TIDMTRAK
RNS Number : 1629T
Trakm8 Holdings PLC
02 July 2018
2 July 2018
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Final Results
Migration to a Telematics Service Provider now complete
with progress in core telematics division driving higher
recurring revenues
Trakm8 Holdings plc (AIM: TRAK), a leading telematics and data
supplier to global markets, announces its final results for the
year ended 31 March 2018 (FY-2018).
FINANCIAL SUMMARY:
FY-2018 FY-2017 Change
Group revenue GBP30.1m GBP26.8m +12%
--------- --------- ---------
Solutions revenue GBP26.8m GBP21.3m +26%
--------- --------- ---------
Recurring revenue(1) GBP10.8m GBP9.8m +10%
--------- --------- ---------
Operating Profit GBP1.3m GBP0.9m +55%
--------- --------- ---------
Profit before tax GBP1.2m GBP0.7m +69%
--------- --------- ---------
Adjusted profit before
tax(2) GBP2.8m GBP1.2m +142%
--------- --------- ---------
Profit after tax GBP1.6m GBP1.5m +7%
--------- --------- ---------
Cash generated from operations GBP4.7m GBP0.7m +608%
--------- --------- ---------
Net debt(3) GBP3.3m GBP3.9m -GBP0.5m
--------- --------- ---------
Basic earnings per share 4.40p 4.51p -2%
--------- --------- ---------
Adjusted earnings per
share(2) 8.19p 5.81p +41%
--------- --------- ---------
(1) Recurring revenues are generated from ongoing service and
maintenance fees
(2) Before exceptional costs and share based payments
(3) Total borrowings less cash
OPERATIONAL HIGHLIGHTS
-- Successful exit from non-core Contract Electronics Manufacturing ('CEM') activities
-- Achieved planned reduction of annual operating costs by
GBP1.5m with savings reinvested into sales and marketing -
particularly in Fleet Management
-- Core telematics business revenue (Solutions Revenue) grew by
26% and Group adjusted profit before tax grew by 142%.
-- Recurring Service revenue increased by 10%
-- Solutions Revenue now represents 90% of total revenue (FY-2017: 80%)
-- Over 251,000 connected units in operation (FY-2017: 190,000)
-- Launch of Trakm8's Insight software platform and RoadHawk 600
4G integrated telematics camera
-- New contract wins with Intelematics, Mecalac and Calor Gas
UK; and contract extensions with Iceland Foods, Marmalade, and
Direct Line Group
-- Maintained considerable investment in R&D
-- Further streamlining of operational activities to Coleshill
and Prague through the closure of Trakm8's Bodmin and Livingston
offices
-- Board strengthened with the appointment of new Finance Director
OUTLOOK
-- Due to customer inventory build-up in Q4-FY2018 and the
terminated CEM activities, revenue and profit for the first half of
FY-2019 is expected to be below the figure reported at H1-2018;
although the full year result is anticipated to be in line with
market expectations and higher than FY-2018
-- The new financial year has begun with a new contract award
from Intelematics Australia, a contract extension from FMG and a
positive growth in connections
-- Trakm8 has decided to expand its existing facilities in
Coleshill to meet demand for both product and people resources
Commenting on the Final Results, John Watkins, Executive
Chairman said:
"It is pleasing to report very strong progress during the past
year. Our ambition to reduce annual operating costs by GBP1.5m was
successfully achieved by the half year, and delivered full year
savings of GBP2m with these savings reinvested into our sales and
marketing resources. Coupled with our decision to continue a high
level of investment in R&D, this resulted in core telematics
service revenues increasing by 26% and adjusted profit before tax
having increased by 142%.
"We have continued to develop market leading software and
hardware solutions and during the year launched the new Insight
software platform and the RoadHawk 600, which have provided the
Group with a strong pipeline of opportunities. During the year, we
announced new contracts with Intelematics, Calor Gas UK and
Mecalac, and a number of contract extensions with Marmalade,
Iceland Foods, and Direct Line Group.
"Since year end, the Group is also pleased to announce a
contract award from Intelematics Australia, and a contract
extension from FMG.
"Although revenues for H1-FY2019 are expected to be lower than
last year following the termination of CEM contracts and a customer
inventory build-up in Q4-FY2018, new contracts in the insurance
sector will start deliveries in the second half. As a result, we
expect the second half of FY-2019 will be considerably better than
last year resulting in a year on year growth.
"In addition to continuing to grow our UK operations, we are
focused on expanding our international business in Europe and Asia.
Trakm8's pipeline is strong and the Board is confident of meeting
market expectations for the full year ending 31 March 2019."
A presentation for analysts is being hosted today (2 July 2018)
at 9.30am at Buchanan's offices, 107 Cheapside, London EC2V 6DN.
For further information, please contact Buchanan at
trakm8@buchanan.uk.com
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 1675 434 200
Jon Furber, Finance Director www.trakm8.com
Arden Partners plc (Nominated Adviser Tel: +44 (0) 20 7614 5900
& Broker)
Paul Shackleton / Alex Penney www.arden-partners.com
Media enquiries:
Buchanan
Chris Lane / Tilly Abraham Tel: +44 (0) 20 7466 5000
trakm8@buchanan.uk.com www.buchanan.uk.com
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 analyses data collected by 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 and
reporting portal (Trakm8 Insight), integrated telematics/cameras,
self-installed telematics units and one of the widest ranges of
installed telematics devices. Trakm8 has over 250,000
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, 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 STRONG PROGRESS
FY-2018 was a year of strong progress for Trakm8. During the
year we successfully exited from all Contract Electronics
Manufacturing (CEM) and third-party hardware supply to focus on our
core telematics services without distraction and associated
overheads. The benefits of this increased focus are already coming
through and provided the necessary capacity for the second half
growth in device demand. This demand came through later than
originally expected, but fully utilised our production capacity in
the last two months of the year.
The revenues of the core telematics business grew by 26% and the
Group adjusted profit before tax grew by 142%. Connections grew by
32% to 251,000. Revenues generated from providing data and
analytics services increased by 10%.
We also started the year with the ambition to reduce annual
operations costs by GBP1.5m, which by the half year we had fully
achieved and delivered full year savings of GBP2m. We repurposed
that saving into increased sales and marketing expenditure with a
particular focus on Fleet activities. As a result, we have seen an
increase in new contracts and extensions including those from
ScottishPower, General Traffic, COLAS CZ, HW Martin Group, and
Strategic Analytics Team. We have also secured many contracts
within the SME and small fleet sector via our digital sales
strategy. We decided to maintain the significant level of R&D
spend that we had established the previous year. We are confident
that these two initiatives will drive Trakm8's future growth. The
operational cost reduction focus has continued with the closure of
our offices in Bodmin and Livingston, consolidating those
activities in Coleshill and Prague, with the additional benefit of
closer cooperation between the teams. We have embarked on
implementing a new ERP system, provided by Epicor, which we expect
will lead to further efficiency improvements.
The investment in sales and marketing expense was rewarded with
a wide range of contract extensions and new customer contract
awards both in the UK and internationally. The pipeline is strong
and the Sales and Marketing teams have continued to expand. Trakm8
launched its first fully internet-based sales strategy in the UK,
under the Trakm8 Prime banner, and traction of this has been
good.
The investment in engineering resources has delivered
market-leading software and hardware solutions. Trakm8's Insight
platform, which was launched with Iceland Foods and Calor Gas UK,
provides superb customer experience and data, enabling vehicle
operators to significantly improve operational efficiencies and
reduction in risk. Insight is available as a mobile app experience
as well as via web portals. The RoadHawk 600 integrated telematics
and camera product is the first in the UK using 4G technology and
has been implemented by large and small enterprises. 3,000 units
were deployed in the second half of the year. The latest self-fit
telematics devices, both in 2G and 4G, have best-in-class
functionality and fit rates; they are being deployed in volume
across Europe and Asia by major customers.
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 26% to GBP26.8m (2017:
GBP21.3m). Recurring service revenues grew by 10% to GBP10.8m.
Solutions revenues increased from 80% of the Group's total revenues
in 2017 to 90% in the 2018 Year.
In total, we had in excess of 251,000 connections (FY-2017:
190,000) at the year-end. Our solutions sales cover both the fleet
management and insurance/automotive market sectors. The total fleet
management connections increased by 11% over the year to 73,000
(FY-2017: 66,000). Telematics for insurance/automotive is
experiencing higher levels of growth. At the year-end we had
178,000 insurance/automotive connections (FY-2017: 124,000), which
is an increase of 44%.
The key outcomes in the year were the contract renewal with
Direct Line Group, new contract awards with Intelematics and Calor
Gas UK, along with the contract extension with Iceland Foods. A
contract was also secured with a leading global vehicle leasing
company to supply devices based on our Trakm8connectedcare software
and hardware.
We have continued to invest in our software solutions,
algorithms and devices, ensuring that Trakm8 retains market-leading
solutions with the widest and deepest offer in the market
today.
Post-period end, we have announced a contract with Intelematics
Australia and a contract extension with FMG.
Products
Product sales are predominantly revenue from CEM, along with
hardware-only sales to other telematics service providers and
integrators and sales of third-party manufactured camera products.
We terminated all CEM activity during FY-2018 and as a result,
total product revenues reduced by 41% to GBP3.3m (FY-2017:
GBP5.5m). Consequently, Product sales accounted for just 10% of
total revenues down from 20% in FY-2017.
Included in FY-2018 is GBP2.0m of revenues from the terminated
CEM activities and therefore this will be the last year that we
report Product sales as a category. The migration to a Telematics
Service Provider is now complete.
Research and development ('R&D')
Trakm8 has maintained the significant level of investment in
R&D from the previous year. Although as a percentage of revenue
this is reducing, the Board believes that this level of investment
is necessary to retain a portfolio of market-leading technology.
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 building out the
capability of the Insight platform to provide best-in-class data
analytics and customer experience, creating algorithms with
increasingly accurate driver profiling for efficiency and risk,
crash detection and video feature recognition. All the technologies
within the Group are now consolidated into a single solution.
Trakm8 also expects to launch soon a range of devices with new and
enhanced functionality and smaller size to address market
opportunities not currently served.
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 the ROI for our customers
improves.
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 slightly during
FY-2018 as reductions in operational headcount were partially
offset by increases in our customer service, sales and marketing
teams. In total our staff numbers have reduced by 8% over the year.
As a result, revenue per employee increased by 22%.
It has been a demanding year as the Group has worked through the
very high levels of change. 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
Our focus is on organic growth driven by the implementation of
the strategy outlined above and we continue to make solid progress.
The new financial year has started very much as the previous year
left off with new contract awards and growth in connections. The
final GBP2.0m reduction in revenues related to terminated CEM
activities will impact FY2019, but we are positive that the growth
of our Telematics Services will more than offset this over the full
year. The GBP2.0m year-on-year reduction in terminated CEM
activities is mostly a first half reduction.
Due to customer inventory build-up in Q4-FY2018 and the
terminated CEM activities, revenue for the first half of FY-2019 is
expected to be below the figure reported at H1-2018 although the
full year result is anticipated to be in line with market
expectations and higher than FY-2018.
To ensure that we can meet the demand expected over the coming
years, both for manufactured product and people resources, Trakm8
has decided to expand its existing manufacturing and distribution
facilities in Coleshill. During the year, Trakm8 will expect to
invest over GBP1.5m to create state-of-the-art facilities, to
increase capacity to circa 1m devices per annum - and do so with
high levels of automation in assembly and test.
We expect to expand our international business in Europe and
Asia, whilst continuing to grow our domestic business in the UK.
Overall, we expect that the percentage of connections from outside
the UK will grow. In addition, we will continue to invest in our
digital sales strategy.
The pipeline of features for the Insight data platform and
camera products is strong, so we expect to maintain our position as
a provider of market-leading solutions.
The Board is confident that FY-2019 will result in further
progress and growth as we deliver our strategy and is confident of
meeting market expectations for the year.
John Watkins
Executive Chairman
2 July 2018
FINANCIAL REVIEW
TRADING RESULTS
2018 2017 Change
GBP000 GBP000
-------- -------- -------
Group Revenue 30,081 26,759 +12%
-------- -------- -------
Solutions Revenue 26,808 21,256 +26%
-------- -------- -------
Recurring Revenue 10,826 9,842 +10%
-------- -------- -------
Profit before tax 1,173 693 +71%
-------- -------- -------
Adjusted Profit before
tax(1) 2,794 1,156 +142%
-------- -------- -------
Basic earnings per
share 4.40p 4.51p -2%
-------- -------- -------
Adjusted earnings
per share 8.19p 5.81p +41%
-------- -------- -------
(1) Before exceptional costs and share based payments
Revenue
Group revenue increased by 12% to GBP30.1m (2017: GBP26.8m),
with Solutions revenue growth of 26% from the core continuing
activities of the Group offset by a reduction in product revenues
following the strategic decision to exit from Contract Electronic
Manufacturing (CEM) activities.
The solutions revenue growth of 26% to GBP26.8m (2017: GBP21.3m)
reflect the continued growth in telematics connections across our
core Fleet, Insurance and Automotive sectors and continued growth
in sales of Optimisation solutions. Recurring revenue generated
from service and maintenance fees increased by 10% to GBP10.8m
(2017: GBP9.8m). Growth in recurring revenue will always lag behind
headline growth in new unit sales given that the service and
maintenance revenues are recognized over the life time of the
contract.
Product revenues decreased from GBP5.5m to GBP3.3m following the
planned exit from CEM activities. All sub-contract electronic
manufacturing activities had ceased by the year end.
Profit before tax
Profit before tax increased by 71% to GBP1.2m (2017: GBP0.7m).
This significant improvement was generated by the strong solutions
revenue growth being delivered at gross margin percentages in line
with the prior year resulting in a GBP1.6m increase in gross
profit. Additionally other income increased by GBP0.2m. This was
offset by GBP1.2m increase of non-recurring exceptional costs that
are detailed further below and GBP0.3m increase in depreciation and
amortisation, primarily resulting from capitalised development
costs, reflecting the significant investment undertaken by the
group in earlier years. Other overheads decreased by GBP0.1m.
Adjusted Profit before tax
As detailed above, the improved trading performance resulted in
adjusted profit before tax increasing by 142% to GBP2.8m (2017:
GBP1.2m). The improvement in gross profit converted into adjusted
profit before tax, with administrative costs excluding exceptional
costs only up GBP0.2m on prior year. During the year the company
has increased its investment in sales and marketing by 54% all part
of a strategy to increase market share. This investment was funded
by streamlining of activities resulting in other overheads
(excluding Sales, Marketing and Engineering costs) before
exceptional costs and depreciation and amortisation decreasing by
31%.
Exceptional Costs
Exceptional costs total GBP1.4m (2017: GBP0.2m) relating to
three projects undertaken to streamline activities and additional
costs relating to the acquisition of Roadsense Technology Limited
in the previous financial year. The projects to streamline
activities were to fully integrate the acquisitions made in prior
years including closing two offices, relocating the head office and
administrative functions to our core site in the West Midlands and
costs associated with the exit from contract electronic
manufacturing. This project has resulted in operating costs
(excluding Sales & Marketing costs and Engineering costs)
decreasing GBP2m year on year.
Balance Sheet
2018 2017
GBP000 GBP000
------- -------
Non- Current Assets 21,534 19,759
------- -------
Net Current Assets 6,848 5,800
------- -------
Non-Current Liabilities 6,240 5,329
------- -------
Net Assets 22,142 20,230
------- -------
Net Assets increased by GBP1.9m to GBP22.1m (2017: GBP20.2m).
This reflects the significant improvement in trading performance
and profitability in the year, with retained profit for the year of
GBP1.6m.
Non-current assets increased by GBP1.7m to GBP21.5m (2017:
GBP19.8m). This is due to the continued investment in development
in both our software and hardware with capitalised development
costs totalling GBP3.4m (2017: GBP3.2m).
Cash Flow
2018 2017
GBP000 GBP000
------------------------------ --------------------------------
Cash generated by
operations 4,735 668
------------------------------ --------------------------------
Investing activities (3,716) (4,447)
------------------------------ --------------------------------
Free Cash Flow(1) 1,019 (3,016)
------------------------------ --------------------------------
Financing activities 463 1,898
------------------------------ --------------------------------
Change in Cash in
Year 1,482 (1,881)
------------------------------ --------------------------------
Net Debt 3,300 3,867
------------------------------ --------------------------------
(1) Cash generated from operating activities less cash used in
investing activities (excluding cashflow relating to
acquisitions)
Cash generated from operating activities increased significantly
in the year to GBP4.7m (2017: GBP0.7m), which included R&D tax
credit cash receipts of GBP1.6m (2017: GBP0.1m). The R&D tax
credit cash receipt reflects the Group's investment in development.
Cash generation excluding the impact of the R&D tax credit cash
is still GBP3.1m (2017: GBP0.6m).
Free cash flow improved to an inflow of GBP1.0m (2017: outflow
GBP3.0m). This represents a 90% conversion of profit before tax to
cash. As we have stated, our strategy in the next couple of years
is to maintain our current level of investment in development which
will reduce as a proportion of revenue and profit. We anticipate
this improved leverage will continue to improve the conversion of
adjusted profit before tax into cash in the medium term. If as
planned, we make the considerable investment in manufacturing
capacity and quality equipment then this will also impact our free
cash flow and net debt for 2019.
Net Debt
Net debt decreased by GBP0.6m to GBP3.3m (2017: GBP3.9m). Cash
balances total GBP3.5m (2017: GBP2.0m) and total borrowings GBP6.8m
(2017: GBP5.9m) of which GBP2.9m was our term loan with HSBC and
GBP3.4m (2017: GBP1.7m) were amounts drawn under our GBP5m
revolving credit facility with HSBC. During the year the revolving
credit facility was extended by 2 years and is repayable in
December 2020.
Consolidated Statement of Comprehensive Income For The Year Ended 31 March 2018
----------------------------------------------------------------------------------------------------------------------
Note Year ended Year ended
31 31
March 2018 March 2017
GBP'000 GBP'000
REVENUE 4 30,081 26,759
Cost of sales (15,232) (13,550)
------------------------ -------------------------
Gross profit 14,849 13,209
Other income 5 566 325
Administrative expenses excluding exceptional costs (12,681) (12,462)
Exceptional administrative costs 7 (1,405) (214)
------------------------ -------------------------
Total administrative costs (14,086) (12,676)
OPERATING PROFIT 6 1,329 858
Finance income 33 -
Finance costs 8 (189) (165)
------------------------ -------------------------
PROFIT BEFORE TAXATION 1,173 693
Income tax 398 777
PROFIT FOR THE YEAR 1,571 1,470
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit or
loss:
Exchange differences on translation of foreign operations 9 (1)
------------------------ -------------------------
TOTAL OTHER COMPREHENSIVE INCOME 9 (1)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO
OWNERS OF THE PARENT 1,580 1,469
------------------------ -------------------------
ADJUSTED PROFIT BEFORE TAX 6 2,794 1,156
----- ------------------------
EARNINGS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO
OWNERS OF THE PARENT
Basic 9 4.40p 4.51p
Diluted 9 4.33p 4.36p
The results relate to continuing operations.
Consolidated Statement of Changes in Equity For The Year Ended 31
March 2018
-------------------------------------------------------------------------------------------------------------------------
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 2016 320 9,641 1,122 200 (4) 5,796 17,075
Comprehensive
income
Profit for the
year - - - - - 1,470 1,470
Other
comprehensive
income
Exchange
differences
on
translation
of
overseas
operations - - - (1) - - (1)
Total
comprehensive
income - - - (1) - 1,470 1,469
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Transactions
with
owners
Shares issued 37 2,142 16 - - - 2,195
Equity
Dividend - - - - - (649) (649)
Share placing
fees - (109) - - - - (109)
IFRS2
Share-based
payments - - - - - 249 249
Transactions
with
owners 37 2,033 16 - - (400) 1,686
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Balance as at
1
April 2017 357 11,674 1,138 199 (4) 6,866 20,230
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Comprehensive
income
Profit for the
year - - - - - 1,571 1,571
Other
comprehensive
income
Exchange
differences
on
translation
of
overseas
operations - - - 9 - - 9
Total
comprehensive
income - - - 9 - 1,571 1,580
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Transactions
with
owners
Shares issued 2 76 - - - - 78
IFRS2 Share
based
payments - - - - - 216 216
Tax recognised
directly
in equity
(Note
11) - - - - - 38 38
Transactions
with
owners 2 76 - - - 254 332
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Balance as at
31
March 2018 359 11,750 1,138 208 (4) 8,691 22,142
--------- ------------- ---------- ----------------- ------------ ------------ -------------------
Consolidated Statement of Financial Position As At 31 March 2018
-----------------------------------------------------------------------------------------------------------
Note As at 31 March 2018 As at 31 March 2017
ASSETS GBP'000 GBP'000
NON CURRENT ASSETS
Intangible assets 10 19,460 17,108
Property, plant and equipment 1,756 1,855
Deferred income tax asset - 297
Amounts receivable under finance leases 318 499
21,534 19,759
------------------------- -------------------------
CURRENT ASSETS
Inventories 2,556 3,674
Trade and other receivables 10,844 6,076
Corporation tax receivable 1,001 1,645
Cash and cash equivalents 3,472 1,990
17,873 13,385
------------------------- -------------------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (9,598) (6,471)
Borrowings (1,151) (1,052)
Provisions (47) (62)
Deferred income tax liability (229) -
(11,025) (7,585)
------------------------- -------------------------
CURRENT ASSETS LESS CURRENT LIABILITIES 6,848 5,800
TOTAL ASSETS LESS CURRENT LIABILITIES 28,382 25,559
NON CURRENT LIABILITIES
Trade and other payables (581) (480)
Borrowings (5,621) (4,805)
Provisions (38) (44)
NET ASSETS 22,142 20,230
------------------------- -------------------------
EQUITY
Share capital 11 359 357
Share premium 11,750 11,674
Merger reserve 1,138 1,138
Translation reserve 208 199
Treasury reserve (4) (4)
Retained earnings 8,691 6,866
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE
PARENT 22,142 20,230
------------------------- -------------------------
Consolidated Statement of Cash-Flows For The Year Ended 31 March 2018
--------------------------------------------------------------------------------------------------------------
Notes Year ended 31 March 2018 Year ended 31 March 2017
GBP'000 GBP'000
NET CASH GENERATED FROM OPERATING ACTIVITIES 12 4,735 668
------------------------- ---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of subsidiary undertaking (net of
cash acquired) - (763)
Purchases of property, plant and equipment (91) (181)
Purchases of software (236) (262)
Proceeds from sale of plant and equipment - -
Capitalised development costs (3,389) (3,241)
NET CASH USED IN INVESTING ACTIVITIES (3,716) (4,447)
------------------------- ---------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of new shares 78 2,070
Increase in bank loan 2,600 2,700
Repayment of bank loans (1,880) (1,954)
Repayment of obligations under hire purchase
agreements (146) (104)
Interest paid (189) (165)
Dividends paid to owners of the parent - (649)
NET CASH GENERATED FROM FINANCING ACTIVITIES 463 1,898
------------------------- ---------------------------
NET INCREASE / (DECREASE) IN CASH AND CASH
EQUIVALENTS 1,482 (1,881)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
YEAR 1,990 3,871
CASH AND CASH EQUIVALENTS AT OF YEAR 3,472 1,990
------------------------- ---------------------------
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 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. The Company's principal activity is to act
as a holding company for its subsidiaries.
The condensed consolidated financial statements are presented
in Sterling and all values are rounded to the nearest
thousand (GBP'000) except where otherwise indicated.
2 AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF
COMPLIANCE WITH IFRS
The Group's financial statements have been prepared in
accordance with 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 2018
and audited information for the year ended 31 March 2017
does not comprise statutory accounts within the meaning
of sections 404 and 435 Companies Act 2006. The information
has been extracted from the audited statutory financial
statements for the year ended 31 March 2018 which will
be delivered to the Registrar of Companies in due course.
Statutory financial statements for the year ended 31 March
2017 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
2018 and 2017 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 presented on a going concern
basis. The Group has cash balances of GBP3,472,000 and
undrawn revolving credit facilities of GBP1,600,000 at
31 March 2018 therefore the Directors have a reasonable
expectation that the Group will have adequate financial
resources to continue in operation for the foreseeable
future. A cash flow forecast for the next 12 months prepared
by the Directors has indicated that the Group will have
adequate financial resources to continue in operation
for the foreseeable future.
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, 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 Insurance and Automotive Solutions (Solutions) and Hardware
as Discrete Devices (Products) as part of their internal reporting.
Products is the sale of Contract Electronic Manufacturing services
(now ceased) and other third party hardware only supply. 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
2018 2017
GBP'000 GBP'000
Solutions 26,808 21,256
Products 3,273 5,503
30,081 26,759
---------------------- ---------------------
A geographical analysis of revenue by destination
is as follows:
Year ended 31 March Year ended 31 March 2017
2018
----------------------------------------- -------------------------------------------------------------
Solutions Products Total Solutions Products Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
United Kingdom 26,484 3,068 29,552 20,922 5,405 26,327
North America 56 - 56 - 18 18
Norway 58 - 58 71 - 71
Rest of Europe 73 197 270 260 14 274
Rest of World 137 8 145 3 66 69
26,808 3,273 30,081 21,256 5,503 26,759
------------- ------------- ----------- -------------- ---------------------- ---------------------
5 OTHER INCOME
Year ended Year ended
31 March 31 March
2018 2017
GBP'000 GBP'000
Grant income 531 325
R&D tax credit 35 -
566 325
----------- -----------------------
6 OPERATING PROFIT
The following items have been included in arriving at operating profit:
Year ended 31 March 2018 Year ended 31 March 2017
GBP'000 GBP'000
Depreciation
- owned fixed assets 261 282
- assets on hire purchase 60 22
Amortisation of intangible assets 1,484 1,157
Operating lease rentals
- Land and buildings 159 129
- Other 263 230
Research and development expenditure 1,485 1,314
Loss on foreign exchange transactions (59) 40
Staff costs 7,936 7,302
Loss on disposal of property plant & equipment 26 -
Exceptional administrative costs 1,405 214
Auditors' remuneration
- Fees payable to the Company's auditors for the
audit of the parent
company and consolidated financial statements 103 71
Fees payable to the Company's auditors for other
services:
- Share based payments advisory services 8 -
- Tax compliance services - 10
- Tax advisory services - 10
----------------------------- -------------------------
Adjusted profit before tax is monitored by the Board
and measured as follows:-
Year ended 31 March 2018 Year ended 31 March 2017
GBP'000 GBP'000
Profit before tax 1,173 693
Exceptional administrative costs (note 9) 1,405 214
Share based payments 216 249
Adjusted profit before tax 2,794 1,156
------------------------- -------------------------
7 EXCEPTIONAL ADMINISTRATIVE COSTS
Year ended 31 March 2018 Year ended
31 March 2017
GBP'000 GBP'000
Acquisition costs 256 63
Integration costs 501 90
Head Office relocation 238 -
Contract manufacturing closure
costs 410 61
1,405 214
--------------------------------- ---------------------
The acquisition costs incurred in 2018 relate to non-underlying charges
under two separate
agreements linked to the acquisition in the prior year. The costs incurred
are directly linked
to the acquisition and not as part of the ongoing underlying business. One
agreement terminates
on 31 July 2019, and the second agreement on 31 March 2019. The 2017
acquisition costs relate
to the actual acquisition itself.
The Company has incurred significant costs relating to a project to
streamline and rationalise
the operations of the business. This has resulted in the following
non-underlying, one-off
costs:
- In the current and prior year, integration costs relate to costs
incurred integrating the
activities of Route Monkey Limited and DCS Systems Limited that were
acquired in previous
financial years and include costs associated with office closures. This
integration project
is now complete.
- Head Office relocation costs are non-underlying costs incurred in moving
the Head Office
and associated administrative functions from Shaftesbury to the West
Midlands which was completed
by the end of the financial year.
- In the current and prior year, contract manufacturing closure costs
relate to residual
inventory costs and contract exit costs following cessation of
manufacturing contracts with
third-parties. All these contracts have now ceased.
8 FINANCE COSTS
Year ended Year ended 31 March 2017
31 March 2018
GBP'000 GBP'000
Interest on bank loans 147 148
Amortisation of debts issue costs 13 -
Interest on Hire Purchase and similar agreements 29 17
189 165
--------------------------- -------------------------
9 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance with IAS 33 using the profit
for the year and the weighted average number of Ordinary shares in issue during the year as
follows:
Year ended 31 March 2018 Year ended 31 March 2017
GBP'000 GBP'000
Profit for the year after taxation 1,571 1,470
Exceptional administrative costs 1,405 214
Share based payments 216 249
Tax effect of adjustments (267) (43)
Adjusted profit for the year after taxation 2,925 1,890
---------------------------- ----------------------------
No. No.
Number of Ordinary shares of 1p each 35,898,254 35,723,254
Basic weighted average number of Ordinary shares
of 1p each 35,740,877 32,594,891
Diluted weighted average number of Ordinary shares
of 1p each 36,297,287 33,708,702
Earnings per share 4.40p 4.51p
Diluted earnings per share 4.33p 4.36p
Adjust for effects of:
Exceptional costs 3.18p 0.53p
Share based payments 0.61p 0.77p
Adjusted earnings per share 8.19p 5.81p
Adjusted diluted earnings per share 8.06p 5.61p
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
2016 9,752 1,920 - 4,052 1,104 16,828
Additions -
Internal
developments - - - 2,822 263 3,085
Additions -
External
purchases - - - 419 - 419
Acquisition of
RSL 665 - 100 - - 765
Reclassified - - - (59) 59 -
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
As at 31 March
2017 10,417 1,920 100 7,234 1,426 21,097
Additions -
Internal
developments - - - 2,707 117 2,824
Additions -
External
purchases - - - 680 332 1,012
As at 31 March
2018 10,417 1,920 100 10,621 1,875 24,933
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
AMORTISATION
As at 1 April
2016 - 1,479 - 1,221 132 2,832
Charge for
year - 192 22 757 186 1,157
Amortisation - - - - - -
on
disposals
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
As at 31 March
2017 - 1,671 22 1,978 318 3,989
Charge for
year - 117 34 1,123 210 1,484
Amortisation - - - - - -
on
disposals
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
As at 31 March
2018 - 1,788 56 3,101 528 5,473
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
NET BOOK
AMOUNT
As at 31 March
2018 10,417 132 44 7,520 1,347 19,460
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
As at 31 March
2017 10,417 249 78 5,256 1,108 17,108
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
As at 1 April
2016 9,752 441 - 2,831 972 13,996
----------------- ----------------- ----------------- -------------------- ----------------- -----------------
11 SHARE CAPITAL
As at 31 March 2018 As at 31 March 2017
No's GBP'000 No's GBP'000
Authorised: '000's '000's
Ordinary shares of 1p each 200,000 200,000 200,000 200,000
Allotted, issued and fully
paid:
Ordinary shares of 1p each 35,898 359 35,723 357
Movement in share capital:
As at 31 March 2018 As at 31 March 2017
GBP'000 GBP'000
As at 1 April 357 320
New shares issued 2 37
As at 31 March 359 357
------------------------- -----------------------
The Company currently holds 29,000 Ordinary shares in treasury representing 0.08% (2017: 0.08%)
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 35,869,254.
During the year the following shares were issued:
Date Description Shares Share Capital Premium
No's
'000's GBP'000 GBP'000
Exercise of options over Ordinary Shares
27/11/2017 by an employee 50 1 22
Exercise of options over Ordinary Shares
29/03/2018 by an employee 125 1 54
175 2 76
----------------------- ------------------------- -----------------------
12 CASH GENERATED FROM OPERATIONS
As at 31 March 2018 As at 31 March 2017
GBP'000 GBP'000
Profit before tax 1,173 693
Depreciation 321 304
Loss on disposal of fixed assets 26 -
Net bank and other interest 156 165
Amortisation of intangible assets 1,484 1,157
Share based payments 216 249
-------------------- ---------------------
Operating cash flows before movement in working capital 3,376 2,568
Movement in inventories 1,118 (1,377)
Movement in trade and other receivables (4,614) 499
Movement in trade and other payables 3,237 (1,105)
Movement in provisions (21) (46)
-------------------- ---------------------
Cash generated from operations 3,096 539
Interest received 33 -
Income taxes received 1,606 129
--------------------
Net cash inflow from operating activities 4,735 668
-------------------- ---------------------
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR FKDDBCBKDFOK
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