Transense Regulatory News (TRT)

30 Mar 2007 07:03

Transense Technologies PLC30 March 2007 Transense Technologies PLC ("Transense") Preliminary results for the year ended 31 December 2006 Chairman's Statement Our results for the year show a 9% increase in turnover to £604,000 but a lossfor the year of £1,210,000, an increase of £164,000 over the restated loss of£1,046,000 in 2005. One of the reasons for this is the new accounting standardwhich requires the Company to make a charge to the profit and loss account forshare options. The calculated expense, which was £72,000 higher than last year,is £244,000. Because this sum is non cash it is credited to reserves and has noeffect on the balance sheet. In addition, following a detailed review, we have incurred a special £178,000patent cost amortisation charge. Whilst continually updating our relevantpatents, we have eliminated those patents which are no longer of use, andrestricted those remaining to the geographic areas in which we shall earn ourincome. The effects will be to reduce the cash costs of maintaining the patentsas well as incurring lower amortisation charges. As ever this intellectual property is the foundation of our licence deals andgrowth in shareholder value. We now have 20 granted patents and 12 new patentapplications in progress, as well as six trade mark and design registrations. The past year was very eventful indeed especially in the second half when inNovember Michelin announced it was marketing our tyre pressure monitoringtechnology (TPMS) in commercial vehicle tyres under the name e-tire 2. This isthe first time our SAW technology has been commercialised after many years ofresearch and development. The existing programs we have on engine torquemeasurement are now at an advanced stage, with one company in particular havingcompleted faultless dynamometer testing equivalent to circa two years ofdriving. Testing is now taking place in-vehicle and so far the reports areextremely good. The North American vehicle manufacturers have reacted very positively to SAWtorque sensors and have indicated that they out-perform other forms of torquesensors proposed for production fit to cars. A USCAR independent assessmentproject carried out during 2006 recently confirmed the excellent performance ofSAW sensors applied to automatic transmission output torque sensing. BothDaimlerChrysler and Ford now have granted US Patents which mention the use ofSAW torque sensors. A further torque program with a major European group is alsowell underway and the reports we are receiving back are also positive. Honeywellis actively promoting SAW torque sensors with a view to early volume supply. Last year we mentioned that we were working with a South African company to putour sensors into its Intelliband product. This program has taken longer thanplanned, but one of our engineers is in South Africa to progress the developmentof Intelliband with our TPMS technology. We are at an advanced stage with another customer to incorporate our TPMS intotheir existing car-monitoring black box, but we still need to sign asatisfactory agreement before we can proceed further. Our relationship with Lear has started with considerable confidence and ourjoint teams of engineers are co-operating well. I can reveal that together wehave already demonstrated our TPMS technology in vehicles to two of the leadingcar manufacturers in Europe. These demonstrations were well received and moreare actively being arranged for other manufacturers throughout the world. Many shareholders will be aware that our working relationship with Honeywellgoes from strength to strength and that we have granted them a non-exclusivelicence to use our pressure SAW technology in fields outside the automotiveindustry. Honeywell are the largest manufacturers of pressure sensors in theworld and see SAW sensors extending the horizon in this marketplace. As the markets for tyre pressure monitoring and torque grow exponentially, moreand more companies, much larger than us, are trying to join the race. Fromexperience we know that, from the time of concept reporting to a fully workingtechnology, it takes many years to obtain acceptance in the markets with whichwe are dealing. Most of the so-called breakthroughs that are announced neversee the light of day and, as far as we and our associates are concerned, thereis nothing without a battery threatening us yet. We will once again update our product presentation at the AGM and on our website to give you the best possible view of future progress by project. Last yearwe anticipated commercial TPMS starting end 2006 and car TPMS and Torquestarting during 2008 with clearly the thrust of revenue growth likely to developin 2009 and beyond. As we always point out, the marketing and ramp-up of volumeproduction of our technology is in the hands of our licensees. They are farlarger than Transense and have their own internal confidential timescales, whichmakes it difficult to predict when royalties are likely to flow in a major way.However we are now more convinced that large revenues will develop over themedium term. As we approach our goals we are constantly aware that extra hands will be neededto help us on our way and strengthen our management team. With this in mind I ampleased to inform you that Rodney Westhead has agreed to join the board ofTransense as a non-executive director. Rodney is a Chartered Accountant bytraining and until 2005 was Chief Executive of Ricardo, the major Automotiveconsulting engineering group with sales of £150 million a year. I can also report that we have appointed Noble & Company Limited as ourNominated Advisor and broker. I would like to thank Bridgewell for all theadvice they have given us over the years and also KBC Peel Hunt for their inputas joint brokers to our company. Many thanks to all the Transense team for their excellent supportive work andresponses over the past year. Finally last year we described the future advent of electronic proxy voting. Forthose who wish to use this facility, please see the details in the AGM notes ofthe Annual Report which will be issued by end April. Peter Woods March 29th 2007Chairman Transense Technologies plc Profit & Loss Account for the Year to 31 December, 2006 2006 2005 (restated see Note 2) £000 £000Turnover 604 553Cost of sales (52) (85)Gross profit 552 468 Administrative expenses (1,966) (1,672) Operating loss (1,414) (1,204) Net interest income 90 58 Loss on ordinary activities before taxation (1,324) (1,146) Taxation 114 100Loss for the year (1,210) (1,046) Loss per share (2.1p) (1.9p) Balance Sheet at 31 December, 2006 2006 2005 £000 £000 £000 £000Fixed assets 1,655 1,665 Current assets: Debtors 664 598 Cash 1,390 2,399 2,054 2,997Less: Creditors falling due within one year 288 288 Net current assets 1,766 2,709 Net assets 3,421 4,374 Capital and reserves: Share capital 5,646 5,641 Share premium 5,376 5,368 Profit and loss account (7,601) (6,635)Shareholders' funds 3,421 4,374 Transense Technologies plc Cash Flow Statement for theYear to 31 December, 2006 Year Year 2006 2005 (restated see Note 2) £000 £000Net cash outflow from operating activities (944) (912) Returns on investments and servicing of finance 90 58 Taxation Corporation tax received 114 100 Net capital expenditures (282) (168)Cash outflow before management of liquid resources and financing (1,022) (922) Management of liquid resources Receipts from / (payments to) short term deposits 1,015 (1,200) Financing Issue of new ordinary shares 13 2,160 Increase in cash in the year 6 38 Reconciliation of operating loss to net cash outflow fromoperating activities Operating loss (1,414) (1,204) Depreciation and amortisation 292 87 Charge on share option schemes 244 172 Profit on disposal of fixed asset 0 (5) Net movement in current debtors and creditors (66) 38Net cash outflow from operating activities (944) (912) Reconciliation of net cash flow to movement in net funds Increase in cash in the year 6 38 Cash (inflow) / outflow from changes in liquid resources (1,015) 1,200 Movement in net funds in the year (1,009) 1,238 Net funds at 1 January 2,399 1,161 Net funds at 31 December 1,390 2,399 Analysis of net funds Liquid resources Cash Total £000 £000 £000 At 1 January 2,300 99 2,399 Cash flow (1,015) 6 (1,009) At 31 December 1,285 105 1,390 Notes to the Preliminary results for the year 2006 1. The summary of results for the year to 31 December, 2006 does notconstitute statutory accounts within the meaning of Section 240 of the CompaniesAct 1985. The full statutory accounts, which will be available to shareholdersshortly, have been reported on by the Company's auditors but have not yet beendelivered to the Registrar of Companies. Full accounts in respect of the yearto 31 December, 2005 have been delivered to the Registrar of Companies and theAudit Report on these accounts was unqualified. 2. Administrative expenses includes a charge of £244,000 (2005 £172,000)after valuation of the Company's employee share option schemes in accordancewith Financial Reporting Standard 20. The 2005 comparative figures have beenadjusted accordingly. These items have been added back in the statement ofMovement in shareholders' funds in the financial statements. There are no otherrecognised gains or losses for the current and prior year. 3. The amortization charge of £275,000 (2005 £56,000) includes £178,000,which eliminates all patents that are no longer of use, and limits theconstructive patents to the geographical areas in which royalty income will beearned. 4. No deferred tax asset is recognised in these financial statements inrespect of trading losses to date. 5. The Annual Report and Accounts will be posted to shareholders by the endof April and the Annual General Meeting will be held on 24 May, 2007. This information is provided by RNS The company news service from the London Stock Exchange