TWD.L Regulatory News (TWD)

20 September 2018

Trackwise Designs Plc 

("Trackwise", the "Company" or the "Group")

Interim Results for the six months ended 30 June 2018

Trackwise, a leading provider of specialist products using printed circuit technology, is pleased to announce today its interim results for the year ended 30 June 2018. These results relate to the trading period immediately prior to the Company's recent Admission to AIM.

Financial highlights

· Revenues of £1.846m (2017: £1.607m) up 14.9% year on year

· IHT Revenues of £331K (2017: £53K) up 567% year on year

· Operating profits of £154K (2017: £100K) up 54%

· EBITDA of £347K (2017: £202K)

· Gross margins of 39% (2017: 35%) on a like for like basis

· Basic EPS of 0.74 pence per share

Operational highlights

· Admission to AIM on 31 July 2018 post period end

· Continued focus on our chosen markets, Aerospace, Automotive, Space and Industrial, and have made further progress in winning new business from a range of customers:-

o In aviation we have developed our work with a Tier 1 UK aerospace manufacturer and moved further forward with developing the industrialisation plan for the integrated harness technology ("IHT") product application;

o Successfully installed a full harness wiring solution to a Boeing subsidiary for large format unmanned aerial vehicles ("UAVs");

o Continued development of our offering to our large European Space Prime Contractor manufacturing flexible printed circuit boards ("PCBs") for solar arrays;

o  In automotive our work with a leading OEM has continued and we are actively engaged in the second phase of their EV battery pack management solution and also with multiple other participants in this rapidly evolving field.

o Continued to invest in our technological development with a doubling of headcount in our development team.

 Post half year end highlights

· Successful flotation on AIM in July raising £4.6m net in an oversubscribed fundraising

· We have installed and commissioned the first continuous vertical plating line which enhances our plans to be ready for commercialisation of IHT for use with civil aircraft manufacturer supply in 2019;

Philip Johnston, CEO of Trackwise commented:

"In the last six months the Company has moved to new premises and completed a successful flotation on AIM raising £4.6m in an oversubscribed fundraising. Throughout this period, we have continued to be focused on addressing new opportunities.

We are delighted with the growth in IHT revenues and see considerable growth in this area as new markets open up. Current trading is in line with expectations and we view the future with optimism."

Chairman's Statement

I am pleased to be addressing shareholders for the first time following the Company's successful Admission to AIM.

The Company, which will celebrate its 30th anniversary in 2019, has pioneered a state-of-the-art new wiring technology and management are well set to deliver this important development for the next phase of the Company's growth.

I look forward to leading the Board and management on this journey. The Board are delighted to welcome all our new shareholders and thank them for their support.

The RF division has traded in line with expectations for the first half and is expected to do so for the remainder of the year with order books in line with historic patterns and management plans.

Trading in the IHT division continues to be well ahead of last year with a continual increase in enquiries for the use of the technology in a range of applications across our chosen markets. Revenues are well ahead of last year (567%).

We successfully moved our production facility to the larger premises at Ashvale and increased both our capacity and capability whist doing so.

The Company's financial performance for the half year and to the date of this announcement is in line with market expectations for the full year. 

For further information contact:

Notes to editors

Trackwise is an established business that manufactures specialist products using printed circuit technology. The Company consists of two divisions Radio Frequency ("RF") and Improved Harness Technology ("IHT").

The RF business unit manufactures specialist printed circuits which are primarily used in the antenna infrastructure to support the 3G/4G mobile phone networks. However, the technology has a number of other applications which render the RF business a stable revenue generator.

The IHT division utilises the Company's unique proprietary technology, a patented process that Trackwise has developed to manufacture unlimited length multilayer flexible printed circuits. The Directors believe that the technology has many applications but believe one of its primary uses could be to replace traditional wire harness used in a variety of industries.

Trackwise Designs plc was admitted to trading on AIM on 31 July 2018 with the ticker TWD.

For additional information please visit: www.trackwise.co.uk

Interim Statement of Comprehensive Income for the six months ended 30 June 2018

All activity relates to continuing operations.

Note 9 has details of the IFRS transition adjustments applied to the comparative period results.

Interim Statement of Financial Position

Interim Statement of Changes in Equity

Notes to the Interim Financial Information

1. Corporate information

Trackwise Designs Limited is a Company incorporated in the United Kingdom. The registered address of the Company is 1 Ashvale, Alexandra Way, Ashchurch, Tewkesbury, Gloucestershire, GL20 8NB.

The principal activity of the company is the development, manufacture and sale of printed circuit boards.

2. Accounting policies

Basis of preparation

This unaudited consolidated interim financial information has been prepared in accordance with IFRS as adopted by the European Union including IAS 34 'Interim Financial Reporting'. The principal accounting policies used in preparing the interim results are those it expects to apply in its financial statements for the year ending 31 December 2018 and are unchanged from those disclosed in the financial information included in the Company's Alternative Investment Market ('AIM@) listing document in July 2018.

The financial information does not contain all of the information that is required to be disclosed in a full set of IFRS financial statements. The financial information for the six months ended 30 June 2018 and 30 June 2017 is unreviewed and unaudited and does not constitute the Company's statutory financial statements for those periods.

The comparative financial information for the full year ended 31 December 2017 has, however, been derived from the audited statutory financial statements for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditor's report on those accounts was unqualified, did not include references to any matters to which the auditor drew attention by way of emphasis without qualifying its report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

The financial information in the Interim Report is presented in Sterling.

In line with the transition provisions of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers the Company has elected to apply on transition to these standards on 1 January 2018 a limited retrospective approach. Applying a limited retrospective approach on adoption of IFRS 9 and IFRS 15 in 2018 results in no restatement of comparative periods or in opening retained earnings on 1 January 2018.

3. Segmental reporting

IFRS 8, Operating Segments, requires operating segments to be identified on the basis of internal reports that are regularly reviewed by the company's chief operating decision maker. The chief operating decision maker is considered to be the Board of Directors.

The company comprised only one operating segment until 31 December 2017 for the sale of printed circuit boards. The operating segments are monitored by the chief operating decision maker and strategic decisions are made on the basis of adjusted segment operating results. From January 2018 the RF and IHT activities have begun to be separately reviewed and monitored. Revenue of £1,515,000 arose from RF and £231,000 from IHT in the six months ended 30 June 2018.

All assets, liabilities and revenues are located in, or derived in, the United Kingdom. The material assets and liabilities relate to overall activity with the exception of the intangible development costs and deferred grants which are solely in respect of IHT.

Notes to the Interim Financial Information

In the six months ended 30 June 2018 the company had two major customers who represented 28% and 9% of total revenue (six months ended 30 June 2017: 41% and 9% of revenue, full year ended 31 December 2017: 33% and 14% of revenue).

Revenue by geographical destination was as follows:

4. Income tax

Taxation is provided at the estimated rate of tax for the period, applying 17% to deferred tax balances, and including the benefit of enhanced allowances for research and development costs.

5. Dividends paid and proposed

Amounts recognised as distributions to equity holders in the period:

6. Earnings per share

The calculation of the basic and diluted earnings per share is based on the following data:

Notes to the Interim Financial Information

7. Intangible fixed assets

Additions to capitalised development costs represent further and continuing development of the IHT technology and capability.

8. IPO and post balance sheet events

On 31 July 2018, the Company's shares were listed on AIM and 5,238,097 new ordinary shares were placed raising £4.6m net of related costs for the company. The existing working capital and loan facilities were repaid with borrowings now comprising only hire purchase facilities used to finance tangible fixed assets.

Copies of this statement will be available on the Company's website (www.trackwise.co.uk) and from Trackwise Designs PLC, 1 Ashvale, Alexandra Way, Tewkesbury, Gloucester, GL20 8HB