TRAK Trakm8 Holdings Plc

RNS Number:2732R
Trakm8 Holdings PLC
01 April 2008


1 April 2008

                                     TrakM8
                                           
                              TRAKM8 HOLDINGS PLC
                           ("Trakm8" or "the Group")

                                 Trading Update

Trakm8, (AIM: TRAK), one of the UK's leading telematics technology and service
providers to the global vehicle tracking and security markets, announces an
update to trading prior to entering its close period before publication of the
results for the year ended 31 March 2008.

The markets in which the Group operates have proved challenging in the second
half with strong competition emerging across the product range. This has been
compounded by a strengthening of the Euro in the second half year which has
pushed the Group's cost of hardware up correspondingly. This latter change,
together with the weakening of the US Dollar, has substantially reduced the
Group's competitiveness in Dollar denominated countries (principally the United
States of America ("US")). Concurrent to this the Group was notified by its
major US customer that it was ceasing to take our product for competitive
reasons which resulted in the Group losing significant but low margin hardware
sales in the US. The Group however perceives certain parts of the US to be an
attractive market for direct telematics product sales and expects to commence
operations in this market in the near future.

Despite the factors noted above the Group has continued to see margin
improvement in all product areas as high margin service related revenues
increase as a percentage of total sales. The Directors believe that this margin
trend will continue as the development cost benefits flow through from the
acquisition of PJSoft, the Group's Prague based software house. In addition the
partnership with Tyco is starting to bear fruit with over one thousand new T6
hardware units now sold. The T6 has a lower cost of manufacture and will allow
for improved hardware related sales margins and continue the Groups ability to
compete on price. Whilst sales and pre exceptional profitability have been
behind management's expectations for the second half of the year the Group is
however expected to make lower pre exceptional losses than experienced in the
first half due to the gross margin improvement and continued efforts to contain
costs.

This highly competitive landscape has also affected sales of the Trakm8 SWIFT(R)
product where the sales process has extended and product price has emerged as
the primary purchasing decider. To counter this competitive threat and to
diversify the Groups revenue generating capability the Group will shortly
announce an expansion of Trakm8 SWIFT(R) aimed at increasing revenues from this
source in the half year commencing April 2008.

The Group remains committed to increasing sales and generating profitable
revenue streams at all levels and to this end this has refocused the sales and
technology elements of the business. The Directors remain confident that the
increased competitiveness offered by the T6 together with an encouraging
immediate order pipeline put Trakm8 in a good position to enter the next
financial year. The Company is also due to benefit from the Government funding
awarded to Trakm8 as announced on the 14 December 2006 and 11 March 2008.

-ends-


For further information please contact:

Trakm8 plc                                                         0870 380 0531
Dawson Buck, Chairman                                              
Cary Knapton, Chief Executive Officer                              

Tavistock Communications                                           020 7920 3150
Simon Hudson

Arbuthnot Securities                                               020 7012 2000
Paul Vanstone


About Trakm8

Trakm8, based in Shaftesbury, Dorset is the leading technology provider,
designer and developer of GPRS based hardware and software to the vehicle
tracking and security market. The Company distributes its hardware and software
worldwide through a network of distributors. In addition the Company provides
ASP vehicle monitoring and tracking services direct to the B2B market. Trakm8's
products allow vehicles and drivers to be monitored, allowing organisations to
manage deliveries and services, or track stolen vehicles down to 5 metres.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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