Regulatory news

Trading Update

Tracsis plc

("Tracsis" or the "Company")

Trading Update

Tracsis is a leading provider of software, hardware and services for the rail, traffic data and wider transport industries, and is pleased to provide the following trading update for the year ended 31 July 2020.

Group revenues are expected to be around £48m (2019: £49.2m) and as noted previously, Covid-19 has had a negative impact of around £10m on overall revenues mainly in our Traffic & Data Services Division, though the impact was much less than originally feared. Under the circumstances, the Board is pleased with the overall revenue performance, which was assisted by a very strong performance from our Rail Technology & Services Division.

Despite the impact of Covid-19, the Group expects to report a pre IFRS 16 EBITDA margin in the region of 20% (2019: 21%). Adjusted EBITDA before the adoption of IFRS 16 and Adjusted Profit are therefore both expected to be less than the previous year (2019: £10.5m EBITDA, £9.7m Adjusted Profit). The majority of the EBITDA has been generated from our Rail Technology & Services Division given that this has largely been protected from the impact of Covid-19 with the exception of a reduction in delay-repay related revenues.

Cash balances at the end of July were circa £18m (2019: £24.1m) after having completed the acquisition of iBlocks Limited in March 2020, making all tax payments due and all payments due in respect of previous acquisitions. This once again reflects continued strong cash generation within the business and provides a strong platform for continued investment in future opportunities and growth.

Our Rail Technology & Services Division has continued to trade very well throughout the pandemic. The performance of this part of the Group is underpinned by high levels of recurring Software revenue. In addition, our Remote Condition Monitoring business has traded very strongly, as have all of our Software businesses which continue to deliver a number of major multi-year contracts. Alongside this, the Group has started delivery of the recently announced major software contract wins which include a large multi-year TRACS Enterprise contract and a large RSSB grant secured by Bellvedi to develop innovative dynamic train planning software over the next two years. iBlocks, which was acquired in March 2020, has traded well since joining the Group, and integration is ongoing and progressing well. The business continues to pursue a number of exciting opportunities in the smart ticketing space, which could be a major growth opportunity.

Despite the impact that Covid-19 has had on clients cancelling and postponing projects within the Traffic & Data Services division we have continued to secure new work during the pandemic, with the most notable sources of revenue being the continued strong performance of Compass Informatics and the delivery of a major contract within our Traffic Data business. The impact of the reduced revenue on profitability has been mitigated to an extent by not requiring casual labour at major events that have not taken place, plus other actions that have been proactively taken to quickly reduce the fixed cost base across this part of the Group.

Full Year results will be announced to the market in November 2020 and an exact date will be communicated in due course. The Group aims to be in a position to provide further guidance on the outlook for 2021 and beyond at this point in time, though is mindful that there continues to be uncertainty across the transport sector. The Board remains confident that the Group is well positioned to navigate through this period of uncertainty whilst continuing to pursue and invest in future growth opportunities.

Enquiries:

Tracsis plc | Tel: 0845 125 9162

Chris Barnes, CEO

Max Cawthra, CFO

finnCap Ltd | Tel: 020 7220 0500

Christopher Raggett/Scott Mathieson, Corporate Finance

Andrew Burdis, Corporate Broking