Final Results
ITIS Holdings PLC
28 June 2001
Date: Thursday 28th June 2001
Contact: Stuart Marks, Chief Executive
ITIS Holdings plc
Telephone: 0207 282 2940
Ginny Pulbrook, Director
Citigate Dewe Rogerson
Telephone: 0207 282 2940
ITIS Holdings plc
Preliminary Results for the year ended 31 March 2001
Highlights
Business Highlights
* Considerable progress has been made in positioning ITIS as a leading
European telematics service provider:
+ acquired UK licence to broadcast traffic information nationally
using RDS-TMC technologies (International standard for providing
traffic data over conventional FM radio);
+ significant contract with Toyota (GB) PLC to supply traffic
information content via RDS-TMC;
+ advanced negotiations with a major vehicle manufacturer to develop
driver services and supply traffic information;
+ new voice based traffic information service for Carphone Warehouse;
+ FVD system now operational;
+ exclusive contract with National Express for collection of Floating
Vehicle Data ('FVD');
+ continued market penetration by NavTrak brand.
* Strategic objective of focusing on core NavTrak brand coupled with aim
of securing further contracts with OEMs for the supply of telematics
content, applications and services.
* Substantial development of new product offerings:
+ TrafficWatch
+ Navigate
+ JourneyDiary
Financial Highlights
Turnover for the twelve months ended 31st March 2001 was £585,226 (2000: £
429,549); loss after taxation of £8,042,705 (2000: £4,697,011) reflects the
development costs of new driver services and subsidised NavTrak model and
strong cash position of £25,769,329 at 31st March 2001.
Commenting on the results, Stuart Marks, Chief Executive of ITIS Holdings plc
stated: 'ITIS has made substantial progress since our flotation last October;
we have established relationships with major international vehicle
manufacturers, grown our NavTrak brand and launched innovative new telematics
package offerings. The Group is at an exciting stage of its development and is
well placed to pursue future growth opportunities.'
The Chairman's and the Chief Executive's Statement
Strategic Overview
Since our successful flotation on the AIM Market of the London Stock Exchange
in October 2000, ITIS has made considerable progress in achieving our
strategic objective of becoming the leading content provider in the European
telematics market. During the period under review, the Group has continued to
build the NavTrak brand, launched new in-vehicle services, strengthened
existing alliances and importantly won a significant contract with Toyota to
provide traffic information content via RDS-TMC.
When we floated in October 2000 our initial strategy was to subsidise the sale
of the NavTrak Data Collections Units (DCUs) through various distribution
channels to create a subscriber base and to develop and promote a range of
driver services, in order to raise brand awareness with OEMs. Our success in
securing the contract with Toyota demonstrates the strength of our telematics
proposition earlier than we had originally anticipated and we therefore aim to
build on this success by accelerating our focus towards securing further
contracts with OEMs to provide telematics content, applications and services.
The Directors believe that this focus will lead to significant revenue
generation in the medium term. We remain committed to supporting the NavTrak
business but we will be selective with box subsidisation, and where NavTrak is
sold by dealers and insurers purely for security purposes, we will introduce a
higher price which may impact on connections but will greatly reduce the
impact on the Group's cash reserves.
Financial Overview
Turnover for the 12 months ended 31st March 2001 was £585,226. (2000: £
429,549), with a loss after taxation of £8,042,705 (2000: £4,697,011). These
results reflect the anticipated increase in operating costs as a direct result
of the business operating the subsidised model for NavTrak hardware and the
development of new driver services.
We expect the result of our strategic decision to introduce a higher price for
NavTrak and focus on delivery of telematics content, applications and services
to OEMs to lead to increased and better quality revenues and to have a
resultant significant positive impact on our cash position.
The Directors believe that ITIS, with its strong commercial market position,
has sufficient cash to implement its current strategy.
Business Review
NavTrak
At flotation, ITIS stated that the NavTrak system, as a fully recognised
in-vehicle tracking product, would advance and offer opportunities for the
Group to sell its services to an increasing number of corporate and other
clients. This has been achieved and during the financial year to March 2001,
we have connected 3,121 units, a 363% increase over the previous 12 months.
During the two months to May 31st 2001, we have already connected a further
1,197 units which is a considerable increase over the same period last year.
NavTrak is sold in many major dealership groups and up-market independent car
entertainment specialists as well as now being recognised by over 40 insurers,
some of which recommend NavTrak as the preferred tracking device.
NavTrak has become a leading aftermarket telematics brand. Its unique approach
is based on superior technology for stolen vehicle tracking and developing
everyday user applications for the technology. The vehicle tracking has been
further strengthened by the launch of the higher margin Proactive Security
System in February, a device which alerts the NavTrak control centre when a
vehicle is being moved by anyone other than an authorised driver. This was
developed in response to the insurance industries' requirements for a tracking
system that addressed the growing problem of vehicle theft with the owner's
keys where as much as 53% of new vehicles stolen are taken with the keys.
In addition, NavTrak has successfully launched the UK's only full service
telematics package for drivers, which includes TrafficWatch, Navigate and
JourneyDiary.
NavTrak will continue to provide an important platform to demonstrate the
Group's capabilities. The services underline our expertise in this area and,
we believe, will be attractive to vehicle manufacturers as they seek to
partner with companies which can develop driver services for their own
hardware.
Vehicle Manufacturers
In May 2001, ITIS announced a three year contract with Toyota (GB) PLC to
supply traffic information content to a selected number of Toyota models via
RDS-TMC in return for an annual licence fee. The selection of ITIS by Toyota
is a significant endorsement of our strategic approach to the collection and
transmission of traffic content as well as to the quality of this content. At
the beginning of the year, we announced that we had acquired the sole licence
for broadcasting RDS-TMC across the Classic FM network, the only national
commercial radio station in the UK. The contract with Toyota is a material
step towards positioning ITIS at the forefront of the European telematics
industry and signifies the first truly commercial RDS-TMC service in the UK.
RDS-TMC has been adopted as a standard by the automotive industry throughout
Europe. The Group is currently in discussions with several other vehicle
manufacturers in relation to the provision of services via RDS-TMC and in
addition, with a major OEM to supply telematics content, applications and
services. We expect to make a more detailed announcement shortly.
Both our NavTrak and Floating Vehicle Data products rely on GSM as the
communications technology. Whilst ITIS is excited about the potential benefits
that 3G and GPRS will bring, our plans are not impacted by any delay in the
introduction of these services. Whilst vehicle manufacturers will have their
own views of individual communication strategies for their telematics
products, RDS-TMC, which is based on FM radio transmissions, remains the only
international standard that has currently been adopted.
Floating Vehicle Data
Manufacturers and their customers are becoming much more discerning about the
quality of the traffic information provided and are seeking solutions that
offer not only timely and relevant delivery but predictions about where and
when delays are most likely to occur. ITIS has developed a unique Floating
Vehicle Data (FVD) system, which using GSM and GPS obtains historic and
real-time vehicle data from the Data Collection Units (DCUs), which is
analysed and made available to ITIS customers. The DCUs are supplied to the
company by Minorplanet Systems plc, a key industry partner and the world's
leading fleet management provider. Historic information is key to FVD and is
stored in our own data warehouse. The recurring trends that are extracted from
it are then used to assist the customer in making the best choice on his or
her route.
To support our FVD strategy we are delighted to announce a three year
exclusive contract to equip approximately 530 National Express coaches with
our DCU. These coaches, which collectively travel 80 million miles each year
in the UK, combined with Minorplanet's dominance of the fleet management
market, put ITIS in an unrivalled position to collect the best real time and
historic data for its client base. In addition, our approach is scaleable
worldwide in areas where both GSM and digital mapping are available. ITIS
intends to extend the network into Europe later this year.
Spanish Joint Venture with Minorplanet
In February 2001 the company announced a joint venture with Minorplanet in
Spain to commercialise two products that exploit technology developed by
professors at the Universities of Madrid and Barcelona in regard to in-vehicle
computing capability and genetic algorithms. The first product, the
Mini-Navigator, is a PC processor and memory which will be connected to the
existing Minorplanet AEM 4000 in-vehicle telematics unit (Minorplanet DCU),
and vehicle's engine management system. The principal application for ITIS is
advanced vehicle security for high value cargoes. For example the unit can be
programmed to report to the NavTrak Control Centre if the vehicle enters
pre-set high risk areas. In the future, the Mini Navigator will exploit thin
client and GPRS technologies enabling new services to be offered on a range of
hand held devices. The second product, Distos, uses genetic algorithms (so
called because they mimic the process of evolution) to develop solutions for
navigation, dynamic re-routing and vehicle scheduling problems. Distos is the
only package in the world which is able to give accurate time s for journey
completion based on ITIS real time and predictive information.
New Services
Cellular Networks
In addition to our new NavTrak based services, ITIS has reached agreement on
special short dial codes with Vodafone and Cellnet to launch new traffic
related services. The Company is also in discussions with Orange to launch a
similar service. These services will focus on the provision of route specific
journey time forecasts and progress updates, estimating position and progress.
The development of these services will make ITIS products more accessible to
the traveller using a mobile phone, without the need for additional equipment.
Carphone Warehouse
Carphone Warehouse has selected ITIS to provide voice based traffic
information for its enhanced Mviva Portal. The service will allow callers to
select a specific route and find out in advance of travelling whether or not
there are any delays - it will complement the WAP service that ITIS has been
providing to Mviva's customers since its launch. Shoppers visiting Carphone
Warehouse stores will be able to collect a wallet card that contains details
of selected voice services including TrafficWatch from ITIS. The phone numbers
will also be listed in the Carphone Warehouse Buyers Guide which reaches 1
million readers and it is hoped that eventually it might be possible to
pre-programme numbers into some of the 3 million phones a year sold by
Carphone Warehouse
Board Changes and senior management appointment
David Ross has resigned from the Board as a Non-Executive Director, and we
would like to thank him for his contribution and invaluable advice over the
last nine months. Our relationship with David and indeed The Carphone
Warehouse remains very strong as indicated by our new voice based traffic
service.
We are pleased to announce that Andrew Smith, previously European Marketing
and Sales Manager for the telematics division of Ford Motor Company, will be
joining us next month as Automotive Business Director with responsibility for
developing relationships with vehicle manufacturers.
Andrew has spent 11 years at the Ford Motor Company in a wide range of roles,
but for the last two years he worked exclusively in the telematics area during
which time he was responsible for launching the telematics system on the Ford
Focus.
Current Trading and Prospects
The Group continues to make significant progress. In the two months since the
year end, we have connected 1,197 NavTrak units, a rise of 32.3%, reflecting
the growing momentum in the NavTrak business. Since the formal launch of the
TrafficWatch service at the beginning of June, 43% of customers have
registered their payment details.
We recognise that telematics is a huge market but our success will be based
around working with those manufacturers who are committed to delivering
services for customers today. Manufacturers now recognise that they have a
choice of suppliers and our relationship with Toyota is the first endorsement
of this. We are confident that other manufacturers will recognise the quality
and importance of the range of our telematics services and we expect to make
an announcement shortly of a contract with a major OEM for the provision of
telematics content, applications and services.
Considerable progress has been achieved since flotation. We have invested in
the right technologies, developed significant partnerships with world-class
companies, established new sales channels and are launching innovative
products and services on a regular basis. With the strategic shift in our
business model towards delivery of services to OEMs, our strong financial
controls and our healthy cash position, we are confident that ITIS is well
placed to exploit the opportunities within this evolving market place and will
emerge as one of the leading suppliers of telematics products and services.
ITIS Holdings plc
Preliminary results for the year ended 31 March 2001
Consolidated profit and loss account
2001 2000
£ £
Group turnover 585,226 429,549
Cost of sales (1,688,653) (1,165,168)
-------------- -----------------
Gross loss (1,103,427) (735,619)
Distribution costs (615,068) (1,353,887)
Administration expenses (6,992,861) (2,562,088)
---------------- ---------------
Group operating loss (8,711,356) (4,651,594)
Share of operating loss in joint venture (50,000) -
Amortisation of joint venture goodwill (47,222) -
Group interest receivable 855,654 28,675
Group interest payable and similar charges - (21,297)
--------------- -----------------
Loss on ordinary activities before taxation (7,952,924) (4,644,216)
Tax on loss on ordinary activities - -
----------------- ---------------
Loss on ordinary activities after taxation (7,952,924) (4,644,216)
Dividends on non-equity shares (89,781) (52,795)
--------------- --------------
Loss for the financial year (8,042,705) (4,697,011)
======== ==========
p p
Basic and diluted loss per ordinary share (11.1) (10.1)
========= =========
All activity has arisen from continuing operations.
The group has no recognised gains or losses other than its loss for the year.
Consolidated balance sheet
2001 2000
£ £
Fixed assets
Intangible assets 512,520 297,524
Tangible assets 860,419 215,011
Investments
- joint ventures
- share of gross assets 998,750 -
- share of gross liabilities (198,750) -
- associated goodwill 802,778 -
---------------- ------------
2,975,717 512,535
----------------- -------------
Current assets
Stocks 93,879 110,985
Debtors 1,307,647 395,723
Cash at bank and in hand 25,769,329 47,438
---------------- -------------
27,170,855 554,146
Creditors: Amounts falling due within one year (2,281,980) (2,059,832)
-----------------
---------------
Net current assets (liabilities) 24,888,875 (1,505,686)
---------------- ---------------
Total assets less current liabilities 27,864,592 (993,151)
Creditors: Amounts falling due after more than (415,000) -
one year
-------------- ----------------
Net assets (liabilities) 27,449,592 (993,151)
========= =========
Capital and reserves
Called-up share capital 5,186,286 3,055,354
Share premium account 37,342,877 2,945,418
Profit and loss account (15,079,571) (6,993,923)
----------------- -------------
Shareholders' funds (deficit) 27,449,592 (993,151)
========== ==========
Shareholders' funds (deficit) may be analysed
as:
Equity interests 27,449,592 (3,157,747)
Non-equity interests - 2,164,596
--------------- --------------
27,449,592 (993,151)
========= =========
Consolidated cash flow statement
Note 2001 2000
£ £
Net cash outflow from operating activities 3 (7,969,036) (3,177,778)
----------- -------------
Returns on investments and servicing of finance
Interest paid - (21,297)
Interest received 855,654 28,675
------------ ------------
Net cash inflow from returns on investments and 855,654 7,378
servicing of finance
------------ -----------
Capital expenditure and financial investment
Purchase of intangible fixed assets (935,000) (285,655)
Purchase of tangible fixed assets (902,305) (161,067)
------------ -----------
Net cash outflow from capital expenditure (1,837,305) (446,722)
Acquisitions and disposals
Investment in joint venture (1,700,000) -
------------ -----------
Cash outflow before financing (10,650,687) (3,617,122)
------------ -----------
Financing
Issue of share capital 36,395,667 3,646,437
------------ -----------
Net cash inflow from financing 36,395,667 3,646,437
------------ -----------
Increase in cash in the year 4 25,744,980 29,315
========= ========
Reconciliation of movements in group shareholders' funds (deficit)
2001 2000
£ £
Loss for the financial year (8,042,705) (4,697,011)
----------------- -----------------
New equity share capital subscribed 651,482 38,376
New preference share capital subscribed 1,479,450 2,111,801
Premium on new share capital subscribed 34,397,459 1,496,260
net of expenses
Shares issued to employee benefit trust (132,724) -
Dividends on non-equity shares 89,781 52,795
----------------- -------------
Net addition to (reduction in) 28,442,743 (997,779)
shareholders' funds
Opening shareholders' (deficit) (993,151) 4,628
funds
---------------- ----------------
Closing shareholders' funds 27,449,592 (993,151)
(deficit)
========== ========
Notes
1. Basis of Preparation
The financial information set out in this preliminary announcement does not
constitute the Group's statutory accounts for the years ended 31 March 2000 or
2001. The financial information for 2000 is derived from the statutory
accounts for 2000 which have been delivered to the Registrar of Companies.
The auditors have reported on the 2000 accounts : their report was unqualified
and did not contain a statement under section 273(2) or (3) of the Companies
Act 1985.
The statutory accounts for 2001 will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following
thegroup's annual general meeting which will be held during September.
A copy of the annual report and accounts will be circulated to all
shareholders of the company shortly and copies will also be available for
members of the public upon application to the registered office at The Warrant
House, 1 High Street, Altrincham, Cheshire, WA14 1PZ and on the website
www.itisholdings.com
2. Dividends on non-equity shares
2001 2000
Dividends on preference shares 89,781 52,795
--------------- --------------
The directors do not recommend the payment of a dividend (2000 - nil)
3. Reconciliation of operating loss to net cash outflow from operating
activities
2001 2000
£ £
Operating loss (8,711,356) (4,651,594)
Depreciation and amortisation of licenses 547,482 762,966
Decrease (increase) in stocks 17,106 (110,985)
Increase in debtors (911,924) (217,951)
Increase in creditors 1,055,237 1,039,786
Loss on disposal of fixed assets 34,419 -
--------------- ---------------
Net cash outflow from operating activities (7,969,036) (3,177,778)
---------------- ---------------
4. Reconciliation of net cash flow to movement in net funds (debt)
2001 2000
£ £
Increase in cash in the year 25,744,980 29,315
--------------- ------------
Change in net funds 25,744,980 29,315
Net funds (debt) brought forward 13,657 (15,658)
------------- ------------
Net funds carried forward 25,758,637 13,657
--------------- ------------
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Wednesday, 18th December 2024
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