4th Nov 2013 13:27
LONDON (Alliance News) - Turbo Power Systems Inc Monday said its third quarter pretax losses narrowed significantly, as its gross profit increased and its total expenses dropped.
Turbo Power Systems, which designs and manufactures high performance electric motors and generators, drives and power electronics, said it made a GBP214,000 net loss for the quarter ended September 30, a significant narrowing on the GBP1.7 million net loss reported for the corresponding period last year.
Gross profit increased 64% to GBP1.9 million on the back of a 46% increase in revenue to GBP5.2 million and a a slower rise in the cost of sales, which moved up to GBP3.3 million from GBP2.4 million.
Total expenses, comprising of distribution costs, research and product development, and general and administrative dropped to GBP2.0 million from GBP2.9 million.
"We will continue to focus on reducing our cost base and look for further operational efficiencies, and this is now becoming part of the mind-set of our organisation. We will also continue to concentrate on increasing our order intake in line with the first three quarters of this year. The order intake year to date stands at GBP14.6 million, a significant improvement over 2012 of GBP3.82 million, driven by continuous production orders from our major customers," Carlos Neves, Chief Executive, said in a statement.
But the company, which is structured into two divisions - electrical machines and power electronics - warned that it is, "critically dependent upon the continued financial support of its intermediate parent undertaking TAO UK... for such continued financial support in order to meet forecasted working capital requirements and support the company's growth plans".
The company said it expects to receive the additional funding from TAO UK during the last quarter of 2013 and it is in discussions with TAO UK about the alternatives available to the company when the loans of GBP8.59 million become repayable on April 1, 2014.
Despite a warning that a failure to generate positive cash flows from operations or to secure additional financing would "cast substantial doubt" over the company's ability to continue as a going concern, the directors of the Turbo Power Systems believe they will be able to deliver the company's projected financial performance and that support from TAO UK will remain in place to help it achieve its growth plans.
Turbo Power Systems shares were Monday quoted at 0.580 pence, up 5.5%.
By Samuel Agini; [email protected]; @samuelagini
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