TIDMTRAK
RNS Number : 8451J
Trakm8 Holdings PLC
03 July 2017
3 July 2017
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Preliminary Results
for the year ended 31 March 2017
Trakm8, the AIM quoted telematics and data provider to the
global market place, announces its audited preliminary results for
the year ended 31 March 2017.
FINANCIAL SUMMARY:
2017 2016 Change
Revenues GBP26.8m GBP25.7m +4%
--------- --------- ---------
Recurring revenues GBP9.8m GBP8.3m +18%
--------- --------- ---------
Adjusted operating
profit* GBP1.3m GBP3.9m -67%
--------- --------- ---------
Operating Profit GBP0.9m GBP3.1m -71%
--------- --------- ---------
Profit before tax GBP0.7m GBP3.0m -77%
--------- --------- ---------
Profit after tax GBP1.5m GBP3.3m -55%
--------- --------- ---------
Net debt** GBP3.9m GBP1.1m +GBP2.8m
--------- --------- ---------
Adjusted earnings
per share* 5.81p 13.44p -57%
--------- --------- ---------
Basic earnings per
share 4.51p 11.15p -60%
--------- --------- ---------
Proposed dividend nil 2p n/a
per share
--------- --------- ---------
(*) before exceptional costs and share based payments
(**) total borrowings less cash
OPERATING HIGHLIGHTS:
-- Financial performance in line with February 2017 revised expectation:
o impacted by delayed contract wins and significant investment
in preparation for growth
-- New orders booked up 37% year on year, benefitting the new financial year:
o like for like growth of 33%
o renewed contract momentum either side of year end
o installed base increased 26% to 190,000 (2016: 151,000)
-- Organic revenues up 9% like for like:
o excludes GBP2.5m contract manufacturing and Roadsense
revenues
-- Placing of GBP2.1m completed in March 2017 to strengthen
balance sheet and provide working capital
o GBP2.0m cash and GBP3.3m undrawn RCF facility available to
fund continued investment
-- Fully consolidated into four business units and reduced
operating costs by annualised GBP1.5m
OUTLOOK
-- Continuation of strong new contract and extensions momentum, pipeline and opportunities
-- Good start to new financial year with revenues 10% higher
than the corresponding two month period last year
-- Much improved performance expected, consistent with market expectations
John Watkins, Executive Chairman said:
"This has been a year of investment and preparation for growth.
The investment resulted in a significant increase in costs whilst
the contracts expected to be secured were won too late in the year
to benefit revenues. This resulted in disappointing results for the
year when compared to our original expectations. However, this
investment in new products provides a strong pipeline of
opportunities for the future.
"We have recently announced new contracts with a roadside
assistance technology company, and Mecalac, and renewed and
extended contracts with Marmalade, Iceland Foods, Shell and Direct
Line Group. These important contracts together with our strong
pipeline of further opportunities provide additional visibility in
our outlook for this year.
"Overall, we anticipate reaping the rewards of our investments
as evidenced by our renewed contract momentum. As a result we are
confident of achieving a much improved performance in the new
financial year consistent with market expectations."
A presentation for analysts is being hosted today (3 July 2017)
at 9.15am for 9.30am at MHP's offices. For further information,
please contact MHP Communications trakm8@mhpc.com.
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 / Charlie Barker
finnCap (Nomad & Broker to
Trakm8) 020 7220 0500
Ed Frisby / Simon Hicks -
corporate finance
Tim Redfern / Richard Chambers
- corporate broking
Notes to editors
About Trakm8
Trakm8 is a UK based Big Data company supplying telematics-based
solutions and data insight to the global market. Through IP owned
technology, The Group analyses billions of miles worth of data to
create and fine tune algorithms. These are used to produce
telematics based solutions that score driver behaviour, monitor
vehicle health and continuously improve the security and
operational efficiency of both private drivers and company
fleets.
The Group's product portfolio includes cameras (including the
recently launched integrated telematics camera), self-installed
telematics units and technology to eliminate distracted driving due
to mobile phones.
Headquartered in Dorset with a manufacturing facility in the
West Midlands, the Group supplies, through its dedicated business
units Fleet, Optimisation, Insurance and Automotive, many
well-known customers in the UK and internationally including the
AA, Saint Gobain, EON, Direct Line Group and Young Marmalade.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005.
www.trakm8.com / @Trakm8
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
EXECUTIVE CHAIRMAN'S STATEMENT
A YEAR OF INVESTMENT
This has been a year of investment and preparation for growth
for the Group. This resulted in a significant increase in our
overhead costs before we converted the potential orders in our
pipeline into revenues, profits and cash flows. This resulted in
disappointing results for the year when compared to our original
expectations. However, we expect to reap the rewards of this
investment in the new financial year, with a number of new contract
wins and extensions either side of the year end providing new
momentum, supporting our confidence.
Orders booked for the year were up by 33% like for like. As
contracts secured were won later in the year than expected, this
translated into revenues for the year up by only 4% to GBP26.8m
(2016: GBP25.7m). This headline rate masked a 9% underlying organic
growth in revenues (excluding Roadsense revenues, acquired during
the year, and deliberate reductions in non-core product and
contract manufacturing sales).
Our sales of new fleet management solutions and insurance
products have increased our already solid base of recurring
revenues, providing future visibility from which we can continue to
expand. Furthermore, the range and breadth of the data we are now
able to provide gives us a market leading proposition for all the
business sectors we touch.
Adjusted operating profit (before exceptional costs and share
based payments) reduced by 67% to GBP1.3m as a result of the
significant increase in investment to drive long term growth,
increasing overhead costs ahead of revenues. Our total research and
development expenditure increased from GBP2.9m to GBP4.5m. We also
incurred significantly increased sales and marketing costs. Our
operating profits reduced by 71% to GBP0.9m (2016: GBP3.1m). Our
statutory profit before tax reduced to GBP0.7m (2016: GBP3.0m).
In February 2017, the Group decided to reduce debt and to
underpin the working capital requirements of growing the business.
It completed an oversubscribed fundraise of GBP2.0m (net of fees)
on 3 March 2017. The Directors and senior management showed their
commitment to the Company by investing GBP0.7m alongside the
institutional and other investors. As a result at the year end the
Group had cash and cash equivalents of GBP2.0m and an available
revolving credit facility of GBP3.3m to draw down upon if required,
compared to net debt of GBP3.9m (2016: GBP1.1m). This should be
sufficient for the Group's requirements over the next twelve
months.
The Group remains in a phase of rapid growth and significant
investment; this requires it to invest heavily in working capital.
This is likely to result in cash conversion as a percentage of
operating profit being comfortably below 100% in the next few
years, until such time as the Group reaches a more mature state.
However, the Board notes that recent corporate consolidation has
valued target companies on the basis of revenue and installed base,
rather than on profitability and cash flows, such is the growth
profile of the telematics industry.
As announced in March 2017, the Group has initiated a major
streamlining exercise, the first phase of which is expected to
generate annualised savings of GBP1.5m at a one-off cost of
GBP0.1m. These savings have been achieved through the various
consolidation activities that have been undertaken to focus the
Group into one operating business, whilst retaining focus on our
core activities of designing innovative products and selling them
more effectively.
ACQUISITIONS
In August 2016, we completed the acquisition of Roadsense
Technology Limited ("Roadsense") which provides fleet telematics
solutions to the SME market. The purchase consideration was GBP0.8m
paid in cash.
The acquisition complemented our vehicle telematics solutions
enabling Trakm8 to address a wider customer base. The success of
this acquisition along with that of Route Monkey in the previous
year was demonstrated by the seven year contract extension
announced post year end with Iceland Foods for a fully integrated
camera, telematics and optimisation solution. This was validation
of the powerful business case for having made the DCS (cameras),
Route Monkey (optimisation) and Roadsense (fleet sales)
acquisitions. Roadsense is now fully integrated into the Group as
part of Trakm8 Fleet Business Unit.
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. Revenues increased by 24% to GBP21.3m (2016:
GBP17.2m) and more importantly within this growth our recurring
revenues grew by 18% to GBP9.8m (2016: GBP8.3m). Growing these
service revenues is a key focus as it provides increasing
confidence and predictability to future periods. In total we had in
excess of 190,000 units (2016: 151,000) reporting to our servers at
the year end. The trend of increasing Solution sales is
demonstrated by the share of the revenues that are now Solutions.
This increased from 67% in 2016 to 80% in 2017.
Our solutions sales cover both the fleet management and
insurance market sectors. The total fleet management units
increased by 12% over the year to 66,000 (2016: 59,000). Telematics
for insurance is experiencing higher levels of growth. At the year
end we had 124,000 insurance solution units reporting to our
servers (2016: 92,000), which is an increase of 35%. Market
forecasts are predicting compound annual growth rates in excess of
46% for the number of insurance telematics policies in force and we
have seen a corresponding increased level of interest from well
known 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 continued to invest in our crash algorithms and driver
scoring algorithms and believe that these are now very competitive.
Broadening these in conjunction with video algorithms based on
driver distraction analysis, will further improve these driver
behaviour solutions.
Investment in the latest generation server and portal has
progressed well so that the Group can deploy much higher levels of
units and process much higher levels of data. The new product
launched since year end, called Trakm8 Insight, replaces Trakm8
SWIFT. Trakm8 Insight is the new web portal which allows our
customers to view information about their vehicles such as
real-time locations, driver behaviour and vehicle health faults.
Initial customer feedback is positive. This new architecture along
with the new hardware platforms continue to give Trakm8 market
leading solutions with the widest and deepest offer in the market
today.
Since the year end, as stated above, we have announced a
contract extension with Iceland Foods to provide our 4G integrated
camera and telematics solution with driver feedback devices to
1,500 vehicles. This is the Group's first significant order for the
complete fleet solution (fully integrated camera, telematics and
optimisation).
A contract was also recently announced with a roadside
assistance technology company to supply devices based on our 4(th)
generation self-fit hardware and Trakm8connectedcare software. This
solution will be widely deployed to road side assistance providers
across Europe. It follows a 12 month trial of the solution with the
AA in the UK.
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 included together with the revenues
from our contract electronic manufacturing facility in Coleshill,
Birmingham. Total product revenues reduced by 35% to GBP5.5m (2016:
GBP8.4m) with GBP2.7m of this reduction being accounted for by the
deliberate elimination of sales to a single contract manufacturing
customer. As a result Product sales accounted for 20% of total
revenues down from 33% in 2017.
Although Trakm8 has market leading devices that are of interest
to other Telematics companies, this is no longer a strategic sales
focus for the Group due to the relatively low margins and the
increased demand for Trakm8 solutions. As a result the Group
expects to fill all its existing capacity this year and is not
aiming to supply third parties; this is likely to lead to a further
planned reduction in product revenues.
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 39% increase in the average number
of Engineers in our research & development teams to 82 (2016:
59) during the year. The Trakm8connectedcare automotive connected
solution has been considerably expanded and we now have a number of
features important to our customers that can be derived from 95%+
of the vehicles that report this data to the diagnostic port.
The integrated 4G camera telematics unit has been launched and
well received by the market.
Insurance propositions have been expanded to improve the crash
detection algorithms and now include driver scoring solutions.
The next generation portal and server solution, Trakm8 Insight,
was launched after year end. It replaces Trakm8 SWIFT which is now
almost ten years old.
BOARD CHANGES
Keith Evans was appointed Deputy Chairman so that the Group
could benefit from his extensive commercial and financial
experience and expertise and to act as a further link to
shareholders.
DIVID
In September 2016, we paid a dividend of 2 pence per share,
reflecting the very strong financial performance in that year. As a
result of the disappointing trading last year, the Group does not
propose to recommend a dividend for the year at the forthcoming
AGM. However, the Board will continue to review its dividend policy
and plans to recommend a dividend payment when the Group's
financial performance justifies it again.
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 staff numbers have
grown by 18% over the year including six new colleagues we have
welcomed from the Roadsense acquisition.
It has been a demanding year as the Group has experienced rapid
growth. We have an exceptional team 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 started the new financial year consistent with its
expectations for the year as whole. The revenues in the first two
months of the new financial year are 10% greater than the
corresponding period last year.
We have recently announced new contracts with a roadside
assistance technology company, and Mecalac, the construction
equipment group. We have also announced renewed and extended
contracts with Marmalade, Iceland Foods, Shell and Direct Line
Group. These important contracts together with our strong pipeline
of further opportunities provide additional visibility in our
outlook for this year.
Overall, we anticipate reaping the rewards of our investments as
evidenced by our renewed contract momentum. As a result we are
confident of achieving a much improved performance in the new
financial year consistent with market expectations.
John Watkins
EXECUTIVE CHAIRMAN
3 July 2017
FINANCIAL REVIEW
TRADING RESULTS
Revenues increased by 4% to GBP26.8m (2016: GBP25.7m) and
organic growth was 9%, excluding the benefit of the acquisition of
Roadsense, and excluding the impact of prior year acquisitions and
reductions in non core product and contract manufacturing
sales.
Solutions revenues continued to grow as we continued our
investment in new products and the consolidation of our recent
acquisitions. These revenues increased by 24% to GBP21.3m (2016:
GBP17.2m) and now account for 80% of our total revenues, up from
67% last year. We had expected further growth in these revenues but
the signing of certain new contracts occurred much later than
anticipated. Our recurring revenues increased by GBP1.5m to GBP9.8m
(2016: GBP8.3m) and now represent 37% of total revenues (2016:
32%).
Product revenues reduced by 35% to GBP5.5m (2016: GBP8.4m) as we
ended our contract with Microlise and continued to withdraw from
our contract electronic manufacturing operations. This strategy
will continue into 2018 and is planned to lead to a further drop in
product revenues.
Our gross margin increased by 1.1% to 49.4% (2016: 48.3%) helped
by lower manufacturing revenues being replaced by higher margin
solution revenues and their accompanying recurring revenues. The
effect of Brexit and increased raw material prices is estimated to
have decreased our gross margin by 2%. The total cost in the year
of Brexit including adverse currency movements was GBP0.6m.
OVERHEADS
Total overheads (excluding exceptional costs) increased by 42%
to GBP12.5m (2016: GBP8.8m). During the year we have made
substantial investments in our engineering and sales and marketing
teams, increasing average staff numbers by 23 and 13 respectively.
Our total research and development costs increased to GBP4.5m from
GBP2.9m out of which we have expensed GBP1.3m (2016: GBP1.0m).
ADJUSTED OPERATING PROFIT
Adjusted operating profit is one of our key performance
indicators and is operating profit before exceptional costs and
share based payments. This dropped to GBP1.3m (2016: GBP3.9m) on
account of disappointing revenue growth accompanied by the
increases in our staff numbers. Our operating profit was GBP0.9m
(2016: GBP3.1m).
EXCEPTIONAL COSTS
Exceptional costs totalled GBP0.2m and consisted of costs
incurred from the acquisition of Roadsense Technology Limited
("Roadsense") together with rationalisation and integration costs,
and costs associated with our exit from our contract manufacturing
operations.
PROFIT
Profits before tax were GBP0.7m (2016: GBP3.0m). We realised a
net tax credit of GBP0.8m (2016: GBP0.3m) during the year resulting
from substantial R&D tax credits arising from our investment in
research and development of new technologies. Profits after tax
were GBP1.5m (2016: GBP3.3m). The Group has tax losses carried
forward of GBP7.3m (2016: GBP6.3m).
EARNINGS PER SHARE
Basic earnings per share decreased by 60% to 4.51 pence (2016:
11.15 pence). Adjusted earnings per share which is before
exceptional costs and share based payments also fell to 5.81 pence
(2016: 13.44 pence).
BALANCE SHEET
Net assets increased to GBP20.2m (2016: GBP17.1m). Continuing
investment in our telematics solutions together with investments in
software and goodwill arising from the acquisition of Roadsense
increased our net intangibles by GBP3.1m to GBP17.1m (2016:
GBP14.0m).
Our inventories increased by GBP1.4m to GBP3.7m (2016: GBP2.3m)
due to increasing our quantities of finished goods in expectation
of additional demand in the final quarter. These orders were
delayed into the new financial year and so inventories were higher
than anticipated at the year end. However inventories are expected
to reduce on the back of the substantial new orders we have
announced since year end.
FINANCING
Net borrowings at the year end were GBP3.9m (2016: GBP1.1m). Our
bank facilities comprised our term loan of GBP3.9m and our GBP5.0m
revolving credit facility of which GBP1.7m was drawn at 31(st)
March 2017. Our term loan is repayable by monthly instalments until
2021 and outstanding amounts under the revolving credit facility
are repayable in December 2018.
In March 2017, the Group raised a net GBP2.0m (after fees)
through a share placing of 3.2m shares at 65 pence per share. The
proceeds were used to repay part of our revolving credit facility
and to strengthen our working capital position to support future
growth.
At the year end the Group had cash balances of GBP2.0m (2016:
GBP3.9m) and total borrowings of GBP5.9m (2016: GBP4.9m).
CASHFLOW
Net cash generated from operating activities was GBP0.7m (2016:
GBP4.5m). This decrease was largely due to the reduction in our
earnings before depreciation and amortisation plus the funding of
increases in our inventories, reduction in trade and other payables
and our investment in engineering resources. In addition, we have
experienced a net GBP1.9m working capital deterioration compared to
2016 due to our evolving business model, reflecting many customers'
preference to sign SaaS (software as a service) type contracts
which spreads the payments for hardware and software elements over
the term of the contract.
Our free cashflow (operating cashflow less capex and capitalised
development costs) was a net outflow of GBP3.0m (2016: inflow
GBP2.0m) after our substantial investment in capex and capitalised
development costs of GBP3.7m. Our free cashflow as a percentage of
adjusted operating profit was -228% (2016: +51%). We anticipate
improved cash flows in the new financial year as our profitability
improves.
James Hedges
FINANCE DIRECTOR
3 July 2017
Consolidated Statement of Comprehensive Income
For The Year Ended 31 March 2017
--------------------------------------------------------------------------------------------------------
Note Year Year
ended ended
31 March 31 March
2017 2016
GBP GBP
REVENUE 3 26,758,532 25,649,188
Cost of sales (13,549,580) (13,251,581)
---------------- -------------
Gross profit 13,208,952 12,397,607
Other income 325,058 81,443
Administrative expenses excluding
exceptional costs (12,461,917) (8,756,085)
Exceptional administrative costs 5 (214,492) (612,559)
---------------- -------------
Total administrative costs (12,676,409) (9,368,644)
OPERATING PROFIT 4 857,601 3,110,406
Finance income 45 874
Finance costs 6 (164,585) (108,208)
---------------- -------------
PROFIT BEFORE TAXATION 693,061 3,003,072
Income tax 777,382 340,678
PROFIT FOR THE YEAR ATTRIBUTABLE
TO THE OWNERS OF THE PARENT 1,470,443 3,343,750
---------------- -------------
OTHER COMPREHENSIVE INCOME
Items that may be subsequently
reclassified to profit or loss:
Currency translation differences (791) 3,811
---------------- -------------
TOTAL OTHER COMPREHENSIVE INCOME (791) 3,811
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR ATTRIBUTABLE TO OWNERS
OF THE PARENT 1,469,652 3,347,561
---------------- -------------
Adjusted Operating profit 4 1,321,518 3,921,044
--------------- ----------------
EARNINGS PER ORDINARY SHARE (PENCE)
ATTRIBUTABLE TO OWNERS OF THE
PARENT
Basic 7 4.51p 11.15p
Diluted 7 4.36p 10.27p
There were no discontinued operations in 2017
or 2016. Accordingly the results relate to continuing
operations.
Consolidated Statement of Changes in Equity For The Year
Ended 31 March 2017
---------------------------------------------------------------------------------------------------------------------
Share Share Merger Translation Treasury Retained Total
capital premium reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP
Balance as at 1
April 2015 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
Reclassification
of previous
Treasury
share
transactions - (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 1
April 2016 320,350 9,641,062 1,122,181 199,414 (4,495) 5,795,877 17,074,389
--------- ----------- ---------- --------------- ---------------- ------------- -----------
Comprehensive
income
Profit for the
year - - - - - 1,470,443 1,470,443
Other
comprehensive
income
Exchange
differences
on translation
of overseas
operations - - - (791) - - (791)
Total
comprehensive
income - - - (791) - 1,470,443 1,469,652
--------- ----------- ---------- --------------- ---------------- ------------- -----------
Transactions with
owners
Shares issued 36,882 2,141,942 15,397 - - - 2,194,221
Equity dividend - - - - - (649,270) (649,270)
Share placing
fees - (108,667) - - - - (108,667)
IFRS2 Share based
payments - - - - - 249,425 249,425
--------- ----------- ---------- --------------- ------------- -----------
Transactions with
owners 36,882 2,033,275 15,397 - - (399,845) 1,685,709
--------- ----------- ---------- --------------- ---------------- ------------- -----------
Balance as at 31
March 2017 357,232 11,674,337 1,137,578 198,623 (4,495) 6,866,475 20,229,750
--------- ----------- ---------- --------------- ---------------- ------------- -----------
Consolidated Statement of Financial Position As
At 31 March 2017
-----------------------------------------------------------------------
Note As at As at
31 March 31 March
2017 2016
ASSETS GBP GBP
NON CURRENT ASSETS
Intangible assets 17,107,776 13,996,240
Property, Plant and equipment 1,854,885 1,572,613
Deferred income tax asset 297,368 801,365
Amounts receivable under finance
leases 498,634 294,296
19,758,663 16,664,514
------------ ------------
CURRENT ASSETS
Inventories 3,674,003 2,258,882
Trade and other receivables 6,075,575 7,239,954
Corporation tax receivable 1,645,169 24,001
Cash and cash equivalents 1,989,992 3,871,110
13,384,739 13,393,947
------------ ------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (6,470,839) (7,541,122)
Borrowings (1,051,419) (968,182)
Provisions (61,749) (92,208)
(7,584,007) (8,601,512)
------------ ------------
CURRENT ASSETS LESS CURRENT LIABILITIES 5,800,732 4,792,435
TOTAL ASSETS LESS CURRENT LIABILITIES 25,559,395 21,456,949
NON CURRENT LIABILITIES
Trade and other payables (480,211) (395,313)
Borrowings (4,805,596) (3,927,586)
Provisions (43,838) (59,661)
NET ASSETS 20,229,750 17,074,389
============ ============
EQUITY
Share capital 8 357,232 320,350
Share premium 11,674,337 9,641,062
Merger reserve 1,137,578 1,122,181
Translation reserve 198,623 199,414
Treasury reserve (4,495) (4,495)
Retained earnings 6,866,475 5,795,877
TOTAL EQUITY 20,229,750 17,074,389
============ ============
Consolidated Statement of Cash-Flows For The
Year Ended 31 March 2017
--------------------------------------------------------------------------
Notes Year Year
ended ended
31 March 31 March
2017 2016
GBP GBP
NET CASH GENERATED FROM OPERATING
ACTIVITIES 9 667,604 4,447,310
------------ -------------
CASH FLOWS FROM INVESTING
ACTIVITIES
Interest received 45 874
Acquisition of subsidiary
undertaking (net of cash acquired) (763,461) (7,697,531)
Purchases of property, plant
and equipment (180,603) (528,597)
Purchases of software (262,149) (79,134)
Proceeds from sale of plant 300 -
and equipment
Capitalised development costs (3,241,379) (1,852,639)
NET CASH USED IN INVESTING
ACTIVITIES (4,447,247) (10,157,027)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of new shares 2,070,157 5,839,751
Sale of Treasury shares - 79,810
Increase in bank loan 2,700,000 6,000,000
Repayment of bank loans (1,954,067) (5,751,888)
Increase in HP agreement - 126,242
Repayment of obligations under
hire purchase agreements (103,710) (12,839)
Interest paid (164,585) (108,208)
Dividends paid to owners of (649,270) -
the parent
NET CASH GENERATED FROM FINANCING
ACTIVITIES 1,898,525 6,172,868
------------ -------------
NET (DECREASE) / INCREASE
IN CASH AND CASH EQUIVALENTS (1,881,118) 463,151
------------ -------------
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 3,871,110 3,407,959
------------ -------------
CASH AND CASH EQUIVALENTS
AT OF YEAR 1,989,992 3,871,110
------------ -------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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 Company is registered in England and
is limited by shares.
The Group's principal activity is the manufacture, marketing and
distribution of vehicle telematics equipment and services. The
Company's principal activity is to act as a holding company for its
subsidiaries.
2. BASIS OF PREPARATION
The audited financial information included in this preliminary
results announcement for the year ended 31 March 2017 and audited
financial information for the year ended 31 March 2016 does not
comprise statutory accounts within the meaning of sections 404 and
435 of the Companies Act 2006. The information has been extracted
from the audited statutory financial statements for the year ended
31 March 2017 which will be delivered to the Registrar of Companies
in due course. Statutory financial statements for the year ended 31
March 2016 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 GBP1,989,992 at 31 March 2017
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 audited financial
statements are consistent with those used in the preparation of the
audited financial statements for the year ended 31 March 2017.
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:
Year Year
ended ended
31 March 31 March
2017 2016
GBP GBP
Solutions 21,255,795 17,208,779
Products 5,502,737 8,440,409
26,758,532 25,649,188
-------------------- -----------
A geographical analysis of revenue
by destination is as follows:
Year ended 31 March Year ended 31 March
2017 2016
Solutions Products Total Solutions Products Total
GBP GBP GBP GBP GBP GBP
United Kingdom 20,921,406 5,405,002 26,326,408 16,769,774 8,048,848 24,818,622
USA - - - - 168,652 168,652
Canada 360 17,863 18,223 390 46,592 46,982
Norway 70,555 - 70,555 117,527 - 117,527
Rest of
Europe 260,310 13,770 274,080 224,078 7,784 231,862
UAE - 66,102 66,102 - 136,819 136,819
Rest of
World 3,164 - 3,164 97,010 31,714 128,724
21,255,795 5,502,737 26,758,532 17,208,779 8,440,409 25,649,188
=========== ========== =========== =========== ========== ===========
4. OPERATING PROFIT
The following items have been included in arriving
at operating profit:
Year ended Year ended
31 March 31 March
2017 2016
GBP GBP
Depreciation
- owned fixed assets 282,229 227,194
- assets on hire purchase 21,729 5,075
Amortisation of intangible
assets 1,156,947 655,528
Operating lease rentals
- Land and buildings 128,747 92,173
- Other 229,510 219,625
Research and development
expenditure 1,314,360 1,002,096
Loss on foreign exchange
transactions 40,048 46,212
Staff costs 7,301,417 6,036,138
Profit on disposal of property 103 -
plant & equipment
GBP GBP
Auditors' remuneration
Fees payable to the Company's
auditors for the audit of the
parent
company and consolidated
financial statements 71,000 57,000
Fees payable to the Company's
auditors for other services:
The audit of the Company's
subsidiaries - 40,000
Tax compliance services 9,800 12,500
Tax advisory services 9,930 12,450
----------- -----------
Adjusted Operating profit is monitored
by the Board and measured as follows:
Year ended Year ended
31 March 31 March
2017 2016
GBP GBP
Operating Profit 857,601 3,110,406
Exceptional administrative
costs 214,492 612,559
Share based payments 249,425 198,079
Adjusted Operating profit 1,321,518 3,921,044
----------- -----------
5. EXCEPTIONAL ADMINISTRATIVE
COSTS
Year ended Year ended
31 March 31 March
2017 2016
GBP GBP
Acquisition costs 63,190 578,943
Integration costs 89,514 33,616
Contract manufacturing residual 61,788 -
inventory provisions
214,492 612,559
----------- -----------
The acquisition costs related to the purchase
of 100% of the share capital of Roadsense Technology
Limited in August 2016. The 2016 acquisition costs
related to the purchase of the trade and assets
of DCS in June 2015 and 100% of the share capital
of Route monkey Holdings Limited. The integration
costs related to the reorganisation of management
and integration of business systems and processes
following the acquisitions. The contact manufacturing
residual inventory costs are associated with the
cessation of our manufacturing contracts with
third parties as part of our streamlining of the
business. These costs have been included as part
of Administration costs.
6. FINANCE COSTS
Year Year
ended ended
31 March 31 March
2017 2016
GBP GBP
Interest on bank
loans 148,348 102,345
Interest on Hire
Purchase agreements 16,237 5,863
164,585 108,208
========== ===========
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:
Year Year
ended ended
31 March 31 March
2017 2016
GBP GBP
Profit for the year after taxation 1,470,443 3,343,750
Exceptional administrative costs 214,492 612,559
Share based payments 249,425 198,079
Tax effect of adjustments (42,898) (122,512)
Adjusted profit for the year after
taxation 1,891,462 4,031,876
----------- -----------
No. No.
Number of Ordinary shares of 1p each 35,723,254 32,035,064
Basic weighted average number of Ordinary
shares of 1p each 32,594,891 30,000,972
Diluted weighted average number of Ordinary
shares of 1p each 33,708,702 32,571,617
Earnings per share 4.51p 11.15p
Diluted earnings per share 4.36p 10.27p
Adjust for effects of:
Exceptional costs 0.53p 1.63p
Share based payments 0.77p 0.66p
Adjusted earnings per share 5.81p 13.44p
Adjusted diluted earnings per share 5.61p 12.56p
8. SHARE CAPITAL
As at 31 March As at 31 March
2017 2016
No's GBP No's GBP
Authorised '000's '000's
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 35,723 357,232 32,035 320,350
Movement in share capital:
As at As at
31 March 31 March
2017 2016
GBP GBP
As at 1
April 320,350 289,738
New shares issued 36,882 30,612
As at 31
March 357,232 320,350
-------------- ----------
The Company currently holds 29,000 Ordinary shares
in treasury representing 0.08% (2016: 0.09%) 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 35,694,254.
During the year the following shares were issued:
Date Description Shares Consideration Premium
number GBP GBP
Exercise of options
over Ordinary Shares
07/04/2016 by an employee 100,000 13,000 12,000
Exercise of options
over Ordinary Shares
28/04/2016 by an employee 100,000 19,500 18,500
Exercise of options
over Ordinary Shares
03/05/2016 by an employee 50,000 9,750 9,250
Exercise of options
over Ordinary Shares
26/07/2016 by an employee 200,000 36,500 34,500
Share issue to senior
management shareholders
30/09/2016 of Roadsense 7,420 15,471 15,397
Share issue in connection
10/03/2017 with capital raising 3,230,770 2,100,000 2,067,692
3,688,190 2,194,221 2,157,339
========== ============== ==========
The shares issued to senior management shareholders
of Roadsense were issued at a premium which was subject
to merger relief and has been taken to the Merger
reserve.
9. CASH GENERATED FROM OPERATIONS
Year ended Year ended
31 March 31 March
2017 2016
GBP GBP
Profit before tax 693,061 3,003,072
Depreciation 303,958 232,269
Profit on disposal (103) -
of fixed assets
Net bank and other interest 164,540 107,334
Amortisation of intangible
assets 1,156,947 655,528
Share based payments 249,425 198,079
------------ ------------
Operating cash flows before
movement in working capital 2,567,828 4,196,282
Movement in inventories (1,376,921) (39,011)
Movement in trade and other
receivables 498,593 (1,211,259)
Movement in trade and other
payables (1,104,571) 1,489,544
Movement in provisions (46,282) 11,754
------------ ------------
Cash generated from operations 538,647 4,447,310
Income taxes received 128,957 -
------------
Net cash inflow from operating
activities 667,604 4,447,310
------------ ------------
10. BUSINESS COMBINATIONS
Roadsense Technology Limited
On 1 August 2016 the Company acquired the entire share capital
of Roadsense Technology Limited for a total consideration of
GBP778,932.
Roadsense provides telematics solutions to smaller businesses.
The company was acquired to extend the customer base of the Group.
The assets and liabilities as at 1 August 2016 arising from the
acquisition were as follows:
Fair value
GBP
Intangible
assets 100,000
Property and
equipment 99,875
Inventory 38,200
Trade and other
receivables 62,486
Trade and other
payables (186,584)
-----------
Net assets
acquired 113,977
Goodwill 664,955
Total consideration 778,932
-----------
Satisfied
by:
Cash 763,461
Fair value of shares
in the Company 15,471
778,932
-----------
The acquisition was settled in cash of GBP763,461 and by issuing
7,420 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 GBP15,471 on the
acquisition date. Merger relief has been applied, leading to the
addition of GBP15,397 to the merger reserve rather than share
premium.
The revenue included in the consolidated statement of
comprehensive income since 1 August 2016 contributed by Roadsense
was GBP580,010. Roadsense also contributed an operating loss of
GBP235,239 over the same period. The Directors have concluded that
it is impractical to provide disclosure of the revenues and profit
that Roadsense would have contributed to the Group had it been
consolidated from 1 April 2016. This is due to audited accounts not
being available for the period 1 April 2016 to 31 July 2016, and
significant adjustments have been required to Roadsense's
accounting policies in respect of revenue recognition to align with
the requirements of IFRS and Trakm8 Holdings PLC's accounting
policies. Therefore it is impractical to recalculate revenues for
the period 1 April 2016 to 31 July 2016.
Acquisition related costs amounting to GBP63,190 have been
recognised as an exceptional administrative expense in the
consolidated statement of comprehensive income. The goodwill
arising on the acquisition represents the value of the marketing
expertise and customer relationships acquired which Trakm8 Holdings
PLC plans to integrate into their existing telematics
offerings.
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 Limited. Under the purchase agreement,
contingent consideration of up to GBP2,000,000 was payable subject
to the business achieving certain performance targets during the
year to 31 December 2016. None of this contingent consideration is
payable. No provision in relation to this consideration was
recognised in the prior year financial statements, so no adjustment
has been made in these financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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