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Transense – interims argue “continue to view the future with cautious optimism”… but is it cash crunch ahoy?

By Steve Moore | Wednesday 7 February 2018

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.

Sensor systems technologies company Transense (TRT) has announced results for its half year ended 31st December 2017, including emphasising “significant market traction for both tyre probes and the iTrack II system for mine haul trucks”. Sounds encouraging…

Overall though, group revenue was only 3% ahead of the corresponding 2016 period, at £1.07 million – and there was also only a slightly reduced loss, to £0.92 million. The net cash outflow was £1.19 million.

The company argues “we are closely engaged with a select number of the world's leading companies, which are capable of generating very substantial growth in future” and “with Translogik revenues building and commercial traction increasing, we continue to view the future with cautious optimism”. However, the noted net cash outflow saw period-end cash (net) down to £1.33 million.

The company points to that with a “growing rental business the directors expect to see the lower levels of cash consumption”. However, there will need to be a swift and dramatic about-turn from the first half financial performance to avoid cash crunch ahoy.

I previously noted caution HERE on an AGM update in December - pointing to the noted trading performance and no working capital or cash position update. As the shares continue a slump from then, hopefully that warning was heeded. Still a sell / bargepole.

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