ToroTrak fka LSE:TRK

[Lhasa]

Torotrak Interims out today

Full report at http://www.investegate.co.uk/Article.aspx?id=200811250700118365I

My overall assessment is that the Interims are as good as we could have hoped.

Financial highlights:

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£9.7m cash resources, with no debt, at 30 September 2008 (2007: £8.7m) provide a solid foundation of financial capital to underpin commercialisation

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Growth in revenues to £0.9m (2007: £0.5m) from increased levels of engineering activity with key customers

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Strong weighting of revenues expected in the second half from existing and potential new licensees

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Losses reduced to £1.9m (2007: £2.4m) in line with expectations

My own chosen excerpts from the report:-

Outdoor power equipment

Infinitrak's continuing investment in new technology has been unaffected by the difficult near term trading outlook. A second transmission is now in development, which is a simpler, lower cost unit than the TTT with broad market appeal. This will make it an easier proposition to launch into current market conditions. The first vehicles equipped with prototypes of this transmission demonstrate strong advantages over competing products.

Truck and bus

The extent and reach of our technology for commercial vehicle applications is proving to be greater than originally envisaged when we began to target this market. Torotrak's technology is increasingly being seen as potentially transformational for commercial vehicle applications as it offers fuel consumption and emissions benefits as well as providing high levels of refinement and sophistication in the driving experience. Furthermore, the detailed design work being carried out for our first customer in this field continues to support the view that transmissions featuring Torotrak technology provide a strong cost advantage compared to the automatic gearboxes that are currently available in this market.

The potential for Torotrak's technology in the truck and bus market is considerable and represents a significant opportunity to deliver short to medium term licence and engineering income and, most importantly, future royalty income streams.

Off-highway

Our active licensees in the agriculture sector, Carraro and Iseki, both continue to make progress with their respective plans towards market introduction. We are also working with an emerging-economy customer, new to Torotrak, that is keen to engage in a development programme in this sector.

Our first programme in the material handling sector, a prototype fork lift truck transmission, has been successfully commissioned in the customer's vehicle and delivered to the client, a leading manufacturer in the global materials handling equipment market. This customer has been pleased with the performance of Torotrak's technology which has provided a highly competitive driving feel together with excellent levels of control. Within the scope of this first programme we have been able to demonstrate a range of innovative capabilities and features of the technology which reinforces its appeal. The client is about to commence their programme of internal evaluation and testing, which will determine the next stage of our commercial engagement with them.

Automotive

As previously reported, much of our focus in the small car market has been with Aisin AW, with whom we continue to work closely. Additionally, we have now commenced a feasibility study for a new small car transmission with another tier 1 automotive transmission and components manufacturer, that is a new client for Torotrak.

Tata has now selected its first target application of Torotrak's technology and we are currently helping their engineers with the early stages of specifying and configuring this application, in preparation for commencing detailed design and prototype implementation.

Lhasa