REG - Transense Technlgy - Final Results <Origin Href="QuoteRef">TRT.L</Origin> - Part 1

Transense TechnologiesAnnouncement

26/09/2017 07:06

RNS Number : 7659R
Transense Technologies PLC
26 September 2017
26 September 2017
Transense Technologies Plc 
("Transense" or "the Company" or "the Group")
Final results for the year ended 30 June 2017
Transense Technologies Plc (AIM: TRT), the provider of sensor systems for industrial, mining and transportation markets, is pleased to report audited results for the year ended 30 June 2017 in line with the Board's expectations. Each of the two business units have gained commercial traction which the Board expect to lead to increased revenues in 2018 and beyond.
Highlights
 Revenues steady at 2.00m (2016: 2.08m*)
 Increased opex investment in product development and commercialisation 
 Pre tax loss from continuing operations for the year of 2.16m (2016: Pre tax profit of 1.59m, adjusted pre tax loss of 1.17m**)
 Net cash used in operations of 0.88m (2016: net cash generated 0.84m)
 Net cash at end of period of 2.52m (2016: 3.65m)
 Signed significant, non-exclusive, license with General Electric ("GE") for single specialist application using SAW technology
 Market launch of iTrack II system for mining productivity with system now demonstrating commercial successes following the adoption by major global mining companies
 Probe sales gaining traction and first significant PCAS order in July 2017
* the comparative revenue of 2.08m is calculated after deducting the gross license fee of 3.04m which arose from the disposal of the IntelliSAW division in October 2015
** the net adjusted pre tax loss of 1.17m is calculated by reference to the pre tax profit of 1.59m less the license fee (net of costs) of 2.76m 
Executive Chairman of Transense Technologies, David Ford, said:
"Since the beginning of the new financial year on 1 July 2017, revenues have shown a significant increase on the run rate of the prior year. iTrack II was adopted by two Glencore mines in Australia during June 2017, and in early August 2017, a further Australian mine operated by BHP. These systems are now in implementation, and revenues have commenced.
During the year, several multinational tyre manufacturers have commenced the implementation of new software platforms that have been integrated with the probe and it has become clear that our product is the tread depth tool of choice for Bridgestone, Goodyear and Continental, amongst others and as a result our probe revenue in the final quarter of the year experienced a marked upturn.
More recently the Group has been involved in discussions with a number of other divisions within GE regarding further projects and the relationship between the Company and GE continues to progress well.
"The forward looking cash flow based on the anticipated level of activity indicates that the Group should have sufficient funds available for the short to medium term"
For further information please visit www.transense.co.ukor contact:
Transense Technologies Plc
Graham Storey, Chief Executive 
Tel: +44 (0) 1869 238380
finnCap (Nomad & Joint Broker)
Ed Frisby, Giles Rolls (Corporate Finance)
Tony Quirke, Abigail Wayne (Corporate Broking)
Tel: +44 (0) 20 7220 0500
Beaufort Securities Ltd (Joint Broker)
Elliot Hance
Tel: +44 (0) 20 7382 8300 
Corporate.broking@beaufortsecurities.com
IFC Advisory
Tim Metcalfe, Graham Herring, Heather Armstrong
Tel: +44 (0) 20 3053 8671
About Transense Technologies 
Based in Oxfordshire, UK, Transense has developed patent-protected sensor systems and supporting technology for use in a variety of diverse high growth markets. Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems. Transense is targeting the transport and mining industries, and the global torque, temperature and pressure sensing markets, via its trading divisions, Translogik and SAWSense.
Transense's shares are admitted to trading on AIM, a market operated by the London Stock Exchange (AIM: "TRT"). 
www.transense.co.uk
Chairman's statement
The Group has made further significant progress over the last year in positioning each of the two core businesses for future success. Revenue from continuing operations was steady compared with the prior year, and the net loss for the year came in line with the Board's expectations. 
Financial results and condition 
Revenues for the current year amounted to 2.00m, compared with 2.08m in the prior year (stated before the IntelliSAW related license fee of 3.04m). Administrative expenses increased to 3.32m from 2.54m in the prior year. This increase in expenditure reflects new product support and the commercial and marketing activity within Translogik to launch iTrack II and deliver effective pre-contract engagement with a number of key customers for this system. 
The pre tax loss from continuing operations for the year was 2.16m compared with a profit of 1.59m and loss in the prior year adjusted for the effects of the net IntelliSAW licence fee of 1.17m. The total loss attributable to shareholders was 2.17m (2016: profit of 1.15m) resulting in a net loss per ordinary share of 22.84 pence (2016: earnings of 12.90 pence). The Board do not recommend payment of a dividend (2016: Nil).
Net cash balances at 30 June 2017 were 2.52m (2016: 3.65m). 
Strategy
The Group provides innovative sensor systems for various complex applications and operates two principal businesses, SAWSense and Translogik.
The Group intends to continue to commercialise sensor technologies by working closely with global partners in order to build value for shareholders through the generation and distribution of net income, and/or the return of capital on realisation.
SAWSense designs and develops Surface Acoustic Wave (or "SAW") sensor devices that can be used to measure torque, pressure and/or temperature in harsh, restricted or demanding environments to very high accuracy. This world leading technology has a broad range of potential uses ranging from premium value custom applications through to high volume mass markets.
Translogik designs and markets a range of Tyre Pressure Monitoring Systems ("TPMS"), products and services for heavy duty off road vehicles (particularly mine-haul trucks), commercial truck and bus as well as passenger cars. These comprise the iTrack system, which provides real-time tyre temperature and pressure measurements for mine-haul trucks in service, and a range of tyre probes and other offerings for the road transport sector. 
The Translogik product offerings are continually evolving with the focus on providing a comprehensive service to clients in the mining and truck industry and this strategy has resulted in the successful launch of the iTrack II system in September 2016.
Our markets
SAW sensing in global industries
Sensor technology is widely used in virtually every industrial application across a broad range of industries, contributing to many billions of dollars in revenue. Sensors using SAW technology are powered by radio frequency and do not require a battery and are wireless. This means that the sensor has significant benefits, as the package can be extremely small and light and is suited to harsh environments or remote locations, and does not require regular maintenance. Being wireless enables the sensor to be used in rotating components, other moving parts, or environments where electrical wiring would pose a safety risk.
These benefits are particularly appropriate in drives, motors, gearboxes, valves and couplings, which are in common use in the industrial equipment, energy generation, oil & gas, aviation, military and automotive sectors.
As Original Equipment Manufacturers (OEMs) seek ever more data on a real-time basis to optimise the performance of their products, accurate and frequent measurement becomes increasingly important. The world's largest and most successful companies in these fields are recognising SAW as one of the enabling technologies in developing the "Internet of Things" in this arena, contributing to a vision by which machines are networked with embedded sensors to optimise performance using real time analytical tools, algorithms and interactive controls.
TPMS in Mining
The original iTrack system was developed to provide tyre pressure and temperature monitoring data to mine haul-truck operators, primarily to reduce or eliminate the incidence of tyre failure. The associated benefits in tyre life management were evident, and were initially viewed as a means of payback for the improved safety performance achieved.
Over recent years the collection of pressure and temperature data has become increasingly sophisticated, and our systems for measuring, monitoring and reporting tyre conditions are seen by key customers as a management tool to optimise asset utilisation and productivity, whilst continuing to make a key contribution to mine safety.
This work culminated in the September 2016 launch of the iTrack II system. iTrack II collects live tyre performance data from sensors, and transmits this instantly to an optional in-cab display, and to web based applications readable in real time by the Translogik Global Control Centre, and by individual mine operators in their own operational control rooms. This valuable data can be utilised to minimise truck down time, extend tyre life, and improve safety. Crucially, it can also be used to increase mine productivity by identifying opportunities to optimise routings, loadings, and even road architecture.
During earlier stages of commercialisation, we were met with resistance to financing the outright purchase of equipment by mine operators under severely constrained capital budgets during what has been a cyclically challenging few years for the industry. Accordingly, we are now offering implementation of iTrack II on an operating lease financing model, which enables users to generate additional revenues and save costs, against which they are able to meet the ongoing operating costs associated with using the system at a net gain. 
During the launch and market engagement phase, we have focused most of our attention on our more developed markets in Chile, Australia and Southern Africa, in which we have highly effective teams and channel partners. We have also begun to increase resources in additional territories such as the US, Canada and other countries in the Latin America region during the year. Results have been very encouraging, with several mine operators running successful trials and choosing to adopt iTrack II toward the end of the financial year. The gestation period for widespread adoption, and the lead time to translate positive trial outcomes and orders into revenue, have been slower than we originally may have hoped, however we are confident that there are encouraging signs of commercial traction with a number of major global mining companies. 
Tyre pressure probes
Our tyre tread depth probes offer a fast and reliable way for mining and on the road truck service providers as well as passenger car tyre fitters to record and automatically transmit tread depth data by bluetooth. The tool has been manufactured for over 15 years during which time it has earned a reputation in the market place as a rugged and reliable tool. Coupled with software developed in-house we also offer a Passenger Car Audit System ("PCAS"), which has recently received its first significant order. 
New Joint Brokers 
The Company announced the appointment of Beaufort Securities Limited ("Beaufort") as joint broker to the Company to improve the service available to the large group of private investors interested in Transense. Beaufort have a large network of UK retail and High Net Worth investors and will provide retail tailored research on Transense as part of its ongoing services to the Company.
Capital structure
During the year, the Company undertook a reduction in share capital by the cancellation of the deferred shares and the share premium account. This action should provide a better base to facilitate the Company having distributable reserves and in turn enabling the payment of dividends from income or return of capital to shareholders from major licensing transactions or partial disposals from profits arising in future. Additionally, the ordinary share capital was subject to a 50:1 consolidation to mitigate the effect of prior dilutions on the unit price per share, and to reduce trading spreads and transaction costs for shareholders in future dealings.
Prospects 
The Board believes that the technology and products developed by the Group are now well positioned in their marketplaces. It anticipates that the market traction demonstrated to date will continue to build and is accordingly cautiously optimistic of future prospects.
David M Ford 
Group Chairman 
25 September 2017
Chief Executive's report
Towards the latter part of this breakthrough year, the Group has commenced generating commercial revenues from products and services that are well placed to offer unique solutions over a sustained period of competitive advantage in future. 
SAWSense
SAWSense is a leader in the development of Surface Acoustic Wave ("SAW") wireless, batteryless, sensor systems that offer significant advantages over legacy systems in common use. The business continues to be involved in several live projects in conjunction with major global industrial companies. In the short to medium term, the primary source of ongoing revenue is dependent upon the level of customer chargeable engineering activity and royalties, which was 0.29m in 2017 (2016: 0.42m).
In the prior year, pilot production had commenced of sensor kits to measure temperature, vibration and torque on a new range of industrial equipment recently launched by a large European OEM. Whilst the technology continues to be under commercial evaluation, the customer has yet to determine how the benefits it offers are to be monetised. Accordingly, there can be no certainty of future income from this source. 
We continue to develop potential applications in other sectors, most notably automotive, although commercialisation in these areas is not considered to be imminent.
In July 2016, SAWSense entered into a significant licensing agreement with GE for the use of our patented, wireless, passive SAW technology in a certain specific torque application. The Group received a non-refundable license fee of $0.50m on completion in July 2016, with a further $0.25m received in March 2017 following successful technical validation. In addition to the fee, GE will pay to Transense a perpetual sales royalty in respect of unit sales upon commercialisation, although this is not likely to arise for several years. More recently the Group has been involved in discussions with a number of other divisions within GE regarding further projects and the relationship between the Group and GE continues to progress well.
Translogik
iTrack
Our iTrack products provide a range of features that allow mine operators to track their vehicles' tyre temperature, pressure, speed, braking and location in real-time and receive early warning of potential problems, hazards or opportunities.
In September 2016, we successfully launched the new iTrack II system, a combination of sensor and transmission technology which we believe offers unparalleled features and benefits to mine operators across the world. We set out to maximise functionality and connectivity in a single comprehensive system, comprising rugged and reliable hardware, connectivity with other technologies, and meaningful real-time output.
The control unit is mounted in each truck, and transmits live data across various protocols to iTrack servers at one of three global control centres. Dedicated iTrack experts are on hand to analyse live and historic data, determine trends and create custom reports and warnings. Mine operations will have access to tyre temperature, pressure, sensor function, GPS and speed data on easy to read, customisable screens. This data can provide invaluable signals, not only to avoid tyre failures and increase life, but also to increase truck speeds, availability and productivity. Our offer provides the equipment on finance or operating lease although our preference will be towards operating leases with additional charges for data provision and monitoring. 
The market response to launch has been very encouraging and we have subsequently generated live trials on 14 sites covering 3 continents/territories. Trials have generally been successful, and whilst the rate of adoption meets our high expectations, the trial duration and lead times to roll out and revenue generation are often extended by understandable bureaucratic and operational delays. 
Probe
During the year, several multinational tyre manufacturers have commenced the implementation of new software platforms that have been integrated with the probe and it has become clear that our product is the tread depth tool of choice for Bridgestone, Goodyear and Continental, amongst others and as a result our Probe revenue in the final quarter of the year experienced a marked upturn.
In addition to this we have, since the year end, received our first significant order for our PCAS, from Tiger Wheel in South Africa. PCAS is a software system coupled with our tread depth probe which enables a tyre fitter to complete a fast, accurate tread depth audit of a passenger car and produce a customer friendly report which acts as a visual aid for the garage to sell tyres and additional services such as alignments. We are hopeful this initial order will lead to further sales in South Africa and elsewhere. 
Current trading and outlook
Since the beginning of the new financial year on 1 July 2017, revenues have shown a significant increase on the run rate of the prior year. iTrack II was adopted by two Glencore mines in Australia during June 2017, and in early August 2017, a further Australian mine operated by BHP. These systems are now in implementation, and revenues have commenced.Several other opportunities are at a reasonably advanced stage, and we expect further order activity in Australia, Latin America and Southern Africa in coming weeks.
Furthermore, as indicated above, order intake for probes has started to build momentum, and has already reached a level comparable with nearly 60% of the aggregate order intake for last year.
We continue to engage with GE and others on commercialisation of SAW projects in a variety of applications, although we do not anticipate strong growth in revenues in this area in the short term.
Accordingly, we consider that the outlook for the next financial year is satisfactory. 
Graham Storey
Chief Executive
25 September 2017
Strategic Report
Financial Review 
Results for the year 
Revenues from continuing activities totalled 2.00m (2016: 5.12m and after excluding the IntelliSAW licence fee resulting in revenue of 2.08m). The pre-tax loss (before discontinued operations) totalled 2.16m (2016: profit 1.60m which included the licence fee of 3.04m before costs and 2.76m after costs and an adjusted loss of 1.16m before the net licence fee). 
Translogik revenues fell by 27% to 1.19m, and SAWSense generated 0.81m of revenues, including the GE licence fees of 0.58m, from the design, development and low volume production activities (2016: 0.45m excluding the IntelliSAW licence fee of 3.04m). Gross margins were 57% (2016: 64% excluding the IntelliSAW licence fee) reflecting the change in the mix between business activities.
Administrative overheads for the year amounted to 3.32m compared with 2.54m in the prior year.
The fall in Translogik revenues reflected the slow down in sales during the period of upgrading iTrack from the original version to iTrack II ("IT2"). IT2 was launched in September 2016 and the additional support costs (including staffing overseas offices in South America, Australia and Africa) and marketing represented over 0.40m of the increased administrative costs. The other principal costs contributing to the increase were the provision for a potential bad debt of 0.09m and one off professional costs 0.09m and a reduction in the forex gain of 0.08m.
The Earnings per share (EPS) are set out below (in Pence):
2017
2016
EPS (including discounted operations)
(22.84)
12.90 
EPS (excluding discounted operations)
(22.78)
18.05
The EPS numbers are calculated after rebasing the old 1p shares, reflecting the 50:1 share reduction carried out in November 2016.
Taxation 
The Company has UK tax losses available to carry forward at 30 June 2017 of approximately 18.7m, subject to HMRC agreement.
Certain elements of development expenditure undertaken by the Company are eligible for enhanced research and development tax relief which generally relates to salary costs of technical staff. 
Cash flow and financial position 
There was a net cash outflow of 1.13m (2016: inflow of 3.18m) during the year, arising from trading and 0.06m of proceeds arising from the exercise of warrants in January 2017.
Net cash used in operations amounted to 0.88m (2016: inflow of 0.84m).
At 30 June 2017 the group had net cash balances of 2.52m (2016: 3.65m). 
The forward looking cash flow forecasts based on the anticipated level of activity indicates that the Group should have sufficient funds available for the short to medium term. The Board are however aware that the affect of increased demand for iTrack rentals will put pressure on working capital due to the timeline between investment and recoupment. 
Going Concern
The financial statements have been prepared on the going concern basis. The Group has made a loss for the year of 2.17m (2016: profit of 1.15m). The Group has Accumulated Losses of 0.01m (2016: Accumulated Losses of 21.84m before the Share Capital reorganisation). The balance of cash and cash equivalents at 30 June 2017 is 2.52m (2016: Cash and cash equivalents 3.65m). 
The Group meets its day to day working capital requirements through existing cash reserves and does not currently have an overdraft facility. The directors have prepared cash flow forecasts for the period to 31 December 2018. These forecasts indicate that the Group will continue to be able to operate within its current cash resources for the foreseeable future.
Capital Structure
The Company Share Capital reduction and reorganisation were completed during the year.
A more detailed review of the financial year is provided in the Chairman's statement and the Chief Executives report.
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2017


Year ended
30 June
Year ended
30 June



2017

2016



'000

'000
Continuing operations





Revenue


2,003

5,122
Cost of sales


(865)

(1,036)



----------------------------------------------

----------------------------------------------
Gross profit


1,138

4,086






Administrative expenses


(3,318)

(2,541)



----------------------------------------------

----------------------------------------------
Operating profit/(loss)


(2,180)

1,545
Financial income


23

51



----------------------------------------------

----------------------------------------------






Profit/(loss) before taxation 


(2,157)

1,596
Taxation


(4)

29



----------------------------------------------

----------------------------------------------
Profit/(loss) from continuing operations


(2,161)

1,625



----------------------------------------------

----------------------------------------------
Discontinued operations





Loss from discontinued operation


(5)

(472)



----------------------------------------------

----------------------------------------------
(Loss)/profit for the year


(2,166)

1,153



==============================================

==============================================
Basic and fully diluted profit/(loss) per share (pence)





Continuing operations


(22.78)

18.05
Discontinued operations


(0.06)

(5.15)



----------------------------------------------

----------------------------------------------
Total operations


(22.84)

12.90



==============================================

==============================================






(Loss)/profit for the year


(2,166)

1,153



----------------------------------------------

----------------------------------------------
Other comprehensive income:





Exchange difference on translating foreign operations


21

-



----------------------------------------------

----------------------------------------------
Other comprehensive income for the year


21

-
Total comprehensive income for the year attributable to the equity holders of the parent


(2,145)

1,153



==============================================

==============================================
Consolidated Balance Sheet
at 30 June 2017

Year ended 30 June
Year ended 30 June

2017
2017
2016
2016

'000
'000
'000
'000



Restated
Restated
Non current assets




Property, plant and equipment
258

313

Intangible assets
938

894

Trade lease receivables
59

383


----------------------------------------------

----------------------------------------------



1,255

1,590
Current assets




Inventories 
985

571

Corporation tax
-

74

Trade and other receivables
702

1,742

Cash and cash equivalents
2,520

3,654


----------------------------------------------

----------------------------------------------



4,207

6,041


----------------------------------------------

----------------------------------------------
Total assets

5,462

7,631





Current liabilities




Trade and other payables
(511)

(614)

Current tax liabilities
(41)

(41)

Provisions
(100)

(53)


----------------------------------------------

----------------------------------------------

Total liabilities

(658)

(708)


----------------------------------------------

----------------------------------------------
Net assets

4,804

6,923


==============================================

==============================================
Equity




Issued share capital

4,766

11,546
Share premium

22

17,218
Translation reserve

21

-
Accumulated loss

(5)

(21,841)


----------------------------------------------

----------------------------------------------


4,804

6,923


==============================================

==============================================
Consolidated Statement of Changes in Equity
For the year ended 30 June 2017
Group
Share
capital
Share
premium
Translation reserve
Cumulative
losses
Total
equity

'000
'000
'000
'000
'000






Balance at 1 July 2015 
9,779
16,523
-
(22,994)
3,308
Profit for the year
-
-
-
1,153
1,153
Shares issued and share premium
1,767
695
-
-
2,462

----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Balance at 30 June 2016
11,546
17,218
-
(21,841)
6,923

----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Loss for the year
-
-
-
(2,166)
(2,166)
Share reorganisation
(6,823)
(17,218)
-
24,041
-
Costs of share reorganisation
-
-
-
(39)
(39)
Shares issued and share premium
43
22
-
-
65
Currency movement on subsidiary reserves
-
-
21
-
21

----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Balance at 30 June 2017
4,766
22
21
(5)
4,804

==============================================
==============================================
==============================================
==============================================
==============================================
Consolidated Cash Flow Statement 
For the year ended 30 June 2017

Group

Year ended
30 June
2017
Year ended
30 June
2016

'000
'000
(Loss)/profit before taxation from continuing operations

(2,157)
1,596
Adjustments for:


Financial income
(23)
(51)
Depreciation
118
111
Amortisation of intangible assets
238
170
Loss on discontinued operation
(5)
(472)
Profit on disposal of discontinued operation
-
32
Unrealised currency translation gain
21
-
Cost of capital restructure
(39)
-

----------------------------------------------
----------------------------------------------
Operating cash flows before movements in working capital 

(1,847)

1,386
(Increase)/decrease in receivables 
1,040
(802)
(Decrease)/increase in payables
(50)
249
(Increase)/decrease in inventories 
(414)
13
Decrease in trade lease receivables
324
-

----------------------------------------------
----------------------------------------------
Cash (used)/generated in operations
(947)
846
Taxation recovered/(paid)
70
(7)

----------------------------------------------
----------------------------------------------
Net cash (used)/generated in operations
(877)
839

----------------------------------------------
----------------------------------------------
Investing activities


Interest received
23
51
Acquisitions of property, plant and equipment
(63)
(130)
Acquisitions of intangible assets
(282)
(258)
Assets/liabilities held for sale
-
218

----------------------------------------------
----------------------------------------------
Net cash used in investing activities
(322)
(119)

----------------------------------------------
----------------------------------------------
Financing activities


Proceeds from issue of equity share capital
65
2,462

----------------------------------------------
----------------------------------------------
Net cash from financing activities
65
2,462

----------------------------------------------
----------------------------------------------
Net (decrease)/increase in cash and cash equivalents 

(1,134)

3,182
Cash and equivalents at the beginning of year

3,654

472

----------------------------------------------
----------------------------------------------
Cash and equivalents at the end of year 
2,520
3,654

==============================================
==============================================
NOTES RELATING TO THE GROUP FINANCIAL STATEMENTS
BASIS OF PREPARATION
The group financial statements have been prepared and approved by the Directors in accordance with the International Financial Reporting Standards (IFRS) as adopted by the EU and with those parts of the Companies Act 2006 that are relevant to companies preparing accounts under IFRS.
1 SEGMENT INFORMATION
The Group has two reportable segments being the unique trading divisions, SAWsense and Translogik, which make use of technology developed by the Group to measure and record temperature, pressure and torque. 
The business revenues include royalties, engineering support and sale of product in relation to this technology.
Information regarding the Group's segments is included in the primary statements and notes to the financial statements. Revenue and EBITDA are the Group's key focus and in turn is the main performance measure adopted by management.
The tables below sets out the Group's revenue split and operating segments. 
Revenue

Year ended
30 June 2017
Year ended 
30 June 2016

'000
'000

North America
703
3,506
Chile
659
576
United Kingdom & Europe
313
541
Australia
104
409
Rest of the World
224
90

----------------------------------------------
----------------------------------------------

2,003
5,122

=============================================
=============================================

Translogik
'000
SAWsense
'000
Total
'000
Year ended 30 June 2017
Sales
1,193
810
2,003

=============================================
=============================================
=============================================




Gross profit
376
762
1,138
Allocated overheads
(1,304)
(482)
(1,786)

----------------------------------------------
----------------------------------------------
----------------------------------------------




Contribution 
(928)
280
(648)

----------------------------------------------
----------------------------------------------
----------------------------------------------




Group overheads


(1,509)
Loss from discontinued operations


(5)



----------------------------------------------
Loss before taxation


(2,162)




Taxation


(4)



----------------------------------------------
Loss for the year


(2,166)



=============================================

Translogik
'000
SAWsense
'000
Total
'000
Year ended 30 June 2016
Sales
1,633
3,489
5,122

=============================================
=============================================
=============================================




Gross profit
936
3,150
4,086
Allocated overheads
(955)
(329)
(1,284)

----------------------------------------------
----------------------------------------------
----------------------------------------------




Contribution 
(19)
2,821
2,802

----------------------------------------------
----------------------------------------------
----------------------------------------------




Group overheads


(1,206)
Loss from discontinued operations


(472)



----------------------------------------------
Profit before taxation


1,124




Taxation


60







----------------------------------------------
Profit for the year


1,184



=============================================
During the year ended 30 June 2017 there were 3 (year ended 30 June 2016: 1) customer whose turnover accounted for more than 10% of the Group's total revenue as follows:
Year ended 30 June 2017
Revenue
'000
Percentage of total



Customer A
624
31%
Customer B
380
19%
Customer C
221
11%



Year ended 30 June 2016
Revenue
000
Percentage of total



Customer A
3,037
59%
2 FINANCIAL INCOME AND EXPENSE
Recognised in profit or loss

Year ended
30 June 2017
Year ended
30 June 2016

'000
'000



Finance income
23
45
Interest income on cash on deposit 
-
6

 
 
Total finance income
 23
51
3 TAXATION
Recognised in the statement of comprehensive income

Year ended
30 June 2017
Year ended
30 June 2016

'000
'000
Current tax expense


Current year
4
1
Adjustment for previous year
-
(30)

----------------------------------------------
----------------------------------------------
Tax charge/(credit)
4
(29)

=============================================
=============================================
 
Reconciliation of effective tax rate

Year ended
30 June 2017
 Year ended 30 June 2016

'000
'000
(Loss)/profit for the year
(2,157)
1,124
Total tax credit
-
-

----------------------------------------------
----------------------------------------------
(Loss)/profit before tax
(2,157)
1,124

=============================================
=============================================



Tax calculated at the average standard UK corporation tax rate of 19.75% (2016: 20.00%)
(426)
225
Expenses not deductible for tax purposes
48
36
Current year losses for which no deferred tax asset was recognised
378
-
Adjustment for overseas profits
4
(14)
Research and development tax relief/tax credit
-
(70)
Utilisation of capital losses
-
(6)
Utilisation of trading losses
-
(170)
Prior year adjustment
-
(30)

----------------------------------------------
----------------------------------------------
Total tax charge/(credit)
4
(29)

=============================================
=============================================
A deferred tax asset has not be recognised in respect of the following item:





Tax Losses
3,561
3,361

=============================================
=============================================
Reductions in the UK corporation tax rate from 21% to 20% (effective from 01 April 2015) has been enacted with a further reduction to 19% with effect from 01 April 2017. This will reduce the Company's future current tax charge accordingly. Deferred tax has been calculated at the rate of 19% substantively enacted at the balance sheet date. The effect of this change is that the deferred tax asset as at 30 June 2017 has been calculated based on the rate of 19% substantively enacted at the balance sheet date.
The Group has tax losses, subject to agreement by HM Revenue and Customs, in the sum of 18.74m (2016: 16.76m), which are available for offset against future profits of the same trade. There is no expiry date for tax losses. An appropriate asset will be recognised when the Group can demonstrate a reasonable expectation of sufficient taxable profits to utilise the temporary differences. 
The June 2015 budget announced that the rate will reduce further to 18% by 2020. 
As a result, the effective tax rate used to calculate the current tax for the period ended 30 June 2017 was 19.75% (2016: 20.00%)
4  EARNINGS PER SHARE
Basic loss per share is calculated by dividing the loss after taxation of 2.17m (2016: profit of 1.15m) by the weighted average number of ordinary shares in issue during the year of 9,483,815 (2016: 9,162,170). These weighted share figures have been adjusted to reflect the 50:1 consolidation that took place in the year. Unexercised options over the ordinary shares are not included in the calculation of diluted loss per share as they are anti-dilutive.

Year ended 30 June 2017
 Year ended 30 June 2016

Number 
Number
Weighted average number of shares - basic
9,483,815
9,162,170
Share option adjustment
-
-



Weighted average number of shares - diluted
9,483,815
9,162,170

Year ended 30 June 2017
Year ended 30 June 2016

'000
'000
(Loss)/earnings from continuing operations
(2,160)
1,656



From continuing operations


Basic (loss)/earnings per share
(22.78)
18.05



Loss from discontinued operations
(5)
(472)



From discontinued operations


Basic loss per share
(0.06)
(5.15)



Earnings attributable to shareholders


Basic (loss)/earnings per share
(22.84)
12.90
There are 675,000 share options at 30 June 2017 (2016: 20,095,000) that are not included within diluted earnings per share because they are anti-dilutive
5 CASH AND CASH EQUIVALENTS

Group

30 June 2017
30 June 2016

000
000



Cash and cash equivalents per balance sheet
2,520
3,654

 
 
Cash and cash equivalents per cash flow
statements 
2,520
3,654
6 STATUTORY ACCOUNTS
The Financial information set out in this preliminary announcement does not constitute the Company's Consolidated Financial Statements for the financial years ended 30 June 2017 or 30 June 2016 but are derived from those Financial Statements. Statutory Financial Statements for 2016 have been delivered to the Registrar of Companies and those for 2017 will be delivered following the Company's AGM. The auditors Grant Thornton UK LLP have reported on those 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 2017 or 2016.
The Statutory accounts are available on the Company web site and will be posted to shareholders who have requested a copy and thereafter by request to the Company's registered office.
The information communicated in this announcement is inside information for the purposes of Article 7 of Regulation 596/2014
 

This information is provided by RNS
The company news service from the London Stock Exchange
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