Tracsis Share Discussion Threads

[canteatvalue] 27/3/2013 10:56

Surprised no one has commented on the bonus structure in the takeover disclosure. The management get £0 bonus if the PBT is less than £750k in the 12 months after acquisition. I make that to be a P/E of 5.5 (assuming ~20% tax rate) for their base level of profit expectation! The top level of bonus only kicks in over £950k, which would put the acq on a P/E of 4.3. And this is only in the next twelve months, before any real time for any cross sell / synergies to kick in in full.

Classic cheap Tracsis acquisition! It still doesn't even make that big a dent in the cash pile given the rate at which they are piling it up, so they are probably still on the prowl for more. Guess it must be hard to find deals going so cheaply!

[mmelody] 26/3/2013 17:18

i didnt get enough out of skhg so moved over here now. had looked in a couple of years ago...maybe I should have dipped in then. but i see a rosy future.

[cestnous] 26/3/2013 08:36

Looks like a nice acquisition...

"We believe that this acquisition, whilst being immediately earnings enhancing, will also drive growth for the combined Group and in turn provide further value to our shareholders."

[valustar1] 25/3/2013 21:57

Maybe the news that the rail franchising process is to restart helped today

[kalkanite] 25/3/2013 18:42

Bought into Tracsis today. Have had them on my watch list since Stewy's excellent post on TMF. We are now close to full year figures which should hopefully be around 13.6p EPS. That would then put Tracsis on a historical EPS multiple of around 13 which seems very cheap for a company with excellent growth prospects.

With £8.5m in the bank and a history of shrewd acquisitions I'm looking forward to the next year.

There are quite a few synergies with C21 which I also hold, sales, research and head office costs could be pooled and we could have a company that has a strong hold in both rail and road transportation, I'm sure Tracsis could use the CCTV arm on trains with their market penetration. Just a thought as that would be win win for me :-)

[sparkymoc] 18/3/2013 23:42

Just read a report form this company for the first time. Good growth, high margins, great balance sheet, PE fine. Not many negatives here.

Looks worth a punt.

[apad] 05/3/2013 09:28

Tracsis' first freight contract could lead to overseas deals
Yorkshire Post

Published on Tuesday 5 March 2013 01:00

TRANSPORT software group Tracsis is setting its sights on international expansion to tap into growing markets in the US, New Zealand, Australia and Scandinavia.

The Leeds University spin-out, which produces software can prevent train derailments and delays, has just won its first contract with a major UK freight operator.

It believes this will pave the way for overseas contracts.

Tracsis' chief executive John McArthur said: "The two big English speaking countries with freight are Australasia and the US. The freight market is as big, if not bigger, than passenger. We're fairly bullish we can replicate the success we've had with the UK client."

Tracsis is already pitching its freight software to Australian and American operators.

In the past the company has focused on passenger trains, but it has now successfully devised software suitable for the freight market.

"In the past all our software has been for the passenger rail operators.

"We've never generated revenue from freight rail before. It's sizeable in the UK but enormous in the US. Most people fly in the US so rail tends to be freight," said Mr McArthur.

Freight runs a different operating model to passenger rail as drivers can be gone for a week.

"We believe we can offer a unique product," said Mr McArthur. "In the past the problem has been solved with pen and paper and a large amount of people. It was solved manually."

Freight trains run to customer orders rather than a passenger timetable and operators have to plan the trains and the labour that will drive those trains.

Tracsis's software can reduce costs and driving hours.

Mr McArthur said the overseas market is ten times bigger than the UK market, offering the group plenty of scope for growth.

He was speaking yesterday as the company announced a 50 per cent increase in pre-tax profits to £1.7m in the six months to January 31.

Revenues rose 29 per cent to £4.7m and all areas of the group performed better than last year.

Mr McArthur said the core TRACS software product is being well received by transport operators, with high levels of renewals by existing clients.

Another software product TRACS Roster was sold to two existing UK clients and will deliver long term recurring revenues.

In December, the group won a new client in New Zealand for its COMPASS software product

Tracsis said demand for its various consultancy and professional services offerings has been mixed.

Its team worked extensively on the Great Western franchise bid in the early part of the financial year, before franchise bid activity was halted by the Government pending the outcome of two independent reviews.

The industry is waiting for the Department for Transport to re-start the franchising model.

Tracsis said there is increasing pressure from owning groups, supply chain intermediaries and the recent Brown report, which is encouraging a swift resolution to the rail re-franchising process.

"Whilst a prolonged delay of rail franchising activity may impact our consultancy offering, any impact on other group trading is anticipated to be negligible," said Mr McArthur.

"We have been actively seeking other business development opportunities in more traditional non-franchise bid consultancy work in order to counter the impact of ongoing delays, and have won several major projects recently."

The group continues to look for acquisitions and has cash balances of £8.5m that could be used to fund deals.

[stewy_18] 04/3/2013 12:48

Thanks for that. Good find.

Interesting they mention the Scandinavian pilot progressing nicely in the interview but not in the interims. Could be an interesting 6 months.

[kayha2] 04/3/2013 12:34

Some fairly positive results this morning! Found an interview with the FD here:
ow.ly/ijFpM

[stewy_18] 04/3/2013 11:07

APAD,

Agreed. I have posted my comments here if anyone is interested:-


Thanks and regards

Stuart

[apad] 04/3/2013 08:47

EPS very healthy, net op cash flow down a bit, good divvy increase, software license income good, working PER 14.
I'm happy.
apad

[wjccghcc] 04/3/2013 08:20

Disagree. If you strip out the cash then PE is around 11.5. H2 MPEC was exceptional last year and there is no doubt that consultancy will have a quiet year due to the refranchising delays. However, despite this, it looks like they're in a good position to beat expectations again.

[westcountryboy] 04/3/2013 08:19

marlint111: a simple matter of checking past interims. Then you would see that in 2011 H1 eps was 0.47p and fy eps was 4.49p and in 2012 H1 eps was 3.47p and fy eps was 9.96p.

[marlint111] 04/3/2013 08:03

I've sold my remaining holdings here.

Results good- but actually down in key areas on H2 2012 (not sure on the seasonality here- i.e. whether H2 is always better than H1 or not).

Growth still impressive- but slowing down, and more than fairly priced in at current P/E ratio in my opinion.

[penpont] 04/3/2013 07:59

Todays statement is understandably cautious in places but the eps of 5.2p seems to leave them reasonably well placed to at least meet, if not beat, the current 10.7p forecast.

[apad] 08/2/2013 08:39

Just like dating girls really:-)
apad

[jamielein] 08/2/2013 08:21

I've bought a few back this morning. I regretted selling out when I did as I really like the company.

[apad] 08/2/2013 08:08

Tracsis is pleased to announce that it has signed an agreement with a major UK rail freight operator to supply a customised version of its TrainTRACS crew scheduling software. The contract is for the provision of software, support and additional development work and will run for three years with annual reviews. This transaction marks Tracsis' entry into the rail freight market.

John McArthur, Chief Executive Officer commented:

"This contract is a significant milestone for Tracsis and demonstrates our long held belief that our planning software is applicable to other transport verticals. The rail freight market holds a great opportunity for the Group both in the UK and overseas and is a sector that is not burdened by the current hiatus relating to passenger franchising. We are confident this will be the first of a number of sales to freight operators, and hope to develop other complementary products to these customers in the fullness of time."

apad

[canteatvalue] 30/1/2013 16:01

I'm happy to keep holding here. They aren't dirt cheaply rated but I think the potential for long term organic growth here is really good (they really haven't even begun tapping the international markets for their expertise yet - but they will) and I believe management can create a hell of a lot inorganic value from the cash pile they already have unlike most managements for whom 'price' is a small consideration compared to hand-wavy 'strategic' motives.

In the short term I wouldn't be surprised to see some weakness due to the short-termers focusing on what's happening in the next six months though. I'm one of those people who takes a relaxed attitude to such moves and focus on where Tracsis will be in five years.

[cestnous] 30/1/2013 15:15

Well I'll be holding it long term unless something unsuspected occurs as I think it may well turn into another Judge as PP says.

[staverly] 30/1/2013 13:29

Not impressed with today's TS but hardly unexpected. What would bother me if i were a shareholder is the effusive tone of CEO. Perhaps not surprising then that management made no mention of progress in respect of "large untapped opportunities overseas".
Of course there may be interesting M&A developments in the pipeline (and it looks as though there needs to be). In the meanwhile i'd be careful with this one.

[jamielein] 30/1/2013 12:17

Paul, looks like you've had similar thoughts to me. I think the share price will drift until further news.

[paulypilot] 30/1/2013 11:32

Hi,

For anyone interested, my comments on Tracsis trading update are here:




Regards, Paul.

[marlint111] 30/1/2013 09:36

I've also reduced my holding my half here.

Peformance is good, but not great (though hopefully lots of revenue is only delayed due to re-franchising problems).

Price is reasonable on forward P/E of 13 once you strip out the big cash pile.