Year End Trading Update

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 Nigel Rogers (Executive Chairman) Melvyn Segal (CFO)	Via Walbrook PR
Allenby Capital (Nominated Adviser and Broker) Jeremy Porter / George Payne (Corporate Finance) Tony Quirke (Sales & Corporate Broking)	Tel: [phone]
Walbrook PR Tom Cooper / Nick Rome	Tel: [phone] [e-mail]

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

For further information please contact  [e-mail] .

 

END

 

 

TSTUSUNRUOUBRAR