Interim Management Statement
(This statement was issued by Torotrak to coincide with the company's AGM which commenced at 12 noon London time today, July 24)
RNS Number : 7927Z
24 July 2008
('Torotrak' or 'the Company')
Annual General Meeting and
Interim Management Statement for the first quarter ended 30 June 2008
Torotrak Plc today publishes its interim management statement describing progress made in the first quarter of the financial year ending 31 March 2009. This also includes the statement to be delivered at Torotrak's Annual General Meeting which takes place today.
Since reporting results for the financial year ended 31 March 2008 to shareholders on 20 May 2008, Torotrak's trading has been in line with market expectations. We have a high level of committed orders and are pursuing a number of business development prospects helped by the momentum gained through the significant agreements and contracts concluded during the last financial year.
Engineering development projects
We have started our new year with a strong engineering order book, working on development projects in each of our four target markets of Outdoor Power Equipment ('OPE'), Off Highway, Truck and Bus and Automotive. Our fee earning engineering services are running at more than double the average levels achieved during the year to 31 March 2008.
Start of production of OPE transmissions
Infinitrak has commenced production and sales of Twin Toroidal Transmissions (TTTs), as previously reported, with transmissions now installed in approximately 100 of our joint venture partner MTD's vehicles. These are being sold through MTD's selected dealers in the US. More than 300 transmissions have also been built to satisfy the first order from Infinitrak's new third party UK customer, Advanced Turf Technology (ATT). ATT has ambitious plans for their professional mowers based on the significant advantages offered by Torotrak's IVT technology.
Orders from MTD for further TTTs will be fulfilled in the second half of the current financial year with volumes depending upon MTD's own market forecasts and requirements. As previously commented, this is likely to be affected by the very difficult US trading conditions in consumer markets. We will update Investors in November when we announce our Interim Results. This year's objectives are to develop TTTs for introduction into further MTD products and for TTT to be positioned as MTD's transmission of choice for selected models in 2009. As we have previously reported, Infinitrak's plan is to achieve a robust and high quality market introduction this year with initial volumes at a modest level leading to a significant increase thereafter. We will also continue to progress third party sales opportunities.
We are making good progress on the development of Infinitrak's second, lower cost transmission, which is demonstrating good cost competitiveness and has benefitted from the development work undertaken to date on the TTT.
Licensing and business development
Income from licensing activity this year is likely to be weighted towards the second half of the year, with two thirds of our planned licensing income for the current financial year already covered by secured orders. Business development activity to acquire new licensees continues at high levels, stimulated by the considerable interest generated by the market launch of Infinitrak's first transmission and by the substantial licence agreements secured in our last financial year.
Profile and strategy
Our participation as part of the consortium that includes Jaguar, Flybrid, Xtrac, Ford, Prodrive and Ricardo is an example of the opportunities that are open to us to exploit the need for energy conservation arising from increased fuel prices and climate change. This high profile UK project, to pursue a flywheel hybrid solution in the automotive sector, has attracted considerable industry interest and positions Torotrak amongst a select group of well respected companies at the forefront of such opportunities.
Our work with Tata Motors and with the currently undisclosed European Truck & Bus Manufacturer, also places us at the leading edge of development with customers that have the appetite to invest and innovate. These key activities are progressing to plan and are complemented by activities elsewhere including fork lift truck applications and continued development in our automotive and agriculture sectors.
We continue to see growth in our base of earnings from engineering, licensing and through the start of sales from Infinitrak. Our strategy is to grow earnings through the point of break even whilst also securing further development agreements, and growing joint venture income, and hence accessing new customers across diversified markets. Our customers see, as we do, the opportunity to build significant medium to long term future value.
Torotrak is the world leader in full-toroidal traction-drive transmission technology, focused on the development of IVT (Infinitely Variable Transmission) and TCVT (Toroidal Continuously Variable Transmission) systems which deliver outstanding levels of performance, functionality and commercial advantage in automotive, truck, bus, outdoor power equipment, agricultural and off-highway applications.
For further information, please visit www.torotrak.com or contact:
Dick Elsy, Chief Executive
Jeremy Deering, Fianance Director
Tel: +44 1772 900938
Tel: +44 20 7920 3150 or +44 7966 477256