TIDMTRK
RNS Number : 5833R
Torotrak PLC
30 June 2015
30 June 2015
Torotrak plc
("Torotrak", the "Company" or the "Group")
Preliminary Final Results for the Year Ended 31 March 2015
(unaudited)
Torotrak (LSE: TRK), a leading developer and supplier of
emissions reduction and fuel efficiency technology for vehicles,
announces its Preliminary unaudited Final Results for the year
ended 31 March 2015.
Flybrid KERS - mechanical hybrids
-- Milestones achieved:
o Commenced initial trials of a Wrightbus StreetLite vehicle
fitted with Flybrid KERS on a public bus route with Arriva
o Fuel savings in StreetLite bus independently validated on a
standard test cycle at Millbrook
o Accelerated flywheel durability testing successfully
completed, verification of production-intent design underway
o JCB excavator KERS units successfully built, in-vehicle and
rig testing underway
-- Memorandum of Understanding entered into with a global Tier 1
manufacturer of commercial vehicle and passenger car drivelines
ahead of delayed commercial launch in mid-2016
-- Flybrid bus KERS wins prestigious Society of Motor
Manufacturers & Traders (SMMT) Award for Automotive Innovation
2014
V-Charge - powering downsized engines
-- Milestones achieved:
o Ford Motor Company announced as a participant in University of
Bath evaluation project
o Simulation conducted by University of Bath in conjunction with
Ford and Tier 1 confirms significant potential benefits from
V-Charge technology in a downsized engine for the mass market,
hardware build for in-vehicle testing underway
-- Next generation prototype unit already installed in demonstrator vehicle
Variable traction drive transmissions
-- Milestones achieved:
o Success-related GBP1 million deferred license fee received
from Allison in November 2014
Financial Highlights
-- Cash balance of GBP7.6 million as at 31 March 2015
After the period end
-- Appointment of a new Chief Executive, Adam Robson
-- Launched a Subscription, Firm Placing, Placing and Open Offer
to raise approximately GBP13.8 million (before costs), subject to
approval by Shareholders
-- Restructured the terms of the Flybrid acquisition agreement,
reducing the potential cash payable under the earn-out by GBP10
million and converting GBP1.8 million of the Vendor Loan Notes into
a five year term loan, subject to approval by Shareholders
-- Implemented a reorganisation, reducing cash operating costs
and continuing to focus resources on commercialising the Group's
technology
Adam Robson, Chief Executive, commented: "I am pleased that we
have launched the fund raise, restructured the Flybrid acquisition
agreement as, together with the implementation of the
reorganisation, this will create a platform for financial stability
and growth. The Executive management team is completely focused on
commercialising the Group's technologies, building on the progress
made in the last year on bus KERS and V-Charge in particular. We
are working with our partners to deliver value to Torotrak
Shareholders."
For more information, please visit www.torotrak.com or
contact:
Torotrak plc +44 1772 900 931
Adam Robson, Chief Executive
Rex Vevers, Finance Director
Charles Stanley Securities (Joint Financial Adviser &
Joint Broker) +44 20 7149 6000
Marc Milmo / Karri Vuori / Freddie Crone
Cantor Fitzgerald Europe (Joint Financial Adviser & Joint
Broker) +44 20 7894 7000
Rick Thompson / Will Goode / David Banks
Tavistock +44 20 7920 3150
Simon Hudson / James Collins
Chairman's Statement
During the last 12 months the Group has made progress across all
of the three main technologies: KERS, V-Charge and Main Drive
Transmissions. The Group has also largely completed the integration
of the Flybrid business that was acquired in January 2014 and the
two engineering teams are working together on a number of key
customer programmes.
On 30 March 2015, the Group announced the appointment of Adam
Robson as Chief Executive Officer (effective 13 April 2015),
replacing Jeremy Deering, who had stated his intention to stand
down in November 2014. Adam's track record in commercialising
technology and his experience in the automotive sector will prove
invaluable to Torotrak as it furthers discussions and negotiations
with customers and partners directed at bringing products to market
based on its world class technologies. Adam has announced that his
focus is to commercialise the Group's technologies, delivering
revenues and Shareholder value. The Board has announced a fund
raise, a restructuring of the terms of the earn-out relating to the
Flybrid acquisition and a re-organisation of the Group's resources.
I report on these later in this statement.
The progress made in developing and productionising the bus and
off-highway KERS products, developing V-Charge and delivering
improved durability in main drive transmission core components
provides an excellent platform on which to secure funded commercial
engagements with Tier 1s and OEMs to take our technology through to
commercial production. The Group, under Adam's leadership, will
build on the significant achievements over the last year and drive
long term value for Shareholders.
Performance of the Group
Our new Chief Executive Officer, Adam Robson, reports in detail
on the last 12 months, the targets achieved and challenges faced by
the Group. However, I set out below the key aspects of the Group's
performance.
The financial performance of the Group has been disappointing.
The normalised loss after tax (before amortisation of intangible
asset (know-how), associated tax credit and exceptional items)
increased to GBP6.7 million (2014: GBP3.4 million), reflecting
lower licensing revenues, a full year's operating costs for Flybrid
and the investment in developing and productionising the bus and
off-highway KERS product. The Group closed the financial year with
a cash balance of GBP7.6 million (2014: GBP14.9 million) and loan
notes due to the vendors of Flybrid of GBP2.8 million (2014: GBP2.8
million). The net reduction in cash of GBP7.3 million arises from
the operating loss for the year and the investment in capital
expenditure, being plant, machinery and patents.
In KERS, we have successfully completed the development and
testing of the bus KERS product and secured independent validation
of the fuel and CO(2) savings achieved in a KERS-equipped Wrightbus
StreetLite vehicle on a standard test cycle at the Millbrook test
track. In March this year we commenced a bus trial on a public bus
route in Kent in collaboration with Wrightbus and Arriva which is
intended to demonstrate the effectiveness of the technology under
real-world conditions. In parallel, the Group has completed the
next generation production-intent design in collaboration with a
global Tier 1 supplier in preparation for commercial launch in
mid-2016. The KERS programme with JCB is progressing well with
encouraging results from in-vehicle and rig testing.
In V-Charge, we have been pleased to announce that we are
working with Ford and a global Tier 1 engine boosting company on
the development and demonstration of our variable supercharging
technology as an enabler for engine downsizing. The results from
simulations conducted by the University of Bath confirm the
potential of V-Charge to deliver performance and/or fuel efficiency
benefits. Based on these successful results, the final stage of the
programme is underway to demonstrate the results from in-vehicle
testing using the Group's latest V-Charge hardware.
In main drive transmission technology, we successfully
demonstrated further improvements in core component durability and
based on these results the Group received the final GBP1 million
licence payment from our major shareholder and commercial partner
Allison. The next steps are to work with Allison to determine how
the increased core component life can be used to develop a smaller,
lighter, lower cost transmission and to identify the optimum target
product.
Fund raise and reorganisation
The Group has today launched a Subscription, Firm Placing,
Placing and Open Offer to raise approximately GBP13.8 million
(before costs) and announced a restructuring of the terms of the
Flybrid acquisition, both of which are subject to approval by
Shareholders at a General Meeting to be held on 22 July 2015.
The restructuring of the terms of the Flybrid acquisition
agreement reduces the potential cash consideration payable under
the earn-out arrangements by GBP10 million and the Vendors will
receive 71,428,571 New Ordinary Shares in the Company in lieu of
any future earn-out payments. In addition, GBP1.8 million of the
GBP2.8 million loan notes arising from the initial cash
consideration for the acquisition in January 2014 is to be
converted into a 5 year term loan secured on the assets of Flybrid
that can be repaid by the Group at any time during the five years
and the remaining GBP1 million will be paid out of the proceeds of
the fund raise. The loan will be used to help fund the
commercialisation of KERS in the passenger car and commercial
vehicle markets. The restructuring and cancellation of the earn-out
arrangements will ensure that the Group continues to focus on
commercialising the technology in the best interests of all
Shareholders.
As part of the strategy to re-focus activities, the Group has
commenced an internal reorganisation to reduce costs and to realign
resources with the key commercial drivers for the Group. The effect
of this will be to reduce operating costs and focus the Group's
resources on securing nearer term commercial opportunities such as
licensing and lower volume product sales.
The reorganisation will also complete the integration of Flybrid
into the Group, bringing together the best aspects of both
businesses. Jonathan Hilton will step down from his executive role
and will be appointed Non-Executive Deputy Chairman, working with
Adam Robson to identify and develop new opportunities to
commercialise the Group's technologies. Doug Cross will remain in a
full-time executive role as Chief Technology Officer, working
alongside Steve Hughes as Chief Operating Officer.
As part of the reorganisation, the Board intends to submit a
proposed restructuring of Executive management's and all other
employees' remuneration for Shareholder approval at the next AGM of
the Company to be held in September 2015. This restructuring will
involve a reduction in cash remuneration (including the elimination
of cash bonuses), and a restructuring of the LTPSP scheme to more
closely align the interests of executives/employees and
Shareholders whilst at the same time helping to retain key
employees.
Regulatory environment and market drivers
The laws and regulations covering vehicle fuel efficiency and
emissions continue to tighten with OEMs facing significant
challenges to identify cost-effective technologies that can help
them meet regulatory obligations. In the EU, the new passenger car
emissions regulations were enacted requiring a 27 per cent.
reduction in CO(2) emissions by 2021, with a proposed further 18 -
28 per cent. reduction planned by 2025. In North America and Asia,
similar regulations are being implemented which will drive OEMs'
need for new low cost solutions.
In addition to tougher emissions regulations, a new vehicle test
cycle is planned for introduction from 2017/18 onwards. The World
Harmonised Light Duty Test Procedure (WLTP) is expected to result
in higher CO(2) emissions compared with those measured under the
current EU type-approval (NEDC) test protocol. As a result, it will
become even more challenging for vehicle manufacturers to satisfy
the CO(2) emissions requirements.
The Board believes that the combination of tighter emissions
regulations and the new vehicle test procedure will cause OEMs to
accelerate the adoption of new low cost technologies, such as those
offered by the Group.
People
During the year, there have been a number of changes at Board
level. In November last year I took over as Chairman from John
Weston who remains on the Board as a Non-Executive Director. John
joined the Group in June 2011 and the Board would like to thank him
for his stewardship of the Group over this period.
Also in November, Jeremy Deering announced his intention to step
down as Chief Executive Officer. Jeremy joined the Group as Finance
Director in June 2006, becoming Chief Executive Officer in August
2012 and he stepped down from the Board in April this year. On
behalf of the Board and his colleagues I would like to thank him
for his contribution to the Group and wish him well for the
future.
The Group has an excellent team which has worked tirelessly
during the past year to deliver the strong technical progress that
we have reported on today. I would like to thank them for their
hard work and support over the last 12 months.
Outlook
The next 12 months will see the Group commence commercial
production and sales of its bus KERS product in the UK bus market
in collaboration with Wrightbus and our new Tier 1 partner. The
Group is also targeting securing licensing arrangements of KERS
and/or V-Charge into the passenger car or commercial vehicle
markets. Both technologies offer OEMs cost-effective ways to help
address the vehicle fuel-efficiency and emissions challenges from
2020/21 onwards using mechanical-based solutions. I look forward to
reporting to Shareholders on the progress achieved.
N Barter
Chairman
29 June 2015
Chief Executive's Review
A platform for growth
Introduction
Since taking over as Chief Executive Officer on 13 Aril 2015, I
have spent much of my time resetting the strategic focus of the
Group to commercialise its technology and reorganising the Group's
Executive management team, engineering and other resources to
deliver on this commitment. I have met with our major institutional
Shareholders and commercial partners and set out my priorities for
the Group. I am excited to have joined Torotrak at this important
time and I look forward to helping deliver the significant value
embedded in the Group's different technologies.
Fund raise, Flybrid agreement restructuring and
reorganisation
We have today launched a Subscription, Firm Placing, Placing and
Open Offer to raise approximately GBP13.8 million (before costs) to
finance the launch of the bus KERS product, the development and
licensing of KERS and V-Charge in the passenger and commercial
vehicle markets and on-going support to our two key Tier 1
licensees of our toroidal traction drive technology (Allison and
Univance). In conjunction with the fund raise, the earn-out
agreement related to the acquisition of Flybrid has been
restructured resulting in the elimination of up to GBP10 million of
additional cash consideration. Under the terms of the restructure,
the Flybrid Vendors will receive a one-off settlement of 71,428,571
New Ordinary Shares and will convert GBP1.8 million of loan notes
into a five year term loan, secured on the assets of Flybrid and
repayable by the Group at any time during the five year term and
the remaining GBP1 million will be paid out of the proceeds of the
fund raise.
The combination of the fund raise and the restructuring of the
Flybrid agreement, both of which are conditional on shareholder
approval, will secure additional cash funding to enable the Group
to commercialise its technologies and launch bus KERS in the market
in mid-2016. In addition, restructuring the earn-out agreement
removes a potential conflict and ensures that all members of the
Board and Executive management are fully aligned to maximise the
commercial opportunity for the KERS technology.
As part of the strategy to reset the focus of the Group's
resources on commercialising the Group's technology, we have
announced a reorganisation that will reduce on-going cash operating
expenses by approximately 20 per cent. on an annualised basis and
align resources to deliver commercial success. The Group's
engineering resources have been allocated under Steve Hughes and
Doug Cross with combined commercial, project management and
technical teams focusing on the nearer term key commercial
opportunities.
Leveraging the capabilities of the Group's current and future
Tier 1 partners, such as Univance, in conjunction with the
reorganisation will help the Group deliver Shareholder value
through licensing and other product sales.
Operating Review
Bus KERS
The Group's primary focus since acquiring Flybrid has been
completing the design, development and testing of the bus KERS
product and commencing the in-service trials in a Wrightbus
StreetLite vehicle with Arriva. During the year the engineering
team has successfully completed the following programme
activities:
-- Installed KERS units into two Wrightbus StreetLite vehicles,
successfully completing the necessary calibration and drivability
tests to maximise energy capture and fuel savings. The KERS-enabled
vehicles have undergone an extensive series of tests both on public
roads and test tracks such as Millbrook. The Vehicle Certification
Agency has confirmed the KERS-enabled bus has successfully passed
the braking performance tests necessary to operate on a public bus
route;
-- Independent testing completed at the Millbrook test track,
confirming that the bus KERS system can deliver fuel savings and
can give bus operators an attractive payback. With the new GBP30
million incentive fund announced by the Government for Low Emission
Bus (LEB) procurement, we anticipate that the payback to bus
operators could be significantly faster with initial capital
grants. The Group has also conducted its own testing at the
Millbrook test track which confirms the significant fuel savings
that are available to bus operators in real-world use;
-- In March this year, Arriva commenced a public trial of a
Flybrid KERS-enabled Wrightbus StreetLite vehicle. The vehicle is
in service with Arriva on a public bus route in Gillingham, Kent.
The Group, in conjunction with Arriva, will monitor the in-service
performance of the vehicle using on board telemetry. This is an
important validation of the KERS product and will provide an
excellent opportunity to showcase the technology to potential
customers including bus operators and other bus OEMs;
-- Extensive accelerated flywheel assembly durability testing
equivalent to more than 10 years of in-service operation has been
successfully completed; this confirms the target design life of at
least 1 million kilometres. This also confirms an important benefit
of the Group's flywheel hybrid compared to battery hybrids which
require a mid-life battery pack replacement, increasing
through-life costs and operating downtime. Destructive testing to
validate the flywheel functional safety has also been successfully
performed proving the patented safety features of the system.
In parallel, the engineering team has completed the
production-intent design for the low cost industrialised bus KERS
system, reducing weight, parts count and estimated cost. The first
units are currently being assembled at the Group's facility in
Leyland and will be used as part of a comprehensive design
verification test programme to validate the functional performance,
reliability and improved fuel efficiency of the KERS system.
The Group has been working in close collaboration with a major
global Tier 1 manufacturing and assembly partner that is a
technology leader in commercial vehicle and light vehicle driveline
systems. The combined engineering teams of our Tier 1 partner and
the Group's development team are focused on optimising the design
for manufacture, reliability and cost and building a supply chain
to deliver the volumes required by bus operators and to support a
commercial market launch in mid-2016. The Group signed a Memorandum
of Understanding with the Tier 1 earlier this year which is
expected to lead to a formal volume supply agreement. The initial
agreement is that the Tier 1 will supply KERS units (excluding
flywheel assemblies) and the Group will manufacture flywheel
systems and assemble these into the complete KERS unit for shipment
to bus OEMs.
The Group is targeting in-vehicle trials of the new
production-ready KERS units later this year and, following
investment in tooling, the commercial launch of KERS is scheduled
for mid-2016. Whilst this is approximately 12 months later than
originally planned, the Group believes that KERS can deliver the
required bus operator payback.
The recent announcement by the UK Government's Office for Low
Emission Vehicles of a GBP30 million fund for (Ultra) Low Emission
Bus procurement (LEB) is a welcome initiative to encourage bus
operators to procure new low carbon vehicles. Initial indications
suggest that a Flybrid KERS unit could be eligible for a capital
grant of up to 75 per cent., which would enable the KERS unit to
offer bus operators a rapid payback. The LEB programme is also
designed to stimulate the uptake of new low carbon technologies
that offer value for money and that help to reduce the need for
government subsidy over the period of the scheme and beyond. We are
working with our partner, Wrightbus, to ensure that the Flybrid
KERS equipped StreetLite is eligible for grant funding under this
scheme.
We were also delighted that Flybrid was the 2014 winner of the
prestigious Society of Motor Manufacturers and Traders (SMMT) Award
for Automotive Innovation (AAI) for KERS for buses and commercial
vehicles. The AAI recognises new UK-developed low carbon vehicle
technologies which will make a lasting impression on the motor
industry for years to come.
Off-highway KERS
The collaboration with JCB, part-funded by the UK-Government
formed Advanced Propulsion Centre, to design, develop and
commercialise Flybrid flywheel systems for excavators is
progressing well. In-vehicle and rig tests of flywheel systems are
encouraging.
The Group is looking at other opportunities for its KERS systems
in other off-highway applications.
Passenger Car KERS
The Group has recently completed feasibility studies for two
major European-based OEMs. Whilst these studies are early-stage
feasibility studies, it confirms the Group's view that OEMs are
looking at mechanical-based energy recovery systems as a lower
cost, more effective solution than battery based hybrid solutions.
The Group is engaged with a number of other passenger car OEMs and
Tier 1s in Europe, North America and China, who are investigating
the opportunities for KERS with potential feasibility and
demonstrator vehicle programmes.
V-Charge
In April this year, we announced that the Group was working with
Ford Motor Company, a class leader in efficient passenger car
engines, to evaluate the potential benefits of V-Charge technology
in engine downsizing. The project, funded by Innovate UK, in
collaboration with the University of Bath (a world recognised
centre of excellence in this field) and a global Tier 1 engine
boosting supplier is developing a production orientated version of
V-Charge. This work is focused on fully exploiting the capability
of V-Charge technology through optimisation of multiple engine
parameters demonstrating the emissions reduction and performance
improvement opportunities for the technology. The technology has
the potential to reduce the complexity and cost of multi-stage
boosting systems that are necessary to achieve increased specific
engine outputs.
The initial simulation results from the University of Bath
collaboration confirm that V-Charge has the potential to improve
the performance of a modern downsized gasoline engine when compared
to competing advanced boosting technology, making it a potential
enabler for more aggressive engine downsizing. Using current
supercharger compressor technology, V-Charge can provide improved
low speed torque output, and under full-load conditions is
predicted to deliver improved fuel consumption and CO(2) emission
reductions without the 'lag' associated with existing boosting
solutions. Time to torque, a measure of engine response and vehicle
drivability, matches and in some cases improves upon competing
advanced boosting products. Configured with next generation
compressor technology that fully exploits the characteristics of
V-Charge, further benefits are expected. The Directors believe that
these results are achieved with simplified hardware integration and
superior noise vibration and harshness characteristics compared to
the competition.
The next stage of the programme will see the Group's V-Charge
hardware integrated into two passenger cars and the University of
Bath will independently validate the performance and
fuel-efficiency benefits delivered by V-Charge in real-world drive
cycles. We expect to be able to report the results of in-vehicle
testing later this financial year.
The Group is working closely with Univance (an existing licensee
for the Group's continuously variable transmission (CVT)
technology), to explore the commercial opportunity to use V-Charge
CVT technology to improve fuel efficiency, with a focus on
on-highway commercial vehicle boosting applications. Univance is
working with several Japanese OEMs who are interested in commencing
demonstration programmes to confirm the benefits of using
Torotrak's CVT in conjunction with a turbocharger over and above
competitor technologies. We hope to be able to report further
progress in this area over the next six months.
Main drive transmissions
In November 2014, Allison paid the final GBP1 million licence
fee, deferred from earlier in the year; confirming the step-change
improvement in key component durability and lifetime. The Group is
working with Allison to determine the most appropriate product for
the Group's technology, taking into account the market
opportunities and the key drivers of fuel efficiency, packaging and
cost.
As reported at the Group's interim results, the Group has been
invited to participate in a feasibility study for off-highway
applications to be commissioned and completed during 2015.
Univance, the Group's existing Tier 2 manufacturing licensee,
has recently secured a Japanese government grant to develop a
family of variators for off-highway and auxiliary drive
applications using the Group's CVT technology and has identified a
number of lead customers for this product family. On a recent to
visit to Japan, the Group has agreed to support these programmes as
part of the drive to secure new commercial opportunities.
Manufacturing
During the year the Group has invested in low volume
manufacturing, test and build equipment at the Leyland facility.
Investments include:
-- Carbon fibre filament winding and flywheel hub manufacturing
capability to manufacture complete flywheels in lower volumes up to
a few thousand units per annum, meeting the initial requirements
for on and off-highway commercial vehicle markets;
-- CNC machining capability to manufacture multiple high-value
components enabling multiple engineering programmes to be delivered
more quickly and cost-effectively and to help capture valuable
design-for-manufacture learnings and IP.
In addition, investment has also been made in 24-hour
('lights-out') accelerated flywheel durability testing capability
to further KERS development test facilities in order to support
product development programmes for the Group's key KERS programmes
including with Wrightbus.
Delivery against the Group's targets
The following is a summary of the progress achieved against the
targets the Group set itself in last year's Annual Report.
IVT
Targets Status
------------------------------------ -----------------------------------------
Allison pays the final GBP1 million GBP1 million license fee received
deferred licence fee in November 2014
------------------------------------ -----------------------------------------
Allison engineering programme Work continues to identify a new
continues, targeting a new design design that optimises the benefits
of the improved durability results
and further reduces package and
cost
------------------------------------ -----------------------------------------
Definition of market segment On-going
targeted for IVT introduction
for on-highway commercial vehicles
------------------------------------ -----------------------------------------
Secure one new customer/programme The Group is awaiting confirmation
for off-highway IVT that a UK government funded feasibility
study with a major off-highway
OEM has been secured
------------------------------------ -----------------------------------------
KERS
Targets Status
------------------------------------------ --------------------------------------
Confirm/announce low-volume manufacturing Secured a Memorandum of Understanding
strategy and partnering approach with a global Tier 1 manufacturing
partner
------------------------------------------ --------------------------------------
Complete testing of bus KERS Completed, validating fuel savings
at Millbrook test track on a standard test cycle
------------------------------------------ --------------------------------------
Complete initial trial of a Wrightbus The trial commenced in March 2015
fitted with Flybrid KERS operating and is continuing in partnership
on a public bus route with Arriva with Arriva
------------------------------------------ --------------------------------------
Commence design verification Design verification testing commenced
testing of the new bus KERS system, in May 2015
in readiness for commercial production Commercial production delayed until
by end calendar year 2015 mid-2016
------------------------------------------ --------------------------------------
Accelerated durability tests Successfully completed, including
underway and on track to meet successful validation of containment
target requirements safety case
------------------------------------------ --------------------------------------
Build and commence testing of Delayed into H1 2016
a further 25 KERS units for fleet
trials
------------------------------------------ --------------------------------------
Build a pipeline of sales prospects Good progress has been made
for bus KERS to support the start Positive results from the bus KERS
of commercial production by end trial with Arriva will provide
2015 linked to the new LEB grant further opportunity to secure KERS
scheme orders
------------------------------------------ --------------------------------------
JCB excavator design completed, Successfully completed
hardware build underway
------------------------------------------ --------------------------------------
Identification of other off-highway In progress
vehicle applications for the
KERS system
------------------------------------------ --------------------------------------
V-Charge
Targets Status
---------------------------------------- ----------------------------------
Key simulation work completed Successfully completed, programme
in collaboration with University to validate results in-vehicle
of Bath and OEM/Tier 1 support, commenced
confirming performance/fuel-efficiency Ford announced as OEM partner in
benefits in a downsized state-of-the the project
art production engine
---------------------------------------- ----------------------------------
Secure funded Tier 1 engagement Linked to successful results of
in-vehicle hardware testing on
University of Bath project
---------------------------------------- ----------------------------------
Supply of next generation hardware Successfully completed
for trails on multi-stage premium
automotive application
---------------------------------------- ----------------------------------
Automotive application of V-Charge and KERS
Targets Status
----------------------------------- ---------------------------------------
Announce new feasibility programme Two limited feasibility studies
secured as the first step in successfully completed with different
commercialisation programme with automotive manufacturers.
Tier 1/OEM Discussions on-going about next
steps
----------------------------------- ---------------------------------------
Financial
Revenue in the current financial year was GBP3.8 million,
slightly higher than the previous year (2014: GBP3.5 million).
Licensing revenue was GBP1.0 million (2014: GBP3.0 million), all of
which arose from the final licence payment from Allison, previously
deferred pending satisfactory completion of durability testing.
Engineering services revenue was GBP2.8 million (2014: GBP0.5
million) reflecting the main KERS programmes that were active
during the year. Gross profit for the year was GBP2.0 million
(2014: GBP3.0 million) reflecting the change from high margin
licence revenue in 2014 to lower margin engineering services
revenue during the year.
Total operating costs for the Group, excluding intangible asset
amortisation (know-how) and exceptional items, increased by GBP2.2
million to GBP9.2 million during the year, largely relating to the
acquisition of Flybrid and the additional engineering resources
taken on to deliver the bus KERS and other engineering
programmes.
The adjusted operating loss (before intangible asset
amortisation (know-how) and exceptional items) for the current
financial year was GBP7.2 million (2014: GBP4.0 million). The
increase is attributable to a GBP1.0 million reduction in gross
profit, largely due to the reduction in high margin licence income,
and a GBP2.2 million increase in operating costs, as discussed
above. After deducting intangible asset amortisation (know-how)
charges of GBP0.8 million (2014: GBP0.1 million) and exceptional
charges of GBP0.4 million (2014: GBP0.7 million) the operating loss
for the year was GBP8.4 million (2014: GBP4.8 million). The
increase in intangible asset amortisation (know-how) charges of
GBP0.7 million reflects a full year charge for the amortisation of
the intangible asset amortisation (know-how) arising from the
acquisition of Flybrid. The exceptional charge of GBP0.4 million
relates to the departure of a senior employee at the beginning of
the financial year and the departure of Jeremy Deering. The
exceptional charge of GBP0.7 million in the previous financial year
included GBP0.6 million relating to professional and other fees
incurred during the acquisition of Flybrid.
Net finance income of GBP0.04 million was in line with the
previous year and the income tax credit of GBP0.6 million (2014:
GBP0.5 million) largely relates to research and development tax
credits. Normalised loss for the year after tax (before intangible
asset amortisation (know-how), associated tax credit and
exceptional charges) attributable to Shareholders increased to
GBP6.7 million (2014: GBP3.4 million) due to lower licensing
revenues and higher operating costs including a full year's costs
for Flybrid. Including intangible asset amortisation (know-how),
associated tax credit and exceptional costs, the loss attributable
to Shareholders was GBP7.8 million (2014: GBP4.2 million).
Net cash used in operating activities was GBP6.2 million (2014:
GBP4.0 million). The increase of GBP2.2 million was driven by lower
licensing revenues (a decrease of GBP2.0 million), increased
operating costs (an increase of GBP1.6 million in cash terms),
offset by increased engineering services gross profit (an increase
of GBP1.0 million), and increased tax receipts (an increase of
GBP0.4 million). Net cash used in investing activities decreased to
GBP1.1 million from GBP5.0 million in the previous year; a decrease
of GBP3.9 million which largely relates to the acquisition of
Flybrid in the previous financial year. Capital expenditure on
property, plant and equipment and patents was in line with the
previous year at GBP1.2 million. Cash flow from financing
activities was GBP14.9 million lower due the fund raise completed
last year to acquire Flybrid. The closing cash balance was GBP7.6
million (2014: GBP14.9 million) excluding GBP2.8 million of loan
notes due to the Vendors of Flybrid (2014: GBP2.8 million).
The carrying value of the Group's intangible assets decreased by
GBP0.5 million to GBP15.2 million as a result of a GBP0.8 million
amortisation charge relating to the know-how acquired upon the
acquisition of Flybrid offset by a net increase of GBP0.3 million
in the value of patents.
Summary
The Group has made considerable progress against a number of the
targets set out in last year's Annual Report. In particular;
completion of testing of bus KERS at Millbrook test track;
commencement of trials on a public bus route operated by Arriva;
successful completion of IVT durability testing leading to the
receipt of the final GBP1 million license fee from Allison; and
confirmation of V-Charge performance/fuel-efficiency benefits in
conjunction with Ford and the University of Bath. However, in a
number of areas progress has been slower than we had hoped
resulting in the commercial production of bus KERS being delayed
into mid-2016 and a funded Tier 1 automotive application for KERS
or V-Charge not yet secured. Nevertheless, the Group is in a strong
position to build on the technical progress made and the focus is
now to convert this into tangible commercial success.
My focus as Chief Executive Officer is to commercialise the
Group's technology, delivering value to Shareholders on the
significant investments made. In particular, commence commercial
production and sales of our bus KERS product in the UK in mid-2016;
successfully demonstrate the benefits of V-Charge on two in-vehicle
applications with Ford and use this as a platform to secure a Tier
1 license in passenger cars; and convert the first of the on-going
KERS discussions with Tier 1s and OEMs into a licence for KERS in
passenger cars. Whilst it is difficult to forecast the precise
timing of licensing deals, I am confident that our technologies
offer OEMs a number of cost-effective ways to help address the
regulatory challenges they face across their vehicle fleets from
2020/21 onwards. Our technologies offer OEMs mechanical-based,
proven, mass-market capable solutions.
I would like to thank all our staff for all their hard work and
dedication during the last year that has enabled us to make
tangible progress and build a platform for growth going
forward.
A Robson
Chief Executive
Financial Statements 2015
Consolidated Income Statement
For the year ended 31 March 2015
Group
2015 Group
GBP000 2014
Notes (unaudited) GBP000
Revenue 5 3,779 3,520
Direct costs 5 (1,792) (494)
------------- --------
Gross profit 1,987 3,026
Operating loss 5 (8,426) (4,769)
Operating loss before intangible asset
amortisation (know-how) and exceptional
items (7,230) (3,970)
Intangible asset amortisation (know-how) 7 (765) (127)
Exceptional items 6 (431) (672)
Operating loss (8,426) (4,769)
------------------------------------------ ------ ------------- --------
Net finance income 35 36
Loss before tax (8,391) (4,733)
Income tax credit 8 626 509
Loss for the year attributable to the
owners of the Parent Company (7,765) (4,224)
============= ========
Basic and diluted loss per share (pence) (2.84) (2.14)
============= ========
There is no other comprehensive income in the year and therefore
no separate Statement of Other Comprehensive Income is required
(2014: GBPnil).
Consolidated Balance Sheet
As at 31 March
Restated
Group (note 3)
2015 Group
GBP000 2014
(unaudited) GBP000
Notes
--------------------------------------------- ------ ------------- ----------
Assets
Non-current assets
Intangible assets 7 15,221 15,719
Property, plant and equipment 1,698 1,742
Investments 273 273
Trade and other receivables 10 147 147
------------- ----------
Total non-current assets 17,339 17,881
------------- ----------
Current assets
Inventories 383 205
Trade and other receivables 10 1,016 743
Tax receivable 435 604
Cash and cash equivalents 7,616 14,859
------------- ----------
Total current assets 9,450 16,411
------------- ----------
Total assets 26,789 34,292
------------- ----------
Liabilities
Non-current liabilities
Finance lease obligations 11 (311) (243)
Deferred tax 9 (2,121) (2,275)
------------- ----------
Total non-current liabilities (2,432) (2,518)
Current liabilities
Trade and other payables 11 (5,373) (5,433)
Total current liabilities (5,373) (5,433)
------------- ----------
Total liabilities (7,805) (7,951)
Net assets 18,984 26,341
============= ==========
Capital and reserves
Issued share capital 12 27,629 27,420
Share premium 9,140 9,093
Other reserves (244) (141)
Accumulated loss (17,541) (10,031)
------------- ----------
Total equity attributable to equity holders
of the Parent Company 18,984 26,341
============= ==========
Statements of Changes in Equity
Group
Group share Group
share premium other Group accumulated Total
capital account reserves loss equity
GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1 April 2013 17,496 55,497 (100) (59,574) 13,319
Comprehensive income
Loss for the period - - - (4,224) (4224)
--------- --------- ---------- ------------------ --------
Total comprehensive expense - - - (4,224) (4,224)
--------- --------- ---------- ------------------ --------
Transactions with owners
Transfer of shares under
share
incentive plan - - 6 (4) 2
Issue of shares to Allison
Transmission Inc. 1,271 1,016 - - 2,287
Issue of shares as consideration
for
Flybrid acquisition 784 1,216 - - 2,000
Issue of shares as result
of the Open Offer and Firm
Placing (net of costs) 7,618 5,090 - - 12,708
Share-based payment charge - - - 249 249
Issue of shares under share
incentive plan 47 - (47) - -
Issue of shares under LTPSP 204 - - (204) -
Share premium reduction - (53,726) - 53,726 -
--------
Total transactions with
owners 9,924 (46,404) (41) 53,767 17,246
--------- --------- ---------- ------------------ --------
Balance at 31 March 2014 27,420 9,093 (141) (10,031) 26,341
--------- --------- ---------- ------------------ --------
Comprehensive income
Loss for the period - - - (7,765) (7,765)
--------
Total comprehensive expense - - - (7,765) (7,765)
--------- --------- ---------- ------------------ --------
Transactions with owners
Transfer of shares under
share
incentive plan - - 6 2 8
Adjustment to costs resulting
from the Open Offer and
Firm Placing - 47 - - 47
Share-based payment charge - - - 353 353
Issue of shares under share
incentive plan 109 - (109) - -
Issue of shares under LTPSP 100 - - (100) -
--------
Total transactions with
owners 209 47 (103) 255 408
--------- --------- ---------- ------------------ --------
Balance at 31 March 2015
(unaudited) 27,629 9,140 (244) (17,541) 18,984
========= ========= ========== ================== ========
Consolidated Statement of Cash Flows
Notes
Group Restated
(note
2015 3) Group
GBP000 2014
(unaudited) GBP000
---------------------------------------------- ------ -------------- -----------
Cash flows from operating activities
Loss for the year (7,765) (4,224)
-------------- -----------
Adjustments for:
Depreciation 589 404
Amortisation 7 954 290
Net finance income receivable (35) (36)
Loss on disposal of plant and equipment 15 -
Profit on disposal of intangible assets - (15)
Taxation (626) (509)
Increase in inventories (178) (42)
(Increase)/decrease in trade and other
receivables (248) 273
Increase in trade and other payables 54 45
Decrease in provisions - (750)
Charge for equity-settled employee share
schemes and bonuses 353 249
-------------- -----------
Cash used in operations (6,887) (4,315)
Tax received 641 273
-------------- -----------
Net cash used in operating activities (6,246) (4,042)
-------------- -----------
Cash flows from investing activities
Acquisition of property, plant and equipment (609) (774)
Acquisition of patents (542) (386)
Acquisition of Flybrid Automotive Limited
(net of cash acquired) 14 - (3,883)
Increase of investment in Rotrex A/s - (17)
Net finance income received 36 39
-------------- -----------
Net cash used in investing activities (1,115) (5,021)
-------------- -----------
Cash flows from financing activities
Proceeds from the issue of share capital 4 16,003
Expenses of share placing - (1,006)
Finance lease income net of repayments 114 (20)
Net cash generated from financing activities 118 14,977
-------------- -----------
Net (decrease)/increase in cash and cash
equivalents (7,243) 5,914
Cash and cash equivalents at start of
year 14,859 8,945
-------------- -----------
Cash and cash equivalents at end of year 7,616 14,859
============== ===========
Notes to the Financial Statements
1. General information
Torotrak plc (the "Company" or "Parent Company") is a publicly
traded company incorporated and domiciled in the UK. The address of
its registered office is 1 Aston Way, Leyland, Lancashire PR26 7UX.
The Company is listed on the Main Market of the London Stock
Exchange.
The Annual Report and Financial Statements for the year ended 31
March 2014 have been delivered to the Registrar of Companies and
are available on Torotrak's website www.torotrak.com and the Annual
Report and Financial Statements for the year ended 31 March 2015
will be posted to Shareholders and made available on Torotrak's
website in July 2015.
The preliminary final results for the year ended 31 March 2015
are unaudited.
2. Basis of preparation
This announcement was approved by the Board of Directors on 29
June 2015. The financial information in this announcement does not
constitute the Group's statutory accounts for the years ended 31
March 2015 or 31 March 2014 but it is derived from those accounts.
Statutory accounts for 31 March 2014 have been delivered to the
Registrar of Companies, and those for 31 March 2015 will be
delivered after the Annual General Meeting. The auditors have
reported on the accounts for the year ended 31 March 2014; their
report was unqualified, did not include a reference to any matters
to which the auditors drew attention by way of emphasis without
qualifying their report and did not contain a statement under
section 498(2) or (3) of the Companies Act 2006.
The unaudited consolidated financial statements from which these
results are extracted have been prepared under the historical cost
convention in accordance with IFRS (International Financial
Reporting Standards), as adopted by the EU, IFRS IC interpretations
and those parts of the Companies Act 2006 applicable to companies
reporting under IFRS. The standards used are those published by the
International Accounting Standards Board (IASB) and endorsed by the
EU and effective at the time of preparing these financial
statements (June 2015).
The Directors have continued to adopt the going concern basis in
preparing these unaudited preliminary results. In concluding that
the going concern basis of preparation remains appropriate, the
Directors have taken into consideration the GBP13.8 million
fundraising launched on 30 June 2015, which requires the approval
of the Shareholders at a General Meeting to be held on 22 July
2015.
As at the date of approving these unaudited preliminary results,
the fundraising has not been approved by the Group's Shareholders.
Accordingly, a material uncertainty exists which may cast
significant doubt about the Group's ability to continue as a going
concern.
If the fundraising does not proceed, the Group would have a very
limited period of time in which to take remedial measures available
to address its cash flow requirements. Should the fundraising not
proceed, the Directors would severely reduce discretionary spend
and would immediately endeavour to conserve cash and raise further
funds. In addition, the Directors would have to consider whether
they could find a purchaser for the Group as a whole, or any of the
individual entities therein, within the limited timeframe
available.
Although these measures are potentially available to the Group,
the outcome of such measures lie outside of the full control of the
Group and, as a result, the Directors cannot be certain that they
will be successful. In addition, the Company would have a very
limited period of time in which to effect such recourses. If the
Issue does not proceed and alternative immediate funding is not
obtained, it would have a material adverse impact on the Group's
prospects and its financial condition and the Directors would need
to consider whether it is appropriate for the Group to cease
trading and enter into a liquidation process.
These unaudited preliminary results therefore do not include the
adjustments that would result if the Group were unable to continue
as a going concern including, for example, the reduction in
carrying value of assets and the recognition of additional
liabilities.
3. Accounting policies
The accounting policies adopted in the preparation of this
unaudited financial information are consistent with those adopted
for the year ended 31 March 2014, as included in the published
financial statements, other than in relation to new and amended
standards, as set out below, which have been adopted for the first
time in the year:
(a) New and amended standards adopted by the Group:
The following new standards and amendments to standards are
mandatory for the first time for the financial year beginning 1
April 2014 and have an impact on the Group:
-- IFRS 11, 'Joint Arrangements'. Prior to the adoption of IFRS
11, the Group accounted for its investments in joint ventures by
applying the proportional consolidation method. Under IFRS 11,
proportional consolidation is no longer an accepted accounting
treatment and therefore the Group's investments in joint ventures
are now accounted for using the equity method. The impact of this
change in accounting policy has been to reduce loans due to and
from joint ventures and cash and cash equivalents with an
offsetting entry being made within non-current assets to 'net
investments in joint ventures'. As required by IAS 1, the change in
accounting policy has been applied retrospectively and the prior
year Financial Statements have been restated to reflect the impact
of the change in policy as described above. The change in
accounting policy has had no impact on the net assets of the Group
or its loss for the current and prior periods.
The following new standards and amendments to standards are
mandatory for the first time for the financial year beginning 1
April 2014 and have no impact on the Group:
-- IFRS 10, 'Consolidated Financial Statements'
-- IFRS 12, 'Disclosures of Interests in Other Entities'
-- IAS 27 (revised 2011) 'Separate Financial Statements'
-- Amendments to IFRS 10,11 and 12 on transition guidance
-- Amendments to IAS 32 on financial instruments asset and liability offsetting
-- Amendment to IAS 36 'Impairment of Assets' on recoverable amount disclosures
-- Amendment to IAS 39 'Financial Instruments: Recognition and
Measurement' on novation of derivatives and hedge accounting
4. Statement of Directors' Responsibilities
Each of the Directors confirms that, to the best of their
knowledge:
-- the Financial Statements within the full Annual Report and
Accounts from which the financial information within this Final
Results announcement has been extracted, have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and profit of
the Company and the undertakings included in the consolidation
taken as a whole; and
-- the Strategic Report, which includes the Strategic Review,
the Chairman's Letter, the CEO's Review, and the Principal Risks
and Uncertainties (note 17) include a fair review of the
development and performance of the business and the position of the
Company and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that it faces.
5. Segmental analysis
Year ended 31 March 2015 (unaudited)
Income
Engineering from licence Development
services agreements activities Total
GBP000 GBP000 GBP000 GBP000
--------------------------------------- -------------- -------------- -------------- ---------
Revenue (by technology)
IVT 370 1,000 - 1,370
KERS 2,221 - - 2,221
V-charge and other 188 - - 188
2,779 1,000 - 3,779
Direct costs (1,772) (20) - (1,792)
-------------- -------------- -------------- ---------
Gross profit 1,007 980 - 1,987
Other operating costs - - (5,877) (5,877)
-------------- -------------- -------------- ---------
Segmental profit/(loss) 1,007 980 (5,877) (3,890)
Other operating costs not allocated
to segments (4,536)
---------
Operating loss (8,426)
=========
Note: Development activities include research and the creation
of intellectual property. Some technology information has been
combined where the values are deemed immaterial.
Exceptional items of GBP431k and the amortisation of the
intangible asset (know-how), created as a result of the Flybrid
acquisition, of GBP765k have been included in other operating costs
not allocated to segments.
Year ended 31 March 2014
Income
Engineering from licence Development
services agreements activities Total
GBP000 GBP000 GBP000 GBP000
--------------------------- -------------- -------------- -------------- ---------
Revenue (by technology)
IVT 172 3,000 - 3,172
KERS 165 - - 165
V-charge and other 183 - - 183
520 3,000 - 3,520
Direct costs (494) - - (494)
-------------- -------------- -------------- ---------
Gross profit 26 3,000 - 3,026
Other operating costs - - (4,564) (4,564)
-------------- -------------- -------------- ---------
Segmental profit/(loss) 26 3,000 (4,564) (1,538)
Other operating costs not
allocated to segments (3,231)
---------
Operating loss (4,769)
=========
Note: Development activities include research and the creation
of intellectual property. Some technology information has been
combined where the values are deemed immaterial.
Exceptional items of GBP672k and the amortisation of the
intangible asset (know-how), created as a result of the Flybrid
acquisition, of GBP127k have been included in other operating costs
not allocated to segments.
Significant customers
The following revenues are attributable to significant
customers:
Group
2015 Group
GBP000 2014
(unaudited) GBP000
------------------------------- ------------- --------
Allison Transmission Inc. (i) 1,370 3,151
Undisclosed customer (ii) 1,963 -
Note:
(i) The revenue from Allison Transmission Inc. has been
generated from engineering services and licence agreements.
(ii) The revenue from the undisclosed customer has been
generated from engineering services.
6. Exceptional items
Group
2015 Group
GBP000 2014
(unaudited) GBP000
------------------------------- ------------- --------
Re-organisation costs 431 117
One-off legal and other costs - 555
------------- --------
Total exceptional items 431 672
============= ========
The re-organisation costs relate to severance and associated
expenses in relation to a reduction in employees and costs
connected to the termination of a Director. In 2014, the one-off
legal and other costs relate to the acquisition of the remaining
80% stake in Flybrid Automotive Limited.
7. Intangible assets
Patents Know-how Goodwill Total
GBP000 GBP000 GBP000 GBP000
------------------------------------- -------- --------- --------- -------
Cost
At 1 April 2013 2,919 - - 2,919
Additions in year 377 - - 377
Assets acquired through acquisition
(note 14) 168 11,499 2,300 13,967
Disposals in year (706) - - (706)
At 31 March 2014 2,758 11,499 2,300 16,557
-------- --------- --------- -------
Additions in year 456 - - 456
-------- --------- --------- -------
At 31 March 2015 3,214 11,499 2,300 17,013
======== ========= ========= =======
Accumulated Amortisation
At 1 April 2013 1,230 - - 1,230
Charge for the year 163 127 - 290
Disposals in year (682) - - (682)
At 31 March 2014 711 127 - 838
-------- --------- --------- -------
Charge for the year 189 765 - 954
-------- --------- --------- -------
At 31 March 2015 900 892 - 1,792
======== ========= ========= =======
Asset impairment provision
At 1 April 2013 (39) - - (39)
Utilisation in year 39 - - 39
-------- --------- --------- -------
At 31 March 2014 - - - -
-------- --------- --------- -------
At 31 March 2015 - - - -
======== ========= ========= =======
Net book value
At 31 March 2015 2,314 10,607 2,300 15,221
======== ========= ========= =======
At 31 March 2014 2,047 11,372 2,300 15,719
======== ========= ========= =======
At 1 April 2013 1,650 - - 1,650
======== ========= ========= =======
The carrying value of intangible patent assets, know-how and
goodwill, and their potential impairment, is reviewed annually on a
case by case basis, having regard to the commercial classification
of a patent and its commercial applicability by market and
territory. Expenditure relating to patent cases which do not meet
defined criteria as approved by the Board of Directors, is
subsequently abandoned and the resulting costs charged to the
Income Statement. Having completed the 2015 annual impairment
review, the Group has recognised no impairment (2014: GBPnil).
The average remaining life of the assets is 14 years (2014: 13
years).
A fixed and floating charge has been granted to the Vendors of
Flybrid Automotive Limited over all patents, know-how, trademarks
and other intangible assets owned by Flybrid Automotive Limited, or
in which it may have an interest. The fixed and floating charge can
be called in the event that the Group does not satisfy, as they
fall due, any amounts owed to the Vendors under the terms of the
earn-out agreement entered into at the time of the acquisition of
Flybrid in January 2014.
It is proposed at the General Meeting to be held on 22 July 2015
that the Flybrid acquisition agreement be restructured. Therefore,
the existing charge over the assets of Flybrid will, as a
consequence, be cancelled and replaced by a new fixed and floating
charge over all patents, know-how, trademarks and other intangible
assets owned by Flybrid Automotive Limited, or in which it may have
an interest, in relation to a GBP1.8 million loan (see note
15).
8. Income tax credit
Group
2015 Group
GBP000 2014
(unaudited) GBP000
-------------------------- ------------- --------
UK Corporation Tax
Current tax for the year 365 392
Prior year tax 107 92
Deferred tax 154 25
------------- --------
Total UK Corporation Tax 626 509
============= ========
The Finance Act 2000 introduced the research and development tax
credit, which allows companies with qualifying expenditure to
surrender their tax losses for cash. The effective tax rate for
these credits is 32.63 per cent. (2014: 24.75 per cent.) compared
to the current UK corporation tax rate of 21 per cent. (2014: 23
per cent.).
9. Deferred tax
Group
31 March Group
2015 31 March
GBP000 2014
(unaudited) GBP000
------------- ----------
Deferred tax liability 2,121 2,275
============= ==========
The deferred tax liability relates solely to the intangible
assets recognised on the acquisition of Flybrid Automotive Limited
and is based on 20 per cent. of the intangible asset (know-how)
value. The deferred tax liability will be amortised through the
Income Statement to match the amortisation of the underlying
intangible asset, being over 15 years.
Deferred tax assets have not been recognised relating to tax
losses or unclaimed capital allowances as the Group is not forecast
to generate sufficient future taxable profits against which the
losses could be utilised. The Group also has unrecognised deferred
tax assets relating to potential future deductions on the exercise
of share options issued to Group employees.
10. Trade and other receivables
Restated
Group (note3)
31 March Group
2015 31 March
GBP000 2014
(unaudited) GBP000
-------------------------- ------------- ----------
Non-current assets
Loan to Rotrex A/S 147 147
------------- ----------
Total non-current assets 147 147
============= ==========
Current assets
Trade receivables 171 64
Accrued income 176 6
Other receivables 186 236
Prepayments 483 437
------------- ----------
Total current assets 1,016 743
============= ==========
There is no provision for impairment for trade receivables at 31
March 2015 (2014: GBPnil). No trade receivables were overdue at 31
March 2015 (2014: GBP2k). In 2014 these related to a number of
independent customers for whom there was no recent history of
default. All amounts overdue but not impaired are less than 3
months overdue.
11. Trade and other payables
Restated
Group (note 3)
31 March
2015 Group
31 March
GBP000 2014
(unaudited) GBP000
------------------------------- -------------- ----------
Non-current liabilities
Finance lease obligations 311 243
Deferred tax 2,121 2,275
-------------- ----------
Total non-current liabilities 2,432 2,518
============== ==========
Current liabilities
Trade payables 227 550
Pension 29 39
Accruals 1,343 1,765
Social security 148 99
Finance lease obligations 118 72
Vendor loan notes 2,800 2,800
Deferred income 708 108
-------------- ----------
Total current liabilities 5,373 5,433
============== ==========
The GBP2.8 million vendor loan notes relate to the acquisition
of Flybrid Automotive Limited. It is proposed at the General
Meeting to be held on 22 July 2015 that the Flybrid Acquisition
Agreement be restructured as follows; redemption of GBP1.0 million
of loan notes to be paid in cash to the Flybrid Vendors; redemption
of GBP1.8 million of loan notes settled through the issue of a new
GBP1.8 million interest bearing loan, secured on the assets of
Flybrid and repayable 5 years from the date of the General Meeting,
or earlier at the Group's option (see Note 15).
12. Issued share capital
31 March
2015
31 March
GBP000 2014
Number
(unaudited) (unaudited) Number GBP000
----------------------------- ------------- ------------- ------------ ---------
Authorised
Ordinary shares of 10 pence
each 450,000,000 45,000 450,000,000 45,000
Allotted and fully paid
Ordinary shares of 10 pence
each 276,286,047 27,629 274,195,926 27,420
============= ============= ============ =========
31 March
2015 31 March
Number GBP000 2014
(unaudited) (unaudited) Number GBP000
--------------------------------------- -------------- ------------- ------------ ---------
Ordinary shares of 10 pence
each
At beginning of year 274,195,926 27,420 174,958,022 17,496
Shares issued under the SIP
scheme 1,090,784 109 474,424 47
Shares issued under the LTPSP
scheme 999,337 100 2,037,602 204
Shares issued to Allison
Transmission Inc. - - 12,706,064 1,271
Shares issued as a result
of open offer and firm placing - - 76,182,824 7,618
Shares issued as equity consideration
as part of the Flybrid Automotive
Limited acquisition - - 7,836,990 784
-------------- ------------- ------------ ---------
At end of year 276,286,047 27,629 274,195,926 27,420
============== ============= ============ =========
Shares issued as part of the open offer and firm placing and
approved by Shareholders at a General Meeting held on 8 January
2014 are reported net of the expenses relating to the issue,
totalling GBP1.0 million. The expenses are reported within share
premium.
It is proposed at a General Meeting to be held 22 July 2015 that
the Group issue New Ordinary Shares under a Subscription, Firm
Placing, Placing and Open Offer (see note 15).
13. Loss per share
Basic loss per share is calculated by dividing the loss
attributable to equity holders of the Parent Company for the period
by the weighted average number of ordinary shares in issue during
the period, excluding those held in trust. For diluted loss per
share, the weighted average number of ordinary shares in issue is
adjusted to assume issue of all dilutive potential ordinary shares,
being those share options with a non market-based performance
condition granted to employees where the exercise price is less
than the average market price of the ordinary shares during the
year, and those shares with a market based performance condition
based on the current estimate of the number of shares that will
vest under the performance criteria.
For the year ended 31 March 2015 potential share options were
antidilutive, as their inclusion in the diluted loss per share
calculation would have reduced the loss, and hence have been
excluded.
Diluted Basic Diluted
Basic loss loss loss loss
Loss per share per share per share per share
2015 2015 2015 Loss 2014 2014
GBP000 pence pence 2014 pence pence
(unaudited) (unaudited) (unaudited) GBP000
------------------- -------------- ------------- ------------- ---------- -------------- ------------
Loss attributable
to owners
of the Parent
Company (7,765) (2.84) (2.84) (4,224) (2.14) (2.14)
============== ============= ============= ========== ============== ============
31 March
2015 31 March
Number 2014
(unaudited) Number
Weighted average number of shares 273,469,160 196,967,091
Dilutive effect of share options 12,064,334 6,516,385
-------------- ------------
Diluted weighted average number of shares 285,533,494 203,483,476
============== ============
14. Business combinations
On 9 January 2014 the Group completed the purchase of the
remaining 80 per cent. of Flybrid Automotive Limited
("Flybrid").
The consideration for the acquisition of the remaining 80 per
cent. was GBP6.0 million in cash and GBP2.0 million in the
Company's new ordinary shares. Of the GBP6.0 million cash
consideration due, GBP4.2 million was paid to the Vendors on
completion with a further GBP1.8 million satisfied by the issuance
of loan notes payable no earlier than 7 July 2014 and subject to
Flybrid Automotive Limited meeting certain revenue performance
criteria.
No changes have been made to the acquisition accounting in the
current period.
15. Post Balance Sheet date events
The Group has at the date of this announcement launched a
Subscription, Firm Placing, Placing and Open Offer to raise GBP13.8
million (before costs) and announced a restructuring of the terms
of the Flybrid acquisition agreement, both of which are subject to
approval by Shareholders at a General Meeting to be held on 22 July
2015.
The restructuring of the terms of the Flybrid acquisition
agreement reduces the potential cash consideration payable under
the earn-out arrangements by GBP10 million with the Vendors
receiving GBP5 million of New Ordinary Shares in the Company in
lieu of any future earn-out payments. In addition, GBP1.8 million
of the GBP2.8 million loan notes arising from the initial cash
consideration for the acquisition in January 2014 is to be
converted into a 5 year term loan secured on the assets of Flybrid
that can be repaid by the Group at any time during the five years.
The loan carries a fixed annual interest rate of 7 per cent.
payable in cash, monthly in arrears (the existing loan notes do not
attract any interest).
In order to undertake the Subscription, Firm Placing, Placing
and Open Offer, it will be necessary for the Company to first
reduce the nominal value of the Ordinary Shares (English company
law prohibits the issue of new shares by an English company at a
price below their nominal value). Pursuant to the Reorganisation of
Share Capital and prior to the issue of the New Ordinary Shares,
the Company intends to sub-divide and convert the 276,286,047
existing Ordinary Shares of 10 pence each into 276,286,047 existing
Ordinary Shares of 1 pence each and 276,286,047 Deferred Shares of
9 pence each. The Reorganisation of Share Capital is also
conditional on Shareholder approval.
16. Forward looking statements
Certain statements in this Preliminary Announcement are
forward-looking. The terms 'expect', 'should be', 'will be' and
similar expressions identify forward looking statements. Although
the Board believes that the expectations reflected in these forward
looking statements are reasonable, such statements are subject to a
number risks and uncertainties and actual results and events could
differ materially from those expressed or implied by these forward
looking statements.
17. Principal risks and uncertainties
The principal risks and uncertainties which the business faces
are: maintaining sufficient cash to meet the on-going working
capital requirements, commercialisation of products and technology,
creation or acquisition of technical solutions and intellectual
property protection, competition and technical advances, senior
management and skilled personnel, quality of supply, product
liability claims, economic drivers and environmental legislation. A
full description of these risks and the mitigating actions taken by
the Group will appear in the 2015 Annual Report and Accounts.
18. Approval
The Preliminary Announcement was approved by the Board of
Directors on 29 June 2015.
Date and Venue of AGM
The Annual General Meeting of the Company will be held at
Coventry Transport Museum, Millennium Place, Hales Street,
Coventry, CV1 1JD on 4 September 2015.
-ends-
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BKLLLEQFEBBB
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