REG - Tan Delta Systems - Trading update

Tan Delta SystemsAnnouncement

02/01/2024 07:00

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RNS Number : 2718Y  Tan Delta Systems PLC  02 January 2024

Tan Delta Systems plc

("Tan Delta" or the "Company")

 

Trading update

 

Tan Delta Systems plc (AIM:TAND), a leading provider of intelligent monitoring
and maintenance systems for commercial and industrial equipment announces a
trading update for the year ended 31 December 2023 ("FY 2023").

 

Revenue for FY 2023 is expected to be approximately £1.44 million (FY 2022:
£1.6 million). Whilst this is below original management expectations, the
timing of the year end has ultimately straddled a number of mature trials that
had been expected to commence roll out towards the end of H2 2023, but due to
customer logistics, are now expected to commence in H1 2024. The Board is
keen to emphasise that good and comprehensive progress has been made on these
mature trials and alongside these, numerous other trials and roll outs have
progressed as expected.

 

A key operational focus for H2 2023 was to hire talented people to support and
enable our rapid scaling plans with a particular focus on sales, customer
support and production. Pleasingly, good progress has been made including with
the appointment of a head of business development for the US, marketing
manager, product manager and customer support engineer. The recruitment of the
right people is taking time and longer than originally anticipated for certain
positions and resulted in a cost saving to that originally budgeted.
Accordingly, the Board expects that the Group's adjusted net loss for FY23
will be broadly in line with original management expectations at circa £0.4
million.

 

Cash remains healthy and is approximately £4.5 million as at the year end.

 

Progress on our strategy

 

Following our successful AIM IPO in August 2023, our objectives were to
continue to support existing customer trials and evaluations and for the first
time commence global product marketing to pro-actively introduce our existing
solutions to new customers in the global heavy-commercial and industrial
rotating equipment markets, where reliability, cost reduction and ESG are
critical success factors.

 

In terms of customers, we are progressing discussions with a number of new
potential customers including one of the world's largest ship engine
manufacturers with 15,000 active engines each requiring ten sensors. Elsewhere
we are developing solutions for one of the world's leading oil and gas
producers seeking to optimise their use of oil and decrease their maintenance
costs both of which contribute towards their ESG targets. More recently, we
signed an evaluation agreement with Siemens to trial our sensors on their
baggage handling equipment, which could open a new vertical with the potential
for significant sensor volumes.

 

In October, we rolled out our first ever marketing program through selected
digital channels, which was also complemented by two new sales hires. This
successfully generated a significant number of enquiries across multiple
market segments and product groups as the global market learns about our
technology and products for the first time. A Tan Delta system is a considered
purchase by substantial companies and thus we expect to see these enquiries
begin converting into sales from the end of Q1 2024 and then continue to grow
strongly as we continue to ramp up marketing activities and attend the first
of a series of exhibitions as an exhibitor.

 

Additional non-executive director search

 

As set out in the Company's Admission Document, the Company remains committed
to appointing a second independent non-executive director.  The Company is in
active discussions to fill this position, although no formal offer has yet
been made. However, the Board are optimistic that an appropriate candidate
will be appointed in due course, and further updates will be made as
appropriate and as soon as practicable.

 

Outlook

 

Whilst a little slower than originally envisaged, the Company has gained
significant momentum since its AIM IPO in August 2023 which continues to
accelerate. We are deploying our investment capital diligently and have seen a
significant increase in sales pipeline, in part due to our successful initial
marketing efforts. Accordingly, we look forward to 2024 with great optimism as
we continue to implement our business plan and introduce commercial and
industrial operators of equipment with intelligent monitoring and management
systems that enable them to reduce costs, improve reliability and hit their
ESG targets.

 

For enquiries, please contact:

  Tan Delta Systems plc                                             +44 845 094 8710
  Chris Greenwood, CEO
  Steve Johnson, CFO

  Zeus (Nominated Adviser and Broker)                               +44 203 829 5000
  David Foreman, James Hornigold, Ed Beddows (Investment Banking)
  Nick Searle (Sales)

 

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