("Tracsis" or the "Group")
Tracsis plc, a leading provider of software and services for the traffic data and transportation industry, is pleased to provide the following trading update for the six months ended 31 January 2017.
Group revenues for the six months to 31 January 2017 were c. £15.5m (2016: £13.1m), and EBITDA is expected to be slightly ahead of the previous period (2016: £3.2m) as is Adjusted Pre Tax Profit (2016: £2.9m*).
Group cash balances remained strong at c. £12.5m, after paying aggregate contingent consideration in respect of the SEP and On-trac acquisitions of £1.1m. The business continues to be debt free.
*Comparative figures restated for the disposal of Tracsis Traffic Data Pty Limited that took place 22nd December 2015.
Rail Technology & Services
On-trac, which was acquired in December 2015 performed well in the period and made a good contribution towards overall Group performance, with high levels of recurring revenue. The On-trac pipeline remains strong with new products garnering significant interest with our major rail customers.
We were also pleased to complete delivery of our North American Remote Condition Monitoring order which was announced in August 2016, and continue to target further sales in North America both with this client and others to complement our strong UK position in this market.
The Group's software and consultancy offering continued to benefit from high renewal rates for existing products. Due to longer sales cycles associated with higher value products combined with changes in the Department for Transport's franchise bid timetable, some sales anticipated to take place in H1 are now expected to take place in H2 which is supported by our current pipeline.
Traffic & Data Services
SEP, which was acquired in September 2015 continues to trade well and as noted previously, the majority of the revenue and profit from this business will be delivered over the summer months. Due to this seasonality, and as evidenced by last year's trading, the second half of the financial year is expected to be significantly stronger than the first half.
In addition, the Traffic & Data Services division is trading well albeit within competitive market conditions, which has led to increased price competition and associated gross margin pressure. Given the Group has grown rapidly to become the UK's largest transport data collection company, management has taken steps to maintain operational efficiency through an investment of technology and an improvement of internal processes which has led to an associated reduction of costs. These changes ensure the Group is well positioned for the future.
Due to the timing of software sales that are anticipated and the high seasonality inherent in some parts of the Group, the second half of the financial year is expected to be significantly stronger than the first half.
The outcome for the full year remains subject to the timely conversion of new sales for our various software products and services, supported by the improvement in gross margin initiatives that commenced at the start of the financial year. Delivery of these goals will result in revenues and profits being in line with current expectations and we will provide a further update with our Interim Results.
The Group's strategy of growth via organic and acquisitive growth remains unchanged and so too do the key market drivers within the traffic and transport markets which remain positive.
The Group's Interim results will be announced on or around 23 March 2017.
For more information please contact:
John McArthur/Max Cawthra, Tracsis plc
Tel: 0845 125 9162
Dominic Emery/Matt Lewis, Investec Bank plc
Tel: 020 7597 4000
Rebecca Sanders-Hewett / Sarah Fabietti-Dallison / Sam Modlin, Redleaf Communications
Tel: 0207 382 4730
The information communicated in this announcement is inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.