Final Results

RNS Number : 0220O

Transense Technologies PLC

16 September 2013

 

16 September 2013

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 12 months ended 30 June 2013.  Comparative figures in the Financial Highlights are shown for the 12 months ended June 2012, using unaudited figures extracted from management accounts, against which percentage comparisons have been made, and also for the statutory audited 18 months ended June 2013.

Financial Highlights

·     Revenue increased 98% to £1.5m (2012: £0.765m, 18 months: £1,014m )

·     Gross Profit increased 140% to £1.02m (2012: £0.424m, 18 months: £0.565m)

·     Positive cash position at 30 June 2013 of £1.98m (30 June 2012: £0.195m)

Operational Highlights

·     Completed a successful Placing and over-subscribed Open Offer which, together with a further placing, raised approximately £5m

·     Significant developments within Translogik

o  Large increase in sales and installations of iTrack mining tyre monitoring system

o  Increase in sales of tyre inspection tools with three of the largest orders

o  Surge in enquires for RFID products

·     IntelliSAW division completed a number of installations

·     SAWsense continues to support longer-term development projects

Graham Storey, CEO, commented:

"The last twelve months have been the most successful in terms of revenue in the Company's history and indications in recent months are that this pattern of growth is continuing into the coming year. Having invested heavily in R&D, developing products and a worldwide partner and distribution network, the Company has moved into a new phase of growth, with rapid expansion underpinned by our strengthened balance sheet. We look forward to the coming years with considerable confidence."

For further information, please contact:

Transense Technologies plc	Tel: [phone]
Graham Storey, Chief Executive
N+1 Singer - Nominated Adviser Shaun Dobson, Aubrey Powell	Tel: [phone]
Newgate Threadneedle	Tel: [phone]
Caroline Evans-Jones, Robyn McConnachie

About Transense Technologies

Based in Oxfordshire, UK, Transense has developed patent-protected sensor systems and supporting technology for use in a variety of diverse high growth markets. Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems. Transense is targeting the global electrical Smart Grid applications market, the transport and mining industries, and the global torque, temperature and pressure sensing markets, via its three trading divisions, IntelliSAW, Translogik and the newly established SAWSense, respectively.

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

This has been a transformational year for Transense, in which we have seen market acceptance of our range of technologically driven products, with, quarter on quarter, the number of enquiries received from and quotations submitted to actual and potential customers growing at record levels, as has the number of field trials.

Sales in the 12 months to 30th June 2013 amounted to £1,517,000, almost double the level achieved in the comparable previous 12 month period.  The pre-tax loss for the year amounted to £2,443,000 compared to £3,398,000 for the 18 month accounting period to 30th June 2012.

It has been more than four years since the existing senior management team was formed.  Its first requirement was to understand the nature of the patented technology that had been developed and to evaluate the opportunities for its application in the market place.  The commercial approach adopted meant moving the Company away from its roots of granting licences to third parties, and into designing, building, testing and marketing a set of products and sensors for utilisation by major manufacturers or service providers closely linked with engineering, and with the automotive and mining industries. 

This strategy has taken time, capital and effort to roll out, however its success is now evident.  Products had to be developed and tested at length, engineers, software experts and a sales force had to be recruited, and an extensive and worldwide marketing initiative had to be undertaken.  Income for several years was modest, but the operational structure had to be implemented and the associated costs absorbed.  This resulted in extensive trading losses.  We are grateful for the continued to support shown to us by our shareholders in our fundraisings during this period of corporate development.

We are now seeing the outcome of our efforts.  In the autumn of 2012 we received the first significant order for our iTrack system from an Anglo-American subsidiary in South Africa, and a repeat order has recently followed.  Our US division, IntelliSAW, is also benefitting from health and safety policies implemented across the world with its batteryless and wireless temperature monitoring systems installed in electrical switchgear cabinets, providing real-time continuous information and early warnings of potential failures or overheating.  In addition, our SAWsense division continues to develop applications for torque measurement for the automotive, aviation and wind turbine industries - long term projects with the potential for delivering a royalty revenue stream.

It has therefore been a year of great progress.  The loyalty of our staff has been a key feature.  We thank them, and hope that the incentivisation measures in place and our encouraging progress will provide appropriate rewards for their years of patience as Transense's strategic plans were enacted and their continuing endeavours will drive the success of the business.

What is clear is that we have a proven set of products, which ascertain changes in temperature, pressure and torque, providing instantly accessible information to customers.  These sensors give Transense a real competitive advantage.  We are budgeting for large revenue increases, and the recent and successful fundraise should enable us to take the Company to a more viable financial state.  I look forward to reporting our further progress in a few months' time.

D G Kleeman
Chairman

13th September 2013

Chief Executive's report

Transense has made excellent commercial and operational progress during the last financial year. The Company is pleased to have secured significant contracts in both the Translogik and IntelliSAW divisions and sales momentum is continually increasing.

Translogik

Our Translogik division has concentrated on marketing its iTrack system and probes.

iTrack

iTrack is a tyre pressure monitoring system aimed initially at earth moving vehicles enabling fleet operators to monitor the pressure and temperature of tyres to reduce risks of blow-out and tyre wear, vehicle damage, and to reduce downtime for vehicles having 24 hour per day utilisation.

Further to our Anglo American orders for Translogik's iTrack system, two further orders for mines in Chile, managed by our distributor, Otraco have followed post year end, as announced in August 2013. With a combined sales value of approximately £2.5 million, the Company believes these two major contracts signify market acceptance of the iTrack solution and have led to an increased level of enquiries regarding the system from around the world, as awareness of the benefits grows, both in terms of safety and cost savings that the system offers mine operators.

It took almost two years from commencing system pilots, to securing end-user orders which was much longer than originally anticipated. The Board believes that an inflexion point has been reached and, with a number of long-term field trials already underway, we are confident that further material deployments will follow.

We have high hopes for the receipt of further valuable orders from South Africa, Australia and Chile in the current financial year. Consideration is being given to the possibility of the leasing of the system and our technology to the customers of a period of several years as an alternative to an outright sale.

iProbes and tags

Volumes for Translogik's iProbes and RFID (Radio Frequency Identification) tags for commercial tyre casings are also growing as the wide-scale adoption of tyre RFID systems with major tyre OEMs accelerates, driven by the requirements to improve operational efficiency and provide cost savings in logistics, production and quality control. The recent move by Michelin to open up its RFID patents free of charge in an effort to promote a global tyre RFID standard should see the demand for RFID enabled products within the tyre management industry grow strongly over the next few years. 

In May this year we received a substantial order from Dunlop Japan for iProbe kits (including RFID tags) resulting in total sales to date of around £295,000 of which £235,000 arose after our year end. The value of this order alone was close to the total value of all probes sold in the corresponding period in the previous year. In addition to this, the Company also received two more orders from its value added resellers in North America and Europe.  Probe sales in the last 6 months of the financial year were over 4 times the value of sales in the comparable January-June period in 2012, providing a substantive market validation of our innovative tools for this global market. 

The Translogik tyre probe allows key tyre measurements to be taken with high precision and (in an independent customer testing procedure) up to 60% faster than conventional methods, providing significant benefit to fleet operators. Integration of the iProbe and its data capture capability with the electronic systems of large fleet companies can be a lengthy process but, once tested and approved for commercial use by end-customers, pilot projects are increasingly converting into material orders.  We are therefore confident of the potential to generate repeat orders from existing customers and further adoption of Translogik tyre management solutions.

IntelliSAW

IntelliSAW has also benefitted from the worldwide emphasis by industry on health and safety at work. Its customers recognise the need for early warning signals of potential overheating in switchgear, thereby reducing the risk of expensive and potentially harmful failures in electrical sub-stations ensuring better availability of power supply.  Whilst sales progress for IntelliSAW's sensors has been slower than originally anticipated, the number of trial installations has materially increased worldwide, particularly in the emerging markets.

IntelliSAW has completed a number of installations with highlights including a first full factory fit-out at the new state-of-the-art, Fuxin Special Steel Company (FSSC) Steel Plant in China, an initial implementation for POSCO, South Korea's largest steel manufacturer, and initial orders from Saudi Arabia and Taiwan. Additionally, multiple pilots are continually supported by the Company's partners in various territories including the Americas, Europe, the Middle East, China, Southeast Asia and India] and are expected to lead to further orders in due course.

IntelliSAW's market is large and growing but the sales cycle is lengthy and slow.  Potential customers require exhaustive testing, and invariably wait for suitable opportunities to close down installations temporarily before incorporating our sensors and related equipment into their units.  As with iTrack, the period between the first point of contact and the placing of an order can cover an extensive period over which we have little to no control.  Order intake, therefore, is difficult to budget, and results from quarter to quarter can vary hugely, thereby materially affecting our financial reporting.  However, we are encouraged by the growth in enquiries received, the addition of further partners and in the number of pilots pending or underway and reasonably expect that sales trends will become more visible and sales budgeting more readily and reliably accomplished.

Successful Placing and Open Offer

During the period June and July 2013 the Company completed two successful placings and an over-subscribed Open Offer which straddled the year end and raised approximately £5 million in aggregate gross proceeds to support the rapidly growing pipeline of business.  This additional capital is being used to maximise the growth potential of the business, particularly through sales and field channel support and quality control. This fundraising allows additional resources to be made available across the Group as Translogik and IntelliSAW seek to achieve near and medium-term revenue growth. The fundraising also supports, the Company's newly established trading division, SAWsense, focused on commercialising our valuable library of patents and sensor expertise as it continues its longer-term development projects with existing partners such as General Motors, McLaren and Intelwind, as well as other new areas of opportunity, both in the automotive and non-automotive fields.

Outlook

The last twelve months have been the most successful in terms of revenue in the Company's history and indications in recent months are that this pattern of growth is continuing into the coming year. Having invested heavily in R&D, developing products and a worldwide partner and distribution network, the Company has moved into a new phase of growth, with rapid expansion underpinned by our strengthened balance sheet. We look forward to the coming years with considerable confidence.

Graham Storey

CEO

13th September 2013

Finance Director's Report

The Group's Financial Highlights for the year were as follows:

		2013	2012 *	Change
		£000's	£000's
Group Revenue		1,517	765	98%
EBITDA		( 2,157)	(2,343)	8%
Net Loss after Taxation		(2,383)	(2,560)	7%
Loss per share		(1.20)p	(1.6)p	25%
Shareholders' Funds		3,392	1,757	93%
Cash		1,989	195

* 2012 Comparisons are unaudited figures extracted from management accounts for the twelve months to 30 June 2012 or as at 30 June 2012

Summary of Financial Review

·     Transense achieved record revenues for the 12 month period and achieved 98% growth on the equivalent period to 30 June 2012.

·     Recently announced orders from Anglo American (Kumba Iron Ore), Otraco and Dunlop Japan (Sumitomo) have resulted in record visibility of revenue for the financial year to 30 June 2014.

·     Both the EBITDA & Net Loss after Taxation have improved in the year to 30 June 2013, reflecting the major improvement in revenue generation and ongoing cost management. This has also been achieved despite the inclusion of a full year of the expenses of our IntelliSAW office against 9 months of full operational cost in the comparative period.

·     Shareholders' funds and cash resources have benefitted from the fundraising that straddled the year end and produced a total inflow of new funds, net of costs, of around £4.9 million.

·     The fundraising completed in July 2013, referred to above, was the first to be completed from a position of having a major order on board and one where the proceeds of the fundraising could be used substantially for expansion purposes by increasing sales support and channel support.  Further investment will also be made in quality control, in product and software development, and to market and promote our industry leading products.  Some related overhead and working capital expansion is expected as a function of growing our operations in support of actual and anticipated sales growth.

·     Transense has nearly 40 active patents that are constantly reviewed on a rolling basis and any patents that are considered of no value are fully amortised. This policy ensures that we concentrate expenditure on those patents that are relevant and valuable to the business.

·     Transense has in excess of £13 million of tax losses to carry forward against future trading profits. This should ensure that in the first few years of profitability the tax charge will be virtually zero and once the losses have been exhausted Transense should be eligible to pay tax at the reduced rate of 10% based on the current Patent Box legislation.

Melvyn Segal FCA

Financial Director

13^th September 2013

Consolidated Statement of Comprehensive Income

for the period ended 30 June 2013

		Year ended 30 June	18 months ended 30 June
	Note	2013	2012
		£000	£000
Revenue		1,517	1,014
Cost of Sales		(500)	(449)
Gross Profit		1,017	565
Administrative Expenses		(3,464)	(3,997)
Operating loss		(2,447)	(3,432)
Financial Income		4	34
Loss before Taxation		(2,443)	(3,398)
Taxation		60	73
Loss for the Period		(2,383)	(3,325)
Basic and fully diluted loss per share (pence)	2	(1.20)	(2.24)

Consolidated Balance Sheet

at 30 June 2013

			Year ended		18 months ended
			30 June		30 June
	Note	2013	2013	2012	2012
		£000	£000	£000	£000
Non current assets
Property, plant and equipment		137		149
Intangible assets		989		1,188
			1,126		1,337
Current assets
Inventories		315		140
Corporation tax		61		73
Trade and other receivables		440		299
Cash and cash equivalents		1,989		195
			2,805		707
Total assets			3,931		2,044
Current liabilities
Trade and other payables		(488)		(254)
Current tax liabilities		(51)		(33)
Total liabilities			(539)		(287)
Net assets			3,392		1,757
Equity
Issued share capital			9,102		8,591
Share premium			13,144		9,753
Warrant reserve			378		430
Accumulated loss			(19,232)		(17,017)
Total equity			3,392		1,757

Statement of Changes in Equity

	Share		Share		Warrant		Cumulative		Total
	Capital		premium		reserve		losses		equity
	£000		£000		£000		£000		£000
Balance at 1 January 2011	8,145		8,956		710		(14,047)		3,764
Loss for the year							(3,325)		(3,325)
Shares and warrants 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
Loss for the year							(2,383)		(2,383)
Shares and warrants issued and share premium	511		3,391		-		-		3,902
Transfer between reserves	-		-		(52)		52		-
Share based payments	-		-		-		116		116
Balance at 30 June 2013	9,102		13,144		378		(19,232)		3,392

Consolidated Cash Flow Statement

for the period ended 30 June 2013

	Note	Group
		Year ended 30 June	18 months ended 30 June
		2013	2012
		£000	£000
Loss Before Tax		(2,443)	(3,398)
Financial Income		(4)	(34)
Depreciation		72	78
Amortisation		218	320
Loss on disposal of fixed assets		-	11
Share Based payments		116	75
Operating cashflows before movements in working capital		(2,041)	(2,948)
(Increase) / decrease in receivables		(141)	101
Increase / (decrease) in payables		234	(113)
(Increase)/decrease in inventories		(175)	(99)
Cash used in Operations		(2,123)	(3,059)
Taxation recovered		90	65
Net cash used in operations		(2,033)	(2,994)
Investing activities
Interest received		4	34
Proceeds from disposal of fixed and investment assets		-	72
Acquisitions of property, plant & equipment		(60)	(112)
Acquisitions of intangible assets		(19)	(114)
Net cash used in investing activities		(75)	(120)
Financing activities
Proceeds from issue of equity share capital & warrants		3,902	1,243
Net cash from financing activities		3,902	1,243
Net increase / (decrease) in cash & cash equivalents		1,794	(1,871)
Cash and equivalents at the beginning of the period		195	2,066
Cash and equivalents at the end of the period		1,989	195

Notes to the results for the period ended 30 June 2013

1. The financial information set out above is an extract of the company's statutory accounts for the financial period for the 12 months ended 30 June 2013, 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 £ 2,383,000 (2012: £ 3,325,000) by the weighted average number of ordinary shares in issue during the year of 199,347,274 (2012: 147,859,462).  Unexercised options and warrants over the ordinary shares are not included in the calculation of diluted loss per share as their effect is anti-dilutive.

3. The Company completed successful Placings and an over-subscribed Open Offer which straddled the year end and raised approximately £5 million in aggregate gross proceeds.

4. The financial statements have been prepared on a going concern basis. 

 

END

 

 

FR UVUAROSAKAUR