(“Torotrak”, the “Company” or the “Group”)
Interim Management Statement
Torotrak (LSE: TRK) today publishes its Interim Management Statement for the period from 1 April 2014 to 30 July 2014, which includes the trading update to be delivered today at the Company’s Annual General Meeting.
Since the start of the current financial year the Company has made good progress in relation to the objectives published in the December 2013 Prospectus and the 2014 Annual Report.
Our key strategic objectives remain to:
- Achieve a successful, earlier to market launch of Flybrid KERS in commercial vehicle applications, beginning with buses, where fleet trials are due to commence later this year;
- Establish low volume manufacturing capability to support high unit value supply of products and to build growing product revenues commencing in the next financial year;
- Introduce high profile, low volume show cases of our technology for launch in the next three years, which also contribute to product development for next stage higher volume applications; and
- Establish Tier 1, licensed manufacturing partnerships for volume launch of our products in the critical period: 2017 – 2019, ahead of the next wave of passenger car and commercial vehicle platforms requiring next generation, low CO2 technology.
Since the start of the financial year on 1 April 2014, good progress has been made in relation to all of these objectives:
Flybrid KERS in commercial vehicles
- The first KERS installation in a Wrightbus StreetLite bus has demonstrated good driveability and energy capture during on road testing in Leyland during July 2014;
- We are now conducting calibration and performance optimisation with the bus powertrain and vehicle operating strategy prior to the next stage testing at Millbrook;
- The Company is on track to commence KERS trials in a bus on a public route with Arriva in Q3 2014;
- We are building a strong pipeline of potential sales opportunities for KERS in buses and considerable interest is being shown in the technology; and
- A funded programme with JCB is underway to design, develop and make Flybrid technology ready for production in excavators, building on successful trials of a prototype design in 2013.
- Flywheels and flywheel assembly component manufacturing is scaling up in the Leyland facility to support wider bus fleet trials scheduled for Q1 2015 and expected start of commercial production by end 2015;
- Positive responses to requests to tender have been received from supply chain partners, confirming the bill of material costs for commercial production of KERS units for buses is within target; and
- We are in advanced stages of discussion with key partners for sub-system supply of KERS for buses.
Lower volume showcases of technology & product development
- We have commenced a funded programme with Lotus Cars, announced in February this year, integrating KERS into the manual transmission of a performance passenger car.
Tier 1 Manufacturing partnerships
- The next stage engineering programme with Allison is underway and on track to receive a success related £1m deferred license fee in Q4 2014; and
- Collaboration with a Tier 1 and global passenger car OEM to optimise V-Charge for new engine platform is progressing well.
There is continued, strong business development engagement with OEMs, Tier 1s, and Tier 2s across each product area and in a number of major automotive territories. This has been reflected in terms of six new evaluations and three expressions of volume requirement subject to manufacturer engagement. Our estimate of minimum development time to market is approximately three years, meaning that to achieve our objectives, Tier 1s need to be signed up between this financial year and the financial year ending March 2016.
Jeremy Deering, Chief Executive commented; “Six months after the acquisition of Flybrid and the fund raise, I am delighted to see the market opportunities opening up for us in the way we predicted. The strength of the two organisations, and the breadth of our CO2 reducing technologies, is creating much deeper and urgent engagement with OEMs and Tier 1s than ever before. The new team has great confidence in achieving the objectives as outlined to Shareholders at the time of the Flybrid acquisition.”
Notes to Editors
Torotrak is a leading developer and supplier of variable drive transmission, engine boosting and kinetic energy recovery systems for vehicles. Our portfolio of technology solutions substantially improves fuel economy and reduces CO2 emissions in vehicles through harnessing the power of supercharging to enable engine downsizing, capturing and recycling energy that would otherwise be lost and managing the engine at the optimum point.