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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Torotrak | LSE:TRK | London | Ordinary Share | GB0002922382 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.0705 | 0.051 | 0.09 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMTRK
RNS Number : 2245M
Torotrak PLC
27 July 2017
27 July 2017
Torotrak plc
("Torotrak", the "Company" or the "Group")
Preliminary Final Results for the year ended 31 March 2017
Torotrak (LSE: TRK), a developer and supplier of emissions reduction and fuel efficiency technology for vehicles, announces its Preliminary Final Results for the year ended 31 March 2017.
Chairman's Letter
Two years ago we set out to definitively realise the value of the Group's three technologies within a three year period and to return the maximum achievable value to our shareholders. We are now close to having completed this process and whilst the capabilities of the Company's technology have been proven, for reasons largely beyond our control, the commercial progress that the Board would like to have made has not been forthcoming. The clear strategic focus of the Board is to realise value from the Company's technology portfolio and other assets, be it through licence deals or actual sales of the assets and Intellectual Property ('IP') portfolio.
Adam's review set out below details the activities of the last 12 months and I would like to highlight the key achievements and some of the difficult decisions that we have taken during the year.
Performance Outcomes
In Flybrid, we have successfully continued our focus on developing products for the off-highway sector following the decision last year to stop our development for the bus sector (due to the pressures of continued low fuel prices and the adoption of electrification to achieve zero emissions within city centres). We now have a proven off-highway product, offering a family of flywheel energy recovery and storage modules (ERS) for manufacture in conjunction with our Tier 2 manufacturing partners. There is a growing market interest in these products, with at least one potential new customer expected to start their evaluations by the end of 2017. This result is encouraging but has been slow to achieve, due to the severe resource constraints the off-highway sector has faced over the last four to five years. These same pressures have also affected our development programmes with partners. The programme with the Energy Technologies Institute to demonstrate a transmission-connected KERS in a large mining truck application has been on hold for eight months but has recently re-started. Our first Advanced Propulsion Centre (APC) programme with JCB to demonstrate the use of an ERS on an excavator has now been completed and the results used to inform the development and launch of the new ERS product family. The start of our new APC programme with Caterpillar Inc. to demonstrate the integration of a low cost flywheel into off-highway machines and construction equipment had been delayed by seven months but commenced in May 2017.
In V-Charge, we successfully completed the product development to the point of being ready for licensing and productionisation by a Tier 1 partner. We had confirmation of the performance advantages and system benefits of V-Charge compared to other advanced boosting technologies endorsed by OEMs and Tier 1s through evaluation of our demonstration vehicles and on-engine test results. Their findings confirmed that V-Charge can enable significant engine downsizing and downspeeding, to help vehicle OEMs meet the challenging emissions regulations in a cost-effective and practical manner, which can also improve vehicle performance. However, we have done this at the same time as the passenger car industry reached a consensus to significantly accelerate the investment in the mass electrification of vehicle powertrains. The result has been to make it imperative for industry participants to focus all their available resources on technologies linked to vehicle electrification and has made these electric solutions increasingly more competitive as the resulting high volume projections and development focus have driven down forecast costs. Consequently, we now believe that the investment required by Tier 1s to productionise and commercialise V-Charge for mass market passenger cars is unlikely to advance any further. Whilst continuing to seek to find buyers for this technology, the Board took the decision in January 2017 to suspend further engineering development activity.
Lastly, as previously reported, IVT/CVT has not been a key focus for the Group over this time with our licensees remaining largely inactive, with the Board's approach being to try and find buyers for the Group's IVT/CVT IP and tangible assets with a view to realising value wherever possible.
Impact on our Business
The decisions taken by our Tier 1 and OEM partners not to take V-Charge forwards into production coupled with the lack of progress from our IVT/CVT licensees, led us to the inevitable but painful decision that we must cease all further investment in the traditional Torotrak variable transmission-related technologies. As a result, we started a consultation process in January 2017 to close the Leyland site which was the home of this technology and this process is substantially completed with the site to be vacated by the end of 2017. Our aim has been to minimise the impact on our licensees, whilst realising any possible residual value for our shareholders. We have made redundant all the employees based at Leyland and the majority have now left the business, except for a small team who are completing customer engineering programmes and supporting the sale of the IP and assets. We expect over the coming months to complete the sale and/or licensing of the technology and associated IP portfolio and sell the remaining physical assets such as test rigs and demonstrator vehicles. The proceeds from this are being used to off-set the closure costs.
We have continued investment in, and business development efforts within, the Flybrid business unit in Silverstone and this has brought some success with the development of the ERS modules for the off-highway market and growing interest from OEM customers. However, as noted above, the difficult conditions in the off-highway market have delayed the product development cycle and pushed out the anticipated market launch.
The Board is exploring a range of possible options to realise the best value for shareholders including licensing or selling the Group's IP and assets and/or providing additional funding to further develop ERS.
Financial Results
We closed the financial year with GBP5.1m in cash as anticipated, which was less than originally hoped for at the start of the year as the targeted licensing and other commercialisation events did not materialise as described above. Consequently, the Company must now generate additional cash inflows during the current financial year to fund the operating costs of the Group including the ongoing development and other costs of the Flybrid business and the costs of closing the Leyland site.
The operating loss for the year before intangible asset amortisation (know-how) and exceptional items was GBP7.3m, in line with the previous year (2016: GBP7.4m). The Group recorded exceptional costs in the year of GBP13.5m (2016: GBP6.1m), of which GBP12.5m (2016: GBP5.4m) was non-cash and non-cash annual intangible asset amortisation (know-how) of GBP0.8m (2016: GBP0.8m), resulting in a loss attributable to shareholders of GBP19.7m (2016: GBP13.5m). The exceptional costs in the year include: GBP2.0m (2016: GBP0.6m) of restructuring and other costs including the closure of the Leyland site and sale of IVT/CVT assets; and a GBP11.4m non-cash impairment of the Group's know-how and goodwill assets. This impairment charge is required under International Financial Reporting Standards to reflect the current uncertainty created by the Company's financial position and whether it can obtain the necessary funding to enable the Group to continue to operate these assets over the long term. Impairing the value of the assets, as required by the Accounting Standards, reflects the current funding uncertainty and does not reflect the Board's assessment of the value of the technology which has a wide range of potential values depending on the success (or otherwise) of the different value realisation options being pursued which are set out above.
Note 2 to this statement provides further details on the basis of preparation of the financial statements and the material uncertainty created by the Company's financial position, which may cast significant doubt on the Group's ability to continue as a going concern. Adam's review below provides further details on the financial performance of the Group during the year.
Board and People
I would like to thank all of our colleagues for their hard work and dedication during the last twelve months. This has been a difficult year; our number of employees has reduced from 76 at the close of last year to 33 now.
The staff at Leyland have been exemplary in their professionalism and commitment to the business. I would like to wish them every success in the next phase of their careers, in many cases in new industries and with some continuing to push to see the Torotrak IVT/CVT technology enter production with our licensees.
For the staff at Silverstone, I wish to thank them for all their hard work and to wish them every success at this exciting period in Flybrid's growth.
Given the size of the Company and the need to minimise costs we are reducing the size of the executive team and the Board. In particular, we have agreed that John McLaren will step down from the Board with immediate effect and that Eric Alström will leave the Board after the AGM. I would like to thank them both for the support that they have given the Board.
Finally, I must thank our small corporate team and Board for their commitment and their ongoing support whilst we restructure the Group.
Nick Barter
Chairman
27 July 2017
CEO's Review
This year has seen us focussed primarily on securing value from our technologies and managing the impact of market changes that have worked against us. Despite the progress made within Flybrid in the off-highway sector and our technical successes, the overall outcome has been very disappointing. The value we have been able to realise has fallen far short of the potential we saw in 2015.
Electrification Revolution
The passenger car industry appeared to largely conclude during the second half of 2016 that it will collectively drive the partial and then often complete electrification of the powertrain over the coming years at a pace that was generally unanticipated even 12 months previously. This conclusion has decisively impacted our business in two notable ways:
-- Forecasts of the costs of electrification solutions have fallen rapidly, despite misgivings about what will actually be achieved, which made our mechanical solutions appear less attractive, especially V-Charge; and
-- CEOs at Tier 1s and OEMs have directed their engineering and business development resources to be focussed, often exclusively, on electrical solutions as they seek to catch-up with this shift and/or realign their business away from a dependence on mechanical solutions.
The impact on us has been stark. For V-Charge it meant that, despite positive technical and performance evaluation results from our Tier 1 and OEM partners, there were no resources available at either OEMs or Tier 1s to work further on productionising the technology. Whilst a number of promising conversations were entered into on our V-Charge technology, unfortunately the Tier 1s and OEMs concluded that it did not fit with their new priority of vehicle electrification. And at Flybrid, a promising passenger car KERS solution which we had developed with an OEM was stopped, despite offering a higher CO2 saving per Euro on-cost than the competing electric hybrid alternative, and a performance car programme on which we were nominated in preference over a battery-based KERS was also stopped.
Continued Low Oil Prices
Oil prices have recovered from their record low in February 2016 but have plateaued at around the $45/50 per barrel level. This situation looks set to continue. The result is continued pressure on energy saving solutions such as ours to either increase fuel savings and/or reduce cost. We have been successful in doing this, especially on our ERS product family which now costs 35% less than anticipated two years ago but this has further delayed our product launches.
The off-highway sector has lived through a number of difficult years, caused in particular by low economic growth, excess capacity and weakness in the key resources sectors of oil and mining caused by low commodity prices. Data provided by Off-highway Research Limited shows that the off-highway sector peaked in 2011 with 1,024,939 units being produced and declined for five consecutive years to 2016 when 650,133 units were manufactured. The result has been a squeeze on investment in new technologies and product development which still continues today despite a more promising outlook as the unwinding of excess inventory holds back increases in production. This has slowed the pace of development at Flybrid. Development programmes have tended to slip and so despite good levels of interest from multiple OEMs we have not yet seen these translated into active product launch programmes. Looking forward, Off-highway Research Limited is forecasting global production to recover to around 810,000 units in 2020 and we see Flybrid benefitting from this trend which will hopefully enable OEMs in the sector to increase their investments in new products and technologies from the very low levels experienced over the last few years.
Cash Constraints
As a technology development business with limited recurring revenues, we have to live within our constrained cash resources whilst trying to invest at a sufficiently fast rate so as not to miss our market opportunities. The delays in progress at Flybrid and the ultimately unsuccessful attempt to license/sell the V-Charge technology have worsened this situation and have forced us to slow down activities across the board to conserve cash. As noted elsewhere, we have taken the decision to focus on delivering shareholder value from KERS which is addressing the off and on-highway markets in which mechanical solutions remain attractive, and we will continue to work to unlock value from the Company's IVT/CVT portfolio and V-Charge. The Board remains determined to realise the value from our extensive IP portfolio and attractive commercial opportunities.
Progress and Outlook for Flybrid
The Flybrid business has made significant progress during the last year. The business has developed a clear, product driven strategy for the off-highway market and this has been well received by prospective customers. The origin of the product is the unit developed with Advanced Propulsion Centre (APC) funding and with JCB as our OEM partner over the last 4 years (the APC programme was completed in April 2017). The product line now comprises a family of modular Energy Recovery and Storage (ERS) units which share common parts. The units can be integrated into a machine using standard off-the-shelf hydraulic pumps or electric motors. The result is a low cost and flexible solution that can be used across a very broad range of machine types, from wheeled loaders to excavators and in machine sizes ranging from fork lift trucks to open cast mining equipment. There is growing market interest in these products, with at least one potential new customer expected to start their hardware evaluation by the end of 2017 and we are currently manufacturing demonstration units of the production ready designs for the product.
Flybrid has also been developing key customer relationships, notably with three major externally funded programmes in hand:
-- The Energy Technologies Institute (ETI) programme to demonstrate a transmission integrated KERS unit on an off-highway truck with the OEM programme partner and with the intention of being equally applicable to on-highway trucks;
-- The new APC funding programme with Caterpillar Inc., to develop a transmission integrated flywheel for off-highway machines and construction equipment; and
-- The new EU Horizon 2020 funded programme with Valeo and Volvo Cars to demonstrate an electro-mechanically integrated KERS unit for passenger cars.
We have therefore seen two significant developments with regards to Flybrid's strategy:
-- Flybrid can become a product-based manufacturing business (in collaboration with Tier 2 manufacturing partners); and
-- With its highly simplified products and lower expected volumes in off-highway (compared to previous on-highway targets), Flybrid does not necessarily require a major Tier 1 licensee as a partner to enter its target markets.
Consequently, Flybrid has the potential to be developed into a business supplying products (in collaboration with manufacturing partners) and hence reduce the reliance on licensing as the route to market, which the experience of the last 20 years has shown to be very difficult. However, Flybrid will require significant further investment to realise this strategy and we are actively searching for partners who can provide this as well as reviewing alternative solutions from licensing/sale of the IP and assets.
Torotrak IVT/CVT
In 2015 we decided to focus all IVT/CVT related engineering resources on the V-Charge pressure charging technology and we successfully delivered this technology as ready for licensing in summer 2016, at which point we launched a formal licensing/sale process. The process involved the presentation of the system to 15 OEMs and Tier 1 engine boosting product manufacturers, a significant number of whom conducted detailed technical and commercial evaluations. We announced the results of these evaluations in January 2017, which was that whilst the product performed well and met or exceeded all the performance targets, none of the parties wished to take it forward into production, as they were now going to focus exclusively on electrical alternatives, in line with their new focus on vehicle electrification. Most of those who did not evaluate the product also cited their reason as being that they intended to focus on electrical solutions.
As a result of the move towards investment into electric solutions by the automotive industry which impacted our ability to deliver value from V-Charge, together with the slow progress being made by our licensee base towards launching IVT/CVT transmissions, mainly due to the low oil prices and weak off-highway market conditions, we concluded that we must cease all further investment in this technology area. Accordingly, we announced in January 2017 our plan to close the Leyland site and the subsequent redundancy of all staff employed at the site. Since that date we have been implementing the closure plan, in a manner to maximise the value we could realise for the assets, whilst minimising any further expenditure. We are on track to complete the closure of the site by the end of 2017 and we expect that the sale/licensing of the assets and IP will be used to offset the full closure costs arising from redundancies and the termination of the lease on the building. The actions we have taken or have in hand include:
-- 40 employees have left the business by July 2017 and a further 3 are under notice of redundancy and will leave at the start of September;
-- We have nearly concluded final licensing arrangements with our licensees; -- We are expecting to sell the patent base and assets in the remainder of the year; and -- We expect to see the site closed by the end of 2017.
Executive management and Board
We are also in the process of simplifying and shrinking the executive management team to align it with the new strategy. Its size will be reduced by the date of the Annual General Meeting from five full-time members to a full-time Managing Director for Flybrid reporting to me as Group CEO and supported by Rex Vevers as Group CFO. I am very pleased to announce that Steve Hughes has accepted the role of Managing Director of Flybrid. Steve joined Torotrak three years' ago and has since then been leading the development of Flybrid product-line and customer relationships in the off-highway sector. Steve joined us from JCB where he was Engineering Director of the Transmissions Division.
Financial
For the current financial year, revenue was GBP1.5m (2016: GBP1.2m). Gross profit for the year rose significantly to GBP0.8m from GBP0.1m in the previous year, reflecting the increase in customer-funded development programmes, particularly linked to the opportunities for the Flybrid technology in the off-highway market.
The net cash operating costs for the year were GBP6.7m, representing an increase of 6% over the previous financial year. After adjusting for the additional costs incurred in the year involved in marketing and trying to sell V-Charge, the underlying net cash operating costs were in line with the previous year, retaining the 20% year-on-year reduction achieved last financial year. Total operating costs (including non-cash costs such as depreciation, but excluding intangible asset amortisation (know-how) and exceptional items) increased from GBP7.5m to GBP8.1m.
The adjusted operating loss before intangible asset amortisation (know-how) and exceptional items for the current financial year was GBP7.3m (2016: GBP7.4m). The reduction reflects the increase in gross profit partly offset by the increase in net operating costs. After deducting non-cash intangible asset amortisation (know-how) costs of GBP0.8m (2016: GBP0.8m) and exceptional costs of GBP13.5m (2016: GBP6.1m), of which GBP12.5m (2016: GBP5.4m) was non-cash, the operating loss for the year was GBP21.5m (2016: GBP14.3m).
In accordance with Internal Financial Reporting Standards ('IFRS') the Group is required to assess the in-use carrying value of the intangible assets (know-how) and goodwill on an annual basis (see notes 6 and 7 for further details). Due to the uncertainty relating to the Group's ongoing funding position, under IFRS the Board has been required to recognise a non-cash impairment charge of GBP11.4m (2016: GBPnil) to write down to nil the in-use carrying value of the intangible assets (know-how) and goodwill. This impairment charge reflects the uncertainty of the Group obtaining the necessary funding to enable it to continue to operate these assets over the long term. Impairing the value of the assets reflects the current funding uncertainty and does not reflect the Board's assessment of the value of the technology which has a wide range of potential values depending on the success (or otherwise) of the different value realisation options being pursued. The other elements of the exceptional charge include a GBP1.1m (2016: GBPnil) non-cash cost of writing down the value of the IVT/CVT related assets to their estimated realisable value; GBP0.9m (2016: GBP0.5m) being the estimated cash costs of restructuring the business including terminating the Leyland lease obligations and making all the staff redundant. In the previous financial year, the exceptional charge also included a GBP5.0m non-cash cost to restructure the Flybrid acquisition agreement and a GBP0.4m non-cash provision against the permanent diminution in the long term value of the investment in Rotrex A/S.
Net finance cost was GBP0.2m (2016: GBP0.1m) reflecting a full year's interest charge on the five year term loan. The income tax credit of GBP1.9m (2016: GBP0.8m) includes a research and development cash tax credit of GBP0.1m (2016: GBP0.5m) and a non-cash deferred tax credit of GBP1.8m (2016: GBP0.3m) representing the tax effect of the intangible asset (know-how) and goodwill impairment charge. The loss for the year attributable to shareholders was GBP19.7m (2016: GBP13.5m), the increase being largely due to the one-off non-cash impairment charge.
Net cash used in operating activities during the year fell by GBP1.6m to GBP5.3m. The decrease was principally due to the receipt of a GBP0.4m tax credit that was delayed from March 2016 into the current financial year and a GBP0.8m favourable movement in working capital. Net cash used in investing activities was in line with the previous year at GBP0.6m. Net cash used in financing activities was GBP0.3m, being interest payments on the five year term loan and repayments on the outstanding equipment lease liabilities, compared to a net cash inflow in the previous year of GBP11.3m (being the proceeds from the issue of equity net of repayment of the vendor loan notes).
The closing cash balance was GBP5.1 million (2016: GBP11.3 million). The outstanding balance on the five year term loan was GBP1.8 million (2016: GBP1.8 million).
Outlook for the Group
We are planning to implement major changes in the Group to make its size and cost base appropriate to the revised focus of the business. These actions include:
-- Completing the process to realise cash from the IVT/CVT technology and pursuing opportunities to realise value from the other IP and assets within the Group;
-- Pursuing options to fund the development and realise value from Flybrid; -- Reducing the size of the Board to 2 non-executive directors and 2 executives; and -- Completing the closure of the Leyland site by the end of 2017.
Our Staff
I would like to thank all of our staff for their hard work and passion during the last year and for the professionalism they have shown in adversity. To all the former staff at Leyland, I wish them all well in the new paths they are either already taking or will start upon in the near future. To the staff at Flybrid, I congratulate them on their successes and look forward to our continuing journey together. And I thank the members of the Torotrak plc Board for their leadership and guidance through the last twelve months and in particular I thank those who will be leaving the Board for their service to the company.
Adam Robson
Chief Executive Officer
27 July 2017
Financial Statements 2017
Consolidated Income Statement
Hot Features
Premium
Group Group
For the year ended 31 March 2017 2016
Notes GBP000 GBP000
---------------------------------- ------ --------- ---------
Revenue 5 1,456 1,231
Direct costs 5 (645) (1,133)
---------------------------------- ------ --------- ---------
Gross profit 811 98
Operating loss 5 (21,490) (14,255)
Operating loss before intangible
asset amortisation (know-how)
and exceptional items (7,263) (7,433)
Intangible asset amortisation
(know-how) 7 (767) (767)
Exceptional items 6 (13,460) (6,055)
---------------------------------- ------ --------- ---------
Operating loss (21,490) (14,255)
---------------------------------- ------ --------- ---------
Net finance costs (164) (55)
Loss before tax (21,654) (14,310)
Income tax credit 9 1,944 812
---------------------------------- ------ --------- ---------
Loss for the year attributable
to the owners of the Parent
Company (19,710) (13,498)
---------------------------------- ------ --------- ---------
Basic and diluted loss per share
(pence) 14 (3.63) (2.93)
---------------------------------- ------ --------- ---------
There is no other comprehensive income in the current or prior year and therefore no separate Statement of Other Comprehensive Income is required (2016: GBPnil).
Balance Sheet
Group Group
2017 2016
As at 31 March Notes GBP000 GBP000
------------------------------- ------ --------- ---------
Assets
Non-current assets
Intangible assets 7 1,887 14,576
Property, plant and equipment 8 832 1,379
Investments 3 3
Total non-current assets 2,722 15,958
------------------------------- ------ --------- ---------
Current assets
Inventories 56 221
Trade and other receivables 11 709 964
Tax receivable 129 779
Cash and cash equivalents 5,121 11,305
------------------------------- ------ --------- ---------
Total current assets 6,015 13,269
------------------------------- ------ --------- ---------
Total assets 8,737 29,227
------------------------------- ------ --------- ---------
Liabilities
Non-current liabilities
Finance lease obligations 12 (74) (190)
Deferred tax 10 - (1,809)
Borrowings 12 (1,811) (1,811)
------------------------------- ------ --------- ---------
Total non-current liabilities (1,885) (3,810)
Current liabilities
Finance lease obligations 12 (116) (122)
Trade and other payables 12 (2,429) (1,993)
Total current liabilities (2,545) (2,155)
------------------------------- ------ --------- --------- Total liabilities (4,430) (5,925) ------------------------------- ------ --------- --------- Net assets 4,307 23,302 ------------------------------- ------ --------- --------- Capital and reserves Issued share capital 13 30,355 30,319 Share premium 23,851 23,851 Other reserves (226) (194) Accumulated loss (49,673) (30,674) ------------------------------- ------ --------- --------- Total equity attributable to equity holders of the Parent Company 4,307 23,302 ------------------------------- ------ --------- ---------
Statements of Changes in Equity
Group
Group and Group
and Parent and
Parent Company Parent
Company share Company Group
share premium other accumulated Total
capital account reserves loss equity
GBP000 GBP000 GBP000 GBP000 GBP000
--------------------------- --------- --------- ---------- ------------- ---------
Balance at 1 April
2015 27,629 9,140 (244) (17,541) 18,984
---------
Loss for the period - - - (13,498) (13,498)
--------------------------- --------- --------- ---------- ------------- ---------
Total comprehensive
expense - - - (13,498) (13,498)
---------
Transfer of shares
under share incentive
plan - - 50 (19) 31
Issue of shares
to Allison Transmissions
Inc. 174 1,046 - - 1,220
Issue of shares
to vendors of Flybrid
Automotive Limited 714 4,286 - - 5,000
Issue of shares
as a result of
the Placing and
Open Offer and
Firm Placing (net
of costs) 1,802 9,379 - - 11,181
Share-based payment
charge - - - 384 384
---------
Total transactions
with owners 2,690 14,711 50 365 17,816
--------------------------- --------- --------- ---------- ------------- ---------
Balance at 31 March
2016 30,319 23,851 (194) (30,674) 23,302
------------- ---------
Loss for the period - - - (19,710) (19,710)
--------------------------- --------- --------- ---------- ------------- ---------
Total comprehensive
expense - - - (19,710) (19,710)
---------
Transfer of shares
under share incentive
plan - - 4 - 4
Share-based payment
charge - - - 711 711
Issue of shares
under share incentive
plan 36 - (36) - -
------------- ---------
Total transactions
with owners 36 - (32) 711 715
--------------------------- --------- --------- ---------- ------------- ---------
Balance at 31 March
2017 30,355 23,851 (226) (49,673) 4,307
--------------------------- --------- --------- ---------- ------------- ---------
Statements of Cash Flows
Group Group
2017 2016
For the year ended 31 March Notes GBP000 GBP000
-------------------------------------- ------ --------- ---------
Cash flows from operating activities
Loss for the year (19,710) (13,498)
-------------------------------------- ------ --------- ---------
Adjustments for:
Depreciation 8 416 562
Amortisation 7 969 950
Non-cash exceptional cost in
relation to the restructure
of the Flybrid acquisition
agreement 6 - 5,000
Impairment of investment in
Rotrex A/S 6 - 270
Creation of provision against
Rotrex A/S loan 6 - 147
Impairment of assets 6 12,512 -
Net finance costs 164 55
Loss on disposal of plant and
equipment - 1
Loss on disposal of patents - 70
Taxation 9 (1,944) (812)
Decrease in inventories 54 162
Decrease in trade and other
receivables 257 52
Increase/(decrease) in trade
and other payables 492 (446)
Charge for equity-settled employee
share schemes and bonuses 711 384
-------------------------------------- ------ --------- ---------
Cash used in operations (6,079) (7,103)
Tax received 785 156
-------------------------------------- ------ --------- ---------
Net cash used in operating
activities (5,294) (6,947)
-------------------------------------- ------ --------- ---------
Cash flows from investing activities
Acquisition of property, plant
and equipment (354) (184)
Acquisition of intangible assets
(patents) (252) (450)
Net cash used in investing
activities (606) (634)
-------------------------------------- ------ --------- ---------
Cash flows from financing activities
Proceeds from the issue of
share capital (net of costs) - 12,432
Net finance costs (162) (45)
Repayment of borrowings 12 - (1,000)
Net hire purchase finance (122) (117)
Net cash (used)/generated in
financing activities (284) 11,270
-------------------------------------- ------ --------- ---------
Net (decrease)/increase in
cash and cash equivalents (6,184) 3,689
Cash and cash equivalents at
start of year 11,305 7,616
Cash and cash equivalents at
end of year 5,121 11,305
-------------------------------------- ------ --------- ---------
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 2016 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 2017 will be posted to Shareholders and made available on Torotrak's website in July 2017.
2. Basis of preparation
This announcement was approved by the Board of Directors on 26 July 2017. The financial information in this announcement does not constitute the Group's statutory accounts for the years ended 31 March 2017 or 31 March 2016 but it is derived from those accounts. Statutory accounts for the year ended 31 March 2016 have been delivered to the Registrar of Companies, and those for 31 March 2017 will be delivered after the Annual General Meeting. The Auditors have reported on the accounts for the year ended 31 March 2016; 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 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 (July 2017).
The consolidated Financial Statements from which these results are extracted have been prepared on a going concern basis, as the Directors have considered the trading and cash flow forecasts for the Group for a period of at least 12 months from the date of approval of this report and after taking into account the anticipated proceeds from asset sales / licences have concluded that the Group would have sufficient resources to remain in operation for a period of at least twelve months from the date that the Financial Statements were approved.
The ability of the Group to realise funds from the sale of property, plant and equipment, and the sale/licensing of intangible assets and intellectual property, is outside the full control of the Group and, as a result, the Directors cannot be certain that it will be successfully completed within the next twelve months. If the sale of property, plant and equipment, and the sale/licensing of intangible assets and intellectual property, is unsuccessful or is significantly delayed, the Group would have a very limited period of time in which to take remedial action to address its cash flow and solvency requirements. The Directors would need to significantly reduce discretionary spend and would immediately endeavour to conserve cash and seek to raise further funds, if possible. 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. Accordingly a material uncertainty exists which may cast significant doubt about the Group's ability to continue as a going concern.
The Auditors' Report on the statutory financial statements for the year ended 31 March 2017 will contain reference to the significant uncertainty disclosed above
3. Accounting policies
The accounting policies adopted in the preparation of this financial information are consistent with those adopted for the year ended 31 March 2016, 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 standards have been adopted by the Group for the first time for the financial year beginning on 1 April 2016:
-- Annual improvements 2014 (effective for annual periods beginning on or after 1 January 2016)
-- Amendment to IFRS 11, 'Joint arrangements' on acquisition of an interest in a joint operation', (effective for annual periods beginning on or after 1 January 2016)
-- Amendments to IAS 16, 'Property, plant and equipment' and IAS 41, 'Agriculture' on bearer plants (effective for annual periods beginning on or after 1 January 2016)
-- Amendment to IAS 16 , 'Property, plant and equipment' and IAS 38,'Intangible assets', on depreciation and amortisation (effective for annual periods beginning on or after 1 January 2016)
-- Amendments to IAS 27, 'Separate financial statements' on equity accounting (effective for annual periods beginning on or after 1 January 2016)
-- Amendments to IFRS 10, 'Consolidated financial statements' and IAS 28, 'Investments in associates and joint ventures' on applying the consolidation exemption (effective for annual periods beginning on or after 1 January 2016)
-- Amendments to IAS 1, 'Presentation of financial statements' disclosure initiative (effective for annual periods beginning on or after 1 January 2016)
(b) Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group.
The following new standards and amendments to standards, which have been issued but are not yet effective, and have not been early adopted by the Group:
-- Amendments to IAS 7, Statement of cash flows on disclosure initiative (effective for annual periods beginning on or after 1 January 2017)
-- Amendments to IAS 12, 'Income taxes on Recognition of deferred tax assets for unrealised losses (effective for annual periods beginning on or after 1 January 2017)
-- Amendments to IFRS 2, 'Share based payments', on clarifying how to account for certain types of share-based payment transactions (effective for annual periods beginning on or after 1 January 2018)
-- IFRS 9, 'Financial Instruments' (effective for annual periods beginning on or after 1 January 2018)
-- IFRS 15, 'Revenue from contracts with customers' (effective for annual periods beginning on or after 1 January 2018)
-- Amendments to IFRS 15, 'Revenue from contracts with customers' (effective for annual periods beginning on or after 1 January 2018)
-- IFRS 16, 'Leases' IFRS 15, 'Revenue from contracts with customers' (effective for annual periods beginning on or after 1 January 2019)
-- Amendments to IFRS 4, 'Insurance contracts' regarding the implementation of IFRS 9, 'Financial instruments' (effective for annual periods beginning on or after 1 January 2018)
-- Amendment to IAS 40, 'Investment property', relating to transfers of investment property (effective for annual periods beginning on or after 1 January 2018)
-- Annual improvements 2014-2016 (effective for annual periods beginning on or after 1 January 2018)
-- IFRIC 22, 'Foreign currency transactions and advance consideration' (effective for annual periods beginning on or after 1 January 2018)
The Group is currently assessing the impact these new standards and amendments to existing standards may have on the Group Financial Statements. The amendment to IFRS 15, 'Revenue from contracts with customers', may impact the timing of revenue recognition however due to the varying nature of the activities it is not possible to determine the impact going forward.
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 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 reporting
Year ended 31 March 2017
Income
from Development
Engineering licence activities
services agreements (i) Total
GBP000 GBP000 GBP000 GBP000
------------------------------- -------------- ------------ -------------- ---------
Revenue (by technology)
IVT 292 - - 292
KERS 1,100 - - 1,100
V-Charge and other 64 - - 64
1,456 - - 1,456
Direct costs (645) - - (645)
------------------------------- -------------- ------------ -------------- ---------
Gross profit 811 - - 811
Other operating costs - - (4,834) (4,834)
------------------------------- -------------- ------------ -------------- ---------
Segmental profit/(loss) 811 - (4,834) (4,023)
Other operating costs
not allocated to segments
before intangible asset
amortisation (know-how)
and exceptional items (3,240)
Intangible asset amortisation
(know-how) (767)
Exceptional items (13,460)
------------------------------- -------------- ------------ -------------- ---------
Operating loss (21,490)
------------------------------- -------------- ------------ -------------- ---------
Note:
(i) Development activities include research and the creation of intellectual property. Some technology information has been combined where the values are deemed immaterial.
(ii) There were no transactions between segments.
Year ended 31 March 2016
Income
from Development
Engineering licence activities
services agreements (i) Total
GBP000 GBP000 GBP000 GBP000
------------------------------- -------------- ------------ -------------- ---------
Revenue (by technology)
IVT 79 100 - 179
KERS 982 - - 982
V-Charge and other 70 - - 70
1,131 100 - 1,231
Direct costs (1,131) (2) - (1,133)
------------------------------- -------------- ------------ -------------- ---------
Gross profit - 98 - 98
Other operating costs - - (4,675) (4,675)
------------------------------- -------------- ------------ -------------- ---------
Segmental profit/(loss) - 98 (4,675) (4,577)
Other operating costs
not allocated to segments
before intangible asset
amortisation (know-how)
and exceptional items (2,856)
Intangible asset amortisation
(know-how) (767)
Exceptional items (6,055)
------------------------------- -------------- ------------ -------------- ---------
Operating loss (14,255)
------------------------------- -------------- ------------ -------------- ---------
Note:
(i) Development activities include research and the creation of intellectual property. Some technology information has been combined where the values are deemed immaterial.
(ii) There were no transactions between segments.
Significant customers
The following revenues are attributable to significant customers:
Group Group
2017 2016
GBP000 GBP000
-------------------------- -------- --------
Undisclosed customer (i) - 100
Undisclosed customer - 613
Undisclosed customer 866 130
Undisclosed customer - 150
Undisclosed customer 270 -
-------------------------- -------- --------
Note: (i) The revenue from this undisclosed customer has been generated from licence fees.
The revenue from the remaining significant customers has been generated from engineering services.
The chief operating decision maker does not review measures of assets, liabilities, depreciation or amortisation at an operating segment level and therefore no disclosures have been presented. The results, assets and liabilities of all segments arise in the Group's country of domicile, being the United Kingdom.
6. Exceptional items
Group Group
2017 2016
GBP000 GBP000
-------------------------------------------- -------- --------
Provision for impairment - Intangible 12,036 -
assets
Provision for impairment - Property, 365 -
plant and equipment
Impairment provision - Inventories 111 -
Restructuring provision - severance
related 227 530
Provision for lease obligations 692 -
Share issue in relation to the restructure
of the Flybrid acquisition agreement - 5,000
Impairment of investment in Rotrex
A/S - 270
Provision against the loan to Rotrex
A/S - 147
Restructuring costs - one-off legal
and other costs 29 108
-------------------------------------------- -------- --------
Total exceptional items 13,460 6,055
-------------------------------------------- -------- --------
In January 2017 the Board announced a strategic refocus of the Group. This resulted in the cessation of operations at the Group's Leyland site, the suspension of further development on V-Charge and the commencement of a process to seek buyers for the IVT/CVT technology. The Directors have also identified a material uncertainty over the Group's ability to continue as a going concern and over its viability over the next two years and therefore the ability of the Group to continue to finance the ongoing product development and launch the products containing the technology into the market (see note 7).
An impairment provision has been recorded against the intangible assets, property, plant and equipment and inventories which reflects the uncertainty that the Group can continue to finance its operations and realise value from the continued use of these assets by the Group. Impairment provisions are judgemental and hence will be reviewed for their validity as circumstances change. (See also notes 7 and 8).
The provision for lease obligations represents the estimated costs to be incurred in order to meet the Group's obligations under the property lease, upon vacation of the Leyland site.
On 22 July 2015 the Group received Shareholder approval to restructure the acquisition agreement with the vendors of Flybrid Automotive Limited and as such a one-off settlement was agreed with the vendors by way of issuing new Ordinary Shares in the Group to the value of GBP5 million. The vendors of Flybrid Automotive Limited, Jon Hilton (Non-Executive Director) and Doug Cross (Chief Technology Officer), received shares to the value of GBP3.5 million and GBP1.5 million respectively as part of the settlement. The GBP5 million has been treated as an exceptional item.
The investment in Rotrex A/S and the loan due from Rotrex A/S have been written down due to the uncertainty of the value of the net assets of Rotrex A/S and also the recoverability of the loan.
7. Intangible assets
Patents Know-how Goodwill Total
GBP000 GBP000 GBP000 GBP000
---------------------------- -------- --------- --------- -------
Cost
At 1 April 2015 3,214 11,499 2,300 17,013
Additions in year 375 - - 375
Disposals in year (36) - - (36)
At 31 March 2016 3,553 11,499 2,300 17,352
Additions in year 316 - - 316
At 31 March 2017 3,869 11,499 2,300 17,668
---------------------------- -------- --------- --------- -------
Accumulated Amortisation
At 1 April 2015 900 892 - 1,792
Charge for the year 183 767 - 950
Disposal in the year (6) - - (6)
---------------------------- -------- --------- --------- -------
At 31 March 2016 1,077 1,659 - 2,736
Charge for the year 202 767 - 969
---------------------------- -------- --------- --------- -------
At 31 March 2017 1,279 2,426 - 3,705
---------------------------- -------- --------- --------- -------
Asset impairment provision
At 1 April 2015 and 31
March 2016 40 - - 40
Creation of provision (see
note 6) 663 9,073 2,300 12,036
---------------------------- -------- --------- --------- -------
At 31 March 2017 703 9,073 2,300 12,076
Net book value
At 31 March 2017 1,887 - - 1,887
---------------------------- -------- --------- --------- -------
At 31 March 2016 2,436 9,840 2,300 14,576
---------------------------- -------- --------- --------- -------
At 1 April 2015 2,314 10,607 2,300 15,221
---------------------------- -------- --------- --------- -------
The carrying value of goodwill, patents and know-how, and any 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 or provided for; with the resulting costs being charged to the Income Statement. Having completed the 2017 annual impairment review, the Group has not abandoned any patents (2016: GBP30k) but has created an additional impairment provision of GBP663k (2016: GBP40k) for patents to be abandoned once Board approval has been obtained and to recognise the change in market conditions and opportunities for its V-Charge, IVT and CVT technologies and the impact this has had on the carrying value of its patent portfolio. This additional provision has been treated as an exceptional item in these Financial Statements.
The Directors have considered the carrying value of the Group's remaining patent assets related to the Group's IVT / CVT and V-charge technologies and believe their value to be supported by offers and letters of interest received from parties interested in acquiring the assets from the Group.
Following the restructure of the Flybrid acquisition agreement at the General Meeting held on 22 July 2015 the vendors of Flybrid Automotive Limited were granted a 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 due to the vendors.
Impairment review - Goodwill and know-how
While the Group's know-how assets related to the Flybrid business are amortised annually, given the uncertainty relating to the Group's ongoing funding position the in-use carrying value of the know-how and goodwill assets have been subject to an impairment review. All goodwill and know-how have been allocated to the Flybrid cash generating unit ('CGU').
The recoverable amount of CGUs is assessed based on the value in use. In prior years, the recoverable amount of goodwill and know-how has been supported by the Directors' value-in-use calculations, which are based on the Group's business plan and ability to continue to finance the development of the technology and to generate licence, product sale and engineering service revenues from these assets over a forecast period of seven years.
In preparing the financial statements the Directors have identified a material uncertainty over the Group's ability to continue as a going concern and over its viability over the next two years and therefore the ability of the Group to finance the ongoing product development and launch the products containing the Group's technology into the market. Accordingly, due to the material uncertainty of the funding position of the Group, the Directors have decided to reduce the in-use carrying value of these assets to nil for the year ended 31 March 2017.
Although the Directors believe that the Group's Flybrid assets, including know-how have significant underlying value, and would expect to realise this value in the future, the uncertainty of the amount and timing of the future cashflows is such that the current value in use is uncertain and hence have been impaired in full with the charge taken to exceptional costs (see note 6).
In future periods, where the Directors have greater certainty over the viability of the Group the impairment of know-how may be reversed. However, the impairment of goodwill cannot be reversed in line with IFRS.
The impairment charge recognised is non-cash and has been treated as an exceptional item in these financial statements given the nature and magnitude of the charge.
8. Property, plant and equipment
Group
Note (i) Group office Group plant, Group
Leasehold manufacturing furniture machinery computer Group test
improvements equipment and fittings and equipment equipment vehicles Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
Cost
At 1 April
2015 1,298 632 167 4,084 1,761 91 8,033
Additions in
year 1 - 1 207 16 19 244
Disposals in
year - - - - (1) - (1)
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
At 31 March
2016 1,299 632 168 4,291 1,776 110 8,276
Additions in
year 44 - - 173 17 - 234
Disposals in
year - - - (417) (7) - (424)
At 31 March
2017 1,343 632 168 4,047 1,786 110 8,086
Depreciation
At 1 April
2015 945 99 144 3,565 1,491 91 6,335
Charge in year 78 119 11 177 177 - 562
At 31 March
2016 1,023 218 155 3,742 1,668 91 6,897
Charge in year 42 63 5 198 98 10 416
Disposals - - - (417) (7) - (424)
At 31 March
2017 1,065 281 160 3,523 1,759 101 6,889
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
Impairment
Provision
At 1 April
2015 and 31
March 2016 - - - - - - -
Creation of
provision 252 - - 113 - - 365
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
At 31 March
2017 252 - - 113 - - 365
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
Net book value
At 31 March
2017 26 351 8 411 27 9 832
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
At 31 March
2016 276 414 13 549 108 19 1,379
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
At 1 April
2015 353 533 23 519 270 - 1,698
--------------- -------------- -------------- -------------- -------------- ------------ ------------- --------
Note: (i) In January 2017, the Board announced a strategic refocus of the Group resulting in the cessation of operations at the Group's Leyland site. Accordingly, an impairment provision has been created against the leasehold improvements carried out at that site to write down these assets to their estimated net realisable value (see note 6).
9. Income tax credit
Group Group
31 March 31 March
2017 2016
GBP000 GBP000
-------------------------- ---------- ----------
UK Corporation Tax
Current tax for the year 129 393
Prior year adjustment (5) 107
Deferred tax 1,820 312
-------------------------- ---------- ----------
Total tax credit 1,944 812
-------------------------- ---------- ----------
10. Deferred tax
Group Group
31 March 31 March
2017 2016
GBP000 GBP000
------------------------ ----------- ----------
Deferred tax liability - 1,809
------------------------ ----------- ----------
In the financial year ended 31 March 2016 the deferred tax liability relates solely to the intangible asset recognised on the acquisition of Flybrid Automotive Limited at the prevailing tax rate. The deferred tax liability has been released to reflect the reduction in the carrying value of the intangible asset (see note 7) in the financial year ended 31 March 2017.
Deferred tax assets have not been recognised relating to tax losses or unclaimed capital allowances as uncertainty remains over the sufficiency of 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.
11. Trade and other receivables
Group Group
31 March 31 March
2017 2016
GBP000 GBP000
-------------------------- ---------- ----------
Non-current assets
Loan to Rotrex A/S - -
-------------------------- ---------- ----------
Total non-current assets - -
Current assets
Net trade receivables 35 66
Accrued income 164 269
Other receivables 48 98
Prepayments 462 531
-------------------------- ---------- ----------
Total current assets 709 964
-------------------------- ---------- ----------
The Group net trade receivables includes a provision for impairment of GBP51k in relation to a potentially unrecoverable debt as at 31 March 2017 (2016: GBP51k) in accordance with the Group's accounting policy. No other trade receivables were overdue at 31 March 2017 (2016: GBPnil). No trade receivables were written off in the year.
The other classes of trade and other receivables do not contain impaired assets.
All trade and other receivables are denominated in UK pounds (2016: All UK Pounds).
The fair value of trade and other receivables has been considered to be consistent with the book value due to the short-term nature of trade and other receivables.
12. Trade and other payables
Group Group
31 March 31 March
2017 2016
GBP000 GBP000
------------------------------- ----------- -----------
Non-current liabilities
Finance lease obligations 74 190
Borrowings 1,811 1,811
Deferred tax - 1,809
------------------------------- ----------- -----------
Total non-current liabilities 1,885 3,810
------------------------------- ----------- -----------
Current liabilities
Trade payables 383 862
Accrued pension contributions 11 36
Accruals 1,855 618
Social security 123 119
Finance lease obligations 116 122
Deferred income 57 358
Total current liabilities 2,545 2,115
------------------------------- ----------- -----------
At a General Meeting held on 22 July 2015, the Shareholders approved the restructure of the Flybrid acquisition agreement. As part of the restructure, GBP1.8 million of the GBP2.8 million vendor loan notes, arising from the initial consideration for the acquisition in January 2014, have been converted into a 5 year term loan. The loan is secured on the tangible and intangible assets of Flybrid Automotive Limited, which can be repaid by the Company 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 previous vendor loan notes did not attract any interest). The remaining GBP1.0 million of the GBP2.8 million loan notes was paid in cash on 23 July 2015.
Assuming the loan to the Flybrid vendors runs its full duration to July 2020, the future undiscounted cashflows, at 7 per cent., will be GBP2,217,000.
13. Issued share capital
31 March 31 March
2017 2016
Number GBP000 Number GBP000
-------------------------- -------------- ----------- -------------- ---------
Allotted and fully
paid (i)
Ordinary Shares of
1 pence each 548,909,251 5,489 545,357,557 5,453
Deferred Shares of
9 pence each 276,286,047 24,866 276,286,047 24,866
-------------------------- -------------- ----------- -------------- ---------
Total Share Capital 30,355 30,319
-------------------------- -------------- ----------- -------------- ---------
31 March 31 March
2017 2016
Number GBP000 Number GBP000
-------------------------- -------------- ----------- -------------- ---------
Ordinary Shares of
1 pence each
At beginning of year 545,357,557 5,453 276,286,047 2,763
Shares issued under
the SIP scheme 3,551,694 36 - -
Shares issued to Allison
Transmissions Inc. - - 17,436,311 174
Shares issued as a
result of the Open
Offer and Firm Placing - - 180,206,628 1,802
Shares issued to vendors
of Flybrid Automotive
Limited - - 71,428,571 714
Ordinary Shares at
end of year 548,909,251 5,489 545,357,557 5,453
-------------------------- -------------- ----------- -------------- ---------
Deferred Shares at
end of year 276,286,047 24,866 276,286,047 24,866
-------------------------- -------------- ----------- -------------- ---------
Total Share Capital 30,355 30,319
-------------------------- -------------- ----------- -------------- ---------
Note:
(i) The Company received Shareholder approval to reorganise the share capital, reducing the nominal value of the Ordinary Shares by sub-dividing and converting the 276,286,047 Ordinary Shares of 10 pence each, existing on 30 June 2015, into 276,286,047 Ordinary Shares of 1 pence each and 276,286,047 Deferred Shares of 9 pence each.
Following the General meeting held on 22 July 2015 the Company issued 197,642,939 of new Ordinary Shares under a Subscription, Firm Placing, Placing and Open Offer and 71,428,571 of new Ordinary Shares as a result of the restructure of the Flybrid acquisition agreement.
14. Loss per share
Basic loss per share is calculated by dividing the loss attributable to equity holders of the Parent Company for the year by the weighted average number of Ordinary Shares in issue during the year, excluding those held in trust. For diluted loss per share, the weighted average number of Ordinary Shares in issue is adjusted to assume the issue of all potentially dilutive Ordinary Shares, being those share options with non market-based performance conditions 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 2017 potentially dilutive Ordinary Shares were antidilutive, as their inclusion in the diluted loss per share calculation would have reduced the loss per share, and hence have been excluded.
Basic Diluted Basic Diluted
loss loss loss loss
per per per per
Loss share share Loss share share
2017 2017 2017 2016 2016 2016
GBP000 pence pence GBP000 pence pence
------------------- --------- -------- ---------- --------- -------- ------------
Loss attributable
to owners of the
Parent Company (19,710) (3.63) (3.63) (13,498) (2.93) (2.93)
------------------- --------- -------- ---------- --------- -------- ------------
31 March 31 March
2017 2016
Number Number
---------------------------------------------------- ------------------- --------------
Weighted average number of
shares 543,442,609 460,608,146
Dilutive effect of share options 82,305,295 40,085,938
---------------------------------------------------- ------------------- --------------
Diluted weighted average number
of shares 625,747,904 500,694,084
---------------------------------------------------- ------------------- --------------
15. 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.
16. Principal risks and uncertainties
The principal risks and uncertainties which the business faces are: maintaining sufficient cash to meet the ongoing 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 2017 Annual Report and Accounts.
17. Approval
The Preliminary Announcement was approved by the Board of Directors on 26 July 2017.
Date of AGM
The Annual General Meeting of the Company will be held on 29 September 2017.
For more information, please visit www.torotrak.com or contact:
Torotrak plc Adam Robson, Chief Executive / Rex Vevers, Finance Director Tel: +44 1772 900931 Cantor Fitzgerald Europe (Financial Adviser & Broker) Marc Milmo / Will Goode Tel: +44 20 7894 7000 Tavistock (Financial PR) Simon Hudson / Lulu Bridges / James CollinTel: +44 20 7920 3150
This information is provided by RNS
The company news service from the London Stock Exchange
END
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