TIDMTRAK
RNS Number : 8289E
Trakm8 Holdings PLC
04 July 2023
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
4 July 2023
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Final Results
Trakm8 Holdings plc (AIM: TRAK), the global telematics and data
insight provider, announces its final results for the year ended 31
March 2023 (FY-2023).
FINANCIAL SUMMARY:
FY-2023 FY-2022
Group revenue GBP20.2m GBP18.1m
---------- ---------
of which, Recurring revenue(1) GBP10.5m GBP9.8m
---------- ---------
Adjusted Profit before tax(2) GBP0.3m GBP0.0m
---------- ---------
(Loss) before tax (GBP1.2m) (GBP0.1m)
---------- ---------
(Loss)/Profit after tax (GBP0.8m) GBP0.2m
---------- ---------
Net cash inflow generated from GBP4.3m GBP3.8m
operations
---------- ---------
Net debt(3) GBP5.6m GBP5.4m
---------- ---------
Adjusted basic earnings per share(2) 0.95p 0.41p
---------- ---------
Basic (loss)/earnings per share (1.57p) 0.37p
---------- ---------
(1) Recurring revenues are generated from ongoing service and
maintenance fees
(2) Before exceptional costs and share based payments
(3) Total borrowings less cash and cash equivalents. FY-2023 net
debt excludes GBP1.3m IFRS 16 lease liability.
OPERATIONAL OVERVIEW
-- 12% increase in revenues
-- 32% increase to over 348,000 connected devices in operation (FY-2022: 264,000)
-- 7% increase in recurring revenues to GBP10.5m (FY-2022: GBP9.8m)
-- 54% increase in software revenues to GBP2.1m (FY-2022: GBP1.4m)
-- Substantial contract extensions with Iceland Foods and Sainsburys
-- Significant reduction in indirect costs following strategic review
-- Successfully navigated a large number of supply chain challenges but at an increased cost
-- Continued inflationary costs pressures across all areas of operations
OUTLOOK
-- Insurance expected to be impacted by reinsurance cost and capacity issues in H1
-- H1 revenues expected to be in line with prior year but with lower operating costs
-- The Board expects full year to continue trend of improved
performance with strong second half revenues, including from a
significant software contract
- Ends -
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 1675 434 200
Jon Edwards, Chief Financial Officer www.trakm8.com
Allenby Capital Limited (Nominated Tel: +44 (0) 20 3328 5656
Adviser & Broker)
David Hart/ Vivek Bhardwaj , Corporate www.allenbycapital.com
Finance
Tony Quirke/ Joscelin Pinnington, Sales
and Corporate Broking
Notes to Editors
Trakm8 is a UK based technology leader in fleet management,
insurance telematics, connected car, and optimisation. Through IP
owned technology, the Group uses AI data analytics collected from
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 348,000 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 Direct Line
Group, Ticker, Howden, Sainsburys, Iceland Foods, AA, EON, GSF, and
Saint Gobain.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005. Trakm8 is also recognised with the LSE Green
Economy Mark.
www.trakm8.com / @Trakm8
EXECUTIVE CHAIRMAN'S STATEMENT
Results
The revenues of the business increased by 12% and posted an
adjusted profit before tax of GBP0.3m (FY-2022: GBP0.0m). Loss
before tax was GBP1.2m (FY-2022: GBP0.1m) and Loss after Tax was
GBP0.8m (FY-2022: profit GBP0.2m).
In September last year, the Company announced a restructuring to
focus on those market and products where we have been most
successful. This was largely completed during the year and once
complete will reduce our annual cash outflow by over GBP2.5m,
helping to mitigate the effect of inflationary pressures on
remaining costs. We reduced our headcount down to 121 which did not
impact our rate of order entry overall and resulted in a profitable
second half to the year.
Connections grew by 32% to 348,000 (FY-2022: 264,000).
Telematics for insurance/automotive connections increased by 45%.
At the year-end, we had 279,000 insurance/automotive connections
(FY-2022: 193,000). The total number of fleet management
connections decreased by 3% over the year to 69,000 (FY-2022:
71,000). Recurring service revenues increased by 7% to GBP10.5m
(FY-2022: GBP9.8m).
The impact of the war in Ukraine on inflation and COVID induced
component shortages have been widely reported. Trakm8 navigated
through these, avoiding any missed customer deliveries and managed
to develop revised devices to ensure continued supply where
necessary. This did however negatively impact direct costs.
It was pleasing to maintain strong cash generation in the
business with a cash flow from operations of GBP4.3m (FY-2022:
GBP3.8m). The Company paid down the final GBP0.9m of HMRC deferred
payments on VAT/PAYE/NI. This resulted in a free cash flow of
GBP0.9m (FY-2022: GBP0.6m) and net debt, excluding IFRS16 lease
liabilities, increased by GBP0.3m to GBP5.6m. The Group had GBP1.1m
cash on hand and an undrawn overdraft facility of GBP0.5m.
The Group issued unsecured convertible loan notes amounting to
GBP1.58m with a repayment or conversion in September 2025. The
Group also extended its loan facilities with HSBC to 31 July 2024
maintaining existing terms.
Overheads excluding exceptional costs increased by 16% to
GBP11.9m with the restructuring and cost saving completed mid way
through the year. Headcount reduced by 24% during the year with
underlying overall payroll costs 16% lower than at the end of the
previous year despite significant salary inflation.
Trakm8 has also made good progress with the process of Science
Based Targets with the goal of achieving net zero emissions by
2050.
A good number of contract wins and renewals were secured with
both fleet and insurance clients showing our commitment to long
term customer relationships.
Research and development ('R&D')
Trakm8 has maintained a significant level of investment in
R&D for another year but following a period of significant
investment has been able to reduce the amount invested going
forward. The Board believes that this new lower level of investment
is necessary and sufficient to retain a portfolio of market-leading
technology. Over time as revenues grow, we expect that this
investment as a proportion of revenues will further decline. Trakm8
continues to focus on owning the intellectual property ('IP') we
use in our solutions, and we see this as one of our key competitive
advantages. Telematics systems are complex; but because we own all
the elements that encompass a solution (with the exception of the
mobile networks) we have the ability to understand and resolve
problems more easily than our competitors.
The R&D investment has concentrated on the update of all our
devices to the most modern and most available components,
finalisation of a multi-camera solution, development of the feature
set in Insight particularly for our two major optimisation clients,
and further development of our Insurance Broker platform. As
identified in previous years, the requirement to do more for less
cost remains a key strategy as this widens the opportunity to
expand the rate of growth as the return on their investment for our
customers improves.
ESG
The Group provides solutions that significantly improve the
carbon footprint of clients' operations through improved
efficiencies and reduced risk costs. Trakm8 also provides device
exchange programmes to recycle hardware thereby reducing the need
to make new ones and reducing the cost of telematics to our
clients. We also provide business optimisation consultancy for
clients to assess opportunities for further reducing their carbon
footprint.
Trakm8 is also committed to Science Based Target initiative
(SBTi) with the objective to reduce our Scope 1 and Scope 2
emissions and reach Net Zero by 2025. All our company cars are now
fully electric and we are analysing all our uses of energy to
minimise our impact on the environment through further internal
projects. We will also work with our supply chain to try to
minimise our sourcing from suppliers not committed to reducing
their carbon impact.
Governance
The Group has adopted the Quoted Companies Alliance's (QCA)
Corporate Governance Code for small and mid-size quoted companies,
which the Board considers the most appropriate for the size and
structure of the Group. More information can be found in the
Governance Report section of this report and our website.
Please see
https://www.trakm8.com/investor-relations/corporate-governance for
our full compliance statement.
Dividend
The Group does not propose to recommend a dividend for the year
at the forthcoming AGM. However, the Board will continue to review
its dividend policy in light of future results and investment
requirements.
People
The number of people Trakm8 employs has reduced further during
FY-2023 with reductions across the business. In total, our staff
numbers have reduced by 24% over the year.
Trakm8 has an exceptionally talented team and I would like to
thank everyone for their hard work, dedication and contribution to
the ongoing success of the business.
Outlook
In the trading update in April this year, we advised the market
that there had been a significant impact on the insurance market
with increased re-insurance costs and some insurance capacity being
removed from the market. We expected that this would impact
revenues for the first quarter. This has turned out to be correct
and we now expect that this will continue to significantly impact
the second quarter of the financial year.
We expect that Group revenues in the first half of the year will
be broadly in line with last year but with much lower operating
costs.
We secured several new Insurance contracts this year and last.
The capacity constraints are expected to diminish in the last
calendar quarter of 2023 and therefore the Insurance activity is
expected to be strong in the second half of the year. As with last
year, we expect that trading will be significantly loaded on the
second half of the financial year when we also expect to secure a
significant software contract. The Board expects that FY2024 will
continue the trend of recent years with improving operational and
financial results.
John Watkins
EXECUTIVE CHAIRMAN
3 July 2023
FINANCIAL REVIEW
TRADING RESULTS
2023 2022 Change
Group Revenue (GBP'000) 20,197 18,111 +12%
-------- ------- ---------
of which, Recurring Revenue
(GBP'000) 10,466 9,806 +7%
-------- ------- ---------
(Loss) before tax (GBP'000) (1,243) (122) -919%
-------- ------- ---------
(Loss)/Profit after tax
(GBP'000) (783) 187 -512%
-------- ------- ---------
Adjusted Profit before
tax(1) (GBP'000) 306 3 +10,100%
-------- ------- ---------
Basic (Loss)/earnings per
share (p) (1.57) 0.37 -516%
-------- ------- ---------
Adjusted basic earnings
per share (p) 0.95 0.41 +137%
-------- ------- ---------
(1) Before exceptional costs and share based payments
Revenue
Group revenue increased by 12% to GBP20.2m (FY-2022: GBP18.1m)
with strong second half revenues of GBP11.2m versus first half
revenues of GBP9.0m.
Insurance and Automotive revenues grew by 26% to GBP8.7m
(FY-2022: GBP6.9m) and benefitted from a full year of shipments to
new customers launched late last year, driving both increased
device sales and associated service and maintenance fees. The
latter part of the period saw further contract wins and extensions
adding additional customers to increase the diversity and size of
our Insurance client base.
Fleet and Optimisation revenues increased to GBP11.4m (FY-2022:
GBP11.3m) inclusive of GBP1.9m of software sales (FY-2022: GBP1.2m)
following strong contract extensions in the second half of the
period with both Iceland and Sainsburys. This resulted in second
half revenues increasing to GBP6.57m versus GBP4.83m for the first
six months. Recurring revenues remained strong at GBP7.0m (FY-2022:
GBP6.9m) with slightly higher attrition in device connections being
offset by increased service fees per device as we continue to add
features and benefits to our solutions to both new and existing
customers alike.
Loss before tax
The Group reported a loss before tax of GBP1.2m (FY2022:
GBP0.1m). Gross margin value for the year, inclusive of exceptional
cost of sales, increased to GBP12.5m (FY-2022: GBP11.1m) and
percentages were slightly increased to 61.8% (FY-2022: 61.3%). The
ongoing impact of COVID continued to drive significant cost
pressures in material procurement during the first half of the
year, including GBP0.2m of exceptional costs as we maintained
continuity of supply to our customers. This was offset in the
second half with significant high margin software sales and the
supply of materials returning to a less distressed state and
therefore lower exceptional costs of just GBP0.05m.
Whilst total administration costs increased during the year, we
did complete a change in strategy as announced in September 2022
which significantly reduced operational costs ensuring a reduced
cost base for future periods. This coupled with improved, higher
margin trading resulted in a profit before tax of GBP1.2m in the
second half of the year as expected, compared to a first half loss
before tax of GBP2.4m. This was despite inflationary pressures in
our remaining costs.
Adjusted Profit before tax
The Group maintained the progress of the prior year with an
adjusted profit of GBP0.3m (FY-2022: GBP0.0m). Improved gross
margins were offset by inflationary pressures and increased costs
with the most significant increases being Real Estate costs,
Interest and Amortisation of GBP0.2m, GBP0.1m and GBP0.2m
respectively.
The reduction in headcount did result in monthly payroll spend
reducing by 28% helping reduce second half expensed staff costs by
GBP0.6m.
Exceptional Costs
Exceptional costs totalled GBP1.5m (FY-2022: GBP0.5m) and were
dominated by the costs of our restructuring efforts as previously
discussed. These costs include staff costs as our head count
reduced from the beginning of the period by 24% to 121 along with
associated professional fees incurred in executing our plan.
GBP0.3m of premium material costs were incurred to ensure delivery
of products to our customers. Other COVID costs include a contract
write down as termination for a Fleet customer's contracts was
agreed due to their trading performance during and since the
pandemic.
Balance Sheet
2023 2022
GBP'000 GBP'000
-------- --------
Non-Current Assets 26,200 25,874
-------- --------
Net Current Assets 1,582 1,704
-------- --------
Non-Current Liabilities 8,653 7,702
-------- --------
Net Assets 19,129 19,876
-------- --------
Net Assets decreased by GBP0.7m to GBP19.1m (FY-2022: GBP19.9m)
reflecting the loss for the year, after deducting the IFRS2 Share
based payments charges.
Non-current assets increased by GBP0.3m to GBP26.2m (FY-2022:
GBP25.9m). This is due to a GBP0.3m reduction in right of use
assets due to depreciation offset by a GBP0.3m increase in
Intangible assets and GBP0.3m increase in Property, plant and
equipment. Intangible assets increased due to the continued, albeit
reduced, investment in development in both software and hardware
with capitalised development costs in the year totaling GBP2.7m
(FY-2022: GBP2.9m), offset by amortisation of GBP2.3m (FY-2022:
GBP2.1m).
Non-Current Liabilities increased during the year with the issue
of a new GBP1.58m convertible loan note which helped finance our
change of strategy and restructure. This was offset by a full year
of capital repayments to both HSBC and Maven following their
recommencement in the second half of FY-2022.
Cash Flow
2023 2022
GBP'000 GBP'000
-------- --------
Net Cash generated from
operations 4,314 3,810
-------- --------
Investing activities (3,419) (3,254)
-------- --------
Free Cash Flow(1) 895 556
-------- --------
Financing activities (780) (1,992)
-------- --------
Increase/(Decrease)
in Cash in Year 115 (1,366)
-------- --------
Net Debt(2) 5,618 5,395
-------- --------
(1) Cash generated from operating activities less cash used in
investing activities (excluding cash flows related to
acquisitions)
(2) Total borrowings less cash and cash equivalents. FY-2023 net
debt excludes GBP1.3m IFRS 16 lease liability.
Cash from operating activities increased by GBP0.5m to GBP4.3m
(FY-2022: GBP3.8m) with improved working capital management. This
was despite the final repayment of GBP0.9m to HMRC under the time
to pay agreement negotiated at the end of FY-2021. Cash from
operating activities also included R&D tax credit cash receipts
of GBP0.7m (FY-2022: GBP0.7m) which reflects the Group's continued
investment in cutting edge development.
Free cash inflow of GBP0.9m (FY-2022: GBP0.6m) is due to the Net
Cash generated from operating activities as detailed above, offset
by cash outflows from investing activities which increased by
GBP0.2m to GBP3.4m (FY-2022: GBP3.2m).
Financing activities was an outflow of GBP0.8m (FY-2022:
GBP2.0m). A full year of repayments in relation to our agreements
with HSBC and Maven drove outflows of GBP1.1m (FY2022: GBP0.7m) but
new unsecured convertible loan notes were issued totaling GBP1.58m
which assisted the financing of our restructuring activities.
Net Debt
Net debt excluding IFRS 16 lease liability of GBP1.3m (FY-2022
GBP1.6m) increased by GBP0.3m to GBP5.6m (FY-2022: GBP5.4m). Cash
balances total GBP1.1m (FY-2022: GBP1.0m) and total borrowings
including IFRS16 lease liability of GBP1.3m totals GBP6.9m
(FY-2022: GBP6.9m). Borrowing comprised GBP4.1m (FY-2022: GBP4.9m)
term loan with HSBC, a GBP0.8m (FY-2022: GBP1.2m) term loan with
MEIF WM Debt LP, Unsecured Convertible Loan Notes of GBP1.6m
(FY-2022: GBPnil) and GBP1.6m (FY-2022: GBP2.0m) of obligations
under Right-to-use lease liabilities. In addition, at the year end,
the Group had a GBP0.5m unused overdraft facility with HSBC.
Consolidated Statement of Comprehensive Income For The Year Ended 31
March 2023
Note Year ended 31 Year ended 31 March
March 2023 2022
GBP'000 GBP'000
REVENUE 4 20,197 18,111
Cost of sales (7,445) (7,004)
Exceptional cost of sales (261) -
------------------ ------------------------
(7,706) (7,004)
Gross profit 12,491 11,107
Other income 5 16 13
Administrative expenses excluding exceptional
costs (11,860) (10,193)
Exceptional administrative costs 7 (1,272) (568)
------------------ ------------------------
Total administrative costs (13,132) (10,761)
OPERATING PROFIT/(LOSS) 6 (625) 359
Finance income 50 67
Finance costs 8 (668) (548)
------------------ ------------------------
LOSS BEFORE TAXATION (1,243) (122)
Corporation tax 460 309
PROFIT/(LOSS) FOR THE YEAR (783) 187
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified
to profit or loss:
Exchange differences on translation of
foreign operations 9 10
------------------ ------------------------
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) 9 10
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR
THE YEAR ATTRIBUTABLE TO OWNERS OF THE
PARENT (774) 197
================== ========================
LOSS BEFORE TAXATION (1,243) (122)
-------------- ------------------ ------------------------
Exceptional cost of sales 261 -
Exceptional administrative costs 1,272 568
IFRS2 Share based payments charge 16 (443)
-------------- ------------------ ------------------------
ADJUSTED PROFIT/(LOSS) BEFORE TAX 306 3
PROFIT/(LOSS) PER ORDINARY SHARE (PENCE)
ATTRIBUTABLE TO OWNERS OF THE PARENT
Basic (1.57p) 0.37p
Diluted (1.57p) 0.37p
The results all relate to continuing operations.
Consolidated Statement of Changes in Equity For The Year Ended 31 March 2023
---------------------------------------------------------------------------------------------------------------------------------------------------------
Share Share Merger Translation Treasury Convertible Retained Total
capital premium reserve reserve reserve loan reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1
April 2021 500 14,691 1,138 193 (4) - 3,604 20,122
Comprehensive loss
Income for the year - - - - - 187 187
Other comprehensive
loss
Exchange differences
on translation of
overseas operations - - - 10 - - - 10
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Total comprehensive
income - - - 10 - - 187 197
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Transactions with
owners
IFRS2 Share-based
payments release - - - - - - (443) (443)
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Transactions with
owners - - - - - - (443) (443)
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Balance as at 1
April 2022 500 14,691 1,138 203 (4) - 3,348 19,876
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Comprehensive income
Loss for the year - - - - - - (783) (783)
Other comprehensive
income
Exchange differences
on translation of
overseas operations - - - 9 - - - 9
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Total comprehensive
loss - - - 9 - - (783) (774)
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Transactions with
owners
IFRS2 Share based
payments charge - - - - - - 16 16
Convertible Loan - - - - - 11 - 11
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Transactions with
owners - - - - - 11 16 27
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Balance as at 31
March 2023 500 14,691 1,138 212 (4) 11 2,581 19,129
---------- --------------- ------------ ------------------ -------------- ------------- -------------- -------------
Consolidated Statement of Financial Position As At 31 March 2023
---------------------------------------------------------------------------------------------------
Note As at 31 As at
March 2023 31 March
2022
ASSETS GBP'000 GBP'000
NON CURRENT ASSETS
Intangible assets 10 23,382 23,012
Property, plant and equipment 1,103 803
Right of use assets 1,711 2,032
Amounts receivable under finance leases 4 27
26,200 25,874
--------------------- --------------------
CURRENT ASSETS
Inventories 2,426 1,322
Trade and other receivables 7,948 7,944
Corporation tax receivable 856 709
Cash and cash equivalents 1,119 1,004
12,349 10,979
--------------------- --------------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (9,196) (7,521)
Borrowings (1,031) (1,115)
Right of use liability (466) (612)
Provisions (74) (27)
(10,767) (9,275)
--------------------- --------------------
CURRENT ASSETS LESS CURRENT LIABILITIES 1,582 1,704
TOTAL ASSETS LESS CURRENT LIABILITIES 27,782 27,578
NON CURRENT LIABILITIES
Trade and other payables (828) (626)
Borrowings (5,435) (4,855)
Right of use liability (1,113) (1,367)
Provisions (166) (112)
Deferred income tax liability (1,111) (742)
(8,653) (7,702)
--------------------- --------------------
NET ASSETS 19,129 19,876
--------------------- --------------------
EQUITY
Share capital 11 500 500
Share premium 14,691 14,691
Merger reserve 1,138 1,138
Translation reserve 212 203
Treasury reserve (4) (4)
Convertible loan reserve 11 -
Retained earnings 2,581 3,348
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT 19,129 19,876
--------------------- --------------------
Consolidated Statement of Cash Flows For The Year Ended 31
March 2023
-------------------------------------------------------------------------------------
Notes Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
NET CASH GENERATED FROM OPERATING ACTIVITIES 12 4,314 3,810
------------------ ---------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment (749) (420)
Proceeds from sale of property, plant
and equipment - 125
Purchases of software (12) (48)
Capitalised development costs (2,658) (2,911)
NET CASH USED IN INVESTING ACTIVITIES (3,419) (3,254)
------------------ ---------------------
CASH FLOWS FROM FINANCING ACTIVITIES
New Convertible loan note 1,580 -
Loan arrangement fees (36) (5)
Repayment of loans (1,095) (743)
Repayment of obligations under lease
agreements (619) (674)
Interest paid (610) (500)
NET CASH USED IN FINANCING ACTIVITIES (780) (1,922)
------------------ ---------------------
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS 115 (1,366)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 1,004 2,370
------------------ ---------------------
CASH AND CASH EQUIVALENTS AT OF
YEAR 1,119 1,004
------------------ ---------------------
Notes to the Consolidated Financial Statements
1 GENERAL INFORMATION
Trakm8 Holdings PLC ("Company") and its subsidiaries (together
the "Group") develop, manufacture, distribute and sell telematics
devices and services and optimisation solutions.
Trakm8 Holdings PLC is a public limited company incorporated
in the United Kingdom (registration number 05452547). The
Company is domiciled in the United Kingdom and its registered
office address is 4 Roman Park, Roman Way, Coleshill, West
Midlands, B46 1HG. The Company's Ordinary shares are traded
on the AIM market of the London Stock Exchange. The Company
is registered in England and is limited by shares.
The Group's principal activity is the development, manufacture,
marketing and distribution of vehicle telematics equipment
and services and optimisation solutions. The Company's principal
activity is to act as a holding company for its subsidiaries.
The consolidated financial statements are presented in Sterling
and all values are rounded to the nearest thousand (GBP'000)
except where otherwise indicated.
2 PREPARATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE
WITH IFRS
The Group's financial statements have been prepared in accordance
with UK-adopted International Financial Reporting Standards
("IFRS") and IFRS Interpretations Committee ("IFRS IC") interpretations
and with those parts of the Companies Act 2006 applicable
to companies reporting under IFRS.
3 BASIS OF PREPARATION
The audited financial information included in this preliminary
results announcement for the year ended 31 March 2023 and audited
information for the year ended 31 March 2022 does not comprise
statutory accounts within the meaning of section 434 Companies
Act 2006. The information has been extracted from the audited
statutory financial statements for the year ended 31 March 2023
which will be delivered to the Registrar of Companies in due
course. Statutory financial statements for the year ended 31
March 2022 were approved by the Board of directors and have been
delivered to the Registrar of Companies. The report of the independent
auditors for the year ended 31 March 2023 and 2022 respectively
on these financial statements were unqualified and did not include
a statement under section 498 of the Companies Act 2006.
These financial statements are prepared on a going concern basis
after assessing the principal risks. To monitor the future cash
position the Group produces projections of its working capital
and long term funding requirements covering 3 months in detail
and 1 and 2 year projections. These projections are updated on
a regular basis to reflect current trading and latest information
on future trading. The Group does have a substantial recurring
revenue base that accounts for 52% of revenues that provide a
strong underlying base.
The Group extended its debt facilities with HSBC in March 2023
in line with the existing arrangement inclusive of quarterly
covenant tests of both Leverage and Debt Service. In addition
the HMRC arrangement to repay GBP1.7m of VAT and PAYE accrued
during the COVID-19 pandemic was settled during the year. During
the year a new Convertible Loan note with existing shareholders
was secured totalling GBP1.58m, helping to finance a significant
restructure following a review of the company strategy.
At the year end the Group has cash balances of GBP1,119,000 and
an unused overdraft facility of GBP500,000. The Groups latest
projections for twelve months from the date of signing the financial
statements show that the Group has sufficient cash resources
and will meet its covenants with headroom for the foreseeable
future. The Group has completed adverse sensitivities against
its current projections to reflect potential external risks where
the wider economic climate reduces demand, across both Insurance
and Automotive device sales and Fleet new business contracts,
as well as potential increases in material costs incurred.
To assess the potential impact of these, a 10% reduction in Fleet
new business contract value and Insurance shipments and a 10%
increase in material costs were modelled against the Groups current
forecast. Despite the cumulative impact of these changes the
Group still maintains compliance with the covenants for the coming
twelve months without the inclusion of any mitigations that could
and would be implemented such as price increases and savings
in both direct and indirect costs.
On this basis the Directors have a reasonable expectation that
the Group will have adequate financial resources to continue
in operation for the foreseeable future and therefore it is appropriate
to adopt the going concern basis of accounting in preparing the
financial statements.
4 SEGMENTAL ANALYSIS
The chief operating decision maker ("CODM") is identified as the Board. It continues to define
all the Group's trading under the single Integrated Telematics Technology segment and therefore
review the results of the group as a whole. Consequently all of the Group's revenue, expenses,
assets and liabilities are in respect of one Integrated Telematics Technology segment.
The Board as the CODM review the revenue streams of Integrated Fleet, Optimisation, Insurance
and Automotive Solutions ("Solutions") as part of their internal reporting. Solutions represents
the sale of the Group's full vehicle telematics and optimisation services, engineering services,
professional services and mapping solutions to customers.
A breakdown of revenues within these streams
are as follows:
Year ended 31 March 2023 Year ended 31 March 2022
GBP'000 GBP'000
Solutions: 20,197 18,111
Fleet and optimisation 11,475 11,217
Insurance and automotive 8,722 6,894
------------------------- -------------------------
A geographical analysis of revenue by
destination is as follows:
Year ended 31 March 2023 Year ended 31 March 2022
GBP'000 GBP'000
United Kingdom 19,769 17,784
North America - -
Norway - -
Rest of Europe 397 272
Rest of World 31 55
20,197 18,111
------------------------- -------------------------
5 OTHER INCOME
Year ended 31 March 2023 Year ended 31 March 2022
GBP'000 GBP'000
Grant income 16 13
16 13
------------------------- -------------------------
6 OPERATING (LOSS)/PROFIT
The following items have been included in arriving at operating
(loss)/profit:
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Depreciation
- owned assets (see note 15) 227 176
- right of use assets (see note
16) 540 630
Amortisation of intangible assets
- owned assets (see note 14) 2,300 2,134
Other operating lease rentals 96 34
Research and development expenditure 395 669
Loss on disposal of property
plant and equipment 222 263
Loss on foreign exchange transactions 32 22
Staff costs (note 12) 5,693 5,187
Exceptional cost of sales (see 261 -
note 9)
Exceptional administrative costs
(see note 9) 1,272 568
Auditors' remuneration
- Fees payable to the Company's auditors for
the audit of the parent
company and consolidated financial
statements 100 77
Adjusted profit before tax is monitored by the
Board and measured as follows:
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Loss before tax (1,243) (122)
Exceptional costs (note 9) 1,533 568
Share based payments 16 (443)
Adjusted profit before tax 306 3
------------------- -------------------
7 EXCEPTIONAL COSTS
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Exceptional costs of sales
Covid-19 - component acquisition 261 -
261 -
Exceptional administrative costs
Covid-19 - other costs 234 646
Integration & restructuring costs 1,038 107
Furlough grant income - (185)
Total exceptional administrative
costs 1,272 568
Total exceptional costs 1,533 568
-------------------- --------------------
During the year the Group completed a review of its strategy and
significantly reduced its sales and marketing resources,
engineering investment and associated support functions. In
addition, the Group completed a refresh of it's hardware platforms
and narrowed its product range accordingly. Costs were incurred
during the period through a reduction in headcount, inventory write
down, non-refundable marketing event deposits and associated
professional service costs.
In the prior year, restructuring costs were also incurred as a
result of headcount reduction.
The Group incurred exceptional costs in the current and prior
financial year relating to the COVID-19 pandemic. These costs
include the increased cost of temporarily buying inventory from
auxiliary markets to ensure continuity of supply of key components
which were in constraint due to supply chain issues caused by the
pandemic. In addition, the group terminated a contract with a
customer affected by ongoing issues following the pandemic.
In the prior year, the Group received furlough grant income that
relates to income received from the Coronavirus Job Retention
Scheme for employees furloughed as a result of Covid-19.
8 FINANCE COSTS
Year ended Year ended
31 March 31 March
2023 2022
GBP'000 GBP'000
Interest on loans 510 388
Amortisation of debt issue costs 58 48
Interest on lease liabilities 100 112
668 548
--------------------------- ------------------------
9 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance
with IAS 33 using the (loss)/profit for the year and the weighted
average number of Ordinary shares in issue during the year as
follows:
Year ended Year ended
31 March 2023 31 March 2022
GBP'000 GBP'000
(Loss)/Profit for the year after
taxation (783) 187
Exceptional administrative costs 1,533 568
Share based payments 16 (443)
Tax effect of adjustments (291) (108)
Adjusted profit for the year after
taxation 475 204
----------------------------- ----------------------------
No. No.
Number of Ordinary shares of 1p each
at 31 March 50,004,002 50,004,002
Basic weighted average number of Ordinary
shares of 1p each 50,004,002 50,004,002
Diluted weighted average number of
Ordinary shares of 1p each 50,004,002 50,056,538
Basic (loss)/profit per share (1.57p) 0.37p
Diluted (loss)/profit per share (1.57p) 0.37p
Adjust for effects of:
Exceptional costs 2.48p 0.92p
Share based payments 0.03p (0.89p)
Adjusted basic earnings per share 0.95p 0.41p
Adjusted diluted earnings per share 0.95p 0.41p
10 INTANGIBLE
ASSETS
Goodwill Intellectual Customer Development Software Total
property relationships costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
As at 1 April
2021 10,417 1,920 100 19,242 1,759 33,438
Additions -
Internal
developments - - - 2,521 46 2,567
Additions -
External
purchases - - - 390 2 392
---------------- ----------------- ----------------- ------------------ --------------- ---------
As at 31 March
2022 10,417 1,920 100 22,153 1,807 36,397
Additions -
Internal
developments - - - 2,320 - 2,320
Additions -
External
purchases - - - 338 12 350
As at 31 March
2023 10,417 1,920 100 24,811 1,819 39,067
---------------- ----------------- ----------------- ------------------ --------------- ---------
AMORTISATION
As at 1 April
2021 - 1,920 100 7,974 1,257 11,251
Charge for year - - - 1,943 191 2,134
---------------- ----------------- ----------------- ------------------ --------------- ---------
As at 31 March
2022 - 1,920 100 9,917 1,448 13,385
Charge for year - - - 2,125 175 2,300
As at 31 March
2023 - 1,920 100 12,042 1,623 15,685
---------------- ----------------- ----------------- ------------------ --------------- ---------
NET BOOK AMOUNT
As at 31 March
2023 10,417 - - 12,769 196 23,382
---------------- ----------------- ----------------- ------------------ --------------- ---------
As at 31 March
2022 10,417 - - 12,236 359 23,012
---------------- ----------------- ----------------- ------------------ --------------- ---------
As at 1 April
2021 10,417 - - 11,268 502 22,187
---------------- ----------------- ----------------- ------------------ --------------- ---------
Goodwill arose in relation to the Group's acquisition of 100%
of the share capital of Roadsense Technology Limited (Roadsense),
Route Monkey Limited (Route Monkey), Box Telematics Limited
(Box) and DCS Systems Limited (DCS).
Since the acquisition Roadsense, Box, Route Monkey and DCS have
been incorporated into the Trakm8 business. These businesses
have therefore been assessed as one cash generating unit for
an impairment test on Goodwill.
The impairment review has been performed using a value in use
calculation.
The impairment review has been based on the Group's budgets
for FY-2024 which have been reviewed and approved by the Board
and projections for FY-2025. Forecasts for the subsequent 3
years have been produced based on 7% (a prudent growth rate
for the telematics market) growth rates in revenue and EBITDA
in each year. A net present value has been calculated using
a pre tax discount rate of 9% (Group's weighted average cost
of capital) which is deemed to be a reasonable rate taking account
of the Group's cost of funds and an extra element for risk.
A terminal value has been calculated and included in the discounted
cash flow forecasts used within the model to fully support the
goodwill value. A growth rate of 2% was used to determine the
terminal value.
The forecast show sufficient headroom of cash flow above the
net assets value when we have performed sensitivity analysis.
1. An increase in the discount rate
to 13% shows headroom of GBP8m.
2. A decrease in the growth rate to
3% shows headroom of GBP15m.
3. A decrease in the terminal growth rate
to 1% shows headroom of GBP20m.
In addition, sensitivity analysis has been undertaken and indicates
that an impairment will be triggered by:
1. Decrease in annual growth rates from 7% to 3% and decrease
in terminal growth rate from 2% to 1% and increase the discount
rate from 10% to 14%.
Or triggered by:
1. Decrease in net cash generated from operating activities
for FY-2024 and FY-2025 of 14%.
Amortisation expenses of GBP2,300,000 (2022: GBP2,134,000) have
been charged to Administrative expenses in the Consolidated
Statement of Comprehensive Income.
11 SHARE CAPITAL
As at 31 March As at 31 March
2023 2022
No's GBP'000 No's GBP'000
Authorised: '000's '000's
Ordinary shares
of 1p each 200,000 2,000 200,000 2,000
Allotted, issued and fully
paid:
Ordinary shares
of 1p each 50,004 500 50,004 500
The Company currently holds 29,000 Ordinary shares in treasury
representing 0.06% (2022: 0.06%) of the Company's issued share
capital. The number of 1 pence Ordinary shares that the Company
has in issue less the total number of Treasury shares is 49,975,002.
12 CASH GENERATED FROM
OPERATIONS
As at 31 As at 31
March 2023 March 2022
GBP'000 GBP'000
Loss before tax (1,243) (122)
Depreciation 767 806
(Profit)/Loss on disposal
of fixed assets 222 263
Net bank and other interest 618 481
Exceptional costs 1,533 568
Amortisation of intangible
assets 2,300 2,134
Exchange movement 9 10
Share based payments 16 (443)
---------------------- -----------------------
Operating cash flows before movement
in working capital 4,222 3,697
Movement in inventories (1,104) 87
Movement in trade and other receivables 19 (1,242)
Movement in trade and
other payables 1,877 1,184
Movement in provisions 101 (78)
---------------------- -----------------------
Cash generated from operations before
exceptional costs 5,115 3,648
Cash outflow from exceptional
costs (1,533) (568)
---------------------- -----------------------
Cash generated from operations 3,582 3,080
Interest received 50 67
Income taxes
received 682 663
----------------------
Net cash inflow from operating
activities 4,314 3,810
---------------------- -----------------------
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END
FR SSMFADEDSEIW
(END) Dow Jones Newswires
July 04, 2023 02:00 ET (06:00 GMT)
Grafico Azioni Trakm8 (LSE:TRAK)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Trakm8 (LSE:TRAK)
Storico
Da Apr 2023 a Apr 2024
