural equipment. Enhanced sensing is also required to
enable more autonomous operation of machinery.
During the year, SAWsense technology underwent rigorous trials by a major
producer of agricultural machinery. The project was completed on schedule
and validated the accuracy and reliability of the resulting data. Whilst
this is expected to strengthen the business case for the use of SAW, this was
an advanced research and technology program and work continues to explore
production applications for the technology. A number of other off-highway
OEM's have also expressed interest and are at an early stage of engagement in
information exchange under NDA. We believe that the addressable market for
torque and temperature sensors in this sector exceeds US$25m per annum.
The global market for force and torque sensors for industrial robotics was
estimated to be worth US$300m in 2022 and was forecast to grow to more than
US$650m by 2028. Engagement with a select group of leading companies in this
industry indicates that SAW technology can provide an improved way to measure
torque and temperature in a robotic system, increasing the speed and accuracy
of the robot by reducing joint flex and motor jitter. This in turn offers
increased load capacity and productivity, because of this we believe that this
valuable differentiation results in more than US$50m per annum of the robot
torque sensor market to be addressable by our technology by 2028.
Motorsport and high-performance vehicles
SAWsense continues to work closely in the premium motor sport sector with our
joint collaboration agreement partner, McLaren Applied. During the year, use
of SAW was extended beyond its roots in IndyCar to the Le Mans Daytona Hybrid
series of endurance racing. There are further opportunities to extend to
additional championships at proposal stage, with the outcome expected in the
final quarter of 2023.
SAW has proven to be more accurate and reliable than competitor systems and
offers a lower lifecycle cost to event organisations and race teams. Whilst
motorsport is a niche sector, we estimate that the addressable market for
motorsport torque measurement exceeds US$25m per annum and believe that there
are unique characteristics in our technology to be successful.
Success in these motor sport applications demonstrates the performance and
reliability of the technology in harsh operating conditions.
Electric Motors and Drives (EMD)
The drive to reduce global dependency on fossil fuels is heavily dependent on
the development and commercialisation of efficient electric motors and drives
across a broad range of transport and industrial applications. Using SAW
technology offers access to real-time torque and temperature data to improve
performance, efficiency, range and functional safety, and provides opportunity
to reduce material costs, particularly of rare earth materials in permanent
magnet motors.
Unlike our other key target sectors, the use of real time torque data to
control electric motors and drives is not common practice, and instead
controls are reliant upon traditional torque estimation methods with roots
going back decades. During the year we have contracted a leading engineering
consultancy to carry out a program of simulation work to demonstrate the
benefits of using real time actual torque in the control loop, with good
results.
In the current year, these findings will be expanded by conducting live trials
on a demonstration test rig, and we anticipate that this activity will
generate opportunities to expand our intellectual property portfolio further
and to build a platform for commercial advancement.
Business development activities
Throughout the year there has been an increasing volume of inbound enquiries
across all of our main target markets, mostly driven by the increased
awareness of the benefits of our technology from marketing assets such as
on-line video content, conference presentations and trade show attendance.
Discussions with Parker Meggitt are ongoing, a further update will be provided
in due course. There are several other potential customers in this sector
whose involvement is covered by confidentiality agreements.
Enquiries are carefully vetted, and those which meet our qualification
criteria enter a standardised process through a number of stage gates.
Passage through this mechanism can take several months before reaching
agreement on a funded development project to instrument a demonstration unit
and carry out performance assessment. Beyond that, there are many other
factors to evaluate (including for example productionisation methods, supply
chain and associated cost) before customers are ready to commit to full scale
commercial implementation.
Overall, it is realistic to expect that achieving volume production in highly
regulated markets such as aerospace and automotive will take three to five
years, during which period customers will have the capacity and willingness to
fund further development work.
This process has been underway for more than one year, and progress has been
made both in the number of active qualified enquiries (which has more than
doubled from 24 to 57), and the depth of engagement indicated by moving to
towards funded development (which has also doubled from 6 to 13). Full
details are as follows:
Status of potential customers by sector as at September 2023 (September 2022)
Electric Motors & Drives Industrial Machinery Performance Automotive
Aerospace Total
Stage 4 - Contracted 1 (1) 0 (0) 0 (0) 1 (1) 2 (2)
Stage 3 - Contract under negotiation 2 (1) 0 (0) 0 (0) 0 (0) 2 (1)
Stage 2 - In development 1 (1) 3 (1) 1 (1) 1 (0) 6 (3)
Stage 1a - Development project in planning 3 (0) 2 (2) 1 (1) 1 (0) 7 (3)
Stage 1b - Active enquiry 7 (4) 24 (8) 8 (3) 1 (0) 40 (15)
Total 14 (7) 29 (11) 10 (5) 4 (1) 57 (24)
iTrack royalty income
Royalty income from iTrack generated income of £2.01m during the year,
representing an increase of 29% over the prior year (FY22: £1.56m). By the
end of the year, the installed base had risen to almost four times that which
prevailed at the outset of the licence, and the annualised royalty run rate
had increased to $2.92m, compared with $2.26m, representing a 29% increase
over the prior year.
Bridgestone Corporation, Japan, continues to indicate that iTrack is a key
strategic component of their mobility solutions business and express
confidence in the future growth potential for this technology.
Board structure and composition
In May 2023, Steve Parker joined the Board as an independent non-executive
director. He is a highly experienced board director with an enviable track
record of leading and advising businesses across the technology, automotive
and transportation sectors. The Company has already benefited greatly from
his expertise and judgement, and I am grateful for his valuable support.
Rodney Westhead has indicated that he intends to retire from the Board
following the appointment of an appropriate independent non-executive director
and chair of audit committee to replace him. He has served as a director
since 2007 and has made an invaluable contribution over many years, especially
more recently as the commercialisation of SAW technology has come to the
forefront of the Company's strategy. The directors intend to appoint a
suitable successor during the current financial year.
Distribution policy
Since February 2022, when the Company first announced the commencement of a
programme to conduct market purchases of ordinary shares of 10 pence each in
the Company, a total of 935,356 ordinary shares have been acquired for
treasury at an average price of 80 pence each (including 40,000 post year
end).
During the financial year the share price fluctuated between 48.5 pence and
95.5 pence, and averaged approximately 80 pence. The directors continue to
view the Company's shares as undervalued at this level and will execute
further market purchases when suitable opportunities arise, subject to the
renewal of shareholder approval for such action at the upcoming Annual General
Meeting.
The board has given careful consideration to the relative merits of share
buybacks as an alternative form of distribution over the payment of
dividends. On balance, share buybacks are considered to be more flexible and
tax efficient, and are the preferred mechanism for the majority of
shareholders by both number and value. Accordingly, the directors do not
recommend the payment of a dividend at the present time.
Current trading and outlook
In the first two months of trading since the end of the financial year
revenues have increased year on year by 16%, and the commercial pipeline in
both Translogik and SAWsense continue to expand.
Royalties from iTrack have increased almost fourfold since inception in 2020,
and with seven years of the licence to run it is expected to provide more than
sufficient cash income to enable further significant investment in both
SAWsense and Translogik and deliver strong returns to shareholders.
We have visibility of several exciting growth opportunities for Translogik and
are now adding an experienced and successful business development leader with
sole focus on the delivery of greater scale and reach.
There has been a rapid expansion of market awareness at SAWsense, and an
increasing intensity of funded development projects. Taken together with the
potential to add depth, breadth and longevity to the intellectual property
portfolio of this segment, the directors are confident of achieving a
financially self-sustaining business model with substantial strategic
value.
We now believe that we have built a dynamic leadership group within the
executive team, with the requisite skills, experience and networks to deliver
further step changes in results in coming years.
Nigel Rogers
Executive Chairman
25 September 2023
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
Year ended Year ended
30 June 30 June
2023 2022
£'000 £'000
Revenue 3,529 2,632
Cost of sales (474) (398)
---------------------------------------------- ----------------------------------------------
Gross profit 3,055 2,234
Administrative expenses (2,086) (1,970)
Exceptional administrative expenses (220) -
---------------------------------------------- ----------------------------------------------
Operating Profit 749 264
Financial income/(expense) 4 (12)
Other income 113 16
---------------------------------------------- ----------------------------------------------
Profit before taxation 866 268
Taxation 530 609
---------------------------------------------- ----------------------------------------------
Profit and total comprehensive income for the year attributable 1,396 877
To the equity holders of the parent ---------------------------------------------- ----------------------------------------------
Basic profit per share for the year (pence) 8.81 5.36
============================================== =============================================
Consolidated Balance Sheet
At 30 June 2023
At 30 June At 30 June
2023 2023 2022 2022
£'000 £'000 £'000 £'000
Non current assets
Property, plant and equipment 154 167
Intangible assets 731 671
Deferred tax 1,175 645
---------------------------------------------- ----------------------------------------------
2,060 1,483
Current assets
Inventories 260 88
Trade and other receivables 1,263 1,133
Cash and cash equivalents 978 1,055
---------------------------------------------- ----------------------------------------------
2,501 2,276
---------------------------------------------- ----------------------------------------------
Total assets 4,561 3,759
Current liabilities
Trade and other payables (334) (560)
Lease liabilities (36) (65)
---------------------------------------------- ----------------------------------------------
(370) (625)
Non current liabilities
Lease liabilities - (42)
---------------------------------------------- --------------------------------------
Total liabilities (370) (667)
---------------------------------------------- --------------------------------------
Net assets 4,191 3,092
============================================= =====================================
Equity
Issued share capital 1,644 1,644
Share premium 65 65
Treasury Shares (708) (303)
Share based payments 288 180
Retained earnings/(accumulated loss) 2,902 1,506
---------------------------------------------- ----------------------------------------------
Total equity 4,191 3,092
============================================== ==============================================
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Share Share Share based payments Retained earnings Treasury Shares Total
capital premium Equity
£'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 1,631 - 82 629 - 2,342
Comprehensive income for the year:
Profit for the year - - - 877 - 877
Share based payment - - 98 - - 98
Warrants exercised 13 65 - - - 78
Treasury shares - - - - (303) (303)
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30 June 2022 1,644 65 180 1,506 (303) 3,092
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Share Share Share based payments Retained earnings Treasury Shares Total
capital premium Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2022 1,644 65 180 1,506 (303) 3,092
Comprehensive income for the year:
Profit for the year - - - 1,396 - 1,396
Share based payment - - 108 - - 108
Treasury shares - - - - (405) (303)
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30 June 2022 1,644 65 288 2,902 (708) 4,191
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Consolidated Cash Flow Statement
For the year ended 30 June 2023
Year ended 30 June Year ended 30 June
2023 2022
£'000 £'000
Profit/(loss) from operations 1,396 877
Adjustments for:
Taxation (530) (609)
Net financial (income)/expense (4) 12
Share based payment 108 98
Depreciation 98 88
Amortisation and impairment of intangible assets 112 155
---------------------------------------------- ----------------------------------------------
Operating cash flows before movements in working capital 1,180 621
(Increase) in receivables (130) (569)
(Decrease)/increase in payables (226) 300
(Increase) in inventories (172) (15)
---------------------------------------------- ----------------------------------------------
Cash generated/(used) in operations 652 337
Taxation received - 71
---------------------------------------------- ----------------------------------------------
Net cash generated in operations 652 408
---------------------------------------------- ----------------------------------------------
Investing activities
Acquisitions of property, plant and equipment (85) (44)
Acquisitions of intangible assets (172) (56)
---------------------------------------------- ----------------------------------------------
Net cash (used in)/generated from investing activities (257) (100)
---------------------------------------------- ----------------------------------------------
Financing activities
Treasury shares (405) (303)
Warrants exercised - 78
Interest received/(paid) 4 (12)
Payment of lease liabilities (71) (62)
---------------------------------------------- ----------------------------------------------
Net cash used in financing activities (472) (299)
---------------------------------------------- ----------------------------------------------
Net (decrease)/increase in cash and cash equivalents (77) 9
Cash and equivalents at the beginning of year 1,055 1,046
---------------------------------------------- ----------------------------------------------
Cash and equivalents at the end of year 978 1,055
============================================== ==============================================
NOTES RELATING TO THE COMPANY FINANCIAL STATEMENTS
BASIS OF PREPARATION
Both the Parent Company financial statements and the Company financial
statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards as adopted by the United Kingdom
("Adopted IFRSs") and those parts of the Companies Act 2006 that are relevant
to companies preparing accounts under IFRS. On publishing the Parent Company
financial statements here together with the Company financial statements, the
Company is taking advantage of the exemption in s408 of the Companies Act 2006
not to present its individual statement of comprehensive income and related
notes that form a part of these approved financial statements.
1 SEGMENT INFORMATION
The Company had three reportable segments being the unique trading divisions,
SAW and Translogik, which make use of technology developed by the Company to
measure and record temperature, pressure and torque, and the iTrack royalty
activity in respect of income from licensed technology.
Revenue and EBITDA are the Company's key focus and in turn is the main
performance measure adopted by management.
The tables below set out the Company's revenue split and operating segments.
These disclose information for continuing operations and in view of their
relative size, information for discontinued operations. The disposal of iTrack
operations will result in future royalty income replacing direct sales income
and costs.
Revenue
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
North America 351 323
South America 143 123
Australia 32 41
Europe 485 387
UK 379 92
Rest of the World 129 109
-------------------------------------------- --------------------------------------------
1,519 1,075
=========================================== ===========================================
iTrack
Royalty
2,010 1,557
Total
Revenue
3,529 2,632
Segments
Translogik SAW iTrack royalties Unallocated Total
£'000 £'000 £'000 £'000 £'000
Year ended 30 June 2023
Sales 1,027 492 2,010 - 3,529
===================== ===================== ===================== ===================== ====================
Gross profit 588 457 2,010 - 3,055
Administrative expenses (165) (1,119) (44) (758) (2,066)
Exceptional administrative expenses (220) (220)
----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Operating profit/(loss) 423 (882) 1,966 (758) 749
Other income - 113 - - 113
Net financial income - - - 4 4
Taxation - - - 530 530
----------------------------- ---------------------------- ----------------------------- ----------------------------- -----------------------------
Profit/(loss) for the year 423 (769) 1,966 (224) 1,396
========== =========== =========== =========== ===========
EBITDA reconciliation
Operating profit 749
Other income 113
Depreciation and amortisation 209
------------------
EBITDA 1,071
===========
Note: Adjusted EBITDA (excluding share based
payments)
1,179
Translogik SAW iTrack royalties Unallocated Total
£'000 £'000 £'000 £'000 £'000
Year ended 30 June 2022
Sales 875 200 1,557 - 2,632
================== =================== =================== =================== ====================
Gross profit 484 193 1,557 - 2,234
Administrative expenses (126) (1,014) (44) (786) (1,970)
--------------------------- -------------------------- -------------------------- -------------------------- -----------------------------
Operating profit/(loss) 358 (821) 1,513 (786) 264
Other income - 16 - - 16
Net financial expense - - - (12) (12)
Taxation - - - 609 609
--------------------------- -------------------------- -------------------------- -------------------------- -----------------------------
Profit/(loss) for the year 358 (805) 1,513 (189) 877
========== ========= ========== ======= ===========
During the year ended 30 June 2023 there was 1 customer (2022: 2) whose
turnover accounted for more than 10% of the Company's total continuing revenue
as follows:
Year ended 30 June 2023 Revenue Percentage of total
£'000
Customer A 2,010 57
Year ended 30 June 2022 Revenue Percentage of total
£000
Customer A 1,557 59
Customer B 339 13
2 TAXATION
Recognised in the statement of comprehensive income in respect of continuing
operations
Year ended Year ended
30 June 2023 30 June 2022
£'000 £'000
Current tax credit
Adjustment for previous year - (11)
Deferred tax credit
Current year (530) (598)
--------------------------------------------- ---------------------------------------------
Tax credit in Statement of Comprehensive Income (530) (609)
============================================ ============================================
Reconciliation of effective tax rate
Year ended Year ended 30 June 2022
30 June 2023
£'000 £'000
Profit/(loss) before tax 866 268
============================================= =============================================
Tax calculated at the average standard UK corporation tax rate of 23.50% 178 51
(2022: 19:00%)
Expenses not deductible for tax purposes 23 19
Utilisation of losses brought forward for which no deferred tax asset was 25 (23)
recognised
Recognition of deferred tax in respect of prior year losses (756) (645)
Prior year adjustment - (11)
---------------------------------------------- ----------------------------------------------
Total tax credit (530) (609)
============================================= =============================================
Deferred tax assets are
Recognised - in respect of tax losses 1,175 645
Unrecognised - in respect of tax losses and other timing differences 4,528 4,900
============================================= =============================================
The applicable UK corporation tax rate is a blend of 19% for the first 9
months and 25% thereafter giving an average rate for the reporting period of
20.5%. The Group has tax losses, subject to agreement by HM Revenue and
Customs, in the sum of £21.9m (2022: £22.8m), which are available for offset
against future profits of the same trade. There is no expiry date for tax
losses. An appropriate deferred tax asset is being recognised as the Group is
able to demonstrate a reasonable expectation of sufficient future taxable
profits arising in order to utilise the losses.
3 EARNINGS PER SHARE
Year ended 30 June 2023 Year ended 30 June 2022
Number Number
Weighted average number of shares - basic 15,849,527 16,365,640
Share option adjustment for potentially dilutive shares - -
-------------------- -------------------
Weighted average number of shares - diluted 15,849,527 16,365,640
============ ===========
Last year showed potential dilutive impact of share options being 431,808
however this was incorrect as none of the share options had reached the hurdle
requirement necessary for the option to be exercised. There are 1,504,300
share options and no warrants in place at 30 June 2023 (1,594,500 share
options 30 June 2022).
Year ended 30 June 2023 Year ended 30 June 2022
£'000 £'000
Profit/(loss) 1,396 877
-------------------- --------------------
Basic profit per share 8.81 5.36
There are 1,504,300 share options and no warrants in place at 30 June 2023
(1,594,500 share options at 30 June 2022).
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 2023 or 30 June 2022 but are derived from those Financial Statements.
Statutory Financial Statements for 2022 have been delivered to the Registrar
of Companies and those for 2023 will be delivered following the Company's
AGM. The auditors Cooper Parry Group Limited have reported on the 2022 and
2023 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 2022 or 2021.
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 reg
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