Torotrak makes headway

TRANSMISSION specialist Torotrak has reduced its annual loss to £1.9m, and is starting to see the benefits of license agreements with big players, despite tough conditions in the auto sector.

The Leyland-based company, which has its core markets in commercial vehicles, outdoor power equipment, off-highway and automotive, signed a major licence and exclusivity agreement with US company Allison Transmission, now the company’s largest shareholder with a 9.1% stake, in March 2009.

The company said that the growing credibility of its technology has opened up new opportunities away from main drive transmissions in areas such as variable drives for auxiliary equipment.

“The adoption of our technology by an increasing number of major partners is undoubtedly enhancing our ability to open doors elsewhere,” it said in its results statement.

It added: “At this stage of the company’s development, Torotrak’s financial results are heavily influenced by our continuing success in securing major new licensees.”

Torotrak did make £500,000 headway on its pre-tax loss – taking it from £2.4m to £1.9m for the year top the end of March 2009. Revenues increased by 25% to £4.6m from £3.7m.

The company saw a growth in operating cash flow to £1.0m (2008: £0.5m) and a reduction in operating loss to £2.4m (2008: £2.8m). Cash at year-end increased by 30% to £15.0m (2008: £11.5m).

The company said that despite the automotive industry’s difficulties, there remains strong interest in developing ways to increase efficiency and reduce fuel consumption.

Torotrak said it will continue to develop its intellectual property portfolio and secure additional licensees in core markets.

Dick Elsy, chief executive said: “Torotrak has this year moved onto a very strong commercial footing – strong in terms of the year’s achievements and strong in terms of our platform for the future.

“Whilst the economic environment has been extremely challenging, Torotrak has succeeded in three key areas: in gaining more customers; in strengthening our financial resources; and in delivering a strong forward order book to continue our business growth towards full commercialisation.”