Final Results

TRACSIS PLC ("Tracsis" or "the Company") Maiden Preliminary Results following year of continued growth and profitability Tracsis Plc (AIM: TRCS) the specialist provider of labour optimisation software and consultancy services to the transport industry, announces preliminary results for the year ended 31 July 2008. Key Points: * Trading profitably in line with expectations: * Revenue up 8% to Â£805,000 (2007: Â£742,000). * Profit before tax of Â£393,000 (2007: Â£422,000) after charging Â£61,000 (2007: Â£6,000) in respect of the fair value of stock options. * Contracts signed or in negotiation for revenue of over Â£1.5 million for the year ending 31 July 2009. * Placing and admission to AIM on 27 November 2007 raising Â£1.7 million (net of expenses). * Strong and growing balance sheet. At year end: * Net assets of Â£2.59 million (2007: Â£646,000). * Cash balances of Â£1.9 million (2007: Â£715,000). * The Company is debt free. * Significant client wins in the year including Virgin West Trains, Arriva Cross Country and Southeastern Railway. * Since the year end the Company has completed a further placing and the acquisition of profitable rail consultancy RWA Rail Limited on 5 August 2008. Tracsis and RWA Rail operate within the same sector and have a similar customer profile; the enlarged group will benefit from cross-selling opportunities and an enhanced business delivery capability. * Favourable market drivers suggest continued growth for the future, most notably a rise in UK passenger rail journeys and derived revenue. John McArthur, Chief Executive Officer, commented: "Following our introduction to AIM in November 2007 the Company delivered another year of profitable growth whilst at the same time establishing itself as a public company and completing the acquisition of RWA Rail Limited, which has significantly enhanced the service capability and growth potential of the Group. We continue to maintain a tight grip on costs and a prudent approach to investment and financial exposure to ensure we retain our profitability. Our balance sheet remains strong with healthy cash reserves and no debt. "Looking ahead, Tracsis is uniquely positioned to work with transport operators to deliver software and consultancy services which provide tangible financial and operational benefits. In tough economic conditions, passenger transport markets continue to grow and we believe this trend will continue throughout 2009 as bus and rail become increasingly attractive modes of transport. The year ahead presents us with the opportunity to extend our customer base and continue working with clients on a number of new product initiatives. We will evaluate further strategic acquisitions where suitable and anticipate good trading in the period ahead." 5 December 2008 Enquiries: Tracsis Plc 0845 125 9162 John McArthur, Chief Executive Officer Haggie Financial LLP 0207 417 8989 Nicholas Nelson/Kathy Boate nicholas.nelson@haggie.co.uk Zeus Capital 0161 831 1512 Bobby Fletcher/Alex Clarkson Tracsis Plc Chairman and Chief Executive Officer's Statement Introduction We are pleased to report on a year of continued growth, development of the business and a financially healthy company, making inroads into the transport market. These results cover a period of corporate activity which included the initial placing and admission to AIM (completed November 2007), followed by the Company's first acquisition of RWA Rail Limited (completed 5 August 2008), more details of which are set out below. Business Description Tracsis Plc is a provider of resource optimisation software and consultancy services to companies in the passenger transport industries (primarily passenger bus and rail). The Company's core product suite is used to automate and optimise the process by which labour schedules are created and allows for this activity to be done with greater speed and with a higher degree of efficiency than existing methods. The Company has contracts in place with some of the largest transport operators throughout the UK and operates a revenue model that provides a high percentage of recurring revenue. The Company's goal is to become a leading provider of operational planning software and consultancy services to global transport markets. Financial Summary Following our admission to AIM a year ago, we are pleased to report maiden results showing that trading has been profitable and in line with expectations. Revenue for the year increased 8% to Â£805,000 (2007: Â£742,000). Profit before tax for the year amounted to Â£393,000 (2007: 422,000) which is stated after charging Â£61,000 (2007: Â£6,000) in respect of a fair value charge for stock options. The Company has a stronger balance sheet, with net assets of Â£2,592,000 as at 31 July 2008 (2007: Â£646,000). The Company has cash and cash equivalents totalling Â£1,898,000, a substantial increase from the balance of Â£715,000 at 31 July 2007. Furthermore, the Company has no bank debt or long term liabilities. Our new client wins this year include some of the largest and most complex rail operators in the UK and were testament to our continued investment in client support and product innovation which is rapidly securing our position as the leading provider of resource optimisation software. Looking forwards, we have good visibility of over Â£1.5 million revenue for the year ending 31 July 2009 with a significant portion of this already secured under contract. Trading Progress During the year the Company has made good trading progress, with growth into the core transport markets. At the interim stage, we reported that a number of key milestones had been achieved. Notable amongst these was the securing of contracts with a further three passenger train operating companies (TOCs): West Coast Trains (Virgin Rail Group), Cross Country (Arriva) and Southeastern Railway (Govia). This was accomplished partly through the strengthened sales and marketing channels, which have been significantly expanded since January. We plan to increase our range of products and, in collaboration with one of our existing customers, are nearing the completion of a new intelligent rostering suite. This will be a compatible downstream solution that interfaces with our core scheduling product and should lead to new revenues from both new and existing customers. Overall, due to underlying growth in public transport markets, the Company has remained largely insulated from the general economic downturn. The Directors believe that, although cautious in terms of investment and expenditure, our clients continue to look for innovative solutions to provide a more effective delivery of passenger services whilst managing overhead cost. Moreover, recent trading reports from the major publicly quoted rail and bus companies paint a picture of growth. Expectations are of this continuing in the face of changing socio-economic pressures in Britain, which favour a shift towards public transport (especially passenger rail). There was a 7.1% increase in rail passenger journeys through 2007-2008 compared to the same period over 2006-2007, now totalling 1.2 billion per annum. As commuters make the change to rail travel there has been a 10.8% increase in revenue generated by rail passengers over the last year, with fares alone accounting for some Â£5.6 billion. Any rise in passenger demand should in turn drive additional rail services and the supporting infrastructure in back office planning capabilities such as those provided by Tracsis. RWA Rail acquisition On 18 July 2008, the Company announced the acquisition of RWA Rail Limited ("RWA") for an initial cash consideration of Â£580,000 and the issue of 1,084,113 new Ordinary Shares. RWA is a provider of consultancy services to the rail sector, focusing on operational and strategic planning. Accordingly this will enable the enlarged group to provide a wider range of services to a more diverse client base. As Tracsis and RWA operate within the same sector and have a similar customer profile, the enlarged group will benefit from cross-selling opportunities and an enhanced business delivery capability. RWA generated revenue of Â£1,019,000 in the year ended 31 March 2008 resulting in EBIT of Â£293,000. We welcome Robert Watson, the founder and Managing Director of RWA to the Board in his new capacity as Chief Operating Officer of Tracsis. Robert brings with him valuable experience and knowledge of UK and international rail markets and his addition is a huge benefit to the enlarged group. Staff The above acquisition brings the complement of employees to 25 split across our Leeds and Loughborough locations. The Board would like to thank management and staff for their commitment and hard work during a year of rapid evolution for the Company. Outlook Tracsis remains uniquely positioned to continue growing organically and via opportunistic acquisitions. The Company has developed good relationships with major transport operators within a market that continues to grow, and can be reactive to future growth opportunities due to a strong financial position. We believe the year ahead presents good potential to extend our customer base and we anticipate a favourable trading period ahead. Rod Jones John McArthur Chairman Chief Executive Officer Tracsis Plc Income statement for the year ended 31 July 2008 2008 2007 Â£000 Â£000 Revenue 805 742 Administrative expenses (505) (335) Operating profit 300 407 Finance income 93 15 Profit before tax 393 422 Taxation (94) (92) Profit for the year 299 330 Earnings per share Basic (pence per share) 2.47 15,870.61 Diluted (pence per share) 2.37 15,136.33 All of the above activities are continuing. Tracsis Plc Balance sheet at 31 July 2008 2008 2008 2007 2007 Â£000 Â£000 Â£000 Â£000 Assets Non-current assets Plant and equipment 6 8 Deferred tax 18 - Total non-current assets 24 8 Current assets Trade and other receivables 1,081 164 Cash and cash equivalents 1,898 715 Total current assets 2,979 879 Total assets 3,003 887 Liabilities Non-current liabilities Deferred tax - 2 Total non-current liabilities - 2 Current liabilities Trade and other payables 302 149 Current tax liabilities 109 90 Total current liabilities 411 239 Total liabilities 411 241 TOTAL NET ASSETS 2,592 646 Capital and reserves attributable to equity holders of the company Share capital 70 - Share premium reserve 1,641 17 Share based payments reserve 61 5 Retained earnings 820 624 TOTAL EQUITY 2,592 646 Tracsis Plc Statement of changes in equity for the year ended 31 July 2008 Share Share-based Share Premium Payments Retained Capital Reserve Reserve Earnings Total Â£000 Â£000 Â£000 Â£000 Â£000 Balance at 31 July 2006 - - - 353 353 Changes in equity for 2007 Profit for the year - - - 330 330 Total recognised income and - - - 330 330 expense for the year Share option charge - - 6 - 6 Adjustment for options - - (1) 1 - subsequently exercised Issue of share capital - 17 - - 17 Dividends paid - - - (60) (60) Balance at 31 July 2007 - 17 5 624 646 Changes in equity for 2008 Profit for the year - - - 299 299 Total recognised income and - - - 299 299 expense for the year Share option charge - - 61 - 61 Adjustment for options - - (5) 7 2 subsequently exercised Issue of share capital 70 1,624 - (50) 1,644 Dividends paid - - - (60) (60) Balance at 31 July 2008 70 1,641 61 820 2,592 Tracsis Plc Cash flow statement for the year ended 31 July 2008 2008 2007 Â£000 Â£000 Cash flows from operating activities Profit before tax 393 422 Finance income (93) (15) Depreciation 5 3 Share based payments 61 6 Operating cash flows before 366 416 movements in working capital (Increase)/decrease in trade and (917) 143 other receivables Increase/(decrease) in trade and 153 (11) other payables Cash (used in)/generated by (398) 548 operations Tax paid (93) (46) Net cash (used in)/generated from (491) 502 operating activities Cash flows from investing activities Purchases of property, plant and (3) (4) equipment Finance income received 93 15 Net cash generated from investing 90 11 activities Cash flows from financing activities Issue of share capital (net of 1,644 3 expenses) Dividends paid to equity (60) (60) shareholders Net cash generated from financing 1,584 (57) activities Net increase in cash and cash 1,183 456 equivalents Cash and cash equivalents at start 715 259 of year Cash and cash equivalents at end of 1,898 715 year Tracsis Plc Notes to the preliminary announcement 1. (a) Basis of preparation This is the first time the Company has prepared its financial statements in accordance with IFRSs, having previously prepared its financial statements in accordance with UK GAAP accounting standards. Details of how the transition from UK accounting standards to EU adopted IFRS has affected the Company's reported financial position, financial performance and cash flows are given in note 1. (c) below. The financial information on the Company set out above does not constitute `statutory accounts' within the meaning of section 240 of the Companies Act 1985. This preliminary report was approved by the Board of Directors on 4 December 2008. The statutory accounts for the year ended 31 July 2008 have not been filed with the Registrar of Companies, but will be delivered to the Registrar of Companies following the Company's Annual General Meeting and will also be available on the Company's website at www.tracsis.com. The financial information for the year ended 31 July 2008 has been extracted from the Company's audited statutory accounts upon which the auditors issued an unqualified opinion. The report did not contain a statement under section 237 (2) or (3) of the Companies Act 1985 and did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report. The figures for the year ended 31 July 2007 have been extracted from the statutory accounts which have been filed with the Registrar of Companies. The auditors' report for the 2007 accounts was unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 1. (b) Changes in Accounting Policies - First time adoption In preparing the financial statements, the Company has elected to apply the following transitional arrangements permitted by IFRS 1 `First-time Adoption of International Financial Reporting Standards': * IFRS 2 `Share-based payments' has been applied to employee options granted after 7 November 2002 that had not vested by 1 January 2006. The Company has made estimates under IFRSs at the date of transition, which are consistent with those estimates made for the same date under UK GAAP unless there is objective evidence that those estimates were in error, i.e. the Company has not reflected any new information in its opening IFRS balance sheet, but reflected that new information in its income statement for subsequent periods. 1. (c) Explanation of transition to IFRS The Company's financial statements for the year ended 31 July 2008 are the first financial statements that comply with International Financial Reporting Standards (IFRS). The financial statements prior to and including 31 July 2007 had been prepared in accordance with Generally Accepted Accounting Principles in the United Kingdom (UK GAAP). As required by IFRS 1, the impact of the transition from UK GAAP to IFRS is explained below. The accounting policies set out above have been applied consistently to all periods presented in this financial information and in preparing an opening IFRS balance sheet at 1 August 2006 for the purposes of transition to IFRS. Presentational adjustments: IAS 1 - Presentation of Financial Statements. The form and presentation in the UK GAAP financial statements has been changed to be in compliance with IAS 1. There is no impact on the balance sheet at date of transition or at 31 July 2008 nor on the profit for the year ended 31 July 2007. Adjustments to reported loss and net assets: There are no adjustments arising from the transition to IFRS and therefore there is no impact on the reported Income Statement for the Company for the year ended 31 July 2007, nor on the Balance Sheet for the Company at 31 July 2007 and 31 July 2006. Consequently, no reconciliation between IFRS and UK GAAP has been provided. IAS 7 - Cash Flow Statements. The IFRS Cash Flow Statement, prepared under IAS 7, presents cash flows in three categories: cash flows from operating activities, cash flows from investing activities and cash flows from financing activities. Other than the reclassification of cash flow into the new disclosure categories, there are no significant differences between the Company's Cash Flow Statement under UK GAAP and IFRS. Consequently, no cash flow reconciliations are provided. Purchases of tangible fixed assets under UK GAAP have been reclassified to purchases of property, plant and equipment under IFRS. 2. Earnings per share Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume the conversion of all dilutive potential ordinary shares. The Company has one class of dilutive potentially ordinary shares: those share options granted to employees where the exercise price is less than the average market price of the company's ordinary shares during the year. Profit for Weighted Earnings per the period average number share Â£'000 of shares (pence) Basic earnings per share Year ended 31 July 2008 299 12,081,414 2.47 Year ended 31 July 2007 330 2,082 15,870.61 Diluted earnings per share Year ended 31 July 2008 299 12,606,516 2.37 Year ended 31 July 2007 330 2,183 15,136.33 The weighted average number of ordinary shares for the purposes of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: 2008 2007 Weighted average number of ordinary shares 12,081,414 2,082 used in the calculation of basic earnings per share Shares deemed to be issued in respect of 525,102 101 employee share options Weighted average number of ordinary shares 12,606,516 2,183 used in the calculation of diluted earnings per share 3. Events after the balance sheet date On 5 August 2008, the Company acquired the entire issued share capital of RWA Rail Limited. The acquisition price comprised initial consideration of the issue of 1,084,113 new ordinary shares at 53.5p per share and cash consideration of Â£580,000. Deferred consideration of up to Â£145,000 in cash and up to 271,029 new ordinary shares is payable subject to satisfaction of certain performance criteria following the acquisition. The fair value of the shares to be issued was based upon the market price of shares in Tracsis plc. The following table shows the amounts to be recognised at the acquisition date for assets and liabilities acquired. Â£'000 Debtors 597 Cash at bank 362 Creditors due within one year (291) Provisions for liabilities and (2) charges Fair value of net assets acquired 666 The carrying value of the assets and liabilities immediately before acquisition equates to the fair values above. In addition on 5 August 2008 the Company issued 373,832 new ordinary shares of 0.4p each pursuant to a placing of shares to raise additional working capital for the Company. The shares were issued at a price of 53.5p per share for total cash consideration of Â£200,000. 4. Publication of Annual Report and Accounts In accordance with AIM Rule 20, Tracsis plc confirms that its Annual Report and Accounts for the year ended 31 July 2008 will shortly be sent to all shareholders and will then be available for download from the Company's website at www.tracsis.com.

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