Final Results

Transense Technologies PLC
23 April 2001


 
Chairman's statement
 
 
I am pleased to be able to present the Company's financial results for the
year ended 31 December 2000, my first since being appointed Chairman of
Transense Technologies following the retirement of Graham Jarrett at the end
of last year.
 
Review 
 
The period under review has been significant for Transense Technologies. We
have signed a licence agreement with 3DMi for in-wheel tyre pressure
monitoring, another with ATMEL for the manufacture of Application Specific
Integrated Circuits (ASICs) and a further with SAWTEK Inc for the manufacture
of the Surface Acoustic Wave devices (SAWs). These last two licences are
particularly important, with both the ASICs and SAWs being fundamental
components for the exploitation of our technology.
 
The financial results for 2000, which included sales of £166,000, showed a
loss of £650,000 before adjustment for provisions, compared with a loss of
£484,000 for the previous year. This reflects the rising level of development
activity and associated operating costs with extra staff employed, greater
office costs and more professional fees. The closing balance sheet shows a
cash level of £1.7 million compared with £1.9 million at the start of the
year. Our funds were supplemented during the year by £1.1 million from share
options exercised by former investors and advisers, and £0.1 million of bank
deposit interest.
 
The Company also transferred its Employers' National Insurance Contributions
('ENIC') liability on share options to directors and employees. By their
shouldering the Company's ENIC liability on share options, Transense was
enabled to reverse the £200,000 provision, having received Inland Revenue
clearance for such a transfer. Following this and the subsequent approval at
the EGM in February, some directors and employees exercised their options
early, adding to the company's cash balance which, as I write this report,
stands at £2.1 million.
 
 
 
 
Development Update 
 
Since the signing of our licence agreement with ATMEL we have now received
the first ASIC prototypes for torque measurement. This will enable customers
for the electric power steering and driveline applications to begin carrying
out further tests on their systems shortly. Already one major European car
manufacturer, after earlier successful demonstrations, has asked for a
steering system incorporating our steering transducer to be tested in a
specific vehicle. A major supplier to the car manufacturers will also be
demonstrating a steering system incorporating our torque technology at the
Frankfurt car show in September.
 
Similar to the SmarTire licence signed in 1999, the 3DMi agreement is also
for producing tyre pressure monitoring systems. However, whereas SmarTire is
interested in a system connected to the back of a tyre valve, 3DMi is working
on systems which can be embedded in either composite or aluminium wheels.
These two applications licences are non-exclusive and, in addition to
up-front licence fees, will provide Transense with a royalty on all sales. I
can report that development programmes have already started, with both
companies expecting to bring the product to market within the next two years.
Already existing SmarTire battery technology has been selected for the new
Aston Martin and the Morgan.
 
As I am sure shareholders are aware, tyre pressure technology has been
particularly topical, with Firestone having to recall over seven million of
its tyres following over 200 fatal accidents. The United States Congress has
recently passed legislation which makes it obligatory for all new vehicles to
be equipped with tyre pressure monitoring technology from October 2003.
 
Our tyre pressure monitoring systems are the only ones that do not rely on
batteries, are of low cost and environmentally friendly, which provides our
product with an important advantage over any competitors in this significant
market. We have set up a new company called Wheelsure. The technology in this
company, which is a unique lock-nut method for wheel nuts, was introduced to
us approximately six months ago. It is an extension of our interest in wheels
and tyres, as we have been aware for sometime of the safety problems
associated with wheel nuts coming loose resulting, in some instances, in the
wheel falling off with potentially fatal consequences. Whilst the Wheelsure
product is mechanical by nature, the patents on this device are strong and
our engineers have already made a number of improvements and made further
patent applications. We believe the Wheelsure product lends itself to
licensing and that there is a large market for such a device, with trials
already having started with local authorities and large fleets.
 
Conclusion 
 
The year 2000 has been significant for Transense and we believe that our
future growth will be considerable. I would like to acknowledge however, that
our achievements to date would not have been possible without the enormous
contribution of our small but dedicated team led by its Chief Executive James
Perry. I would also like to give a special mention of Graham Jarrett and John
George, who both retired from the board at the end of last year and whose
guidance over the past 10 years has been integral in the development of this
Company. Peter Woods and I joined the Company because we believe it has great
potential and look forward to contributing to its growth.
 
 
Sir Dominic Cadbury
Chairman 22 April, 2001
 
 
 
 
                
                            PROFIT & LOSS ACCOUNT 
                      For the Year to 31 December 2000 
 

                                                                             
                                                             2000       1999 
                                                            £'000      £'000 
    Turnover                                                  166         76 
    Cost of Sales                                            (11)       (23) 
                                                                             
    Gross profit                                              155         53 
    Administration expenses                                 (721)      (711) 

    Operating Loss                                                           
    (including Long Term Provision no longer required                        
    £200,000 (1999, provision of £200,000))                 (566)      (658) 
    Net interest income/(expense)                            116        (26) 
    Loss on ordinary activities before taxation             (450)      (684) 
    Taxation                                                    0          0 
    Loss on ordinary activities after taxation              (450)      (684)  
    Dividends                                                   -          - 
    Loss per share:  Basic                                 (3.9p)      (8.8p) 
                     Fully diluted                         (3.5p)      (6.5p) 
 

                                                                              
                                 BALANCE SHEET                                
                              at 31 December 2000                             
                                                    2000                 1999 
                               £'000               £'000    £'000       £'000 
  Fixed Assets                                       934                  714 
  Current assets: Debtors       187                            54            
                  Cash        1,746                         1,927             
                              1,933                         1,981            
  Less: creditors falling                                                     
  due within one year           147                  414                      
  Net Current assets                               1,786                1,567  
  Total assets less                                2,720                2,281 
  current liabilities                                                         
  Provision for                                        0                (200) 
  liabilities and charges                                                     
  Total assets less total                          2,720                2,081  
  liabilities                                                                 
  Capital & reserves:                               
  Share capital                                    1,171                1,038   
  Share premium                                    3,443                2,487 
  Other capital reserve                                5                    5 
  Profit & Loss account                          (1,899)              (1,449) 
  Shareholders' funds                              2,720                2,081  
                 





                                  CASH FLOW STATEMENT
                          For the year to 31 December 2000

                                                          2000              1999
                                                £'000    £'000    £'000    £'000
Net cash outflow from operating activities              (1,095)           (159)
Returns on investments and servicing of finance             116            (26)
Taxation UK Corporation tax                                   0               0
Capital expenditure and financial investment              (266)           (199)
Acquisitions and disposals                                 (25)               0
                                                        (1,270)           (384)
Equity dividends paid                                         0               0
Cash outflow before financing                           (1,270)           (384)
Management of liquid resources
Payments to short term deposits                         (1,720)             (0)
Financing
Issue of new ordinary shares                  1,089                2,395
Short term loans                                  0       1,089     (87)  2,308
(Decrease)/Increase in cash in the year                 (1,901)           1,924

Reconciliation of operating loss to net cash outflow from
operating activities
Operating loss                                            (566)           (658)
Depreciation, amortisation and loss
on disposal of fixed assets                                  72              19
Net movement in current debtors
and creditors                                             (401)             280
(Decrease)/Increase in provision
for liabilities and charges                               (200)             200
                                                        (1,095)           (159)

Reconciliation of net cash flow to movement in net debt

(Decrease)/increase in cash in the year                 (1,901)          1,924
Net funds at 1 January                                    1,927              3
Net funds at 31 December                                     26          1,927

In addition £ 1,720,000 of cash (1999: £nil) was held on short term deposit.



 
 
 
Notes to the Preliminary Results for the Year 2000 
 
 
1. Post Balance Sheet Event 

At an Extraordinary General Meeting on 9 February 2001 an Ordinary Resolution
was passed which allowed the variation of certain options for ordinary shares
in the Company granted to directors and employees, to accelerate the first
date on which these options could be exercised. As a result 706,000 new
shares were issued on that date, with the Company receiving £684,000 being
the aggregate proceeds of the options exercised.
 
2. The Accounts 
The summary of results for the year to 31 December 2000 does not constitute
statutory accounts within the meaning of S240 of the Companies Act 1985. The
full statutory accounts, which will be available to shareholders shortly,
have not been reported on by the Company's auditors and have not been
delivered to the Registrar of Companies. Full accounts in respect of the year
to 31 December 1999 have been delivered to the Registrar of Companies and the
Audit report on these accounts was unqualified.
 
3. The Annual Report and the AGM 
The Annual Report and Accounts will be posted to shareholders at the
beginning of May, and the Annual General Meeting will be held on 1 June 2001.
 
 
 
 
For further information, please contact: 
 
Jim Perry, Chief Executive
Transense Technologies plc                          01869 238030
 
John Mellett
Graeme Bayley
HSBC                                               020 7336 9000
 
John Coyle
Clerkenwell Communications                         020 7713 0900
                                                   07770 687 370
                                                   07699 727 796 (pager)