Last checked at 25 Sep 2023 07:00
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which is part of UK law by virtue of the European Union (withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
25 September 2023
Transense Technologies plc
("Transense" or the "Company")
Final results for the year ended 30 June 2023
& notice of investor presentation
Transense Technologies plc (AIM: TRT), the provider of specialist sensor systems, announces its final results for the year ended 30 June 2023.
The Board of Transense is pleased to announce substantial increases in revenue and profitability, and further considerable progress in the development of commercial pipeline opportunities. The Company has achieved the strategic objectives set out in 2020, and now sets out commercial and financial goals for the medium term to 2028.
The directors consider that there are positive market drivers across all key target market sectors which provide ample opportunity to expand, despite current uncertain economic conditions, and Transense is investing in technology, equipment and human resources in order to build strategic and sustainable long term shareholder value.
Financial highlights:
• Revenue up 34% to £3.53m (FY22: £2.63m)
• iTrack royalty increased 29% to £2.01m (FY22: £1.56m)
• Translogik probe revenue up 17% to £1.03m (FY22: £0.88m)
• SAW revenue up 146% to £0.49m (FY22: £0.20m) with further substantial increases in activity from prospective customers
• Adjusted profit before taxation of £1.09m (FY22: £0.27m) *
• Earnings per share up more than 64% to 8.81 pence (FY22: 5.36 pence)
• Cash and cash equivalents at year end of £0.98m (FY22: £1.06m)
• Completed share buybacks of £0.40m (FY22: £0.30m)
• Distributable reserves at year end of £2.90m (FY22: £1.20m)
*Before exceptional administrative expenses
Executive Chairman of Transense, Nigel Rogers, said:
"We are pleased to report these results, showing continued growth and our strategy delivering. We have visibility of several exciting growth opportunities for Translogik and are now adding an experienced and successful business development leader with sole focus on the delivery of greater scale and reach.
"There has been a rapid expansion of market awareness at SAWsense, and an increasing intensity of funded development projects.
"We now believe that we have built a dynamic leadership group within the executive team, with the requisite skills, experience and networks to deliver further step changes in results in coming years."
Investor Presentation: 4pm, Monday 25 September 2023
Nigel Rogers (Executive Chairman) and Melvyn Segal (Chief Financial Officer) will provide a presentation to review the Company's results and prospects at 4pm on Monday 25 September 2023. The presentation will be hosted through the online platform Investor Meet Company.
To attend the presentation, investors can sign up to Investor Meet Company for free and select to meet Transense Technologies plc via the following link:https://www.investormeetcompany.com/transense-technologies-plc/register-investor. Investors who have already registered and selected to meet the Company will automatically be invited to the presentation.
Questions can be submitted before the event to transense@walbrookpr.com or in real time during the presentation via the "Ask a Question" function.
For further information please visit www.transense.com or contact:
Transense Technologies plc Nigel Rogers (Executive Chairman) Melvyn Segal (CFO) | Tel: Via Walbrook PR |
Allenby Capital (Nominated Adviser and Broker) Jeremy Porter/George Payne (Corporate Finance) Tony Quirke/Stefano Aquilino (Sales & Corporate Broking) | Tel: +44 (0)20 3328 5656 |
Walbrook PR Tom Cooper/Nick Rome | Tel: +44 (0)20 7933 8780 Transense@walbrookpr.com |
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 aerospace, electric motors & drives, industrial machinery and performance automotive.
The Company'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 transense@walbrookpr.com .
CHAIRMAN'S STATEMENT
The Company has delivered excellent results with revenues up by one third and pre tax profits (before exceptional administrative costs) up fourfold. The potential to continue on this trajectory is underpinned by a healthy pipeline of new business opportunities, giving the directors confidence in the prospects for Transense.
Business strategy
The business strategy of the Company remains to develop innovative sensing solutions across a range of applications, which are commercialised either through the launch of products and services to customers or by forming strategic alliances with partner organisations. Value is realised through a combination of commercial income, royalties, licensing income and capital gains on disposals.
There are currently two active business segments: Translogik and SAWsense. Translogik develops and supplies smart, connected tyre monitoring equipment for the commercial truck and bus market, and SAWsense designs and supplies advanced sensor solutions for accurate non-contact measurement of torque, force, pressure and temperature for aerospace, electric motors and drives (EMD), industrial machinery and high performance automotive sectors. In addition, the company earns residual royalty income from iTrack, a system developed by the company for monitoring mining haul tyre performance which was licenced to Bridgestone Corporation for a ten year period expiring in 2030.
The directors consider that there are positive market drivers across all of our key target market sectors which provide ample opportunity to expand both businesses, despite current uncertain economic conditions. We are investing in technology, equipment and human resources across both active business segments in order to secure greater access to the target markets and build strategic and sustainable long term shareholder value.
Results for the year
Revenues for the year increased by 34% to £3.53m (FY22: £2.63m), with SAWsense up 146% and Translogik up 17%. Royalty income from iTrack increased by 29%, reflecting an expected improvement in the second half of the year. Gross margin improved to 87% of revenue (FY22: 85%) amounting to £3.05m (FY22: £2.23m).
Administrative expenses increased a modest amount to £2.09m (FY22: £1.97m), before exceptional severance costs of £0.22m. Earnings before Interest, Taxation, Depreciation and Amortisation (EBITDA) adjusted for the charge for exceptional costs and share-based payments was £1.40m (FY22: £0.62m), and the adjusted net profit before taxation (excluding exceptional costs) was £1.09m (FY22: £0.27m).
There was a credit for taxation of £0.53m (FY22: £0.61m) arising from the increase in the deferred taxation asset relating to the use of previous years' tax losses in the future, reflecting a future forecast period of two years which is in line with the basis adopted in the prior year. In total, the Company has UK tax losses available to carry forward at 30 June 2023 in excess of £21m, which are available for offset against future profits subject to HMRC agreement, of which approximately £4.70m is currently recognised for deferred taxation purposes (FY22: £2.58m).
The resulting net total comprehensive income attributable to equity shareholders was £1.40m (FY22: £0.88m) resulting in earnings per share (EPS) of 8.81 pence (FY22: 5.36 pence).
The adjusted EPS before exceptional administrative costs was 10.20 pence.
The Company's financial position strengthened further during the year with net assets increasing to £4.19m (FY22: £3.09m) as a result of the retention of net profits after taxation. Net available cash balances amounted to £0.98m (FY22: £1.06m), and the final quarter royalty income on iTrack receivable on 31 July 2022 stood at £0.54m (FY22: 0.47m).
Net cash generated from operations amounted to £0.65m (FY22: £0.41m). This was re-invested in capital expenditure of £0.26m (FY22: £0.10m) and in the share buy-back programme during the year totaling £0.41m (FY22: £0.30m). The directors anticipate that the Company will continue to be cash generative for the foreseeable future and will accumulate further cash balances well in excess of the ongoing and any proposed new buy-back programme.
Mid-term financial goals 2023-28
Mid-term financial goals for the Company's businesses were last set out in June 2020, immediately following the completion of the iTrack licence with Bridgestone. Since that time, financial results have been in line with or ahead of our expectations.
The directors now consider it an appropriate time to set out new mid-term goals for the company for the period 2023 to 2028. During this period it is anticipated that the iTrack licence income will continue to show healthy growth before reaching a peak in the year ending 30 June 2025. The increase in the number of installations thereafter is unlikely to fully offset the reduction in the unit royalty rate, and the annual royalty in the year to 30 June 2026 is expected to reduce to a level comparable with the year ended 30 June 2023.
The directors are confident that prospects in each of the two active business segments will be such that the Company can maintain the overall level of profitability and earnings despite any reduction in the level of iTrack royalty revenues.
Segmental review
Translogik tyre monitoring
Our range of tyre monitoring equipment marketed under the Translogik brand generated revenue of £1.03m; an increase of almost 17% over the prior year (FY22: £0.88m), and the segmental result was up by 17% to £0.42m (FY22: £0.36m).
The road haulage and transport logistics sector continues to experience strong volume growth yet is also subject to intense competitive pressure to reduce unit costs and optimise asset utilisation. In parallel, however, operators are subject to increasing road safety regulations, including the mandatory use of tyre pressure monitoring systems (TPMS) in the EU from 2024 and the US from 2028. These add to the existing regulations for mandatory vehicle inspections and digital record keeping, and the increasing adoption of radio frequency identification tags (RFID) for tyre inventory management.
All of these challenges can be managed efficiently through the use of Translogik tyre monitoring equipment, which digitises key tyre data to integrate into a fleet management platform. We have a robust blue chip customer base of global tyre manufacturers upon which to build, lending credibility to the effectiveness and reliability of our equipment.
The directors estimate that there is an addressable market for fleet management tools exceeding US$25m per annum, and this leads us to believe that Translogik provides the capacity to accelerate segmental revenue in the next three to five years. Accordingly, we have recently secured the appointment of a dedicated business development director to lead this activity who has the breadth of knowledge and established network of contacts to deliver step change when he takes up this new role shortly.
SAWsense
SAWsense revenues more than doubled to £0.49m (FY22: £0.20m) and with operating overheads almost unchanged the net loss (before exceptional costs) for the segment reduced by 33% to £0.55m (FY22: £0.82m). During the year, changes were implemented to the segmental management structure to better align the senior team to customer needs, which is now led by Ryan Maughan as Business Development Director and Andy Bullock as Technical Director.
Our market approach for SAW technology continues to focus on four sectors in which there are applications with clear differentiated benefits, and we have made good progress in each during the year.
Target market sectors for SAWsense:
Aerospace
The aerospace sector is undergoing a period of profound change driven by the need to reduce the environmental impact of air travel, and opportunities to expand the sector through new and innovative platforms for electrified urban air mobility (UAM). This has created intense development activity by established market leaders and new entrants, focused on developing cleaner and more efficient conventional aircraft, and on the feasibility of new propulsion systems including all-electric, hybrid electric and hydrogen fuel cell technology.
In the past twelve months, we have doubled the number of potential customers with whom we are working to introduce SAW technology into aerospace applications from seven to fourteen. These include GE Aerospace, to whom we have granted existing licences, and Parker Meggitt who are subject of a Memorandum of Understanding signed in September 2022 with the shared intention of agreeing terms for a licence before the end of 2023. Discussions with Parker Meggitt are ongoing, and a further update will be provided in due course. In addition, there are several other potential customers in this sector whose involvement is covered by confidentiality agreements.
The case for using SAW torque sensing has been proven for helicopter engines, and there are now live development activities for use in electric actuator force and torque control, and torque in hybrid generation systems and advanced open rotor engines. In addition, there are other opportunities to introduce SAW for use in electric propulsion motors for aerospace applications, as well as torque, pressure and/or temperature measurement for a variety of other airframe and propulsion systems.
The aircraft sensor market was estimated to be valued at US$4bn in 2021, with forecast compound annual growth at a rate of 8% in the period to 2028. The directors believe that a realistic goal for annual revenue from development, engineering services and component supply into this sector by SAWsense could lie in the range US$5-10m by 2030.
Industrial Machinery (including Off-Highway Vehicles and Robotics)
The use of SAW sensing technology for torque and/or temperature can improve accuracy, efficiency and power distribution in industrial machinery ranging from robots to agricultural equipment. Enhanced sensing is also required to enable more autonomous operation of machinery.
During the year, SAWsense technology underwent rigorous trials by a major producer of agricultural machinery. The project was completed on schedule and validated the accuracy and reliability of the resulting data. Whilst this is expected to strengthen the business case for the use of SAW, this was an advanced research and technology program and work continues to explore production applications for the technology. A number of other off-highway OEM's have also expressed interest and are at an early stage of engagement in information exchange under NDA. We believe that the addressable market for torque and temperature sensors in this sector exceeds US$25m per annum.
The global market for force and torque sensors for industrial robotics was estimated to be worth US$300m in 2022 and was forecast to grow to more than US$650m by 2028. Engagement with a select group of leading companies in this industry indicates that SAW technology can provide an improved way to measure torque and temperature in a robotic system, increasing the speed and accuracy of the robot by reducing joint flex and motor jitter. This in turn offers increased load capacity and productivity, because of this we believe that this valuable differentiation results in more than US$50m per annum of the robot torque sensor market to be addressable by our technology by 2028.
Motorsport and high-performance vehicles
SAWsense continues to work closely in the premium motor sport sector with our joint collaboration agreement partner, McLaren Applied. During the year, use of SAW was extended beyond its roots in IndyCar to the Le Mans Daytona Hybrid series of endurance racing. There are further opportunities to extend to additional championships at proposal stage, with the outcome expected in the final quarter of 2023.
SAW has proven to be more accurate and reliable than competitor systems and offers a lower lifecycle cost to event organisations and race teams. Whilst motorsport is a niche sector, we estimate that the addressable market for motorsport torque measurement exceeds US$25m per annum and believe that there are unique characteristics in our technology to be successful.
Success in these motor sport applications demonstrates the performance and reliability of the technology in harsh operating conditions.
Electric Motors and Drives (EMD)
The drive to reduce global dependency on fossil fuels is heavily dependent on the development and commercialisation of efficient electric motors and drives across a broad range of transport and industrial applications. Using SAW technology offers access to real-time torque and temperature data to improve performance, efficiency, range and functional safety, and provides opportunity to reduce material costs, particularly of rare earth materials in permanent magnet motors.
Unlike our other key target sectors, the use of real time torque data to control electric motors and drives is not common practice, and instead controls are reliant upon traditional torque estimation methods with roots going back decades. During the year we have contracted a leading engineering consultancy to carry out a program of simulation work to demonstrate the benefits of using real time actual torque in the control loop, with good results.
In the current year, these findings will be expanded by conducting live trials on a demonstration test rig, and we anticipate that this activity will generate opportunities to expand our intellectual property portfolio further and to build a platform for commercial advancement.
Business development activities
Throughout the year there has been an increasing volume of inbound enquiries across all of our main target markets, mostly driven by the increased awareness of the benefits of our technology from marketing assets such as on-line video content, conference presentations and trade show attendance.
Discussions with Parker Meggitt are ongoing, a further update will be provided in due course. There are several other potential customers in this sector whose involvement is covered by confidentiality agreements.
Enquiries are carefully vetted, and those which meet our qualification criteria enter a standardised process through a number of stage gates. Passage through this mechanism can take several months before reaching agreement on a funded development project to instrument a demonstration unit and carry out performance assessment. Beyond that, there are many other factors to evaluate (including for example productionisation methods, supply chain and associated cost) before customers are ready to commit to full scale commercial implementation.
Overall, it is realistic to expect that achieving volume production in highly regulated markets such as aerospace and automotive will take three to five years, during which period customers will have the capacity and willingness to fund further development work.
This process has been underway for more than one year, and progress has been made both in the number of active qualified enquiries (which has more than doubled from 24 to 57), and the depth of engagement indicated by moving to towards funded development (which has also doubled from 6 to 13). Full details are as follows:
Status of potential customers by sector as at September 2023 (September 2022)
Aerospace | Electric Motors & Drives | Industrial Machinery | Performance Automotive |
Total | |
Stage 4 - Contracted | 1 (1) | 0 (0) | 0 (0) | 1 (1) | 2 (2) |
Stage 3 - Contract under negotiation | 2 (1) | 0 (0) | 0 (0) | 0 (0) | 2 (1) |
Stage 2 - In development | 1 (1) | 3 (1) | 1 (1) | 1 (0) | 6 (3) |
Stage 1a - Development project in planning
| 3 (0) | 2 (2) | 1 (1) | 1 (0) | 7 (3) |
Stage 1b - Active enquiry | 7 (4) | 24 (8) | 8 (3) | 1 (0) | 40 (15) |
Total | 14 (7) | 29 (11) | 10 (5) | 4 (1) | 57 (24) |
iTrack royalty income
Royalty income from iTrack generated income of £2.01m during the year, representing an increase of 29% over the prior year (FY22: £1.56m). By the end of the year, the installed base had risen to almost four times that which prevailed at the outset of the licence, and the annualised royalty run rate had increased to $2.92m, compared with $2.26m, representing a 29% increase over the prior year.
Bridgestone Corporation, Japan, continues to indicate that iTrack is a key strategic component of their mobility solutions business and express confidence in the future growth potential for this technology.
Board structure and composition
In May 2023, Steve Parker joined the Board as an independent non-executive director. He is a highly experienced board director with an enviable track record of leading and advising businesses across the technology, automotive and transportation sectors. The Company has already benefited greatly from his expertise and judgement, and I am grateful for his valuable support.
Rodney Westhead has indicated that he intends to retire from the Board following the appointment of an appropriate independent non-executive director and chair of audit committee to replace him. He has served as a director since 2007 and has made an invaluable contribution over many years, especially more recently as the commercialisation of SAW technology has come to the forefront of the Company's strategy. The directors intend to appoint a suitable successor during the current financial year.
Distribution policy
Since February 2022, when the Company first announced the commencement of a programme to conduct market purchases of ordinary shares of 10 pence each in the Company, a total of 935,356 ordinary shares have been acquired for treasury at an average price of 80 pence each (including 40,000 post year end).
During the financial year the share price fluctuated between 48.5 pence and 95.5 pence, and averaged approximately 80 pence. The directors continue to view the Company's shares as undervalued at this level and will execute further market purchases when suitable opportunities arise, subject to the renewal of shareholder approval for such action at the upcoming Annual General Meeting.
The board has given careful consideration to the relative merits of share buybacks as an alternative form of distribution over the payment of dividends. On balance, share buybacks are considered to be more flexible and tax efficient, and are the preferred mechanism for the majority of shareholders by both number and value. Accordingly, the directors do not recommend the payment of a dividend at the present time.
Current trading and outlook
In the first two months of trading since the end of the financial year revenues have increased year on year by 16%, and the commercial pipeline in both Translogik and SAWsense continue to expand.
Royalties from iTrack have increased almost fourfold since inception in 2020, and with seven years of the licence to run it is expected to provide more than sufficient cash income to enable further significant investment in both SAWsense and Translogik and deliver strong returns to shareholders.
We have visibility of several exciting growth opportunities for Translogik and are now adding an experienced and successful business development leader with sole focus on the delivery of greater scale and reach.
There has been a rapid expansion of market awareness at SAWsense, and an increasing intensity of funded development projects. Taken together with the potential to add depth, breadth and longevity to the intellectual property portfolio of this segment, the directors are confident of achieving a financially self-sustaining business model with substantial strategic value.
We now believe that we have built a dynamic leadership group within the executive team, with the requisite skills, experience and networks to deliver further step changes in results in coming years.
Nigel Rogers
Executive Chairman
25 September 2023
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2023
|
| Year ended 30 June | Year ended 30 June | ||
|
|
| 2023 |
| 2022 |
|
|
| £'000 |
| £'000 |
Revenue |
|
| 3,529 |
| 2,632 |
Cost of sales |
|
| (474) |
| (398) |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- |
Gross profit |
|
| 3,055 |
| 2,234 |
|
|
|
|
|
|
Administrative expenses |
|
| (2,086) |
| (1,970) |
Exceptional administrative expenses |
|
| (220) |
| - |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- |
Operating Profit |
|
| 749 |
| 264 |
Financial income/(expense) |
|
| 4 |
| (12) |
Other income |
|
| 113 |
| 16 |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- |
Profit before taxation |
|
| 866 |
| 268 |
Taxation |
|
| 530 |
| 609 |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- |
Profit and total comprehensive income for the year attributable |
|
| 1,396 |
| 877 |
To the equity holders of the parent |
|
| ---------------------------------------------- |
| ---------------------------------------------- |
|
|
|
|
|
|
Basic profit per share for the year (pence) |
|
| 8.81 |
| 5.36 |
|
|
| ============================================== |
| ============================================= |
Consolidated Balance Sheet
At 30 June 2023
|
| At 30 June | At 30 June | |||
|
| 2023 | 2023 | 2022 | 2022 | |
|
| £'000 | £'000 | £'000 | £'000 | |
Non current assets |
|
|
|
|
| |
Property, plant and equipment |
| 154 |
| 167 |
| |
Intangible assets |
| 731 |
| 671 |
| |
Deferred tax |
| 1,175 |
| 645 |
| |
|
| ---------------------------------------------- |
| ---------------------------------------------- |
| |
|
|
| 2,060 |
| 1,483 | |
Current assets |
|
|
|
|
| |
Inventories |
| 260 |
| 88 |
| |
Trade and other receivables |
| 1,263 |
| 1,133 |
| |
Cash and cash equivalents |
| 978 |
| 1,055 |
| |
|
| ---------------------------------------------- |
| ---------------------------------------------- |
| |
|
|
| 2,501 |
| 2,276 | |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- | |
Total assets |
|
| 4,561 |
| 3,759 | |
|
|
|
|
|
| |
Current liabilities |
|
|
|
|
| |
Trade and other payables |
| (334) |
| (560) |
| |
Lease liabilities |
| (36) |
| (65) |
| |
|
| ---------------------------------------------- |
| ---------------------------------------------- |
| |
|
|
| (370) |
| (625) | |
Non current liabilities |
|
|
|
|
| |
Lease liabilities |
|
| - |
| (42) | |
|
|
| ---------------------------------------------- |
| -------------------------------------- | |
Total liabilities |
|
| (370) |
| (667) | |
|
|
| ---------------------------------------------- |
| -------------------------------------- | |
Net assets |
|
| 4,191 |
| 3,092 | |
|
|
| ============================================= |
| ===================================== | |
Equity |
|
|
|
|
| |
Issued share capital |
|
| 1,644 |
| 1,644 | |
Share premium |
|
| 65 |
| 65 | |
Treasury Shares |
|
| (708) |
| (303) | |
Share based payments |
|
| 288 |
| 180 | |
Retained earnings/(accumulated loss) |
|
| 2,902 |
| 1,506 | |
|
|
| ---------------------------------------------- |
| ---------------------------------------------- | |
Total equity |
|
| 4,191 |
| 3,092 | |
|
|
| ============================================== |
| ============================================== | |
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
| Share capital | Share premium | Share based payments | Retained earnings | Treasury Shares | Total Equity | |
|
| £'000 | £'000 | £'000 | £'000 | £'000 |
|
Balance at 1 July 2021 | 1,631 | - | 82 | 629 | - | 2,342 | |
Comprehensive income for the year: |
|
|
|
|
|
| |
Profit for the year | - | - | - | 877 | - | 877 | |
Share based payment | - | - | 98 | - | - | 98 | |
Warrants exercised | 13 | 65 | - | - | - | 78 | |
Treasury shares | - | - | - | - | (303) | (303) | |
| ------------------------------ | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | |
Balance at 30 June 2022 | 1,644 | 65 | 180 | 1,506 | (303) | 3,092 | |
| ------------------------------ | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | |
| Share capital | Share premium | Share based payments | Retained earnings | Treasury Shares | Total Equity | |
|
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
Balance at 1 July 2022 | 1,644 | 65 | 180 | 1,506 | (303) | 3,092 | |
Comprehensive income for the year: |
|
|
|
|
|
| |
Profit for the year | - | - | - | 1,396 | - | 1,396 | |
Share based payment | - | - | 108 | - | - | 108 | |
Treasury shares | - | - | - | - | (405) | (303) | |
| ------------------------------ | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | |
Balance at 30 June 2022 | 1,644 | 65 | 288 | 2,902 | (708) | 4,191 | |
| ------------------------------ | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | ---------------------------------------------- | |
Consolidated Cash Flow Statement
For the year ended 30 June 2023
|
| Year ended 30 June 2023 | Year ended 30 June 2022 |
|
| £'000 | £'000 |
Profit/(loss) from operations |
| 1,396 | 877 |
Adjustments for: |
|
|
|
Taxation |
| (530) | (609) |
Net financial (income)/expense |
| (4) | 12 |
Share based payment |
| 108 | 98 |
Depreciation |
| 98 | 88 |
Amortisation and impairment of intangible assets |
| 112 | 155 |
|
| ---------------------------------------------- | ---------------------------------------------- |
Operating cash flows before movements in working capital |
| 1,180 | 621 |
(Increase) in receivables |
| (130) | (569) |
(Decrease)/increase in payables |
| (226) | 300 |
(Increase) in inventories |
| (172) | (15) |
|
| ---------------------------------------------- | ---------------------------------------------- |
Cash generated/(used) in operations |
| 652 | 337 |
Taxation received |
| - | 71 |
|
| ---------------------------------------------- | ---------------------------------------------- |
Net cash generated in operations |
| 652 | 408 |
|
| ---------------------------------------------- | ---------------------------------------------- |
Investing activities |
|
|
|
Acquisitions of property, plant and equipment |
| (85) | (44) |
Acquisitions of intangible assets |
| (172) | (56) |
|
| ---------------------------------------------- | ---------------------------------------------- |
Net cash (used in)/generated from investing activities |
| (257) | (100) |
|
| ---------------------------------------------- | ---------------------------------------------- |
Financing activities |
|
|
|
Treasury shares |
| (405) | (303) |
Warrants exercised |
| - | 78 |
Interest received/(paid) |
| 4 | (12) |
Payment of lease liabilities |
| (71) | (62) |
|
| ---------------------------------------------- | ---------------------------------------------- |
Net cash used in financing activities |
| (472) | (299) |
|
| ---------------------------------------------- | ---------------------------------------------- |
Net (decrease)/increase in cash and cash equivalents |
| (77) | 9 |
Cash and equivalents at the beginning of year |
| 1,055 | 1,046 |
|
| ---------------------------------------------- | ---------------------------------------------- |
Cash and equivalents at the end of year |
| 978 | 1,055 |
|
| ============================================== | ============================================== |
NOTES RELATING TO THE COMPANY FINANCIAL STATEMENTS
BASIS OF PREPARATION
Both the Parent Company financial statements and the Company financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the United Kingdom ("Adopted IFRSs") and those parts of the Companies Act 2006 that are relevant to companies preparing accounts under IFRS. On publishing the Parent Company financial statements here together with the Company financial statements, the Company is taking advantage of the exemption in s408 of the Companies Act 2006 not to present its individual statement of comprehensive income and related notes that form a part of these approved financial statements.
1 SEGMENT INFORMATION
The Company had three reportable segments being the unique trading divisions, SAW and Translogik, which make use of technology developed by the Company to measure and record temperature, pressure and torque, and the iTrack royalty activity in respect of income from licensed technology.
Revenue and EBITDA are the Company's key focus and in turn is the main performance measure adopted by management.
The tables below set out the Company's revenue split and operating segments. These disclose information for continuing operations and in view of their relative size, information for discontinued operations. The disposal of iTrack operations will result in future royalty income replacing direct sales income and costs.
Revenue
| Year ended 30 June 2023 | Year ended 30 June 2022 |
| £'000 | £'000 |
North America | 351 | 323 |
South America | 143 | 123 |
Australia | 32 | 41 |
Europe | 485 | 387 |
UK | 379 | 92 |
Rest of the World | 129 | 109 |
| -------------------------------------------- | -------------------------------------------- |
| 1,519 | 1,075 |
| =========================================== | =========================================== |
iTrack Royalty 2,010 1,557
Total Revenue 3,529 2,632
Segments
| Translogik £'000 | SAW £'000 | iTrack royalties £'000 | Unallocated £'000 | Total £'000 |
Year ended 30 June 2023 |
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Sales | 1,027 | 492 | 2,010 | - | 3,529 |
| ===================== | ===================== | ===================== | ===================== | ==================== |
Gross profit | 588 | 457 | 2,010 | - | 3,055 |
Administrative expenses | (165) | (1,119) | (44) | (758) | (2,066) |
Exceptional administrative expenses | (220) | (220) | |||
| ----------------------------- | ----------------------------- | ----------------------------- | ----------------------------- | ----------------------------- |
Operating profit/(loss) | 423 | (882) | 1,966 | (758) | 749 |
Other income | - | 113 | - | - | 113 |
Net financial income | - | - | - | 4 | 4 |
Taxation | - | - | - | 530 | 530 |
| ----------------------------- | ---------------------------- | ----------------------------- | ----------------------------- | ----------------------------- |
Profit/(loss) for the year | 423 | (769) | 1,966 | (224) | 1,396 |
| ========== | =========== | =========== | =========== | =========== |
EBITDA reconciliation |
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Operating profit |
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| 749 |
Other income |
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| 113 |
Depreciation and amortisation |
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| 209 |
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EBITDA |
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| 1,071 |
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Note: Adjusted EBITDA (excluding share based payments) 1,179
| Translogik £'000 | SAW £'000 | iTrack royalties £'000 | Unallocated £'000 | Total £'000 |
Year ended 30 June 2022 |
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Sales | 875 | 200 | 1,557 | - | 2,632 |
| ================== | =================== | =================== | =================== | ==================== |
Gross profit | 484 | 193 | 1,557 | - | 2,234 |
Administrative expenses | (126) | (1,014) | (44) | (786) | (1,970) |
| --------------------------- | -------------------------- | -------------------------- | -------------------------- | ----------------------------- |
Operating profit/(loss) | 358 | (821) | 1,513 | (786) | 264 |
Other income | - | 16 | - | - | 16 |
Net financial expense | - | - | - | (12) | (12) |
Taxation | - | - | - | 609 | 609 |
| --------------------------- | -------------------------- | -------------------------- | -------------------------- | ----------------------------- |
Profit/(loss) for the year | 358 | (805) | 1,513 | (189) | 877 |
| ========== | ========= | ========== | ======= | =========== |
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During the year ended 30 June 2023 there was 1 customer (2022: 2) whose turnover accounted for more than 10% of the Company's total continuing revenue as follows:
Year ended 30 June 2023 | Revenue £'000 | Percentage of total |
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Customer A | 2,010 | 57 |
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Year ended 30 June 2022 | Revenue £000 | Percentage of total |
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Customer A | 1,557 | 59 |
Customer B | 339 | 13 |
2 TAXATION
Recognised in the statement of comprehensive income in respect of continuing operations
| Year ended 30 June 2023 | Year ended 30 June 2022 |
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| £'000 | £'000 |
Current tax credit |
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Adjustment for previous year | - | (11) |
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Deferred tax credit |
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Current year | (530) | (598) |
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Tax credit in Statement of Comprehensive Income | (530) | (609) |
| ============================================ | ============================================ |
Reconciliation of effective tax rate
| Year ended 30 June 2023 | Year ended 30 June 2022 |
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| £'000 | £'000 |
Profit/(loss) before tax | 866 | 268 |
| ============================================= | ============================================= |
Tax calculated at the average standard UK corporation tax rate of 23.50% (2022: 19:00%) | 178 | 51 |
Expenses not deductible for tax purposes | 23 | 19 |
Utilisation of losses brought forward for which no deferred tax asset was recognised | 25 | (23) |
Recognition of deferred tax in respect of prior year losses | (756) | (645) |
Prior year adjustment | - | (11) |
| ---------------------------------------------- | ---------------------------------------------- |
Total tax credit | (530) | (609) |
| ============================================= | ============================================= |
Deferred tax assets are |
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Recognised - in respect of tax losses | 1,175 | 645 |
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Unrecognised - in respect of tax losses and other timing differences | 4,528 | 4,900 |
| ============================================= | ============================================= |
The applicable UK corporation tax rate is a blend of 19% for the first 9 months and 25% thereafter giving an average rate for the reporting period of 20.5%. The Group has tax losses, subject to agreement by HM Revenue and Customs, in the sum of £21.9m (2022: £22.8m), which are available for offset against future profits of the same trade. There is no expiry date for tax losses. An appropriate deferred tax asset is being recognised as the Group is able to demonstrate a reasonable expectation of sufficient future taxable profits arising in order to utilise the losses.
3 EARNINGS PER SHARE
| Year ended 30 June 2023 | Year ended 30 June 2022 |
| Number | Number |
Weighted average number of shares - basic | 15,849,527 | 16,365,640 |
Share option adjustment for potentially dilutive shares | - | - |
| -------------------- | ------------------- |
Weighted average number of shares - diluted | 15,849,527 | 16,365,640 |
| ============ | =========== |
Last year showed potential dilutive impact of share options being 431,808 however this was incorrect as none of the share options had reached the hurdle requirement necessary for the option to be exercised. There are 1,504,300 share options and no warrants in place at 30 June 2023 (1,594,500 share options 30 June 2022).
| Year ended 30 June 2023 | Year ended 30 June 2022 |
| £'000 | £'000 |
Profit/(loss) | 1,396 | 877 |
| -------------------- | -------------------- |
Basic profit per share | 8.81 | 5.36 |
There are 1,504,300 share options and no warrants in place at 30 June 2023 (1,594,500 share options at 30 June 2022).
4 STATUTORY ACCOUNTS
The Financial information set out in this announcement does not constitute the Company's Consolidated Financial Statements for the financial years ended 30 June 2023 or 30 June 2022 but are derived from those Financial Statements. Statutory Financial Statements for 2022 have been delivered to the Registrar of Companies and those for 2023 will be delivered following the Company's AGM. The auditors Cooper Parry Group Limited have reported on the 2022 and 2023 financial statements. Their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under Section 498(2) or (3) of the Companies Act 2006 in respect of the Financial Statements for 2022 or 2021.
The Statutory accounts are available on the Company's website and will be posted to shareholders who have requested a copy and thereafter by request to the Company's reg