Transense reports first profits

Transense Technologies, which develops RFID and TPMS systems, reported its first profits of £20,000 (EBITDA) for the first half of the current financial year, ended 31 December. The figures are still comparatively small, but the company hopes its progress is now entering growth territory.

In statement chairman David M Ford said: “The Board believes that this marks a significant watershed moment towards the ongoing success and profitability of the company. It is also a very substantial advance over the corresponding period loss of £0.9 million, resulting from an increase in revenue of approximately 130 per cent to £2.215 million (H1 2013: £0.967 million).

According to Ford the growth is down to the strategic decision to focus on both medium and long term income streams. “When the present Board took over the running of the Company in 2008, it took a strategic decision to develop near and medium term revenue streams in order to support the ongoing costs of existing
IP royalty projects with longer timelines for development and commercialisation.”

Furthermore he expressed the board’s optimism about future success: “it is the board’s belief that the trading divisions are now well set to become major profit centres in their own right. Both Translogik and IntelliSAW are servicing markets that are global in scale, have massive growth potential for the company, and with
high barriers to entry for potential competitors due to the time it takes to develop products of this nature.”

To this end he added: “Translogik is currently leading the way in terms of revenue growth, as the increasing cost of tyres and fuel is driving the mining and commercial vehicle markets to seek out new technology for maximising the life and performance of its assets. Translogik, through its iTrack system and tyre
probe products, is benefitting from these market drivers.”

Translogik progress

As a result this is said to have translated into a “step-change” at the Translogik part of the business which trades in TPMS systems and probes. The apparent “step change” is said to have come from improved sales volumes of both the original (Gen1) probe and the newer iProbe. “Having received several record value orders in the second half of 2013 which
have already been announced, we received a further two conditional orders together worth approximately US$750k. The conditionality has recently been satisfied and these orders should ship in the near future. Our distribution partners are also reporting significant increases in industry interest in the tyre probe.”

Deployment of Translogik’s iTrack Tyre Temperature and Pressure Monitoring Systems for mining and off-the-road vehicles continues at the Sishen mine in South Africa, owned by Kumba
Iron Ore, a subsidiary of Anglo American plc, as well as at mines managed by Otraco Chile, a subsidiary of Otraco International (a leading provider of earthmover/off-the-road tyre management services to the mining industry).

As the volume of data gathered by the number of iTrack systems around the globe
grows, some interesting details have emerged. For example, one mine has recognised a particular benefit of the continuous temperature data provided by
iTrack.

This data is designed to enable mine operators to operate their trucks for longer periods at faster speeds, while still remaining within tolerances specified by the tyre manufacturers. Previously mine fleet managers had to leave a much wider safety margin to ensure that tyre performance parameters were not exceeded. Data provided by this mine operator has indicated an increase in productivity of approximately 7.5 per cent. In this particular mine this translates into 27 trucks achieving the production previously requiring 29 trucks. At a capital cost of approximately US$5 million per truck.

Another mine has reported achieving fuel savings (as a result of operating their tyres at correct pressures at all times) at a rate of approximately £20,000 per truck per annum. Although not as large as the capital savings achieved by higher productivity, Transense’s argument is that this is sufficiently significant return on investment to justify iTrack.