LONDON--(BUSINESS WIRE)--
Wheelsure Holdings plc
(“Wheelsure” or the “Group”)
Final Results for the Year Ended 31 August 2014
CHAIRMAN'S STATEMENT AND STRATEGIC REPORT
The results for the year ended 31 August 2014 show a turnover of just over GBP144K (2013: GBP209K) and a loss before tax of GBP406K (2013: GBP382K).
Although disappointing, the main reason for the drop in sales was that approvals and consequential orders we had anticipated in the first half year of trading were delayed until the second half of the year. However, I am pleased to report that the stronger second half performance has continued beyond the year end, with sales of over GBP80K being achieved since the year end. Sales of GBP170K for the last 8 calendar months already exceed the sales for the 12 month period ended. This figure excludes further sales in the USA where the royalty income is anticipated but has not yet been invoiced.
Strategy and Outlook
Your Board has already communicated, in detail, that in the rail market, there is a long drawn out process (and rightly so) for our new products to go through vigorous testing procedures and trials before approval is given for us to start supplying product. Our strategy reflects this market process and, in addition to our own efforts, we have sought proactive specialist partners to work with us. The role of these partners varies by territory, but is either a traditional agent or distributor remit, or a full licensing agreement including manufacturing and supply logistics.
The commentary below outlines our progress and activity in our target regions, categorised as follows:
A) Strong technical approval allied to direct sales method or proven distributor/agency relationship in an attractive market;
B) Approved product status and commercial arrangements in place in attractive market, but as yet unable to consistently commercialise;
C) Product introduced with a commercial partner but still in early test/trial stage.
Category A
UK
Regular orders are now being received from London Underground (LUL) and since the year end we have delivered our first order to the Docklands Light Railway (DLR), again, after extensive testing, design and trialling. The LUL orders are now from a broader base of track engineers and on a wider number of track applications.
Italy
During the financial year small orders have started to come in from Ferrovienord and Ferrovie del Gargano (private rail operators) and associated manufacturers. We have confidence that these orders will start to increase in volume over the coming months.
Importantly, we continued in our ongoing testing and acceptance process for the manufacture of crossings with the state rail operator, Rete Ferroviaria Italiana (RFI). We are delighted to report that Tracksure has now been formally incorporated into RFI's technical specification for the manufacture of Crossings. This important breakthrough has been followed up with the first order for just under €20k's worth of product.
This order forms the final part of the homologation process (gaining approved supplier status) and the Board is confident we are now in a strong position to realise the market potential in this important market.
Germany
As we have previously announced, DB Netz AG (DB) undertook a final six month product evaluation of Tracksure for use in brake retarders. This has now been successfully completed and we are pleased to inform you that Tracksure has now been formally incorporated into the DB specification for this application.
An order for 40 new retarders for Halle in Germany has already been placed with the supplier, Siemens AG, for delivery in the first half 2015 incorporating Tracksure products.
Following this achievement, discussions with Siemens and DB with regard to establishing supplier approval status continue to cement our business base in Germany.
Holland
Progress in Holland has been slow with only small orders received in the financial period. This is entirely due to delays in the completion of the approval process with Prorail (Dutch rail operator). However, we continue to work actively with our partner to resolve this issue and remain confident that the country's main rail contractors will utilise Tracksure upon the anticipated approval.
USA
As previously reported, Tracksure products were being supplied to the North American railroads by L.B Foster (LBF), even before concluding an agreement. We announced in December 2014 that this exclusive agreement, which embraces the United States, Canada and Mexico, had been finalised with LBF which is a NASDAQ listed company.
The Board consider that this implementation of a supply/licensing model (including a 3rd party logistics agreement), which has already delivered royalty income of $23,000 since the year end, is a significant strategic development for our Company.
So far the income has been derived from a single specialist application, the diamond crossing, with just one of the major class 1 railroad companies. LBF is now in a position to proactively broaden this product base with other major railroad companies, further product applications and, as previously reported, the Transits.
Category B
Australia
We have ongoing track evaluations with two rail contractors in Australia and have also identified potential distributor partners. These opportunities will be vigorously pursued.
In addition to the above, Tracksure has been asked to tender for the supply of a range of track components on a 50km track upgrade. This is for a rail contractor which also has interests in the USA and we are now waiting to see if our tender has been accepted.
Spain
The weak economy has, to date, mitigated strongly against commercialising our approval in Spain. Our partner continues to work hard to break this logjam and pursue other opportunities. This has resulted in Tracksure being formally approved by Renfe (following a two year evaluation) and will hopefully lead to a tender opportunity in the first quarter of 2015.
Hungary
As with Spain, the turmoil in other European countries are currently limiting opportunities. We are reviewing our position in Hungary to see if an alternative route to market may facilitate business development, which can be used to back up the technical approval that has already been won.
Category C
France, South Africa, Turkey, Malaysia and Brazil.
In each of these territories, Tracksure is seeking to develop opportunities, but we remain in the early stages of our process. As part of our relationship with L.B.Foster we have also started to look at the market opportunity in Brazil.
Key Performance Indicators
The directors consider the Group's financial key performance indicators to be turnover and loss before tax.
| 2014 | 2013 | ||||||||||
| £ | £ | ||||||||||
| Turnover |
144,434 |
209,066 | |||||||||
| Loss before tax | 406,417 | 382,217 | |||||||||
Non-financial key performance indicators include the number of new customers. For the year ended 31 August 2014 these amounted to 7 (2013: 5).
Principle Risks and Uncertainties
- Financial risk - the Group faces the financial risk that there may be insufficient cashflow as working capital in the future to continue to commercialise the products and generate revenue streams.
- Currency risk - during the normal course of business, certain transactions are carried out in currencies other than Sterling which exposes the Group to a certain level of currency risk. To mitigate this risk, transactions are carried out in Sterling wherever possible, and minimal cash balances are held in currencies other than Sterling.
- Liquidity risk - liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities as they fall due. The directors have prepared forecasts which indicate that the Group will be able to meet its liabilities as they fall due for at least the next twelve months.
Future Prospects
As part of our overall strategy, Tracksure is establishing excellent supply and logistics arrangements to support a developing global business as well as looking at technical enhancements (and complementary products) that will give the business increased momentum. Income continues to be derived from the sale of Wheelsure products to a small but regular group of customers, although primary focus is on continuing to expand the Tracksure business in line with the strategy summarised above.
The Board is confident that pursuing the strategy will grow business and opportunities in the countries detailed and we will continue to look to initiate new activity where the market conditions are suitable.
GJMulder
Chairman
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WHEELSURE HOLDINGS PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT for the Year Ended 31 August 2014 |
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Notes |
2014 | 2013 | |||
| £ | £ | |||||
|
TURNOVER |
144,434 | 209,066 | ||||
| Cost of sales | 91,289 | 116,271 | ||||
|
GROSS PROFIT |
53,145 | 92,795 | ||||
| Administrative expenses | 452,471 | 473,790 | ||||
|
OPERATING LOSS |
3 |
(399,326) | (380,995) | |||
| Interest payable and similar charges |
4 |
7,091 |
1,222 |
|||
|
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION |
(406,417) | (382,217) | ||||
| Tax on loss on ordinary activities |
5 |
(9,222) | (9,543) | |||
|
LOSS FOR THE FINANCIAL YEAR FOR THE GROUP |
(397,195) | (372,674) | ||||
CONTINUING OPERATIONS
None of the Group's activities were acquired or discontinued during the current year or previous year.
TOTAL RECOGNISED GAINS AND LOSSES
The Group has no recognised gains or losses other than the losses for the current year or previous year.
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WHEELSURE HOLDINGS PLC CONSOLIDATED BALANCE SHEET 31 August 2014 |
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2014 |
2013 |
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| Notes | £ | £ | £ | £ | |||||||
|
FIXED ASSETS |
|||||||||||
| Intangible assets | 7 | 60,087 | 60,713 | ||||||||
| Tangible assets | 8 | 8,016 | 5,351 | ||||||||
| Investments | 9 | - | - | ||||||||
| 68,103 | 66,064 | ||||||||||
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CURRENT ASSETS |
|||||||||||
| Stocks | 10 | 31,662 | 58,759 | ||||||||
| Debtors | 11 | 75,127 | 42,351 | ||||||||
| Cash at bank | 104,458 | 100,449 | |||||||||
| 211,247 | 201,559 | ||||||||||
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CREDITORS |
|||||||||||
| Amounts falling due within one year | 12 | 158,427 | 80,128 | ||||||||
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NET CURRENT ASSETS |
52,820 | 121,431 | |||||||||
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TOTAL ASSETS LESS CURRENT LIABILITIES |
120,923 | 187,495 | |||||||||
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CAPITAL AND RESERVES |
|||||||||||
| Called up share capital | 14 | 1,261,442 | 929,040 | ||||||||
| Share premium | 15 | 3,414,750 | 3,439,368 | ||||||||
| Profit and loss account | 15 | (4,555,269) | (4,180,913) | ||||||||
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SHAREHOLDERS' FUNDS |
17 | 120,923 | 187,495 | ||||||||
The financial statements were approved by the Board of Directors on 29 January 2015 and were signed on its behalf by:
G Dodl - Director
NOTES TO THE FINANCIAL STATEMENTS
1. PUBLICATION OF NON-STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in the Companies Act 2006.
The financial information for the year ended 31 August 2014 has been extracted from the audited financial statements to that date, which were prepared in accordance with UK GAAP and with the requirements of the Companies Act 2006. These financial statements have yet to be delivered to the Registrar of Companies. The financial statements for the year ended 31 August 2013, which received an unqualified auditors' report, have been delivered to the Registrar of Companies.
2. ACCOUNTING POLICY – GOING CONCERN
The Group made a loss in the year to 31 August 2014 of £397,195 and its net assets at that date were £120,923.
The Group has prepared forecasts for the period to 31 January 2016 which indicate that the Group will need to raise an additional net £100,000 of working capital and to achieve its increased sales targets to continue to trade for that period.
The directors are also confident that the increased sales targets can be met.
The financial statements have been prepared on a going concern basis on the assumption that the additional working capital of net £100,000 will be raised and sales targets achieved to allow the Group to continue its operational activities until at least 31 January 2016. However the directors are aware that until the additional net £100,000 of working capital has been raised and sales targets achieved there is a material uncertainty about the future of the Group as a going concern.
Taking into account all the information that could be reasonably expected to be available the directors consider it appropriate to prepare the accounts on a going concern basis.
3. LOSS PER ORDINARY SHARE
Loss per ordinary share is based on the loss for the financial year ended 31 August 2014 of £397,195 (2013: £372,674) and 110,563,843 (2013: 77,774,925) ordinary shares being the weighted average number of ordinary shares in issue during the period.
| Loss | Number of | Loss per share | |||||
| £ | shares | Pence | |||||
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2014 |
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| Basic loss per share | 397,195 | 110,563,843 | 0.36 | ||||
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2013 |
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| Basic loss per share | 372,674 | 77,774,925 | 0.48 |
4. DIVIDENDS
No dividends are proposed for the year ended 31 August 2014.
5. Copies of the Report and Accounts will be sent to shareholders shortly and will be available from the registered office of the Company, 8 Woburn Street, Ampthill, Bedfordshire, MK45 2HP.
6. The Company confirms that it meets the recommendation at Guidance Note 69.1 of the ISDX Growth Market - Rules for Issuers.
7. The statement and figures above are extracted from the Company’s full audited accounts.
Enquires:
| Wheelsure Holdings plc | ||
| Gerhard Dodl, CEO | 01525 840 557 | |
| Peterhouse Corporate Finance Limited | 020 7220 9797 | |
| Duncan Vasey and Mark Anwyl |
30 January 2015