- Revenue: Up 18% year on year, just short of GBP4.2 million.
- Profit Before Tax: Up 20% at over GBP1.3 million.
- Earnings Per Share: Increased by 15%, over 10p for the first time.
- Cash: Ended the year at just under GBP1.3 million, rose to around GBP1.5 million in August.
- Royalty Revenue: iTrack royalty revenue grew 30% in FY24.
- Translogik Revenue: Up 9% year on year.
- SAWsense Revenue: Fell back 8% year on year.
- Revenue Momentum: Overall revenues grew by over 30% from H1 to H2.
- iTrack Revenue: Grew from GBP1.23 million to GBP1.38 million from H1 to H2.
- Translogik Revenue (H2): Increased by nearly 30%, from just under GBP0.5 million to GBP630,000.
- SAWsense Revenue (H2): Nearly a five-fold increase.
- Projected Profit Before Tax (FY25): GBP1.6 million, 26% up on FY24.
- iTrack Revenue Projection (FY25): GBP2.95 million, 13% increase year on year.
- Translogik Revenue Projection (FY25): GBP1.5 million, 34% increase year on year.
- SAWsense Revenue Projection (FY25): GBP1 million, 120% increase year on year.
- Cash Flow from Operations: GBP1.56 million generated, net cash retained of GBP300,000.
- Share Buybacks: Totaled GBP320,000 in the year.
- R&D, Plant and Equipment Investment: Nearly GBP900,000.
- Tax Losses: GBP21 million available for carry forward against future profits.
- Current Trading: Revenues increased by more than 60% ahead of the same period in the prior year.
- Net Cash (August): Increased to GBP1.5 million.
Release Date: September 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Transense Technologies PLC (LSE:TRT, Financial) reported an 18% year-on-year increase in revenues, reaching nearly GBP 4.2 million.
- Profit before tax rose by 20%, surpassing GBP 1.3 million.
- The company achieved a 30% growth in royalty revenue from its iTrack business, with a compound annual growth rate of over 40% since 2020.
- Translogik business saw a 9% increase in revenue, and SAWsense experienced a nearly five-fold increase in the second half of FY24.
- The company has expanded its customer base, including new key accounts like Hankook and partnerships with major companies such as Airbus and Protean.
Negative Points
- SAWsense revenue fell by 8% year-on-year, despite the strong second-half performance.
- The company faces challenges in scaling up production capacity and supply chain readiness, requiring significant capital investment.
- The iTrack royalty rate is set to decrease in FY26 and again in FY28, potentially impacting future revenue streams.
- The integration of new non-executive directors and the retirement of long-serving board members may pose transitional challenges.
- Economic uncertainties and market dynamics, such as currency fluctuations, could affect financial performance and projections.
Q & A Highlights
Transense Technologies PLC (LSE:TRT) Earnings Call Highlights
Q: Could you give an idea of the options when the iTrack royalty agreement expires in 2030? Is an extension possible?
A: Nigel Rogers, Executive Chairman: No, an extension is not possible. The iTrack deal was structured as a reward for our initial investment and an exit from that business. The royalty can be viewed as deferred consideration for the sale of the business.
Q: What level of capital investment might investors expect with regard to the supply chain readiness associated with SAW production capabilities in the near future?
A: Ryan Maughan, Managing Director: We invested about £800k last year and expect a similar level moving forward. This will include key equipment investments, done carefully to ensure efficiency.
Q: How much will Transense be investing in the APC Pulse project, and how much grant will be received?
A: Melvyn Segal, Chief Financial Officer: Our share of the grant is just over £500k. Most of the investment will cover salary costs, CAPEX, and some external subcontractor work.
Q: Does the current partnership with Protean Electric prevent Transense from entering similar proof of concepts with competitors in the UK or abroad?
A: Ryan Maughan, Managing Director: No, it does not. We are free to operate and have other ongoing programs in the electric drive space with confidential customers.
Q: What is the status of the relationship with Parker Meggitt?
A: Ryan Maughan, Managing Director: The relationship has evolved. Initially, we signed an MOU with Meggitt, which was acquired by Parker. We are now actively discussing several projects and have proposals for engineering programs with them.
Q: Where is the production of Translogik devices taking place, and what sort of margin increase can be expected versus the current outsourced model?
A: Ryan Maughan, Managing Director: Production has been brought in-house to our facility in Weston on the Green. We expect a margin enhancement of around 30-40%, which will also allow us to incentivize global distribution better.
Q: When is the dilution of the 150p LTIP reflected in the new share count? Is this captured in the reporting period?
A: Nigel Rogers, Executive Chairman: The dilution will be reflected if and when the options are exercised. We have been buyers of shares rather than sellers, indicating our confidence in the company's future.
Q: What was the justification for having two offices at opposite ends of the country with only 25 employees?
A: Ryan Maughan, Managing Director: The Newcastle office provides flexibility in hiring and supports the management team based in the northeast. It also helps us recruit more efficiently for support roles.
Q: What impact will AI have on your business?
A: Nigel Rogers, Executive Chairman: AI is generally seen as a positive for our business. It requires accurate measurements, which our technologies provide, thus enhancing the value we offer to our customers.
Q: What are the future plans for new IP and patents?
A: Ryan Maughan, Managing Director: We have filed new patents and have several more in progress. This is a significant change from the past and reflects our ongoing innovation and development efforts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
