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Trakm8 Holdings Plc LSE:TRAK London Ordinary Share GB00B0P1RP10 ORD 1P
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Technology Hardware & Equipment 18.1 -0.1 0.4 41.9 8

Trakm8 Holdings PLC Final Results

29/06/2022 7:00am

UK Regulatory (RNS & others)


Trakm8 (LSE:TRAK)
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TIDMTRAK

RNS Number : 5300Q

Trakm8 Holdings PLC

29 June 2022

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.

29 June 2022

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 2022 (FY-2022).

FINANCIAL SUMMARY:

 
                                          FY-2022    FY-2021    Change 
 Group revenue                           GBP18.1m   GBP16.0m     +13% 
                                        ----------  ---------  ------- 
 of which, Recurring revenue(1)           GBP9.8m    GBP9.4m     +5% 
                                        ----------  ---------  ------- 
 Loss before tax                         (GBP0.1m)  (GBP1.9m)    +93% 
                                        ----------  ---------  ------- 
 Adjusted Profit/(Loss) before 
  tax(2)                                  GBP0.0m   (GBP0.3m)   +101% 
                                        ----------  ---------  ------- 
 Profit/(Loss) after tax                  GBP0.2m   (GBP1.2m)   +115% 
                                        ----------  ---------  ------- 
 Net cash inflow generated from 
  operations                              GBP3.8m    GBP4.7m     -19% 
                                        ----------  ---------  ------- 
 Net debt(3)                              GBP5.4m    GBP4.9m     +10% 
                                        ----------  ---------  ------- 
 Basic Profit/(Loss) per share             0.37p     (2.47p)    +115% 
                                        ----------  ---------  ------- 
 Adjusted basic earnings per share(2)      0.41p      0.07p     +486% 
                                        ----------  ---------  ------- 
 

(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-2022 net debt excludes GBP1.6m IFRS 16 lease liability.

OPERATIONAL OVERVIEW

   --      13% increase in revenues 
   --      4% increase to over 264,000 connected units in operation (FY-2021: 254,000) 
   --      5% increase in recurring revenues to GBP9.8m (FY-2021: GBP9.4m) 
   --      150% increase in software revenues to GBP1.4m (FY-2021: GBP0.5m) 
   --      New contract wins with Ticker and Adiona 
   --      Strong continued reduction in direct and indirect costs 
   --      Successfully navigated a large number of supply chain challenges 

OUTLOOK

   --      Group revenues in current financial year to end of May 2022 were 11% ahead of last year 

o Revenues from insurance clients increasing due to new contract wins and increased volumes from existing clients - revenues to end of May 2022 were 33% ahead of the comparable 2021 period

o Fleet sales showing good progress - revenues to end of May 2022 were 4% ahead of the comparable 2021 period

-- Inflationary pressure on payroll and components is partially mitigated with lower headcount and lower designed-in device costs

-- The Company continues to face component availability issues that could impact deliveries but the expectation is that we will continue to overcome these

-- The Board believes Trakm8 is building increasing momentum and is hopeful that this can be transformed into improved financial returns as we move forward

- 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/Liz Kirchner, Corporate            www.allenbycapital.com 
 Finance 
 Tony Quirke, 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 264,000 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 AA, Saint Gobain, EON, Iceland Foods, GSF, Direct Line Group, Ticker and Ingenie.

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

Covid-19 continued to impact the market for telematics, particularly in our Insurance business where young drivers were unable to secure driving tests compounded by the scarcity and higher costs of second hand cars. It also led to significant challenges in the supply of electronic components for our devices. Trakm8 managed its way through most of this and achieved a very significant improvement on the previous year delivering results in line with market expectations, returning to a profit after tax for the first time in several years.

The revenues of the business increased by 13% and despite higher costs due to lower furlough support and supply chain challenges posted an adjusted profit before tax of GBP0.0m (FY-2021: loss GBP0.3m). Loss before tax improved to GBP0.1m (FY-2021: loss GBP1.9m) and Profit after Tax improved to GBP0.2m (FY-2021: loss GBP1.2m).

Connections grew by 4% to 264,000. The total number of fleet management connections increased by 1% over the year to 71,000 (FY-2021: 70,000). Telematics for insurance/automotive connections increased by 5%. At the year-end we had 193,000 insurance/automotive connections (FY-2021: 184,000). Recurring service revenues increased by 5% to GBP9.8m (FY-2021: GBP9.4m). Software revenues increased by 150% to GBP1.4m (FY-2021: GBP0.5m). A good number of contract wins and renewals were secured particularly with the insurance clients.

It was pleasing to have strong cash generation of the business with a cash flow from operations of GBP3.8m (FY-2021: GBP4.7m). The Company paid down GBP0.9m of HMRC deferred payments on VAT/PAYE/NI, with the balance of GBP0.9m to be paid during this financial year. This resulted in a free cash flow of GBP0.6m (FY-2021: GBP2.0m) and net debt increased by GBP0.5m at GBP5.4m (pre-IFRS 16). The Group had GBP1.0m cash on hand and an undrawn overdraft facility of GBP0.5m.

Overheads excluding exceptionals increased by 6% due to a reduction of furloughed staff along with an increased marketing spend. Headcount reduced by 5% during the year with underlying salary costs 5% lower than at the end of the previous year.

Trakm8 was awarded the London Stock Exchange Green Economy Mark during the year in recognition that what the Company does plays a significant role in reducing the carbon footprint of our customers' operations. Trakm8 has also started the process of joining the Science Based Targets initiative in the goal of achieving net zero emissions by 2050.

Research and development ('R&D')

Trakm8 has maintained a significant level of investment in R&D for another year. The Board believes that this level of investment is necessary to retain a portfolio of market-leading technology. Over time as revenues grow we expect that this investment as a proportion of revenues will 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 development of self-fit devices, a multi-camera solution, development of the feature set in Insight, 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 our customers' return on investment improves.

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 ( https://www.trakm8.com/investor-relations/corporate-governance ) .

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-2022 with reductions across the business. In total our staff numbers have reduced by 5% over the year.

Trakm8 has a great team and I would like to thank everyone for their hard work, dedication and contribution to the ongoing success of the business.

Outlook

We start the new financial year with the ongoing supply chain challenges impacting our costs and our development progress. A significant amount of our engineering resources are devoted to redesigning current devices to meet component changes.

Currently Insurance & Automotive devices supplied to end of May 2022 amount to 60% more than the corresponding period last year due to the increased number of new clients secured. Fleet deliveries have been reasonably good with new unit shipments 38% greater than the corresponding period last year.

These shipments whilst increasing revenues for devices and where applicable installation in the short term, also drive increased levels of service revenues and profit for future periods.

April and May revenues were 11% higher than the corresponding period in FY 2022.

Like many businesses, Trakm8 is having to continue to face challenges in a number of areas in particular, component supply availability and logistics which have the potential to lead to shortages that could impact customer product deliveries. In addition, salary and component inflationary pressures are prevalent. However, the board is taking action to minimise the impact of these challenges on the Trakm8 business through, for example, reduced headcount, higher selling prices and engineered cost reductions.

On a much more positive note, we are seeing strong growth in the Insurance business due, in particular, to new customer wins. In addition, we are optimistic about securing a number of Fleet deployment contract renewals during the remainder of this year.

It is against this business generation backdrop that the Board believes Trakm8 is building increasing momentum and is hopeful that this can be transformed into improved financial returns as we move forward.

John Watkins

EXECUTIVE CHAIRMAN

28 June 2022

FINANCIAL REVIEW

TRADING RESULTS

 
                                  2022      2021   Change 
 Group Revenue (GBP'000)        18,111    15,961     +13% 
                               -------  --------  ------- 
 of which, Recurring Revenue 
  (GBP'000)                      9,806     9,379      +5% 
                               -------  --------  ------- 
 Loss before tax (GBP'000)         122     1,867     +93% 
                               -------  --------  ------- 
 Profit/(Loss) after tax 
  (GBP'000)                        187   (1,237)    +115% 
                               -------  --------  ------- 
 Adjusted Profit/(Loss) 
  before tax(1) (GBP'000)            3     (342)    +101% 
                               -------  --------  ------- 
 Basic Profit/Loss per share 
  (p)                             0.37    (2.47)    +115% 
                               -------  --------  ------- 
 Adjusted basic earnings 
  per share (p)                   0.41      0.07    +486% 
                               -------  --------  ------- 
 

(1) Before exceptional costs and share based payments

Revenue

Group revenue increased by 13% to GBP18.1m (FY-2021: GBP16.0m) as the impact of Covid-19 reduced. Fleet revenues increased by 18% to GBP11.2m and Insurance and Automotive revenues increased by 7% to GBP6.9m. Despite the majority of Covid-19 lockdown measures ending early in the financial year, Insurance revenues recovered much slower than anticipated due to the well publicised driving test delays and second hand car price inflation and availability but offset by shipments to new customers in the final quarter. This was complimented by increased levels of Fleet and Optimisation orders including strong software revenues in H1. Recurring revenue generated from service and maintenance fees increased by 5% to GBP9.8m (FY-2021: GBP9.4m) due to the higher levels of shipments of devices across both business units and implementation of optimisation services.

Loss before tax

The Group reported a loss before tax of GBP0.1m (FY-2021: GBP1.9m). This marked significant progress as increased revenues delivered gross margins of GBP11.1m (FY-2021: GBP9.3m). Total administrative costs remained broadly similar at GBP10.8m despite the increased levels of revenue. This included an increase in marketing spend of GBP0.1m to aid revenue growth, a reduction of Coronavirus Job Retention Scheme income to GBP0.19m (FY-2021: GBP0.94m) and an increase in depreciation and amortisation of GBP0.2m. This was offset by overall reduction in employee costs of GBP0.38m and a reduction in share-based payments of GBP0.6m compared to the prior year.

Adjusted Profit before tax

With the improved revenues and gross margins, the Group returned to profitability with an adjusted profit of GBP0.0m (FY-2021: GBP0.3m loss). The improved revenue performance was offset by increased employee costs as the furloughed staff costs decreased to GBP0.4m (FY-2021: GBP1.6m) along with increases in depreciation and amortisation, marketing costs and a reduction in Other Income of GBP0.2m, GBP0.1m and GBP0.2m respectively. Our continued efforts in efficiency savings improved underlying overheads including a reduction in employee costs of GBP0.3m to offset the cost increases.

Exceptional Costs

Exceptional costs totalled GBP0.6m (FY-2021: GBP1.3m) and again primarily include one off costs relating to Covid-19 albeit greatly reduced from the prior year. This included GBP0.4m of employee costs whilst on furlough in the first half of the year and GBP0.2m of component costs due to the ongoing supply chain challenges instigated by Covid-19 both here and abroad. This was offset by GBP0.2m received as part of the Coronavirus Job Retention Scheme. In addition, GBP0.1m was incurred in our ongoing project to streamline our internal operations.

Balance Sheet

 
                               2022      2021 
                            GBP'000   GBP'000 
                           --------  -------- 
 Non-Current Assets          25,874    25,640 
                           --------  -------- 
 Net Current Assets           1,704     4,169 
                           --------  -------- 
 Non-Current Liabilities      7,702     9,687 
                           --------  -------- 
 Net Assets                  19,876    20,122 
                           --------  -------- 
 

Net Assets decreased by GBP0.2m to GBP19.9m (FY-2021: GBP20.1m) reflecting the profit for the year, after deducting the IFRS2 Share based payments credits.

Non-current assets increased by GBP0.2m to GBP25.9m (FY-2021: GBP25.6m). This is due to a GBP0.5m reduction in right of use assets due to depreciation offset by a GBP0.8m increase in Intangible assets and GBP0.1m decrease in Property, plant and equipment. Intangible assets increased due to the continued investment in development in both software and hardware with capitalised development costs in the year totaling GBP2.9m (FY-2021: GBP2.3m), offset by amortisation of GBP1.9m (FY-2021: GBP1.7m).

Cash Flow

 
                               2022      2021 
                            GBP'000   GBP'000 
                           --------  -------- 
 Net Cash generated from 
  operations                  3,810     4,702 
                           --------  -------- 
 Investing activities       (3,254)   (2,667) 
                           --------  -------- 
 Free Cash Flow(1)              556     2,035 
                           --------  -------- 
 Financing activities       (1,992)   (1,330) 
                           --------  -------- 
 (Decrease)/Increase 
  in Cash in Year           (1,366)       705 
                           --------  -------- 
 Net Debt(2)                  5,395     4,887 
                           --------  -------- 
 

(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-2022 net debt excludes GBP1.6m IFRS 16 lease liability.

Cash from operating activities reduced by GBP0.9m to GBP3.8m (FY-2021: GBP4.7m) which included the repayment of GBP0.9m to HMRC under the time to pay agreement negotiated at the end of the last financial year. FY-2021 included the deferment of payments to HMRC which increased Cash from operating activities by GBP1.7m. Cash from operating activities also included R&D tax credit cash receipts of GBP0.7m (FY-2021: GBP0.9m) which reflects the Group's continued investment in development.

Free cash inflow of GBP0.6m (FY-2021: GBP2.0m) is due to the Net Cash generated from operating activities as detailed above, offset by cash outflows from investing activities which increased by GBP0.6m to GBP3.3m (FY-2021: GBP2.7m).

Financing activities was an outflow of GBP1.9m (FY-2021: GBP1.3m). Following the negotiation of new and revised terms for the Group's borrowings in March 2021, capital repayments to both HSBC and the MEIF WM Debt LP resumed in the second half of the year totalling GBP0.7m (FY2021: GBP0.1m).

Net Debt

Net debt excluding IFRS 16 lease liability of GBP1.6m (FY-2021 GBP1.9m) increased by GBP0.5m to GBP5.4m (FY-2021: GBP4.9m). Cash balances total GBP1.0m (FY-2021: GBP2.4m) and total borrowings including IFRS16 lease liability of GBP1.6m totals GBP7.9m (FY-2021: GBP9.1m). Borrowing comprised GBP4.9m (FY-2021: GBP5.3m) term loan with HSBC, a GBP1.2m (FY-2021: GBP1.5m) term loan with MEIF WM Debt LP and GBP2.0m (FY-2021: GBP2.4m) 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 2022 
 
                                                                           Note              Year ended              Year ended 
                                                                                               31 March                31 March 
                                                                                                   2022                    2021 
                                                                                                GBP'000                 GBP'000 
  REVENUE                                                              4                         18,111                  15,961 
  Cost of sales                                                                                 (7,004)                 (6,643) 
                                                                                 ----------------------  ---------------------- 
 
  Gross profit                                                                                   11,107                   9,318 
 
  Other income                                                         5                             13                     194 
 
  Administrative expenses excluding exceptional 
   costs                                                                                       (10,193)                 (9,585) 
  Exceptional administrative costs                                     7                          (568)                 (1,342) 
                                                                                 ----------------------  ---------------------- 
  Total administrative costs                                                                   (10,761)                (10,927) 
 
  OPERATING PROFIT/(LOSS)                                              6                            359                 (1,415) 
 
  Finance income                                                                                     67                      78 
  Finance costs                                                        8                          (548)                   (530) 
                                                                                 ----------------------  ---------------------- 
 
  LOSS BEFORE TAXATION                                                                            (122)                 (1,867) 
  Income tax                                                                                        309                     630 
 
  PROFIT/(LOSS) FOR THE YEAR                                                                        187                 (1,237) 
 
  OTHER COMPREHENSIVE INCOME 
  Items that may be subsequently reclassified 
   to profit or loss: 
  Exchange differences on translation of 
   foreign operations                                                                                10                     (3) 
                                                                                 ----------------------  ---------------------- 
  TOTAL OTHER COMPREHENSIVE INCOME/(LOSS)                                                            10                     (3) 
 
 
  TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR 
   THE YEAR ATTRIBUTABLE TO OWNERS OF THE 
   PARENT                                                                                           197                 (1,240) 
                                                                                 ======================  ====================== 
 
  LOSS BEFORE TAXATION                                                                            (122)                 (1,867) 
  Exceptional administrative costs                                                                  568                   1,342 
  IFRS2 Share based payments charge                                                               (443)                     183 
                                                                                 ----------------------  ---------------------- 
  ADJUSTED PROFIT/(LOSS) BEFORE TAX                                    6                              3                   (342) 
 
  PROFIT/(LOSS) PER ORDINARY SHARE (PENCE) 
   ATTRIBUTABLE TO OWNERS OF THE PARENT 
 
  Basic                                                                9                          0.37p                 (2.47p) 
  Diluted                                                              9                          0.37p                 (2.47p) 
 
  The results all relate to continuing operations. 
  Consolidated Statement of Changes in Equity For The Year Ended 31 
   March 2022 
 ------------------------------------------------------------------------------------------------------------------------------------------ 
 
                   Note      Share          Share      Merger       Translation                Treasury                Retained       Total 
                           capital        premium     reserve           reserve                 reserve                earnings      equity 
                           GBP'000        GBP'000     GBP'000           GBP'000                 GBP'000                 GBP'000     GBP'000 
  Balance as at 1 
   April 2020                  500         14,691       1,138               196                     (4)                   4,658      21,179 
 
  Comprehensive 
  loss 
  Loss for the year              -              -           -                 -                       -                 (1,237)     (1,237) 
  Other 
  comprehensive 
  loss 
  Exchange differences 
   on translation of 
   overseas operations           -              -           -               (3)                       -                       -         (3) 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
  Total comprehensive 
   loss                          -              -           -               (3)                       -                 (1,237)     (1,240) 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
 
  Transactions 
  with 
  owners 
  IFRS2 Share-based 
   payments charge               -              -           -                 -                       -                     183         183 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
  Transactions with 
   owners                        -              -           -                 -                       -                     183         183 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
 
  Balance as at 1 
   April 2021                  500         14,691       1,138               193                     (4)                   3,604      20,122 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
 
  Comprehensive 
  income 
  Income for the year            -              -           -                 -                       -                     187         187 
  Other 
  comprehensive 
  income 
  Exchange differences 
   on translation of 
   overseas operations           -              -           -                10                       -                       -          10 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
  Total comprehensive 
   income                        -              -           -                10                       -                     187         197 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
 
  Transactions 
  with 
  owners 
  IFRS2 Share based 
   payments credit               -              -           -                 -                       -                   (443)       (443) 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
  Transactions with 
   owners                        -              -           -                 -                       -                   (443)       (443) 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
  Balance as at 31 
   March 2022                  500         14,691       1,138               203                     (4)                   3,348      19,876 
                          --------  -------------  ----------  ----------------  ----------------------  ----------------------  ---------- 
 
 
 
 Consolidated Statement of Financial Position As At 31 March 2022 
------------------------------------------------------------------------------------------------- 
                                                Note               As at 31                 As at 
                                                                 March 2022              31 March 
                                                                                             2021 
 ASSETS                                                             GBP'000               GBP'000 
 NON CURRENT ASSETS 
 Intangible assets                               10                  23,012                22,187 
 Property, plant and equipment                                          803                   891 
 Right of use assets                                                  2,032                 2,512 
 Amounts receivable under finance leases                                 27                    50 
                                                                     25,874                25,640 
                                                      ---------------------  -------------------- 
 CURRENT ASSETS 
 Inventories                                                          1,322                 1,409 
 Trade and other receivables                                          7,944                 6,679 
 Corporation tax receivable                                             709                   690 
 Cash and cash equivalents                                            1,004                 2,370 
                                                                     10,979                11,148 
                                                      ---------------------  -------------------- 
 LIABILITIES 
 CURRENT LIABILITIES 
 Trade and other payables                                           (7,521)               (5,417) 
 Borrowings                                                         (1,115)                 (855) 
 Right of use liability                                               (612)                 (680) 
 Provisions                                                            (27)                  (27) 
                                                                    (9,275)               (6,979) 
                                                      ---------------------  -------------------- 
 
 CURRENT ASSETS LESS CURRENT LIABILITIES                              1,704                 4,169 
 
 TOTAL ASSETS LESS CURRENT LIABILITIES                               27,578                29,809 
 
 NON CURRENT LIABILITIES 
 Trade and other payables                                             (626)               (1,546) 
 Borrowings                                                         (4,855)               (5,815) 
 Right of use liability                                             (1,367)               (1,767) 
 Provisions                                                           (112)                 (190) 
 Deferred income tax liability                                        (742)                 (369) 
                                                                    (7,702)               (9,687) 
                                                      ---------------------  -------------------- 
 
 NET ASSETS                                                          19,876                20,122 
                                                      ---------------------  -------------------- 
 
 EQUITY 
 Share capital                                   11                     500                   500 
 Share premium                                                       14,691                14,691 
 Merger reserve                                                       1,138                 1,138 
 Translation reserve                                                    203                   193 
 Treasury reserve                                                       (4)                   (4) 
 Retained earnings                                                    3,348                 3,604 
 
 TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS 
  OF THE PARENT                                                      19,876                20,122 
                                                      ---------------------  -------------------- 
 
 The loss for the Company for the year determined in accordance with 
  the Companies Act 2006 was GBP176,000 (2021: loss GBP257,000). 
 The notes on pages 46 to 81 of the annual report and accounts are 
  an integral part of these consolidated financial statements. These 
  financial statements were approved by the Board of directors and 
  authorised for issue on 28 June 2022 and are signed on its behalf 
  by: 
 John Watkins - Director                        Jon Edwards - 
                                                 Director 
 Consolidated Statement of Cash Flows For The Year Ended 31 
  March 2022 
--------------------------------------------------------------------------- 
 
 
 
                                                 Notes             Year ended             Year ended 
                                                                     31 March               31 March 
                                                                         2022                   2021 
                                                                      GBP'000                GBP'000 
 NET CASH GENERATED FROM OPERATING ACTIVITIES     12                    3,810                  4,702 
                                                        ---------------------  --------------------- 
 
 CASH FLOWS FROM INVESTING ACTIVITIES 
 Purchases of property, plant and equipment                             (420)                  (330) 
 Proceeds from sale of property, plant                                    125 
  and equipment                                                                                    - 
 Purchases of software                                                   (48)                   (47) 
 Capitalised development costs                                        (2,911)                (2,290) 
 
 NET CASH USED IN INVESTING ACTIVITIES                                (3,254)                (2,667) 
                                                        ---------------------  --------------------- 
 
 CASH FLOWS FROM FINANCING ACTIVITIES 
 Increase in loans                                                          -                  5,300 
 Loan arrangement fees                                                    (5)                   (88) 
 Repayment of loans                                                     (743)                (5,379) 
 Repayment of obligations under lease 
  agreements                                                            (674)                  (670) 
 Interest paid                                                          (500)                  (493) 
 
 NET CASH USED IN FINANCING ACTIVITIES                                (1,922)                (1,330) 
                                                        ---------------------  --------------------- 
 
 NET (DECREASE)/INCREASE IN CASH AND 
  CASH EQUIVALENTS                                                    (1,366)                    705 
 
 CASH AND CASH EQUIVALENTS AT BEGINNING 
  OF YEAR                                                               2,370                  1,665 
                                                        ---------------------  --------------------- 
 
 CASH AND CASH EQUIVALENTS AT OF 
  YEAR                                                                  1,004                  2,370 
                                                        ---------------------  --------------------- 
 

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 
     as endorsed by the European Union, 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 2022 and audited 
      information for the year ended 31 March 2021 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 2022 
      which will be delivered to the Registrar of Companies in due 
      course. Statutory financial statements for the year ended 31 
      March 2021 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 2022 and 2021 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 54% of revenues that provide a 
      strong underlying base. 
 
      The Group renewed its debt facilities with HSBC in March 2021 
      and benefitted from deferral of capital repayments which recommenced 
      in September 2021. This was in addition to reaching an agreement 
      with HMRC to repay GBP1.8m VAT, PAYE & NI equally between this 
      financial year and next. Covenant tests to the end of March 2022 
      were an absolute EBITDA tested quarterly, moving to quarterly 
      cash flow cover and leverage covenants from June 2022. 
 
      At the year end the Group has cash balances of GBP1,004,000 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 
      material shortages constrain its ability to fulfil orders or 
      demand of its products and services reduce and material costs 
      increase. 
 
 
 
 
      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               Year ended 
                                                                           31 March                 31 March 
                                                                               2022                     2021 
                                                                            GBP'000                  GBP'000 
  Solutions:                                                                 18,111                   15,961 
  Fleet and optimisation                                                     11,217                    9,520 
  Insurance and automotive                                                    6,894                    6,441 
                                                                -------------------  ----------------------- 
 
        A geographical analysis of revenue by destination 
         is as follows: 
 
                                                                         Year ended               Year ended 
                                                                           31 March                 31 March 
                                                                               2022                     2021 
                                                                            GBP'000                  GBP'000 
  United Kingdom                                                             17,784                   15,647 
  North America                                                                   -                        4 
  Norway                                                                          -                        2 
  Rest of Europe                                                                272                      293 
  Rest of World                                                                  55                       15 
                                                                             18,111                   15,961 
                                                                -------------------  ----------------------- 
 
 
    5     OTHER INCOME 
                                                                         Year ended               Year ended 
                                                                           31 March                 31 March 
                                                                               2022                     2021 
                                                                            GBP'000                  GBP'000 
  Grant income                                                                   13                      194 
                                                                                 13                      194 
                                                                -------------------  ----------------------- 
 
 
  6   OPERATING PROFIT/(LOSS) 
 
      The following items have been included in arriving at operating 
       profit/(loss): 
                                                                    Year ended               Year ended 
                                                                      31 March                 31 March 
                                                                          2022                     2021 
                                                                       GBP'000                  GBP'000 
      Depreciation 
   - owned assets                                                          176                      156 
   - right of use assets                                                   630                      625 
      Amortisation of intangible 
       assets 
   - owned assets (see note 
    10)                                                                  2,134                    1,992 
  Other operating lease rentals                                             34                       13 
  Research and development 
   expenditure                                                             669                      637 
  Loss on disposal of property plant 
   and equipment                                                           263                      318 
  Loss on foreign exchange 
   transactions                                                             22                        1 
  Staff costs                                                            5,187                    6,465 
  Exceptional administrative 
   costs (see note 7)                                                      568                    1,342 
      Auditors' remuneration 
      - Fees payable to the Company's auditors for 
       the audit of the parent 
    company and consolidated financial 
     statements                                                             77                       73 
 
      Adjusted profit/(loss) before tax is monitored by the 
       Board and measured as follows: 
                                                                    Year ended               Year ended 
                                                                      31 March                 31 March 
                                                                          2022                     2021 
                                                                       GBP'000                  GBP'000 
  Loss before tax                                                        (122)                  (1,867) 
  Exceptional administrative 
   costs (note 9)                                                          568                    1,342 
  Share based payments                                                   (443)                      183 
  Adjusted profit/(loss) before 
   tax                                                                       3                    (342) 
                                                       -----------------------  ----------------------- 
 
  7   EXCEPTIONAL ADMINISTRATIVE 
       COSTS 
                                                                    Year ended               Year ended 
                                                                      31 March                 31 March 
                                                                          2022                     2021 
                                                                       GBP'000                  GBP'000 
  Integration & restructuring 
   costs                                                                   107                      168 
  Covid-19 costs                                                           646                    2,109 
  Furlough grant income                                                  (185)                    (935) 
                                                                           568                    1,342 
                                                       -----------------------  ----------------------- 
 
 
   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 raw materials 
    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 this includes the costs 
    of employees during periods of furlough. 
 
 
   The Group has also incurred significant costs relating to its 
    ongoing project to streamline and rationalise the operations 
    of the business. This has resulted in the following non-underlying, 
    one-off costs: 
 
    - Restructuring costs incurred as a result of a headcount reduction 
    activity undertaken during the current financial year. 
 
    - In the prior year, integration and restructuring costs incurred 
    relate to integrating the activities of Route Monkey Limited 
    and Roadsense Limited that were acquired in previous financial 
    years and include costs associated with office closures and 
    costs and profits incurred as part of its long-term real estate 
    plan. 
 
    - In the current and 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 
                                                                   2022                           2021 
                                                                GBP'000                        GBP'000 
       Interest on bank loans                                       388                            373 
       Amortisation of debt issue costs                              48                             37 
       Interest on right of use assets                              112                            120 
                                                                    548                            530 
                                           ----------------------------  ----------------------------- 
  9     EARNINGS PER ORDINARY SHARE 
 
        The earnings per Ordinary share have been calculated in accordance 
         with IAS 33 using the profit/(loss) for the year and the weighted 
         average number of Ordinary shares in issue during the year as 
         follows: 
                                                             Year ended                       Year ended 
                                                          31 March 2022                    31 March 2021 
                                                                GBP'000                          GBP'000 
        Profit/(Loss) for the year after 
         taxation                                                   187                          (1,237) 
        Exceptional administrative costs                            568                            1,342 
        Share based payments                                      (443)                              183 
        Tax effect of adjustments                                 (108)                            (255) 
        Adjusted profit for the year 
         after 
         taxation                                                   204                               33 
                                           ----------------------------  ------------------------------- 
 
                                                                    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*                         50,056,538                       50,004,002 
 
        Basic profit/(loss) per share                             0.37p                          (2.47p) 
        Diluted profit/(loss) per share                           0.37p                          (2.47p) 
 
        Adjust for effects of: 
        Exceptional costs                                         0.92p                            2.17p 
        Share based payments                                    (0.89p)                            0.37p 
 
        Adjusted basic earnings per share                         0.41p                            0.07p 
        Adjusted diluted earnings per 
         share                                                    0.41p                            0.07p 
 
        *In the current year, the Group awarded Tranch AI with an exercise 
         price of 16p. This grant is dilutive as the exercise price is 
         less than the average share price as at year end. 
 
 
 
 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 
   2020                               10,417             1,920               100               17,190           1,903       31,530 
  Additions - Internal 
   developments                            -                 -                 -                2,119               -        2,119 
  Additions - External 
   purchases                               -                 -                 -                  171              47          218 
  Impairments                              -                 -                 -                    -           (155)        (155) 
  Disposals                                -                 -                 -                (238)            (36)        (274) 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
  As at 31 March 
   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 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
       AMORTISATION 
  As at 1 April 
   2020                                    -             1,910               100                6,479           1,044        9,533 
  Charge for 
   year                                    -                10                 -                1,733             249        1,992 
  Disposals                                -                 -                 -                (238)            (36)        (274) 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
  As at 31 March 
   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 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
       NET BOOK AMOUNT 
  As at 31 March 
   2022                               10,417                 -                 -               12,236             359       23,012 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
 
  As at 31 March 
   2021                               10,417                 -                 -               11,268             502       22,187 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
 
  As at 1 April 
   2020                               10,417                10                 -               10,711             859       21,997 
                              --------------  ----------------  ----------------  -------------------  --------------  ----------- 
 
    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-2023 which have been reviewed and approved by the Board 
   and projections for FY-2024. Forecasts for the subsequent 3 
   years have been produced based on 7% (a prudent growth rate 
   for 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 shows sufficient headroom of cash flow above the 
    net assets value when we have performed sensitivity analysis. 
   1. An increase in the discount rate to 12% 
    shows headroom of GBP3m. 
   2. A decrease in the growth rate to 5% shows 
    headroom of GBP10m. 
   3. A decrease in the terminal growth rate 
    to 1% shows headroom of GBP11m. 
 
   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 4% and decrease 
    in terminal growth rate from 2% to 1% and increase the discount 
    rate from 10% to 11%. 
   Or triggered 
    by: 
   1. Decrease in net cash generated from operating activities 
    for FY-2023 and FY-2024 of 14%. 
 
   Amortisation expenses of GBP2,134,000 (2021: GBP1,992,000) have 
    been charged to Administrative expenses in the Consolidated 
    Statement of Comprehensive Income. 
 
 
 11    SHARE CAPITAL 
                                                        As at 31 March              As at 31 March 
                                                              2022                       2021 
 
                                                              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% (2021: 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 March         As at 31 March 
                                                                     2022                   2021 
                                                                  GBP'000                GBP'000 
 
  Loss before 
   tax                                                              (122)                (1,867) 
  Depreciation                                                        806                    781 
  (Profit)/Loss on disposal 
   of fixed assets                                                    263                    318 
  Net bank and other 
   interest                                                           481                    452 
  Exceptional 
   costs                                                              568                  1,342 
  Amortisation of intangible 
   assets                                                           2,134                  1,992 
  Exchange movement                                                    10                    (3) 
  Share based payments                                              (443)                    183 
                                                    ---------------------  --------------------- 
  Operating cash flows before movement 
   in working capital                                               3,697                  3,198 
  Movement in inventories                                              87                    634 
  Movement in trade and other 
   receivables                                                    (1,242)                  1,166 
  Movement in trade and other 
   payables                                                         1,184                     70 
  Movement in provisions                                             (78)                     33 
                                                    ---------------------  --------------------- 
  Cash generated from operations before 
   exceptional costs                                                3,648                  5,101 
  Cash outflow from exceptional 
   costs                                                            (568)                (1,342) 
                                                    ---------------------  --------------------- 
  Cash generated from 
   operations                                                       3,080                  3,759 
  Interest received                                                    67                     78 
  Income taxes received                                               663                    865 
                                                    --------------------- 
  Net cash inflow from operating 
   activities                                                       3,810                  4,702 
                                                    ---------------------  --------------------- 
 

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