REG - Transense Technlgy - Year End Trading Update

Transense TechnologiesAnnouncement

05/07/2022 07:00

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RNS Number : 2718R  Transense Technologies PLC  05 July 2022

Transense Technologies plc

("Transense" or the "Company")

 

Year End Trading Update

 

Transense Technologies plc (AIM: TRT), the developer of specialist sensor
systems, is pleased to provide a trading update for the financial year ended
30 June 2022 based on unaudited management information.

Highlights

·    Results for the year in line with market expectations

·    Strong royalty and sales revenue growth

·    Progress in product and business development across all divisions

·    Cash balanced maintained, despite spending circa £0.30m on a share
buyback programme - and with the next quarterly royalty payment of not less
than £0.43m due in July

·    Resilient business model leads to Board confidence in growth
prospects

Revenue, EBITDA & Cash

Revenue for the year has increased by almost 50% to around £2.6m, which is
line with market expectations.  Adjusted EBITDA* is also expected to be in
line with market expectations, and net earnings may exceed market expectations
as a consequence of an increased tax credit arising from extending the
recognition of deferred tax assets arising from prior years' losses.

Net cash balances at 30 June 2022 amounted to £1.05m (FY21: £1.04m).
Trading was cash generative and the Company invested approximately £0.30m in
the share buyback programme announced in February 2022.  Royalties for the
final quarter of the financial year, receivable at the end of July 2022, are
expected to be not less than £0.43m, further strengthening the available cash
position of the Company.

iTrack Royalties

The underlying royalty income for the financial year from iTrack increased by
more than 75% compared with the prior year, reaching US$2m. Royalty income is
denominated in US dollars, which has strengthened against Sterling during the
year to a level slightly more favourable than the exchange prevailing at the
outset of the licence in June 2020. The run rate of royalty income now exceeds
£1.85m per annum at current exchange rates, representing an almost threefold
increase since inception of the deal.

Surface Acoustic Wave (SAW)

Revenues were above those of the prior year, primarily due to the sale of
torque management systems for motor sport applications and technical support
on pre-production projects, including for the GE T901 engine programme.  In
addition, the Company began to realise income from claims under the Technology
Developer Accelerator Programme ("TDAP") grant announced in May 2022, which
could in total amount to £0.13m by the end of FY23.

Business development activities have been expanded and continue to generate
positive responses.  The feedback obtained affirms potential demand for SAW
technology across a broad range of applications, including torque and
temperature measurement to improve the control and efficiency of electric
motor drive units.  This in turn has led the Company to commit additional
engineering resource, with key appointments including the new Technical
Director announced recently.  Costs attributable to the SAW business have
been contained within budgets set out in the Company's internal business plan
and are also in line with market expectations.

Translogik

Translogik tyre probe revenues continue to deliver strong growth with an
increase of more than 15% over the prior year. Due to careful management and
close co-operation with key suppliers, the well publicised shortages of
electronic components has not had any material impact on product availability,
and margins have been protected, partly as a consequence of a high proportion
of sales arising outside the U.K. and denominated in US dollars and Euros.

The new modular TLGX range is now well established and has been adopted by a
number of leading global tyre original equipment manufacturers (OEMs) as the
hardware choice to complement their fleet tyre management solutions. As
previously reported, the original TL-G1 probe is being phased out and will
shortly be entirely replaced by the TLGX range.

Not all Tyre Management Systems are operated directly by these OEMs.  We are
increasingly engaging with both software and hardware companies who have a
very broad customer base ranging from OEMs to logistics operations, and this
has opened up further new exciting opportunities for future growth.

Outlook

The directors are mindful that global economic conditions are likely to become
even more challenging in coming months, however, they consider that the
Company's business model provides considerable resilience. The momentum that
has built up in royalty income now generates sufficient net income to
comfortably cover fixed overheads, and Translogik revenue generated in a
business-to-business setting is expected to be more reliable than mainstream
consumer markets.  Furthermore, the directors continue to believe that
controlled investment in SAW technology, supported by customer contributions
and grant income, offers opportunities to deliver significant levels of
commercial revenue in future.  Accordingly, the Board is optimistic about
growth prospects despite the gathering economic headwinds.

Final audited results for the year ended 30 June 2022 and a more detailed
trading update are expected to be released around the end of September 2022.

*Adjusted EBITDA refers to net earnings before interest, taxation,
depreciation and amortisation adjusted for the cost of share based payments.

 

 

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 (Sales & Corporate Broking)
 Walbrook PR                                        Tel: +44 (0)20 7933 8780

 Tom Cooper / Nick Rome                             Transense@walbrookpr.com

 

Notes to Editors:

Transense is a developer of specialist wireless sensor systems used to
enable real-time data gathering and monitoring.  Products include the
patent protected Surface Acoustic Wave (SAW) sensor technology, used to
improve equipment power, performance, reliability and efficiency; iTrack,
Transense 's Tyre Pressure Monitoring System, licensed to Bridgestone
Corporation, the world's largest tyre producer, under a ten-year deal in June
2020; and a range of intelligent tyre monitoring equipment under the
Translogik brand. Target sectors include automotive, aerospace, industrial,
green energy, rail and marine.

 

The Group's strategy is to maximise shareholder value through the delivery of
sustained revenue growth from all three principal technologies - SAW, iTrack
and Translogik probes - through leveraging excellence in innovation, know-how
in commercialising technologies, industry partnerships and exposure to global
growth markets.

 

Transense is headquartered in Oxfordshire, UK, and was admitted to trading on
AIM, a market operated by the London Stock Exchange (AIM: TRT), in
1999.  www.transense.com (http://www.transense.com/)

 

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

 

 

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