TIDMTRAK
RNS Number : 0661D
Trakm8 Holdings PLC
04 July 2016
4 July 2016
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Preliminary Results
for the year ended 31 March 2016
Trakm8, the AIM quoted telematics and data provider to the
global market place, is pleased to announce its unaudited
preliminary results for the year ended 31 March 2016.
Financial highlights:
2016 2015 Change
--------------------- ---------- ---------- -------
Revenues GBP25.65m GBP17.85m +44%
--------------------- ---------- ---------- -------
Operating Profit GBP3.11m GBP1.76m +77%
--------------------- ---------- ---------- -------
Adjusted operating
profit* GBP3.92m GBP1.88m +109%
--------------------- ---------- ---------- -------
Cash generated from
operations GBP4.45m GBP1.19m +274%
--------------------- ---------- ---------- -------
Profit before tax GBP3.00m GBP1.70m +76%
--------------------- ---------- ---------- -------
Adjusted earnings
per share* 13.44p 6.24p +115%
--------------------- ---------- ---------- -------
Basic earnings per
share 11.15p 5.84p +91%
--------------------- ---------- ---------- -------
Dividend per share 2p nil n/a
(proposed)
--------------------- ---------- ---------- -------
-- Revenues up 44% year on year included:
o Strong organic growth of 28%
o First time contributions from the trade and assets of DCS
Systems Ltd ("DCS") and Route Monkey Holdings Ltd ("RML") which
were acquired in the year
o Recurring revenues up 49% to GBP8.31m
-- Orders received up 29% year on year (organic basis)
-- Net debt(+) of GBP1.09m (2015: net cash GBP0.60m), following
GBP10.4m acquisition cash spend, GBP6.0m equity placing and strong
cash flow and conversion
-- Maiden final dividend of 2 pence per share to be proposed
Operating highlights:
-- 151,000 units now reporting to our servers (2015: 102,000)
-- Two acquisitions, DCS and RML completed in the year;
integrations proceeding to plan. Both are profitable, cash
generative and earnings enhancing
-- Substantial contract wins for both fleet and insurance customers:
o during the year: with Iceland Foods, Kubota UK, and the AA
o post year end: with Scottish Power, BT Fleet, Allianz and
Shell
-- Significant investment in R&D and sales and marketing resources to drive growth
(*) before exceptional costs and share based payments (+) total borrowings less cash
Outlook
-- Continuation of a strong order pipeline and increase in sales opportunities
-- Good visibility of revenue and cash flow due to recurring revenues and new contract wins
John Watkins, Executive Chairman said:
"This has been a rewarding year for the Group with revenues up
by 44% and adjusted operating profit up by 109% despite a
significant increase in overheads as we invested as planned in the
future growth of the business. We have achieved strong organic
growth, good first time contributions from acquisitions as well as
robust cash flow and cash conversion. This strong financial
performance is enabling the payment of a proposed maiden
dividend.
The Group has had a successful start to the new financial year
consistent with its expectations for the year as whole,
notwithstanding the new uncertainties created due to the Brexit
vote. The latest contract win with Allianz together with our strong
pipeline of further opportunities provide additional visibility in
our outlook for this year. Therefore the Board remains optimistic
of a positive outlook for the year as a whole."
We expect to have our audited Annual Report and Financial
Statements for the year ended 31 March 2016 available on our
website on 11 July 2016.
A presentation for analysts is being hosted today (4 July 2016)
at 9.15am for 9.30am at MHP's offices. For further information,
please contact MHP Communications on trakm8@mhpc.com.
-ends-
For further information please contact:
Trakm8 Holdings plc 01747 858444
John Watkins, Executive Chairman
James Hedges, Finance Director
MHP Communications (Financial
PR to Trakm8) 020 3128 8100
Reg Hoare / Jade Neal
finnCap (Nomad & Broker to
Trakm8) 020 7220 0500
Ed Frisby / Simon Hicks -
corporate finance
Joanna Weaving - corporate
broking
J.P. Morgan Cazenove (Financial
Adviser) 020 7742 4000
Robert Constant
Wendy Hohmann
Notes to Editors
About Trakm8
Trakm8 Group is a UK based Big Data company utilising telematics
as their primary enabler. Through IP owned technology, over two
billion miles worth of data is collected annually through their
fleet management solutions to create and fine tune algorithms used
to score driver behaviour, monitor vehicle health and continuously
improve the security and operational efficiencies of customers'
vehicles.
With its headquarters in Dorset and a manufacturing facility in
the West Midlands, the Group supplies a number of well-known
customers in the fleet management and insurance sectors across the
UK and further afield including customers such as the AA, Saint
Gobain, EON, Direct Line Group and Young Marmalade.
The Group's portfolio offers complete telematics solutions,
which since the acquisition of the assets of DCS Systems, includes
dashboard cameras that enable customers to record driving incidents
and mitigate the risk from "crash to cash" accidents. This is
complemented through a comprehensive hardware range, which includes
a self-install unit that is one of the smallest available on the
global market.
Recently, the Group acquired Route Monkey, significantly
enhancing the Group's Logistics solution which offers both route
scheduling and optimisation, including routing for Electric
Vehicles.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005.
www.trakm8.com / @Trakm8
Trakm8 Holdings PLC
EXECUTIVE CHAIRMAN'S STATEMENT
Introduction
I am very pleased to present our results for the year ended 31
March 2016. This has been a rewarding year for the Group with
revenues up by 44% to GBP25.65m and adjusted operating profit up by
109% to GBP3.92m despite a significant increase in overhead costs
as we invested as planned in the future growth of the business. Our
profit before tax increased to GBP3.00m (2015: GBP1.70m).
Our sales of new fleet management solutions and insurance
products have culminated in growth in all areas and provide us with
a solid base of recurring revenues from which we can continue to
expand. Furthermore the range and breadth of the data we are now
able to provide gives us an overwhelming proposition for all the
business sectors we touch.
The revenue growth of 44% was made up of organic growth of 28%
with the addition of first time contributions from the acquisitions
we made during the year. Orders received are also up by 29% like
for like.
Trakm8's business model is strongly cash generative now that it
is a profitable business and given the robust core of recurring
revenues, although this tends to be substantially skewed to the
second half due to the timing of contract renewals. This year we
have reported cash generation from operating activities of GBP4.45m
(2015: GBP1.19m), with significantly improved free cashflow
conversion(*) , after capex and capitalised development costs, of
51% (2015: -1%). The improved cash conversion is expected to
continue as revenues increase and development spending as a
percentage of revenues reduces.
(*) (Free cashflow conversion being net cash from operating
activities / adjusted operating profit)
Acquisitions
During the financial year we completed two acquisitions. We
acquired the trade and assets of DCS Systems Ltd ("DCS") in June
2015 giving us vital knowledge and experience of digital camera
systems and included the Dogcam, RoadHawk and Lawmate brands. The
purchase consideration was GBP3.28 million.
In December 2015 we acquired the Route Monkey Group ("RML")
which provides routing and scheduling optimisation solutions. The
purchase consideration was for a value of GBP5.04m, together with
further contingent consideration of up to a GBP2.0m maximum.
However, despite an earnings enhancing performance and encouraging
prospects, it is unlikely that RML will achieve its target to
trigger the payment of the contingent consideration (which has
therefore not been provided for).
These two acquisitions complement our vehicle telematics
solutions and are enabling us to develop the more integrated
solutions that our customers are demanding, providing richer and
more refined data. The integration of both of these acquisitions is
on track and they have been earnings enhancing and cash generative
since their acquisition dates.
Solutions
Solutions sales are the core of our telematics offerings and
comprise revenues from customers where they pay for service fees in
addition to the cost of the hardware, installation and other
bespoke services. Sales increased by 57% to GBP17.21m (2015:
GBP10.98m) and more importantly within this growth our recurring
revenues grew by 49% to GBP8.31m (2015: GBP5.58m). Growing these
service revenues is a key focus as it provides increasing
confidence and predictability to future periods. In total we had
151,000 units (2015: 102,000) reporting to our servers at the year
end.
Our solutions sales cover both the fleet management and
insurance market sectors. The total fleet management units only
increased marginally over the year to 58,522 (2015: 57,763) due to
the loss of circa 5,000 units from our South African distributor
who struggled with the weakness of the rand. Telematics for
insurance is a newer market and is currently experiencing high
levels of growth. At the year end we had 92,025 insurance solution
units reporting to our servers (2015: 44,468). Market forecasts are
predicting growth rates in excess of 42% and we have certainly seen
an increased level of interest from established insurance
businesses. As a result the lifetime cost of an installed unit has
dropped significantly over the last couple of years with a growing
appetite from customers for richer data.
We have invested in our First Notification of Loss ("FNOL")
algorithms and are now able to identify the majority of crashes -
particularly at speeds below 40 mph which are notoriously difficult
to detect. According to the US National Highway Traffic Safety
Administration in excess 90% of insurance claims are due to driver
error and the ability to offer black box data in conjunction with
video footage of events leading up to an accident is proving to be
a powerful driver to enable insurance companies to reduce the cost
and management of policyholder's claims.
We have accelerated the development of our Fleet management
solutions and believe we offer one of the widest ranges of
solutions available in addition to camera and optimisation
capabilities. We are now able to download and report on vehicle
diagnostic data from in excess of 95% of all vehicles since 2006
and this is providing valuable information in particular for fleet
managers and our road side assistance customers. New contracts won
during the year included Bibby Distribution and Kubota together
with the contract extension we announced last December with the AA
whereby our telematics solutions will be offered to the AA business
customers. We were also delighted that Route Monkey secured a three
year contract extension with Iceland for their optimisation
software.
In addition since the year end we have announced a new contract
with Scottish Power to provide our telematics solution with driver
feedback devices to 1,600 vehicles and a contract with BT Fleet to
market our telematics solutions to their business customers. We
have also secured a 12 month contract extension from Shell, which
has been Route Monkey's largest customer in recent years.
Furthermore, we have been awarded two initial contracts by Allianz,
the global insurance company, to supply devices with specifically
developed software to Allianz's Global Telematics business. The
initial supply contract comes with a launch order of 5,000 devices
to start the pipe filling for Allianz Insurance telematics in
China.
Products
Product sales are the sales of our hardware mainly to other
telematics service providers and integrators. In addition the sales
of the DCS camera products are now included together with the
revenues from our contract electronic manufacturing facility in
Coleshill, Birmingham. Total product revenues increased by 23% to
GBP8.44m (2015: GBP6.87m) with GBP1.85m of this growth being
accounted for by sales of camera products. Organic product sales
reduced by GBP0.3m as we continue to focus on solutions sales to
our own customers rather than lower margin product sales to third
parties.
Reflecting this strategy, during the year our manufacturing
facility made in excess of 138,000 telematics units and it is
anticipated this growth will continue. Manufacturing our own
telematics units gives the Group a lower overall unit cost together
with a much shorter time to market for introducing new products.
For example after only two years of marketing the smallest self fit
telematics device, we are now developing our 4(th) version as we
continue to refine the product and enhance the insights that can be
gained from the richness of the data.
Research and Development
We operate in a competitive market where hardware costs are
reducing, along with the costs of sending data over the mobile
networks. At the same time customers are becoming increasingly
aware of the variety and volumes of data that can be made available
from telematics solutions and this is driving the market towards
providing "more for less". We also exist in a fragmented market
where there are many competitors with few barriers to entry. Trakm8
has always focussed on owning the intellectual property ("IP") we
use in our products and solutions and we see this as one of our key
competitive advantages. Telematics systems are complex but because
we own all the elements that encompass a solution (with the
exception of the mobile networks) we have the ability to understand
and resolve problems more easily than our competitors.
The Group has invested in a 44% increase in the average number
of Engineers in our research & development teams to 59 (2015:
41) during the year. We have rolled out our battery health
monitoring algorithm and submitted an associated patent
application. Our self fit telematics device continues to be the
smallest on the market and is now auto-configurable when plugged
into a new vehicle. We have also reduced the time our installers
require to fit our fixed wired devices. Our hosting architecture
has also been developed so that we can now manage much larger
quantities of devices using Amazon Web Services.
We have continued to enhance our algorithms for the risk scoring
of drivers for insurance companies so that their premiums can be
more accurately calculated to match the level of risk. Our
acquisition of the DCS assets in June 2015 has given us a valuable
insight into dash cams and later this year we will be launching an
integrated telematics and camera product. This will enable users to
receive an instant summary of events leading up to a crash incident
including visual data from the camera and vehicle data from our
telematics unit.
During the year the Group initiated a data security audit by a
third party to understand the strengths and weaknesses in our
system for collecting, transferring, storing and presenting the
growing volumes of data we are now managing. Data security is very
important to us and to all of our customers and we were pleased to
gain accreditation with ISO 27001 - the standard for Information
Security Management.
Board Changes
During the year we made significant changes to our Board
reflecting the need to strengthen and focus it as a result of our
strong growth. First, Bill Duffy joined as an independent
Non-Executive Director. Bill has considerable commercial experience
having been CEO of Andrew Page, Halfords Autocentres and a number
of other leading automotive aftermarket companies. He has also been
a consultant to the Board over the past 12 months.
In addition Trakm8 appointed two of its executives to be
Directors of the Group: Sean Morris, as Group Engineering Director
and Mark Watkins as Group Operations Director. Sean joined the
Group following senior engineering positions at Continental UK, RAC
and Aston Martin. Mark joined the Group following a successful
career in IT and operations at Continental UK and Ford Motor
Co.
Paul Wilson resigned from the Board in December but remains a
senior executive of the Group and we wish to thank him for his
contribution over the past six years. He is now concentrating his
efforts on supporting the AA Fleet Intelligence reseller
opportunity.
Advisors
We were pleased to announce in April 2016 the appointment of JP
Morgan Cazenove as financial adviser to the Company. finnCap remain
the Company's Broker and Nominated Adviser. This appointment
reflected the Board's belief that it is appropriate to broaden its
advisory relationships given the evolution of the business and the
telematics industry as a whole and to help us take the next steps
in the Company's development.
Dividend
In April 2016 we announced that the Board had considered the
payment of a dividend in light of the Group's strong financial
performance and its confidence in Trakm8's prospects. As a
consequence the Board is proposing to pay a maiden dividend of 2
pence per share subject to shareholder approval at our Annual
General Meeting in September 2016. The dividend timetable will be
confirmed in due course.
People
The number of people we employ has grown rapidly as we have
continued to invest strongly in our customer service, sales and
marketing and engineering teams. In total our organic staff numbers
have grown by 24% over the year and in addition we have welcomed 24
new colleagues from the DCS and Route Monkey acquisitions. It has
been a demanding year as the Group has experienced rapid growth and
I would like to thank everyone for their hard work, dedication and
contribution to the ongoing success of the business
Outlook
The Group has had a successful start to the new financial year
consistent with its expectations for the year as whole. The first
two months have continued with the strong organic growth of
previous years with orders received 57% greater than the
corresponding period last year (organic 44%). Following the high
level of investment in the business last year, we anticipate costs
growing more slowly this year. We will also benefit from full year
contributions from our two recent acquisitions.
The referendum decision to leave the European Union will
inevitably lead to uncertainty both politically and commercially
for some time. Uncertainty is always unwelcome and may lead to
potential customers choosing to delay their investment decisions
until the outlook becomes clearer. In addition recent currency
movements may lead to additional costs for many of our components
which are not priced in sterling but equally our solutions will
become more attractive to overseas customers.
We have also recently announced two contracts with Allianz, the
global insurance company to provide the next generation of our self
fit telematics device together with the development of specific
software to meet their requirements. These important contracts
together with our strong pipeline of further opportunities provide
additional visibility in our outlook for this year.
Therefore the Board remains optimistic of a positive outlook for
the year as a whole.
John Watkins
EXECUTIVE CHAIRMAN
1 July 2016
Trakm8 Holdings PLC
FINANCIAL REVIEW
Trading Results
Revenues for the year were up by 44% at GBP25.65m (2015:
GBP17.85m). Organic growth was 28% and this was supplemented by a
GBP1.85m contribution from our acquisition of the DCS assets in
June 2015 and a further GBP0.86m from the acquisition of Route
Monkey at the end of December 2015. Sales of digital cameras have
performed broadly in line with our expectations and Route Monkey
revenues benefited from the contract renewal with Iceland in
January 2016. Particularly pleasing was the 49% increase in our
recurring revenues to GBP8.31m (2015: GBP5.58m). Our recurring
revenues are reported as fees from service and data feeds only and
do not include any amortised hardware costs for contracts which
have been offered at a fixed monthly fee for a specific term.
Our gross margin percentage increased by 3.1% to 48.3% (2015:
45.2%). We would anticipate our gross margin percentage to increase
in future years as the proportion of our recurring revenues
increases and as we concentrate our manufacturing facility on
making a more focussed range of products. This however will be
tempered by the increasing price pressure that exists in the
telematics market towards lower cost hardware and richer data.
Trakm8 is strongly placed to manage these demands through owning
all of the intellectual property in its telematics solutions.
Adjusted Operating Profit
One of our key performance indicators is Adjusted Operating
Profit (Operating Profit before exceptional costs and share based
payments). The growth in our Adjusted Operating Profit was 109% to
GBP3.92m (2015: GBP1.88m).
Overheads
Our overheads before exceptional costs increased by 39% to
GBP8.76m (2015: GBP6.30m) reflecting a significant ramp up in
expensed research and development, customer service, sales and
marketing activities during the year. This led to a substantial
increase in our average staff numbers over the year from 157 in
2014/15 to 224 in 2015/16. In total 24 staff members joined us as a
result of the acquisitions of DCS and RML. The increase in our
investment in new products and research and development over the
year resulted in the capitalisation of development costs of
GBP1.85m (2015: GBP0.86m) and the expensing of GBP1.00m (2015:
GBP0.35m) in line with the accounting standards.
Profit before tax
Profit before tax has increased by 76% to GBP3.00m (2015:
GBP1.70m). The tax credit for the year is GBP0.34m (2015: tax
charge GBP0.0m). Profit before tax includes exceptional costs of
GBP0.61m (2015: nil) which were incurred in relation to the
acquisition and integration costs of the trade and assets of DCS
and RML.
The Group has tax losses of GBP6.3m to utilise in future
periods.
Earnings per share
Basic earnings per share increased by 91% to 11.15 pence (2015:
5.84 pence). Our adjusted earnings per share which is before
exceptional costs and share based payments, increased by 115% to
13.44 pence (2015: 6.24 pence).
Balance Sheet, Financing and Cash Flow
Our intangible non current assets grew by GBP10.34m as a result
of the two acquisitions we completed during the year together with
our increased investment in development costs. Goodwill arising
from the DCS acquisition was GBP2.18m with a further GBP0.32m
intangibles relating to acquired development costs. The acquisition
of Route Monkey created GBP5.59m of goodwill and in addition we
acquired GBP0.98m of algorithms and related software.
A new five year bank facility was taken out with HSBC in
December to replace existing facilities and to complete the
acquisition of Route Monkey. In addition a new GBP5m revolving
credit facility was granted by HSBC and this facility has yet to be
drawn down.
In addition to this facility, to fund the Route Monkey
acquisition 1,801,802 new ordinary shares were placed with
institutional investors at a price of 333 pence, to raise GBP6m.
184,441 new ordinary shares were also issued as part of the
consideration to the senior management shareholders of Route
Monkey.
Total cash generated from operations during the year was an
excellent GBP4.45m (2015: GBP1.19m) representing 114% of adjusted
operating profit (2015: 63%). Free cashflow conversion, after capex
and capitalised development costs, was 51% (2015: -1%). As a result
we ended the year with total cash of GBP3.87m set against total
borrowings of GBP4.96m, giving overall a net debt of GBP1.09m
(2015: net cash GBP0.60m).
James Hedges
Finance Director
1 July 2016
Trakm8 Holdings PLC
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2016
Note Unaudited Audited
Year Year
ended ended
31 March 31 March
2016 2015
GBP GBP
REVENUE 3 25,649,188 17,853,436
Cost of sales (13,251,581) (9,791,655)
------------- ------------------
Gross profit 12,397,607 8,061,781
Other income 81,443 -
Administrative expenses excluding
exceptional costs (8,756,085) (6,301,424)
Exceptional administrative costs 5 (612,559) -
------------- ------------------
Total administrative costs (9,368,644) (6,301,424)
OPERATING PROFIT 4 3,110,406 1,760,357
Finance income 874 388
Finance costs 6 (108,208) (58,439)
------------- ------------------
PROFIT BEFORE TAXATION 3,003,072 1,702,306
Income tax 340,678 (13,241)
------------- ------------------
PROFIT FOR THE YEAR ATTRIBUTABLE
TO THE OWNERS OF THE PARENT 3,343,750 1,689,065
OTHER COMPREHENSIVE INCOME /
(EXPENSE)
Items that may be subsequently
reclassified to profit or loss:
Currency translation differences 3,811 (4,460)
------------- ------------------
TOTAL OTHER COMPREHENSIVE INCOME
/ (EXPENSE) 3,811 (4,460)
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR ATTRIBUTABLE TO OWNERS
OF THE PARENT 3,347,561 1,684,605
------------- ------------------
Adjusted Operating profit 4 3,921,044 1,877,289
----------------------------------- ----- ------------- ------------------
EARNINGS PER ORDINARY SHARE
(PENCE) ATTRIBUTABLE TO OWNERS
OF THE PARENT
Basic 7 11.15p 5.84p
Diluted 7 10.27p 5.48p
There were no discontinued operations in 2016
or 2015. Accordingly the results relate to continuing
operations.
Trakm8 Holdings PLC
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2016
----------------------------------------------------------------------------------------------------------------------------------
Share Share Merger Translation Treasury Retained Total
capital premium reserve reserve reserve earnings equity
attributable
to owners
of the
parent
GBP GBP GBP GBP GBP GBP GBP
Balance as at
1 April 2014 288,738 3,641,561 509,837 200,063 - 491,877 5,132,076
Comprehensive
income
Profit for the
year - - - - - 1,689,065 1,689,065
Other
comprehensive
expense
Exchange
differences
on translation
of overseas
operations - - - (4,460) - - (4,460)
Total
comprehensive
(expense) /
income - - - (4,460) - 1,689,065 1,684,605
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Transactions with
owners
Shares issued 1,000 11,500 - - - - 12,500
Reclassification
of previous
Treasury
share
transactions - 67,076 - - (23,250) (43,826) -
Sale of own
shares - 37,263 - - 11,625 - 48,888
IFRS2 Share based
payments - - - - - 116,932 116,932
Transactions with
owners 1,000 115,839 - - (11,625) 73,106 178,320
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Balance as at
1 April 2015
(Audited) 289,738 3,757,400 509,837 195,603 (11,625) 2,254,048 6,995,001
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Comprehensive
income
Profit for the
year - - - - - 3,343,750 3,343,750
Other
comprehensive
income
Exchange
differences
on translation
of overseas
operations - - - 3,811 - - 3,811
Total
comprehensive
income - - - 3,811 - 3,343,750 3,347,561
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Transactions with
owners
Shares issued 30,612 6,110,982 612,344 - - - 6,753,938
Share placing
fees - (300,000) - - - - (300,000)
Sale of own
shares - 72,680 - - 7,130 - 79,810
IFRS2 Share based
payments - - - - - 198,079 198,079
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Transactions with
owners 30,612 5,883,662 612,344 - 7,130 198,079 6,731,827
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Balance as at
31 March 2016
(Unaudited) 320,350 9,641,062 1,122,181 199,414 (4,495) 5,795,877 17,074,389
-------------- ---------------- -------------- --------------- -------------- ---------- -------------
Trakm8 Holdings PLC
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
as at 31 March 2016
--------------------------------------------------------------------------
Note Unaudited Audited
As at As at
31 March 31 March
2016 2015
ASSETS GBP GBP
NON CURRENT ASSETS
Intangible assets 13,996,240 3,652,203
Property and equipment 1,572,613 1,246,669
Deferred income tax asset 801,365 665,688
16,370,218 5,564,560
------------ -------------
CURRENT ASSETS
Inventories 2,258,882 1,493,417
Trade and other receivables 7,620,001 4,911,525
Cash and cash equivalents 3,871,110 3,407,959
13,749,993 9,812,901
------------ -------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (7,541,122) (5,124,668)
Borrowings (981,182) (575,644)
Provisions (92,208) (92,193)
(8,614,512) (5,792,505)
------------ -------------
CURRENT ASSETS LESS CURRENT LIABILITIES 5,135,481 4,020,396
TOTAL ASSETS LESS CURRENT LIABILITIES 21,505,699 9,584,956
NON CURRENT LIABILITIES
Trade and other payables (395,313) (306,034)
Borrowings (3,976,336) (2,236,001)
Provisions (59,661) (47,920)
NET ASSETS 17,074,389 6,995,001
============ =============
EQUITY
Share capital 8 320,350 289,738
Share premium 9,641,062 3,757,400
Merger reserve 1,122,181 509,837
Translation reserve 199,414 195,603
Treasury reserve (4,495) (11,625)
Retained earnings 5,795,877 2,254,048
TOTAL EQUITY ATTRIBUTABLE TO OWNERS
OF THE PARENT 17,074,389 6,995,001
============ =============
Trakm8 Holdings PLC
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2016
Notes Unaudited Audited
Year Year
ended ended
31 March 31 March
2016 2015
GBP GBP
NET CASH GENERATED FROM OPERATING
ACTIVITIES 9 4,447,310 1,186,080
CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 874 388
Acquisition of subsidiary undertaking
(net of cash acquired) (7,697,532) (5,175)
Purchases of property, plant
and equipment (528,596) (355,087)
Purchases of software (79,134) -
Proceeds from sale of plant
and equipment - 9,888
Capitalised development costs (1,852,639) (861,849)
NET CASH USED IN INVESTING
ACTIVITIES (10,157,027) (1,211,835)
------------- ------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of new shares 5,839,751 12,500
Sale of Treasury shares 79,810 48,888
New bank loan 6,000,000 3,000,000
New HP agreement 126,242 -
Interest paid (108,208) (58,439)
Repayment of loans (5,751,888) (2,480,021)
Repayment of obligations under (12,839) -
hire purchase agreements
NET CASH GENERATED FROM FINANCING
ACTIVITIES 6,172,868 522,928
------------- ------------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 463,151 497,173
------------- ------------------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 3,407,959 2,910,786
------------- ------------------
CASH AND CASH EQUIVALENTS AT OF YEAR 3,871,110 3,407,959
------------- ------------------
Trakm8 Holdings PLC
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2016
1. GENERAL INFORMATION
Trakm8 Holdings PLC ("Company") and its subsidiaries (together
the "Group") manufacture, distribute and sell telematics devices
and services.
Trakm8 Holdings PLC is a public limited company incorporated in
the United Kingdom (registration number 05452547). The Company is
domiciled in the United Kingdom and its registered office address
is Lydden House, Wincombe Business Park, Shaftesbury, Dorset, SP7
9QJ. The Company's Ordinary shares are traded on the AIM market of
the London Stock Exchange.
The Group's principal activity is the manufacture, marketing and
distribution of vehicle telematics equipment and services.
2. BASIS OF PREPARATION
The unaudited financial information included in this preliminary
results announcement for the year ended 31 March 2016 and audited
financial information for the year ended 31 March 2015 does not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006. The information has been extracted from the
unaudited statutory financial statements for the year ended 31
March 2016 which will be delivered to the Registrar of Companies in
due course. Statutory financial statements for the year ended 31
March 2015 were approved by the Board of directors and have been
delivered to the Registrar of Companies. The report of the auditors
on these financial statements was unqualified and did not include
an emphasis of matter paragraph.
These financial statements are presented on a going concern
basis. The Group has cash balances of GBP3,871,110 at 31 March 2016
and the Directors have a reasonable expectation that the Group will
have adequate financial resources to continue in operation for the
foreseeable future.
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the European Union, the interpretations of International Financial
Reporting Interpretations Committee (IFRIC) and the Companies Act
2006 applicable to companies reporting under IFRS.
Whilst the financial information included in this preliminary
announcement has been prepared in accordance with International
Financial Reporting Standards (IFRS), this announcement does not
contain sufficient information to comply with IFRS. The accounting
policies used in the preparation of these unaudited financial
statements are consistent with those used in the preparation of the
audited financial statements for the year ended 31 March 2015.
3. SEGMENTAL ANALYSIS
The chief operating decision maker ("CODM") is identified as the
Board. It continues to define all the Group's trading under the
single Integrated Telematics Technology segment and therefore
review the results of the group as a whole. Consequently all of the
Group's revenue, expenses, results, assets and liabilities are in
respect of one Integrated Telematics Technology segment.
The board as the CODM review the revenue streams of Integrated
Fleet Management and Insurance Solutions (Solutions) and Hardware
as Discrete Devices (Products) as part of their internal reporting.
Products is the sale of hardware through the Group's distributors.
Solutions represents the sale of the Group's full vehicle
telematics service to customers, engineering services, professional
services and mapping solutions.
A breakdown of revenues within these
streams are as follows:
Unaudited Audited
Year Year
ended ended
31 March 31 March
2016 2015
GBP GBP
Solutions 17,208,779 10,981,695
Products 8,440,409 6,871,741
25,649,188 17,853,436
----------- -----------
A geographical analysis of revenue
by destination is as follows:
Unaudited Audited
Year ended 31 March Year ended 31 March
2016 2015
Solutions Products Total Solutions Products Total
GBP GBP GBP GBP GBP GBP
United Kingdom 16,769,774 8,048,848 24,818,622 10,268,761 6,174,260 16,443,021
USA - 168,652 168,652 98,534 191,744 290,278
Canada 390 46,592 46,982 360 226,146 226,506
Norway 117,527 - 117,527 377,043 - 377,043
Rest of
Europe 224,078 7,784 231,862 132,040 46,760 178,800
UAE - 136,819 136,819 - 175,880 175,880
Rest of
World 97,010 31,714 128,724 104,957 56,951 161,908
17,208,779 8,440,409 25,649,188 10,981,695 6,871,741 17,853,436
=========== ========== =========== =========== =========== ===========
All non-current assets are located in the UK with the exception
of GBP7,004 (2015: GBP5,023) which are held in Europe.
4. OPERATING PROFIT
The following items have been included in arriving at operating
profit:
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Depreciation
- owned fixed
assets 227,194 176,571
- assets on hire 5,075 -
purchase
Amortisation of intangible
assets 655,528 542,713
Operating lease
rentals
Land and buildings 92,173 51,862
Other 219,625 142,838
Research and development
expenditure 1,002,096 350,177
Loss on foreign exchange
transactions 46,212 18,227
Staff costs 6,036,138 4,479,252
GBP GBP
Auditors' remuneration
Fees payable to the Company's
auditors for the audit of
the parent
company and consolidated
financial statements 57,000 10,000
Fees payable to the Company's
auditors for other services:
The audit of the Company's
subsidiaries 40,000 30,000
Tax compliance 12,500 -
services
Tax advisory services 12,450 7,500
------------ ------------
Adjusted Operating profit is monitored by the Board and measured
as follows:
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Operating Profit 3,110,406 1,760,357
Exceptional administrative 612,559 -
costs
Share based payments 198,079 116,932
Adjusted Operating
profit 3,921,044 1,877,289
------------ ------------
5. EXCEPTIONAL COSTS
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Acquisition costs 578,943 -
Integration costs 33,616 -
612,559 -
------------ ------------
The acquisition costs related to the purchase of the trade and
assets of DCS Systems Ltd in June 2015 and 100% of the share
capital of Route Monkey Holdings Ltd in December 2015. The
integration costs related to the reorganisation of management and
integration of business systems and processes following the
acquisitions. These costs have been included as part of
Administration costs.
6. FINANCE COSTS
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Interest on bank loans 108,208 58,439
------------ ------------
7. EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated using the
profit for the year and the weighted average number of Ordinary
shares in issue during the year as follows:
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Profit for the year after
taxation 3,343,750 1,689,065
Exceptional administrative 612,559 -
costs
Share based payments 198,079 116,932
Tax effect of adjustments (122,512) -
------------ -----------------
Adjusted Profit for the
year after taxation 4,031,876 1,805,997
------------ -----------------
No. No.
Number of Ordinary shares
of 1p each 32,035,064 28,973,821
Basic weighted average number
of Ordinary shares of 1p each 30,000,972 28,944,151
Basic weighted average number
of Ordinary shares of 1p each
(diluted) 32,571,617 30,823,153
Earnings per share 11.15p 5.84p
Adjust for effects of:
Exceptional costs 1.63p -
Share based payments 0.66p 0.40p
Adjusted earnings per
share 13.44p 6.24p
Diluted earnings per
share 10.27p 5.48p
Adjusted diluted earnings
per share 12.38p 5.88p
Adjusted diluted earnings per share is based on the Adjusted
Profit for the year after taxation and the same number of shares
used in the calculation of Diluted earnings per share.
8. SHARE CAPITAL
Unaudited Audited
As at 31 March As at 31 March
2016 2015
No's GBP No's GBP
'000's '000's
Authorised
Ordinary shares
of 1p each 200,000 2,000,000 200,000 2,000,000
Allotted, issued
and fully paid
Ordinary shares
of 1p each 32,035 320,350 28,974 289,738
Movement in share
capital:
As at As at
31 March 31 March
2016 2015
GBP GBP
As at 1 April 289,738 288,738
New shares issued 30,612 1,000
As at 31 March 320,350 289,738
---------- ----------
The Company currently holds 29,000 Ordinary shares in treasury
representing 0.10% of the Company's issued share capital. The
number of 1 pence Ordinary shares that the Company has in issue
less the total number of Treasury shares is 32,006,064.
During the year the following shares were issued:
Date Description Shares Consideration Premium
number GBP GBP
Exercise of options
over Ordinary Shares
by Directors and an
04/09/2015 employee of the Company 975,000 126,750 117,000
Exercise of options
over Ordinary Shares
by an employee of the
15/09/2015 Company 100,000 13,000 12,000
Share placing to fund
acquisition of Route
21/12/2015 Monkey 1,801,802 6,000,000 5,981,982
Share issue to senior
management shareholders
21/12/2015 of Route Monkey 184,441 614,189 612,344
3,061,243 6,753,938 6,723,326
---------- -------------- ----------
The shares issued to senior management shareholders of Route
Monkey were issued at a premium which was subject to merger relief
and has been taken to the Merger reserve.
9. CASH GENERATED FROM OPERATIONS
Unaudited Audited
Year ended Year ended
31 March 31 March
2016 2015
GBP GBP
Reconciliation of profit before
tax to net cash flow from operating
activities:
Profit before tax 3,003,072 1,702,306
Depreciation 232,269 202,159
Bank and other interest 107,334 58,051
Amortisation of intangible
assets 655,528 517,125
Share based payments 198,079 116,932
---------------- ------------
Operating cash flows before
movement in working capital 4,196,282 2,596,573
Movement on retranslation
of overseas operations 3,190 (3,764)
Movement in inventories (39,011) (212,808)
Movement in trade and
other receivables (1,211,259) (1,641,882)
Movement in trade and
other payables 1,486,354 394,829
Movement in provisions 11,754 (21,073)
---------------- ------------
Cash generated from operations 4,447,310 1,111,875
Income taxes received - 74,205
Net cash inflow from
operating activities 4,447,310 1,186,080
---------------- ------------
10. BUSINESS COMBINATIONS
Route Monkey Holdings Limited
On 30 December 2015 the Company acquired the entire share
capital of Route Monkey Holdings Ltd and its wholly owned
subsidiary, Route Monkey Ltd "Route Monkey" for a total
consideration of GBP5,036,584.
Route Monkey provides technology solutions that optimise fleet
routing. The company was acquired to bring new and complimentary
route planning and optimisation technology capability to the Group.
The assets and liabilities as at 30 December 2015 arising from the
acquisition were as follows:
Unaudited
Fair value
GBP
Intangible assets 979,891
Property and
equipment 24,995
Trade receivables 1,380,632
Trade and other
payables (975,479)
Deferred tax (181,000)
Borrowings (1,784,357)
------------
Net liabilities
acquired (555,318)
Goodwill 5,591,902
Total consideration 5,036,584
------------
Satisfied by:
Cash 4,422,395
Fair value of shares
in the Company 614,189
5,036,584
------------
The acquisition was settled in cash of GBP4,422,395 and by
issuing 184,441 shares in Trakm8 holdings PLC. The fair value of
the equity shares issued was based on the market value of Trakm8
holdings PLC's traded shares with a fair value of GBP614,189 on the
acquisition date. Merger relief has been applied, leading to the
addition of GBP612,344 to the merger reserve rather than share
premium.
The revenue included in the consolidated statement of
comprehensive income since 30 December 2015 contributed by Route
Monkey was GBP855,823. Route Monkey also contributed operating
profit of GBP585,404 over the same period. The Directors have
concluded that it is impractical to provide disclosure of the
revenues and profit that Route Monkey would have contributed to the
Group had it been consolidated from 1 April 2015. This is due to a
combination of the fact that Route Monkey previously had a
different year end and audited accounts are not available for the
period 1 April 2015 to 31 December 2015, and significant
adjustments have been required to Route Monkey's accounting
policies in respect of revenue recognition to align with the
requirements of IFRS and Trakm8's accounting policies and it is
impractical to recalculate revenues for the period 1 April 2015 to
31 December 2015.
Acquisition related costs amounting to GBP404,743 have been
recognised as an exceptional administrative expense in the
consolidated statement of comprehensive income.
Under the purchase agreement to acquire Route Monkey, contingent
consideration of up to GBP2,000,000 is payable subject to the
business achieving certain performance targets during the year to
31 December 2016. No provision in relation to this consideration
has been recognised in these consolidated financial statements, as
the Directors consider the likelihood of any contingent amounts
being payable under the agreement to be highly unlikely.
The goodwill arising on the acquisition represents the
significant value of the software analytics acquired will bring
when integrated principally into Trakm8's existing telematics
offering, as well as further synergies.
DCS Systems Limited
On 16 June 2015 Trakm8 Limited acquired the business and assets
of DCS Systems Limited "DCS" for a consideration of GBP3,275,136.
DCS specialises in the design and distribution of camera systems
for the motor vehicle, bicycle and security markets.
The fair values of the identifiable assets of the business as at
the date of acquisition were:
Unaudited
Fair value
GBP
Intangible assets 320,000
Property and equipment 4,000
Inventories 726,454
Trade receivables 92,583
Trade and other
payables (43,901)
------------
Net assets acquired 1,099,136
Goodwill 2,176,000
Total consideration 3,275,136
------------
Satisfied by:
Cash 3,275,136
------------
The revenue included in the consolidated statement of
comprehensive income since 15 6 2015 contributed by DCS was
GBP1,851,789. DCS also contributed operating profit of GBP312,015
over the same period.
Had DCS been consolidated from 1 April 2015, the consolidated
statement of comprehensive income would show revenue of
GBP2,330,700 and operating profit of GBP392,709 in relation to this
entity.
Acquisition related costs amounting to GBP174,200 have
recognised as an exceptional administrative expense in the
consolidated statement of comprehensive income.
The goodwill arising on the acquisition represents the value of
the camera technology acquired. The value of which is considerably
enhanced when combined with Trakm8's existing product range and
further synergies.
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR AKNDBOBKDNOK
(END) Dow Jones Newswires
July 04, 2016 02:00 ET (06:00 GMT)
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