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REG - Transense Technlgy - Interim Results & Investor Presentation

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RNS Number : 3472C  Transense Technologies PLC  22 February 2022

This announcement contains inside information for the purposes of the UK
version of the Market Abuse Regulation 596/2014/EU (which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018)

 

 

Transense Technologies plc

("Transense" or the "Company")

 

Interim results & Investor Presentation

 

Transense Technologies plc, the developer of specialist sensor systems,
reports its interim results for the six months ended 31 December 2021.  The
Company has continued to deliver strong revenue growth, resulting in being
profitable at the pre-tax level and cash generative.

Highlights:

•     Total revenue up by 35% to £1.20m (FY21 H1: £0.89m)

•     iTrack royalty closing annualised run rate of £1.56m, up nearly
40% since June 2021 (£1.12m) and up 144%  since inception in June 2020
(£0.64m)

•     Revenues from Translogik tyre probes up 15% on FY21 H1

•     EBITDA* of £0.20m (FY21 H1: £0.06m)

•     Profit before taxation of £0.08m (FY21 H1: Loss of £0.05m)

•     Earnings per share of 0.69 pence (FY 21 H1: 0.29 pence)

•     Net cash at end of period of £1.07m (30 June 2021: £1.04m),
increasing to £1.50m at 31 January 2022 following receipt of final quarter
iTrack royalty payment

•     Board and SAW team strengthened by new appointments

•     Share buy back plan proposed

*Earnings before interest, tax, depreciation and amortisation

Commenting on the results and prospects, Executive Chairman of Transense,
Nigel Rogers, said:

"These results further demonstrate the robust nature of our business strategy,
with commercial income from royalties and probe sales increasing their
contribution.  These steady sources of revenue have enabled us to make
further controlled investment into our SAW business, where the development of
our capabilities continues in parallel with increasing prospects for future
commercial success.

 

"The Board expects the Company to continue on a high growth trajectory, with
minimal additional spend and a consequential low downside risk profile.  With
the availability of uncommitted cash and a growing distributable reserves
balance, the directors plan to initiate a programme of share buybacks to
address the short term effects of current market conditions and protect
prospects for the delivery of longer-term shareholder value."

 

Investor Presentation: 4pm today, Tuesday 22 February 2022

Nigel Rogers (Executive Chairman) and Melvyn Segal (Chief Financial Officer)
will provide a presentation on the Company and its Interim Results at 4pm
today, Tuesday 22 February 2022. The presentation will be hosted through the
digital platform Investor Meet Company.

To attend the presentation, investors can sign up to Investor Meet Company for
free and select to meet Transense Technologies plc via the following link:
https://www.investormeetcompany.com/transense-technologies-plc/register-investor
(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.

This interim results report will not be posted to shareholders but will be
available on the Company's website later today along with the investor
presentation.

 

 

For further information please visit www.transense.com or contact:

 Transense Technologies plc                       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 (Equity Sales)
 Walbrook PR                                      Tel: +44 (0)20 7933 8780

 Tom Cooper/Nick Rome/Nicholas Johnson            Transense@walbrookpr.com

Notes to Editors:

Transense develops and supplies wireless sensor technology and systems. The
Company has three business areas:

·    SAW, patent protected Surface Acoustic Wave sensor technology that
provides real time measurement of torque, temperature, pressure and strain,
that is used to improve efficiency, performance and safety of propulsion
systems and machinery;

·    Translogik, smart, connected commercial vehicle tyre inspection
equipment, used by vehicle fleets to more easily gather and maintain accurate
tyre safety and condition data; and

·    iTrack, a tyre pressure monitoring system for off-highway machinery,
licensed exclusively to Bridgestone Corporation, the world's largest tyre
producer, under a ten-year deal.

Target market sectors include automotive, aerospace and industrial machinery.
The Group's strategy is to leverage excellence in innovation, know-how in
wireless sensor technologies and form industry partnerships in these global
growth sectors to maximise shareholder value through sustained revenue growth
from all three principal technologies - SAW, iTrack and Translogik.

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.

For further information please contact transense@walbrookpr.com
(mailto:transense@walbrookpr.com)

 

 

 

Transense Technologies plc

Chairman's Statement

I am pleased to report interim financial results which further demonstrate the
robust nature of our business strategy, with commercial income from royalties
and probe sales increasing their contribution.  These steady sources of
revenue have enabled us to make further controlled investment into our SAW
business, where the development of our capabilities continues in parallel with
increasing prospects for future commercial success.

 

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.

Business review

iTrack royalty income

In June 2020, the Company granted an exclusive worldwide licence to ATMS
Technology Limited ("ATMS"), a wholly-owned subsidiary of Bridgestone
Corporation Japan (Bridgestone), covering all current and future iTrack
technology for a period of ten years.  Under the licence, ATMS offers
Bridgestone customers worldwide tyre monitoring systems for all off-the-road
vehicles using iTrack technology.  Transense receives a quarterly royalty
payment based upon the number and classification of vehicles upon which the
iTrack technology is deployed over a ten year period, at the conclusion of
which ATMS will have the option to acquire the technology for a nominal cash
sum.

During the six months ended 31 December 2021 the iTrack installed base
continued to gather momentum, generating a 76% increase in royalty income
compared with the equivalent period last year to £0.66m (FY21 H1: £0.37m).
The annualiased run rate of royalty income in Sterling terms increased by
nearly 40% during the period, exiting at the rate of £1.56m per annum (30
June 2021 run rate: £1.12m).

Bridgestone has publicly stated that it continues to pursue a mid-term
strategy to develop mobility solutions as an integral and growing element of
their offer to customers, with a target of securing up to 20% of revenues from
digital products.  By February 2022, iTrack was installed at more than 40
sites, double the number twelve months previously.  They expect the
development of their mining solutions business will be further accelerated by
the recent acquisition of Otraco, a tyre services provider with a particularly
strong presence in two key geographical markets: Australia and Chile.  The
combination of Bridgestone and Otraco provides further sales opportunities,
including the addition of more than 60 sites where Otraco provides tyre
management services in these markets.

Surface Acoustic Wave

Transense is a leader in the development of Surface Acoustic Wave ("SAW")
sensor technology.  SAW technology provides exceptionally compact and rugged
sensor systems that measure torque, strain, pressure and temperature. SAW
sensors operate wirelessly and at high speed without the need for a local
power source, bringing benefits in applications where real-time values for
torque, temperature or other measurements can be used to optimise efficiency,
improve safety and increase performance.

Although our SAW technology has been in existence for many years, the
structural and management changes brought about by the iTrack licence in June
2020 provided an ideal opportunity to reboot the development of applications
and commercialisation. Since that point, the focus of Board attention, the
formation of our commercial advisory panel ("SAWCAP") and the strengthening of
the management and engineering teams has transformed future prospects.

These results show a small reduction in reported revenue from ongoing
customers from £0.11m to £0.07m, however, this was substantially due to
short term timing differences and is not considered to be a significant
performance indicator in gauging prospects for future success.

In September 2021, a Joint Collaboration Agreement was signed offering our
partner, McLaren Applied Limited, exclusivity in the use of our technology for
premium motorsport driveline applications in exchange for meeting minimum
revenue targets on an annual basis over the duration of the agreement. Initial
revenues in the period were not anticipated to be significant, and these will
ramp up during the second half of this financial year and continue into
subsequent financial years. Joint marketing efforts are planned to raise the
profile of the high-performance control systems that McLaren can deliver using
our technology, which may also extend beyond the premium motorsport sector.

Revenues from the provision of technical support for the GE ITEP programme
were also reduced from the relatively high level last year, as the programme
moves from development towards full production.  Engine testing begins early
this year with First Engine To Test, initiating a multi-year test campaign on
eight factory engines, with flight test engine deliveries to the US Government
commencing late in 2022 to support aircraft flight testing on four different
platforms.

We have continued to expand our reach in business development through the
SAWCAP initiative and our increased market presence through social media and
direct approaches.  The Board was delighted with the appointment of Ryan
Maughan FIMechE MSc in a part-time role as Business Development Director in
December 2021.  His deep knowledge and extensive network of contacts across
the highly specialised Power Electronics, Electric Motors and Drives (PEMD)
sector is already opening up many potential opportunities for new business.

As Covid travel restrictions begin to ease, we welcome the opportunity to
recommence face-to-face meetings with customers and potential customers during
the second half of the current financial year, most of whom we have been
unable to visit for the past two years.  Looking towards the second half, we
anticipate increased premium motorsport activity.  We are also working with a
major OEM in a high value off highway application, with whom we have recently
completed a successful test bed trial and expect to move into a second stage
field trial later in the year.

In business development, we are exploring the use of SAW technology with two
leading aerospace clients and are in exploratory stages of engagement with
tier one automotive, industrial and off-highway suppliers.  These discussions
are at an early stage and, whilst not offering certainty of future success as
yet, there is potential to secure customer and/or grant funding to support
their further development.   Overall, we are pleased with progress in the
commercialisation of SAW technology and optimistic towards prospects.

In anticipation of the increase in commercial SAW activity we have committed
controlled investment in design and operations through new key engineering
appointments, bringing our team up to eight highly skilled and motivated
engineers. We have also committed modest capital expenditure of approximately
£100,000 to further develop our in-house assembly, test and calibration
capabilities to streamline future throughput and facilitate increased pilot
production capacity.  These operational improvements have been led by Nick
Hopkins, who we were delighted to also welcome to the Board in December 2021
as Chief Operating Officer.

Translogik Probes

Our range of tyre tread depth probes provide extremely accurate and reliable
tyre data instantly, and is aimed towards service providers, systems
integrators and fleet managers in the truck and bus sector.  Our product
range is designed to be compatible with the tyre management systems of most of
the world's leading tyre producers.  The new modular TLGX Series range,
launched in June 2020, currently has four levels offering progressively
enhanced features at a variety of price points.

Revenue from Translogik probes increased by 15% to £0.47m (FY21 H1: £0.41m),
with around two thirds of sales attributable to the new range.  This rapid
adoption has presented opportunities to upsell, hence gross margin improved
slightly from 52.0% to 54.4% despite significant increases in component
costs.  Accordingly, it is likely that the older Gen 1 product will be
subject to a last time buy programme during the second half of the financial
year.  The current global shortage of electronic components has not impacted
probe sales to date, although sourcing components remains a challenge and
appropriate action is being taken to mitigate any shortages until the supply
chain returns to normal.

In addition to an increased level of enquiries from independent fleet users,
development work is underway to align the TLGX range even more closely with
the fleet management systems of a select group of leading tyre manufacturers,
which is expected to drive further increases in demand in coming months.

 

Financial review

 

Key performance indicators

 

The Board considers the following to be key performance indicators:

 

                                  FY 2022       FY 2021
                                  Interim       Interim       Full Year

                                  (unaudited)   (unaudited)   (audited)
                                  £'000         £'000         £'000
 Turnover                         1,203         895           1,773
 Gross Profit                     986           695           1,388
 EBITDA                           196           56            61
 Profit/(Loss) before Taxation    82            (53)          (157)
 Profit after Taxation            114           48            156
 EPS (pence)                      0.69          0.29          0.96
 Cash                             1,071         1,050         1,046
 Net increase/(decrease) in cash  25            (143)         (147)

 

Reported results

Revenues for the six months from continuing operations increased by 35% to
£1.20m (FY21 H1: £0.89m).

Royalty income generated by iTrack technology increased by 76% to £0.66m
(FY21 H1: £0.37m). The installed base increased by 35% during the past six
months, and the annualised royalty run rate at 31 December 2021 was 167%
higher than the opening US Dollar run rate in June 2020 and an increase of
144% in Sterling terms.

SAW revenues reduced slightly to £0.07m for the period (FY21 H1: £0.11m).
Whilst SAW activities continue to incur a net loss, the Board is satisfied
that the current level of operating costs is appropriate to the prospects of
future commercial success.

Translogik probe revenues increased by 15% to £0.47m, generating a net profit
contribution of £0.19m to the Company's results.

Operating expenses in the period increased to £0.90m (FY21 H1: £0.79m) and
the Company delivered EBITDA* from continuing operations of £0.20m (FY21 H1:
£0.06m).

The net profit before taxation from continuing operations was £0.08m (FY21
H1: loss of £0.05m) and, after recognition of the R&D tax credit and
deferred tax, the net profit after taxation attributable to shareholders was
£0.11m (FY21 H1: £0.05m).  Earnings per share amounted to 0.69 pence (FY21
H1: 0.29 pence).

*Earnings Before Interest, Depreciation and Amortisation as set out in Note 4.

Cash flow and financial position

Net cash inflow from operating activities before movements in working capital
amounted to £0.24m (FY21 H1: outflow of £0.08m).

Net cash balances at the end of the period stood at £1.07m (30 June 2021:
£1.05m) and net assets stood at £2.57m (30 June 2021: £2.34m).  Net cash
as at 31 January 2022 increased to £1.50m following receipt, in January 2022,
of the quarterly royalties from Bridgestone for the period to 31 December
2021. The Board has assessed the financial and operational needs of the
business over the next twelve months taking into account a range of
contingencies, and the directors are satisfied that the Company has access to
adequate sources of finance.

Accordingly, the Board considers that the Company will have sufficient
resources to continue in operational existence for the foreseeable future, and
has adopted the going concern basis of accounting.

Share buy backs

The Company's share price over  the period rose from 90.5p on 1 July 2021 to
a peak of 122.5p on 5 November 2021, before falling back to close the six
months at 31 December 2021 at 80.5p and subsequently has been as low as 67.0p
more recently.  In the opinion of the directors, this unusual short term
volatility has little or no correlation with the underlying performance of the
business or any material change in prospects.  Rather, the share price
appears to move in response to small changes in the marginal supply and demand
for shares, with thin trading volumes in an illiquid market.  Accordingly,
the Board is planning for the Company to commence a programme of share
buybacks, in order to mitigate the effects of short term supply excess and
promote the preservation of long term shareholder value, and to offset the
dilutive impact of share awards to directors and employees.

Outlook and prospects

The Company is now experiencing good growth in the royalty income from iTrack,
and is aware of further opportunities to grow sales of the Translogik probe
business.

 

Investment in the development of our SAW capabilities is carefully controlled,
proportionate to the scale and number of available commercial opportunities,
and will have minimal impact on future profitability. The additional SAW
based head count at employee and Board level, together with the SAWCAP input,
has already substantially improved the opportunities to commercialise SAW. The
directors continue to focus on maximising the use of our resources and the
delivery of future success.

 

Accordingly, the directors are confident that the Company can continue to
deliver results on a growth trajectory, whilst carrying corespondingly low
risk.  Furthermore, the share buy back programme we intend to propose today
will enable the Company to acquire shares during any future periods in which
market conditions cause any unjustified weakness in the share price.

 

Nigel Rogers

Executive Chairman

22 February 2022

 

 

 

 

 Transense Technologies plc
 Condensed Statement of Comprehensive Income

                                                     Half year to      Half year to      Full year to
                                                     31 Dec 21         31 Dec 20         30 Jun 21
                                                     (Unaudited)       (Unaudited)       (Audited)
                                                     £'000             £'000             £'000
 Continuing operations
 Revenue                                             1,203             895               1,773
 Cost of sales                                       (217)             (200)             (385)
 Gross profit                                        986               695               1,388
 Operating costs                                     (898)             (790)             (1,581)

 Operating profit/(loss)                             88                (95)              (193)
 Financial expense                                   (6)               (6)               (12)
 Other income                                        -                 48                48
 Profit/(Loss) before taxation                       82                (53)              (157)
 Taxation                                            32                101               313
 Profitfor the period from continuing operations     114               48                156

 

 

 

 

 Transense Technologies plc
 Condensed Statement of Financial Position

                                             31 Dec 21             31 Dec 20             30 Jun 21
                                             (Unaudited)           (Unaudited)           (Audited)
                                             £'000                 £'000                 £'000
 Non current assets
 Property, plant and equipment               201                   248                   211
 Intangible assets                           731                   815                   770
 Deferred tax                                68                                          47
                                             1,000                 1,063                 1,028
 Current assets
 Inventory                                   108                   61                    73
 Corporation tax receivable                  71                    100                   60
 Trade and other receivables                 731                   403                   564
 Cash and cash equivalents                   1,071                 1,050                 1,046
                                             1,981                 1,614                 1,743
 Total assets                                2,981                 2,677                 2,771
 Current liabilities
 Trade and other payables                    (269)                 (225)                 (260)
 Lease liabilities                           (63)                  (63)                  (65)
 Total liabilities                           (332)                 (288)                 (325)
 Non current liabilities
 Lease liabilities                           (75)                  (136)                 (104)

 Total liabilities                           (407)                 (424)                 (429)

 Net assets                                  2,574                 2,253                 2,342
 Capital and reserves
 Share capital                               1,644                 5,451                 1,631
 Share premium                               65                    2,591                 -
 Share based payments                        122                   63                    82
 Accumulated profit/(loss)                   743                   (5,852)               629
 Shareholders' funds                         2,574                 2,253                 2,342

 

 

 

 

 Transense Technologies plc
 Condensed Statement of Changes in Equity (Unaudited)
                                         Share capital     Share premium account         Share based payments      Retained earnings       Total equity
                                         £'000             £'000                                                   £'000                   £'000

                                                                               £'000

 Balance at 1 July 2020                  5,451             2,591               41                                  (5,900)                 2,183

 Comprehensive income for the year:
 Profit for the year                     -                 -                   -                                           156             156
 Share based payment                     -                 -                   41                                          -               41
 Share capital reduction                 (3,820)           (2,591)             -                                           6,411           -
 Expenses of capital reduction           -                 -                   -                                           (38)            (38)

 Balance at 30 June 2021                 1,631             -                   82                                          629             2,342

 Comprehensive income for the period:
 Profit  for the period                  -                 -                   -                                           114             114
 Share based payment                     -                 -                   40                                          -               40
 Warrants exercised                      13                65                  -                                           -               78

 Balance at 31 December 2021             1,644             65                  122                                         743             2,574

 

 

 

 Transense Technologies plc
 Condensed Statement of Cash Flows
                                                               Half year to      Half year to      Full year to
                                                               31 Dec 21         31 Dec 20         30 Jun 21
                                                               (Unaudited)       (Unaudited)       (Audited)
                                                               £'000             £'000             £'000
 Cash flow from operating activities
 Profit for the period                                         114               48                156
 Adjustments for:
 Taxation                                                      (32)              (101)             (313)
 Net financial expense                                         6                 6                 12
 Depreciation of property, plant and equipment                 43                43                85
 Amortisation and impairment of intangible assets              65                60                121
 Share based payments                                          40                22                41

 Operating cash flows before movements in working capital      236               78                102

 Change in receivables                                         (167)             37                (124)
 Change in payables                                            9                 (628)             (594)
 Change in inventories                                         (35)              2                 (10)
 Cash used in operations                                       43                (511)             (626)
 Taxation recovered                                            -                 176               381
 Net cash used in operations                                   43                (335)             (245)

 Cash flows from investing activities
 Acquisition of property, plant & equipment                    (33)              (1)               (6)
 Acquisition of intangible assets                              (25)              (31)              (47)
 Proceeds from disposal of trade and assets (net of cash)      -                 1,236             1,237
 Net cash used in investing activities                         (58)              1,204             1,184

 Cash flows from financing activities
 Capital reduction costs                                       -                 -                 (38)
 Warrants exercised                                            78                -                 -
 Loans repaid                                                  -                 (976)             (976)
 Interest paid                                                 (6)               (6)               (12)
 Payment of lease liabilities                                  (31)              (30)              (60)
 Net cash generated/(used) for financing activities            41                (1,012)           (1,086)

 Net increase/(decrease) in cash and cash equivalents          25                (143)             (147)
 Unrealised currency translation gain                          -                 -                 -
 Cash and cash equivalents at beginning of period              1,046             1,193             1,193
 Cash and cash equivalents at end of period                    1,071             1,050             1,046

 

 

 

Notes to the Interim results for the six months to 31 December 2021

 

1.  Reporting Entity and Basis of Preparation

Transense Technologies plc ("the Company") is a company incorporated in the
United Kingdom under the Companies Act 2006. These condensed interim financial
statements are presented in pounds sterling, rounded to the nearest thousand.

 

The financial statements of the Group are available upon request from the
Company's registered office or at www.transense.com (http://www.transense.com)

 

2.  Going Concern

The Board has considered the financial position and future plans of the
Company and is satisfied that the Company will have adequate resources to
continue in operational existence for the foreseeable future.  Accordingly,
these interim financial statements have been prepared on a going concern
basis.

 

3.  Accounting policies

The Condensed Financial Statements for the half yearly report for the six
months ended 31 December 2021 have been prepared using accounting policies and
methods of computation consistent with those set in Transense Technologies
plc's Annual Report and Financial Statements for the year ended 30 June
2021.  There has been no change to any accounting policy since the date of
that report.

 

4.  Segmental analysis

 Continuing Revenue by region  Half year to  Half year to  Full year to
                               31 Dec 21     31 Dec 20     30 Jun 21
                               (Unaudited)   (Unaudited)   (Audited)
                               £'000         £'000         £'000
 North America                 211           111           244
 South America                 64            38            82
 Australia                     18            17            28
 UK & Europe                   226           261           318
 Rest of the World             24            94            269
 Royalty income                660           374           832
 Total                         1,203         895           1,773

 

 Half Year to 31 Dec 2021       IT Royalties                          SAW                                 Probes                                Admin                                 Total

                                £'000                                 £'000                               £'000                                 £'000                                 £'000
 Turnover                       660                                   73                                  470                                                   -                     1,203
 Gross profit                   660                                   70                                  256                                                   -                     986
 Operating costs                                -                     (442)                                             (62)                                (286)                                 (790)
 EBITDA*                        660                                   (372)                               194                                               (286)                     196
 Depreciation and amortisation        (22)                                (86)                                            -                                     -                           (108)
 Finance expenses                               -                                     (6)                                 -                                     -                                     (6)
 Profit/(loss) before taxation  638                                               (464)                                194                                  (286)                     82
 Taxation                       5                                     6                                                   -                     21                                    32
 Profit/(loss) after taxation                643                                  (458)                   194                                               (265)                     114

 

 Half Year to 31 Dec 2020       IT Royalties                          SAW                                 Probes                                Admin                                 Total

                                £'000                                 £'000                               £'000                                 £'000                                 £'000
 Turnover                                    374                                   114                                 408                                      -                                  896
 Gross profit                                374                                   109                                 212                                      -                                  695
 Operating costs                                -                                 (383)                                 (60)                                (244)                                 (687)
 Other income                                   -                                    48                                   -                                     -                                    48
 EBITDA*                                     374                                  (226)                                152                                  (244)                                    56
 Depreciation and amortisation                (22)                                  (78)                                  (2)                                   -                                 (102)
 Finance expenses                               -                                     (7)                                 -                                     -                                     (7)
 Profit/(loss) before taxation               352                                  (311)                                150                                  (244)                                   (53)
 Taxation                                      50                                    51                                   -                                     -                                  101
 Profit/(loss) after taxation                402                                  (260)                                150                                  (244)                                    48

 

 

 Year to 30 June 2021           IT Royalties                          SAW                                  Probes                                Admin                                 Total

                                £'000                                 £'000                                £'000                                 £'000                                 £'000
 Turnover                       832                                   177                                  764                                                   -                     1,773
 Gross profit                   832                                   171                                  385                                                   -                     1,388
 Operating costs                                -                                 (749)                                  (111)                               (515)                     (1,375)
 Other income                                   -                                    48                                    -                                     -                                    48
 EBITDA*                        832                                               (530)                    274                                               (515)                     61
 Depreciation and amortisation                (47)                                  (156)                                  (3)                                   -                                 (206)
 Finance expenses                               -                                     (12)                                 -                                     -                     (12)
 Profit/(loss) before taxation  785                                               (698)                    271                                               (515)                     (157)
 Taxation                       102                                   164                                                  -                     47                                    313
 Profit/(loss) after taxation   887                                               (534)                    271                                               (456)                     156

 

*Earnings before interest, tax, depreciation and amortisation

 

5.  Corporation tax and deferred tax

The Company is entitled to a Corporation Tax credit in respect of expenditure
on Research and Development.  In January 2022, the Company received £0.07m R
& D tax credit from HMRC in respect of the Financial Year 2021. The
benefit of this credit was substantially recognised in the FY 21 (£0.06m) and
the balance has been recognised in the accounts to 31 December 2021.

The Company has approximately £23m of Corporation Tax losses which, subject
to agreement by HM Revenue and Customs, are available for offset against
future profits of the same trade. There is no expiry date for tax losses,
however there is an annual restriction of £5m plus half of the surplus above
£5m. As the Company moved into profitability Deferred Tax was recognised for
the first time in the full years accounts to 30 June 2021 by recognising a
credit relating to FY 22 estimated results.

 

The deferred tax charge and credit in H1 reflects the charge reversing the
credit for the pre tax profit in H1 and an additional credit reflecting the
forecast pre tax profits for the full year FY22 and FY23 now a profitable
underlying trend is in place. It is recognised on the basis of an effective
rate for the full year FY22 with an estimated credit of approximately £0.25m
to be recognised in the full year accounts.

 

6.  Earnings per share

 

                                                  31 December 2021  31 December 2020  30 June        2021
                                                  Shares            Shares            Shares
 Weighted average number of shares in the period  16,402,998        16,307,282        16,307,282

 Earnings per share
 From continuing operations                       0.69p             0.29p             0.96p

 

 

 

 

 

 

 

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