Final Results and Notice of AGM

RNS Number : 7625N

Transense Technologies PLC

03 October 2012

 



03 October 2012

Transense Technologies plc

Final Results

Transense Technologies plc (AIM:TRT) ("Transense" or the "Company"), the provider of sensor systems for the transportation and industrial markets, is pleased to announce its final results for the 18 months ended 30 June 2012.   

Highlights

·     Both of the Company's trading divisions, Translogik and IntelliSAW, have made significant strides in expanding sales and partner networks

·     IntelliSAW starting pilots for its smart grid wireless sensor systems at several major industrial sites with more pilots expected to follow

·     Translogik, the transport industry division, secured initial order for iTrack from Kumba Iron Ore, a wholly owned subsidiary of Anglo American Plc

·     Successful placing in June raising £1.76m

Graham Storey, CEO, commented: "We are extremely positive about the developing opportunities to exploit Transense's sensor expertise through IntelliSAW and Translogik.  The new IntelliSAW pilots are at major industrial sites and success at any of these could lead to volume orders for the IS485 system.

"The iTrack order from Kumba represents the first commercial success for Translogik's iTrack system in South Africa and we are hopeful that the global exposure within the mining industry that this order has provided will translate into further commercial successes as we promote the global deployment of iTrack.  We have already seen an example of this with the new AutoRFID pilot and are confident that more will follow."

Notice of Annual General Meeting

The Company announces that its Annual General Meeting of shareholders will be held at 3 Lloyd's Avenue, London, EC3N 3DS at 11:00 a.m. on 26 October 2012.

The Annual Report and Accounts for the 18 months ended 30 June 2012 and Notice of Annual General Meeting will be posted today to those shareholders who have requested hard copies.

Electronic copies will also be made available within the 'Investors' section on the Company's website at www.transense.co.uk.

For further information, please contact:

Transense Technologies plc	Tel: [phone]
Graham Storey, Chief Executive
N+1 Brewin - Nominated Adviser Aubrey Powell, Robert Beenstock	Tel: [phone]
Hybridan LLP - Broker	Tel: [phone]
Claire Noyce,  Deepak Reddy
Newgate Threadneedle	Tel: [phone]
Caroline Evans-Jones, Robyn McConnachie

About Transense Technologies

Based in Oxfordshire, UK, Transense has developed patent-protected sensor systems for use in diverse high growth markets. Developed in conjunction with partners including McLaren Electronic Systems and General Motors, Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems. Via two wholly owned divisions, IntelliSAW and Translogik, Transense is targeting the high growth global electrical Smart Grid applications market and the transport industry respectively.

Transense's sensors are also being used in the wind turbine monitoring industry. The Company is part of a consortium of nine companies ("IntelWind") that has begun development on a major EU funded project to improve the efficiency of wind turbines.

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

As indicated earlier this year, our year-end date was changed to 30 June 2012.  The Directors Report & Financial Statements cover, therefore, the 18 month period to 30 June 2012.

In this 18 month period sales amounted to £1,014,000 split as to £663,000 in the 12 months to 31 December 2011 and £351,000 in the 6 months to 30 June 2012 (6 Months to June 2011 - £249,000).  The increased post-tax loss for the 18 months of £3,325,000 compared to the previous period reflects the extra costs of funding the US overhead which has expanded to facilitate the potential new business that is now materialising at our US operation - IntelliSAW, which commenced business more than a year ago and is a provider of wireless sensor systems for smart grid applications.

Despite this trading loss, our business has made substantial progress.  Since we last reported in June this year with our interim figures, our iTrack system has received its first significant order - from one of the world's largest mining companies in respect of one of its South African mines.  Other mining companies are showing interest in our products, whilst the testing of our systems by potential customers takes time, we anticipate further orders of significance.

IntelliSAW's sales are also showing an encouraging momentum.  It has taken the best part of a year since the commencement of its business for IntelliSAW to establish worldwide distribution arrangements within the power generation industry, a feature which much increased the Group's monthly cash outflow.  The exercise has been worthwhile and we are now participating in a high growth industry with major potential, particularly in fast growing Third World countries. Quarter on quarter we are seeing real growth in the intake of orders, and requests for quotations.

We have also completed, since we last reported, the raising of £1.76m, before expenses, by means of a Placing.  This has enabled us to continue to fund the continued expansion of the business.

All in all, a really meaningful 18 month period of progress, which should enable us to report a record level of sales for Transense for the current 6 month period to 31 December 2012.

D G Kleeman
Chairman

2^nd October 2012

Chief Executive's report

The first six months of 2012 has seen a continuation in the solid progress made during 2011 and it is anticipated that this progress will be reflected in the figures to December 2012, and more so throughout 2013. All key projects have moved forward and our two trading divisions have made significant strides in expanding their sales and partner networks, with IntelliSAW starting pilots at several major industrial sites and Translogik securing its first commercial order from Anglo American.

Transense

General Motors Flexplate

The flexplate project is progressing well and Transense continues to provide close engineering support to the General Motors team. The flexplate is an integral part of the vehicle powertrain control system and has the potential to improve vehicle driveability, reduce fuel consumption and improve transmission shift quality. This will be the first time a propulsion system has been able to measure engine torque 'live', enabling optimal control to be maintained throughout a vehicle's life. Current torque management systems rely on simulated models derived from production engine testing which can differ from the actual engine torque output over time. The new flexplate technology provides continuous real-time torque measurement allowing actual torque measurement on a per-vehicle basis for maximisation of engine efficiency.

McLaren

As part of the Joint Development Agreement (JDA) with McLaren signed in August 2011 and following on from the success of the KERS project, Transense is now manufacturing torque sensor shafts for Indycar. The shafts are fitted with Surface Acoustic Wave (SAW) torque sensors by Transense and extensively tested and calibrated for use within the harsh motorsport environment. The shafts are then supplied to McLaren for integration with the sensor interrogation electronics and shipment to the customer. Modifications to the Indycar shaft for sensor compatibility, the SAW torque sensor and the interrogation electronics all contain Transense patented intellectual property.

Work on various other applications of Transense's SAW technology for measuring torque, temperature and pressure, such as IntelWind, continues to progress towards commercialisation.

IntelliSAW

IntelliSAW has continued to see strong demand for its innovative wireless/passive temperature monitoring solutions. This has resulted in the recent commissioning of three new pilot installations of its IS485 electrical switchgear monitoring systems with major industrial companies.

The pilot systems were installed at sites owned by Petrobras in Brazil, currently the fifth largest energy company in the world, Southern China Grid, a major regional power company supplying 230 million people, and the Gujarat State Electricity Corporation (GSECL) in India, which runs twelve power stations. Until now all pilot installations have been carried out by the IntelliSAW technical team, however the new pilot at the Southern China Grid site was carried out by a regional partner. As more of IntelliSAW's channel partners gain expertise in the product this will allow for significant scaling in the rate at which new sites can be added.

Scheduling pilots at such large and complex industrial sites presents significant logistical challenges, as the costs associated with lost operational time dictate that installations can only be carried out during scheduled periods of downtime. In addition, there are stringent performance and safety targets to meet given the critical nature of monitoring such key electrical assets which can result in extended periods of testing being required. However, given these challenges, the Company has been encouraged by the willingness of customers to undertake these pilots and believe this is a testament to the benefits the system provides.

Recent high-profile news stories relating to power grid failures in India are serving to demonstrate the pressing need to maximise the capacity of existing high capital cost infrastructure. The IntelliSAW solution meets this problem head-on, providing continuous real-time monitoring of switchgear temperatures, the leading indicator of potential failure in the switchgear cabinets. Previously announced pilots are continuing and the Company looks forward to these leading to full deployments as customer testing programmes are successfully concluded.

Translogik

iTrack

Following recent successful field trials Translogik received an initial order in August for its iTrack Tyre Temperature and Pressure Monitoring Systems for mining and off-the-road vehicles ("iTrack") from Kumba Iron Ore ("Kumba"), a wholly owned subsidiary of Anglo American Plc. This first batch of systems will be installed onto 29 large haul trucks at Kumba's Sishen mine in the country's Northern Cape Province, one of the seven largest open-pit mines in the world. It operates around the clock, twelve months a year, and in 2010 produced 41.3 million tons of iron ore.

Translogik now has a team member permanently based in South Africa who will be responsible for training Kumba's tyre service provider in the installation process and ongoing support of the system. It is anticipated that the South African Translogik team will expand as further mines sign up for the iTrack system.

This order from Kumba represents the first commercial success for Translogik's iTrack system in South Africa. Having a Company such as Kumba adopt the iTrack system demonstrates the value of the system to the wider mining industry. The ability to monitor the tyre performance of mining vehicles 24/7 and receive instant notification of any potential hazardous situations allows operators to achieve greater levels of safety and efficiency throughout their mines.

A further iTrack order was received from Translogik's Indonesian distributor, AutoRFID Solutions Sdn Bhd. ("AutoRFID"). These systems will be installed as part of a pilot scheme on three of the 168 vehicles at the ADARO mine in Indonesia, one of AutoRFID's clients. The ADARO mine is expanding its operations and expects to be running more than 300 vehicles by the end of 2014.

Enhancements to the iTrack system continue to be made, including Translogik's new mobile application for Android, "MobiTrack". Running on a variety of hand-held devices, the system allows tyre status to be read by the side of the vehicle - no need to gain access to the cab. It also allows remote configuration of the iTrack system and the ability to update tyre positions and adjust settings such as wheel layout/numbering, vehicle registration, in-cab warning levels, and enabling/disabling atmospheric pressure compensation.

Inspection Tools

In a major endorsement of the product, the Translogik iProbe was used by Michelin during its high-profile initiative to improve the safety of buses during the London 2012 Olympics. The iProbe+ was used to provide a wireless non-contact method of reading data from the Michelin 'communicating' tyres to monitor their condition.

By combining the Tyre Pressure Monitoring System (TPMS) and Radio Frequency Identification chips (RFID), Michelin sought to enable London urban transport operators to enhance the safety of the tyres fitted on their buses, thereby immediately improving the mobility of both vehicles and transport users.

Outlook

We are extremely positive about the developing opportunities to exploit Transense's sensor expertise through IntelliSAW and Translogik. The new IntelliSAW pilots are at major industrial sites and success at any of these could lead to volume orders for the IS485 system.

The iTrack order from Kumba represents the first commercial success for Translogik's iTrack system in South Africa and we are hopeful that the global exposure within the mining industry that this order has provided will translate into further commercial successes as we promote the global deployment of iTrack. We have already seen an example of this with the new AutoRFID pilot.

Graham Storey

CEO

2^nd October 2012

Consolidated Statement of Comprehensive Income

for the period ended 30 June 2012

				18 months ended		12 months ended
				30 June		31 December
		Note		2012		2010
				£000		£000
Revenue				1,014		656
Cost of sales				(449)		(301)
Gross profit				565		355
Administrative expenses				(3,997)		(1,878)
Operating loss				(3,432)		(1,523)
Financial income				34		14
Financial expenses				-		-
Loss before taxation				(3,398)		(1,509)
Taxation				73		55
Loss for the period				(3,325)		(1,454)
Basic and fully diluted loss per share (pence)		2		(2.24)		(1.39)

Consolidated Balance Sheet

at 30 June 2012

					18 months ended			12 months ended
					30 June			31 December
			Note		2012	2012		2010	2010
					£000	£000		£000	£000
Non current assets
Property, plant and equipment					149			114
Intangible assets					1,188			1,420
Available for sale assets					-			58
						1,337			1,592
Current assets
Inventories					140			41
Corporation tax					73			55
Trade and other receivables					299			400
Cash and cash equivalents					195			2,066
						707			2,562
Total assets						2,044			4,154
Current liabilities
Trade and other payables					(254)			(367)
Current tax liabilities					(33)			(23)
Total liabilities						(287)			(390)
Net assets						1,757			3,764
Equity
Issued share capital						8,591			8,145
Share premium						9,753			8,956
Warrant reserve						430			710
Accumulated loss						(17,017)			(14,047)
Total equity						1,757			3,764

Statement of Changes in Equity

Group

	Share capital	Share premium	Warrant reserve	Cumulative losses	Total equity
	£000	£000	£000	£000	£000
Balance at 1 January 2010	7,580	7,856	-	(12,608)	2,828
Loss for the year	-	-	-	(1,454)	(1,454)
Shares and warrants issued and share premium	565	1,100	710	-	2,375
Share based payments	-	-	-	15	15
As at 1 January 2011	8,145	8,956	710	(14,047)	3,764
Loss for the period	-	-	-	(3,325)	(3,325)
Shares issued and share premium	446	797	-	-	1,243
Transfer between reserves			(280)	280	-
Share based payments	-	-	-	75	75
Balance at 30 June 2012	8,591	9,753	430	(17,017)	1,757

Consolidated Cash Flow Statement

for the period ended 30 June 2012

	Note	Group
		18 months ended 30 June 2012	12 Months ended 31 December 2010
		£000	£000
Loss before taxation		(3,398)	(1,509)
Adjustments for:
Financial income		(34)	(14)
Depreciation		78	42
Amortisation of intangible assets		320	262
Loss on disposal of fixed assets		11	-
Share based payment		75	15
Operating cash flows before movements in
working capital		(2,948)	(1,204)
Decrease/(increase) in receivables		101	(263)
(Decrease)/increase  in payables		(113)	(101)
(Increase)/decrease in inventories		(99)	(8)
Cash used in operations		(3,059)	(1,576)
Taxation recovered		65	169
Net cash used in operations		(2,994)	(1,407)
Investing activities
Interest received		34	14
Proceeds from disposal of fixed and investment  ssets		72	-
Acquisitions of property, plant and equipment		(112)	(5)
Acquisitions of intangible assets		(114)	(188)
Net cash used in investing activities		(120)	(179)
Financing activities
Proceeds from issue of equity share capital and warrants		1243	2375
Net cash from financing activities		1,243	2,375
Net (decrease)/increase in cash and cash equivalents		(1,871)	789
Cash and equivalents at the beginning of year		2,066	1,277
Cash and equivalents at the end of year		195	2,066

Notes to the results for the period ended 30 June 2012

1. The financial information set out above is an extract of the company's statutory accounts for the financial period for the 18 months ending 30 June 2012, and were prepared in accordance with Adopted IFRS as adopted by the EU. The statutory accounts have been finalised by the directors and will be delivered to the Registrar of Companies in due course.

2. Basic loss per share is calculated by dividing the loss after taxation of GBP3,325,000  (2010:  GBP1,454,000) by the weighted average number of ordinary shares in  issue  during  the  year  of  147,859,462 (2010: 132,207,136).

Options over the ordinary shares are not included in the calculation of diluted loss per share as their effect is anti-dilutive.

3. A successful fund raising was carried out in June 2012 and a further GBP1.76m was raised producing GBP1.6m net of costs received in two tranches in July and August 2012.

4. The financial statements have been prepared on a going concern basis, which the Directors believe to be appropriate for the reason below.

At 30 June 2012, the Group had net assets of £1.8m and a positive cash balance of £195,000.  However following the successful fund raising in June 2012 a further £1.76m was raised producing £1.6m net of costs received in two tranches in July and August 2012. 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 2013. These forecasts make a number of operational assumptions, the most significant of which is a substantially increased level of sales reflecting recently announced orders and future anticipated orders.

The forecast indicates that, assuming the anticipated increased level of sales are achieved, the Group will continue to be able to operate within its current cash resources for the foreseeable future.

However, were the timing of those sales to be delayed, then the group may require additional funding.  In this event, the Directors believe that it would be necessary and possible to arrange bank facilities to provide sufficient funding in anticipation of the operations becoming cash generative.

The Directors have considered controllable mitigating actions available to them to extend the period during which it can operate with the remaining cash reserves. However, the ability to do this may be limited. On the basis that the expected proceeds from the forecast increased level of sales materialises (or that appropriate bank facilities are made available), the Directors consider that the Group will continue to meet its liabilities as they fall due for the foreseeable future. However, there can be no certainty in relation to all these matters.

The Directors have concluded that the achievement and timing of the anticipated orders and also the potential requirement, and ability, to obtain external financing both represent material uncertainties that may cast significant doubt upon the Group's ability to continue as a going concern. The Group may, therefore, be unable to continue realising their assets and discharging their liabilities in the normal course of business. The financial statements do not include any adjustments that would result from the basis of preparation being inappropriate.

 

END

 

 

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