Company Announcements

Tan Delta Systems plc

("Tan Delta", or the "Company")

Interim results for the six months ended 30 June 2023

Tan Delta, a provider of advanced industrial and commercial monitoring systems, is pleased to report its first set of financial results for the six months ended 30 June 2023 ("H1 2023" or the "Period"), since its admission to AIM in August 2023.

Financial highlights:            

·      Revenue increased by 54% to £0.96m (H1 2022: £0.62m)

·      Gross profit increased by 52% to £0.61m at 63% margin (H1 2022: gross profit of £0.4m at 64% margin)

·      Profit from operations (excluding non-underlying items relating to the IPO) of £0.18m (H1 2022: £0.03m)

·      Strengthened balance sheet following receipt of net proceeds of £4.8 million, from successful AIM IPO

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Notes to editors

Tan Delta Systems plc has developed innovative technologies, products and services that enable operators of rotating equipment, from trucks and ships to generators and wind turbines, to reduce oil consumption, maintenance costs, breakdowns and carbon footprint.

Tan Delta's products offer customers a compelling proposition of being able to reduce operating costs whilst improving reliability. This is achieved through equipment operators gaining a better understanding of the actual real time maintenance status of their active equipment through the real time analysis of lubrication oil used within engine, gearboxes and hydraulic systems. Tan Delta's data analytics, enables the following benefits:

·      Reduced oil consumption by approximately 30 per cent, by ensuring oil is not changed before it has reached the end of its life;

·      Reduced breakdowns and associated costs by detecting issues before damage or failure occurs;

·      Increased equipment operating times by enabling intervals between maintenance to be extended and;

·      Reduced carbon footprint through a reduction in oil use and prolonged equipment life.

The Company currently offers four main products built around its core oil condition analysis sensor technology, all of which target primarily large commercial and industrial equipment market segments. 

Tan Delta was admitted to trading on AIM in August 2023 with the ticker TAND.  For additional information please visit www.tandeltasystems.com.

LinkedIn: http://www.tandeltasystems.com

Twitter: https://x.com/Tandeltasysyems

Unaudited statement of profit or loss and other comprehensive income

For the six months ended 30 June 2023

Unaudited statement of financial position

As at 30 June 2023

Unaudited statement of changes in equity

For the six months ended 30 June 2023

Unaudited statement of cash flows

For the six months ended 30 June 2023

Notes to the unaudited condensed interim financial statements.

1.      General information

The interim financial statements were approved by the Board of Directors on the 28 September 2023.

2.      Basis of preparation

The interim financial statements of the Company are for the six months ended 30 June 2023.

The comparative figures for the financial year ended 31 December 2022 are not the Company's statutory accounts for that financial year.  The comparative figures were prepared under International Financial Reporting Standards ('IFRS') for the purposes of presentation in the Company's AIM Admission Document published on 11 August 2023 ('Admission Document').  The statutory accounts filed at Companies House were prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' including the provisions of Section 1A 'Small Entities' and the Companies Act 2006.  The financial statements were audited and prepared in accordance with the provisions applicable to companies subject to the small companies' regime even though they were exempt from audit under Section 477 of the Companies Act 2006.

The condensed interim financial statements for H1 2023 do not include all the information and disclosures required in the annual financial statements and have not been audited or reviewed by an auditor pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information.  However, selected explanatory notes are included to explain events and transactions that are significant for an understanding of the changes in the Company's financial position and performance in the period.

The condensed interim financial statements for H1 2023 have been prepared based on the accounting policies adopted within the Admission Document, and those expected to be adopted for the year ending 31 December 2023.  These accounting policies are drawn up in accordance with adopted International Accounting Standards ('IAS') and International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and adopted by the EU.

AIM-listed companies are not required to comply with IAS 34 'Interim Financial Reporting' and accordingly the Company has taken advantage of this exemption.

IPO costs

On Admission to AIM on 18 August 2023, the Company issued 23,074,000 new ordinary shares, taking the number of ordinary shares in issue to 73,223,800. Total proceeds amounted to circa £6.0m.  The costs associated with the IPO, which were committed at 30 June 2023, amounted to £0.47m and they have been recognised as non-underlying expenses in the income statement in H1 2023.

6.      Income tax expense

No income has yet been recognised in H1 2023 in relation to R&D tax credits available from HMRC through the SME R&D relief scheme.

The calculation of basic earnings per share is based on the results attributable to ordinary shareholders divided by the number of ordinary shares outstanding as if the bonus issue and share split had occurred at the beginning of the earliest period presented. The earnings per share calculations for the period and prior period presented are based on the new number of shares.

The number of shares in issue at the end of the period is used as the denominator in calculating basic earnings per share.  As the Company is loss making the effect of instruments that convert into ordinary shares is considered anti-dilutive, hence there is no difference between the diluted and non-diluted loss per share.

During the period ended 30 June 2023, the Company completed a 110 for 1 bonus share issue and a subdivision of shares. Prior to the bonus issue there were 451,800 shares at £0.001, after the bonus issue there are 50,149,800 shares at £0.001

Banks loans comprise a Coronavirus Business Interruption Loan provided by Lloyds. The loan was taken out in July 2020 and matures five years after this date.

Called up share capital

Called up share capital represents the nominal value of shares that have been issued.

All classes of shares have full voting, dividends, and capital distribution rights.

On 1 June 2023, the ordinary shares were subdivided from £0.01 to £0.001 (45,180 shares to 451,800 shares). Subsequently a bonus issue was made for all the shareholders holding 451,800 shares at that date.  The bonus issue offered 110 ordinary shares for every 1 ordinary share in issue, with a nominal value of £0.001 per share.  This increased the number of ordinary shares in issue by 49,698,000 to 50,149,800.

13.  Reserves

In anticipation of re-registering the Company as a public limited company, at a general meeting of the Company on 1 June 2023, it was resolved that the Company would reduce its share premium account by an amount of £1.52m by crediting the Profit and Loss Account.

Share premium account

This represents the excess value recognised from the issue of ordinary shares above nominal value.

Retained earnings

This represents cumulative net gains and losses less distributions made.

14.  Post balance sheet events

No adjusting events have occurred between reporting date and the date of authorisation of the condensed interim report. The Company listed on AIM on 18 August 2023 raising circa £6.0m. The Company issued 23,074,000 ordinary shares thus taking the total number of ordinary shares in issue to 73,223,800 from 50,149,800. The costs associated with the issue amounted to approximately £1.2m. £0.47m was recognised in H1 2023 and £0.73m will be recognised in H2 2023.

On 18 August 2023, 1,253,745 share options were granted to those eligible under the scheme in line with the disclosures made in the Company's admission document dated on 18 August 2023. The options have an exercise price of £0.26.

 15.  Availability

 Further copies of this interim announcement are available on the Tan Delta Systems plc website, www.tandeltasystems.com.