16 Feb 2010 07:00
16 February 2010
Torotrak Plc
("Torotrak" or "the Company")
Interim Management Statement
Torotrak (LSE: TRK) is today providing an Interim Management Statement for the period 1 October 2009 to 15 February 2010. This provides a brief update on trading since the half-yearly report for the six months to 30 September 2009 which was released on 24 November 2009.
Encouraging progress continues to be made across our key business segments and our target remains to break even on a profit after tax basis for the full year to 31 March 2010.
Commercial Vehicles
As shareholders will be aware, our prototype programmes with Allison Transmission, Inc (Allison) and our European truck and bus manufacturer (ETBM) represent Torotrak's highest priority in terms of achieving high value, volume launches of our technology. We are pleased to report that our confidence continues to grow as the prototype programmes progress to plan and achieve their defined milestones.
With ETBM we have successfully achieved the milestone of completing the first prototype transmission build, triggering a contractual payment of £337,000 due in March 2010. The build process confirmed the thoroughness and accuracy of our initial design and a very high level of conformity in prototype component procurement terms. This first transmission now proceeds to the initial stage of rig testing prior to fitment into the client's vehicle, which is currently being prepared to accept the prototype unit.
Progress with Allison remains purposeful and on track, with momentum maintained as further stages of technology transfer are successfully completed. The engineering programme, led by Allison and supported by Torotrak, is on target. Having now completed 10 months of intensive engagement with Allison since our substantial licensing arrangements were agreed in March 2009, and having passed critical internal milestones at the beginning of this calendar year, our confidence levels have increased accordingly. We expect this level of commitment to continue and confidence to be further reinforced in March with the payment of £3.75m due from Allison in accordance with the terms of our licensing arrangements. We intend to issue a statement at that time confirming this position.
Infinitrak
The new Single Toroidal Transmission (STT), targeted at volume application in ride on mowers in the Outdoor Power Equipment (OPE) market, is now in the final stage of validation testing, both on rig and in the field, using production tooled parts. The STT development programme was commenced against a background of extremely aggressive timing and, as reported in June 2009 when the project started, there was a risk that Infinitrak would not be able to launch the new transmission in time for the 2010 mowing season. Infinitrak is now confident that the new transmission will be released into production shortly, in time to meet this objective. Production facilities at Leitchfield, Kentucky, are fully capable of supporting this.
We are today taking the opportunity to reveal further information about the STT and Infinitrak's new patented technology, called "epicyclic traction drive", which is incorporated into the new transmission. This breakthrough development has substantially enhanced the technical performance and commercial attractiveness of the STT and will be incorporated into future Infinitrak products. Further details are available via our website at www.torotrak.com. The STT unit has received very positive reaction from dealers and other interested parties when compared head to head with current incumbent hydrostatic technology. The compelling user benefits will be marketed very specifically and linked overtly to the Infinitrak transmission brand as a key differentiator in future MTD mower sales.
US OPE sales remain depressed and we therefore expect only limited demand for the STT transmission in Torotrak's financial year to 31 March 2010. Financial contribution is not at this stage the primary concern: quality, brand awareness and positioning are the main objectives. Infinitrak's immediate priority is to gain market acceptance in time to secure more substantial orders later this calendar year and we are confident that this objective will be achieved.
New product developments
We reported at the half year on our development activities in relation to continuously variable transmissions (CVTs) for flywheel-based mechanical hybrids (KERS) and on toroidal variable auxiliary drives (TVADs), particularly for use with alternators and superchargers. We are experiencing considerable commercial interest in these applications of our technology across a broad range of markets, including the high volume automotive sector.
These applications are increasingly seen as providing alternative solutions to the growing challenge of reducing energy consumption. We are now in the process of developing new commercial relationships with appropriate industry partners to exploit the new and potentially valuable global markets that TVAD and KERS CVT technologies open up for us. We will report further on progress when we announce our full year results in May 2010.
| For further information, please visit www.torotrak.com or contact:
| |
| Dick Elsy, Chief Executive | Simon Hudson |
| Jeremy Deering, Finance Director | Lulu Bridges |
| Torotrak Plc | Tavistock Communications |
| Tel: +44 1772 900938 | Tel: +44 20 7920 3150 |