Automotive tech firm Torotrak (TRK) has warned that deteriorating trading prospects in the off-highway market will delay a vital licensing agreement. Basically, negotiations should have been signed and sealed by March 2017, now they will drag on into the following fiscal year.
This is another massive blow from a company that has made a habit of failing to deliver on its power train technology promise, sparking a 25% collapse in the share price to 2.8p. That values the business at just £15m.
Torotrak develops power transmission systems, effectively all of the bits that connect the power generated by the engine to the wheels to make a car go.
‘We continue our discussions with potential original equipment manufacturers and Tier-1 partners for the commercialisation of V-Charge in the passenger car market,’ says CEO Adam Robson. That's a tune Torotrak has been singing for years yet the company has never come close to profitability and last year to 31 March 2016, it earned barely £1.2m of revenue.
In the past three years alone it has chewed through more than £17m of cash.
Investment bank Cantor Fitzgerald Europe analyst William Game has adjusted his year-end cash balance forecast from £7.9m to £5.5m in full year 2017.
He believes there is potential for significant share price performance, but recognises signing the licences is critical for delivering value to shareholders.
