Antonov

Antonov finally confirmed that its automatic gearbox - designed specifically for small cars - will go into production in 2006, after 'tier 1' transmission manufacturer Powertrain acquired a licence to develop its six-speed AAD and dual clutch transmission system. Powertrain is the UK's largest independent motor engine and transmission manufacturer, supplying MG, Rover and Land Rover. Antonov's finance director David Bovell admitted that the company's main problem is convincing the industry to accept the new standard that its prototype has created. This deal, he says, should pave the way for further interest - and deals. But the company is still facing an uphill battle as only 15% of all small cars use an automatic gearbox (the current standard is not built to cope with smaller engines, as it was originally created for tanks) and the European market that it is targeting is predominantly a manually geared arena. Honda also acquired a licence from Antonov in 2002 for non-transmission applications but the technology is yet to be used, although Bovell expects some revenue to trickle in from the deal by 2005. At the interim stage to June no revenues were generated and pre-tax losses widened £300,000 to £1.3m. £25m to date has been sunk into the technology and the company is considering securitising its future revenues. If all goes to plan, Bovell optimistically believes Antonov will break even in 2007. The technology is good but acceptance of the product and, more importantly, significant sales still seem a long way off.

Sector: Automobiles & Parts

Companies: Antonov

Market cap: £34.6m

PE Forecast: n/a

Share price: 41p