TIDMTRAK
RNS Number : 5106G
Trakm8 Holdings PLC
23 November 2015
23 November 2015
TRAKM8 HOLDINGS PLC
("Trakm8" or "the Group")
Half Year Results
Significant momentum in revenues and profit
Trakm8 Holdings plc, the telematics and data provider to the
global market place is pleased to announce its unaudited results
for the six months ended 30 September 2015:
Highlights
Six months Six months Year to Change
to 30 September to 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Revenue 11,726 8,478 17,853 38%
Of which, Recurring
Revenue 3,976 2,404 5,580 65%
Adjusted Earnings before
interest, tax, depreciation
& amortisation* 1,922 1,130 2,597 70%
Adjusted Profit before
tax* 1,478 782 1,819 89%
Net cash and cash equivalents 1,423 1,914 3,408
Adjusted earnings per
share* 5.08p 2.70p 6.24p
*Adjustment for exceptional costs of acquisitions and share
based payments
Financial Highlights
-- Revenues increased by 38%. Like for like revenues up 30%; recurring revenues up by 65%
-- Orders received increased by 29%. Like for like orders received up 21%
-- Adjusted EBITDA increased by 70%
-- Adjusted profit before tax increased by 89% to GBP1.48m (2014: GBP0.78m)
-- Strong net cash generation compared to previous half years
Operating highlights
-- New contract awards and extensions including with Bibby Distribution Ltd
-- Acquisition of trade and assets of DCS Systems Ltd ("DCS")
o Integrated and earnings enhancing
-- Installed base continues to grow
o approximately 135,000 units (2014: 77,000) reporting to our
servers
Current trading
-- Benefit of new contracts together with strong order pipeline
-- Expect to modestly exceed current expectations
John Watkins, Executive Chairman of Trakm8 said:
"Trakm8 has had another strong period of growth from existing
and new customers leading to today's results being ahead of our
previous expectations. The installed base of devices reporting to
our servers continues to increase rapidly and these recurring
revenues are the core of Trakm8's business model and financial
security. The acquisition of the DCS business is meeting our
initial expectations and is proving a good platform for our
strategic goals to integrate video data with our other data
services.
"We continue to be well placed to grow the Group through
investment and acquisitions. Recent contract wins and the stronger
than budgeted start to the year mean we now believe that we will
modestly exceed the current market expectations for the year as a
whole."
For further information, please visit www.trakm8.com or
contact:
Trakm8 Holdings plc
John Watkins, Executive Chairman
James Hedges, Finance Director 01747 858 444
MHP Communications
Reg Hoare / Jade Neal / Charlotte
Coulson 020 3128 8100
finnCap (Nominated Adviser and
Broker)
Ed Frisby / Simon Hicks - Corporate
finance Joanna Scott - Corporate
broking 020 7220 0500
About Trakm8
Trakm8 uses Big Data analytics to improve driver behaviour, and
to maintain its status as a leading technology designer, developer
and manufacturer of telematics products and solutions.
The Trakm8 Group, based in Shaftesbury, Dorset, distributes its
hardware and software through a network of distributors worldwide.
In addition, the company provides vehicle monitoring and tracking
services direct to the B2B market. Trakm8's IP owned products and
services allow vehicles and drivers to be monitored, giving
organisations the ability to manage their deliveries and services,
or to track stolen vehicles down to a distance of five metres.
In June 2015, the Trakm8 Group acquired the business and assets
of DCS Systems Ltd, who specialise in the design and distribution
of camera systems for the automotive, bicycle and security markets.
This further strengthens Trakm8's offering into the telematics
marketplace, with the acquisition based on the market's demand for
forward facing vehicle cameras which enable customers to record
driving incidents and mitigate the risk from "crash to cash"
accidents.
Trakm8's most recent generation of hardware is the T10 product
range, which includes a self-installed telematics device. The
Group's services also include a driver behaviour management
solution that can reduce fuel consumption by over 10% whilst
reducing the risk of accidents. This is complemented by a logistics
routing and scheduling package, integrated tachograph data
reporting facilities, and the ability to read vehicle DTCs
(Diagnostic Trouble Codes) promoting preventative maintenance and
reducing service downtime.
The Group's customers include the AA, St Gobain, EON, Direct
Line Group, & Young Marmalade.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005.
www.trakm8.com / @Trakm8
Executive Chairman's Statement
Results
I am pleased to report Trakm8's results for the six months ended
30 September 2015.
Revenues grew 38% in the period to GBP11.7m (2014: GBP8.5m).
This comprises 58% growth in Trakm8's core Solutions business to
GBP7.9m (2014: GBP5.0m). Products sales increased by 10% to GBP3.8m
(2014: GBP3.5m). The value of new orders received during the period
continued the good trend of recent years and were up by 21%
(excluding DCS). This reinforces the confidence we have that strong
organic growth can be maintained.
Adjusted profit before tax increased by 89% to GBP1.48m (2014:
GBP0.78m). The adjusted profit excludes the share based payment
charge of GBP0.08m and exceptional costs of GBP0.16m related to the
acquisition of DCS. Adjusted earnings per share has increased by
88% to 5.08p (2014: 2.70p).
Total recurring revenues increased by 65% during the period to
GBP4.0m (2014: GBP2.4m), which are generated from increased numbers
of units reporting to our servers. These revenues remain the core
of the Group's business model and financial security. Gross margin
percentages have also benefited from the higher levels of service
revenues.
It is pleasing to note the positive cash generation during the
period. Total cash generated in the six months from operating
activities was GBP1.29m which exceeds the total cash from operating
activities we generated during the year to March 2015. Our total
cash balance as at September 2015 was GBP1.4m. To assist with the
funding of the DCS acquisition in June which cost GBP3.3m, Trakm8
obtained a further debt facility from HSBC Bank of an additional
GBP2 million taking its total debt facility to GBP5.7 million.
Operations
During the period we introduced a new Bluetooth variant of our
self-install telematics device - the T10 micro (BLE) - and have
delivered it to customers in the UK and USA. Further T10 versions
will be ready for manufacturing launch in January 2016.
The data analytics from our data science team has been used to
create service, driver risk scoring and FNOL (first notification of
loss) algorithms that are proving to be of great interest to
current and potential customers. We have also identified
opportunities to sell some of our data in an anonymised format.
A suite of Apps for deeper customer interaction has been
developed for both the B2B and B2C markets.
First customers are seeing Swift 7 front end as part of our move
to a completely new system architecture in readiness for much
higher levels of device and data management.
Following the acquisition of the DCS business, we have scaled up
the development of the deeper integration of video with our
telematics data services. We have launched the first of these
solutions and expect to follow these with further generations with
greater functionality and more valuable data.
We continue to invest in human resources and fixed assets. Our
capex of GBP0.5m has been high during this period but we believe we
have now completed some key short term investments in order to
prepare for stronger growth levels. The IT investment in customer
support and device management has significantly improved the
service levels to our customers. A second new automated pcb
assembly line has been installed, with a number of automated test
processes built into the line for improved quality assurance. Our
engineering teams have been further expanded to meet the growing
opportunities that we have. Total investment in research and
development in the period was in excess of GBP1 million and we have
capitalised GBP0.58m of these costs. The benefits of these
developments continue to be realised in the range of new solutions
described above.
We analyse our revenues in two ways:
Solution Sales
This area of sales comprises Fleet Management, Insurance and
Vehicle Service Solution revenues including associated engineering
services.
Recurring revenues from this base have grown by 66% to GBP4.0m
(2014: GBP2.4m) and now represents 34% of Group revenues. There has
been strong growth of both our Fleet Management and Insurance
Solutions. The first customer for our Vehicle Service Solution
launched during this period. At the period end we had approximately
135,000 units reporting to our servers being an increase of 74%
over last year.
In addition there were several small customer funded engineering
projects completed during the period.
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Overall, Solution sales were 58% greater than the same period of
2014 at GBP7.9m (2014: GBP5.0m) and represent 68% of the Group
total (2014: 59%)
We have expanded our sales resource and as a result developed a
good pipeline of opportunities, with a large number of significant
trials in progress. We anticipate that revenues will continue to
grow strongly in this area.
Product Sales
This area of sales comprises all the hardware revenues from our
sales to other telematics integrators and to our manufacturing
services customers.
Total revenues amounted to GBP3.8m representing 32% of the Group
total and an increase of 10% on last year (2014: GBP3.5m). Sales of
products, excluding DCS camera sales of GBP0.6m, were GBP0.4m down
on last year due to the elimination of a number of lower value
added manufacturing service customers and the focus onto core
telematics device shipments to our Solutions customers. In
addition, during the period, BOX manufactured GBP1.8m of telematics
devices for Trakm8, an increase of 63% on the previous year, which
has had a positive impact on Group profitability.
Since the acquisition in June of the trade and assets of DCS,
sales of cameras have performed well and in line with our
expectations. Volvo Car UK have recently listed the Roadhawk camera
in their official accessories as part of a new contract and TNT
have placed an order after a trial that found 56% of drivers stated
the camera's presence had caused them to change their driving
behaviour for the better and three quarters felt the cameras
improved their personal safety and security.
Strategy
The Group has been following the strategy outlined in the 2015
Annual Report. Our focus is to sell more devices reporting to our
servers and their associated service revenues, along with the use
of the considerable data we now derive from these devices to sell
driver behaviour, risk analysis and vehicle service management
knowledge.
In addition to the excellent organic growth potential of this
market, we have consistently stated that Trakm8's strong financial
business model, the cash generation and solid balance sheet would
enable the Group to consider further acquisitions alongside the
organic growth strategy. We believe that the acquisition of the DCS
business met our strategic objectives. Now that DCS is operating to
our satisfaction, we continue to assess further acquisition
opportunities to enhance our organic growth.
Outlook
The Group believes that we will continue to successfully execute
our outlined strategy and as a consequence deliver growth in
shareholder value. The second halves of our financial years have
consistently shown increasing revenues including service revenues
over the first half. This year we expect that this will be true
again. This, along with a full period effect of DCS, means that we
expect second half of the year revenues will be considerably ahead
of the first six months.
At the time of our Final Results in July we indicated that we
expected to modestly exceed the market's then current expectations.
The Board is now confident that the results for the year ending
31(st) March 2016 will again modestly exceed the market's current
expectations.
JOHN WATKINS
Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the six months to 30 September 2015
Six months Six months Year to
to 30 September to 30 September 31 March
2015 2014 2015
Note Unaudited Unaudited Audited
Continuing operations GBP'000 GBP'000 GBP'000
Revenue 11,726 8,478 17,853
Cost of sales (6,140) (4,545) (9,792)
Gross profit 5,586 3,933 8,061
Administrative
expenses (4,145) (3,181) (6,301)
Operating Profit
before exceptional
items 1,441 752 1,760
Exceptional items 5 (159) - -
Operating Profit 1,282 752 1,760
Finance costs (41) (35) (58)
Profit before taxation 1,241 717 1,702
Income tax - - (13)
Profit attributable to
the owners of the parent 1,241 717 1,689
Other Comprehensive
Income
Currency translation
differences - - (4)
Total Comprehensive Income
for the period attributable
to owners of the parent 1,241 717 1,685
================= ================= ==========
Adjusted EBITDA 1,922 1,130 2,597
------------------------------ ------- ----------------- ----------------- ----------
Basic earnings per
share (pence) 6 4.26 2.48 5.84
Diluted earnings
per share (pence) 6 4.00 2.35 5.48
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the six months to 30 September 2015
Share Share Merger Translation Treasury Retained Total
capital premium reserve reserve Reserve earnings equity
attributable
to owners
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
April 2014 289 3,641 510 200 - 492 5,132
--------- --------- --------- ------------ --------- ---------- --------------
Comprehensive income
Profit for the period - - - - - 717 717
Total comprehensive
income - - - - - 717 717
Transactions with
owners
Shares issued 1 12 - - - - 13
Sale of own shares - - - - - 48 48
IFRS2 Share based
payments - - - - - 65 65
--------- --------- --------- ------------ --------- ---------- --------------
Transactions with
owners 1 12 - - - 113 126
--------- --------- --------- ------------ --------- ---------- --------------
Balance as at 30
Sept 2014 290 3,653 510 200 - 1,322 5,975
--------- --------- --------- ------------ --------- ---------- --------------
Comprehensive income
Profit for the period - - - - - 972 972
Other comprehensive
income
Exchange differences
on
translation of overseas
operations - - - (4) - - (4)
Total comprehensive
income - - - (4) - 972 968
Transactions with
owners
Shares issued - - - - - - -
Reclassification
of previous Treasury
Share Transactions - 67 - - (23) (44) -
Reclassification
of Sale of own shares - 37 - - 11 (48) -
IFRS2 Share based
payments - - - - - 52 52
--------- --------- --------- ------------ --------- ---------- --------------
Transactions with
owners - 104 - - (12) (40) 52
--------- --------- --------- ------------ --------- ---------- --------------
Balance as at 31
March 2015 290 3,757 510 196 (12) 2,254 6,995
--------- --------- --------- ------------ --------- ---------- --------------
Comprehensive income
Profit for the period - - - - - 1,241 1,241
--------- --------- --------- ------------ --------- ---------- --------------
Total comprehensive
income - - - - - 1,241 1,241
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--------- --------- --------- ------------ --------- ---------- --------------
Transactions with
owners
Shares issued 11 129 - - - - 140
Sale of own shares - 73 - - 7 - 80
IFRS2 Share based
payments - - - - - 78 78
--------- --------- --------- ------------ --------- ---------- --------------
Transactions with
owners 11 202 - - 7 78 298
--------- --------- --------- ------------ --------- ---------- --------------
Balance as at 30
Sept 2015 301 3,959 510 196 (5) 3,573 8,534
--------- --------- --------- ------------ --------- ---------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 30 September 2015
30 September 30 September 31 March
2015 2014 2015
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 6,379 3,415 3,599
Plant, property and equipment 1,656 1,289 1,300
Deferred income tax asset 666 753 666
-------------- -------------- ----------
8,701 5,457 5,565
-------------- -------------- ----------
Current assets
Inventories 2,579 1,288 1,493
Trade and other receivables 4,588 4,052 4,912
Cash and cash equivalents 1,423 1,914 3,408
8,590 7,254 9,813
-------------- -------------- ----------
Current liabilities
Trade and other payables (4,964) (4,533) (5,431)
Borrowings (583) (500) (576)
Obligations under finance leases (26) - -
and hire purchase Agreements
Provisions (92) - (92)
-------------- -------------- ----------
(5,665) (5,033) (6,099)
-------------- -------------- ----------
Current assets less current liabilities 2,925 2,221 3,714
-------------- -------------- ----------
Total assets less current liabilities 11,626 7,678 9,279
-------------- -------------- ----------
Non-current liabilities
Borrowings (2,943) (1,542) (2,236)
Obligations under finance leases (101) - -
and hire purchase Agreements
Provisions (48) (161) (48)
(3,092) (1,703) (2,284)
-------------- -------------- ----------
Net assets 8,534 5,975 6,995
============== ============== ==========
Equity
Note
Called up share capital 6 301 290 290
Share premium 3,959 3,653 3,757
Merger reserve 510 510 510
Translation reserve 196 200 196
Treasury reserve (5) - (12)
Retained profit / (loss) 3,573 1,322 2,254
------ ------ ------
Total equity attributable
to owners of the parent 8,534 5,975 6,995
====== ====== ======
CONSOLIDATED CASH FLOW STATEMENT
for the six months to 30 September 2015
Six months Six months Year to
to to 31 March
30 September 30 September 2015
2015 2014 Audited
Unaudited Unaudited
Note GBP'000 GBP'000 GBP'000
Net cash inflow / (outflow)
from operating activities 7 1,295 (197) 1,128
-------------- -------------- ----------
Cash flows from investing activities
Acquisition of trade and assets (3,275) - -
of DCS Systems Ltd
Acquisition of subsidiary
(net of cash) - - (5)
Purchases of property, plant
and equipment (505) (243) (355)
Proceeds from sale of plant 48 - 10
Capitalised Development costs (581) (368) (862)
-------------- -------------- ----------
Net cash used in investing
activities (4,314) (611) (1,212)
-------------- -------------- ----------
Cash flows from financing activities
Issue of new shares 140 12 12
Sale of treasury shares 80 49 49
New bank loan 1,000 - 3,000
New hire purchase contract 102 - -
Repayment of loans (288) (250) (2,480)
Net cash used in financing
activities 1,034 (189) 581
-------------- -------------- ----------
Net increase / (decrease) in cash
and cash equivalents (1,985) (997) 497
Cash and cash equivalents at beginning
of period 3,408 2,911 2,911
-------------- -------------- ----------
Cash and cash equivalents
at end of period 1,423 1,914 3,408
============== ============== ==========
Notes to the financial information (unaudited)
1. The financial information contained in this interim statement
has not been audited or reviewed by the Group's auditor and does
not constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Directors approved and authorised this
interim statement on 20 November 2015. The financial information
for the preceding full year is extracted from the statutory
accounts for the financial year ended 31 March 2015. Those
accounts, upon which the auditor issued an unqualified opinion and
did not include a statement under Section 498(2) or (3) of the
Companies Act 2006, have been delivered to the Registrar of
Companies.
2. Trakm8 Holdings PLC is a public limited company incorporated
in the United Kingdom under the Companies Act 2006. Trakm8 is
domiciled in the United Kingdom and its ordinary shares are traded
on AIM, the market operated by the London Stock Exchange plc.
3. As permitted this Interim Report has been prepared in
accordance with UK AIM Rules for Companies and not in accordance
with IAS 34 "Interim Financial Reporting" and therefore is not
fully in compliance with IFRS. The Interim results have been
prepared in a manner consistent with the accounting policies set
out in the statutory accounts for the financial year ending 31
March 2015.
4. Profit per ordinary share attributable to the owners of the parent
Six months Six months Year to
to to 31 March
30 September 30 September 2015
2015 2014 Audited
Unaudited Unaudited
GBP'000 GBP'000 GBP'000
Profit attributable
to the owners of
the parent 1,241 717 1,685
-------------- -------------- ----------
5. Exceptional costs
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