Trakm8 Share Discussion Threads

[dave2608] 27/4/2020 15:46

OK trakm8Fan if we accept your argument - which I don't - of the sales being done and the cash flowing in later, then where are these sales? They're not indicated in the revenue figures which have totally stalled. This after falling off a cliff in y/e 2019.

Also if this was merely a temporary cash flow problem as you're suggesting then as EpsomSalts1 pointed out in post 4620 then why wouldn't Microlise help them out during this period? After all they are 20% owners. I'm sorry but it just doesn't stack up properly.

[trakm8fan] 27/4/2020 13:35

Dave - cash flow - remember cash is king. Just because they have made a profit doesn't mean they have that cash in yet or that they didn't need more cash sooner to buy parts to manufacture goods for sale which they have not yet been and will not be paid for until sometime. If you were bringing on new customers and these customers were warning you that they will need x thousand units available to order and you know that units will take you 6 weeks to manufacture at a rate of 5000 per week and the component supplier has a lead time of 6 weeks then surely you can see that you need 12 weeks minimum. Their supplier may need payment in advance or soon compared to customers who may not pay for 30 or 60 days. in summary you often need more operating cash to furnish new contracts with larger volumes. Everyone knows that.

[michaelmouse] 27/4/2020 12:48

A good post HE (post 4907). Another great customer if it is Sainsburys.

[dave2608] 27/4/2020 12:19

Indeed let's give it a bit of perspective. If they made £1.4m of profit in the second half of the year then why did they need a £1.4m (net of costs) loan in December? How much were the costs of this loan? I bet they weren't cheap. Why incur these costs if you're making a handsome £1.4 million profit? Sorry but I'm smelling something a little bovine.

[horndean eagle] 27/4/2020 10:42

A bit of perspective. They were healthily profitable in the second half of the year. Adjusted loss in h1 was 1.6m and they are predicting losses for full year of 0.2m so they made 1.4m of profits in the second half of the year. As I understand it they were actually making very good progress in the business before covid hit. They had taken a lot of cost out of the business and were starting to make good traction on the sales side. I understand the supermarket deal was with Sainsburys and was good to go before covid threw a spanner in the works. Pretty certain that returns when things have calmed down a little. Would be a great contract win. Unfortunate that AA smart breakdown launch tied in with covid or else we would have been looking at a much healthier year ahead. AA will relaunch smart breakdown. It is a key part of their transformation. Insurance also starting to look quite positive.

[arthur_lame_stocks] 27/4/2020 10:10

I think you're wrong there dc2 tbh.

[dc2] 27/4/2020 10:04

I'm no accountant but I assume that if they increased their outgoings as part of their growth then they could be in a scenario where they have generated more cash whilst simultaneously increasing their outgoings to make a loss. Not saying this is fact.

[arthur_lame_stocks] 27/4/2020 09:55

Surely if they were loss making for the year the only way they could have generated cash is through depreciation or working capital? Or maybe some money from the Government if they're entitled to any.

[michaelmouse] 27/4/2020 09:34

Yes please feel free to check my TRAK record, and others :). Always an honest account. Where's your track record Blondeamon?



Bought out for £6.50.

Also check out:-



Details winners and losers.

[dc2] 27/4/2020 09:28

I did have one concern about their deferral about PAYE/VAT. Where is this cash held, one assumes it is part of the £1.7m

[michaelmouse] 27/4/2020 09:23

It's difficult to know during these unprecedented times what to expect from company trading updates. Overall, I'd say that it's a pretty good update, although as with all companies at the moment it's difficult to know what the future holds?

Dealing with their debt first of all. Net debt is the same as it was at the equivalent period last year. However, bear in mind that they took on an additional £1.4m loan in December which infers that cash generation has improved considerably.

At the half year, cash had reduced to around £600k but now stands at £1.7m.

"Cash generation from operations has been much improved and at 31 March 2020 the Group net debt was £5.6m (£8.0m after IFRS 16 changes) which is the same as at 31 March 2019 and a £0.5m reduction since Sept 2019. At the year end the Group had £1.7m of cash on hand and a further £0.5m of available funds under our revolving credit facility."

Their recurring revenue base is 50% of total revenues at £9.8m. That's a very big plus. Total revenues at £19.6m showed an increase of £2m in H2 compared to H1 i.e. £10.8m vs £8.8m. Another big plus.

Their insurance market is a big positive at this time, and is clearly less affected than fleet by covid-19 restrictions. Indeed they have launched with 2 new insurance companies post year end with 2 more to come on stream. As mentioned before, By Miles is a customer and they are getting more and more rave reviews by the day.

The self-fit devices are a major advantage in these times, and I believe will be in the future.

They have also confirmed major renewals with fleet customers which we knew about from the website.

Very sensibly they are making use of the Government's furlough scheme, and considering a further loan (interest free for 12 months) whilst they navigate the uncertainty that covid-19 has caused.

In summary, a good recovery to 31 March 2020 and some optimism even in the current climate.

[dc2] 27/4/2020 09:22

Ok, so let's assume they spent it on fast cars etc. They have exchanged a debt which may have had covenants on it for a government backed growth loan which I doubt is as aggressive. Perhaps we are both blinded by Trakm8.

[dc2] 27/4/2020 09:00

I think it does matter. A large growth loan used for its correct purposes implies a reduction in other types of debt. Assuming it was used for growth and not repayment then it also means the company is stronger I.e grown

[dc2] 27/4/2020 08:43

If debt is the same as Sept 2019 then how do you explain the Dec 2019 growth loan?

[40toolong] 27/4/2020 08:41

Blonde, you are just a bit bitter. I think you will see some director buys off the back of this, especially the new guy...

[trakm8fan] 27/4/2020 08:31

More and more insurance customers signing up. These must either be brand new to the market or are moving over from the likes of QTX. Both scenarios are great news although Blondie will just say they are giving their product away cheap. 1.5m loss last year to 200k loss this year is a change of 1.3m. So if there were 800k cost savings they have made 500k more profit from increased volumes over the last few months. Let's say last 5 months to keep the maths simple. Therefore extrapolate over 12 months gives 700k more profit next year than this year if they don't increase volumes and stay at this level. That would be 500k profit next year and cash positive.

[40toolong] 27/4/2020 08:30

When it came to it, couldn’t sell them all. Glad I didn’t now. Nicky has done a great job with winning Altrad. Lots to be excited about. Also AA will see a nice tick up in SB Ashby home owners will be concerned that their vehicles are draining their battery....No the debt problem has been stabilised, now it’s time to grow the top line.

[dc2] 27/4/2020 08:16

Ps. Whilst I wait for Blonde's view I did think our statement read well.

[dc2] 27/4/2020 08:10

I thought you got out at 8p?Anyway, QTX sent out a TU today, worth reading in conjunction with this one. Their's seems much worse but are they reporting the same thing?

[40toolong] 27/4/2020 07:53

Wow, have to give it to them, they have turned around the leaky ship. Now they need to just get through this Covid time. Great news on Eon and AA has finally been confirmed them.

I am topping up think this will now drift to 100p. Telematics companies are worth 10x revenue when traded.

Well done BoD for getting there and not pulling our legs anymore, we had enough of that.

Onwards and upwards