REG - Transense Technlgy - Year End Trading Update

Transense TechnologiesAnnouncement

11/07/2023 07:00

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RNS Number : 5605F  Transense Technologies PLC  11 July 2023

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.

 

 

11 July 2023

Transense Technologies plc

("Transense" or the "Company")

 

Year end trading update

 

Transense Technologies plc, the provider of specialist sensor technology and
measurement systems, is pleased to provide a trading update for the financial
year ended 30 June 2023 based on unaudited management information.

 

Highlights

·      Adjusted EBITDA* for the year expected to be around £1.4m, in
line with market expectations (FY22: £0.6m)

·      Total revenue for the year increased by more than 35% to in
excess of £3.5m, in line with market expectations (FY22: £2.6m)

o    Revenues excluding iTrack royalty income ahead of management
expectations, up by 41% to exceed £1.5m (FY22: £1.1m)

o    SAWsense revenue ahead of management expectations, more than doubled
to £0.5m (FY22: £0.2m)

o    ITrack royalty up 30% to £2.0m (FY22: £1.6m), which was lower than
management expectations, but exit annual run rate exceeds £2.3m (FY22:
£1.9m)

·      Cash balance maintained at £1.0m, despite outgoings of £0.4m on
share buyback programme and £0.2m of non-recurring reorganisation costs

o    The post year end quarterly iTrack royalty receivable in July is
around £0.6m

 

Revenue, Adjusted EBITDA* & Cash

 

Total revenue for the year increased by more than 35% to over £3.5m, which is
in line with market expectations (FY22: £2.6m).

 

The increase in the number of installed units generating royalty income was
consistent with each of the two previous years, however, most of the growth in
the current year arose in Q4 leaving the overall total iTrack royalty income
for the year short of expectations. Significantly, far stronger than expected
growth was generated from both SAWsense and Translogik which outweighed the
royalty shortfall.

 

Adjusted EBITDA* is expected to be around £1.4m, also in line with market
expectations, and more than double the prior year level (FY22: £0.6m). Profit
after tax 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 2023 amounted to £1.0m (FY22: £1.0m).
Trading continued to be cash generative, enabling the Company to invest a
further £0.4m in the ongoing share buyback programme (FY22: £0.3m).
Royalties for the final quarter of the financial year receivable at the end of
July 2023 are expected to be around £0.6m, further strengthening the
available cash position of the Company.

 

SAWsense

 

Revenues were more than double those of the prior year at £0.5m (FY22:
£0.2m) from increased sales of motorsport equipment, combined with
significant new income from customer funded feasibility and applications
development projects in aerospace and automotive electric motors and drives.
In addition, the Company realised income from claims under the Technology
Developer Accelerator Programme ("TDAP") grant announced in May 2022 of £0.1m
(FY22: £ 0.0m).

 

Business development activities have continued to generate a healthy pipeline
of new incoming enquiries, and the conversion of these into chargeable
feasibility and applications development projects is accelerating.  Recent
changes in management structure, repositioning the cost base towards
customer-facing engineering and project management specialists, gave rise to
non-recurring reorganisation costs of £0.2m towards the end of the financial
year.   It is anticipated that these changes will deliver productivity gains
in future, enabling the business segment to generate sufficient income to
cover its own costs more quickly.

 

Translogik

 

Revenues continued to deliver annual growth above 17% and have exceeded £1m
for the first time (FY22: £0.9m).  Much of this success is attributable to
our market leading product range generating increased demand from established
blue-chip customers, reacting to market factors such as greater call for
digitisation of data and vehicle safety regulatory compliance.  This leads us
to believe that increased overhead investment in business development and
marketing infrastructure, planned for FY24, will deliver rapid results in
further acceleration of market penetration through both current and new
channels to market.

 

iTrack Royalties

 

Royalty income for the financial year from iTrack in Sterling terms increased
by 30% to £2.0m (FY22: £1.6m), which was below the expected growth rate of
around 45%.  This had been signalled during the year and was primarily due to
new installations converting late in our financial year rather than uniformly,
and most strongly in the final quarter.

 

The annualised run rate of royalty income exceeded £2.3m by the end of FY23,
an increase of 23% over the FY23 opening rate of £1.9m per annum.

 

Outlook and Audited Results

 

The Board is pleased with the momentum in the ongoing commercial pipeline,
both for SAWsense and Translogik, which provides confidence in the prospects
for the current financial year.

 

Final audited results for the year ended 30 June 2023, and a more detailed
update on trading and outlook, are expected to be announced around the end of
September 2023.

 

 

*Adjusted EBITDA refers to net earnings before interest, taxation,
depreciation and amortisation adjusted for the cost of share based payments of
£0.1m and non-recurring reorganisation costs of £0.2m.

** iTrack Royalties are based on the closing rate at 7 July 2023, however this
may vary if there is a material change in rates at the end of July 2023 when
the quarterly royalties are invoiced and paid.

 

 

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/Jos Pinnington (Sales and Corporate Broking)
 Walbrook PR                                                Tel: +44 (0)20 7933 8780

 Tom Cooper / Nick Rome                                     Transense@walbrookpr.com

 

 

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, electric motors and
drives, industrial machinery (including robotics) and motor sport. Key
customers include GE Aerospace, Parker Meggitt, McLaren Applied and several
other confidential Tier One automotive and aerospace suppliers.

 

·      Translogik - develops smart, connected commercial vehicle tyre
inspection equipment to many of the world's leading tyre suppliers, fleet
operators and service centres. That accurately measure and digitally capture
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.

 

Transense earns residual royalty income from iTrack - a tyre monitoring system
for off-highway vehicles that was designed, developed and supplied by
Translogik and sold under subscription to leading global mining companies. The
associated sales, support and development infrastructure were sold to
Bridgestone Corporation Japan, the world's largest tyre producer, in June
2020, and the intellectual property was licence exclusively to Bridgestone
under a ten-year deal expiring in 2030.

 

For further information please contact transense@walbrookpr.com

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