LONDON - Tan Delta Systems PLC (AIM:TAND), a key player in intelligent monitoring systems for industrial equipment, has released a trading update indicating that its financial results for the fiscal year ending December 31, 2024, will not meet market expectations. The company, known for its real-time oil analysis systems, cited delays in specific pipeline orders as the reason for the shortfall.
The anticipated revenue for FY 2024 is projected to be around £1.2 million, a decrease from the previous year's £1.5 million. Consequently, Tan Delta expects to report an estimated pre-tax loss of £1.2 million. Despite the lower revenue, the company forecasts having £3.0 million in cash at year-end with no debt, and a stockpile of £0.7 million in cost value, accumulated to fulfill orders with short lead times.
Tan Delta has been actively developing a substantial sales pipeline, collaborating with customers to assess and plan the deployment of its systems. The clientele includes large equipment operators, global oil and gas majors like Shell (LON:SHEL), multinational equipment manufacturers such as Wartsila, and a global online retailer looking to enhance the reliability of conveyor gearboxes in their warehouses. The sales process involves a phase of evaluation to quantify benefits before moving on to the logistics of physical implementation and integration with existing maintenance systems.
In the Middle East, Tan Delta is pursuing four specific opportunities with equipment operators, which are collectively valued at approximately $5.0 million. Validation trials have been conducted, leading to promising discussions about rolling out Tan Delta's systems. Although significant initial orders were anticipated to be received within the current financial year, the company now believes these orders will be delayed beyond FY 2024.
Chris Greenwood, Tan Delta's CEO, commented on the update, expressing disappointment in not achieving the financial targets for the year but emphasizing the progress in developing sales opportunities. Greenwood remains optimistic about the future financial performance, reflecting the groundwork laid with customers in planning and implementing Tan Delta's maintenance strategies.
This trading update is based on a press release statement and is now considered public information following its disclosure in accordance with the Market Abuse Regulations.
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