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LONDON (Alliance News) - Transense Technologies PLC Monday posted a widened pretax loss for the first half of its financial year, as revenue more than halved due to a "dramatic reduction in capital expenditure by the mining industry," and it said it is exploring options including the sale of its IntelliSaw business.
The transportation and industrial sensor systems provider said it has moved to mitigate this reduction in demand by offering its iTrack system in a new rental model, which will move its larger one-off orders to an ongoing recurring revenue model. Whilst it hopes this will improve revenue in the future this means the company will not meet its revenue targets for the current year.
Transense noted that it cannot be sure its second half revenue will be higher, or even equal, to its first half, and as a result its future cash position "carries significant uncertainty."
It is reviewing its funding options, including selling its IntelliSAW business. It has hired US-based advisers to manage the sale process and said that the initial response from prospective buyers has been positive. It expects to complete a sale shortly after its current year end although it noted it has not received any formal offers.
For the half year to end-December 2014, Transense posted a pretax loss of GBP1.7 million, widened from a pretax loss of GBP84,000 a year before, as revenue more than halved to GBP930,000 from GBP2.2 million.
"Although trading conditions remain challenging, the directors believe that, with access to capital, a self-sustaining business can be established from identified commercial opportunities," said Chairman David Ford in a statement.
The company's translogik system is fitted to commercial vehicles like heavy mining trucks and wirelessly monitors things like tyre temperature & pressure and tread depth. Its IntelliSAW unit produces critical asset monitoring systems for industry.
The mining sector has been announcing big reductions in planned capital spending as well as cost-cutting programmes, in response to falling prices for commodities including iron ore.
In a seperate announcement Monday, Transense said its Translogik subsidiary has won a deal via Australian distributor Brownfield Engineering and Maintenance Pty Ltd. Under the deal, Translogik will supply iTrack mining tyre monitoring systems for large haul trucks to the Ravensworth mine in Australia. The mine is owned by a unit of FTSE 100-listed Glencore PLC.
Shares in Transense are trading down 20% at 1.50 pence Monday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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