"Optimism has to be in your DNA when introducing a new technology to the market," admits Torotrak's (TRK) upbeat chief executive, Jeremy Deering. That's true of investors, too, and the loss-making vehicle transmission systems company has certainly tested their patience over the years. Commercialisation could, however, become a reality fairly soon ahead of a slew of emissions legislation due after 2015.
After losing big backers like Toyota, General Motors and Ford, Torotrak's new sugar daddy - US automatic transmissions maker Allison - handed over £4.5m in licence and engineering service payments last year, driving revenue up by three-quarters. Another £4m will secure exclusivity this year and Allison has beefed up its stake in Torotrak by £2.5m to 13 per cent. Cash fell slightly after £3m went on a 20 per cent stake in Flybrid - it's developing a mechanical kinetic energy recovery system (M-KERS) that outperforms electric batteries when teamed with Torotrak's technology. A trial with bus operator Arriva in early 2014 could lead to commercial revenues within two years and tests in a Volvo road car have already shown fuel savings of 25 per cent. Buying the rest of Flybrid later this year looks sensible.
Torotrak's V-Charge supercharger, which overcomes the so-called 'turbo lag' in smaller engine vehicles, is promising, too. Nine big car manufacturers are interested and Charles Stanley predicts a tie-up with at least one in "six months or so".
TOROTRAK (TRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 30.3p | MARKET VALUE: | £53m | |
| TOUCH: | 30.3-30.5p | 12-MONTH HIGH: | 41.5p | LOW: 23.3p |
| DIVIDEND YIELD: | nil | PE RATIO: | 1515 | |
| NET ASSET VALUE | 8p | NET CASH: | £8.9m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 4.62 | -1.99 | -1.22 | nil |
| 2010 | 7.64 | 0.82 | 0.63 | nil |
| 2011 | 5.07 | -3.50 | -2.05 | nil |
| 2012 | 4.29 | -1.92 | -1.00 | nil |
| 2013 | 7.48 | -0.39 | 0.02 | nil |
| % change | +74 | - | - | - |
