Transense Technologies (LSE:TRT) — Final Results for the year ended 30 June 2026

0:00 Good afternoon and welcome to the TRANSENSE TECHNOLOGIES PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Please just simply type in your questions and press send. Before we begin, I'd like to submit the following poll. I'd like to hand you over to Nigel Rogers, Executive Chairman. Good afternoon, sir. Good afternoon, and good afternoon to everybody listening online and those who joined this chat later. You're very welcome. We are here to present the financial results and the trading update for TRANSENSE for the year ended June 30. And those of you who've been following the RNS news announcements will know that there's been a few announcements of new business since then, which we'll also cover. I'm co presenting today with Ryan, Ryan Morne. You may notice that he's sucking a cough sweet, and you might have heard that I'm splushing a little bit as well. So both of us are going to do our best to deliver this in strong voices, but forgive us if not. We both have water handy too.

1:00 I'm also just going to pass apologies for Melvin. Melvin was gonna present the financial part of this presentation today. However, he's had some IT problems today, and I have agreed to deputize for him. Hopefully, that means we can get through the numbers nice and quickly and understandably, and I'm more than happy to take questions on them as well. So I will start with a bit of an overview. We present these results today with the appropriate degree of humility, having had to downgrade against the expectations that were set at the start of the year. We set some very ambitious targets for the business way back in January 2026 we first picked upon January 2025 when we appointed Cavendish and expectations were set at that time.

1:47 And they were very aggressive targets to hit. And in many respects, lot of things in the business have gone very well. But like a football manager, I'm a Sunderland supporter, our manager had to stand up and give a post match analysis having lost five-three. There were a lot of positives in the Sunderland Man City game and these results were exactly the same. Having missed the headlines and had some difficult things to talk about, we've also got a lot of very strong positives in the business which we can present today. Let me start then with the performance overview for FY 2026 and put that to bed. Firstly, SOAR. SOARSense, our revenues were up by 20%. Ryan's going to show you a graph of the five year growth rate in SOAR. The revenue growth rate this year was 20%.

2:34 That was a little off target and Ryan will talk about the reasons why. Mostly that was to do with the motorsports segment of our business being fairly flat in that a lot of the new business activity has not yet come through to the top line. So he will be talking about that. There are also positives outside of our traditional aerospace and motorsport customers that are now very well established and building nicely. Within EV, we have been working on a demo unit project with Cummins engines, which is UK government funders in the automotive EV space. And within robotics, we have some new business wins to talk about which are progressing towards production hopefully in FY twenty eight. Within TRANSLOGIIC, again, overall, the revenue was fairly flat. It was actually slightly down, but that masked a lot of strong new business growth amongst the new channels that we've opened to market for TRANSLOGIIC, masked because, once again, the sales into tyre majors for our legacy product was slightly disappointing, down some 34%.

3:35 And we're more than happy to take questions or and and Ryan will talk a little bit about what has happened with our two major tyre customers primarily. However, within the tyre majors, we've also got a very substantial new business win to talk about for FY 2027 and beyond. Meanwhile, we've launched new products for TRANSENSE TECHNOLOGIES to complement the existing product range. And post period, we've won some other new customers alongside the Continental account, which Ryan will be talking about. Within iTrack, the Bridgestone royalty, everybody will know that the royalty rate reduced by 40%. Not new rate prevails for FY '26, FY '27. The volume growth in this year was slightly behind our initial expectation at 7%.

4:22 I think high single digits is a sensible long term run rate, and that's likely to be prevailing for the rest of the ten year period up to FY '30. So revenue this year was down by 34%. That had an impact on revenue and profits of about a million pounds adverse. Post period, actually, Bridgestone have been very busy, and there are some good new installs going in for FY twenty seven. So I'm hopeful that the revenue volume growth rate will return more to the trend rate, and I'll talk about that a little later in the presentation. So that's an overview of what we're going to talk about today. In terms of the financials, I'll just quickly go through the KPIs, and then later on, I'll go through the detailed financial statements in a little more depth. But total revenue was 4,630,000, down from 5.55.

5:15 And as I've said, broadly a million pounds of that was attributable to the royalty. Gross margin continued to be a very healthy 88%, 89.9 last time around. So the margin mix of the business continues to be extremely strong. The adjusted EBITDA, which is a proxy for cash generation, cash product profit, was 660,000, and the adjusted PBT was just on the right side of breakeven. So, importantly, you know, the board had a lot of focus on cash generation, particularly having recognized that the revenue targets were falling were falling behind. And operating cash flow was more than one and a third times EBITDA at 880 k, which gave us a closing cash balance gross of 1,500,000.

6:04 So plenty of cash buffer there compared with our normal target of 1,000,000 approximately of cash buffer available. So the business has the resources to be able to continue to invest and also to weather any unexpected storms. With that, I shall pass over to Ryan, and he'll talk through firstly, SOURCENSENSE and then TRANSLOGIES. And then I'll take you through the financials and talk a bit about the iTrack royalty and the outlook. Thank you, Nigel. So first to talk about SOAR SENSENSE. Just looking at the revenue, where that's come from, and the the four key markets that we operate in. So starting at the the top there, motorsport, obviously, still working very closely with Motion Applied, in that market.

6:58 The the revenue is, slightly down this year, but they have a a very big pipeline of of new business and new business opportunities. So we can see into the future, you know, some good growth in this in the motorsports sector. It's just a little bit delayed in terms of it hasn't hit the the the numbers this year, but there is a a lot of activity around that. Motion applied continue to be a good partner to us. Aerospace has grown well, and that's mostly driven by increased component sales, and work with GE Aerospace or within the, supplier constellation. We're doing a lot of work with Airbus as well, on NRE projects, but also some commercial work. And we do have some other, customer programs outside of of those two.

7:48 You know, they are progressing, I think, characteristically with aerospace market. They are progressing slowly, but they are progressing normally for the aerospace market. So, again, we we can see continued growth coming in aerospace, and we've we've done well in that sector this year. The e drive market, also has grown very well for us this year, so up by 39%. There's a a great project running with Cummins, you know, a very, very big diesel engine manufacturer. That's that's that's going very well. And we've got another number of other opportunities as well, some of which are potentially quite fast moving as as they work through into production.

8:34 But but, you know, a lot of projects there where we're going beyond the, sort of proof of concept now and more into, you know, production intent designs and and starting to ramp up the activity levels with those customers. And then finally, in the robotics market, so I think people probably know this is one that's fairly new to us, but, you know, huge growth in percentage terms there, 268%. Actually, a very healthy pipeline sitting behind that, so I'm not quite sure if we'll grow by 268% over the next months, but it would we definitely have good growth coming in in the robotics market. We're dealing with some of the most sort of well known prestigious companies in that space. The the the initial work that's been done with SAW on on prototypes and sort of proofs of concepts to show that SAW works well in that application, can be made to work very well, and and meets the requirements. So now, you know, we we we are moving into more production intent, development phases with customers in that market.

9:41 Obviously, a very big market with very big growth forecasts over the next, next few years. So, you know, in in general, I think some good, good progress, through those different sectors. And then, this is the the graph that Nigel was alluding to. Obviously, if you look at Source Sense over the last five years, the the business has grown, very substantially. So some some pretty big jumps there. It's not always in a straight line. I think that's kind of the nature of of of the beast when you're doing these things. But, you know, my my view is that we are, we are starting to build some real strong momentum behind the business.

10:28 And, you know, we've we've got a good proposition for for the market and the customers, which we're able to deliver value to them and and generate revenues for us as as we move forward in those those key markets. So very, you know, very good indicator of progress. Finally, SOAR, and and part of that, you know, proposition for customers where we're helping them derisk it has been the pilot line. So I think a lot of people know we've invested quite substantially in this pilot production line, in order to develop, assembly process methods for saw sensors onto on the components like shafts for customers that could be scaled to high volumes. So help the the customer kind of derisk their their setup, and help us improve our repeatability and and and all that good stuff with SOAR.

11:29 The the equipment is all in place now on-site in in in Western on the green. We've been using it in anger. Actually, in in some cases, customer facing work accelerating past the the the actual work to kind of prove out the base processes and things. So there's there's a lot of activity around this equipment both from our sort of fundamental production process development, but then also, doing work for customer facing, elements of projects on there. So really key resource, and we'll see that start to ramp up and be used more in, routine production for us as as we go on. This this line, the the principal purpose of it is to develop pilot production processes, but it does also give us the ability to make, product for the motorsport market, for example, or the aerospace or or other markets through this line that that sort of lowish volume.

12:29 But up up to, you know, several thousand pieces per year, we could do the assembly of on this production line and and still also have capacity for our, the pilot production development work that we're doing on it as well. So it's a it's a it's a really great resource for us as a business and and a game changer in terms of how we can, communicate the technology and that route into high volume production to customers. Okay. So moving on to TRANSLOGIIC. Like Nigel said, he uses a football analogy, a game of two halves. We've we've got our established business in in TRANSENSE TECHNOLOGIES with the global tire majors. So, you know, we we deal at the moment with predominantly with four out of the five biggest tire manufacturers.

13:23 We have a little bit of business with the fifth now. Dealing with those large tire companies, one or two of them in particular have had a pretty difficult time and have been going through some restructuring and changing their businesses. So our base underlying business to those those global tire companies is down, by about 30%. We do still see, opportunities for growth in that market with other tire majors, and also with changing business models and changing use cases for our equipment within those within those tire majors. And I think that's best, sort of explained with the the Cottony deal that we announced recently, and that moves Cottony from being a relatively small customer of ours into, you know, certainly one of our top three customers in the next year year or two.

14:18 The the the business case behind that is is a drive for more digitalization and tire inspection, within their their fleet services and and actually them deploying tire management services into a wider range of customer operations. So it's a it's a great bit of business with with Conti, and and we do have some other, you know, really strong opportunities like retire majors. But, unfortunately, in this year, the actual running revenue has been down with, with some of the bigger customers in that space. However, you know, like Nigel said, it's it's it's offset with increased sales down in the other in the other routes to market. So direct with fleets, software partners, distribution partners, subscription sales, and other other kind of routes to market that we've been working on and setting up. People that follow the company will know we've made a number of announcements this year on new distribution partners.

15:15 And, you know, we do have some some really exciting new programs running with them, where which should, you know, start to deliver, you know, significant revenue in the in the coming months. We've got some new products coming into the market as well, which should also start to shift the needle with with new sales, of those happening as well. So there's there's a lot going on in the market, and, you know, I I'm not too concerned about this year's numbers being flat. I think, you know, if I look back at this business two or three years ago, the pipeline that we've got now and the routes to market and customer relationships, you know, there's a there's a huge amount of development happened, under the hood, and we're really, really well positioned now as that market is is in itself about to grow with, you know, all the new requirements around tire management and tire inspection.

16:06 As as I mentioned, some new products, so the couple that we've we've announced already, being the TLGI, so the inflator product. We've we've just started to put the first tools out to customers for them to do the development work to bring it into their software ecosystems. So, you know, that's an important next step with key customers. I've got a lot of interest in this as a product. It seems to really answer key need in the market. So I have a lot of, you know, high hopes for where that's gonna go. We did a high pressure version of the TLGX, so it's actually took took the standard tool and increased the pressure measuring capability of that, into three fifty psi 24 bar. The standard tool works up to a 150 psi, which is okay for trucks and and buses and cars, but it's not enough for off highway machinery, and aircraft. So the that that increased, operating pressure does open up some new markets for the the TLGX.

17:03 And then in addition to that, we do have some some further product launches coming. So, you know, broadening the product range, we are, you know, we are still working on that inside the business, and and there's more to come on this on that side. We we're really pushing the TRANSENSE TECHNOLOGIES business forward. You know, I think the the plan is to be the standard for, tire management equipment. So tire inspections, you know, for commercial vehicles. We we we are pretty much becoming the standard, but we want to, sort of really cement ourselves into that position, as as being the standard. So very, close relationships with those big, vehicle tire manufacturers, but then also very strong routes to market outside of that. And a and a key part of that is is bringing that, SaaS model more into the revenue lines. You you saw on the previous slide, it's already starting to make a bit of a difference.

18:07 And we again, we've got a a very strong pipeline of opportunities with some very, very big fleets where we're providing their full software and hardware solution, and that gets us into a, a better, recurring revenue model as well for the business. So so very well positioned, for for for very strong growth in the TRANSENSE TECHNOLOGIES side of the business. K. Back to you, Nigel. Thank you. Good. I'll, I'll now just take you through the financial summary again. Obviously, this is FY '26. So, as I said before, the total revenue of 4,630,000 was approximately a million down, on the prior year, a million of that being attributable to the reduction in the iTRAQ royalty.

18:56 Gross profit was very strong, margins 88%, 89%, which is a sustainable go forward rate. There was a significant increase in OpEx around 10%, and that might surprise some people. In in fact, it's the full year effect of the OpEx increase that went in in FY '25 primarily. The the infrastructure around the whole engineering and pilot line build for SOAR was a capability that was built in the early part of f y f y twenty five and through the year. And similarly, the sales capability for TRANSLOGIES was a significant overhead investment in f y twenty five. The headcount in f y twenty five went from around '20 to 35, and there is a full year impact of that in the payroll bill for f y twenty six without any large significant, you know, individually significant recruitments or a significant increase in headcount numbers. It's just the tail end of that coming through.

19:55 The other two key items of OpEx which were higher in '26 and '25 was firstly IT, which I don't think will come as a great surprise. You know, we've had to make a significant investment in IT infrastructure in order to both future proof the business, but also to cyber secure the business where you look at some of the sensitive nature of much of the work that we do. We've had to make a significant investment in IT infrastructure to be able to support that. And then secondly, in our sales and marketing activities where we've had a very busy f y '26 in exhibition attendance. You'll have probably seen a lot of that on social media, and that's really been, you know, a a great fill up in boosting the awareness in the marketplace of the existence both of TRANSLOGIES and of Source Sense. And it's not something that we need to do every year. So I think you you would expect to see a reduction in that level of expense for FY '27.

20:54 That leaves us with an adjusted EBITDA of 660 k. That was more or less matched with interest, depreciation, amortization, the tiny interest charge. It's primarily depreciation and amortization, and you can see there an increase because of the increased asset base overall, broadly breakeven at PBT level. Within cash flow, you know, importantly, that 660 of EBITDA was turned into 880 k of cash generated from operations. We do keep a very close control of short term cash forecasting and cash generation. We were able to continue to invest in the business, however, with investment activities there, CapEx, both tangible and intangible, totaling about GBP 1,300,000, roughly three quarters of million of intangible investment, which is primarily origination of component sets for the replacement ASIC and new suite of AQP parts, and then about 500,000 on tangible CapEx to complete the spend on the pilot production line.

22:01 Out of that CapEx, about 800 k was financed net of the repayments that were made during the year. So we were able to take an asset backed loan, which is secured on the tangible fixed assets that we acquired at a 100% financing, and that was that that's enabled us to maintain that program whilst not losing cash headroom. So, with a net cash increase of 360 k, that took closing cash to 1,500,000 comfortable buffer and net cash, 0.57 after the impact of asset financing. Quick look at the balance sheet. You can see there the asset financing balance of 930,000. Cash and cash equivalents, I've said, at 1,500,000.

22:48 Net working capital was around GBP 1,000,000, so pretty competitively managed. Our grant income on SOAR and our Bridgestone royalty income are all collected quarterly. So in fact, the net working capital is relatively high at the end of June compared to a normal quarterly it's it's a high point within the quarter. I don't propose to say anything more on the balance sheet. So let me now start looking to the future. First of all, Bridgestone and and iTRAQ. Bridgestone have been extremely successful with the iTrack product. It's taken time to build, but their market share has increased substantially. May remember those who followed this story for some considerable time that at the outset, I think the market share for right track that Bridgestone inherited from us was about three or 4%.

23:43 And their market share of large haul truck tires was around 40%. So our aspiration over the ten year period was that they would be able to increase their market share of TPMS systems to be able to achieve the same sort of penetration as they have in tires. And they're well on the way to doing that. In year six, they have a six fold increase in installations. The unit rate, know, as we've as we've said, has reduced in FY twenty seven. But nevertheless, the absolute revenue number is still north of GBP 2,000,000 and expected to increase to sort of GBP 2,100,000, 2,200,000 in the current financial year. This illustration assumes that the average incremental increase is broadly the same in terms of truck numbers rather than percentages.

24:34 So I think it's it's, you know, relatively conservative as an illustration and suggests that there is still further a further 7,500,000 to connect collect over the next four years. You know, as I've said, Bridgestone have actually had a lot of success in the marketplace over the last few months, which is yet to translate fully into ramping up truck numbers. So I I think if there is a surprise on that this year, then my expectation is that it will be a surprise on the upside rather than a disappointment. So if I then round off current trading and and the outlook, you know, what's happened since the end of the year, then, you know, we continue to be ambitious with our growth targets. The market expectation in the latest brokers research note shows a roughly 25% uplift on revenue from f y twenty seven.

25:25 Bridgestone iTrack certainly won't contribute that sort of growth rate. So we need to over perform that both in SOAR and in TRANSENSE TECHNOLOGIES, and we have internal targets that are significantly higher than that. So we have left ourselves some headroom. But nevertheless, they are ambitious targets, we would say that from the outset. In terms of what's happened since the end of the year, we've got two months, nearly three months of trading under our belt, which is in line with our plans. There is some half two waiting to our plans. We, you know, we have more to deliver in half two than we have in half one, but we've made a very good start. In terms of Source Sense, then there are very good prospects for growth with our mature customers in motorsports. And I've seen on the question bar there, there's a few questions about what's happening with motion applied, and I'll I'll put those to Ryan in a few minutes and we can get some depth on that. But also within aerospace, the depth of our relationship, particularly with GE Aerospace and with Airbus, is getting ever stronger and allowing us opportunities to earn increasing amounts of non recurring engineering development revenue, but also component sales.

26:37 And we have a number of other aerospace clients where we expect to move into the development phase on a funded basis. So in terms of the sort of bedrock of that business revenue in the short term, we're well placed. But then we have a number of funded projects underway moving towards higher volume markets where we expect to be able to talk about that as the year progresses in terms of moving towards production. Within TRANSENSE there's a certain uptick in the underlying run rate business. Over the first couple of months of the year. The the business is performing well. But the post year end customer wins will really prime the business for growth in the second half and beyond. We've talked about Continental.

27:25 Again, you know, I've seen a few questions on that, which Ryan and I will answer soon in terms of how that's likely to progress into revenue and what are the similar opportunities there are around it. But I also wouldn't underestimate the two post year end announcements that we've made in terms of our alignment with independent TPMS providers, Bartech and Hamilton, as potential future channels for sales. Also, we have the new products which are already launched and out with customers awaiting demand and further product launches to be announced during this year, which we'd expect to accelerate the prospects within TRANSENSE TECHNOLOGIES. So I think that business is very well set. I will repeat myself on Bridgestone.

28:11 So I will close that, you know, the overall strategic objective of the company is to position SourceSense and to position TRANSLOGIES in strong, defendable positions in high growth markets where they each have something to offer to clients in terms of enabling technology, which, will enable those clients to be more competitive and more successful in their own markets and offer very high growth potential for us. I think that even in a world where r and d budgets are tight, our products tend to promote efficiency, and therefore, you know, there there is a cost justification for them rather than purely a revenue growth justification in a difficult world.

28:57 And as the world adapts to the use of AI, then I think again, in both sides of our business where data is the new oil, then our ability to develop large volume datasets to be used in AI applications will increasingly be recognized for value. I'm going to pause now and curate some questions. Just before I do, this slide offers you some further resources. Do feel free to visit our website. There's some very interesting stuff on there, both in the business pages themselves, but then also in the investor relations pages. There's plenty of history and foundation there and some forward looking information. We also have a YouTube channel with a lot of short explainer videos about various applications that our products are used in and what makes them so special.

29:50 And last but not least, please feel free to email us at [email protected]. We have an an increasing direct contact with our private shareholder base where we now maintain an investor community and make sure that we communicate with those investors directly and give them the opportunity to both ask us questions, including a session that we're running tomorrow evening, but then also from time to time to visit the site. So if you're interested in that sort of activity, please feel free to join our community. I'm going to move to questions now, and I think I'll start, if I may, with TRANSLOGIES.

30:37 We have a few questions grouped together here, Ryan. You might want to make a couple of notes because I think it would probably help if I give you all of the questions and you can answer them, you know, in a logical manner as a story rather than individually. So first of all, sort of overarching, question four, will TRANSLOGIES revenue fully replace the Bridgestone royalty income by 2030 in your opinion if all goes to plan? So I think that's sort of an overarching question. But underneath that, there's a bit of a drill down into the tyre majors' relationships. Firstly, do you expect to announce other deals with tyre majors like Conti? Secondly, how long will it take to reach the 700 k forecast with Conti?

31:29 And then I'm just gonna look at Ben's questions thirteen, fourteen, and 15. Is the problem with tire majors a minor blip or a trend? 14, does the board expect to replicate the deal with other tire majors? 15 is a repeat of the question I've already given you. So I think that's sort of an overarching group of questions there about our relationships with the tire majors and the opportunities to develop the business there. Yeah. So the general overarching question about TRANSLOGIIC replacing British term revenues, in in my view, yes. And, you know, better than there's a lot of growth opportunity for the TRANSENSE TECHNOLOGIES business. We're we've definitely been laying the foundations for that growth for the future with people like Conti and and others. So I mentioned before that's a the Conti deal is a big shift. It moves them from being a pretty small customer to being one of our larger customers.

32:29 We expect that to get up into, sort of run rate revenue over the next twelve months. So it should start to have an impact next calendar year, once we've got the the, custom version of the products launched for them. So, you know, it's it's not a particularly long, program, and and they have a need to get moving with it, as much as we want to get moving with it. We we are in, detailed discussions with other tire majors about similar programs and and also quite some quite different programs, to be honest, relating to, you know, hardware supply for them. Some of those are some of our existing established customers, but we do also have some, some new time major business on the horizon, and we continue to develop that.

33:27 I think the the the downturn that we've seen in that market, I I would characterize it as a blip. I mean, I think we've had this sort of discussion previously. You can go and, you know, you can find news about this outside of, of us. It's one of our particularly customers who was a very big customer, had a a pretty difficult year or so. It it's there's a lot of different factors that have caused that. I think they're they're through through the worst of that now, and and and are looking forward much more optimistically. They've done quite a bit of restructuring on their business, and there's also some you know, they're they're getting some, some of some other things working properly for for them now. So, yeah, it's it's a blip rather than a a major trend, and we are successfully developing business with others. I think in general, the market's gonna get a lot bigger for us with tire majors because up until now, tire majors have have really used our product in their managed tire businesses, and that's been a fairly small segment of what they do. The use case now for our product and tire management software is getting much bigger bigger than that, particularly in Europe because of new legislation.

34:42 So, you know, potentially, there's a a very large increase in the the potential market for our tools with, with customers like like that. So, yeah, I think that covers all the points. Follow-up questions then. A few years ago, we said the addressable market for transcend for TRANSLOGIES, actually, should read, was 25,000,000. Has that figure changed? And I think there's a net there's another aspect of that I'd just like you to cover if you could, Brian, in that since the end of the year, we've actually made three announcements on TRANSLOGIES. Although the continental one was a full blooded RNS, had numbers in it and therefore inevitably got more attention, there's actually two RNS reach announcements about new deals that we've struck with Bartech and Hamilton.

35:33 I think it would be interesting to just explore that part of the marketplace and where the TPMS independence fit into the market and then maybe comment on the total available market as well. Yeah. So, I mean, the total available market is is much, much bigger than 25,000,000. I think what the way we'd positioned that before was, you know, you you could envisage, business like TRANSLOGIES being 25,000,000, revenue. And and I think that the the market is getting bigger and bigger as there's more tyre management coming in, both regulatory required Europe, but commercially required in the rest of the world because tyres are such a big operating cost to fleets.

36:21 So the market is growing. I think it's a good time for us to be in, you know, working in that market. And and as we're expanding our offer, we're increasing the size of of market that we can access. You know, it's it's not that long ago that we didn't have a software package we could offer so we could only sell to customers that already had their own software. Now we're able to complement, you know, to talk directly to fleets that don't have software solutions and to other companies. We only had the inspection tool not that long ago. We've now got, the inflation tool as well and the high pressure version of the inspection tool. So the overall business is broadening, and I think some, you know, there's small growth prospects as a result of that, but also, I would say, resilience as a result of that as well, where we're concentrated in the past on one, two customers and, one product. So, that's the sort of market. Yes. Absolutely.

37:16 You know, I'd I'd be happy I think everyone would be happy if we get TRANSENSE TECHNOLOGIES to a 25,000,000 revenue business. It is a much bigger market than that, though, that we're in. So it's it's not an unrealistic, thing to be wanting to try and do. Yeah. Okay. The the other announcements yeah. You're right. It was one of the questions that said we'd only made one announcement, but we we've made three. So we did two new distribution two new distribution deals. So one focused around The US with Bartech. So Bartech USA is a is a American subsidiary of a UK based company. Fantastic bunch of guys. You know, very, very strong supplier in the aftermarket TPMS market.

38:02 They've got some great routes to market for that product in The US. Very, very strong customer side relationships. So we're working with them, to access a a whole new group of customers compared to our other existing routes to market and distribution channels in The US. So it's it's quite exciting, and there's there's a lot of activity with them, around putting new programs in place. The second relationship was with Hamilton, so also a market leader in the TPMS industry, but this time focused on the European market and that the the purpose of the the deal with Hammonton, they're a bit a little bit different to Bartech, although similar on the surface, but they have a different route to market, obviously, aimed at the the European market this time for us, and and very sort of specific types of customers and applications for the for the tool. So we expect that to bring some significant new business through as well.

39:05 I think, you know, in addition, fair to say that we are also working on some other very significant bits of business. So that's certainly not it in terms of news flow. And they're at the you know, wash the space. There's there's more stuff coming. Right. Thank you. I think we'll flip over to now then. So the first question on SourceSense is around the the pivot of the business model away from licensing and towards becoming a component manufacturer or a component supplier, I should say. Perhaps you could just talk about that a little. The question is, do you envisage SourceSense becoming principally a component manufacturer, an IP licensing business, or a combination of the two? Which model generates the best margin and return on capital?

39:55 Yeah. So the actual it's a bit nuanced, but the answer is none of the above. So really, the the business model for SOURCENCE is we are what you what you what is known in the industry as a a fabless manufacturer. So we we're not really a true component manufacturer. We're we're a fabless company, which so what does that mean? It doesn't mean that we are not excellent, you know, without fabulous. It means that we don't have a manufacturing, in house manufacturing capability for our key components being the ASIC and the sensing elements. So in the past, it's and this is a bit of a nuance. I think the model was that those the manufacturers in our supply chain would act as a tier one and sell to customers.

40:43 The various reasons why that didn't work in the past. So now the the model is that we will be the tier one, and be making those sales directly to the customers, but we we're not manufacturing the components. That that's still being made in our supply chain. So we're a fabulous sensor company, supplying components made in our supply chain to others and benefiting from that in terms of taking the revenue from that. And it means we're in control of what we do. So majority of our revenue should come from component sales. There should also be significant revenue from application engineering and validation support. And then to a lesser extent, we will still earn revenue from instrumenting components such as shafts with torque measurement systems. So and I talked about that when we were going through SAW.

41:32 You know, the pilot line is there principally to help us develop processes we transfer to other people, but it's also there, and it gives us capacity to manufacture in house up to a certain volume ceiling, should we choose to do so for the right sort of project. So things like the shafts and motorsport for motion applied have always been made inside of TRANSENSE. They'll continue to be made inside, but they'll be made on that semi automated production line in the future and will as will other parts, into sort of similarly, specialist market. So there's there's not there is no kind of pure play IP licensing business, envisaged. All of the future revenue is linked to either that product supply, component supply, or the provision of a service for the for the customer. Absolutely.

42:20 That's perhaps an opportunity just to expand a bit on the relationship with Motion Applied then, The JDA expired in September. Is it being renewed? Will the scope be extended? Are you actively exploring new license applications for other areas? Do you anticipate new terms being signed with Motion Applied? Yeah. So Motion the Applied JDA, it's it's not a license. It's it's a it's a was a joint development agreement, which is slightly unusual title in my view given what we actually do with them. But, you know, effectively, Motion Applied act as our distributor into motorsport. They're a value added distributor, so, you know, they hold the customer relationships.

43:06 They do all the trackside support and they do other stuff as well. But effectively, we're we're, you know, developing the the sensor systems, manufacturing them, and and they're doing the distribution into motorsport. So we we absolutely are, working on a a new license agreement with them. The the existing agreement did have some rollover provisions, so it hasn't expired as such, but we are working on renewing that, mutually with with Motion Applied to get a good agreement in place for both of us. Their scope isn't changing under that new agreement. It's still very focused on, you know, it's professional motorsports, and it's on vehicle applications. Applications to them. They are they are focused on as a as a business.

43:53 I I saw a mention of this new deal that Motion Applied have done outside of motorsports. That doesn't have an impact on us. That's not something that we're involved with. Okay. Thank you. There's a cluster of questions, Ryan, around the disclosures of the SOAR pipeline. I think it's fair to say that you and I have had three or four different attempts over the last five or six sets of results to find a succinct way of being able to map what the pipeline looks like for users. And, you know, I don't think we've come up with the perfect solution yet, but this it seems that four or five people asking questions like different formats, and everybody wants to see one somehow. I think, you know, for the purposes of this discussion, it would be very useful for you to just talk through how the pipeline is progressing. I think, you know, there seems to be questions around whether things are disappearing out of the pipeline or whether they're simply progressing more slowly than we thought or whether they're, you know, progressing as we expected, but perhaps spending a bit less money with us directly rather than on their own internal development and validation.

45:06 Can you just talk a little bit about the whole evolution of the sales pipeline over the sort of last twelve months and the next twelve months? Yeah. So, you know, opportunities continue to progress through the pipeline. We we are making progress there, and the the initial you know, those initial projects where we're doing a proof of concept study and then delivering initial prototypes and then moving on to the next phase, which is more of a production intent development. You know, we do have a number of of projects going through that journey. Some of them are going through it very quickly, and the customer is spending a lot of money on their side, doing work, and and we're we're doing a lot of work on our side.

45:54 Some of them are progressing less quickly, and, you know, we do have one or two that have ended up getting installed because of things outside of our control. You know, we've had a one of our customers was acquired, and that slowed things down with them as as they're sort of settling in their new, new group structure. Actually, two of our customers have gone through acquisitions in the last, twelve months, which slowed slowed development projects down. So, you know, they're yeah. Some some of them haven't gone as quickly as we would expect it to. But I I think, you know, where projects have come to where where projects have slowed down or or paused, it's not because of a problem with SAW.

46:40 You know, it's been sort of issues outside of of our our scope. You know, in in general, what we can see is that we're managing to make good progress with SOAR applications, and and we do still have, you know, sufficient projects progressing through the business to give us a lot of confidence. I personally also think some of the ones that have slowed down a little bit in the last twelve months will begin to gather momentum in the next twelve months, as that that changes. So, the the work becomes more involved. The more we do, you know, we're we're learning a lot in terms of those, scale the production processes and the things that we need to do with the pilot line. There's there's a lot of activity around all of that in terms of how we make the those torque measurement systems in particular. Sometimes temperature measures measurement systems are more scalable. So yeah.

47:33 Thank you. Could there's an interesting question on opportunities in the fitness market, Ryan. I think we sort of treat that internally as a subset of the e drive market. And, obviously, it's potentially very high volume, but it's very cost competitive as well. Could you just expand a little bit on some of the opportunities that we've seen? Obviously, are one or two that I'm very well aware of where we got their names, but perhaps you could just talk about areas where there is a use case and the likelihood of us being able to hit the sort of competitive cost targets that make something which is a premium high end consumer product feasible. Yeah. So these effectively, yeah, we have a couple of opportunities that fall under what we call the fitness market.

48:23 So that is distinct from we have talked in about the health market on on and then, you know, we do have separately some health medical applications as well. So what we mean by fitness and why does it come under the e drive? So, basically, you know, you you have a product which is using an electric motor to to power the product or to provide a load, a resistance load for the for the user. This sort of equipment that is is covered by that, you know. If anyone's been in the gym recently, you'll see there's they're full of smart gym equipment where, you know, it tracks and monitors what you're doing and shares it with your friends and all that kind of thing. So this is the era of new smart connected gym equipment, and providing those machines with, improved power measurement for the for the users. So that's that's the application.

49:19 It's a it's it's a growing market. It's it's a huge market actually today. It it grew very quickly in this COVID era, but then had a bit of a dip. But now it's it's, it's going well. And the the fundamental thing they're doing is trying to accurately measure how much input power the user, is putting into the machine, and and we're working on those. The the products are are high end. They're not not cheap. Yes. We're talking about premium items, and there's a a big demand in that industry to make the make that power input data more accurate. Excellent. Thank you. I'm gonna pivot away from the SAW business now towards, sort of corporate matters.

50:07 So we have a question from David b. You mentioned some time ago you were unable to buy shares when they're around the current price due to the closed period. Did you expect to see this price level again? I think when it comes to the share price, it's it's fair to say nothing surprises me. You know, it's the end market is an extremely difficult place to be. Even in a mature company with pretty reliable, slow moving earnings growth, nevertheless, the share price and the valuation driven from its PE ratio can be extremely volatile. You know, there are more people selling into the end market than there are buying. That's a fact.

50:57 And so the marketplace is an extremely difficult place to navigate if you want to try and manage the share price short term. The truth is we don't. It's disappointing for shareholders to see the share price where it is today based on the performance of the business. But all we can do is continue to run the company in the best way that we can to communicate with the market what we're trying to achieve and why we believe that we're building substantial long term value and not accept that there will be timing differences between the market recognizing that value and where the price is today. That does create buying opportunities. The company has taken advantage of those in the past when it was generating more cash than it was able to invest at the time.

51:44 And that was the drive behind the buyback program in the early part of the Bridgestone license income. More recently, as we've stepped up our investment in the business, then we think that's going to produce a higher return than buying the shares even at this price. If the question is directed more at us as individuals, then, you know, you will recognize from the news flow that there is a lot of information available to us on things which are not yet in the public domain. And most of the time, over the course of a twelve month period, you would find that the directors are likely to be inside on one thing or another. So there are not always windows where we can buy. And but when there are, you know, both both of the people you see before you today have been consistent buyers of the stock and have skin in the game, add a little bit of hair, not that.

52:40 So I hope that answers your question on on both directors buying and perhaps company buying as well. Do you consider that the low share price makes the company vulnerable to a bid? Value always finds a way out. That's a fact. We believe that the shareholders in TRANSENSE are solidly behind the board in terms of our execution of strategy. But every every public company is for sale all the time if somebody wants to stump up and buy it. So, you know, I suppose the straight answer to that question is yes. But, you know, we believe that the quality of our communication with shareholders, you know, both formally and informally is such that that does not make us vulnerable to being bought at the wrong price.

53:35 I'm gonna shift to question two, and I'll put it to you, Ryan, just to for contrast. Well, I think it's disappeared. I'm just gonna put it in just I was trying to find it. I think it's been curated out of the list on on account of having been answered. I'm not sure it was. One second. I've got a note of this here. What does a successful TRANSENSE look like in '20 And the next next ahead. And it will be able to be profitable from SOAR and TRANSENSE TECHNOLOGIES without the iTRAQ royalty income.

54:25 TRANSENSE TECHNOLOGIES will have significant growth, expanded its customer base, and also its product offering, really be, you know, leading the way in that tire management tools market. SourceSense will, you know, it'll have sufficient revenue to cover its own costs, but it'll just, I think, be starting to end at a phase of significant revenue scale up as as higher volume projects start to come into production. So we're slightly trailing behind, I think, on that that scale up even though it's it's jumped ahead a little bit at the moment. Yeah. I think that's, that's absolutely right. This is this is a business in which both of our principal businesses are capable of being financially self sufficient and scaling at a rate, which will leave us not vulnerable to the reduction and then eventual disappearance of the iTrack royalty.

55:26 Some of that iTrack royalty will most certainly appear in residual cash in the FY 2030 balance sheet, in my opinion. Right. I think that's just about it for the Q and A, Ryan. So I think we'll wrap up there. Thank you very much everybody who's attended. I hope that your questions were answered and you got what you wanted. For those that are registered on investor.relationstransens.co.uk, then invitations will be coming out to attend the Microsoft Teams, live q and a tomorrow evening, at 5PM. And if anybody would like to join that community, then please email us, and we'll make sure that that happens. Thank you very much, everybody. Have a nice evening. Bye bye.

56:13 Perfect. Thank you, Nigel and Ryan, for updating those investors today. Can I please ask investors not to close this session as you now be automatically redirected to provide your feedback On behalf of the management team of TRANSENSE TECHNOLOGIES PLC, we'd like to thank you for attending today's presentation, and good