Preliminary Results
Transense Technologies PLC
("Transense" or the "Company")
Results for the year ended 31 December 2010
26th May 2011
Management Review
Chairman's statement
It has been a year of considerable, if slower than expected, development. Â By
December 2010, Transense was working on more active and customer-led projects
than ever before in its history. The loss for the year was £1,454,000 (2009 -
£1,472,000 loss).
Included amongst the highlights for the year were:
* a material growth in sales. In 2009 our work on the KERS (Kinetic Energy
Recovery System) project accounted for more than 60% of revenues. We did not
budget for, nor receive any income from this source in 2010, yet Group sales
in 2010 nonetheless increased over 2009 levels, despite not having the one-
off income from the KERS project.
* the successful £2m fundraising in June 2010;
* Translogik's product offering and customer interest expanded;
* the growth in the potential of the original Transense technology for the
automotive industry and the increase in number of revenue earning projects,
both of which continue; and
* the reorganisation of our staffing to reflect the change in our business
model, and the consequent substantial reduction in costs.
Whilst the mid and long-term goal of generating significant recurring income
from our licensees, for our patented torque, temperature and pressure sensors,
continues to be our primary objective, these are currently insufficient to
sustain the Company in the near-term. Â Our strategy has been therefore to seek
income from alternative sources to provide additional revenue streams in the
meantime, and the creation of the Translogik business has been an important step
in filling this gap. Â The development of Translogik's products has taken time,
and this is reflected in sales for the first quarter of 2011. Â However,
Translogik's range of tyre probes and RFID tags and patches has demonstrated
significant savings to customers both in time and money, and in reductions in
vehicle down-time.
For us to take advantage of this growing potential, additional sales and
specialist engineering staff have been recruited in recent months, and the
employment of high quality scientists and engineers remains important to the
Company.
With these staff changes in place, the Board are now confident that we have
overcome the issues that have delayed progress. We are also more confident than
ever about the attractiveness of our technology to potential customers, however,
this is tempered by the relatively long development cycles and the lack of sales
visibility this brings. We look forward to updating you on developments over the
coming months.
DG Kleeman
Chairman
Chief Executive's report
Overview
2010 was another year of progress for the Group. Transense has been extremely
busy, with an increasing number of projects, both automotive and also,
increasingly, non-automotive, and record levels of engineering consultancy work
being undertaken. Â A new Joint venture (JV) company was created, Bulldog
Innovations, in partnership with Sengenuity, an existing licensee, to generate
additional near term market opportunities for Transense's patented Surface
Acoustic Wave (SAW) sensor technology.
Translogik, the wholly-owned subsidiary of Transense, established to provide
near-term revenues for the Group in order to support the medium and long term
strategic goals of the IP licensing business, has continued to develop into a
global tyre management technology provider to the OTR (Off-the-Road) truck and
bus markets, expanding its distribution and support networks, developing
strategic relationships with major regional service providers, and expanding its
range of products to meet the needs of its expanding customer base.
Transense
Significant progress was made during the period in commercialising the Company's
patented SAW sensor technology for the wireless, battery-less measurement of
torque, temperature and pressure. Due to the increased level of activity,
engineering consultancy income increased during the year, and is anticipated to
grow further in 2011.
Torque
A long-term project with a major US automotive OEM for drive-line torque sensing
has continued to gather pace, and the Company is increasingly involved in
supplying, paid for, development engineering to them as potential
commercialisation approaches. In addition, three new transmission opportunities
are currently under discussion with customers.
Since reporting last year about a surge of new interest in the application of
SAW torque sensing technology in the Electrical Power Assisted Steering (EPAS)
arena, the Company has now entered into development relationships with several
leading players involved in EPAS torque sensing which have significant
potential. Prototype shafts, paid for by the customers, have been built and
shipped for evaluation.
Following Transense's decision last year to pursue non-automotive torque sensor
projects, the Company is currently engaged in a project using its sensors within
the gearbox of a high-powered transformer tap-changer, an essential device in
power-transmission systems, as well as in advanced discussions in relation to
two separate wind turbine gearbox projects. Transense are now working with a
group of companies that have applied for European funding to improve wind
turbine reliability.
Two new projects to supply driveline/transmission torque sensors for electric
vehicles are under discussion.
An additional potential new torque application for use in aircraft landing gear
is under discussion with a major aircraft manufacturer.
Temperature & Pressure
Mesnac is continuing to progress with its Truck TPMS (Tyre Pressure Monitoring
System) project, and Transense is supplying SAW sensors for integration into
Mesnac's tyre patches.
Stack, a licensee for TPMS in Motorsport, continues to deliver increasing
quantities of its award-winning system based on Transense's patented IP.
A potential new application for Transense's Temperature & Pressure sensors in
aircraft tyres is under discussion with a major aircraft manufacturer.
Sengenuity & Bulldog Innovations
After working closely with Sengenuity, the sensor trading division of Vectron,
as a licensee for Transense's temperature and pressure sensor technology since
2008, this relationship was developed further with the formation of a JV
company, Bulldog Innovations Limited, in September 2010. The JV provides for
even closer cooperation between the two companies and was established to
accelerate the development of new applications for Transense's existing sensor
and sensor reader technologies both for specific applications and the markets in
which they operate. As anticipated, royalty revenues from these agreements have
started to grow and this growth is expected to continue in the coming years.
Translogik
While having to cope with some slower than expected developments in terms of new
product releases and product trials, Translogik managed to compensate for last
year's loss of income from the KERS project. Â The Board remain optimistic that
Translogik can fulfil its key role in generating near-term revenues in support
of the Group's overall strategy.
iTrack
Targeted primarily at the mining industry, the iTrack OTR TPMS allows real-time
remote tracking of key tyre performance parameters, allowing the mining truck
operators to maximise tyre life and performance, and subsequently increase the
productivity and load-carrying ability of their truck fleets. The trucks used in
these mines can weigh up to 600-tonnes fully laden, and each tyre can cost a
hundred thousand dollars or more. Given the enormous running costs, having
accurate tyre data is absolutely vital. The Board believes that the business
case for the iTrack system in terms of cost savings and ROI to mine operators is
compelling, and that the Translogik system is currently the best available, and
this belief has been borne out during discussions with various mine operators
around the globe over the last year. Translogik has continued to develop and
refine the system based on feedback from the various trials that have, and are
continuing, to take place. However, the Company underestimated the barriers to
entry for a new entrant to the marketplace and this has resulted in slower than
anticipated adoption. Lessons learned have resulted in some minor changes to the
sales strategy and focus for iTrack, and the Company has developed closer
relationships with local mine service providers in many of the key global mining
regions in order to gain important local expertise and on-the-ground support to
resolve technical and installation issues. Additionally, the nature of these
huge mines is such that they are owned and run by some of the world's biggest
multi-nationals, and consequently, the testing, trials and regulatory validation
procedures for new products are both stringent and lengthy.
It is anticipated that within a few months iTrack pilots will be running in six
mines, on three different continents, so while sales have been slower than
anticipated to date, the Company remains hopeful that one of more of these will
result in a successful conclusion and that Translogik will become a major profit
centre in its own right.
iProbe
Translogik recently launched the new 'iProbe' all-in-one tyre inspection tool.
This new probe is a development of the existing Truck Tyre Inspection Probe,
adding a UHF Radio Frequency Identification (RFID) reader and an optional Tyre
Pressure Monitoring System (TPMS) reader, plus various other design
improvements, providing a single, lightweight, hand-held device to the tyre
inspection market. By adding RFID and TPMS reader capabilities to the existing
tread depth and direct pressure reading functionality, the iProbe brings the
functionality previously only available by using multiple devices into a single
convergent product. Developed in close cooperation with existing customers of
the previous probe, this new version has been eagerly anticipated and the first
batch has been sold to the world's three largest tyre manufacturers plus several
fleet management companies. The iProbe is designed to integrate with vendor's
own software and to sit at the very hub of their tyre inspection and maintenance
systems. The iProbe was originally intended for launch in Q4 of 2010, but
slipped to Q2 of 2011 due to technical issues in achieving sufficient RFID tag
read-range from such a small antenna. This delay has impacted sales but the
Company believe the new iProbe is now the best tyre inspection device available
and that sales will increase during the remainder of 2011.
Operations
During the year Translogik has gained several new distribution partners in
Europe, Africa, Asia, North America, Central America and Australia. Sales of the
existing Truck and OTR Probe are continuing, as not all customers require the
advanced features of the iProbe, and Translogik continues to work with various
fleet service providers to integrate these existing products into their tyre
management systems.
Outlook
The road to full commercialisation of the Transense SAW IP patent portfolio
continues. A growing pipeline of active new projects and encouraging
acceleration of progress in drive-line torque provides grounds for optimism.
Overall progress in 2010 has been somewhat below the Board's expectations due to
delays from Translogik, but the causes for these have now been remedied and a
successful conclusion to any of a number of on-going commercial negotiations
would have a material impact on revenues. However, it remains difficult to
predict the timing of agreements and subsequent revenue recognition with any
certainty.
Senior members of the management team recently returned from a seven week trip
encompassing visits to many of the Company's key partners around the globe, in
an effort to cement existing relationships and drive new commercial activity.
The Company remains confident in the quality of its technology, the strength of
these relationships and value of its products to its customers.
Graham Storey
CEO
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2010
  2010 2009
  £000 £000
Continuing operations
Revenue  656 636
Cost of sales  (301) (141)
Gross profit  355 495
Administrative expenses  (1,878) (2,058)
Operating loss  (1,523) (1,563)
Financial income  14 21
Financial expenses  - -
Loss before taxation  (1,509) (1,542)
Taxation  55 70
Loss from continuing operations  (1,454) (1,472)
Basic loss per share (pence) Â (1.39) (2.0)
Fully diluted loss per share (pence) Â (1.10) (1.9)
There is no other recognised income or expenses in either year.
The activities are from continuing activities.
Consolidated Balance Sheet
at 31 December 2010
  2010 2010 2009 2009
  £000 £000 £000 £000
Non current assets
Property, plant  114  151
and equipment
Intangible assets  1,420  1,494
Available for sale  58  90
assets
   1,592  1,735
Current assets
Inventories  41  33
Corporation tax  55  169
Trade and other  400  137
receivables
Cash and cash  2,066  1,277
equivalents
   2,562  1,616
Total assets   4,154  3,351
Current
liabilities
Trade and other  (367)  (491)
payables
Current tax  (23)  (32)
liabilities
Total liabilities   (390)  (523)
Net assets   3,764  2,828
Equity
Issued share   8,145  7,580
capital
Share premium   8,956  7,856
Warrant reserve   710  -
Accumulated loss   (14,047)  (12,608)
Total equity   3,764  2,828
Company Balance Sheet
at 31 December 2010
  2010 2010 2009 2009
  £000 £000 £000 £000
Non current assets
Property, plant  41  53
and equipment
Intangible assets  1,213  1,394
Available for sale  58  90
assets
Investment in  5  5
subsidiary
   1,317  1,542
Current assets
Inventories  10  15
Corporation tax  55  169
Trade and other  1,257  473
receivables
Cash and cash  2,004  1,188
equivalents
   3,326  1,845
Total assets   4,643  3,387
Current
liabilities
Trade and other  (176)  (292)
payables
Current tax  (23)  (32)
liabilities
Total liabilities   (199)  (324)
Net assets   4,444  3,063
Equity
Issued share   8,145  7,580
capital
Share premium   8,956  7,856
Warrant reserve   710  -
Accumulated loss   (13,367)  (12,373)
Total equity   4,444  3,063
Consolidated Cash Flow Statement
for the year ended 31 December 2010
  Group Company
  2010 2009 2010 2009
  £000 £000 £000 £000
Loss before  (1,509) (1,542) (1,0098) (1,308)
taxation
Adjustments for:
Financial income  (14) (21) (14) (21)
Depreciation  42 11 17 9
Amortisation of  262 215 262 215
intangible assets
Share based payment  15 61 15 61
Operating cash
flows before (1204) (1,276) (729) (1,044)
movements in
 working capital
(Increase) in  (263) (62) (839) (398)
receivables
Increase/(decrease) Â (101) 289 (93) 88
in payables
(Increase)/decrease  (8) (15) 5 3
in inventories
Cash used in  (1576) (1,064) (1,656) (1,351)
operations
Taxation recovered  169 - 169 -
Net cash used in  (407) (1,064) (1,487) (1,351)
operations
Investing
activities
Interest received  14 21 14 18
Acquisitions of  (5) (138) (5) (38)
property, plant and
equipment
Acquisitions of  (188) (263) (81) (162)
intangible assets
Net cash used in  (179) (380) (72) (182)
investing
activities
Financing
activities
Proceeds from issue  565 - 565 -
of equity share
capital
Share premium on  1,810 26 1,810 26
issue of equity
share capital &
warrants
Net cash from  2,375 26 2,375 26
financing
activities
Net  789 (1,418) 816 (1,507)
increase/(decrease)
in cash and cash
equivalents
Cash and  1,277 2,695 1,188 2,695
equivalents at the
beginning of year
Cash and  2,066 1,277 2,004 1,188
equivalents at the
end of year
Notes to the results for the year 2010
1. The financial information set out above is an extract of the company's
statutory accounts for the financial year ending 31 December 2010, 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£1,454,000  (2009: £1,472,000) by the weighted average number of ordinary
shares in  issue  during  the  year  of  132,207,136 (2009: 75,408,000).
 Options over4, 140,000ordinary shares (2009: 3,905,000) are not included in the
calculation of diluted loss per share as their effect is anti-dilutive.
3. In July 2010 the Company raised net funds of £2.3million with 56,399,998 new
share capital attached to each was a warrant for one ordinary share with a
subscription period of up to 30 June 2014 was attached at no further cost to the
subscriber issue.
4. The financial statements have been prepared on a going concern basis, which
The Directors believe to be appropriate for the following reasons. The Group
meets its day to day working capital requirements through existing Cash reserves
and does not have any overdraft facility. The Directors have prepared base case
and sensitised cash flow forecasts for the Period to 31 December 2012. These
forecasts make a number of operational Assumptions. The Directors do not have
any plans to arrange bank facilities. The base and sensitised forecast indicate
that, assuming the current cost base The Group will continue to have positive
cash reserves to at least 31 December 2012.
5. The Annual Report and Accounts will be posted to shareholders on the 6th June
and the Annual General Meeting will be held on 29 June 2011. A copy of the
Company's results is available on the Company website www.transense.co.uk
For more information, please contact:
Transense Technologies PLCÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Tel: +44 (0) 1869 238 380
Graham Storey, Chief Executive
Brewin Dolphin - Nomad
Neil Baldwin                                 Tel: +44 (0) 845 213 4726
Hybridan LLP - Broker
Claire Noyce                                 Tel: +44 (0) 207 947 4350
Notes to Editors
About Transense
Transense Technologies is a technology transfer company based in Upper Heyford,
Oxfordshire, Â UK.
Transense  develops  Surface  Acoustic  Wave (SAW), wireless, battery-less,
 sensor  systems  in  partnership  with its licensees and partners, Honeywell,
 Melexis,  Michelin,  SenGenuity,  Stack, Tai-Saw, Texas Instruments, SCHOTT,
McLaren Electronic Systems and Carbon Motors.
Current applications include Tyre Pressure Monitoring Systems (TPMS) and torque
systems for Electrical Power Assisted Steering (EPAS) and driveline management.
Transense is listed on the Alternative Investment Market of the London Stock
Exchange (TRT)
For more information visit www.transense.co.uk
About Translogik
Translogik  provides  a  range  of  hardware  and  software  solutions for asset
management  and tracking,  data collection  and fleet  management focused on the
tyre industry.
The  product portfolio includes  wireless tread depth  data collection tools for
truck  and off-the-road (OTR ) vehicle  tyre inspections, RFID (Radio Frequency
Identification)  tags and  patches for  tyres and  general asset tracking, and a
range of temperature and pressure monitoring systems (TPMS) for bus, truck & OTR
applications in mining, earth-moving and construction.
Translogik Limited is a wholly owned subsidiary of Transense Technologies plc.
www.trans-logik.com
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Transense Technologies plc via Thomson Reuters ONE
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