Chairman's Statement

RNS Number : 2250Z

Trakm8 Holdings PLC

17 September 2020

 

17 September 2020

Trakm8 Holdings plc

("Trakm8", the "Group" or the "Company")

AGM Statement & Trading Update

Trakm8 Holdings plc (AIM: TRAK), the global telematics and data insight provider, is today holding its Annual General Meeting. Executive Chairman John Watkins will make the following statement on current trading at the meeting.

"In our Outlook provided on June 30^th 2020 we identified that Covid-19 had significantly reduced orders, and revenues were 27% down for the first two months of the year but that trading had shown a strong improvement month on month which continued into June.  In addition due to very much lower direct and indirect costs the losses incurred were significantly lower than in the previous year.  This improving trend continued into the recent months, such that overall new orders received this financial year amount to 9% greater than the corresponding period last financial year, and revenues in July and August were each only 7% lower than the same month in the previous financial year.  In addition the losses have continued to be significantly lower than in the previous financial year.

Revenues in the first five months of the current financial year commencing 1 April 2020 have been 15% less than the same period last year.  Overall, connections have increased by 1% to 248,000 since the start of the year.  There has been a higher Fleet attrition rate than normal due to the Covid-19 situation with a 9% reduction (7,000) in Fleet connections to 70,000. There has been a 6% increase (10,000) in Insurance connections to 178,000.  During the period several new insurance customers deployed with Trakm8.  Two of our customers secured contracts with other insurance customers, increasing their demand with Trakm8.  There have been a number of new Fleet customers secured, including the optimisation contract award from a major UK retailer and several of our large customers renewed their contracts.  A number of our Fleet customers have suffered cash flow challenges as a result of Covid-19.  Trakm8 has endeavoured to take a realistic long-term view in supporting these customers.

Half Year revenues are expected to be 18% lower than last year, however Gross Margin percentage is expected to by 8% points higher than last year and Overheads 30% lower than last year.  As a result the Half Year adjusted loss is expected to be 75% lower than the prior year, and the Unadjusted profit before tax to be 55% down year on year.  We have managed our cash carefully, again reduced stock releasing working capital and taking advantage of the furlough scheme and HMRC payment deferrals.  We expect that Net debt excluding IFRS16 lease liabilities at the end of the Half Year will be in the range £5.4m to £5.9m (FY-2020: £5.6m).  The total value, net of the R&D tax credit cash of government tax deferrals amounts to just under £1.0m.  Our cash flow projections provide ample headroom for this to be repaid over the coming months. 

The second half of the year will benefit from the resumption of a more normal level of Fleet activity and a significant increase in the Insurance shipments.  The latter is driven by the wide range of new customers (including at least two more expected to deploy our technology this year) in an insurance market returning to a more normal level following the resumption of driving tests leading to a return of young drivers to the insurance market.  The Company has returned the majority of employees back from furlough during the current quarter, as demand has picked back up, with a partial re-opening of offices in a Covid-19 secure manner to enable some employees to return to office working while observing social distancing, other employees continue to successfully work remotely. 

Given the continued economic uncertainty due to Covid-19, the Group is still unable to provide guidance for the full year financial year.  However, the Group intends to provide a further update and reinstate financial guidance to investors and analysts for the twelve months ending 31 March 2021 at the Interim Results, to be reported in late November 2020.

The Directors regret being unable to meet shareholders at the AGM due to the Covid-19 restrictions, however the Directors have endeavoured to answer any shareholder questions received and have provided answers which will be posted on the Company's website by 10am after the conclusion of the AGM, under "Shareholder Notifications" on the AIM Rule 26 Information page."

- Ends -

For further information:

Trakm8 Holdings plc
John Watkins, Executive Chairman	Tel: [phone]
Jon Furber, Finance Director	www.trakm8.com
Arden Partners plc (Nominated Adviser & Broker)	Tel: [phone]
Paul Shackleton	www.arden-partners.com

About Trakm8

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 analytics and reporting portal (Trakm8 Insight), integrated telematics/cameras/optimisation, self-installed telematics units and one of the widest ranges of installed telematics devices. Trakm8 has over 248,000 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, Scottish Power, Direct Line Group, LexisNexis and Ingenie.

Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.

 

END

 

 

AGMEAKNKFESEEFA