Final Results

ITIS Holdings PLC 15 June 2005 ITIS Holdings plc (the 'Company' or 'ITIS') Preliminary results for the year ended 31st March 2005 ITIS Holdings plc, a leading UK road traffic information and data specialist, is pleased to announce its preliminary results for the year ended 31st March 2005. Highlights • Maiden post-tax profit of £0.34m in second half of the year; • Turnover up 44% to £10.16m (2004: £7.06m); • Loss after taxation for the year reduced by 80% to £1.21m (2004: £6.14m); • Year end cash balance remains strong at £3.41m with the Group expected to generate cash in the current year; • Continued dominance of the RDS-TMC market with sixteen vehicle manufacturers now offering our traffic service as standard with navigation; • New contracts won since interim statement to supply traffic data to DaimlerChrysler, Land Rover, Mini, Mitsubishi Motors Europe, Porsche Cars, Renault, Vauxhall and Volvo; and Co-Pilot, Harman Becker, Sony Europe and Tom Tom; • Deployment results for Cellular Floating Vehicle Data (CFVD, formerly known as Estimotion) ahead of expectations; Stuart Marks, Chief Executive of ITIS Holdings plc, commented: 'We are delighted to announce a maiden profit for the second half of the year and significantly increased turnover and reduced losses for the year as a whole. We believe we have succeeded in creating a fixed cost traffic information business with a portfolio of services which our customers clearly value. This year we remain confident of continued growth across all of our businesses and of further contract wins for our CFVD technology, which will make it an increasingly important contributor to the Group.' Financial Overview For the year ended 31st March 2005 Group turnover increased by 44% to £10.16m (2004: £7.06m). With the majority of the cost base fixed, this resulted in the loss after taxation for the year reducing by 80% to £1.21m (2004: £6.14m). There were no exceptional costs during the year (2004: exceptional costs of £0.75m relating to the impairment of a fixed asset no longer used by the Group and a provision for onerous leases). Cost saving measures implemented during 2004 have resulted in a £1.67m (25%) fall in distribution and administrative expenses. These results demonstrate again that ITIS' operational infrastructure is capable of supporting incremental business without substantial increases to its cost base. Cash usage in the second half of the year included the payment on 1 October 2004 of $1.5m (approximately £816k) deferred consideration to the vendors of Estimotion. Cash balances at 31 March 2005 remained strong at £3.41m (2004: £6.05m). The Group is expected to be cash generative in the current year. Business Review RDS-TMC RDS-TMC remains our most important service and is currently provided to sixteen car manufacturers and virtually the entire aftermarket satellite navigation sector. During the year we completed new OEM contracts with DaimlerChrysler, Land Rover, Mini, Mitsubishi Motors Europe, Porsche Cars, Renault, Vauxhall and Volvo; and Co-Pilot, Harman Becker, Sony Europe and Tom Tom. We expect to see continued increased demand for factory fitted navigation systems and as TMC is standardised on these, we remain optimistic for the growth prospects of this business. By the end of calendar year 2005, we are forecasting to have over 150,000 navigation systems enabled with the ITIS TMC service An important growth area in navigation has been in the PDA (Personal Digital Assistant), PND (Personal Navigation Device) and Smart Phone market which has given rise to significant further opportunities for us to sell our data. ITIS' focus on the development of content enables us to work closely with the hardware manufacturers in this fast growing market to integrate traffic. We now provide our traffic content exclusively to Co-pilot, Route 66 and Tom Tom and we are very close to finalising agreements with the other major vendors in this market. The key to the business' continuing success is the quality of our traffic information; a combination of Floating Vehicle Data and incident information, provided to us under an exclusive contract from Trafficlink, the UK's leading provider of traffic information to the media market. The data is broadcast using Classic FM and selected radio stations, owned by Scottish Radio Holdings, to provide the only truly national broadcast TMC service. Our RDS-TMC service in the UK is the largest commercial deployment of this technology anywhere in the world and we intend to maintain our leadership whilst growing market size. We believe that we can capitalise on our unchallenged expertise in the integration of incident data and flow data and the utilisation of broadcast technology to deliver real time information to the driver in new markets outside of the UK where we will be able to offer CFVD to supplement available incident data. Government Both national and local level feedback on our performance during the first year of our contract to provide historic FVD to the Department for Transport has been very encouraging and this contract is providing an important reference for the company and its technology as we expand outside the UK, especially in our negotiations with State Department of Transportation prospects in the US. We have been actively marketing FVD to all local authorities. This had led to several contracts and we have a significant amount of work in progress. We believe that this area will continue to grow and become an important revenue stream for us. CFVD As previously reported, the implementations of CFVD for the Maryland Department of Transportation in Baltimore (USA), the Flemish Government in Antwerp (Belgium) and for the Scottish Executive have all gone to plan and the quality of information produced has exceeded customer expectations. In particular, the speed of incident detection and the granularity of information have established CFVD as the most cost effective way to monitor traffic flows accurately on highways and in urban areas. It was important for us to demonstrate that the technology worked outside Israel and we have chosen to do this by inviting customers to undertake real time drive tests and to compare their experience with what we were reporting. Having demonstrated the effectiveness of the CFVD technology in a number of reference cities we are now actively promoting its advantages. Vital to the success of CFVD is the development of relationships with the cellular networks covering each potential deployment and agreements with them for the provision of the base data required, typically on a revenue shared basis. Over the last few months we have concluded that the potential market for CFVD is vast. ITIS has the unique advantage of experience in application development as well as existing contracts with Governments and the automotive sector, and we will use these to position the Company competitively. Last month we announced an exciting new partnership with Delcan.NET, a US based provider of transportation management and traveller information systems. ITIS has collaborated with Delcan to establish its North American CFVD project in Baltimore (Maryland, USA). This agreement will enable ITIS to access public agencies in a cost effective and rapid manner without incurring business development costs and operational infrastructure. Our reference sites in Baltimore and Antwerp have attracted a lot of interest from around the world and in the USA, especially where we are in advanced negotiations with four other states to provide a similar service to that offered in Baltimore. Likewise, interest in Europe and in the Far East is expected to lead to further deployments of the CFVD technology. NavTrak NavTrak has performed very well this year and we have developed good relationships with several vehicle manufacturers including Bentley Motors, Land Rover, Ferrari and Maserati. In April 2005, NavTrak gained Thatcham Category 5 accreditation, which is the new insurance standard for stolen vehicle tracking systems. We are pleased to announce that due to the success of NavTrak as an accessory on the Bentley Continental GT, NavTrak will now be offered on the new Bentley Continental Flying Spur saloon and, from next year, has been selected as the only approved Tier 1 supplier to Bentley across Europe. Our strategy for NavTrak is to work directly with vehicle manufacturers to minimise the administration and marketing costs associated with selling this type of product in the aftermarket. Current Trading & Prospects The Board believes that recent achievements, including the maiden profit for the second half of the year, puts the Group in a strong position, both in the UK and overseas, to develop and capitalise on the investments of the past few years. We will continue to focus on our core markets of the automotive and public sectors and to utilise our considerable experience to become a leading company in the global traffic information market. The current financial year has started well and will include initial revenues from a number of new RDS-TMC customers. The Board is confident that ITIS will sustain its exciting high growth. Contact: Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700 Ginny Pulbrook, Director Citigate Dewe Rogerson - 0207 282 2945 ITIS Holdings plc Preliminary announcement of results for the year ended 31 March 2005 Consolidated profit and loss account 2005 2004 £ £ Group turnover 10,159,268 7,057,890 Exceptional direct costs - (362,583) Other cost of sales (6,667,524) (6,496,959) Cost of sales (6,667,524) (6,859,542) ________________ ________________ Gross profit 3,491,744 198,348 Distribution costs (122,948) (235,786) Exceptional administrative expenses - (383,790) Other administrative expenses (4,890,305) (6,066,367) Administrative expenses (4,890,305) (6,450,157) ________________ ________________ Group operating loss (1,521,509) (6,487,595) Interest receivable and similar income 176,943 270,902 Interest payable and similar charges (1,414) (1,607) ________________ ________________ Loss on ordinary activities before taxation (1,345,980) (6,218,300) Tax on loss on ordinary activities 136,417 75,558 ________________ ________________ Loss on ordinary activities after taxation (1,209,563) (6,142,742) Minority interests (1,495) (2,308) _______________ _______________ Loss for the financial year (1,211,058) (6,145,050) _________ _________ p p Basic and diluted loss per ordinary share (1.3) (6.3) _________ _________ All activity has arisen from continuing operations. Consolidated statement of total recognised gains and losses 2005 2004 £ £ Loss for the financial year (1,211,058) (6,145,050) Currency translation difference (2,652) 2,194 _______________ _______________ Total recognised losses relating to the year (1,213,710) (6,142,856) _________ _________ Consolidated balance sheet at 31 March 2005 2005 2004 £ £ Fixed assets Intangible assets 848,407 981,062 Tangible assets 493,286 414,077 ________________ ________________ 1,341,693 1,395,139 ________________ ________________ Current assets Stocks 353,551 156,914 Debtors - due within one year 2,963,417 2,705,050 - due after more than one year 70,000 817,186 Cash at bank and in hand 3,413,341 6,046,068 ________________ ________________ 6,800,309 9,725,218 Creditors: Amounts falling due within one year (3,797,421) (4,539,723) ________________ ________________ Net current assets 3,002,888 5,185,495 ________________ ________________ Total assets less current liabilities 4,344,581 6,580,634 Creditors: Amounts falling due after more than one year (403,177) (1,294,189) Provisions for liabilities and charges (195,493) (328,319) ________________ ________________ Net assets 3,745,911 4,958,126 _________ _________ Capital and reserves Called-up share capital 5,186,286 5,186,286 Share premium account 37,342,877 37,342,877 Profit and loss account (38,787,055) (37,573,345) ________________ ________________ Shareholders' funds 3,742,108 4,955,818 Minority interests - equity 3,803 2,308 ________________ ________________ Total capital employed 3,745,911 4,958,126 _________ _________ Shareholders' funds may be analysed as: Equity interests 524,240 1,737,950 Non-equity interests 3,217,868 3,217,868 ________________ ________________ 3,742,108 4,955,818 _________ _________ Consolidated cash flow statement for the year ended 31 March 2005 Notes 2005 2004 £ £ Net cash outflow from operating activities 2 (1,648,654) (4,975,838) ________________ ________________ Returns on investments and servicing of finance Interest element of finance lease rental payments (1,414) (1,607) Interest received 176,943 275,902 ________________ ________________ Net cash inflow from returns on investments and servicing of finance 175,529 274,295 ________________ ________________ Taxation Foreign tax paid (2,579) - Research and development taxation credit 78,137 241,431 ________________ ________________ Net cash inflow from taxation 75,558 241,431 ________________ ________________ Capital expenditure and financial investment Purchase of tangible fixed assets (296,847) (293,375) Sale of tangible fixed assets 9,200 - Purchase of intangible fixed assets (816,170) (173,570) Sale of intangible fixed assets - 362,475 ________________ ________________ Net cash outflow from capital expenditure (1,103,817) (104,470) ________________ ________________ Cash outflow before financing (2,501,384) (4,564,582) ________________ ________________ Financing Purchase of own shares under Treasury Regulations - (435,443) Issue of shares to minorities - 147 Capital element of finance lease rental payments (128,691) (110,046) ________________ ________________ Net cash outflow from financing (128,691) (545,342) ________________ ________________ Decrease in cash in the year 3 (2,630,075) (5,109,924) _________ _________ Reconciliation of movements in Group shareholders' funds for the year ended 31 March 2005 2005 2004 £ £ Loss for the financial year (1,211,058) (6,145,050) Other recognised gains and losses relating to the year (2,652) 2,194 Purchase of own shares - (435,443) ________________ ________________ Net reduction in Group shareholders' funds (1,213,710) (6,578,299) Opening Group shareholders' funds 4,955,818 11,534,117 ________________ ________________ Closing Group shareholders' funds 3,742,108 4,955,818 _________ _________ 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 2004 or 2005, but is derived from those accounts. Statutory accounts for the year ended 31 March 2004 have been delivered to the Registrar of Companies. The auditors have reported on the accounts for the years ended 31 March 2005 and 2004: their reports were unqualified and did not contain a statement under section 273(2) or (3) of the Companies Act 1985. The financial information set out in this preliminary announcement has been prepared on the basis of the accounting policies as stated in the accounts for the year ended 31 March 2004. 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 Fifth Floor, Station House, Stamford New Road, Altrincham, WA14 1EP and on the website www.itisholdings.com. 2. Reconciliation of operating loss to net cash outflow from operating activities 2005 2004 £ £ Operating loss (1,521,509) (6,487,595) Depreciation and amortisation of licenses 395,419 372,072 Impairment losses - 362,583 (Increase) decrease in stocks (196,637) 611,951 Decrease in debtors 267,399 4,893 Decrease in creditors (463,545) (168,061) (Decrease) increase in provisions (132,836) 328,319 Loss on disposal of fixed assets 3,055 - ________________ ________________ Net cash outflow from operating activities (1,648,654) (4,975,838) _________ _________ 3. Reconciliation of net cash flow to movement in net funds 2005 2004 £ £ Decrease in cash in the year (2,630,075) (5,109,924) Cash outflow from decrease in lease financing 128,691 110,046 ________________ ________________ Change in net funds resulting from cash flows (2,501,384) (4,999,878) Other non cash changes 242,619 - Translation differences (2,652) 2,047 ________________ ________________ Change in net funds in the year (2,261,417) (4,997,831) Net funds brought forward 5,646,068 10,643,899 ________________ ________________ Net funds carried forward 3,384,651 5,646,068 _________ _________ This information is provided by RNS The company news service from the London Stock Exchange

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