Torotrak is today publishing its first interim management statement as required
by the FSA's disclosure and transparency rules. This statement, which includes a
more general update on the Company's progress, will also be delivered at
Torotrak Plc's Annual General Meeting which takes place today.
Placing and Open Offer
We have today, through a separate announcement, confirmed our plans for the firm
placing of new shares with Institutional investors and an open offer to our
existing shareholders. Subject to approval at a forthcoming EGM, this will
provide, net of issue expenses, £5.0m from the placing and a further £1.75m
should the open offer be fully subscribed.
The placing signifies a growing confidence in Torotrak's future and an appetite
to invest in the acceleration of our business plan.
1st Quarter Update
In the first quarter to 30 June 2007, we have secured two new pieces of business
in two new market sectors for Torotrak.
Off Highway - Fork Lift Truck sector:
As announced on 27 June 2007, we have commenced a prototype programme in the
fork lift truck ('FLT') sector which should deliver approximately £450 k in
revenue over the next 18 months. This programme is to complete a full
prototype installation of our transmission technology into a class 4/5 fork
truck of a major global manufacturer. The engineering programme is valuable
income, but more importantly it represents a commitment to the
commercialisation of our transmission in a new sector and is the start of
a wider relationship with the manufacturer with the potential for future
production volumes. Torotrak's transmission technology will provide, at a
competitive price, a variable drive with smooth shuttling ability and
good low speed control.
New potential market - Motorsport:
The second piece of new business is in motorsport, which is a new potential
market for us. Xtrac Ltd, the vehicle transmission design and manufacturing
company, has entered into a licence agreement with us to enable them to
develop highly efficient and compact continuously variable transmissions
(CVTs) for use in the new kinetic energy recovery systems (KERS) proposed
for Formula One ('F1') motor racing. F1 has announced its intention to
introduce new rules for 2009 that will lower the environmental impact of
the sport. Part of this is to recover deceleration energy that can be
stored for acceleration. Xtrac will exploit Torotrak's full-toroidal
traction drive technology for use in kinetic energy recovery systems
within the motorsport industry, to assist its customers in meeting
these new obligations.
Torotrak is currently in the process of negotiating licence agreements with
customers in two of the Company's principal markets, one of which was announced
on 15 May 2007 in relation to a Memorandum of Understanding with a major Asian
car and commercial vehicle manufacturer. Both negotiations offer good
opportunities for licence fees later in the financial year.
The Group has a strong forward order book for engineering services, strengthened
by the confirmation of the FLT prototype programme announced on 27 June 2007.
The timing of programmes in the current financial year is expected to generate a
revenue build up weighted more towards the second half of the year, reversing
the pattern experienced in the year ending 31 March 2007.
A full update on current trading is included in a separate announcement which
will be made today in connection with the Placing and Open Offer.
Dick Elsy, Chief Executive of Torotrak, commented: 'We are very pleased with the
development of the business over the last year and we have some exciting
opportunities in the pipeline. The additional funding that we are proposing
should ensure that Torotrak is able to fully exploit these opportunities.'
For further information:
Dick Elsy, Chief Executive
Jeremy Deering, Finance Director
Torotrak Plc
Tel: +44 1772 900938
Simon Hudson
Lulu Bridges
Tavistock Communications
Tel: +44 20 7920 3150
Information in the announcement is based on unaudited management accounts. In
addition, certain statements made are forward looking statements. Such
statements are based on current expectations and are subject to a number of
risks and uncertainties that could cause actual events or results to differ
materially from any expected future events or results referred to in these
forward looking statements.
