Saturday, 27 November 2010

2010 Half year results and New Brokers

Since the last post on this blog there has been considerable progress in the business partners projects with Torotrak.

Firstly I suggest you go and have a read of the Torotrak Half Year report here:

There are several bits of good news contained in the report, some strategic, some to do with progress and others to do with publicity. You might also want to read the new broker report from new brokers Charles Stanley. They have put an initial share value target of 40p up as their first shot.

Firstly the long awaited MTD license curtailment is now underway and their rights to use the Infinitrak IP being restricted. Sources inside MTD have long said they can't manufacture the TTT or STT (or would that be some of the employees don't want to create competition for their incumbent hydraulic solution ?) - and we have known for over 6 months about the problems. After the missed design freeze in June it was never going to hit production this autumn. Strategically this now frees Torotrak to persue other customers for the STT and it's unique capabilities - which presents a great opportunity for new business development. It's almost a reverse Toyota situation, the customer couldn't get the design to work but this time TRK pulled the plug, not the customer. This alone indicates an improved confidence in the designs by Torotrak.

There is a huge list of partners getting nearer the point of convincing themselves that there can be no turning back to fixed gear ratios. It is truly getting to an exciting part in Torotraks history with large well respected companies investing significant amounts of their own time and money to make IVT technology become a reality.

Again I will remind you to read the half year report - I'm not going to replicate it here, as a long time follower I can see that slowly the technology is being fitted into the practical capabilities it has.

A long time ago I wrote a strategic assignment for a postgraduate degree - using Torotrak as a case study. The conclusion of it was twofold. 1. The need for IVT technology will be driven by legislation - and finally now the Euro Emmission regulations are looming on the horizons and the fines looking more like a reality - the vehicle manufacturers are getting their acts together rapidly. 2. Non-powertrain solutions have been found to get round the "not invented here" and incumbent technology investment (i.e. 6AT gearboxes in saloon cars).

The long term strategy has to be "surround the enemy" (in the words of Sun-Tsu) to develop so many solutions being used so widely that it becomes a no-brainer for passenger cars to adopt the technology. Passenger cars being the volume business that would deliver true TRK value.

This Strategic solution is finally being realised with several derivations of IVT technology making it into reality across different sizes, applications and concepts.

1. Main transmissions

  1. European Bus and Truck - three regime IVT powertrain installed
  2. Allison - Technology transfer complete for full IVT powertrain production ready design
  3. Carraro continue to exhibit and accellerate their IVT family of VARY-T transmissions

2. KERS (Flywheel)

  1. Flybus - Retrofit KERS (kinetic energy recovery solution) using an auxilliary power take off on the normal transmission. Cheaper than electric hybrid and more efficient. And more environmental !
  2. Flybrid - new install - Test transmission installed in Jaguar saloon car for on road testing

3. Engine speed de-coupling devices.

  1. Rotrak - Variable drive supercharging. This allows the effectiveness of the boost to be felt properly at all engine revs, not just at a certain rev-range. This means smaller engines can have a much higher power output and better driveability. Along with the obvious emmissions reduction.

The exciting market prospect of  being able to retrofit a KERS unit into a commercial vehicle is mouthwatering. Instead of the delay of awaiting for the new vehicle production programme to come to fruition (three to 5 years at least just to get to market launch), once a viable economic solution has been developed - it can be installed. Will it be installed ? - in the hard economics of the haulage industry anything with a 1 year payback will be snapped up. If you have an Allison transmission with a PTO languishing about - here's your chance to save some money and be more competitive.

Taking the retrofit route as a faster one to market penetration, one has to look at the possibilities of retrofit not just for KERS units but for Main Transmissions and Rotrak Superchargers. My personal conclusion is that Rotrak may have some possibilities,, main transmissions almost none, but a Retrofit KERS unit into a passenger car remains a much larger goal to be targetting.

Outlook for 2011
With prototype work starting to bear tangible real world results (not just mathematical model results), and a real ride experience that can be felt, the decision makers at Torotrak Licensee companies will soon be putting down hard money for real new vehicle production projects. With their experiences of TRK technology I fully expect that those projects will have a view to the inclusion of TRK technology. I just hope that TRK are ensuring that the decision makers are going to get that experience and make them advocates of the technology.

2011 is going to be the year that critical decisions will be made by the large licensee companies. Until those decisions are made, Torotrak is just another UK technology company. After those decisions are made Torotrak and IVT technology could be one of the most disruptive technologies we have seen since the invention of the car gearbox in the 20th century.

If you invest in Torotrak for dividends, you have about 4-5 more years at least to wait (if not longer depending on the future R&D investments), but if you are investing because of perceived future value - then you'll probably want to be in before those big decisions are made. We watch and wait with patience.

(p.s. all of this report is conjecture and has no value or robustness associated with it in any way and may not be taken as advice. Always do your own research and responsibility for your own financial matters)

Thursday, 22 July 2010

AGM 2010 and Tech Talk

Just a gentle reminder that it is the AGM taking place next week on the 29th of July 2010
More information here:

The annual report is available here for those who have not yet read it:

With promises of a launch of the quieter transmission from Infinitrak in MTD lawnmowers almost for a year now, and the possible news of the KERS unit being fitted to a Jag anytime soon as part of the TSB project there should be something for everyone, or just a sausage roll.

Progress with Allison and their standardised IVT transmission - and where they stand on licenses as well as the news on the current testing rigs for the European bus & truck manufacturer should be covered.

Additionally new partnerships as Rotrak for superchargers will be a topic of interest too. From the books it looks like TRK have put all the money in (even if it is as a loan - which seems a bit shakey) - but there is a nice photo of the CAD model on the website now.

Tech Talk
If you're interested the traditional pre-AGM tech talk has been arranged on this topic:
Subject... "The application of Toroidal Variable Auxiliary Drives (TVAD's) to super chargers"
Speakers... Roger Stone & Chris Brockbank
Time... 7:30pm on Wed 28th July

Seeing as the preliminary results stated they are going to try to focus on shareholder value (and in one comment say that the shareholders to date therefore have not been getting any), it will be an interesting AGM to see if director salaries, royalties and licenses are going to be addressed as well as if more investment in joint ventures is the new flavour of the board. 

The main concern is if the funds in the coffers are starting to burn holes in the boards pockets and they are getting jumpy. If there is excess money left in the coffers then a share-buy-back scheme might be the fastest way to deliver shareholder value. One other suggestion has been to get another licensee to purchase shares in the company - which is all well and good - but that is only likely to result in another share issue and dilution of shareholder value. Heaven forbid, they could even issue a DIVIDEND. But I've not got any hopes up.

Analysis of the preliminary report showed the short to medium term future of Torotrak is in the hands of Allison Transmissions - all outcomes are good - as long as they keep their current license - not continuing at all would obviously be bad. Some people seem to be holding out for Allison to take up all their global exclusivity options and more in terms of power rating - and anything else is bad news - which I can't agree with - as long as they are bringing their transmission to market that's great. If they are focussing on one solution at a time to get it to market and make it work in time for the emissions legislation that will hit - brilliant. The only bad news is if they stop all development - which for a company which owns 9% of TRK - is on the "highly unlikely" side of the scale.

Some news of Carraro would be welcomed, and any other tractor projects. We don't hold anything out for news on TATA, but to still be flagged as under concept studies for commercial vehicles (see page 7 of the annual review) after all this time - and allow to be named - would suggest it's not the flaming torch of shareholder value it once was.

Torotrak are a company in flux. They started out as an academic research project and after targeting the much maligned SUV market (which collapsed before TRK got there) have diversified around in both application and size. Scaleability is being explored, but so is the business model of licensing and partnership because in today's tough times of austerity - there isn't a single car manufacturer project listed on the page 7 diagram. How do TRK get people to invest in their technology and commit to getting it to market ? Buying a seat on the JV board seems to be the current idea - but is that really going to get enough voting rights to make things happen ?

Perhaps at some point, TRK need to design a standardised transmission for a product that needs a CVT (scooters perhaps), find a customer who will put them in (and buy them!), and get a subcontractor to make them and sell them at a profit. Then and only then will Torotrak have real control over their destiny, at the moment they are just spectators, just like us shareholders. As such the JV with Rotrex will be watched with great interest.

Thursday, 27 May 2010

Preliminary results: First full year profit achieved

Preliminary results announcement for the year ended 31 March 2010

Full details available here:

Operating Profit and Profit after Tax both achieved.

Financial highlights
  •  Revenue growth of 66% and above break even in profit after tax
  •  Robust cash resources of £13.1m at year end
  •  Three-year cumulative positive operating cash flow of £0.4m, considerably ahead of expectations set at the time of the 2007 Placing & Open Offer
  • Strong level of licensing and engineering orders
Operational highlights
  • Refreshed strategy increases emphasis on lead customer programmes and energy efficiency solutions to tackle CO2 emissions
  • Commercial vehicle prototype transmissions built and on rig tests, with lead programmes progressing well
  • Second Allison contract payment of £3.75m received in March 2010
  • Infinitrak's second transmission completing field tests prior to production release
  • 15% stake in Rotrex acquired and Rotrak joint venture established to develop and commercialise new technology to assist with engine downsizing
For further details go and read the whole report (linked above)

Before I comment any further I'm going to wait for the reports and information gained from the TPSA representative meeting held with Dick Elsey on Wednesday. Hopefully there will be more information on the positive direction of the new strategy, and the closure of the old strategy and clear end milestones of projects related to it- one of which will be the Allison licensing decision next year.

Key to all this is that we have to wait to see the result of the Commercial transmission projects and the Allison transmission license which combined has had 55% of the companies resources working on it through 2010. Crunch time is in 2011 when Allison have to make a decision on their licensing rights.Watch that space...

Along with a new business strategy we seem to have a new entente cordial with potential investors and shareholders. I for one look forwards to the new focus on communication and information from Torotrak: "our task will be to point to the progress and milestones that inform shareholders of the increased prospects, confidence and proximity to recurring royalties and production earnings." - N.B. Please employ someone who can write with clarity and a positive outlook when you do (I hear that Alastair Campell is looking for a job.)

More news as it happens - There is going to be a tech talk on Superchargers before the next AGM, I'll post details here as before.

Thursday, 15 April 2010

May The Craftsman Zero Turn 42 inch 22 hp Model 28933 Rest In Peace

As you know - I'm not posting a great deal on this blog as the majority of content is automated  and it keeps things ticking over as an information route.

Every now and again there are some nuggets of information I want to draw attention to and this is one of them:

May The Craftsman Zero Turn 42 inch 22 hp Model 28933 Rest In Peace

Given the technical success of the product and the twin-torroidal transmission, (TTT) in the Infinitrak range of products with MTD as the manufacturer, this news is either indicative of the continuing recession in the USA (which is tip-toeing it's way out) or the continued market positioning of the TTT as luxury just being too luxury for too many people.

One cannot fault the pedigree of the product, the market review (as can be read in the link above) however it seemed to be continually reviewed and measured in the wrong ride-on mower category because of it's zero-turn capabilities. The marketing appears to have been off target for the key customers if this is the case - if the experts can't even pigeon-hole it correctly what chance have the salesmen ?

Moving on - in other news we draw closer to the Jaguar project and their installation and adaptation of the Flybrid flywheel solution. Slide 14 - system as installed is the one to look at. on the link here:

New Scientist  magazine also recently highlighted the torotrak transmission credentials in their recent article here:

as references to the technology become more and more public mainstream, hopefully the technology will also start to become more visible in the public domain - a million miles on from the acedemic and industry publications which previously held so much information and hope.

Until the Year end announcements or further RNS's, that's it from me. Hopefully there will be some dilligent forward looking statement on the situation with Sears and Infinitrak sometime soon (explaining that the single torroidal transmission is the reason why...)

Enjoy the spring weather !

Thursday, 28 January 2010

Torotrak TechTalk on Sunday the 31st January 2010

The Torotrak Tech Talk - Sunday 31st January

This weekend's Sunday Lunch and TechTalk takes place on Sunday the 31st January 2010

The talk by John Fuller, (Group Leader – Hydraulics, Simulation and Modelling at Torotrak) is titled ‘Flywheel hybrid systems and the full-toroidal variator’.

It will be held this Sunday at the Lord Leycester Hotel in Warwick.

Please assemble ~12:00 for lunch at 13:00 and the talk starts ~14:00

You are ALL very welcome.


Monday, 4 January 2010

Torotrak 2010 Tech Talk - Sunday January - 31st

Organised by Bob Bridges, there will be the annual Torotrak Tech talk presentation by TRK engineers themselves.

Sunday Lunch and Tech Talk

Yes we have another New Year Sunday Lunch & TechTalk lined up on the last Sunday of January (31.01.2010) and yet again it will be at the Lord Leycester Hotel in Warwick. As always the event is open to all, you do not need to be a member of the TPSA or even a shareholder, to join us.

The location is here:

and the rough timings are...

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