REG - Transense Technlgy - Final Results & Investor Presentation
23/09/2024 07:00
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RNS Number : 1353F Transense Technologies PLC 23 September 2024
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596/2014 which is part of UK law by virtue of the European Union (withdrawal)
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23 September 2024
Transense Technologies plc
("Transense", the "Company" or the "Group")
Final results for the year ended 30 June 2024
& 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 2024.
The Board of Transense is pleased to announce continued increases in revenue
and profitability, and considerable strengthening of the team in both SAWsense
and Translogik. The Company has already started to achieve the strategic
objectives set out last year, covering the commercial and financial goals for
the medium term to 2028.
Substantial investment in people, facilities, equipment and intellectual
property has been made during the year, and the Board now considers that the
key elements are now in place to accelerate the conversion of strong
commercial pipelines. In recent months, two major grant funded development
projects have been announced for SAWsense. Combined with other customer
funded activities, these demonstrate the potential for production applications
in both aerospace and electric vehicle markets, whilst underpinning short term
financial forecasts.
Financial highlights:
• Revenue up 18% to £4.18m (FY23: £3.53m)
• Translogik revenue up 9% to £1.12m (FY23: £1.03m)
• SAWsense revenue reduced by 8% to £0.45m (FY23: £0.49m),
with high growth in second half contributing more than 80% of full year
segmental revenue
• Bridgestone iTrack royalty income up 30% to £2.61m (FY23:
£2.01m)
• Gross margin 87% of revenue (FY23: 87%)
• Adjusted profit before taxation up 20% to £1.31m
(FY23: £1.09m)*
• Earnings per share up 15% to 10.13 pence (FY23:
8.81 pence)
• Cash and cash equivalents at year end of £1.28m
(FY23: £0.98m)
*Before exceptional administrative expenses
Executive Chairman of Transense, Nigel Rogers, said:
"We are delighted with the progress made in the year across the Company's
entire operations. We have strengthened the Board and executive leadership,
whilst making some key appointments in senior management and across the
commercial and engineering teams to achieve a major step up in activity.
Customer engagement has developed in both depth and number, with strong
commercial pipelines and improved visibility to revenue generation. These
factors, combined with the investments we are making from self-generated cash
flow in infrastructure, are expected to support our ambitious growth
trajectory in future."
Investor Presentation: 4pm, Monday 23 September 2024
Nigel Rogers (Executive Chairman), Ryan Maughan (Managing Director) and Melvyn
Segal (Chief Financial Officer) will provide a presentation to review the
Company's annual results and prospects at 4pm on Monday 23 September 2024. 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 Via Investor Relations
(see below)
Nigel Rogers (Executive Chairman)
Ryan Maughan (Managing Director)
Melvyn Segal (Chief Financial Officer)
Allenby Capital (Nominated Adviser and Broker) Tel: +44 (0)20 3328 5656
Jeremy Porter / George Payne (Corporate Finance)
Stefano Aquilino / Tony Quirke (Sales and Corporate Broking)
Investor Relations Tel: +44 (0)1869 238380 investor.relations@transense.co.uk
(mailto:investor.relations@transense.co.uk)
Anice McNamee
Notes to Editors:
Transense is headquartered in Oxfordshire, UK and its shares are traded on
AIM, a market operated by the London Stock Exchange (AIM: TRT). The Company
develops and supplies advanced sensor technology and measurement solutions
used by some of the world's leading companies to improve performance,
efficiency, and safety in demanding, mission critical applications. Transense
currently operates through two active business segments:
· SAWsense - designs, supplies and licences advanced sensor
solutions based on proven, patent protected Surface Acoustic Wave (SAW)
technology to world leading companies in aerospace, automotive, and industrial
machinery (including robotics), enabling improved efficiency and performance
of their products. Key customers include GE Aerospace, Parker Meggitt, McLaren
Applied, Airbus and several other confidential Tier One automotive, aerospace
and industrial machinery suppliers.
· Translogik - develops smart, connected commercial vehicle tyre
inspection equipment to many of the world's leading tyre suppliers, fleet
operators and service centres. Enabling accurate measurement and digital
capture of safety-critical tyre condition data, used to reduce operating
costs, improve safety and provide audit records for regulatory compliance. Key
customers include Bridgestone, Goodyear, Continental and Prometeon (Pirelli),
and leading independent providers of vehicle fleet maintenance management
software.
In addition, Transense earns residual royalty income from Bridgestone iTrack -
a tyre monitoring system for off-highway vehicles that was developed by
Translogik. The associated sales, support and development infrastructure were
sold to Bridgestone Corporation, the world's largest tyre producer, in June
2020, and the intellectual property was licensed exclusively to Bridgestone
under a ten-year deal expiring in 2030.
Find out more at: https://www.transense.com/ (https://www.transense.com/)
CHAIRMAN'S STATEMENT & STRATEGIC REPORT
The Company continues to deliver both revenues and profitability in line with
the expected growth trajectory, whilst stepping up spending on commercial,
engineering and operational capabilities to accelerate future growth in
revenues. This investment has centred on introducing talented and
experienced people at all levels within the organisation, resulting in a
considerable strengthening of the team during the year.
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 inspection 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 Bridgestone 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.
Operating and Financial Review
Results for the Year
Revenues for the year increased by 18% to £4.18m (FY23: £3.53m), with
SAWsense slightly reduced by 8% and Translogik up 9%. Revenue from these
two operating segments was heavily weighted towards the second half of the
year as growth gathered momentum. Royalty income from Bridgestone iTrack
increased by 30%, reflecting increased conversion of new installations in the
year. The Company's gross margin was maintained to 87% of revenue (FY23:
87%) amounting to £3.65m (FY23: £3.01m).
Administrative expenses increased to £2.37m (FY23: £2.09m), before
exceptional severance costs of £0.05m (FY23: £0.22m). This increase
reflects the investment in new people recruited in the second half of the year
to secure and deliver new customer contracts, which will impact more visibly
in revenue in the coming financial year.
Earnings before Interest, Taxation, Depreciation and Amortisation (EBITDA)
adjusted for the charge for exceptional costs and share-based payments was
£1.71m (FY23: £1.40m), and the adjusted net profit before taxation
(excluding exceptional costs) was £1.31m (FY23: £1.09m).
There was a credit for taxation of £0.30m (FY23: £0.53m) 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 three
years. Previously we looked forward two years but increased this to reflect
the projected profitability through to 2030 when the losses will likely be
near to being exhausted. In total, the Company has UK tax losses available to
carry forward at 30 June 2024 of £20.7m, available for offset against future
profits, subject to HMRC agreement, of which approximately £5.90m is
currently recognised for deferred taxation purposes (FY23: £4.70m).
The resulting net total comprehensive income attributable to equity
shareholders for the year was £1.57m (FY23: £1.40m) resulting in earnings
per share (EPS) of 10.13 pence (FY23: 8.81 pence).
Segmental Review
Translogik
Our range of tyre inspection equipment marketed under the Translogik brand
generated revenue of £1.12m; an increase of 9% over the prior year (FY23:
£1.03m). Gross margin reduced slightly to 54% (FY23: 57%) largely due to
foreign exchange movements. The segmental overhead increased from £0.17m to
£0.22m and closed at an annualised rate closer to £0.30m, following the
appointment of new personnel in both the commercial and operational areas.
The new talents they bring to the Company will facilitate strong growth in the
business in the coming year. The segmental operating profit for the year of
£0.38m (excluding exceptional costs) reflects the increased overhead (FY23:
£0.42m).
The main existing market for Translogik products is with global tyre
manufacturers who use the tools in their commercial vehicle businesses to
enable rapid and accurate tyre inspection data to be captured. This data is
captured and analysed with the customer's own software systems and used to
help manage large fleet tyre usage and deliver traceable records for
legislative compliance. Significant opportunities to grow the business in the
road haulage and transport sector have been identified, by providing tyre
inspection tools and data management software to a wider section of the
market.
In order to deliver this, the Company has collaborated with a leading
developer of tyre management software to develop a simple and more accessible
entry level tyre inspection solution that can be easily integrated into
existing business information systems. As vehicle 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,
regulations for mandatory vehicle inspections and digital record keeping and
the increasing adoption of radio frequency identification tags (RFID) for tyre
inventory management there is a strong business case for the adoption of
Translogik solutions.
The Company's directors ("Directors") continue to estimate 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. In order to deliver on this
potential, Translogik has been working to grow its operational, product
engineering and business development capacity, making several new key hires in
the period. This will also facilitate the in-house production of the full
product range in place of the outsourcing model in use previously, with the
aim to further enhance customer service, product availability, quality and
cost.
SAWsense
SAWsense revenues were down slightly at £0.45m (FY23: £0.49m) and with
operating overheads slightly increased, the net loss (before exceptional
costs) for the segment rose to £0.71m (FY23: £0.55m). Revenue and overhead
expenses were both weighted strongly towards the second half of the year, as
the commercial momentum in the business gathered pace and additional
engineering personnel were recruited to deliver new customer funded
development projects.
Our market approach for SAWsense continues to focus on four sectors in which
there are applications with clear differentiated benefits, and we have made
further substantial progress in each during the year. There are now active
customers in each key segment and ongoing development projects that have moved
from small initial feasibility studies into significant funded engineering
programmes to design SAW sensing technology into customers new products.
Target market sectors for SAWsense:
Aerospace
Transense continues to build a strong base in the aerospace market. The
established relationship with GE Aerospace ("GE") is growing as they scale up
their T901 engine program in readiness for production and integrate SAWsense
into new propulsion systems such as in their HEAT and RISE development
projects. The Company is quoting for a variety of additional support
activities to help GE and its supply chain deliver increasing quantities and
future engine programmes.
In the second half of the year, the Company announced a new landing gear
project with Airbus commencing in April 2024 (LANDOne), which is anticipated
to deliver £0.5m of R&D income over its two-year duration. Towards the
end of the year, the Company commenced a new aircraft engine torque sensor
development programme with a new customer. In addition to these programmes
and the other ongoing business the Company has with major aerospace customers,
there remains a healthy pipeline of opportunities within the aerospace market
with both existing and new customers.
SAWsense technology is becoming increasingly well understood and accepted in
the aerospace market and is now well proven as a solution in key
applications. As a result the Directors continue to believe there is a
realistic goal for annual revenue from development, engineering services and
component supply into this sector by SAWsense in the range of US$5-10m by
2030, with significant upside opportunity.
Electric Motors and Drives (EMD)
Using SAWsense technology to measure torque and/or temperature in electric
motors enables improved performance, efficiency, 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, the Company completed the project to simulate the benefits of
incorporating SAWsense technology into electric motors and extended this work
to hardware in the loop testing of a representative electric vehicle
propulsion motor and controller. This work has yielded significant insights
enabling the Company to better promote the technology into this sector.
SAWsense recently announced its participation in the Power-electronics Upscale
for Localisation and Sustainable Electrification ("PULSE") project, a
collaborative R&D project that will be part funded by the UK Government
through the Advanced Propulsion Centre and will be led by In-Wheel Motor drive
system manufacturer Protean Electric ("Protean"). This project follows
around twelve months of work funded by Protean to carry out initial
feasibility studies and concept engineering of SAWsense technology in their
class leading In-Wheel Motor systems. The project aims to industrialise these
systems and allow Transense to develop higher volume manufacturing techniques
to prepare for Protean's production requirements, with clear benefits to other
running projects.
In addition, we continue to work with Tier 1 automotive business Novares on
integrating sensing technology into their electric motor componentry.
Towards the end of the year, the Company commenced a new torque sensor
development project in an electric drive system with a confidential major
European Tier 1 electronics customer, and has an exciting pipeline of other
opportunities in this sector.
Industrial Machinery (including Off-Highway Vehicles and Robotics)
The use of SAWsense technology for torque and/or temperature measurement can
improve accuracy, efficiency and power distribution in industrial machinery
ranging from robotics to agricultural machinery. Enhanced sensing is also
required to enable more autonomous operation of machinery. During the year,
the business secured two programmes with manufacturers of robotic machinery
for initial feasibility studies and prototype supply. The feasibility studies
were successfully completed but delivery of prototype parts scheduled to take
place in the final quarter slipped into the next financial year due to
engineering and production capacity constraints. The business has a pipeline
of opportunities in this space.
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, and 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
SAWsense continues to work closely in the premium motor sport sector with our
partner, McLaren Applied Limited (MAL). Motorsport revenues were subdued by a
delay with one key race series, however MAL is now supplying torque sensing
systems using SAWsense technology into a broader range of motorsport series
including IndyCar, Le Mans Daytona Hybrid (LMDH) and others.
In these demanding applications SAWsense has proven to be more reliable and
accurate than competitor systems, offering 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 that will enable MAL and SAWsense to develop the current
opportunity pipeline into a significant market share.
Success in these motor sport applications demonstrates the performance and
reliability of the technology in harsh operating conditions.
Business Development Activities
SAWsense continues to make progress raising the visibility and awareness of
the business divisions in key markets, driven by developing informative and
engaging video content and conference presentations, as well as an increased
level of trade show attendance which the business intends to continue in the
next financial year.
Enquiries are carefully qualified and those that meet our criteria for
technical and commercial fit 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 production 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 increased from
57 to 71, and the depth of engagement indicated by projects moving from
initial enquiry, through to feasibility studies and then progressing to
customer funded development projects. The number of customers funding such
projects has increased from 10 to 13, and the value of quoted work to support
these more advanced programmes has also increased by an order of magnitude, as
set out below:
Status of potential customers by sector as at September 2024 (September 2023)
Electric Motors & Drives Industrial Machinery Performance Automotive
Aerospace Total
Stage 4 - Contracted 1 (1) 0 (0) 0 (0) 1 (1) 2 (2)
Stage 3 - (Production) Contract under negotiation 1 (2) 0 (0) 0 (0) 0 (0) 1 (2)
Stage 2 - In funded development 4 (1) 3 (3) 2 (1) 1 (1) 10 (6)
Stage 1a - Development project in planning 3 (3) 1 (2) 2 (1) 0 (1) 6 (7)
Stage 1b - Active enquiry 5 (7) 27 (24) 17 (8) 2 (1) 51 (40)
Total 14 (14) 31 (29) 21 (10) 4 (4) 70 (57)
iTrack Royalty Income
Royalty income from Bridgestone iTrack generated income of £2.61m during the
year, representing an increase of 30% over the prior year (FY23: £2.01m).
Over the four completed years since the inception of the licence, it has
generated more than £7m in royalty income.
New installations ran at an improved rate during the year, reaching an
annualised royalty rate of US$3.67m by 30 June 2024. Under the terms of the
licence, the unit rate of royalty income will reduce to 60% of the current
rate with effect from 1 July 2025, and to 40% of the current rate on 1 July
2027, before expiry on 30 June 2030. The Directors have prepared
illustrative examples using compound annual volume growth rates of 10% and
18%, which indicate future royalty income of between £13-£16m over the
remaining life of the licence. The actual rate of volume growth is
uncertain, and future royalty income may lie outside of this range.
Bridgestone Corporation, Japan has rebranded the technology as Bridgestone
iTrack and has accelerated social media and direct marketing of their products
after renaming the relevant subsidiary Bridgestone Mining Solutions Technology
Limited (formerly ATMS Technology Limited). Bridgestone iTrack continues to
be a key strategic component of their mobility solutions business.
Corporate Governance, Board Structure and Composition
The board currently comprises the Executive Chairman, three independent
non-executive directors, and two executive directors. Ryan Maughan was
appointed Managing Director in March 2024 having previously served as Business
Development Director, assuming responsibility for all engineering and
operational activities of the Company in addition to his commercial
responsibilities.
Craig Wilson joined the board with effect from 1 July 2024 as an independent
non-executive director. Prior to his appointment, Craig was Chief Executive
at Williams Advanced Engineering where he led the transformation of the
business from its roots in Formula One racing to provide innovative technology
across a range of industry sectors. His experience and network are highly
relevant to the opportunities now evident in the Company's business.
Rodney Westhead has confirmed his intention to retire from the Board and he
will not seek re-election at the upcoming Annual General Meeting scheduled to
take place in November 2024. The Board is satisfied that reverting to a five
person Board with two independent non-executive directors represents an
appropriate degree of constructive challenge to the executive team.
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 1,217,856 ordinary shares have been acquired for
treasury at an average price of 84 pence each. The Directors continue to
monitor market activity relative to the prospects for the Company, and will
execute further market purchases should 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 commencement of dividend
payments, however this is considered premature in view of the opportunities to
continue to invest in the development of operating business segments for
enhanced future returns. Accordingly, the Directors do not recommend the
payment of a dividend at the present time.
Current Trading and Outlook
Trading in the period since the financial year end has been strong, with
revenues approximately 60% ahead of the corresponding period last year,
profits showing good progress despite increased overhead costs, and net cash
at 31 August 2024 increasing to £1.49m. The depth and scale of customer
engagements across the Company's two trading segments is intensifying.
Translogik is now positioned to convert new business for its tyre management
products directly with fleet customers and has several large potential
contracts under negotiation. We are also bringing the manufacture and
assembly of the full range of Translogik products in-house, facilitated by our
premises reconfiguration. We are confident this change will further improve
customer service, product quality, availability and cost.
Since the end of the financial year, SAWsense has announced its participation
in the PULSE project in the electric vehicle technology, and has also
progressed several other customer funded projects, particularly in the
aerospace sector. These chargeable activities underpin forecast growth in
the short to medium term and indicate a level of commitment by our customers
to pursue full scale industrialisation thereafter.
The Board is pleased with the progress made and remains confident in the
growth prospects over the remaining six year period in which royalty income
will be derived from Bridgestone iTrack and into the next decade.
Nigel Rogers
Executive Chairman
23 September 2024
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2024
Year ended Year ended
30 June 30 June
2024 2023
£'000 £'000
Revenue 4,180 3,529
Cost of sales (526) (474)
---------------------------------------------- ----------------------------------------------
Gross profit 3,654 3,055
Administrative expenses (2,373) (2,086)
Exceptional administrative expenses (47) (220)
---------------------------------------------- ----------------------------------------------
Operating Profit 1,234 749
Financial income/(expense) 26 4
Other income 5 113
---------------------------------------------- ----------------------------------------------
Profit before taxation 1,265 866
Taxation 300 530
---------------------------------------------- ----------------------------------------------
Profit and total comprehensive income for the year attributable 1,565 1,396
To the equity holders of the parent ---------------------------------------------- ----------------------------------------------
Basic profit per share for the year (pence) 10.13 8.81
============================================== ==============================================
Consolidated Balance Sheet
At 30 June 2024
At 30 June At 30 June
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Non current assets
Property, plant and equipment 889 154
Intangible assets 1,034 731
Deferred tax 1,475 1,175
---------------------------------------------- ----------------------------------------------
3,398 2,060
Current assets
Inventories 390 260
Trade and other receivables 1,395 1,263
Cash and cash equivalents 1,281 978
---------------------------------------------- ----------------------------------------------
3,066 2,501
---------------------------------------------- ----------------------------------------------
Total assets 6,464 4,561
Current liabilities
Trade and other payables (493) (334)
Lease liabilities (100) (36)
---------------------------------------------- ----------------------------------------------
(593) (370)
Non current liabilities
Lease liabilities (304) -
---------------------------------------------- --------------------------------------
Total liabilities (897) (370)
---------------------------------------------- --------------------------------------
Net assets 5,567 4,191
============================================= ======================================
Equity
Issued share capital 1,644 1,644
Share premium 65 65
Treasury Shares (1,027) (708)
Share based payments 418 288
Retained earnings/(accumulated loss) 4,467 2,902
---------------------------------------------- ----------------------------------------------
Total equity 5,567 4,191
============================================== ==============================================
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
Share Share Share based payments Retained earnings Treasury Shares Total
capital premium Equity
£'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) (405)
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30 June 2023 1,644 65 288 2,902 (708) 4,191
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Share Share Share based payments Retained earnings Treasury Shares Total
capital premium Equity
£'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2023 1,644 65 288 2,902 (708) 4,191
Comprehensive income for the year:
Profit for the year - - - 1,565 - 1,565
Share based payment - - 130 - - 130
Treasury shares - - - - (319) (319)
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Balance at 30 June 2024 1,644 65 418 4,467 (1,027) 5,567
------------------------------ ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Consolidated Cash Flow Statement
For the year ended 30 June 2024
Year ended 30 June Year ended 30 June
2024 2023
£'000 £'000
Profit/(loss) from operations 1,565 1,396
Adjustments for:
Taxation (300) (530)
Net financial income (26) (4)
Share based payment 130 108
Depreciation 145 98
Amortisation and impairment of intangible assets 152 112
---------------------------------------------- ----------------------------------------------
Operating cash flows before movements in working capital 1,666 1,180
(Increase) in receivables (132) (130)
increase/(decrease) in payables 159 (226)
(Increase) in inventories (130) (172)
---------------------------------------------- ----------------------------------------------
Net cash generated in operations 1,563 652
---------------------------------------------- ----------------------------------------------
Investing activities
Acquisitions of property, plant and equipment (428) (85)
Acquisitions of intangible assets (455) (172)
---------------------------------------------- ----------------------------------------------
Net cash (used in)/generated from investing activities (883) (257)
---------------------------------------------- ----------------------------------------------
Financing activities
Treasury shares (319) (405)
Interest received/(paid) 26 4
Payment of lease liabilities (84) (71)
---------------------------------------------- ----------------------------------------------
Net cash used in financing activities (377) (472)
---------------------------------------------- ----------------------------------------------
Net increase/(decrease) in cash and cash equivalents 303 (77)
Cash and equivalents at the beginning of year 978 1,055
---------------------------------------------- ----------------------------------------------
Cash and equivalents at the end of year 1,281 978
============================================== ==============================================
NOTES RELATING TO THE COMPANY FINANCIAL STATEMENTS
BASIS OF PREPARATION
The consolidated statement of comprehensive income, the consolidated balance
sheet, the consolidated statement of changes in equity, the consolidated cash
flow statement and the associated notes for the year ended 30 June 2024 have
been extracted from the Group's financial statements upon which the auditor's
opinion is unqualified and does not include any statement under section 498 of
the Companies Act 2006.
Whilst the financial information included in this preliminary announcement has
been computed in accordance with UK adopted international accounting
standards, this announcement does not itself contain sufficient information to
comply with all IFRS disclosure requirements. The Company's 2024 Annual Report
and Accounts will be prepared in compliance with UK-adopted International
Accounting Standards (IFRS).
1 SEGMENT INFORMATION
The Company had three reportable segments being the unique trading divisions,
SAWsense 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 2024 30 June 2023
£'000 £'000
North America 464 351
South America 121 143
Australia 4 32
Europe 514 485
UK 323 379
Rest of the World 144 129
-------------------------------------------- --------------------------------------------
1,570 1,519
=========================================== ===========================================
iTrack
Royalty
2,610 2,010
Total
Revenue
4,180 3,529
Segments
Translogik SAW iTrack royalties Unallocated Total
£'000 £'000 £'000 £'000 £'000
Year ended 30 June 2024
Sales 1,120 450 2,610 - 4,180
===================== ===================== ===================== ===================== ====================
Gross profit 604 440 2,610 - 3,654
Administrative expenses (221) (1,159) (44) (949) (2,373)
Exceptional administrative expenses (42) - - - (42)
----------------------------- ----------------------------- ----------------------------- ----------------------------- -----------------------------
Operating profit/(loss) 341 (720) 2,566 (954) 1,234
Other income - 5 - - 5
Net financial income - - - 26 26
Taxation - - - 300 300
----------------------------- ---------------------------- ----------------------------- ----------------------------- -----------------------------
Profit/(loss) for the year 341 (715) 2,566 (628) 1,564
========== =========== =========== =========== ===========
EBITDA reconciliation
Operating profit 1,234
Depreciation and amortisation 297
------------------
EBITDA 1,531
===========
Adjusted EBITDA (excluding share based payments and exceptional administrative 1,708
expense)
===========
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
During the year ended 30 June 2024 there was 1 customer (2023: 1) whose
turnover accounted for more than 10% of the Company's total continuing revenue
as follows:
Year ended 30 June 2024 Revenue Percentage of total
£'000
Customer A 2,610 62
Year ended 30 June 2023 Revenue Percentage of total
£000
Customer A 2,010 57
2 TAXATION
Recognised in the statement of comprehensive income in respect of continuing
operations
Year ended Year ended
30 June 2024 30 June 2023
£'000 £'000
Deferred tax credit
Current year (300) (530)
--------------------------------------------- ---------------------------------------------
Tax credit in Statement of Comprehensive Income (300) (530)
============================================ ============================================
Reconciliation of effective tax rate
Year ended Year ended 30 June 2023
30 June 2024
£'000 £'000
Profit/(loss) before tax 1,265 866
============================================= =============================================
Tax calculated at the average standard UK corporation tax rate of 25.00% 316 178
(2023: 20:50%)
Expenses not deductible for tax purposes 33 23
Utilisation of losses brought forward for which no deferred tax asset was (24) 25
recognised
Recognition of deferred tax in respect of prior year losses (625) (756)
---------------------------------------------- ----------------------------------------------
Total tax credit (300) (530)
============================================= =============================================
Deferred tax assets are
Recognised - in respect of tax losses 1,475 1,175
Unrecognised - in respect of tax losses and other timing differences 3,706 4,528
============================================= =============================================
The applicable UK corporation tax rate is 25% (2023: was 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 £20.7m (2023: £21.9m), 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 2024 Year ended 30 June 2023
Number Number
-------------------- -------------------
Weighted average number of shares - basic 15,446,993 15,849,527
============ ===========
Basic profit per share is calculated by dividing the profit by the weighted
average number of ordinary shares in issue during the year of 15,446,993
(2023: 15,849,527). This excludes treasury shares held by the Company.
Year ended 30 June 2024 Year ended 30 June 2023
£'000 £'000
Profit/(loss) 1,565 1,396
-------------------- --------------------
Basic profit per share (pence) 10.13 8.81
There are 1,532,500 share options and no warrants in place at 30 June 2024
(1,504,300 share options at 30 June 2023).
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