Final Results

RNS Number : 5779G

Trakm8 Holdings PLC

02 July 2012

 



2 July 2012

TRAKM8 HOLDINGS PLC

('Trakm8')

Final Results

for year ended 31 March 2012

Trakm8, the AIM-listed designer and developer of GPRS based hardware and software for the vehicle placement and security market, is pleased to announce its results for the year ended 31 March 2012.

Financial Highlights:

	Year ended 31 March 2012		Year ended 31 March 2011
	£000's		£000's
Revenue	5,215		4,186
Gross profit	3,326		2,787
Gross profit margin %	63.7%	66.6%
Other income	5		362
Operating profit	88		329
EBITDA (Earnings before interest, tax, depreciation & amortisation)	359		593
Adjusted EBITDA (excluding Government grants)	354		234
Profit before taxation	84		323
Cash and cash equivalents	1,087		1,119
Net assets	2,380		2,236

Key points:

·      Revenues up 25%

·      Adjusted EBITDA (excluding Government grants) up £120K

·      Growth in annualised recurring revenues to £1,956K (2011: £1,500K)

·      Robust financial position with good cash balances

·      T8 Mini and Driver feedback devices launched

·      Contract win since year end with Motorola Solutions

John Watkins, CEO of Trakm8, commented on the results:

"The results for the Group have continued to progress well and in line with expectations.

"Trakm8 solutions are expected to increase market penetration both in the large fleet market and the SME space.  The installed base for Trakm8 Swift and its consequent recurring revenues are expected to continue to increase.

"We have a strong balance sheet with substantial cash reserves and minimal debt.  The market for vehicle telematics in the UK is still very fragmented and should opportunities emerge for us to grow by making acquisitions then we will seriously consider them."

For further information please contact:

Trakm8 plc	01747 858444
John Watkins, Chief Executive Officer
James Hedges, Finance Director
MHP Communications	020 3128 8100
Reg Hoare / Vicky Watkins
finnCap	020 7220 0500
Ed Frisby / Christopher Raggett - corporate finance Simon Starr - corporate broking

About Trakm8

Trakm8, based in Shaftesbury, Dorset is the leading technology provider, designer and developer of GPRS based hardware and software to the vehicle tracking and security market.  The Group distributes its hardware and software worldwide through a network of distributors.  In addition the Group provides vehicle monitoring and tracking services direct to the B2B market.  Trakm8's products allow vehicles and drivers to be monitored, allowing organisations to manage deliveries and services, or track stolen vehicles down to five metres.

Chairman's Statement

I am pleased to report that the results for the Group have continued to progress well and in line with market expectations.  Revenues have increased by 25% to £5,215,565 (2011: £4,186,264) and we have realised a profit before tax of £83,884 (2011: £323,133).  Excluding the Government funding of R&D our operating profits have improved by £114,355 over the previous year.  Our adjusted EBITDA (excluding government grants) was £354,297 and this is a better guide to Trakm8's underlying performance.

Trakm8 has successfully introduced a number of new products and software solutions that have been well received by the market.  Our recurring revenues continue to grow, which provides good visibility of our earnings.

Despite the working capital requirement of the considerable growth and the pre-product launch build of inventory, the cash balances remain strong at £1,087,474.  This robust financial position means that we can continue to invest to keep our products at the forefront of their markets and it gives our customers confidence that we are a well established business.

The prospects for the Group continue to be positive.  Trakm8 has achieved progressive gross profit expansion over the period, supported by the increased value-added nature of the Group's activities.  The Group has also seen a positive impact on revenue streams from the service offering, which now accounts for a significant proportion of Group revenues.

The market is growing and the Trakm8 solutions are increasingly capable.  The Board is therefore confident that the Group will continue to grow revenues and the Trakm8 Swift installed base.  I am pleased to report the new financial year has started ahead of the same period last year and we have a good pipeline of sales prospects.

Dawson Buck

Chairman

CEO's Statement

I am pleased with the progress outlined in the Chairman's statement.  Trakm8 has enjoyed a significant improvement in sales of units and complete solutions, which has resulted in strong growth in revenues.

Telematics revenues £2,226,230 (2011: £1,394,998)

Trakm8 supplies other Telematics Service Providers with hardware solutions.  In most cases this also includes our market leading configuration firmware for the hardware unit.  These sales have been the core of Trakm8 revenue over the past 10 years and in excess of 150,000 have been supplied. During the year unit sales increased by 30% following contract wins in the UK and the Middle East.

In the UK we have launched two in vehicle display devices that feed back to the driver vehicle performance and driver behaviour data.  Over 6,000 of these devices were supplied during the year.  Trakm8 has also launched a derivative of the A1091 telematics unit that was acquired from Vincotech in 2010.  The new T8 Mini device combines a compact, waterproof design with exceptionally low power consumption.  The T8, which is fitted onboard vehicles, can access a vast amount of data through the CANbus (Controller Area Network bus).  This has recently been put into production and almost 2,000 units have already been supplied of the two variants.  In addition, a range of tags for driver ID and temperature measurement have also been introduced. 

Following the year end, we today announced a major contract win with Motorola Solutions for 2,300 T8 telematics units to be used in South America.  New firmware was developed to allow data to be transmitted over the private mobile radio network providing a telematics solution in areas of poor or no GSM coverage.

Trakm8 Swift revenues £2,776,872 (2011: £2,553,876)

Trakm8 supplies customers with a fully integrated telematics service provision via Trakm8 Swift, an internet based service which is flexible, low cost and easy to use. Customers include the Automobile Association ("AA"), EO.N and Jewsons.  This solution is also provided through a partner in South Africa.   In total nearly 30,000 units are now using Swift, a net increase of 20% in the past twelve months.  We now have five customers with over 1,000 vehicles operating Trakm8 Swift solutions.

This has increased our base of recurring monthly revenues, which provides the improved security and predictability to future income.  By the end of the financial year under review, the monthly recurring revenue had increased by 30% on the previous year.  This also amounted to 70% of our operational costs up from 62% at the end of the previous year.  

During the past 12 months we have developed a number of variants of Swift.  These include Eco^N, which combines the Driver feedback device with server side analysis to improve the fuel economy of the vehicle.  A security product, primarily for asset management, has also been launched with positive feedback.

The server side solutions have had extensive development so that management reports are easier to use and can provide the higher levels of data now available from the driver feedback devices, the telematics unit and the CANbus connectivity.  It is this provision and management use of the data available that enables vehicle operators to achieve significant reductions in fuel use.  Trakm8's knowledge of the vehicle electronic systems continues to be market leading following continuous development.  Trakm8 has notified in previous statements that it is committed to owning the Intellectual Property throughout the value chain and the extensions of the server side applications continues this trend.  The Trakm8 Swift product range is the core value enhancing segment of the Group.  Hosting multiple applications on a single unit broadens its potential addressable markets including insurance, environmental services, Government and general consultancy.

Professional Services revenues £212,463 (2011: £237,390) 

Trakm8 undertakes bespoke software development for customers.  The customer specific application engineering has been a major feature of the product development team as larger customers have demanded their particular requirements. This has also helped improve the core products.

These engineering projects provide profitable consultancy activities in themselves, helping to integrate the customer with Trakm8 solutions, and provide on-going support and maintenance revenues.  Whilst this activity remains a small percentage of the Group revenues it is considered a key skill and value added capability.

We have recently renamed our subsidiary PJSoft to Trakm8 sro and this year they moved into new offices in Prague.  This development team is an important element of the enhancement of our systems and the Professional Services revenues.  

Government Grants £5,039 (2011: £361,542)

The two Government funded projects, the Trusted Road Usage & Emissions Profiling Project and the Future Intelligent Transport Systems - Project Freeflow Initiative, were successfully completed early last year.  We have been very pleased with the outcomes and much of the development work has been incorporated into our core products.  Trakm8's leading roles in government-sponsored projects ensures the Group is well positioned to capitalise on the regulatory and legislative drivers impacting the field of telematics.

It is pleasing to see that we have realised a profit before tax excluding any Government Grant income and the table below demonstrates how important these projects have been to the continued development of our products.

Outlook

The Group is confident that revenues will continue to improve over the next twelve months with results in line with market expectations.  Trakm8 solutions are expected to increase market penetration both in the large fleet market and the SME space.  The installed base for Trakm8 Swift and its' consequent recurring revenues are expected to continue to increase.

Hardware only solutions are expected to grow on the back of new customers and new products.  To protect the technical superiority of the products and services and to ensure the lowest possible cost base, Trakm8 will continue to expand the engineering and professional services teams.

The cost of fuel continues to rise and the capability of Trakm8 telematics based fleet management solutions to reduce fuel usage continues to become more sophisticated and beneficial to customers. We expect to benefit from these trends.

Cost reduction initiatives and innovative product launches undertaken during the downturn, have left us well positioned for future growth.  We have a strong balance sheet with substantial cash reserves and minimal debt.  The market for vehicle telematics in the UK is still very fragmented and should opportunities emerge for us to grow by making acquisitions then we will seriously consider them. 

Finally, I would like to thank all the Trakm8 staff for their tremendous hard work over the past twelve months.

John Watkins

CEO

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 March 2012

	Notes	2012	2011
		£	£
REVENUE	4	5,215,565	4,186,264
Cost of sales		(1,889,499)	(1,399,046)
		----------------------------------------	------------------------------------------
Gross profit		3,326,066	2,787,218

Other income	5		5,039	361,542
			----------------------------------------	------------------------------------------
			3,331,105	3,148,760
Administrative expenses			(3,242,760)	(2,820,049)
			----------------------------------------	------------------------------------------
OPERATING PROFIT		5	88,345	328,711

Finance income		788	979
		---------------------------------------	------------------------------------------
		89,133	329,690
Finance costs		(5,249)	(6,557)
		---------------------------------------	------------------------------------------
PROFIT BEFORE TAXATION		83,884	323,133

Income tax credit / (charge)		50,666	(117,094)
		----------------------------------------	-----------------------------------------
PROFIT FOR THE YEAR ATTRIBUTABLE TO THE OWNERS OF THE GROUP		134,550	206,039
OTHER COMPREHENSIVE INCOME
Currency translation differences		1,493	1,008
		--------------------------------------	------------------------------------------
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE GROUP		136,043	207,047
		========================	========================

EARNINGS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO OWNERS OF THE GROUP
Basic	6	0.71p	1.10p
Diluted	6	0.70p	1.07p
		=========================	=========================

There were no discontinued operations in 2012 or 2011.  Accordingly the results relate to continuing operations.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 March 2012

	Share capital	Share premium	Merger Reserve	Share based payment reserve	Translation reserve	Retained earnings	Total equity attributable to owners of the Group
	£	£	£	£	£	£	£
Balance as at 1 April 2010	187,647	1,719,402	509,837	63,152	205,313	(666,330)	2,019,021
Comprehensive income
Profit for the year	-	-	-	-	-	206,039	206,039
Other comprehensive income
Exchange differences on translation of overseas operations	-	-	-	-	1,008	-	1,008
Total comprehensive income	-	-	-	-	1,008	206,039	207,047
Transactions with owners
Transfer share based payment reserve to Retained earnings	-	-	-	(63,152)	-	63,152	-
IFRS2 Share based payments	-	-	-	-	-	9,921	9,921
Transactions with owners	-	-	-	(63,152)	-	73,073	9,921
Balance as at 1 April 2011	187,647	1,719,402	509,837	-	206,321	(387,218)	2,235,989
Comprehensive income
Profit for the year	-	-	-	-	-	134,550	134,550
Other comprehensive income
Exchange differences on translation of overseas operations	-	-	-	-	(1,493)	-	(1,493)
Total comprehensive income	-	-	-	-	(1,493)	134,550	133,057
Transactions with owners
Shares issued	1,000	4,250	-	-	-	-	5,250
IFRS2 Share based payments	-	-	-	-	-	5,537	5,537
Transactions with owners	1,000	4,250	-	-	-	5,537	10,787
Balance as at 31 March 2012	188,647	1,723,652	509,837	-	204,828	(247,131)	2,379,833

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 31 March 2012

		2012	2011
		£	£
NON CURRENT ASSETS
Intangible assets		1,005,107	1,150,235
Property and equipment		517,118	463,007
Deferred income tax asset		98,421	63,243
		--------------------------------------	------------------------------------------
		1,620,646	1,676,485
		--------------------------------------	-------------------------------------------
CURRENT ASSETS
Inventories		410,016	259,042
Trade and other receivables		782,375	893,172
Current tax assets		15,488	17,828
Cash and cash equivalents		1,087,474	1,119,027
		--------------------------------------	------------------------------------------
		2,295,353	2,289,069
		--------------------------------------	------------------------------------------
CURRENT LIABILITIES
Trade and other payables		(1,250,672)	(1,473,074)
Borrowings		(56,223)	(27,305)
		--------------------------------------	------------------------------------------
		(1,306,895)	(1,500,379)
		--------------------------------------	------------------------------------------
CURRENT ASSETS LESS CURRENT LIABILITIES		988,458	788,690
TOTAL ASSETS LESS CURRENT LIABILITIES		2,609,104	2,465,175
NON CURRENT LIABILITIES
Borrowings		(163,093)	(159,186)
Provisions		(66,178)	(70,000)
		-------------------------------------	-------------------------------------
NET ASSETS		2,379,833	2,235,989
		========================	========================

  EQUITY

Share capital		188,647	187,647
Share premium account		1,723,652	1,719,402
Merger reserve account		509,837	509,837
Translation reserve		204,828	206,321
Retained earnings		(247,131)	(387,218)
		-----------------------------------	-------------------------------------
TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE GROUP		2,379,833	2,235,989
		========================	========================

CONSOLIDATED CASH FLOW STATEMENT

for the year ended 31 March 2012

	Notes	2012	2011
		£	£
NET CASH INFLOW FROM OPERATING ACTIVITIES	7	110,845	609,832
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment		(91,232)	(49,758)
Purchases of intangible assets		(89,241)	(96,411)
		----------------------------------------	------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES		(180,473)	(146,169)
		----------------------------------------	------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of new shares		5,250	-
New / (repayment of) obligations under hire purchase agreements		53,296	(16,894)
Repayment of loans		(20,471)	(19,880)
		----------------------------------------	------------------------------------------
NET CASH (USED IN) /FROM FINANCING ACTIVITIES		38,075	(36,774)
		----------------------------------------	------------------------------------------
NET (DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS		(31,553)	426,889
		---------------------------------------	------------------------------------------
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		1,119,027	692,138
		---------------------------------------	------------------------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR		1,087,474	1,119,027
		========================	========================

NOTES TO THE GROUP FINANCIAL STATEMENTS

for the year ended 31 March 2012

1.    GENERAL INFORMATION

Trakm8 Holdings PLC ("Company") is a public limited company incorporated in the United Kingdom (registration number 05452547). The Company is domiciled in the United Kingdom and its registered address is Lydden House, Wincombe Business Park, Shaftesbury, Dorset, SP7 9QJ. The Company's Ordinary Shares are traded on the AIM market of the London Stock Exchange.

The Group's principal activity is the manufacture, marketing and distribution of vehicle telematics equipment and services. The Company's principal activity is to act as a holding company for its subsidiaries.

2.     AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE WITH IFRS

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and International Financial Reporting Interpretations Committee ("IFRIC") interpretations as endorsed by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

3.     BASIS OF PREPARATION

The accounting policies have been applied consistently to all periods presented in these consolidated financial statements.

These financial statements are presented in sterling as that is considered to be the currency of the primary economic environment in which the Group operates.  This decision was based on the Group's workforce being based in the UK and that sterling is the currency in which management reporting and decision making is based.

4.     SEGMENTAL ANALYSIS

The format of segmental reporting is based on the Group's management and internal reporting of the segments below which carry different risks and rewards and are used to make strategic decisions.  Telematics is the sale of hardware through the Group's distributors.  Trakm8 SWIFT represents the sale of the Group's full vehicle telematics service direct to customers.  Development and other services comprises bespoke professional services and mapping solutions.

The Board review the revenue results by segment and the gross margin.  Cost of sales comprise hardware costs and have been allocated to the segments based on the number of units sold.  Administration costs and assets and liabilities are not separated out by segment.

Year ended 31 March 2012	Telematics £	Trakm8 SWIFT £	Development & other services £	Unallocated £	Total £
Segment revenue	2,226,230	2,776,872	212,463	-	5,215,565
Gross profit	789,858	2,323,746	212,462	-	3,326,066
Other income	-	-	5,039	-	5,039
Depreciation & amortisation	(124,058)	(53,703)	(93,230)	-	(270,991)
Finance income	-	-	-	788	788
Finance costs	-	-	-	(5,249)	(5,249)
Income tax	-	-	-	50,666	50,666

Year ended 31 March 2011	Telematics £	Trakm8 SWIFT £	Development & other services £	Unallocated £	Total £
Segment revenue	1,394,998	2,553,876	237,390	-	4,186,264
Gross profit	489,081	2,060,747	237,390	-	2,787,218
Other income	-	-	361,542	-	361,542
Depreciation & amortisation	(127,182)	(41,668)	(95,714)	-	(264,564)
Finance income	-	-	-	979	979
Finance costs	-	-	-	(6,557)	(6,557)
Income tax	-	-	-	(117,094)	(117,094)

The Group's operations are located in the UK and the Czech Republic.  The following table provides an analysis of the Group's revenue by geography based upon location of the Group's customers. 

Year ended 31 March 2012	Telematics £	Trakm8 SWIFT £	Development & other services £	Total £
United Kingdom	1,291,621	2,767,583	98,205	4,157,409
Europe	171,772	9,289	24,258	205,319
Africa	214,928	-	90,000	304,928
Rest of the World	547,909	-	-	547,909
	2,226,230	2,866,872	122,463	5,215,565

The Group had one customer who accounted for more than 10% of the Group revenue (2011: two).

Year ended 31 March 2011	Telematics £	Trakm8 SWIFT £	Development & other services £	Total £
United Kingdom	502,235	2,543,862	114,983	3,161,080
Europe	193,874	10,014	58,450	262,338
Africa	278,361	-	47,000	325,361
Rest of the World	420,528	-	16,957	437,485
	1,394,998	2,553,876	237,390	4,186,264

5.     PROFIT FROM OPERATIONS

	2012	2011
	£	£
Profit from operations is stated after (crediting)/charging:
Other income - Government grant	(5,039)	(359,760)
Depreciation - owned fixed assets                    - assets on hire purchase	30,205 6,417	18,955 11,684
Amortisation of intangible assets	234,369	233,925
Operating lease rentals
Land and buildings	14,251	14,222
Other	31,123	11,587
Loss/(profit) on foreign exchange transactions	11,180	(3,987)
Staff costs (note 10)	1,714,323	1,517,374

	2012	2011
	£	£
Auditor's remuneration
- audit services
Parent Company and consolidation	4,680	4,500
Subsidiary audits	10,920	10,500
- tax advisory services	2,285	2,200
	====================	====================

6.     EARNINGS PER ORDINARY SHARE

The earnings per ordinary share has been calculated using the profit for the year and the weighted average number of ordinary shares in issue during the year as follows:

		2012	2011
		£	£
Earnings for the year after taxation		134,550	206,039
		========================	========================
			No.
Number of ordinary shares of 1p each		18,864,731	18,764,731
Basic weighted average number of ordinary shares of 1p each		18,820,621	18,764,731
Basic weighted average number of ordinary shares of 1p each (diluted)		19,159,446	19,180,873
		======================    ==	======================    ==
Basic profit pence per share		0.71p	1.10p
Diluted profit pence per share		0.70p	1.07p
		======================    ==	======================    ==

7.     CASH FLOWS

				2012	2011
				£	£
		Reconciliation of profit before tax to net cash flow from operating activities:
		Profit before tax		83,884	323,133
		Depreciation		36,622	30,639
		Bank and other interest charges		4,461	5,578
		Amortisation of intangible assets		234,369	233,925
		Capitalised development costs		-	(103,441)
		Share based payments		5,537	9,922
				---------------------------------	---------------------------------
		Operating cash flows before movement in working capital		364,873	499,756
		Movement on retranslation of overseas operations		(994)	998
		Movement in inventories		(150,974)	(152,406)
		Movement in trade and other receivables		110,797	(191,843)
		Movement in trade and other payables		(226,224)	375,401
				----------------------------------	----------------------------------
		Cash generated from operations		97,478	531,906
		Interest paid		(5,249)	(6,557)
		Interest received		788	979
		Income taxes received		17,828	83,504
				-----------------------------------	-----------------------------------
		Net cash inflow from operating activities		110,845	609,832
				=====================	=====================

Cash and cash equivalents comprise cash at bank, other short-term highly liquid investments with a maturity of three months or less (together presented as 'Cash and cash equivalents' on the face of the balance sheet).

The financial information set out above does not constitute statutory financial statements for the year ended 31 March 2012 or 2011 but is derived from those financial statements.  Statutory financial statements for the year ended 31 March 2011 have been delivered to the Registrar of Companies.  Statutory financial statements for the year ended 31 March 2012 were approved by the Board of Directors on 28 June 2012 and are audited.

The Company's auditors, Milsted Langdon LLP, have reported on the 2012 and 2011 financial statements and those reports were:

(i)   Not qualified;

(ii)  Did not include a reference to any matters to which the auditors drew attention to by way of emphasis without qualifying their report; and

(iii) Did not contain a statement under Section 498(2) and 498(3) of the Companies Act 2006in respect of the financial statements for the year ended 31 March 2012 and 31 March 2011.

 

END

 

 

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