TIDMTWD
RNS Number : 3231B
Trackwise Designs PLC
20 September 2018
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 GBP1.846m (2017: GBP1.607m) up 14.9% year on year
-- IHT Revenues of GBP331K (2017: GBP53K) up 567% year on year
-- Operating profits of GBP154K (2017: GBP100K) up 54%
-- EBITDA of GBP347K (2017: GBP202K)
-- 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 GBP4.6m 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 GBP4.6m 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:
Trackwise
Philip Johnston (CEO) / Mark Hodgkins (CFO) +44 016 8429 9930
Arden Partners plc (Nominated Adviser and
Broker)
Steve Douglas / Ciaran Walsh / Daniel Gee-Summons +44 020 7614 5900
IFC Advisory Limited (Financial PR & IR)
Tim Metcalfe / Miles Nolan / Zach Cohen +44 020 3934 6600
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
Notes Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
Revenue 3 1,846 1,606 2 2,821
Cost of sales (1,117) (1,038) (1,751)
Gross profit 729 568 1,070
Other operating income 25 - 22
Administrative expenses (600) (460) (1,025)
Operating profit 154 100 67
Exceptional Costs (41) - -
Finance costs (42) (38) (80)
Profit/(loss) before
taxation 71 62 (13)
Taxation 4 - - 21
Profit and total comprehensive
income for the period 71 62 8
------------ ------------- -------------
Earnings per share (pence)
Basic and diluted 6 0.74 0.65 0.084
------------ ------------- -------------
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
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 7 1,913 1,329 1,646
Property, plant and
equipment 1,323 851 1,260
3,236 2,180 2,906
---------- ---------- -------------
Current assets
Inventories 357 232 313
Trade and other receivables 1,011 661 550
Current tax receivable 60 34 95
Cash and cash equivalents 80 332 166
---------- ---------- -------------
1,508 1,259 1,124
---------- ---------- -------------
Total assets 4,744 3,439 4,030
---------- ---------- -------------
LIABILITIES
Current liabilities
Trade and other payables (1,127) (736) (1,123)
Derivative liability (49) - (49)
Borrowings 8 (1,173) (280) (662)
(2,349) (1,016 (1,834)
---------- ---------- -------------
Non-current liabilities
Deferred income - grants (418) (298) (306)
Borrowings (426) (491) (410)
Deferred tax liabilities (254) (234) (254)
---------- ---------- -------------
(1,098) (1,023) (970)
---------- ---------- -------------
Total liabilities (3,447) (2,039) (2,804)
---------- ---------- -------------
Net assets 1,297 1,400 1,226
---------- ---------- -------------
EQUITY
Share capital 381 14 14
Retained earnings 812 876 722
Revaluation reserve 104 143 123
Capital redemption reserve - 367 367
Total equity 1,297 1,400 1,226
---------- ---------- -------------
Interim Statement of Changes in Equity
Share Retained earnings Revaluation Capital redemption Total equity
capital reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2017 14 795 162 367 1,338
Profit and total
comprehensive
income for the period 62 - 62
Revaluation realised
in period 19 (19) -
--------- ------------------ ------------ ------------------- -------------
At 30 June 2017 and
1 July 2017 14 876 143 367 1,400
--------- ------------------ ------------ ------------------- -------------
Loss and total
comprehensive
expense for the
period - (54) - - (54)
Dividends paid - (120) - - (120)
Revaluation realised
in period - 20 (20) - -
At 31 December 2017
and 1 January 2018 14 722 123 367 1,226
--------- ------------------ ------------ ------------------- -------------
Profit and total
comprehensive
income for the period - 71 - - 71
Bonus issue from
reserves 367 - (367) -
Revaluation realised
in period - 19 (19) -
------------
At 30 June 2018 381 812 104 - 1,297
--------- ------------------ ------------ ------------------- -------------
Note Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
Cash flow from operating
activities
Profit/(loss) for the period
before taxation 71 62 (13)
Adjustment for:
Depreciation of property,
plant and equipment 94 88 158
Profit on disposal of property, (1) - -
plant and equipment
Amortisation of intangible
assets 7 57 1 3
Finance costs 42 38 80
Changes in working capital:
Decrease/(increase) in inventories (44) 46 (35)
(Increase)/decrease in trade
and other receivables (461) (23) 88
Increase in trade and other
payables 116 341 599
--------------- ------------ -------------
Cash generated from operations (125) 553 880
Income tax received 35 - -
--------------- ------------ -------------
Net cash (used in)/from operating
activities (91) 553 880
--------------- ------------ -------------
Cash flow from investing
activities
Purchase of property, plant
and equipment (net of new
finance leases) (47) (40) (257)
Proceeds from sale of property, 1 - -
plant and equipment
Purchase of intangible assets
(net of related grant funding) 7 (324) (200) (402)
Net cash used in investing
activities (370) (240) (659)
--------------- ------------ -------------
Cash flow from financing
activities
Dividends paid to shareholders - - (120)
Interest paid (42) (38) (80)
Increase/(decrease) in invoice
discounting - (13) (129)
Proceeds from borrowings 493 - 515
Repayment of borrowings - (22) (241)
Repayment of capital element
of finance
Lease contracts (76) (30) (122)
----- ------ ------
Net cash from/(used in) financing
activities 375 (103) (177)
----- ------ ------
(Decrease)/increased in cash
and cash equivalents (86) 210 44
----- ------ ------
Net cash and cash equivalents
at beginning of the period 166 122 122
----- ------ ------
Net cash and cash equivalents
at end of period (all cash
balances) 80 332 166
----- ------ ------
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
GBP1,515,000 arose from RF and GBP231,000 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:
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
UK 536 354 702
Europe 1,230 1,191 1,983
Other 80 61 136
1,846 1,606 2 2,821
--------------- ------------ -------------
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:
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
Interim ordinary dividends
paid for the six months ended
30 June 2018 of nil (six months
ended 30 June 2017: nil, year
ended 31 December 2017: 1.26)
pence per share - - 120
----------------- -------------- -------------
6. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following data:
Earnings Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2018 June 2017 2017
GBP'000 GBP'000 GBP'000
Earnings for the purpose
of basic earnings per share
being net profit attributable
to the shareholders 71 62 8
--------------- ------------ -------------
Notes to the Interim Financial Information
7. Intangible fixed assets
Goodwill Patent Development Total
costs costs
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 January 2017 104 52 987 1,143
Additions - - 200 200
As at 30 June 2017 104 52 1,187 1,343
Additions - 3 316 319
As at 31 December 2017 104 55 1,503 1,662
Additions - 5 319 324
As at 30 June 2018 104 60 1,822 1,986
--------- ------------- ------------ --------
Amortisation or impairment
At 1 January 2017 - 13 - 13
Charge - 1 - 1
As at 30 June 2017 - 14 - 14
Charge - 2 - 2
As at 31 December 2017 - 16 - 16
Charge - 1 56 57
As at 30 June 2018 - 17 56 73
--------- ------------- ------------ --------
Carrying amount
As at 30 June 2017 104 38 1,187 1,329
--------- ------------- ------------ --------
As at 31 December 2017 104 39 1,503 1,646
--------- ------------- ------------ --------
As at 30 June 2018 104 43 1,766 1,913
--------- ------------- ------------ --------
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 GBP4.6m 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
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END
IR FKCDNABKDOCD
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