TIDMTRAK
RNS Number : 5300Q
Trakm8 Holdings PLC
29 June 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
29 June 2022
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Final Results
Trakm8 Holdings plc (AIM: TRAK), the global telematics and data
insight provider, announces its final results for the year ended 31
March 2022 (FY-2022).
FINANCIAL SUMMARY:
FY-2022 FY-2021 Change
Group revenue GBP18.1m GBP16.0m +13%
---------- --------- -------
of which, Recurring revenue(1) GBP9.8m GBP9.4m +5%
---------- --------- -------
Loss before tax (GBP0.1m) (GBP1.9m) +93%
---------- --------- -------
Adjusted Profit/(Loss) before
tax(2) GBP0.0m (GBP0.3m) +101%
---------- --------- -------
Profit/(Loss) after tax GBP0.2m (GBP1.2m) +115%
---------- --------- -------
Net cash inflow generated from
operations GBP3.8m GBP4.7m -19%
---------- --------- -------
Net debt(3) GBP5.4m GBP4.9m +10%
---------- --------- -------
Basic Profit/(Loss) per share 0.37p (2.47p) +115%
---------- --------- -------
Adjusted basic earnings per share(2) 0.41p 0.07p +486%
---------- --------- -------
(1) Recurring revenues are generated from ongoing service and
maintenance fees
(2) Before exceptional costs and share based payments
(3) Total borrowings less cash and cash equivalents. FY-2022 net
debt excludes GBP1.6m IFRS 16 lease liability.
OPERATIONAL OVERVIEW
-- 13% increase in revenues
-- 4% increase to over 264,000 connected units in operation (FY-2021: 254,000)
-- 5% increase in recurring revenues to GBP9.8m (FY-2021: GBP9.4m)
-- 150% increase in software revenues to GBP1.4m (FY-2021: GBP0.5m)
-- New contract wins with Ticker and Adiona
-- Strong continued reduction in direct and indirect costs
-- Successfully navigated a large number of supply chain challenges
OUTLOOK
-- Group revenues in current financial year to end of May 2022 were 11% ahead of last year
o Revenues from insurance clients increasing due to new contract
wins and increased volumes from existing clients - revenues to end
of May 2022 were 33% ahead of the comparable 2021 period
o Fleet sales showing good progress - revenues to end of May
2022 were 4% ahead of the comparable 2021 period
-- Inflationary pressure on payroll and components is partially
mitigated with lower headcount and lower designed-in device
costs
-- The Company continues to face component availability issues
that could impact deliveries but the expectation is that we will
continue to overcome these
-- The Board believes Trakm8 is building increasing momentum and
is hopeful that this can be transformed into improved financial
returns as we move forward
- Ends -
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 1675 434 200
Jon Edwards, Chief Financial Officer www.trakm8.com
Allenby Capital Limited (Nominated Tel: +44 (0) 20 3328 5656
Adviser & Broker)
David Hart/Liz Kirchner, Corporate www.allenbycapital.com
Finance
Tony Quirke, Sales and Corporate Broking
Notes to Editors
Trakm8 is a UK based technology leader in fleet management,
insurance telematics, connected car, and optimisation. Through IP
owned technology, the Group uses AI data analytics collected from
its installed base of telematics units to fine tune the algorithms
that are used to produce its' solutions; these monitor driver
behaviour, identify crash events and monitor vehicle health to
provide actionable insights to continuously improve the security
and operational efficiency of both company fleets and private
drivers.
The Group's product portfolio includes the latest data analytics
and reporting portal (Trakm8 Insight), integrated
telematics/cameras/optimisation, self-installed telematics units
and one of the widest ranges of installed telematics devices.
Trakm8 has over 264,000 connections.
Headquartered in Coleshill near Birmingham alongside its
manufacturing facility, the Group supplies to the Fleet,
Optimisation, Insurance and Automotive sectors to many well-known
customers in the UK and internationally including the AA, Saint
Gobain, EON, Iceland Foods, GSF, Direct Line Group, Ticker and
Ingenie.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005. Trakm8 is also recognised with the LSE Green
Economy Mark
www.trakm8.com / @Trakm8
EXECUTIVE CHAIRMAN'S STATEMENT
Results
Covid-19 continued to impact the market for telematics,
particularly in our Insurance business where young drivers were
unable to secure driving tests compounded by the scarcity and
higher costs of second hand cars. It also led to significant
challenges in the supply of electronic components for our devices.
Trakm8 managed its way through most of this and achieved a very
significant improvement on the previous year delivering results in
line with market expectations, returning to a profit after tax for
the first time in several years.
The revenues of the business increased by 13% and despite higher
costs due to lower furlough support and supply chain challenges
posted an adjusted profit before tax of GBP0.0m (FY-2021: loss
GBP0.3m). Loss before tax improved to GBP0.1m (FY-2021: loss
GBP1.9m) and Profit after Tax improved to GBP0.2m (FY-2021: loss
GBP1.2m).
Connections grew by 4% to 264,000. The total number of fleet
management connections increased by 1% over the year to 71,000
(FY-2021: 70,000). Telematics for insurance/automotive connections
increased by 5%. At the year-end we had 193,000
insurance/automotive connections (FY-2021: 184,000). Recurring
service revenues increased by 5% to GBP9.8m (FY-2021: GBP9.4m).
Software revenues increased by 150% to GBP1.4m (FY-2021: GBP0.5m).
A good number of contract wins and renewals were secured
particularly with the insurance clients.
It was pleasing to have strong cash generation of the business
with a cash flow from operations of GBP3.8m (FY-2021: GBP4.7m). The
Company paid down GBP0.9m of HMRC deferred payments on VAT/PAYE/NI,
with the balance of GBP0.9m to be paid during this financial year.
This resulted in a free cash flow of GBP0.6m (FY-2021: GBP2.0m) and
net debt increased by GBP0.5m at GBP5.4m (pre-IFRS 16). The Group
had GBP1.0m cash on hand and an undrawn overdraft facility of
GBP0.5m.
Overheads excluding exceptionals increased by 6% due to a
reduction of furloughed staff along with an increased marketing
spend. Headcount reduced by 5% during the year with underlying
salary costs 5% lower than at the end of the previous year.
Trakm8 was awarded the London Stock Exchange Green Economy Mark
during the year in recognition that what the Company does plays a
significant role in reducing the carbon footprint of our customers'
operations. Trakm8 has also started the process of joining the
Science Based Targets initiative in the goal of achieving net zero
emissions by 2050.
Research and development ('R&D')
Trakm8 has maintained a significant level of investment in
R&D for another year. The Board believes that this level of
investment is necessary to retain a portfolio of market-leading
technology. Over time as revenues grow we expect that this
investment as a proportion of revenues will decline. Trakm8
continues to focus on owning the intellectual property ('IP') we
use in our 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 R&D investment has concentrated on the development of
self-fit devices, a multi-camera solution, development of the
feature set in Insight, and further development of our Insurance
Broker platform. As identified in previous years, the requirement
to do more for less cost remains a key strategy as this widens the
opportunity to expand the rate of growth as our customers' return
on investment improves.
Governance
The Group has adopted the Quoted Companies Alliance's (QCA)
Corporate Governance Code for small and mid-size quoted companies,
which the Board considers the most appropriate for the size and
structure of the Group. More information can be found in the
Governance Report section of this report and our website (
https://www.trakm8.com/investor-relations/corporate-governance )
.
Dividend
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 in light of future results and investment
requirements.
People
The number of people Trakm8 employs has reduced further during
FY-2022 with reductions across the business. In total our staff
numbers have reduced by 5% over the year.
Trakm8 has a great team and I would like to thank everyone for
their hard work, dedication and contribution to the ongoing success
of the business.
Outlook
We start the new financial year with the ongoing supply chain
challenges impacting our costs and our development progress. A
significant amount of our engineering resources are devoted to
redesigning current devices to meet component changes.
Currently Insurance & Automotive devices supplied to end of
May 2022 amount to 60% more than the corresponding period last year
due to the increased number of new clients secured. Fleet
deliveries have been reasonably good with new unit shipments 38%
greater than the corresponding period last year.
These shipments whilst increasing revenues for devices and where
applicable installation in the short term, also drive increased
levels of service revenues and profit for future periods.
April and May revenues were 11% higher than the corresponding
period in FY 2022.
Like many businesses, Trakm8 is having to continue to face
challenges in a number of areas in particular, component supply
availability and logistics which have the potential to lead to
shortages that could impact customer product deliveries. In
addition, salary and component inflationary pressures are
prevalent. However, the board is taking action to minimise the
impact of these challenges on the Trakm8 business through, for
example, reduced headcount, higher selling prices and engineered
cost reductions.
On a much more positive note, we are seeing strong growth in the
Insurance business due, in particular, to new customer wins. In
addition, we are optimistic about securing a number of Fleet
deployment contract renewals during the remainder of this year.
It is against this business generation backdrop that the Board
believes Trakm8 is building increasing momentum and is hopeful that
this can be transformed into improved financial returns as we move
forward.
John Watkins
EXECUTIVE CHAIRMAN
28 June 2022
FINANCIAL REVIEW
TRADING RESULTS
2022 2021 Change
Group Revenue (GBP'000) 18,111 15,961 +13%
------- -------- -------
of which, Recurring Revenue
(GBP'000) 9,806 9,379 +5%
------- -------- -------
Loss before tax (GBP'000) 122 1,867 +93%
------- -------- -------
Profit/(Loss) after tax
(GBP'000) 187 (1,237) +115%
------- -------- -------
Adjusted Profit/(Loss)
before tax(1) (GBP'000) 3 (342) +101%
------- -------- -------
Basic Profit/Loss per share
(p) 0.37 (2.47) +115%
------- -------- -------
Adjusted basic earnings
per share (p) 0.41 0.07 +486%
------- -------- -------
(1) Before exceptional costs and share based payments
Revenue
Group revenue increased by 13% to GBP18.1m (FY-2021: GBP16.0m)
as the impact of Covid-19 reduced. Fleet revenues increased by 18%
to GBP11.2m and Insurance and Automotive revenues increased by 7%
to GBP6.9m. Despite the majority of Covid-19 lockdown measures
ending early in the financial year, Insurance revenues recovered
much slower than anticipated due to the well publicised driving
test delays and second hand car price inflation and availability
but offset by shipments to new customers in the final quarter. This
was complimented by increased levels of Fleet and Optimisation
orders including strong software revenues in H1. Recurring revenue
generated from service and maintenance fees increased by 5% to
GBP9.8m (FY-2021: GBP9.4m) due to the higher levels of shipments of
devices across both business units and implementation of
optimisation services.
Loss before tax
The Group reported a loss before tax of GBP0.1m (FY-2021:
GBP1.9m). This marked significant progress as increased revenues
delivered gross margins of GBP11.1m (FY-2021: GBP9.3m). Total
administrative costs remained broadly similar at GBP10.8m despite
the increased levels of revenue. This included an increase in
marketing spend of GBP0.1m to aid revenue growth, a reduction of
Coronavirus Job Retention Scheme income to GBP0.19m (FY-2021:
GBP0.94m) and an increase in depreciation and amortisation of
GBP0.2m. This was offset by overall reduction in employee costs of
GBP0.38m and a reduction in share-based payments of GBP0.6m
compared to the prior year.
Adjusted Profit before tax
With the improved revenues and gross margins, the Group returned
to profitability with an adjusted profit of GBP0.0m (FY-2021:
GBP0.3m loss). The improved revenue performance was offset by
increased employee costs as the furloughed staff costs decreased to
GBP0.4m (FY-2021: GBP1.6m) along with increases in depreciation and
amortisation, marketing costs and a reduction in Other Income of
GBP0.2m, GBP0.1m and GBP0.2m respectively. Our continued efforts in
efficiency savings improved underlying overheads including a
reduction in employee costs of GBP0.3m to offset the cost
increases.
Exceptional Costs
Exceptional costs totalled GBP0.6m (FY-2021: GBP1.3m) and again
primarily include one off costs relating to Covid-19 albeit greatly
reduced from the prior year. This included GBP0.4m of employee
costs whilst on furlough in the first half of the year and GBP0.2m
of component costs due to the ongoing supply chain challenges
instigated by Covid-19 both here and abroad. This was offset by
GBP0.2m received as part of the Coronavirus Job Retention Scheme.
In addition, GBP0.1m was incurred in our ongoing project to
streamline our internal operations.
Balance Sheet
2022 2021
GBP'000 GBP'000
-------- --------
Non-Current Assets 25,874 25,640
-------- --------
Net Current Assets 1,704 4,169
-------- --------
Non-Current Liabilities 7,702 9,687
-------- --------
Net Assets 19,876 20,122
-------- --------
Net Assets decreased by GBP0.2m to GBP19.9m (FY-2021: GBP20.1m)
reflecting the profit for the year, after deducting the IFRS2 Share
based payments credits.
Non-current assets increased by GBP0.2m to GBP25.9m (FY-2021:
GBP25.6m). This is due to a GBP0.5m reduction in right of use
assets due to depreciation offset by a GBP0.8m increase in
Intangible assets and GBP0.1m decrease in Property, plant and
equipment. Intangible assets increased due to the continued
investment in development in both software and hardware with
capitalised development costs in the year totaling GBP2.9m
(FY-2021: GBP2.3m), offset by amortisation of GBP1.9m (FY-2021:
GBP1.7m).
Cash Flow
2022 2021
GBP'000 GBP'000
-------- --------
Net Cash generated from
operations 3,810 4,702
-------- --------
Investing activities (3,254) (2,667)
-------- --------
Free Cash Flow(1) 556 2,035
-------- --------
Financing activities (1,992) (1,330)
-------- --------
(Decrease)/Increase
in Cash in Year (1,366) 705
-------- --------
Net Debt(2) 5,395 4,887
-------- --------
(1) Cash generated from operating activities less cash used in
investing activities (excluding cash flows related to
acquisitions)
(2) Total borrowings less cash and cash equivalents. FY-2022 net
debt excludes GBP1.6m IFRS 16 lease liability.
Cash from operating activities reduced by GBP0.9m to GBP3.8m
(FY-2021: GBP4.7m) which included the repayment of GBP0.9m to HMRC
under the time to pay agreement negotiated at the end of the last
financial year. FY-2021 included the deferment of payments to HMRC
which increased Cash from operating activities by GBP1.7m. Cash
from operating activities also included R&D tax credit cash
receipts of GBP0.7m (FY-2021: GBP0.9m) which reflects the Group's
continued investment in development.
Free cash inflow of GBP0.6m (FY-2021: GBP2.0m) is due to the Net
Cash generated from operating activities as detailed above, offset
by cash outflows from investing activities which increased by
GBP0.6m to GBP3.3m (FY-2021: GBP2.7m).
Financing activities was an outflow of GBP1.9m (FY-2021:
GBP1.3m). Following the negotiation of new and revised terms for
the Group's borrowings in March 2021, capital repayments to both
HSBC and the MEIF WM Debt LP resumed in the second half of the year
totalling GBP0.7m (FY2021: GBP0.1m).
Net Debt
Net debt excluding IFRS 16 lease liability of GBP1.6m (FY-2021
GBP1.9m) increased by GBP0.5m to GBP5.4m (FY-2021: GBP4.9m). Cash
balances total GBP1.0m (FY-2021: GBP2.4m) and total borrowings
including IFRS16 lease liability of GBP1.6m totals GBP7.9m
(FY-2021: GBP9.1m). Borrowing comprised GBP4.9m (FY-2021: GBP5.3m)
term loan with HSBC, a GBP1.2m (FY-2021: GBP1.5m) term loan with
MEIF WM Debt LP and GBP2.0m (FY-2021: GBP2.4m) of obligations under
Right-to-use lease liabilities. In addition, at the year end the
Group had a GBP0.5m unused overdraft facility with HSBC.
Consolidated Statement of Comprehensive Income For The Year Ended
31 March 2022
Note Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
REVENUE 4 18,111 15,961
Cost of sales (7,004) (6,643)
---------------------- ----------------------
Gross profit 11,107 9,318
Other income 5 13 194
Administrative expenses excluding exceptional
costs (10,193) (9,585)
Exceptional administrative costs 7 (568) (1,342)
---------------------- ----------------------
Total administrative costs (10,761) (10,927)
OPERATING PROFIT/(LOSS) 6 359 (1,415)
Finance income 67 78
Finance costs 8 (548) (530)
---------------------- ----------------------
LOSS BEFORE TAXATION (122) (1,867)
Income tax 309 630
PROFIT/(LOSS) FOR THE YEAR 187 (1,237)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified
to profit or loss:
Exchange differences on translation of
foreign operations 10 (3)
---------------------- ----------------------
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) 10 (3)
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR
THE YEAR ATTRIBUTABLE TO OWNERS OF THE
PARENT 197 (1,240)
====================== ======================
LOSS BEFORE TAXATION (122) (1,867)
Exceptional administrative costs 568 1,342
IFRS2 Share based payments charge (443) 183
---------------------- ----------------------
ADJUSTED PROFIT/(LOSS) BEFORE TAX 6 3 (342)
PROFIT/(LOSS) PER ORDINARY SHARE (PENCE)
ATTRIBUTABLE TO OWNERS OF THE PARENT
Basic 9 0.37p (2.47p)
Diluted 9 0.37p (2.47p)
The results all relate to continuing operations.
Consolidated Statement of Changes in Equity For The Year Ended 31
March 2022
------------------------------------------------------------------------------------------------------------------------------------------
Note Share Share Merger Translation Treasury Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
April 2020 500 14,691 1,138 196 (4) 4,658 21,179
Comprehensive
loss
Loss for the year - - - - - (1,237) (1,237)
Other
comprehensive
loss
Exchange differences
on translation of
overseas operations - - - (3) - - (3)
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Total comprehensive
loss - - - (3) - (1,237) (1,240)
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Transactions
with
owners
IFRS2 Share-based
payments charge - - - - - 183 183
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Transactions with
owners - - - - - 183 183
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Balance as at 1
April 2021 500 14,691 1,138 193 (4) 3,604 20,122
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Comprehensive
income
Income for the year - - - - - 187 187
Other
comprehensive
income
Exchange differences
on translation of
overseas operations - - - 10 - - 10
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Total comprehensive
income - - - 10 - 187 197
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Transactions
with
owners
IFRS2 Share based
payments credit - - - - - (443) (443)
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Transactions with
owners - - - - - (443) (443)
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Balance as at 31
March 2022 500 14,691 1,138 203 (4) 3,348 19,876
-------- ------------- ---------- ---------------- ---------------------- ---------------------- ----------
Consolidated Statement of Financial Position As At 31 March 2022
-------------------------------------------------------------------------------------------------
Note As at 31 As at
March 2022 31 March
2021
ASSETS GBP'000 GBP'000
NON CURRENT ASSETS
Intangible assets 10 23,012 22,187
Property, plant and equipment 803 891
Right of use assets 2,032 2,512
Amounts receivable under finance leases 27 50
25,874 25,640
--------------------- --------------------
CURRENT ASSETS
Inventories 1,322 1,409
Trade and other receivables 7,944 6,679
Corporation tax receivable 709 690
Cash and cash equivalents 1,004 2,370
10,979 11,148
--------------------- --------------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (7,521) (5,417)
Borrowings (1,115) (855)
Right of use liability (612) (680)
Provisions (27) (27)
(9,275) (6,979)
--------------------- --------------------
CURRENT ASSETS LESS CURRENT LIABILITIES 1,704 4,169
TOTAL ASSETS LESS CURRENT LIABILITIES 27,578 29,809
NON CURRENT LIABILITIES
Trade and other payables (626) (1,546)
Borrowings (4,855) (5,815)
Right of use liability (1,367) (1,767)
Provisions (112) (190)
Deferred income tax liability (742) (369)
(7,702) (9,687)
--------------------- --------------------
NET ASSETS 19,876 20,122
--------------------- --------------------
EQUITY
Share capital 11 500 500
Share premium 14,691 14,691
Merger reserve 1,138 1,138
Translation reserve 203 193
Treasury reserve (4) (4)
Retained earnings 3,348 3,604
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT 19,876 20,122
--------------------- --------------------
The loss for the Company for the year determined in accordance with
the Companies Act 2006 was GBP176,000 (2021: loss GBP257,000).
The notes on pages 46 to 81 of the annual report and accounts are
an integral part of these consolidated financial statements. These
financial statements were approved by the Board of directors and
authorised for issue on 28 June 2022 and are signed on its behalf
by:
John Watkins - Director Jon Edwards -
Director
Consolidated Statement of Cash Flows For The Year Ended 31
March 2022
---------------------------------------------------------------------------
Notes Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
NET CASH GENERATED FROM OPERATING ACTIVITIES 12 3,810 4,702
--------------------- ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (420) (330)
Proceeds from sale of property, plant 125
and equipment -
Purchases of software (48) (47)
Capitalised development costs (2,911) (2,290)
NET CASH USED IN INVESTING ACTIVITIES (3,254) (2,667)
--------------------- ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans - 5,300
Loan arrangement fees (5) (88)
Repayment of loans (743) (5,379)
Repayment of obligations under lease
agreements (674) (670)
Interest paid (500) (493)
NET CASH USED IN FINANCING ACTIVITIES (1,922) (1,330)
--------------------- ---------------------
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS (1,366) 705
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 2,370 1,665
--------------------- ---------------------
CASH AND CASH EQUIVALENTS AT OF
YEAR 1,004 2,370
--------------------- ---------------------
Notes to the Consolidated Financial Statements
1 GENERAL INFORMATION
Trakm8 Holdings PLC ("Company") and its subsidiaries (together
the "Group") develop, manufacture, distribute and sell telematics
devices and services and optimisation solutions.
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 4 Roman Park, Roman Way, Coleshill, West
Midlands, B46 1HG. 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 development, manufacture,
marketing and distribution of vehicle telematics equipment
and services and optimisation solutions. The Company's principal
activity is to act as a holding company for its subsidiaries.
The consolidated financial statements are presented in Sterling
and all values are rounded to the nearest thousand (GBP'000)
except where otherwise indicated.
2 PREPARATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE
WITH IFRS
The Group's financial statements have been prepared in accordance
with UK-adopted International Financial Reporting Standards
("IFRS") and IFRS Interpretations Committee ("IFRS IC") interpretations
as endorsed by the European Union, and with those parts of
the Companies Act 2006 applicable to companies reporting
under IFRS.
3 BASIS OF PREPARATION
The audited financial information included in this preliminary
results announcement for the year ended 31 March 2022 and audited
information for the year ended 31 March 2021 does not comprise
statutory accounts within the meaning of section 434 Companies
Act 2006. The information has been extracted from the audited
statutory financial statements for the year ended 31 March 2022
which will be delivered to the Registrar of Companies in due
course. Statutory financial statements for the year ended 31
March 2021 were approved by the Board of directors and have been
delivered to the Registrar of Companies. The report of the independent
auditors for the year ended 31 March 2022 and 2021 respectively
on these financial statements were unqualified and did not include
a statement under section 498 of the Companies Act 2006.
These financial statements are prepared on a going concern basis
after assessing the principal risks. To monitor the future cash
position the Group produces projections of its working capital
and long term funding requirements covering 3 months in detail
and 1 and 2 year projections. These projections are updated on
a regular basis to reflect current trading and latest information
on future trading. The Group does have a substantial recurring
revenue base that accounts for 54% of revenues that provide a
strong underlying base.
The Group renewed its debt facilities with HSBC in March 2021
and benefitted from deferral of capital repayments which recommenced
in September 2021. This was in addition to reaching an agreement
with HMRC to repay GBP1.8m VAT, PAYE & NI equally between this
financial year and next. Covenant tests to the end of March 2022
were an absolute EBITDA tested quarterly, moving to quarterly
cash flow cover and leverage covenants from June 2022.
At the year end the Group has cash balances of GBP1,004,000 and
an unused overdraft facility of GBP500,000. The Groups latest
projections for twelve months from the date of signing the financial
statements show that the Group has sufficient cash resources
and will meet its covenants with headroom for the foreseeable
future. The Group has completed adverse sensitivities against
its current projections to reflect potential external risks where
material shortages constrain its ability to fulfil orders or
demand of its products and services reduce and material costs
increase.
To assess the potential impact of these, a 10% reduction in Fleet
new business contract value and Insurance shipments and a 10%
increase in material costs were modelled against the Groups current
forecast. Despite the cumulative impact of these changes the
Group still maintains compliance with the covenants for the coming
twelve months without the inclusion of any mitigations that could
and would be implemented such as price increases and savings
in both direct and indirect costs.
On this basis the Directors have a reasonable expectation that
the Group will have adequate financial resources to continue
in operation for the foreseeable future and therefore it is appropriate
to adopt the going concern basis of accounting in preparing the
financial statements.
4 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, assets and liabilities are
in respect of one Integrated Telematics Technology segment.
The Board as the CODM review the revenue streams of Integrated
Fleet, Optimisation, Insurance and Automotive Solutions ("Solutions")
as part of their internal reporting. Solutions represents the
sale of the Group's full vehicle telematics and optimisation
services, engineering services, professional services and mapping
solutions to customers.
A breakdown of revenues within these streams
are as follows:
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Solutions: 18,111 15,961
Fleet and optimisation 11,217 9,520
Insurance and automotive 6,894 6,441
------------------- -----------------------
A geographical analysis of revenue by destination
is as follows:
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
United Kingdom 17,784 15,647
North America - 4
Norway - 2
Rest of Europe 272 293
Rest of World 55 15
18,111 15,961
------------------- -----------------------
5 OTHER INCOME
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Grant income 13 194
13 194
------------------- -----------------------
6 OPERATING PROFIT/(LOSS)
The following items have been included in arriving at operating
profit/(loss):
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Depreciation
- owned assets 176 156
- right of use assets 630 625
Amortisation of intangible
assets
- owned assets (see note
10) 2,134 1,992
Other operating lease rentals 34 13
Research and development
expenditure 669 637
Loss on disposal of property plant
and equipment 263 318
Loss on foreign exchange
transactions 22 1
Staff costs 5,187 6,465
Exceptional administrative
costs (see note 7) 568 1,342
Auditors' remuneration
- Fees payable to the Company's auditors for
the audit of the parent
company and consolidated financial
statements 77 73
Adjusted profit/(loss) before tax is monitored by the
Board and measured as follows:
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Loss before tax (122) (1,867)
Exceptional administrative
costs (note 9) 568 1,342
Share based payments (443) 183
Adjusted profit/(loss) before
tax 3 (342)
----------------------- -----------------------
7 EXCEPTIONAL ADMINISTRATIVE
COSTS
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Integration & restructuring
costs 107 168
Covid-19 costs 646 2,109
Furlough grant income (185) (935)
568 1,342
----------------------- -----------------------
The Group incurred exceptional costs in the current and prior
financial year relating to the Covid-19 pandemic. These costs
include the increased cost of temporarily buying raw materials
from auxiliary markets to ensure continuity of supply of key
components which were in constraint due to supply chain issues
caused by the pandemic. In addition this includes the costs
of employees during periods of furlough.
The Group has also incurred significant costs relating to its
ongoing project to streamline and rationalise the operations
of the business. This has resulted in the following non-underlying,
one-off costs:
- Restructuring costs incurred as a result of a headcount reduction
activity undertaken during the current financial year.
- In the prior year, integration and restructuring costs incurred
relate to integrating the activities of Route Monkey Limited
and Roadsense Limited that were acquired in previous financial
years and include costs associated with office closures and
costs and profits incurred as part of its long-term real estate
plan.
- In the current and prior year, the Group received furlough
grant income that relates to income received from the Coronavirus
Job Retention Scheme for employees furloughed as a result of
Covid-19.
8 FINANCE COSTS
Year ended Year ended
31 March 31 March
2022 2021
GBP'000 GBP'000
Interest on bank loans 388 373
Amortisation of debt issue costs 48 37
Interest on right of use assets 112 120
548 530
---------------------------- -----------------------------
9 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance
with IAS 33 using the profit/(loss) for the year and the weighted
average number of Ordinary shares in issue during the year as
follows:
Year ended Year ended
31 March 2022 31 March 2021
GBP'000 GBP'000
Profit/(Loss) for the year after
taxation 187 (1,237)
Exceptional administrative costs 568 1,342
Share based payments (443) 183
Tax effect of adjustments (108) (255)
Adjusted profit for the year
after
taxation 204 33
---------------------------- -------------------------------
No. No.
Number of Ordinary shares of 1p
each
at 31 March 50,004,002 50,004,002
Basic weighted average number of
Ordinary
shares of 1p each 50,004,002 50,004,002
Diluted weighted average number
of
Ordinary shares of 1p each* 50,056,538 50,004,002
Basic profit/(loss) per share 0.37p (2.47p)
Diluted profit/(loss) per share 0.37p (2.47p)
Adjust for effects of:
Exceptional costs 0.92p 2.17p
Share based payments (0.89p) 0.37p
Adjusted basic earnings per share 0.41p 0.07p
Adjusted diluted earnings per
share 0.41p 0.07p
*In the current year, the Group awarded Tranch AI with an exercise
price of 16p. This grant is dilutive as the exercise price is
less than the average share price as at year end.
10 INTANGIBLE
ASSETS
Goodwill Intellectual Customer Development Software Total
property relationships costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
As at 1 April
2020 10,417 1,920 100 17,190 1,903 31,530
Additions - Internal
developments - - - 2,119 - 2,119
Additions - External
purchases - - - 171 47 218
Impairments - - - - (155) (155)
Disposals - - - (238) (36) (274)
-------------- ---------------- ---------------- ------------------- -------------- -----------
As at 31 March
2021 10,417 1,920 100 19,242 1,759 33,438
Additions - Internal
developments - - - 2,521 46 2,567
Additions - External
purchases - - - 390 2 392
As at 31 March
2022 10,417 1,920 100 22,153 1,807 36,397
-------------- ---------------- ---------------- ------------------- -------------- -----------
AMORTISATION
As at 1 April
2020 - 1,910 100 6,479 1,044 9,533
Charge for
year - 10 - 1,733 249 1,992
Disposals - - - (238) (36) (274)
-------------- ---------------- ---------------- ------------------- -------------- -----------
As at 31 March
2021 - 1,920 100 7,974 1,257 11,251
Charge for
year - - - 1,943 191 2,134
As at 31 March
2022 - 1,920 100 9,917 1,448 13,385
-------------- ---------------- ---------------- ------------------- -------------- -----------
NET BOOK AMOUNT
As at 31 March
2022 10,417 - - 12,236 359 23,012
-------------- ---------------- ---------------- ------------------- -------------- -----------
As at 31 March
2021 10,417 - - 11,268 502 22,187
-------------- ---------------- ---------------- ------------------- -------------- -----------
As at 1 April
2020 10,417 10 - 10,711 859 21,997
-------------- ---------------- ---------------- ------------------- -------------- -----------
Goodwill arose in relation to the Group's acquisition of 100%
of the share capital of Roadsense Technology Limited (Roadsense),
Route Monkey Limited (Route Monkey), Box Telematics Limited
(Box) and DCS Systems Limited (DCS).
Since the acquisition Roadsense, Box, Route Monkey and DCS have
been incorporated into the Trakm8 business. These businesses
have therefore been assessed as one cash generating unit for
an impairment test on Goodwill.
The impairment review has been performed using a value in use
calculation.
The impairment review has been based on the Group's budgets
for FY-2023 which have been reviewed and approved by the Board
and projections for FY-2024. Forecasts for the subsequent 3
years have been produced based on 7% (a prudent growth rate
for telematics market) growth rates in revenue and EBITDA in
each year. A net present value has been calculated using a pre
tax discount rate of 9% (Group's weighted average cost of capital)
which is deemed to be a reasonable rate taking account of the
Group's cost of funds and an extra element for risk. A terminal
value has been calculated and included in the discounted cash
flow forecasts used within the model to fully support the goodwill
value. A growth rate of 2% was used to determine the terminal
value.
The forecast shows sufficient headroom of cash flow above the
net assets value when we have performed sensitivity analysis.
1. An increase in the discount rate to 12%
shows headroom of GBP3m.
2. A decrease in the growth rate to 5% shows
headroom of GBP10m.
3. A decrease in the terminal growth rate
to 1% shows headroom of GBP11m.
In addition, sensitivity analysis has been undertaken and indicates
that an impairment will be triggered by:
1. Decrease in annual growth rates from 7% to 4% and decrease
in terminal growth rate from 2% to 1% and increase the discount
rate from 10% to 11%.
Or triggered
by:
1. Decrease in net cash generated from operating activities
for FY-2023 and FY-2024 of 14%.
Amortisation expenses of GBP2,134,000 (2021: GBP1,992,000) have
been charged to Administrative expenses in the Consolidated
Statement of Comprehensive Income.
11 SHARE CAPITAL
As at 31 March As at 31 March
2022 2021
No's GBP'000 No's GBP'000
Authorised: '000's '000's
Ordinary shares of 1p each 200,000 2,000 200,000 2,000
Allotted, issued and fully
paid:
Ordinary shares of 1p each 50,004 500 50,004 500
The Company currently holds 29,000 Ordinary shares in treasury
representing 0.06% (2021: 0.06%) 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 49,975,002.
12 CASH GENERATED FROM OPERATIONS
As at 31 March As at 31 March
2022 2021
GBP'000 GBP'000
Loss before
tax (122) (1,867)
Depreciation 806 781
(Profit)/Loss on disposal
of fixed assets 263 318
Net bank and other
interest 481 452
Exceptional
costs 568 1,342
Amortisation of intangible
assets 2,134 1,992
Exchange movement 10 (3)
Share based payments (443) 183
--------------------- ---------------------
Operating cash flows before movement
in working capital 3,697 3,198
Movement in inventories 87 634
Movement in trade and other
receivables (1,242) 1,166
Movement in trade and other
payables 1,184 70
Movement in provisions (78) 33
--------------------- ---------------------
Cash generated from operations before
exceptional costs 3,648 5,101
Cash outflow from exceptional
costs (568) (1,342)
--------------------- ---------------------
Cash generated from
operations 3,080 3,759
Interest received 67 78
Income taxes received 663 865
---------------------
Net cash inflow from operating
activities 3,810 4,702
--------------------- ---------------------
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