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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tracsis Plc | LSE:TRCS | London | Ordinary Share | GB00B28HSF71 | ORD 0.4P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 850.00 | 840.00 | 860.00 | 850.00 | 850.00 | 850.00 | 9,118 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Prepackaged Software | 82.02M | 6.81M | 0.2277 | 37.33 | 254.06M |
From Apr 2019 to Apr 2024
TIDMTRCS
RNS Number : 2547A
Tracsis PLC
23 March 2017
Date: 23 March 2017 On behalf Tracsis plc of: Embargoed until 0700hrs
Tracsis plc
('Tracsis', 'the Company' or 'the Group')
Interim results for the six months ended 31 January 2017
Tracsis plc (AIM: TRCS), a leading provider of software and technology led products and services for the traffic data and transportation industry, is pleased to announce its interim results for the six months ended 31 January 2017.
Financial Highlights:
-- Revenue increased 20% to GBP15.6m (2016: GBP13.1m(1) ) -- Adjusted EBITDA increased 11% to GBP3.5m (2016: GBP3.2m(1) ) -- Adjusted Pre-tax Profit(2) increased 11% to GBP3.1m(2) (2016: GBP2.8m(1) ) -- Statutory Pre-tax Profit increased 10% to GBP1.8m (2016: GBP1.6m(1) ) -- Cash balances at 31 January of GBP12.7m (31 July 2016: GBP11.4m, 31 January 2016: GBP8.0m) -- The business remains debt free with excellent cash flow and cash conversion -- Proposed interim dividend increased by 20% to 0.6p per share (2016: 0.5p)
Operational Highlights:
-- Recently acquired businesses performing well and ahead of expectations
-- Completion of significant operational improvements and cost reduction in our Traffic and Data division
-- North American remote condition monitoring order announced August 2016 successfully delivered, and provides a platform for further opportunities
-- Post period end: Successful renewal and expansion of major data capture contract with a value up to GBP4.8m over four years
(1) Excluding Tracsis Traffic Data Australia Pty which was disposed of in December 2015
(2) Profit before tax (GBP1.8m), plus amortisation of intangible assets (GBP0.8m), share based payments and exceptional items (GBP0.5m)
John McArthur, Chief Executive Officer, commented:
"This was a period of further growth with revenues and profits ahead of the previous year and a good contribution from the businesses we acquired in 2015. The second half of our financial year is expected to be significantly stronger than the first due to natural seasonality within the Group combined with anticipated new software sales.
Tracsis continues to evolve and grow and the past six months have seen us undertake some significant technology, people and process improvements to accommodate a larger, more diverse business. The results of our efforts put Tracsis on stronger, more integrated footing for the future."
Enquiries:
John McArthur / Max Cawthra, Tel: 0845 125 9162 Tracsis plc Dominic Emery / Matt Lewis, Tel: 020 7597 4000 Investec Bank plc Rebecca Sanders Hewett / Tel: 020 7382 4730 Sam Modlin, Redleaf PR Tracsis@redleafpr.com
The information communicated in this announcement is inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014.
Chairman & Chief Executive Officer's Report
Introduction
The Group has reported a further period of growth in the period. Revenue performance in the period was satisfactory and the Board was pleased with the contributions made by its newly acquired businesses.
Group revenues were GBP15.6m (2016: GBP14.3m), EBITDA of GBP3.5m (2016: GBP3.4m) and statutory profit before tax was GBP1.8m (2016: GBP1.5m). Cash balances remained strong at GBP12.7m (2016: GBP8.0m), and the business continues to be debt free.
As highlighted previously, one of the key objectives of the period was process and gross margin improvement both in the Group's Traffic & Data Services division and where necessary across the wider Group, following many years of rapid growth. The Board is pleased that effective action has been taken to address some of the challenges that come with a growing and diverse technology and services Group.
The results of the Group incorporate the disposal of Tracsis Traffic Data Pty Limited that was made in 2015 and the full year results for the acquired businesses of SEP Limited ('SEP') and Ontrac Limited ('Ontrac') that were also made that year.
Trading Progress and Prospects
A summary of performance in the period is as follows:
Rail Technology & Services
Summary segment results:
Revenue GBP7.9m (2016: GBP6.3m) EBITDA GBP3.2m (2016: GBP2.5m) Profit before Tax GBP3.1m (2016: GBP2.4m)
Software & Consultancy
Software sales of GBP3.1m (2016: GBP3.3m) continued to benefit from high renewal rates for existing products, and were adverse to the previous year partly due to the timing of certain key renewals which are now expected to take place in the second half of the year and also the absence of any franchise bid software licence sales due to changes made by the Department for Transport ('DfT') refranchising timetable. As has always been the case, this 'lumpiness' of opportunity is inherent with the rail industry both with the UK and abroad.
The strategy for our software products remains unchanged and we continue to invest in new product development and market these technologies to the major owning Groups who we work closely with. As such, the pipeline of potential opportunities for our suite of products remains consistently strong. Sales of TRACS Enterprise and DayOne are progressing well, although with a longer sales cycle than anticipated.
Consultancy sales of GBP0.8m (2016: GBP1.1m) were achieved almost entirely from non-franchise bid work due to the aforementioned DfT refranchising timetable. Looking ahead to the second half of the year, we expect franchise bid work will recommence, and span both the current H2 period and H1 for our next financial year starting August 2017. Whilst the specific timing of rail bidding can be unpredictable, our consultancy team is structured to be able to accommodate the very busy periods whilst remaining profitable and retaining our skilled people during the quieter times.
Ontrac, which was acquired in December 2015 and whose revenues comprise a combination of software sales, support, consultancy and hosting, performed well and made a good contribution to the Group. Revenues from Ontrac were GBP2.7m (2016: GBP0.5m) reflecting a full six month period of ownership. The business continues to work extensively within UK Rail, and has experienced continued demand for its product offerings which include bespoke development work and significant software hosting services. Tracsis remains confident on the prospects for this business.
Total revenues from the Group's software, hosting and consulting offerings were GBP6.6m taking account of all of the above revenue streams.
Remote Condition Monitoring
Revenues of GBP1.3m were in line with the previous year (2016: GBP1.3m). The Group was pleased to complete delivery of a significant order for a North American client that was originally announced in August 2016. This order ended up having a value of GBP0.4m which was more than originally anticipated. In line with our overseas strategy, we continue to target further sales in North America both with this client and other major Class 1 railroads together with large passenger and metro operators.
Although UK sales for Remote Condition Monitoring from the Group's major customer were adverse to the previous year this was not unexpected given the general sales cycle of Network Rail and being midway through Control Period 5. The Group was pleased to deliver a number of multi-year deals for the Group's Centrix software (the interrogation tool used to analyse RCM data) which has increased our recurring revenue within this part of the business.
Traffic & Data Services (T&DS)
Summary segment results:
Revenue GBP7.7m (2016: GBP8.0m) EBITDA GBP0.3m (2016: GBP0.9m) Profit before Tax GBP0.1m (2016: GBP0.2m)
This part of the Group has grown rapidly to become the UK's largest transport data collection company offering a variety of novel data capture techniques ranging from Bluetooth and wifi signal analysis through to pioneering MND (mobile network data) information which opens new, and potentially far larger, opportunities for Tracsis. At the start of the financial year we commenced a programme focusing on improving our margin - this included increasing operational effectiveness and ensuring that we maximise the benefits and economies of scale that come from our position as market leader.
These changes, which included bolstering senior management, a move to larger more modern offices, a review of how we win and deliver work, and removal of some GBP0.5m direct costs are now complete, with the division positioned to continue growth on a far stronger footing. The benefit of these actions will begin to be felt in H2 with the full impact realised in FY17/18 and should deliver improved margin and profitability.
Continuing revenues from Traffic Data and Passenger Counts were slightly adverse to the previous year at GBP5.9m (2016: GBP6.1m).
Post period end, we were pleased to secure the renewal and expansion of a major contract with a value up to GBP4.8m over four years which is testament to our focus on driving new business and expanding the offering to current customers. Our commercial team continues to work hard to secure further contracts and Framework Agreements covering both renewals of existing contracts and new sales opportunities.
SEP, which was acquired in September 2015 has continued to trade well and delivered revenues of GBP1.8m (2016: GBP0.6m). As noted previously, the majority of revenue and profit from this business is delivered over the summer months and as in the previous year, the second half of the financial year is expected to be significantly stronger than the first half. Continued integration of this business with the Traffic and Data Services division took place, along with work on a number of technology based initiatives with other parts of the wider Group.
Overseas
The contract award in North America was an important milestone in our overseas business development strategy and was delivered in full in the period under review. We also achieved software sales in the United Arab Emirates and continue to work with our existing clients in Sweden, Ireland and New Zealand.
Dividend
The Group remains committed to following the progressive dividend policy that was adopted in previous years. Accordingly, the Directors propose an interim dividend of 0.6p per share, which is a 20% increase on the 0.50p paid in the interim period last year and will mark the 11(th) successive period of this policy. The dividend will be paid on 21 April 2017 to shareholders on the register on 7 April 2017.
Acquisitions
The Group continues to target growth by acquisition and continues to appraise multiple potential opportunities. No acquisitions took place in the period under review despite a number of negotiations taking place.
Income statement
A summary of the Group's results is set out below.
Hot Features
Premium
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------- ----------- ----------- --------
Revenue(3) 15,622 13,057 31,403
Discontinued - 1,238 1,238
------------------------- ----------- ----------- --------
Total 15,622 14,295 32,641
Adjusted EBITDA (1, 3) 3,545 3,195 7,444
Discontinued - 201 201
------------------------- ----------- ----------- --------
Total 3,545 3,396 7,645
Adjusted Pre-Tax Profit
(2, 3) 3,109 2,797 6,699
Discontinued - 168 173
------------------------- ----------- ----------- --------
Total 3,109 2,965 6,872
Profit before tax (3) 1,788 1,624 4,098
Discontinued - (135) (143)
------------------------- ----------- ----------- --------
Total 1,788 1,489 3,955
(1) Earnings before finance income, tax, depreciation, amortisation, exceptional items and share-based payment charges
(2) Profit before tax, plus amortisation, share based payments and exceptional items
(3) Comparative figures exclude Tracsis Traffic Data Pty Limited which was disposed of in December 2015
Sales revenue is analysed further below:
Unaudited Unaudited Audited
Six months Six months Year
Ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- --------
Rail Technology & Services 7,922 6,314 14,066
Traffic & Data Services
- Continuing 7,700 6,743 17,337
Total revenue from continuing
operations 15,622 13,057 31,403
Discontinued operations - 1,238 1,238
Total revenue 15,622 14,295 32,641
------------------------------- ----------- ----------- --------
Balance sheet
The Group continues to have significant levels of cash and remains debt free. Cash balances at 31 January were GBP12.7m (31 January 2016: GBP8.0m, 31 July 2016: GBP11.4m), and cash conversion levels remain good. Contingent consideration of GBP1.1m was paid in respect of the Ontrac and SEP acquisitions in respect of the first year's earn out. Further amounts may be due depending on the financial performance of both businesses in the second year. A summary of cash flows is set out below:
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------ ----------- ----------- --------
Net cash flow from operating
activities 2,315 1,738 5,866
Net cash used in investing
activities (1,062) (7,501) (8,013)
Net cash from financing activities 60 389 179
Exchange differences - 22 12
Movement during the period 1,313 (5,352) (1,956)
------------------------------------ ----------- ----------- --------
Outlook
The Group remains focussed on delivering full year numbers, and as communicated previously, the outcome for the full year remains subject to the timely conversion of new sales for our various software products and services. Our second half trading is also supported by the improvement in gross margin initiatives that commenced at the start of the financial year, and the natural H2 seasonality that is inherent across the Group's operations. Management is confident that the focus on process and margin improvement puts the business on a solid footing.
Our core target markets of rail technology and traffic and transport data services remain buoyant with good growth drivers and Tracsis remains well positioned for the future.
Chris Cole John McArthur Non-Executive Chief Executive Chairman Officer 23 March 2017
Tracsis plc
Condensed consolidated interim income statement for the six months ended 31 January 2017
6 months 6 months ended Year ended 31
ended 31 January 2016 July 2016 (audited)
31 (unaudited)
January
2017
Note Continuing Continuing Discontinued Continuing Discontinued
Operations operations operations Total operations operations Total
(unaudited)
Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue 15,622 13,057 1,238 14,295 31,403 1,238 32,641
Cost of sales (6,632) (4,604) (715) (5,319) (12,559) (715) (13,274)
----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- ---------
Gross profit 8,990 8,453 523 8,976 18,844 523 19,367
Administrative
costs (7,159) (6,765) (654) (7,419) (14,745) (662) (15,407)
Adjusted EBITDA
* 3,545 3,195 201 3,396 7,444 201 7,645
Amortisation of
intangible
assets (837) (566) - (566) (1,378) - (1,378)
Depreciation (393) (334) (29) (363) (744) (29) (773)
Exceptional
item:
Acquisition &
disposal
costs - (121) (31) (152) (136) (39) (175)
Exceptional
item:
Loss on
disposal - - (272) (272) - (272) (272)
Share-based
payment
charges (484) (486) - (486) (1,087) - (1,087)
----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- ---------
Operating profit
/ (loss) 1,831 1,688 (131) 1,557 4,099 (139) 3,960
Finance income 11 28 - 28 36 - 36
Finance expense (18) (16) (4) (20) (37) (4) (41)
Share of result
of equity
accounted
investees (36) (76) - (76) - - -
Profit / (loss)
before tax 1,788 1,624 (135) 1,489 4,098 (143) 3,955
Taxation (387) (312) (50) (362) (372) (50) (422)
----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- --------- Profit / (loss) for the period 1,401 1,312 (185) 1,127 3,726 (193) 3,533 ----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- --------- Other comprehensive income Items that are or may be reclassified subsequently to profit or loss: Foreign currency translation differences - foreign operations - - 189 189 - 189 189 ----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- --------- Total recognised income for the period 1,401 1,312 4 1,316 3,726 (4) 3,722 ----------------- ----- ------------- ------------ ------------- -------- ------------ ------------- --------- Earnings per ordinary share Basic 5 5.06p 4.88p (0.69p) 4.19p 13.40p (0.69p) 12.71p Diluted 5 4.90p 4.70p (0.66p) 4.04p 12.93p (0.67p) 12.26p
* Earnings before finance income, tax, depreciation, amortisation, exceptional items and share-based payment charges.
Tracsis plc
Condensed consolidated interim balance sheet as at 31 January 2017
Unaudited Unaudited Audited
At 31 At 31
At 31 January January July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------------- -------------- ---------- --------
Non-current assets
Property, plant and equipment 2,525 2,516 2,608
Intangible assets 25,295 30,205 26,132
Investments - loan notes
receivable 165 125 250
Investments - equity 464 299 500
Deferred consideration receivable 59 238 167
Deferred tax assets 623 702 573
------------------------------------- -------------- ----------
29,131 34,085 30,230
------------------------------------- -------------- ---------- --------
Current assets
Inventories 210 297 271
Trade and other receivables 5,568 5,897 6,166
Deferred consideration receivable 118 136 133
Cash and cash equivalents 12,698 7,989 11,385
------------------------------------- -------------- ---------- --------
18,594 14,319 17,955
------------------------------------- -------------- ---------- --------
Total assets 47,725 48,404 48,185
------------------------------------- -------------- ---------- --------
Non-current liabilities
Hire-purchase contracts 242 417 296
Contingent & Deferred consideration
payable - 5,830 4,485
Deferred tax liabilities 4,133 5,328 4,284
4,375 11,575 9,065
------------------------------------- -------------- ---------- --------
Current liabilities
Hire-purchase contracts 398 295 368
Trade and other payables 6,550 7,562 8,354
Contingent & Deferred consideration
payable 5,061 2,840 1,665
Current tax liabilities 526 434 67
------------------------------------- -------------- ---------- --------
12,535 11,131 10,454
------------------------------------- -------------- ---------- --------
Total liabilities 16,910 22,706 19,519
------------------------------------- -------------- ---------- --------
Net assets 30,815 25,698 28,666
------------------------------------- -------------- ---------- --------
Equity attributable to equity holders
of the Company
Called up share capital 111 109 110
Share premium reserve 5,834 5,308 5,622
Merger reserve 3,010 3,010 3,010
Share based payments reserve 2,892 1,807 2,408
Retained earnings 18,968 15,464 17,516
Total equity 30,815 25,698 28,666
------------------------------------- -------------- ---------- --------
Tracsis plc- Consolidated statement of changes in equity
For the six months ended 31 January 2017
Share-
Share Based
Share Premium Merger Payments Retained Translation
Capital Reserve Reserve Reserve Earnings reserve Total
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ---------- ---------- ---------- ---------- ----------- -------------- --------
At 1 August 2015 106 4,776 1,846 1,321 14,517 (189) 22,377
Profit for the
six month period
ended 31 January
2016 - - - - 1,127 - 1,127
Other comprehensive
income - - - - - 22 22
Reclassification
on disposal - - - - - 167 167
------------------------ ---------- ---------- ---------- ---------- ----------- -------------- --------
Total comprehensive
income - - - - 1,127 189 1,316
Transactions with
owners:
Exercise of share
options 2 532 - - - - 534
Shares issued as
consideration for
business combinations 1 - 1,164 - - - 1,165
Tax movements in
equity - - - - (180) - (180)
Share based payment
charges - - - 486 - - 486
At 31 January 2016 109 5,308 3,010 1,807 15,464 - 25,698
------------------------ ---------- ---------- ---------- ---------- ----------- -------------- --------
Audited
--------------------- ---- ------ ------ ------ ------- ------ -------
At 1 August 2015 106 4,776 1,846 1,321 14,517 (189) 22,377
Profit for the
year ended 31 July
2016 - - - - 3,533 - 3,533
Other comprehensive
income - - - - - 22 22
Reclassification
on disposal - - - - - 167 167
--------------------- ---- ------ ------ ------ ------- ------ -------
Total comprehensive
income - - - - 3,533 189 3,722
Transactions with
owners:
Dividends - - - - (301) - (301)
Share based payment
charges - - - 1,087 - - 1,087
Tax movements in
equity - - - - (233) - (233)
Exercise of share
options 3 846 - - - - 849
Shares issued as
consideration 1 - 1,164 - - - 1,165
At 31 July 2016 110 5,622 3,010 2,408 17,516 - 28,666
--------------------- ---- ------ ------ ------ ------- ------ -------
Tracsis plc
Consolidated statement of changes in equity (continued)
For the six months ended 31 January 2017
Share-
Share Based
Share Premium Merger Payments Retained
Capital Reserve Reserve Reserve Earnings Total
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- ---------- ---------- ---------- ---------- ----------- --------
At 1 August 2016 110 5,622 3,010 2,408 17,516 28,666
Profit for the
six month period
ended 31 January
2017 - - - - 1,401 1,401
Total comprehensive
income - - - - 1,401 1,401
Transactions with
owners:
Exercise of share
options 1 212 - - - 213 Tax movements in equity - - - - 51 51 Share based payment charges - - - 484 - 484 At 31 January 2017 111 5,834 3,010 2,892 18,968 30,815 --------------------- ---------- ---------- ---------- ---------- ----------- --------
Tracsis plc
Condensed consolidated interim statement of cash flows for the six months to 31 January 2017
Unaudited Unaudited
Six months Six months Audited
to to Year ended
31 Jan 31 Jan 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
----------------------------------- ------------ ------------ ------------
Operating activities
Profit for the period 1,401 1,127 3,533
Finance income (11) (28) (36)
Finance expense 18 20 41
Depreciation 393 363 773
Loss on disposal of plant
& equipment - 2 2
Share of result of equity
accounted investees 36 76 -
Loss on disposal of business - 272 272
Amortisation of intangible
assets 837 566 1,378
Income tax charge 387 362 422
Share based payment charges 484 486 1,087
----------------------------------- ------------ ------------ ------------
Operating cash inflow before
changes in working capital 3,545 3,246 7,472
Movement in inventories 61 (23) 3
Movement in trade and other
receivables 598 (237) (506)
Movement in trade and other
payables (1,804) (809) (17)
----------------------------------- ------------ ------------ ------------
Cash generated from operations 2,400 2,177 6,952
Finance income 11 28 36
Finance expense (18) (20) (41)
Income tax paid (78) (447) (1,081)
----------------------------------- ------------ ------------ ------------
Net cash flow from operating
activities 2,315 1,738 5,866
----------------------------------- ------------ ------------ ------------
Investing activities
Purchase of plant and equipment (184) (443) (795)
Proceeds from disposal of
plant and equipment 3 47 83
Acquisition of subsidiaries - (6,761) (6,761)
Proceeds from disposal of
subsidiaries - 166 166
Equity investments and loans
to investments - (500) (750)
Repayment of loans from 85 - -
investments
Receipt of deferred consideration 123 - 74
Payment of contingent &
deferred consideration (1,089) (10) (30)
----------------------------------- ------------ ------------ ------------
Net cash flow used in investing
activities (1,062) (7,501) (8,013)
----------------------------------- ------------ ------------ ------------
Financing activities
Dividends paid - - (301)
Proceeds from the exercise
of share options 213 534 849
Hire purchase repayments (153) (145) (369)
----------------------------------- ------------ ------------ ------------
Net cash flow from financing
activities 60 389 179
----------------------------------- ------------ ------------ ------------
Net increase/(decrease)
in cash and cash equivalents 1,313 (5,374) (1,968)
Effect of exchange fluctuations - 22 12
Cash and cash equivalents
at beginning of period 11,385 13,341 13,341
Cash and cash equivalents
at end of period 12,698 7,989 11,385
----------------------------------- ------------ ------------ ------------
Notes to the consolidated interim report
For the six months ended 31 January 2017
1 Basis of preparation
Tracsis plc (the 'Company') is a company domiciled in England. The condensed consolidated interim financial report of the Company as at and for the six months ended 31 January 2017 comprises the Company and its subsidiaries (together referred to as the 'Group'). The principal activities of the Group are the provision of software, services and technology for the rail industry ('Rail Technology & Services'), along with traffic surveys, event planning and traffic management, and data capture ('Traffic Data & Services') (see note 4).
The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 July 2016, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union.
The interim financial information for each of the six month periods ended 31 January 2017 and 31 January 2016 has not been audited and does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The information for the year ended 31 July 2016 does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006, but is based on the statutory accounts for that year, on which the Group's auditors issued an unqualified report and which have been filed with the Registrar of Companies.
The principal risks and uncertainties are largely unchanged for the remainder of the financial year and are as disclosed on pages 9 to 12 of the Annual Report & Accounts for the year ended 31 July 2016. The Board considers risks on a periodic basis and has maintained the key risks as follows, on a Group wide basis:
-- Rail industry structure changes -- Competition -- Reduced government spending -- Reliance on certain key customers -- Attraction and retention of key employees -- Technological changes -- Customer pricing pressure -- Health & Safety -- Brand reputation -- Impact of EU Referendum
Further detail on risks is provided in the Annual Report & Accounts for the year ended 31 July 2016.
The condensed consolidated interim financial information was approved for issue on 23 March 2017.
2 Accounting Policies
The accounting policies applied by the Group in these interim financial statements are the same as those applied by the Group in its audited consolidated financial statements for the year ended 31 July 2016 and which will form the basis of the 2017 Annual Report except as described below. The basis of consolidation is set out in the Group's accounting policies in those financial statements.
The preparation of the interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Estimates and judgements are continually evaluated and are based on historical experience and other factors, such as expectations of future events and are believed to be reasonable under the circumstances. Actual results may differ from these estimates. In preparing these interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the audited consolidated financial statements for the year ended 31 July 2016.
3 Changes in accounting policies
The following amendments to financial reporting standards were adopted from 1 August 2016, the start of the new financial year. None of them have had a significant impact on the Group:
-- Accounting for Acquisitions of Interests in Joint Operations (Amendments to IFRS 11)
-- Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28)
-- Clarification of Acceptable Methods of Depreciation and Amortisation (Amendments to IAS 16 and IAS 38)
-- Equity Method in Separate Financial Statements (Amendments to IAS 27) -- Disclosure Initiative (Amendments to IAS 1) -- Annual Improvements to IFRSs 2012-2014 Cycle - various standards
The following new amendments to standards were in issue but are not yet effective for the financial year beginning 1 August 2016:
-- Disclosure Initiative (Amendments to IAS 7) -- Recognition of Deferred Tax Assets for Unrealised Losses (Amendments to IAS 12) -- Annual Improvements to IFRSs 2014-2016 Cycle - various standards -- IFRS 15 Revenue from Contracts with Customers -- IFRS 9 Financial Instruments -- Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2) -- IFRS 16 Leases 4 Segmental analysis
The Group has divided its results into two segments being 'Rail Technology and Services' and 'Traffic & Data Services'. 'Rail Technology and Services' includes the Group's Software, Consultancy and Remote Condition Monitoring technology and also includes Ontrac which was acquired in the previous period. Traffic & Data Services includes SEP which was acquired in the previous period.
In accordance with IFRS 8 'Operating Segments', the Group has made the following considerations to arrive at the disclosure made in these financial statements.
IFRS 8 requires consideration of the Chief Operating Decision Maker ("CODM") within the Group. In line with the Group's internal reporting framework and management structure, the key strategic and operating decisions are made by the Board of Directors, who review internal monthly management reports, budgets and forecast information as part of this. Accordingly, the Board of Directors are deemed to be the CODM.
Operating segments have then been identified based on the internal reporting information and management structures within the Group. From such information it has been noted that the CODM reviews the business as a single operating segment, receiving internal information on that basis. The management structure and allocation of key resources, such as operational and administrative resources, are arranged on a centralised basis.
Sales revenue is summarised below:
Six months Six months Year
Ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------------------- ----------- ----------- --------
Rail Technology & Services 7,922 6,314 14,066
Traffic & Data Services
- Continuing 7,700 6,743 17,337
Total revenue from continuing
operations 15,622 13,057 31,403
Discontinued operations - 1,238 1,238
Total revenue 15,622 14,295 32,641
------------------------------- ----------- ----------- --------
A geographical analysis of revenue is provided below:
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
------------------- ------------ ------------ ---------
United Kingdom 14,804 12,799 30,798
North America 414 3 32
Australia - 1,238 1,238
Rest of the World 404 255 573
Total 15,622 14,295 32,641
------------------- ------------ ------------ ---------
Reconciliations of reportable segment revenues, profit or loss, assets and liabilities and other material items
Information regarding the results of the reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Board of Directors. Segment profit is used to measure performance. There are no material inter-segment transactions, however, when they do occur, pricing between segments is determined on an arm's length basis. Revenues disclosed below materially represent revenues to external customers.
Six months ended 31 January
2017
Rail Traffic
Technology & Data Unallocated
& Services Services Total
GBP000 GBP000 GBP000 GBP000
------------------------------------ ------------ ---------- -------------- --------
Revenues
Total revenue for reportable
segments 7,922 7,700 - 15,622
Consolidated revenue 7,922 7,700 - 15,622
------------------------------------ ------------ ---------- -------------- --------
Profit or loss
EBITDA for reportable
segments 3,163 382 - 3,545
Amortisation of intangible
assets - - (837) (837)
Depreciation (71) (322) - (393)
Share-based payment
charges - - (484) (484)
Share of result of equity
accounted investees - - (36) (36)
Interest receivable/payable(net) - - (7) (7)
------------------------------------ ------------ ---------- -------------- --------
Consolidated profit before
tax 3,092 60 (1,364) 1,788
------------------------------------ ------------ ---------- -------------- --------
Six months ended 31 January
2016
Rail Traffic
Technology & Data Unallocated
& Services Services Total
GBP000 GBP000 GBP000 GBP000
------------------------------------ ------------ ---------- -------------- --------
Revenues
Total revenue for reportable
segments 6,314 7,981 - 14,295
Consolidated revenue 6,314 7,981 - 14,295
------------------------------------ ------------ ---------- -------------- --------
Profit or loss
EBITDA for reportable
segments 2,490 906 - 3,396
Amortisation of intangible
assets - - (566) (566)
Depreciation (48) (315) - (363)
Exceptional item: Acquisition
& disposal costs - - (152) (152)
Exceptional item: Loss
on disposal - (272) - (272)
Share-based payment
charges - - (486) (486)
Share of result of equity
accounted investees - (76) - (76)
Interest receivable/payable(net) - - 8 8
------------------------------------ ------------ ---------- -------------- --------
Consolidated profit before
tax 2,442 243 (1,196) 1,489
------------------------------------ ------------ ---------- -------------- --------
Year ended 31 July 2016
Rail Traffic
Technology & Data
& Services Services Unallocated Total
GBP000 GBP000 GBP000 GBP000
------------------------------------ ------------ ---------- -------------- --------
Revenues
Total revenue for reportable
segments 14,066 18,575 - 32,641
Consolidated revenue 14,066 18,575 - 32,641
------------------------------------ ------------ ---------- -------------- --------
Profit or loss
EBITDA for reportable
segments 5,346 2,299 - 7,645
Amortisation of intangible
assets - - (1,378) (1,378)
Depreciation (111) (662) - (773)
Exceptional item: Acquisition
& disposal costs (79) (96) - (175)
Exceptional items: Loss
on disposal - (272) - (272)
Share-based payment
charges - - (1,087) (1,087)
Interest receivable/payable(net) - - (5) (5)
------------------------------------ ------------ ---------- -------------- --------
Consolidated profit before
tax 5,156 1,269 (2,470) 3,955
------------------------------------ ------------ ---------- -------------- --------
31 January 2017
Rail Traffic
Technology & Data
& Services Services Unallocated Total
GBP'000 GBP000 GBP000 GBP000
--------------------------------- ---------------------- ---------- -------------- ---------
Assets
Total assets for reportable
segments (exc. cash) 3,405 5,075 - 8,480
Intangible assets & investments - - 25,924 25,924
Deferred tax assets - - 623 623
Cash and cash equivalents 5,112 1,674 5,912 12,698
Consolidated total assets 8,517 6,749 32,459 47,725
--------------------------------- ---------------------- ---------- -------------- ---------
Liabilities
Total liabilities for
reportable segments (5,469) (2,247) - (7,716)
Deferred tax - - (4,133) (4,133)
Deferred consideration - - (5,061) (5,061)
Consolidated total liabilities (5,469) (2,247) (9,194) (16,910)
--------------------------------- ---------------------- ---------- -------------- ---------
31 January 2016
Rail Traffic
Technology & Data
& Services Services Unallocated Total
GBP'000 GBP000 GBP000 GBP000
--------------------------------- ---------------------- ---------- -------------- ---------
Assets
Total assets for reportable
segments (exc. cash) 3,958 5,126 - 9,084
Intangible assets & investments - - 30,629 30,629
Deferred tax assets - - 702 702
Cash and cash equivalents 2,619 1,209 4,161 7,989
Consolidated total assets 6,577 6,335 35,492 48,404
--------------------------------- ---------------------- ---------- -------------- ---------
Liabilities
Total liabilities for
reportable segments (6,438) (2,270) - (8,708)
Deferred tax - - (5,328) (5,328)
Deferred consideration - - (8,670) (8,670)
Consolidated total liabilities (6,438) (2,270) (13,998) (22,706)
--------------------------------- ---------------------- ---------- -------------- ---------
31 July 2016
Rail Traffic
Technology & Data
& Services Services Unallocated Total
GBP'000 GBP000 GBP000 GBP000
-------------------------------- ---------------------- ---------- -------------- ---------
Assets
Total assets for reportable
segments (exc. cash) 2,401 6,944 - 9,345
Intangible assets - - 26,882 26,882
Deferred tax assets - - 573 573
Cash and cash equivalents 4,365 1,507 5,513 11,385
Consolidated total assets 6,766 8,451 32,968 48,185
-------------------------------- ---------------------- ---------- -------------- ---------
Liabilities
Total liabilities for
reportable segments (5,004) (4,081) - (9,085)
Deferred tax - - (4,284) (4,284)
Contingent & deferred
consideration - - (6,150) (6,150)
Consolidated total liabilities (5,004) (4,081) (10,434) (19,519)
-------------------------------- ---------------------- ---------- -------------- ---------
5 Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the Half Year to 31 January 2017 was based on the profit attributable to ordinary shareholders of GBP1,401,000 (Half Year to 31 January 2016: GBP1,127,000, Year ended 31 July 2016: GBP3,533,000) and a weighted average number of ordinary shares in issue 27,706,000 (Half Year to 31 January 2016: 26,872,000, Year ended 31 July 2016: 27,807,000), calculated as follows:
Weighted average number of ordinary shares
In thousands of shares
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
Issued ordinary shares at start
of period 27,546 26,564 26,564
Effect of shares issued related
to business combinations - 106 360
Effect of shares issued for
cash 160 202 883
Weighted average number of shares
at end of period 27,706 26,872 27,807
----------------------------------- ------------ ------------ ---------
Diluted earnings per share
The calculation of basic earnings per share for the Half Year to 31 January 2017 was based on the profit attributable to ordinary shareholders of GBP1,401,000 (Half Year to 31 January 2016: GBP1,127,000, Year ended 31 July 2016: GBP3,533,000) and a weighted average number of ordinary shares in issue after adjustment for the effects of all dilutive potential ordinary shares of 28,591,000 (Half Year to 31 January 2016: 27,904,000, Year ended 31 July 2016: 28,811,000).
Adjusted EPS
In addition, Adjusted Profit EPS is shown below on the grounds that it is a common metric used by the market in monitoring similar businesses. A reconciliation of this figure is provided below:
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP'000 GBP'000 GBP'000
Profit attributable to ordinary
shareholders 1,401 1,127 3,533
Amortisation of intangible assets 837 566 1,378
Share-based payment charges 484 486 1,087
Exceptional item: Loss on disposal - 272 175
Exceptional items: Acquisition
& disposal costs - 152 272
--------------------------------------- ------------ ------------ ---------
Adjusted profit for EPS purposes 2,722 2,603 6,445
--------------------------------------- ------------ ------------ ---------
Weighted average number of ordinary
shares
In thousands of shares
--------------------------------------- ------------ ------------ ---------
For the purposes of calculating
Basic earnings per share 27,706 26,872 27,807
Adjustment for the effects of
all dilutive potential ordinary
shares 28,591 27,904 28,811
--------------------------------------- ------------ ------------ ---------
Basic adjusted earnings per
share 9.82p 9.69p 23.18p
Diluted adjusted earnings per
share 9.52p 9.33p 22.37p
--------------------------------------- ------------ ------------ ---------
6 Seasonality
The Group offers a range of products and services within its overall suite, meaning that revenues can fluctuate depending on the status and timing of certain sales. Some of these are exposed to high levels of seasonality for example:
-- SEP Limited has a high level of seasonality based on the timing of events and as such made a loss in the period to 31 January 2017 and 2016 but this is expected to reverse in the second half of the year as was noted in the year ended 31 July 2016;
-- Ontrac Limited performs some significant software development projects and the specific timing of these can vary depending on the commercial terms;
-- The Group's Traffic & Data Services division also derives revenue from work taking place at certain times of the year and is exposed to seasonality;
-- Revenues from remote condition monitoring are also driven by the size and timing of significant orders received from major customers;
-- Finally, the timing of certain software licence renewals and new sales along with consultancy offerings can also impact on when work is performed, revenues are delivered and therefore recognised.
As such, the overall Group continues to be exposed to a high degree of seasonality throughout the year and reporting period and this seasonality has increased in the period under review.
7 Dividends
As part of the Group's commitment to a progressive dividend policy adopted in 2012, the Directors recommend an interim dividend payment of 0.60p per share, with a total expected value of c. GBP167k based on the number of shares in issue at the date of this interim report.
The cash cost of the dividend payments made is shown below:
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2017 2016 2016
GBP000 GBP000 GBP000
------------------------------ ------------- ------------- ---------
Final dividend for 2014/15
of 0.60p per share paid - - 164
Interim dividend for 2015/16
of 0.50p per share paid - - 137
Total dividends paid - - 301
------------------------------ ------------- ------------- ---------
The dividends paid or proposed in respect of each financial year ended 31 July is as follows:
2017 2016 2015 2014 2013 2012
GBP'000 GBP'000 GBP000 GBP000 GBP000 GBP000
------------------------------ ---------- ---------- --------- --------- -------- -------
Interim dividend for 2011/12
of 0.20p per share paid - - - - - 48
Final dividend for 2011/12
of 0.35p per share paid - - - - - 87
Interim dividend for 2012/13 - - - - 75 -
of 0.30p per share paid
Final dividend for 2012/13 - - - - 102 -
of 0.40p per share paid
Interim dividend for 2013/14 - - - 89 - -
of 0.35p per share paid
Final dividend for 2013/14 - - - 119 - -
of 0.45p per share paid
Interim dividend for 2014/15 - - 106 - - -
of 0.40p per share paid
Final dividend for 2014/15 - - 164 - - -
of 0.60p per share paid
Interim dividend for 2015/16 - 137 - - - -
of 0.50p per share paid
Final dividend for 2015/16 - 195 - - - -
of 0.70p per share paid
Interim dividend for 2016/17 167 - - - - -
of 0.60p per share proposed
------------------------------ ---------- ---------- --------- --------- -------- -------
The total dividends paid or proposed in respect of each financial year ended 31 July is as follows:
2017 2016 2015 2014 2013 2012
GBP'000 GBP'000 GBP000 GBP000 GBP000 GBP000
-------------------------- ---------- --------- -------- -------- ------- -------
Total dividends paid per
share n/a 1.2p 1.0p 0.8p 0.7p 0.55p
-------------------------- ---------- --------- -------- -------- ------- -------
8 Related party transactions
The following transactions took place during the year with other related parties:
Purchase of Amounts owed
to
goods and services related parties
H1 H1 FY H1 H1 2016 FY
2017 2016 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------- -------- -------- -------- -------- -------- --------
Leeds Innovation Centre
Limited 41 37 74 8 8 7
Ashtead Plant Hire Co
Limited 10 - 25 1 - 13
Leeds Innovation Centre Limited is a company which is connected to The University of Leeds. Tracsis plc rents its office accommodation, along
with related office services, from this company.
Ashtead Plant Hire Co Limited is a subsidiary of Ashtead Group plc (Ashtead) of which Chris Cole is Chairman. SEP Limited, one of the Group's
subsidiaries purchased goods and services from Ashtead during the year. All transactions with Ashtead took place at arm's length commercial
rates and were not connected to Mr Cole's position at Ashtead. SEP Limited traded with Ashtead prior to its acquisition by Tracsis plc.
Sale of Amounts owed
by
goods and services related parties
H1 H1 FY H1 H1 2016 FY
2017 2016 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- -------- -------- -------- --------
WSP | Parsons Brinckerhoff 1,015 945 2,136 69 18 679
WSP | Parsons Brinckerhoff (WSP) is a company which is connected to Chris Cole who serves as non-executive Chairman of Tracsis plc and also of WSP. Sales to WSP took place at arm's length commercial rates and were not connected to Mr Cole's position at WSP as the Group traded with WSP prior to his appointment at Tracsis in April 2014. On 31 October 2014, WSP completed the acquisition of Parsons Brinckerhoff
(PB) which made PB a related party of the Group from this date. One of the Group's subsidiary companies, Tracsis Traffic Data Limited, traded extensively with PB prior to its acquisition by WSP as it carried out an agreement for a significant piece of data collection work for a UK transport agency which was entered into in May 2014. All transactions with PB took place at arm's length commercial rates and were not connected to Mr Cole's position at WSP.
Nutshell Software Limited
On 21 July 2016, the Group entered into an agreement to make an investment in Nutshell Software Limited, a company connected to Martyn
Cuthbert who is a Director of Ontrac Limited and Ontrac Technology Limited, subsidiary companies of the Group following their acquisition in
December 2015.
Statement of Directors' Responsibilities
The Directors confirm to the best of their knowledge that:
i) The condensed consolidated interim financial information has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union;
ii) The interim management report includes a fair review of the information required by the FSA's Disclosure and Transparency Rules (4.2.7 R and 4.2.8 R).
Financial statements are published on the Group's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
The Directors of Tracsis plc and their functions are listed below.
Further information for Shareholders
Company number: 05019106
Registered office: Leeds Innovation Centre
103 Clarendon Road
Leeds
LS2 9DF
Directors: Chris Cole (Non-Executive Chairman)
John McArthur (Chief Executive Officer)
Max Cawthra (Group Finance Director)
John Nelson (Non-Executive Director)
Lisa Charles-Jones (Non-Executive
Director)
Liz Richards (Non-Executive Director)
Company Secretary: Max Cawthra
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDXLSDBGRD
(END) Dow Jones Newswires
March 23, 2017 03:00 ET (07:00 GMT)
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