Tan Delta Systems FY2025 results: strong pipeline growth, but revenue still waiting to land
Tan Delta Systems has delivered a classic early-stage growth company update. The commercial story is improving fast, with its opportunity pipeline jumping to more than £75 million from around £35 million, but the financials have not caught up yet. Revenue was effectively flat at £1.22 million, losses widened, and cash dropped sharply.
That combination makes this a genuinely mixed set of full-year results. There is clear progress on customer engagement and validation, but investors still need proof that paid evaluations turn into meaningful, repeatable rollouts.
| Key FY2025 numbers | FY2025 | FY2024 |
|---|---|---|
| Revenue | £1.22 million | £1.22 million |
| Gross profit margin | 60% | 62% |
| Adjusted loss before tax | £1.55 million | £1.14 million |
| Reported loss before tax | £1.59 million | £1.17 million |
| Cash balance | £1.49 million | £3.08 million |
| Commercial pipeline | More than £75 million | Approximately £35 million |
Tan Delta revenue, margins and losses: what changed in FY2025?
The headline revenue number was steady rather than exciting. Tan Delta reported revenue of £1,222,256, up only slightly from £1,215,328, which management says reflected slower than expected rollouts with a number of customers.
That matters because this is a business trying to show it can scale. A growing pipeline is useful, but until it feeds through into actual sales, the income statement still looks stuck in first gear.
Gross margin stayed healthy, but moved the wrong way
Gross profit came in at £737,249, down from £754,338, while gross margin slipped to 60% from 62%. That is not a disaster – 60% is still a solid margin level for a hardware-led industrial technology business – but it does show that Tan Delta is not yet getting enough operational leverage.
The company says inflation on supply eased and that pricing has been reviewed since year end to help restore margins. That is encouraging, but again, investors will want to see evidence rather than promises.
Costs rose faster than sales
Administrative expenses increased to £2.40 million from £2.09 million. The business says this reflects investment in customer support, deployment readiness, sales, marketing and product development, as it helps a larger number of customers run trials and evaluations.
There is logic to that. If customers need hand-holding before signing bigger contracts, Tan Delta has little choice but to fund the support effort. The trouble is that this pushed the adjusted loss before tax out to £1.55 million from £1.14 million.
For clarity, the “adjusted” figure excludes share option costs of £41,007. Reported loss before tax was £1.59 million.
Tan Delta’s £75 million commercial pipeline: exciting, but not the same as revenue
This is the best part of the update and the reason investors will keep paying attention. Tan Delta says visible rollout opportunities, where customers are engaged in paid evaluation programmes, increased to more than £75 million from approximately £35 million in 2024.
That is a big jump. It suggests the market is interested in the company’s real-time oil condition monitoring technology, which is designed to help customers cut maintenance costs, reduce downtime and extend equipment life through predictive maintenance – in simple terms, spotting problems before machines fail.
Customer names are still limited, but the quality looks strong
The company highlighted several commercial milestones:
- A strategic agreement with Shell Marine
- A second phase evaluation with the world’s largest online retailer
- A programme with a leading baggage handling company
- Ongoing engagement with major global OEMs, or original equipment manufacturers
That is the sort of customer set you want to see. Big industrial names tend to move slowly, but when they do adopt a product, the rollout can be large and sticky.
The catch is obvious: pipeline is not the same as contract revenue. Tan Delta itself says deployment decisions are hard to predict and expects a number of ongoing evaluations to move towards commercial rollout decisions during late 2026.
Tan Delta cash balance and funding risk: the main issue retail investors should watch
The balance sheet is where the hard questions sit. Cash fell to £1.49 million at 31 December 2025 from £3.08 million a year earlier, while net cash used in operating activities was £1.63 million.
There is some good news here. Tan Delta had no bank debt at either year end, and total liabilities fell to £335,024 from £587,106. Trade payables also dropped sharply to £147,157 from £380,324, which suggests no obvious creditor stress in the numbers provided.
Still, cash burn is real. If rollout timing slips again, investors will quite reasonably wonder whether the company may need additional funding down the line. The RNS does not announce any fundraising, and it says there were no significant events after the reporting period, but the cash position will need close monitoring.
Some working capital trends were better
Inventories fell to £554,264 from £733,136, largely because finished goods reduced. That helped cash. Trade receivables rose to £381,817 from £309,619, which is worth watching, but the company says expected credit losses were immaterial.
Tan Delta regional sales and operational build-out: small clues about demand
Revenue by geography shows a bit more nuance than the top-line number. UK sales fell to £346,151 from £385,068, while Europe rose to £428,773 from £391,350 and Rest of the World increased to £447,332 from £438,910.
So demand did not disappear. It looks more like deals are taking longer to convert, particularly in the UK, while international activity is gradually improving.
The company also increased average employee numbers to 20 from 15, and total employee costs rose to £1.59 million from £1.26 million. That fits management’s explanation that it has been building the structure needed to support future growth.
What Tan Delta Systems said about 2026 rollout timing – and why that matters so much
The key line in the outlook is this: a number of ongoing evaluations are expected to progress towards commercial rollout decisions during late 2026, with adoption expected to build thereafter.
That gives investors a rough timetable, but it also tells you this is not likely to be a quick-fire turnaround story. Tan Delta is still in the validation phase with major customers, and those customers are cautious because the technology could become embedded in long-term maintenance programmes.
In plain English, this can work brilliantly, but it takes time.
My view on Tan Delta Systems shares after the FY2025 results
I’d call this operationally positive but financially stretched. The commercial pipeline growth is impressive, the customer quality looks strong, and the use case is easy to understand in industries where downtime is painfully expensive.
On the other hand, flat revenue and a wider loss are not what investors ultimately buy into. Tan Delta now needs to show that years of trials and technical validation can turn into sizeable orders.
- The bull case: even modest conversion from a more than £75 million pipeline could transform revenue from today’s £1.22 million base.
- The bear case: long sales cycles stay long, cash keeps falling, and shareholders face future dilution before the big rollouts arrive.
So the result matters for one simple reason. Tan Delta looks closer to commercial inflection, but it is not over the line yet. For retail investors, this is now a story about conversion, timing and cash discipline more than technology promise.
