Interim Results
Trakm8 Holdings PLC
15 December 2005
Embargoed until 7am 15 December 2005
TRAKM8 HOLDINGS PLC
("Trakm8" or "the Group")
Interim Results
For the 6 Months to 30 September 2005
Trakm8, a designer and developer of licensed GPRS based hardware and software
for the vehicle placement and security market, is pleased to announce its maiden
interim results for the period ended 30 September 2005.
Highlights
• Revenue increased 125% to £2.46m (H1 2004: £1.09m)
• Profit before tax of £153,000 (H1 2004: loss £125,000)
• Two subsidiaries of FTSE 100 companies as distribution partners coming
on line
• Pace of global growth currently outstripping strong UK growth
• Launched three new products
• Admission to AIM in November
• Reporting profitability for first time
The Group supplies its GPRS ("General Packet Radio Service") based GPS vehicle
placement hardware, enabling software and information management platforms for
the end user through selected distribution partners, including directly to two
subsidiaries of FTSE 100 companies.
The Directors believe the Group has an innovative business model. Instead of
being a fully integrated developer, manufacturer, distributor and maintainer of
its equipment, Trakm8 focuses on the key activity areas it believes make its
products attractive to the end users, and where it believes the financial
returns are greatest - these being the development of the control software
inside the electronic boxes and the software used to track the vehicles.
The Directors also believe that Trakm8's hardware and software products provide
advantages over alternative products in the market, both in terms of
specifications and data management functionality.
Cary Knapton, CEO of Trakm8 commented, "We are delighted to report profitability
in our maiden results as a listed company. It has been a momentous year for
Trakm8, culminating in a successful flotation on AIM in November.
"Our unique mix of hardware and software products enables us to supply into a
variety of potential markets within a fragmented industry. In addition to our
established markets, a number of additional industry trends are emerging from
which we believe the Group is well positioned to benefit, including
pay-as-you-drive insurance, personal security and road tolling. We believe that
our differentiated business model allows us to occupy an important gap in the
vehicle placement industry and we view the future prospects of the Group with
some confidence."
TRAKM8 HOLDINGS PLC
("Trakm8" or "the Group")
Interim Results
For the 6 Months to 30 September 2005
Chairman's Statement
It is with great pleasure that I report the Trakm8 Holdings PLC interim results
in a significant year that has seen us achieve admission to AIM, successfully
launch three new products and report profitability for the first time.
The Group designs and develops licensed Internet based GPS hardware and software
for the vehicle placement and security market. We firmly believe that our
innovative business model of focusing solely on the key activity areas within
our industry will set us apart from others in the market.
As explained fully in note 6 (Post Balance Sheet Events), since the balance
sheet date Trakm8 Holdings PLC has been formed and has acquired the entire
issued share capital of Trakm8 Limited in a share for share exchange. The
purpose of the formation of the holding company was to effect the Admission of
the Group onto AIM, which was successfully achieved in November 2005. It is
expected that the Admission to AIM will enhance the visibility and profile of
the Group and open new opportunities for growth. As part of the Admission to AIM
the Group raised £0.86m which we expect will provide a solid base from which to
launch future growth strategies.
As the holding company was put in place after the balance sheet date, the
interim financial information presented below is purely in respect of Trakm8
Limited and does not reflect the transactions, activities or balances of the
parent company. Trakm8 Holdings PLC will produce its first statutory accounts
for the period ending 31 March 2006 that will incorporate the results of Trakm8
Holdings PLC and Trakm8 Limited. The Directors expect to adopt the principles of
merger accounting in the preparation of the accounts of the Group for the period
ending 31 March 2006.
The Board believes that the outlook for the Group is excellent. We consider that
our differentiated offering combined with the roll out of further services
offers our clients the functionality and flexibility they require. The Board
remains focused on enhancing service support in order to actively drive growth
and take the business forward.
Finally, on behalf of my Board, I would like to thank all the staff for their
hard work and dedication to the Group during the last few years. I would also
like to thank our shareholders for their continued support of Trakm8's
development.
RICHARD WHITE
CHAIRMAN
Chief Executive Officer's Review
Financial Review
Turnover for the six months ended 30 September 2005 was £2.46 million (30
September 2004: £1.09 million). Gross margin improved to 32.2% (2004: 28.0%) and
with operating expenses of £0.64 million (2004: £0.43 million) the Group is
pleased to announce a net profit after taxation for the period of £0.10 million
(2004: loss of £0.11 million).
Net cash outflow for the period was £0.16 million (2004: £0.34 million). The
Directors believe that taking into account the listing on AIM, which generated
£0.86 million cash before expenses, following the end of this financial period
and the expected revenues from operations, that the Group has adequate financial
resources.
The Directors have not declared an interim dividend.
Operational Review
The Group has seen revenue grow in 2005 in part due to the transition in the
vehicle placement market. There has been a recognised increase in both public
awareness and acceptance of the new technology available. Organisations are now
seeing the benefits of vehicle placement technology to their operations enabling
them to become more competitive and achieve incremental cost savings.
Trakm8's products are now being used in the UK as well as across Europe and the
Americas. In the UK, the Group operates through its distributors, including two
vehicle placement subsidiaries of FTSE 100 companies. In other territories,
especially the Americas, operations have shown significant growth in the period.
The business model has proven successful with the use of Value Added Resellers
(VARs) saving the Group unnecessary set up costs and marketing expenses.
Trakm8's route to market is through service providers that typically focus on
particular markets with their own tailored propositions and combinations of
functionality.
This approach has allowed Trakm8 to benefit from the distributors' innovation
and marketing skills to capture market share in a variety of segments in a
fragmented market.
The Group has seen the nature of these distributors evolve from specialist
vehicle placement companies to major trusted brands including vehicle placement
subsidiaries of two FTSE 100 companies.
The Group's philosophy from an early stage has been that customer service is
paramount and it has dedicated itself to this aim over the past two years. This
has resulted in the Group being recognised as a leading vehicle placement
enabler for providing support to its customers and in developing leading edge
sector technology.
Whilst Trakm8's hardware sales currently provide the majority of the Group's
revenue the Board believes that within two years that its higher margin software
offerings, which will include maintenance charges, will account for a
significant increased proportion of revenues.
The modular nature of Trakm8's software architecture means that the Group can
manage its operations via its two UK based server sites; one in London and the
second in Manchester. This provides the Group with flexible, cost effective
capacity that can be scaled up as and when required. This strategy has meant the
Group has avoided incurring large amounts of capital expenditure whilst ensuring
it efficiently utilises the space available on the servers.
In the period the Group's products have sold well, with its primary offering,
the T2002, a Thatcham Category 5 tracking, security and safety device, selling
over 21,000 units since its launch in 2003.
Launched in May 2005, the T4 is an onward development of the T2002 and it
provides higher sensitivity GPS, which allows greater installation flexibility.
Also launched in the reporting period was the trakm8TM Solo, a "plug and play"
solution targeted at the previously unaddressed volume market. It is aimed at
very large fleets looking for core fleet tracking at a good price but is equally
positioned as an innovative value proposition for the smaller fleet. It provides
fleet management and vehicle usage profiling, with an integrated hands free
cellular phone kit, whilst journey report data is delivered to customers simply
via e-mail.
The T2002 and T4 can both accommodate Radio Frequency IDentity (RFID) tags that
allow the location of a driver or an asset to be associated with the vehicle for
use respectively in timesheets or logistics applications.
In combination with the introduction of the T2002, the Group developed a
communication software platform known as STREAM.
STREAM is scaleable platform for delivering vehicle and asset information, with
multiple business-to-business interfaces and a fully featured Web based front
end. This enables a business or fleet manager to monitor the position, condition
and usage of his vehicles remotely, via the Internet.
STREAM is designed to readily integrate with existing business logic and
business processes. This can dramatically reduce the time to implement an
enterprise scale solution. STREAM is offered as either a fully managed, hosted,
application or as a licensed stand-alone solution.
The STREAM software platform allows the Group to increase the value of each unit
sold by combining one or more elements of the portfolio. At the same time this
ensures that product adoption barriers are easily overcome by reducing the work
required to get the hardware working.
Outlook
The Group has identified developments in government legislation for the
transport industries as a potential source of revenue, including road tolling
and health and safety within the fleet and haulage industries.
One of the specific applications for the Group's technology that the Board
believes has great potential, is the pay-as-you-drive insurance market. Trakm8's
products will be able to provide greater resolution for the companies looking to
roll-out this new insurance option and it expects that this is to become a
material source of revenue within two years.
Excitingly, Trakm8's technology facilitates access to vehicle information and
statistics for use by organisations including local councils and central
government for increased operational efficiencies. The Board believes that this
will ultimately enable Trakm8 to become one of the leading content aggregators
in the sector.
The Group is also in the advanced stages of launching its global tool-kit, which
will enable Trakm8 customers to closely monitor the placement and status of
their products and fleets on a real time basis wherever they are in the world.
The tool-kit, which will combine Trakm8's hardware with a new modular software
application, will enable diversified fleets to be efficiently managed across
different time zones and in different languages.
The vehicle placement industry is seeing exciting developments and businesses
are reaping the benefits of this efficiency driven technology. I am delighted to
report that Trakm8 has a strong order book moving into 2006 and remains well
placed to capitalise on the opportunities presenting themselves in the market
place.
The Group anticipates significant growth in the vehicle placement market, driven
by potential fleet management benefits, PAYG insurance, congestion charging,
road tolling, green taxes, CAT5 vehicle theft recovery, navigation and employer
duty of care. Trakm8 firmly believes in the convergence of these applications
onto a single unit and, due to its integrated platform approach and scaleable
server facilities, is ideally placed to capture an increased market share of the
broadening vehicle placement market.
The Board looks forward to the second half of the year with enthusiasm and
optimism and is confident it will continue to successfully deliver its products
to the market.
-ends-
For further information please contact:
Trakm8 Holdings plc On the results day: 020 7920 3150
From 16th December:01747 858 444
Cary Knapton, Chief Executive Officer
Tim Couling, Finance Director
Tavistock Communications 020 7920 3150
Christian Taylor-Wilkinson
Matt Ridsdale
Profit & loss account of Trakm8 Limited
For the period ended 30 September 2005
Note 6 months 6 months Year ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (audited)
£000's £000's £000's
TURNOVER 2,460 1,093 2,952
Cost of Sales (1,668) (787) (1,992)
---------- ------------ -----------
Gross Profit 792 306 960
Operating
Expenses (639) (431) (1,096)
---------- ------------ -----------
OPERATING
PROFIT (LOSS) 153 (125) (136)
Interest
receivable 0 1 2
---------- ------------ -----------
153 (124) (134)
Interest
payable (24) (11) (25)
---------- ------------ -----------
PROFIT (LOSS)
ON ORDINARY
ACTIVITIES
BEFORE TAXATION 129 (135) (159)
Taxation 3 (25) 26 26
---------- ------------ -----------
PROFIT (LOSS)
ON ORDINARY
ACTIVITIES
AFTER TAXATION 104 (109) (133)
Dividends 0 0 0
RETAINED PROFIT
(LOSS) FOR THE
PERIOD 104 (109) (133)
========== ============ ===========
Basic & diluted
earnings per
share 2 - - -
========== ============ ===========
Balance Sheet of Trakm8 Limited
As at 30 September 2005
Note As at As at As at
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (audited)
£000's £000's £000's
FIXED ASSETS
Tangible Assets 389 381 387
---------- ---------- ---------
CURRENT ASSETS
Stocks 339 304 143
Debtors 1,062 342 866
Cash at bank and
in hand 112 26 117
---------- ---------- ---------
1,513 672 1,126
CREDITORS: Amounts
falling due within
one year (991) (548) (701)
NET CURRENT ASSETS 522 124 425
TOTAL ASSETS LESS
CURRENT
LIABILITIES 911 505 812
CREDITORS: Amounts
falling due after (441) (266) (446)
more than one year
---------- ---------- ---------
NET ASSETS 470 239 366
========== ========== =========
CAPTIAL & RESERVES
Called up Share
Capital 13 12 13
Share Premium
Account 598 449 598
Profit & Loss
account (141) (222) (245)
---------- ---------- ---------
SHAREHOLDERS FUNDS 470 239 366
========== ========== =========
Cash flow statement of Trakm8 Limited
For the period ended 30 September 2005
Note six months to six months to Year ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (audited)
£000's £000's £000's
Cash flow from
operating
activities 4 (124) (311) (424)
Returns on investments and servicing
of finance
Interest received 0 1 2
Interest paid (24) (11) (25)
---------- --------- ---------
Net cash outflow
from returns on
investments and
servicing of
finance (24) (10) (23)
========== ========= =========
Taxation 0 0 0
---------- --------- ---------
Capital expenditure & financial
investment
Purchase of
tangible fixed
assets (9) (11) (27)
---------- --------- ---------
---------- --------- ---------
Net cash outflow
from capital (9) (11) (27)
expenditure & financial
investment ---------- --------- ---------
Equity Dividends
paid 0 0 (9)
---------- --------- ---------
---------- --------- ---------
Cash outflow
before financing (157) (332) (482)
========== ========= =========
Financing
Proceeds from the
issue of New
Ordinary Shares 0 0 150
Repayment of Bank
Loans (5) (5) (8)
New Unsecured Loan 0 0 185
---------- --------- ---------
(5) (5) 327
---------- --------- ---------
---------- --------- ---------
(Decrease) in cash
in period (162) (337) (155)
========== ========= =========
Notes to the financial information
1. Basis of Preparation
The interim financial statements comprise the unaudited results for the six
months to 30 September 2005 and for the six months to 30 September 2004; and the
audited financial statements for the year to 31 March 2005. The interim
financial statements have been prepared on a consistent basis and using the
accounting policies set out in the accounts for the year ended 31 March 2005 as
amended to incorporate the adoption of FRS 21 'Events after the balance sheet
date'.
The interim results are unaudited and do not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985.
Statutory financial statements for the Company for the year to 31 March 2005,
prepared on the basis of the accounting policies set out in those accounts, were
reported on by the auditors without qualification or statement under section 237
(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of
Companies. Comparative information for the year ended 31 March 2005 shown in
this report has been extracted from those accounts.
2. Basic and diluted earnings per share
As noted elsewhere in this interim report the financial information is in
respect of Trakm8 Limited and not Trakm8 Holdings PLC and as such the company is
not required to provide earnings/(loss) per share information. In addition the
earnings/(loss) per share information will be calculated by reference to the
results and weighted average number of shares in issue in the parent company
(Trakm8 Holdings PLC) and not the company. Accordingly Earnings/(loss) per share
information has not been provided for the company.
As noted in note 6; 10,112,000 £0.01 ordinary shares were issued by Trakm8
Holdings PLC in a share for share exchange to acquire the entire issued share
capital of the company. If this number of shares had been in issue throughout
the period covered by the interim financial information, the earnings/(loss) per
share would have been
Six months ended 30 September 2005: £0.01
Six months ended 30 September 2004: (£0.01)
Year ended 31 March 2005: (£0.01)
Diluted earnings/(loss) per share numbers have not been calculated as there are
no dilutive shares in the company and will be calculated for Trakm8 Holdings PLC
in their accounts for the year ending 31 March 2006.
3. Taxation
Taxation charged for the six months to September 2005 is calculated by applying
the directors' best estimate of the annual tax rate to the profit for the
period."
4. Reconciliation of operating profit/(loss) to net cash inflow from
operating activities
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
(unaudited) (unaudited) (unaudited)
£000's £000's £000's
Operating profit (loss) 153 (125) (136)
Depreciation 7 5 11
Amortisation 0 0 0
(Profit)/loss on sale of
fixed assets 0 0 (1)
Decrease/(increase) in
stocks (196) (299) (138)
Decrease/(increase) in
debtors (221) 49 (488)
Increase/(decrease) in
creditors 133 59 323
--------- --------- ---------
Net cash flow from
operating activities (124) (311) (429)
========= ========= =========
5. Net Debt as at 30 September 2005
At Cash flow Other At
1 April 2005 non - cash 30 September
Changes 2005
('000s) ('000s) ('000s) ('000s)
Cash at bank 117 (5) 0 112
Overdrafts 0 (157) 0 (157)
--------- --------- --------- ---------
117 (162) 0 (45)
Hire purchase 0 0 0 0
Debts falling
due within 1
yr (10) 5 (5) (56)
Debts falling
due after 1 yr (445) 0 5 (441)
--------- --------- --------- ---------
(339) (157) 0 (497)
========= ========= ========= =========
6. Post Balance Sheet Events
Trakm8 Holdings PLC was incorporated on 13 May 2005 with an authorised share
capital of £2,000,000 divided into 200,000,000 Ordinary Shares of £0.01 each, of
which 2 were issued, nil paid, to the subscribers to the Memorandum of
Association.
On 4 November 2005 the 2 issued and nil paid Ordinary shares were deemed fully
paid up and a further 10,111,998 Ordinary shares were issued credited as fully
paid in exchange for the transfer to Trakm8 Holdings PLC of the entire issued
share capital of Trakm8 Limited pursuant to the terms of a share exchange
agreement.
On 23 November 2005 11,026,000 Ordinary Shares, consisting of 10,112,000
Ordinary Shares in consideration for the entire issued share capital of Trakm8
Limited and a further 914,000 Ordinary Shares ranking pari-pasu, were allotted,
at a Subscription Price of £1 per Ordinary Share, conditional upon admission to
AIM.
Admission to AIM was successfully completed on 29 November 2005 whereupon the
allotment of Ordinary Shares was completed.
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