Interim Results
Transense Technologies PLC
28 September 2007
Transense Technologies plc ('Transense' or the 'Company')
Interim results
Since the beginning of 2007 Transense has concentrated on working with
Honeywell, our exclusive licensee for automotive powertrain torque sensing, on
three major torque projects, two for large US Original Equipment Manufacturers
(OEMs) and one for a prestige European OEM. Each of these projects generates
cash along with a royalty contribution, which has contributed to a revenue
increase to £138,000 compared with £17,000 during the equivalent period in 2006.
With costs tightly controlled and below budgeted levels, the loss for the
period has fallen from £809,000 to £762,000. Cash and cash equivalents at £1.36
million remain similar to the end of last year.
The two US powertrain projects are for engine flexplate torque sensing, which
has the potential to improve fuel consumption, reduce CO2 emissions and improve
the shift smoothness of automatic transmissions - a key quality parameter in the
US. Although the production launch dates for these systems are not yet cast in
stone, the larger of the OEMs has indicated that, subject to our technology
passing critical gates, Surface Acoustic Wave (SAW) torque sensing will be
utilised across their range of passenger vehicles from V8s to in-line 4s.
Together these projects represent a substantial share of the US passenger
vehicle market.
The European OEM project concerns driveshaft torque sensing, a key enabler for '
torque vectoring', one of the latest techniques for enhancing vehicle stability
when cornering. Transense met its project objectives, again proving technically
superior to the competing magneto-elastic technology. Honeywell are now engaged
in commercial negotiations with the OEM.
We are now receiving royalties from the supply chain to Michelin who continue to
commercialise our Tyre Pressure Monitoring System (TPMS) technology in its US
truck tyres. Dedicated systems using multiple TPMS sensors per tyre are also
being actively considered for off-highway vehicles. We continue to fine tune our
batteryless TPMS technology for passenger vehicles and, although it is taking
longer than anticipated to bring to the OEM market, we are still confident that
our approach is both technically and environmentally superior to the first
generation battery powered or indirect Antilock Braking System (ABS) speed
sensor based competition. We anticipate entry via the specialist after-market
suppliers during the next twelve months.
The recently announced agreement with Schott of Germany demonstrates our ongoing
development of commercial partnerships. Together with our licensees, we are
pro-actively seeking to broaden our SAW 'pressure plus temperature' sensor
application coverage to the medical, food processing, aeronautical and
industrial sectors.
I thank the Transense team for their diligence and all shareholders for their
continued support.
Peter Woods
Chairman
28 September 2007
Transense Technologies plc
Income Statement for the 6 months to 30 June 2007
6 months to 6 months to
30 June 2007 30 June 2006
£000 £000
Continuing operations
Revenue 138 17
Cost of sales (23) (14)
Gross profit 115 3
Administrative expenses (Note 3) (914) (861)
Operating loss (799) (858)
Financial income 37 49
Loss before taxation (762) (809)
Taxation - -
Loss for the period attributable to
equity holders of the Company (762) (809)
Basic and diluted loss per share (1.3p) (1.4p)
Balance Sheet at 30 June 2007
30 June 31 December
2007 2006
£000 £000
Non current assets
Property, plant and equipment 17 23
Intangible assets 1,560 1,567
Available for sale investments 65 65
Loans receivable 25 25
1,667 1,680
Current assets
Trade and other receivables 194 639
Cash and cash equivalents 1,362 1,390
1,556 2,029
Total assets 3,223 3,709
Current liabilities
Trade and other payables (226) (267)
Current tax (22) (21)
liabilities
Total liabilities (248) (288)
2,975 3,421
Net assets
Capital and reserves
Share capital 5,687 5,646
Share premium 5,532 5,376
Accumulated loss (Note 4) (8,244) (7,601)
Shareholders' funds 2,975 3,421
Statement of changes in Equity for the six months to 30 June 2007
and the Year to 31 December 2006
Issued share Share premium Accumulated
capital account deficit Total equity
£000 £000 £000 £000
At I January 2006 5,641 5,368 (6,635) 4,374
Loss for the year - - (1,210) (1,210)
Shares issued and share premium 5 8 - 13
Share based transactions - - 244 244
At 31 December 2006 5,646 5,376 (7,601) 3,421
Loss for the period - - (762) (762)
Shares issued and share premium 41 156 - 197
Share based transactions - - 119 119
At 30 June 2007 5,687 5,532 (8,244) 2,975
Cash Flow Statement for the 6 months to 30 June, 2007
6 months to 6 months to
30 June 2007 30 June 2006
£000 £000
Cash flow from operating activities (762) (809)
Loss before taxation
Adjustments for:
Depreciation of property, plant and equipment 6 10
Amortisation of intangible assets 65 51
Equity settled share based payment 119 126
Financial income (37) (49)
(609) (671)
Operating cash flows before movements in working capital
Decrease in receivables 445 504
Increase in payables (40) (104)
Cash used in operations (204) (271)
Investing activities
Interest received 37 49
Acquisition of intangible assets (58) (86)
Acquisition of investments - (40)
Net cash used in investing activities (21) (77)
Financing activities
Proceeds from issue of equity share capital 41 5
Share premium on issue of equity share capital 156 8
Net cash from financing activities 197 13
Net decrease in cash and cash equivalents (28) (335)
Cash and cash equivalents at beginning of periods 1,390 2,399
Cash and cash equivalents at end of period 1,362 2,064
Notes to the Interim results for the six months to 30 June 2007
1. Basis of preparation
The AIM Rules require that the next annual financial statements of the company,
for the year ending 31 December 2007, be prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by the EU
(adopted IFRSs).
This interim financial information has been prepared on the basis of the
recognition and measurement requirements of IFRSs in issue that either are
endorsed by the EU and effective (or available for early adoption) at 31
December 2007 or are expected to be endorsed and effective (or available for
early adoption) at 31 December 2007, the Company's first annual reporting date
at which it is required to use adopted IFRSs. The conversion to IFRS has
involved no impact on the income statement and cash flows of the Company
although there are a number of presentational differences and a reclassification
of a debtor to Loans Receivable in the Balance Sheet. The conversion has also
involved no significant impact on the Company's existing accounting policies.
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2006. The statutory accounts
for 2006, which were prepared under UK GAAP, have been delivered to the
Registrar of Companies. The auditors reported on these accounts; their report
was i) unqualified, ii) did not include references to any matters to which the
auditors drew attention by way of emphasis without qualifying their reports and
iii) did not contain statements under section 237 (2) or (3) of the Companies
Act 1985. The interim financial information for the six months ended 30 June
2006 has been restated in accordance with IFRS. The auditors gave an
independent review report on the UK GAAP financial information.
2. Going concern
The interim financial information has been prepared on a going concern basis,
which assumes that the Company will have adequate resources to continue in
operational existence for the foreseeable future.
3. Share options
Administrative expenses includes a charge of £119,000 (2006: £126,000) after
valuation of the Company's employee share option schemes in accordance with
IFRS2 Share-based payments. Under this standard, the fair value of the options
at the grant date is spread over the vesting period. These items have been
added back in the Statement of Changes in Equity.
4. Deferred tax
No deferred tax asset is recognised in these financial statements in respect of
trading losses to date.
Statement of directors' responsibilities
The directors of Transense Technologies plc ('the directors') have accepted
responsibility to prepare these Interim Financial Statements for the six month
period ended 30 June 2007 on the basis set out in note 1 to the Interim
Financial Statements.
In preparing these Interim Financial Statements, the directors have:
• selected suitable accounting policies and then applied them consistently;
• made judgments and estimates that are reasonable and prudent; and
• prepared the Interim Financial Statements on the going concern basis as
they believe that the entity will continue in business.
The directors have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the entity and to prevent and
detect fraud and other irregularities.
Report of KPMG Audit Plc to Transense Technologies plc
We have audited the Interim Financial Statements of Transense Technologies plc
for the 6 month period ended 30 June 2007 which comprise Income statement,
Balance sheet, Statement of changes in equity, Cash flow statement and the
related notes. The Interim Financial Statements have been prepared for the
reasons and on the basis of the accounting policies set out in note 1 to the
Interim Financial Statements.
Our report was designed to meet the agreed requirements of the Company
determined by the Company's needs at the time. Our report should not therefore
be regarded as suitable to be used or relied on by any party wishing to acquire
rights against us other than the Company for any purpose or in any context. Any
party other than the Company who obtains access to our report or a copy and
chooses to rely on our report (or any part of it) will do so at its own risk. To
the fullest extent permitted by law, KPMG Audit Plc will accept no
responsibility or liability in respect of our report to any other party.
Respective responsibilities of directors and KPMG Audit Plc
As described above, the directors of Transense Technologies plc have accepted
responsibility for the preparation of these Interim Financial Statements in
accordance with the basis of preparation as set out in note 1 to the Interim
Financial Statements.
Our responsibility is to audit the Interim Financial Statements in accordance
with the terms of our engagement letter dated 18 July 2007 and having regard to
International Standards on Auditing (UK and Ireland).
Under the terms of engagement we are required to report to you our opinion as to
whether the Interim Financial Statements have been properly prepared in
accordance with the basis of preparation set out in note 1 to the Interim
Financial Statements. We also report to you if, in our opinion, we have not
received all the information and explanations we require for our audit.
We read the other information accompanying the Interim Financial Statements and
consider whether it is consistent with the audited Interim Financial Statements.
We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the Interim Financial Statements.
Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit having regard to International Standards on Auditing (UK
and Ireland) issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the Interim Financial Statements. It also includes an assessment
of the significant estimates and judgements made by the directors in the
preparation of the Interim Financial Statements, and of whether the accounting
policies are appropriate to the entity's circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the Interim Financial
Statements are free from material misstatement, whether caused by fraud or other
irregularity or error. In view of the purpose for which these Interim Financial
Statements have been prepared, however, we did not evaluate the overall adequacy
of the presentation of the information which would have been required if we were
to express an audit opinion under International Standards on Auditing (UK and
Ireland).
Opinion
In our opinion the Interim Financial Statements of the Company for the period
ended 30 June 2007 have been properly prepared in accordance with the basis of
preparation set out in note 1 to the Interim Financial Statements.
KPMG Audit Plc
Chartered Accountants
Arlington Business Park
Theale
Reading RG7 4SD
28 September 2007
Enquiries:
Transense Technologies plc Tel: 01869 238 380
James Perry, Chief Executive
Paul Vickery, Commercial Manager
Noble & Company Limited Tel: 020 7763 2200
John Llewellyn-Lloyd, CEO
Graeme Bayley, Director
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