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RNS Number : 4139X Transense Technologies PLC 18 February 2025
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
18 February 2025
Transense Technologies plc
("Transense" or the "Company")
Interim Results & Investor Presentation
Transense Technologies plc, the developer of specialist sensor systems,
reports its unaudited Interim Results for the six months ended 31 December
2024. As reported in its trading update dated 22 January 2025, trading
remains in-line with market expectations for the year ending 30 June 2025.
Strong revenue growth during the Period has allowed for strategic investments
in operational capabilities, positioning the Company for further expansion
while safeguarding earnings for the current year.
Financial highlights:
· Revenue increased by 36% to £2.46m (FY24 H1: £1.81m)
· EBITDA in line with last year at £0.73m (FY24 H1: £0.74m)
· Profit before taxation reduced by 13% to £0.55m (FY24 H1: £0. 63m)
· Earnings per share of 3.61 pence (FY 24 H1: 4.32 pence)
· Net cash at 31 December 2024 was £1.19m (30 June 2024: £1.28m),
with subsequent increase to £1.87m at 31 January 2025
SAWsense highlights:
· Revenue increased fourfold vs FY24 H1
· New aerospace engine programme with major engine OEM, and new
development project with major global robotics OEM
· Total live projects stand at 17 with 14 active customers
· Strengthening of team in engineering and operations, creating
capacity for future growth
· Entered H2 with record order book for motorsport sensor systems in
partnership with McLaren Applied
Translogik highlights:
· TIRETASK agreement signed enabling offer of integrated hardware and
software solutions
· New distributors appointed extending reach in South East Asia and
South America
· Post period agreement signed appointing major new distributor in
North America, and initial UK fleet contract under subscription model is
imminent
Commenting on the results and prospects, Executive Chairman of Transense,
Nigel Rogers, said:
"Transense continues on its upward trajectory, with significant revenue growth
across all three income streams. Trading since the period end has been strong,
and the pipeline development across the business, especially in SAWsense,
gives us every reason to be confident in the future.
The planned increase in the cost base in the first half of the year reflects
building the foundations for a period of high revenue growth, and with the
team largely complete we can anticipate improving profitability due to the
effect of operational gearing in the second half of the year and beyond."
Investor Presentation: 4pm today, Tuesday 18 February 2025
Nigel Rogers (Executive Chairman), Ryan Maughan (Managing Director) and Melvyn
Segal (Chief Financial Officer) will provide a presentation on the Company and
its Interim Results at 4pm today, Tuesday 18 February 2025. 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
investor.relations@transense.co.uk (mailto:investor.relations@transense.co.uk)
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 Investor Relations
Nigel Rogers (Executive Chairman) (see below)
Ryan Maughan (Managing Director)
Melvyn Segal (Chief Financial Officer)
Cavendish Capital Market Limited (Nominated Adviser and Broker) 0207 220 0500
Adrian Hadden / Callum Davidson (Corporate Finance)
Jasper Berry (Sales)
Investor Relations Tel: +44 (0)1869 238380
Anice McNamee Investor.relations@transense.co.uk
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, and a growing list of international territory distribution partners.
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/)
Transense Technologies plc
Interim Results for the half year ended 31 December 2024
Chairman's statement
The Directors are pleased to report that the Company remains on track to meet
full-year market expectations for the year ending 30 June 2025, in line with
its recent trading update. Strong revenue growth during the Period has allowed
for strategic investments in operational capabilities, positioning the Company
for further expansion while safeguarding earnings for the current 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.
Business review
Surface Acoustic Wave (SAWsense)
SAWsense continues to make excellent progress commercially, adding new
customers and programmes, and increasing the revenue per customer-a key future
metric. Several key new customers have been onboarded including a major Aero
engine OEM and a global robotics business. The two grant-funded projects,
focused on automotive eDrive systems and aircraft landing gear, are
progressing well. These projects involve sensor engineering, materials
development, and scaling up manufacturing capabilities.
The business is working with a strong base of blue-chip customers on
engineering projects to integrate SAW technology into their products and
deliver future production in volume. The value proposition for SAWsense is
well established in key target markets, and the breadth and depth of
engagement underpins long-term business growth potential.
Aerospace
Commercial progress is evident in the Aerospace market. SAW technology
provides accurate torque and temperature measurement in key aircraft systems
where conventional sensors cannot be installed, and brings improvements in
accuracy, weight and reliability.
We continue to support GE Aerospace's development of the T901 engine under the
ITEP programme. The engine has been successfully integrated into the Sikorsky
UH-60 Blackhawk and commenced aircraft-based testing. We are also supporting
CFM, a joint venture between GE and Safran, in their Hybrid Electric Altitude
Testbed flight demonstrator (HEAT) and Revolutionary Innovation for
Sustainable Engines (RISE) programmes.
Continued development with a major Tier 1 Aero supplier on torque sensing for
a range of non-propulsion applications has progressed from a successful
feasibility study towards planning the next phase of development. There is
also engagement with a global aero engine supplier to provide a torque sensing
system in a new engine platform.
Work is underway on the LandOne project, led by Airbus and grant funded by the
ATI, to explore the use of SAW technology in next generation landing gear.
Electric motors and drives (EMD)
The PULSE project, led by Protean Electric and grant funded by the APC,
commenced in the second quarter and has started positively. This project
aims to provide a route to production scale up to utilise SAW technology for
in-wheel motors for passenger cars by the end of the decade.
The initial patent application for the use of SAW torque sensing in electric
motor control has been accepted, and will shortly be extended to cover all
major global end-user markets. There are many early stage opportunities for
torque and temperature sensing in electric drive systems, and we anticipate
an order to commence a new feasibility investigation with a major global Tier
1 in the second half of the year.
Industrial Machinery & Robotics
There are three live engagements with industrial robotics businesses to
implement improved torque sensors, including one added in the Period. Two of
these engagements are under customer test of prototypes designed and supplied
by Transense, and the third has entered the planning phase for roll out into
low volume production following the completion of a successful feasibility
project.
The Company also has a number of other opportunities in the industrial
machinery market, which are in the proposal development and negotiation phase.
Motorsport
Our partnership with McLaren Applied is delivering good results. SAW
technology has now been deployed into a number of major motorsport
championships, demonstrating excellent performance in these demanding
applications. We enter the second half of the financial year with a record
order book for this market and continue to see good growth potential in
future.
Planned investment
Given the strong pipeline, the Company will expand operations at Weston with a
pilot production line and source updated versions of key components. The Board
has approved over £2.5m in capital expenditure over the next 12-18 months,
including £1.25m for production equipment and the remainder for redesigning
key components to reduce unit costs and improve longevity.
These investments can be funded from existing cash resources, although offers
are in hand (subject to contract) to draw upon asset-backed funding for
production equipment in order to optimise financial headroom.
Translogik
Revenue in the Period grew by 7%. Whilst steady growth was seen with
existing customers, conversion of new opportunities was slower than
anticipated. Some progress has been made in new markets, including
appointing distributors in Southeast Asia and South America and entering a
software partnership with TIRETASK GmbH to launch a subscription-based
service. Whilst significant for longer term growth prospects these
developments were, however, not expected to translate into immediate revenue.
The first UK fleet contract under this model is due for completion (subject
to contract) imminently.
Since the period end, Translogik has appointed Haltec Corporation as a
non-exclusive distributor for the North American market. Haltec is
headquartered in Leetonia, Ohio, and has been at the forefront of the tyre
management industry for over 50 years, pioneering the development of
heavy-duty tyre valve systems widely used in off-highway, trucking and
aerospace applications.
With an extensive sales and support network across the United States and a
subsidiary, AME International, based in Florida that specialises in the
distribution of workshop equipment, Haltec is a trusted supplier to many
leading truck fleets and tyre service centres. Our relationship is
anticipated to significantly increase market reach in the USA.
The transition from outsourced to in-house production at Weston is complete,
improving product quality, customer service, and unit costs. This change also
provides flexibility to scale production and improves lead times. Engineering
resources have been added to support new product development, with headcount
increasing from 1 to 4 over the past year.
Bridegestone iTrack royalty income
Royalty revenue from Bridgestone iTrack was £1.56m, up 26% from the Prior
Period (FY24H1: £1.23m), driven by stronger-than-expected commercial pipeline
conversion. The annual run rate at the end of the Period was £3.34m at the
exchange rate of £1 = US$1.22. The board has adopted a strategy to hedge
forward royalty income by between three and nine months to manage volatility
and improve earnings visibility. Approximately 30% of the expected second-half
royalty income has been hedged at US$1.27, and further hedging for the
remainder of the calendar year is under review.
As previously noted, the royalty rate per installation will decrease by 40%
from 1 July 2025, but the pipeline indicates continued healthy volume
growth. On 5 February 2025, Bridgestone Corporation announced a major new
collaboration with Komatsu to provide integrated vehicle analytics based on
iTrack technology, which is expected to deliver further increases in market
share.
Financial review
Financial results
Revenues for the six months increased by 36% to £2.46m (FY24 H1: £1.81m).
Gross margin was 90% of revenue (FY24 H1: 88%). Revenues continued to be
generated across a global marketplace, with 89% from non-UK sources (FY24 H1:
96%).
Royalty income generated by iTrack technology increased by 26% to £1.56m
(FY24 H1: £1.23m). The installed base has increased more than fivefold since
inception of the contract, increasing from $0.81m, to an annualised royalty
run rate at 31 December 2024 of $4.05m.
SAWsense and Translogik revenues have also increased year on year; SAW by 361%
to £0.38m (FY24 H1: £0.08m) and Translogik by 7% to £0.52m (FY24 H1:
£0.49m).
Operating costs increased to £1.66m, compared with £0.97m in the
corresponding period last year. This primarily reflects the additional
personnel costs associated with building out the engineering, commercial and
operational capabilities needed to deliver revenue growth. The total headcount
rose from 18 to 30 during calendar year 2024. Despite this increase in
operating expenses, EBITDA has remained virtually unchanged, supported by the
increase in revenues and high gross margins.
At a segmental level, the net negative contribution from SAWsense and
Translogik increased slightly, reflecting the cost burden added in the current
year to fuel future growth. The Board continues to monitor segmental
performance as a key financial and operating metric, and is satisfied that the
level of net investment, funded by royalties from Bridgestone iTrack, is
justified by the commercial opportunities for high growth and profitability in
future.
Key performance indicators (KPI)
The Board considers the following to be the key performance indicators for the
Company:
FY 2025 FY 2024
Interim Interim Full Year
(unaudited) (unaudited) (audited)
Revenue (£m) 2.46 1.81 4.18
iTrack royalty run rate growth YoY (in USD) 24% 36% 26%
Translogik revenue growth YoY 7% (6) % 9%
SAW revenue growth YoY 361% (43) % (9) %
Revenue from non-UK sources 89% 96% 92%
Gross Margin (% of revenue) - blended 90% 88% 87%
Gross Margin (% of revenue) - excl iTrack 72% 61% 66%
Net Operating Margin (% of revenue) 22% 34% 31%
EBITDA (£m) 0.73 0.74 1.53
EPS (pence) 3.61 4.32 8.81
Available cash balances (£m) 1.19 1.31 1.28
Distributable reserves (£m) 3.99 2.80 3.44
Average share price in period (pence) 160.0 98.2 103.8
Cash flow and financial position
Net cash inflow from operating activities before movements in working capital
amounted to £0.81m (FY24 H1: £0.79m), which funded increased working capital
of £0.57m (FY24 H1: £0.11m) and capital expenditure of £0.28m (FY24 H1:
£0.26m).
Net cash balances at the end of the period stood at £1.19m (30 June 2024:
£1.28m). The net cash balance at the end of January 2025 was £1.87m, which
reflects the post period collection of receivables, including Bridgestone
iTrack royalties for the final quarter of calendar year 2024.
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.
The Board plans some substantial capital expenditure over this and the next
financial year and whilst the Company has the ability to fund this through
cashflow it is likely the part of the cost, relating to new production line
machinery, will be funded by way of an asset based loan.
Capital allocation and distribution policy
The Company's share price over the period rose from 121.5p on 1 July 2024 to a
peak of 190.0p on 20 September 2024, and closed the period on 31 December 2024
at 172.5p. The most recent share price as at 17 February 2025 stood at
151.5p.
Capital is allocated by the Board with the aim of maximising long term
shareholder returns. Profits generated from Bridgestone iTrack and Translogik
are first applied to meet the Company's unallocated overhead expenses and net
investment in the continuing development of the SAW business.
It is anticipated that a surplus will be generated from these trading
activities, which will be allocated to the retention of earnings in the
business for long term investment, and for distribution to shareholders.
In April 2022, the Company commenced a share buyback programme and at the
beginning of the current financial year the Company held 1,217,856 shares in
treasury, acquired at an average cost of 84p per share. No further purchases
were made in the period.
The Board has authority from shareholders to continue the programme to acquire
further shares for treasury to continue to offset the dilutive impact of share
awards to Directors and employees in due course, and where market conditions
deem such action to be appropriate.
Current trading and outlook
The Directors believe that now is the time to invest in people and
infrastructure to capitalise on strategic growth potential. Recruitment is
almost complete, and work on specifying production equipment and supply chain
improvements is well underway.
Conversion to revenue is accelerating in both SAWsense and Bridgestone iTrack,
and Translogik has already secured significant customer wins in the second
half of the year. All three business segments have seen an increase in new
business opportunities during the Period, and the Company is well-positioned
to continue its growth.
Nigel Rogers
Executive Chairman
18 February 2025
Transense Technologies plc
Condensed Statement of Comprehensive Income
Half year to Half year to Full year to
31 Dec 24 31 Dec 23 30 Jun 24
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Revenue 2,328 1,805 4,180
Grant Revenue 131 - -
Total Revenue 2,459 1,805 4,180
Cost of sales (253) (224) (526)
Gross profit 2,206 1,581 3,654
Operating expenses (1,659) (965)
(2,373)
Exceptional operating expenses - - (47)
Operating profit 547 616 1,234
Financial income 3 11 26
Other Income - 5 5
Profit before taxation 550 632 1,265
Taxation - 38 300
Profit for the period from continuing operations 550 670 1,565
Earnings per share (pence) 3.61 4.32 10.13
Transense Technologies plc
Condensed Statement of Financial Position
31 Dec 24 31 Dec 23 30 Jun 24
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Non current assets
Property, plant and equipment 945 183 889
Intangible assets 1,076 842 1,034
Deferred tax 1,475 1,213 1,475
3,496 2,238 3,398
Current assets
Inventory 513 262 390
Trade and other receivables 1,629 1,305 1,395
Cash and cash equivalents 1,190 1,308 1,281
3,332 2,875 3,066
Total assets 6,828 5,113 6,464
Current liabilities
Trade and other payables (281) (264) (493)
Lease liabilities (100) - (100)
Total liabilities (381) (264) (593)
Non current liabilities
Lease liabilities (257) - (304)
Total liabilities (638) (264) (897)
Net assets 6,190 4,849 5,567
Capital and reserves
Share capital 1,644 1,644 1,644
Share premium 65 65 65
Treasury Shares (1,027) (774) (1,027)
Share based payments 491 342 418
Retained profit 5,017 3,572 4,467
Shareholders' funds 6,190 4,849 5,567
Transense Technologies plc
Condensed Statement of Changes in Equity (Unaudited)
Share capital Share premium account Share based payments Retained earnings Total equity
Treasury Shares
£'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
Comprehensive income for the period - - - 550 - 550
Profit for the period
Share based payment - - 73 - - 73
Treasury Shares - - - - - -
Balance at 31 December 2024 1,644 65 491 5,017 (1,027) 6,190
Transense Technologies plc
Condensed Statement of Cash Flows
Half year to Half year to Full year to
31 Dec 24 31 Dec 23 30 Jun 24
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flow from operating activities
Profit for the period 550 670 1,565
Adjustments for:
Taxation - (38) (300)
Net financial income (3) (11) (26)
Depreciation of property, plant and equipment 103 56 130
Amortisation and impairment of intangible assets 83 60 145
Share based payments 73 54 152
Operating cash flows before movements in working capital 806 791 1,666
Change in receivables (234) (42) (132)
Change in payables (212) (70) 159
Change in inventories (123) (2) (130)
Net cash (used)/generated in operations 237 677 1,563
Cash flows from investing activities
Acquisition of property, plant & equipment (158) (83) (428)
Acquisition of intangible assets (126) (173) (455)
Net cash used in investing activities (284) (256) (883)
Cash flows from financing activities
Treasury shares - (67) (319)
Interest 3 11 26
Payment of lease liabilities (47) (36) (84)
Net cash (used)/generated for financing activities (44) (92) (377)
Net (decrease)/increase/ in cash and cash equivalents (91) 330 303
Cash and cash equivalents at beginning of period 1,281 978 978
Cash and cash equivalents at end of period 1,190 1,308 1,281
Notes to the Interim results for the six months to 31 December 2024
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 2024 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
2024. There has been no change to any accounting policy since the date of
that report.
4. Segmental analysis
Revenue by region Half year Half year to 31 Dec 23 Full year to 30 Jun 24
to 31 Dec 24
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
North America 167 181 464
South America 42 45 121
Australia 11 1 4
Europe 279 199 514
UK 146 71 323
Rest of the World 127 74 144
Grant Income (UK) 132 - -
Total 904 571 1,570
Bridgestone iTrack 1,555 1,234 2,610
Half Year to 31 December 2024 IT Royalties SAWsense Translogik Central Total
£'000 £'000 £'000 £'000 £'000
Turnover 1,555 383 521 - 2,459
Gross profit 1,555 365 286 - 2,206
Operating expenses (22) (735) (210) (692) (1,659)
Operating profit/(loss) 1,533 (370) 76 (692) 547
Net financial income/(expense) - - - 3 3
Taxation - - - - -
Profit/(loss) for the year 1,533 (370) 76 (689) 550
Half Year to 31 December 2023 IT Royalties SAWsense Translogik Central Total
£'000 £'000 £'000 £'000 £'000
Turnover 1,234 83 488 - 1,805
Gross profit 1,234 83 264 - 1,581
Operating expenses (22) (466) (70) (407) (965)
Operating profit/(loss) 1,212 (383) 194 (407) 616
Other income - 5 - - 5
Net financial income - - - 11 11
Taxation - - - 38 38
Profit/(loss) for the year 1,212 (378) 194 (358) 670
Year to 30 June 2024 IT Royalties SAWsense Translogik Central Total
£'000 £'000 £'000 £'000 £'000
Turnover 2,610 450 1,120 - 4,180
Gross profit 2,610 440 604 - 3,654
Operating expenses (44) (1,159) (221) (949) (2,373)
Exceptional operating costs - - (42) (5) (47)
Operating profit/(loss) 2,566 (719) 341 (954) 1,234
Other income - 5 - - 5
Net financial income - - - 26 26
Taxation - - - 300 300
Profit/(loss) for the year 2,566 (714) 341 (628) 1,565
Note:
Grant Income is included in Turnover in the segmental numbers and the actual
grant income for each period is on the face of the Condensed Statement of
Comprehensive Income.
5. Corporation tax and deferred tax
The Company has approximately £21m 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 has moved into consistent profitability, Deferred Tax has been
recognised, and the Deferred Tax credit is calculated to reflect the estimated
results for the following 36 months in the Financial year to 30 June 2024
(previously 24 months).
The current value of the deferred tax asset in the Balance Sheet is £1.475m.
and as we look forward to the end of the decade the Company can see that the
losses brought forward could well be used up by 2030 and with this possibility
in mind the Company has decided to freeze the deferred tax asset and reverse
it when the losses are approaching exhaustion.
6. Earnings per share
31 December 2024 31 December 2023 30 June 2024
Shares Shares Shares
Weighted average number of shares in the period 15,219,884 15,506,141 15,446,993
Basic and diluted Earnings per share 3.61p 4.32p 10.13p
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