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Trakm8 Holdings Plc LSE:TRAK London Ordinary Share GB00B0P1RP10 ORD 1P
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Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Technology Hardware & Equipment 19.6 -1.7 -2.2 - 8

Trakm8 Holdings PLC Half-Year Results

23/11/2020 7:00am

UK Regulatory (RNS & others)


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TIDMTRAK

RNS Number : 0865G

Trakm8 Holdings PLC

23 November 2020

23 November 2020

TRAKM8 HOLDINGS PLC

("Trakm8" or the "Group")

Half Year Results

Trakm8 Holdings plc (AIM: TRAK), the global telematics and data insight provider, announces its unaudited results for the six months ended 30 September 2020:

Financial Highlights

 
                                      6 months        6 months         Year to      Change 
                                          to              to              31 
                                       30 Sept         30 Sept       March 2020 
                                         2020            2019 
                                      Unaudited       Unaudited        Audited 
                                           GBP000          GBP000          GBP000 
                                   --------------  --------------  --------------  ------- 
 Revenue                                    7,321           8,867          19,550    -17% 
                                   --------------  --------------  --------------  ------- 
 of which, recurring revenue(1)             4,635           4,885           9,753    -5% 
                                   --------------  --------------  --------------  ------- 
 Loss before tax                            (845)         (2,197)         (1,705)    -62% 
                                   --------------  --------------  --------------  ------- 
 Adjusted loss before tax(2)                (314)         (1,583)           (224)    -80% 
                                   --------------  --------------  --------------  ------- 
 Loss after tax                             (732)         (1,787)         (1,093)    -59% 
                                   --------------  --------------  --------------  ------- 
 Cash generated from operations             2,055           1,432           4,115    +44% 
                                   --------------  --------------  --------------  ------- 
 Net Debt(3)                                5,574           6,095           5,643    -9% 
                                   --------------  --------------  --------------  ------- 
 Basic (loss)/ earnings per 
  share                                   (1.46p)         (3.57p)         (2.19p)    -59% 
                                   --------------  --------------  --------------  ------- 
 Adjusted basic (loss)/ earnings 
  per share                               (0.56p)         (2.53p)           0.28p    -78% 
                                   --------------  --------------  --------------  ------- 
 

1 Recurring revenues are generated from ongoing service and maintenance fees

2 Before exceptional costs and share based payments

3. Total borrowings less cash excluding IFRS 16 adjustment for leased property and motor vehicles

Operational Overview

   --   H1 2020 results: 

o Significant reduction in losses despite revenue decline as a result of Covid-19

o Improving revenues later in the period, following significant drop in April and May upon Covid-19 lockdown

o Significantly improved gross margins due to lower hardware, labour, communications and installation costs

o Reduced overheads as a result of efficiency improvements implemented in FY2020, which includes lower payroll costs

o Improved cash generation from operations due to significant reduction in losses, PAYE & VAT deferments and strong working capital actions

o Launch of extended range of self-fit telematics devices

   --   Continuation of new contract wins and renewals: 

o Optimisation contract awarded by major UK food retailer

o Strong period of contract renewals in the Fleet business, despite Covid-19 all significant contracts due for renewal in the period have been renewed

o Installed base increases in Insurance from existing and new customers offset in part by Fleet reductions

o Approximately 253,000 connections (March 2020: 245,000 connections), an increase of 8,000 connections, a 3% increase in the six month period since last year end

   --   Stronger H2 and FY2021 outlook: 

o Major automotive customer committed to a further 24,000 units over next 12 months following their European launch

o Strong level of orders, post period, from existing and new Fleet customers

o Additional efficiency savings implemented

o Investment in engineering to deliver additional gross margin improvements over the next 6 months

Outlook

Revenues picked up during the first half with revenues in the second quarter 23% higher than in the first quarter. This improvement continued into October in both Insurance and Fleet, resulting in this being the highest revenue month to date this financial year. The Insurance business benefitted from increasing device shipments to both existing and recently won customers resulting in both September and October 2020 shipments being 50% higher than March 2020. Fleet sales team performance has returned to pre Covid-19 levels, with the total value of orders in the first half 16% up on the first half of the prior year. Orders in October 2020 were 12% up on October 2019.

However due to the second lockdown there is a softening in the market and increased uncertainty that means the Group is still not able to provide guidance for the full financial year at this time. However the Group expects revenue in the second half to be significantly higher than the first half given current orders, even with a reasonable downside scenario taken into account for the ongoing impact of Covid-19.

- Ends -

For further information:

 
       Trakm8 Holdings plc 
       John Watkins, Executive Chairman                Tel: +44 (0) 167 543 4200 
       Jon Furber, Finance Director                               www.trakm8.com 
 
       Arden Partners plc (Nominated Adviser           Tel: +44 (0) 20 7614 5900 
        & Broker) 
       Paul Shackleton, Head of Corporate                 www.arden-partners.com 
        Finance 
        Simon Johnson, Head of Sales 
 
 
 

About Trakm8

Trakm8 is a UK based technology leader in fleet management, insurance telematics, connected car, and optimisation. Through IP owned technology, the Group analyses data collected by 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, self-installed telematics units and one of the widest ranges of installed telematics devices. Trakm8 has over 253,000 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, Direct Line Group and Ingenie.

Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.

www.trakm8.com / @Trakm8

Executive Chairman's Statement

Results

I am pleased to report Trakm8's results for the six months ended 30 September 2020.

The first half of the financial year was significantly impacted by the Covid-19 pandemic. In the early months of the period Fleet activity reduced very significantly. Sales of insurance policies reduced dramatically as vehicles were "sorned", driving lessons and tests cancelled. Gradually over the period both Fleet and Insurance demand levels improved. I am pleased that overall we secured new orders some 10% higher than the same six months of last year.

However, overall revenues reduced by 17% in the period to GBP7.32m (H1 2019: GBP8.87m). There was a reduction of GBP0.53m in Insurance and Automotive revenues and a reduction in Fleet and Optimisation revenues of GBP1.02m.

Total recurring revenues decreased by 5% during the period to GBP4.63m (H1 2019: GBP4.89m), as a result of the decline in the connected base in the Fleet market. The reduction in service fees year on year took place in the early months of the period and have since recovered. Recurring revenues represent 63% of Group revenues (H1 2019: 55%). Covid-19 materially increased Fleet attrition during the period and the slow start for new orders meant new deployments were substantially lower than normal, overall reducing connections by 7,000 units since March 2020 to 70,000 (9%).

Despite the large reduction in telematics insurance policies being written across the market, our success in rolling out solutions to a number of additional clients has resulted in device shipments 14% ahead of the same period last year with the month of September being 177% greater than April. As a result, Insurance & Automotive connections increased by 15,000 since March 2020, to 183,000 (9%). We estimate that the impact of Covid-19 has resulted in circa 33,000 connections less than it would have been.

Gross profit margin has increased to 62% (H1 2019: 53%). This is due in part to the higher recurring revenues as a percentage of sales but also due to the vigorous actions taken over the past 24 months to introduce hardware with lower costs, reduce the direct labour costs and to reduce the cost of communications and installations. This trend is expected to continue as further cost improvements are delivered.

Total overhead costs, excluding exceptional costs and share based payments reduced by GBP1.61m to GBP4.71m (H1 2019: GBP6.32m). This is the result of the cost actions taken over the last 12 months along with GBP0.77m of furloughed staff costs which have been charged to exceptional costs, which have been offset by GBP0.55m of furlough grant received. In addition to this GBP1.61m reduction in overheads the level of R&D expenditure capitalised has reduced by GBP0.27m. Exceptional costs in the period of GBP0.44m include headcount reduction activity undertaken during the period and costs associated with the impact of Covid-19.

Despite the challenges of Covid-19, I am pleased to report that the Group adjusted loss reduced by 80% to GBP0.31m (H1 2019: GBP1.58m). Loss before Tax reduced by 62% to GBP0.85m (H1 2019: GBP2.20m). We estimated if it had not been for the significant impact of Covid-19 that we would have been profitable under both profit measures.

Financial position

Net cash inflow from operating activities was GBP2.06m (H1 2019: GBP1.43m). During the period the R&D tax claim of GBP0.86m was offset against agreed PAYE/NI deferments. At the 30 September GBP1.10m of VAT and PAYE/NI deferments have been agreed, with a repayment schedule that runs into next financial year. The improvement in cash inflow from operating activities is a good result, reflective of the significant reduction in losses and continued strong working capital management, which includes a GBP0.34m reduction in inventory since last financial year end.

The overall cash outflow for the period was GBP0.12m, which was an improvement of GBP0.39m from the prior period. This resulted from the improvement in the cash inflow from operating activities detailed above, and GBP0.27m reduction in capitalised development costs.

Net debt as at 30 September 2020 excluding the impact of the IFRS16 lease recognition was lower than both September last year and the end of the last financial year at GBP5.57m (H1 2019: GBP6.10m) (31 March 2020: GBP5.64m) including GBP1.54m of cash (H1 2019: GBP0.69m). In addition, the Group at 30 September 2020 held an undrawn credit facility of GBP0.50m at HSBC. Net Debt including IFRS 16 reduced to GBP7.27m (H1 2019: GBP8.42m), (31 March 2020: GBP7.95m).

The revolving credit facility with HSBC of which GBP4.50m was drawn at 30 September 2020 is due for renewal on 30 September 2021, therefore still had 12 months to run from 30 September 2020. As a result this is now reported within current liabilities on the balance sheet and the reason why they increased from GBP7.43m to GBP11.70m. The Group expects to extend this facility before year end.

Strategy

The Group has been following the strategy outlined in the 2020 Annual Report. Our focus is to provide ever more meaningful insights to our customers using the data generated by our installed devices and other connections so that they can run their operations more efficiently and safely.

Our primary strategy going forward is to return to growth of our business through more connections, increased device sales and higher service fees. Due to the high level of new contract wins in the Insurance space the number of connections have increased overall by 5% in the past 12 months and by 3% in past 6 months. The number of devices sold has increased by 11% to 49,000 (H1 2019: 44,000). Increased market share is anticipated following the introduction of additional self-fit devices.

Trakm8 has focused on delivering market leading technology and ensuring that the solutions are generating the best possible ROI's for our customers. We have, for another year, further reduced the levels of expenditure in R&D but believe we have appropriate levels of resource to continue to invest heavily to meet the demands of the market and customers. We will continue to own the majority of IP in our value chain. The technical challenges of the RH600 product experienced in previous years have been resolved and new generations of the product will have significant additional features.

Our third strategy has been to improve the efficiencies of our business in every possible way. We have been extremely successful in delivering the GBP1.5m reduction on all costs year-on-year promised last year (on top of the GBP2.0m savings delivered in the previous year). We have continued to focus on this and have implemented a further GBP0.6m of annualised cost reductions by the end of the period. We will continue to seek efficiencies as we go forward.

JOHN WATKINS

Executive Chairman

Unaudited Consolidated Statement of Comprehensive Income for the six months to 30 September 2020

 
                                                            Six months          Six months        Year to 
                                                       to 30 September     to 30 September       31 March 
                                                                  2020                2019           2020 
                                                             Unaudited           Unaudited        Audited 
                                                               GBP'000             GBP'000        GBP'000 
                                            Note 
 
Revenue                                      3                   7,321               8,867         19,550 
Cost of sales                                                  (2,804)             (4,174)        (7,991) 
Gross profit                                                     4,517               4,693         11,559 
 
Other income                                 4                     103                 213            364 
 
Administrative expenses excluding 
 exceptional costs                                             (4,800)             (6,435)       (11,926) 
Exceptional administrative 
 costs                                       7                   (442)               (501)        (1,296) 
Total administrative costs                                     (5,242)             (6,936)       (13,222) 
 
Operating loss                                                   (622)             (2,030)        (1,299) 
 
Finance income                                                      39                   3             12 
Finance costs                                8                   (262)               (170)          (418) 
 
Loss before taxation                                             (845)             (2,197)        (1,705) 
 
Income tax                                                         113                 410            612 
 
Loss for the period                                              (732)             (1,787)        (1,093) 
 
Other Comprehensive Income 
Items that may be subsequently reclassified 
 to profit or loss: 
Exchange differences on translation of 
 foreign operations                                                  5                   1            (7) 
Total other comprehensive income                                     5                   1            (7) 
                                                  --------------------  ------------------  ------------- 
 
Total Comprehensive Loss for the 
 period attributable to owners of 
 the parent                                  5                   (727)             (1,786)        (1,100) 
                                                  --------------------  ------------------  ------------- 
 
Adjusted operating loss before 
 tax                                         6                   (314)             (1,583)          (224) 
Loss before taxation                                             (845)             (2,197)        (1,705) 
Exceptional administrative 
 costs                                                             442                 501          1,296 
IFRS2 Share based payments charge                                   89                 113            185 
                                                  --------------------  ------------------  ------------- 
 
Loss per ordinary share (pence) attributable to 
 owners of the Parent 
 
Basic                                        9                  (1.46)              (3.57)         (2.19) 
Diluted                                      9                  (1.46)              (3.57)         (2.19) 
 
Adjusted basic loss per share 
 (pence)                                     9                  (0.56)              (2.53)           0.28 
Adjusted diluted loss per share 
 (pence)                                     9                  (0.56)              (2.53)           0.28 
----------------------------------------   -----  --------------------  ------------------  ------------- 
 

The results relate to continuing operations.

Unaudited Consolidated Statement of Changes in Equity for the six months to 30 September 2020

 
                         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 
 2019                      500           14,691            1,138             203                   (4)       5,566          22,094 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
Comprehensive income 
Loss for the 
 period                      -                -                -               -                     -     (1,787)         (1,787) 
Other comprehensive income 
Exchange 
 differences 
 on 
 translation 
 of overseas 
 operations                  -                -                -               1                     -           -               1 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
Total 
 comprehensive 
 income                      -                -                -               1                     -     (1,787)         (1,786) 
 
Transactions with owners 
IFRS 2 
 Share-based 
 payments                    -                -                -               -                     -         113             113 
Transactions 
 with owners                 -                -                -               -                     -         113             113 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
Balance as at 
 30 Sept 
 2019                      500           14,691            1,138             204                   (4)       3,892          20,421 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
Comprehensive income 
Loss for the 
 period                      -                -                -               -                     -         694             694 
Other comprehensive income 
Exchange 
 differences 
 on 
 translation 
 of overseas 
 operations                  -                -                -             (8)                     -           -             (8) 
Total 
 comprehensive 
 income                      -                -                -             (8)                     -         694             686 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
Transactions with owners 
IFRS2 
 Share-based 
 payments                    -                -                -               -                     -          72              72 
Transactions 
 with owners                 -                -                -               -                     -          72              72 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
Balance as at 
 31 March 
 2020                      500           14,691            1,138             196                   (4)       4,658          21,179 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
Comprehensive income 
Loss for the 
 period                      -                -                -               -                     -       (732)           (732) 
Other comprehensive income 
Exchange 
 differences 
 on 
 translation 
 of overseas 
 operations                  -                -                -               5                     -           -               5 
Total 
 comprehensive 
 income                      -                -                -               5                     -       (732)           (727) 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
Transactions 
with owners 
IFRS2 Share 
 based 
 payments                    -                -                -               -                     -          89              89 
Transactions 
 with owners                 -                -                -               -                     -          89              89 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
Balance as at 
 30 Sept 
 2020                      500           14,691            1,138             201                   (4)       4,015          20,541 
                --------------  ---------------  ---------------  --------------  --------------------  ----------  -------------- 
 
 

Unaudited Consolidated Statement of Financial Position as at 30 September 2020

 
                                                           As at 30            As at 30           As at 
                                                          September           September        31 March 
                                                               2020                2019            2020 
                                          Note            Unaudited           Unaudited         Audited 
                                                            GBP'000             GBP'000         GBP'000 
 
 Non-current assets 
 Intangible assets                         10                22,230              21,337          21,997 
 Plant, property and 
  equipment                                                     831                 716             717 
 Right of use assets                       14                 2,838               3,073           3,004 
 Deferred income tax 
  asset                                                           -                  39               - 
 Amounts receivable under finance 
  leases                                                         65                  65              41 
                                                             25,964              25,230          25,759 
                                                -------------------  ------------------  -------------- 
 Current assets 
 Inventories                                                  1,701               2,119           2,043 
 Trade and other receivables                                  7,171               6,710           7,854 
 Corporation tax receivable                                     317               1,320             863 
 Cash and cash equivalents                                    1,541                 692           1,665 
                                                             10,730              10,841          12,425 
                                                -------------------  ------------------  -------------- 
 Current liabilities 
 Trade and other payables                                   (5,574)             (5,750)         (6,180) 
 Borrowings                                11               (5,417)             (1,013)         (1,125) 
 Right of use liability                    14                 (679)               (639)           (656) 
 Provisions                                                    (26)                (26)            (27) 
                                                           (11,696)             (7,428)         (7,988) 
                                                -------------------  ------------------  -------------- 
 
 Current assets less current 
  liabilities                                                 (966)               3,413           4,437 
                                                -------------------  ------------------  -------------- 
 Total assets less current 
  liabilities                                                24,998              28,643          30,196 
                                                -------------------  ------------------  -------------- 
 
 Non-current liabilities 
 Trade and other payables                                     (593)               (630)           (713) 
 Borrowings                                11               (1,231)             (5,198)         (5,675) 
 Right of use liability                    14               (1,941)             (2,257)         (2,162) 
 Provisions                                                   (179)               (137)           (157) 
 Deferred income tax 
  liability                                                   (513)                   -           (310) 
                                                            (4,457)             (8,222)         (9,017) 
                                                -------------------  ------------------  -------------- 
 
 Net assets                                                  20,541              20,421          21,179 
                                                -------------------  ------------------  -------------- 
 
 Equity 
 Share capital                             12                   500                 500           500 
 Share premium                                               14,691              14,691          14,691 
 Merger reserve                                               1,138               1,138           1,138 
 Translation reserve                                            201                 204             196 
 Treasury reserve                                               (4)                 (4)             (4) 
 Retained earnings                                            4,015               3,892           4,658 
 Total equity attributable to owners 
  of the parent                                              20,541              20,421          21,179 
                                                -------------------  ------------------  -------------- 
 

Unaudited Consolidated Cash Flow Statement for the six months to 30 September 2020

 
                                                                    Six months             Six months         Year 
                                                                            to                     to           to 
                                                                  30 September           30 September     31 March 
                                                                          2020                   2019         2020 
                                                  Note               Unaudited              Unaudited      Audited 
                                                                       GBP'000                GBP'000      GBP'000 
 
 Net cash generated from operating activities      13                    2,055                  1,432        4,115 
                                                        ----------------------  ---------------------  ----------- 
 
 Cash flows from investing activities 
 Purchases of property, plant and 
  equipment                                                              (183)                      -         (20) 
 Purchases of software                                                    (24)                    (1)         (23) 
 Capitalised Development costs                                         (1,220)                (1,488)      (3,156) 
 Net cash used in investing activities                                 (1,427)                (1,489)      (3,199) 
                                                        ----------------------  ---------------------  ----------- 
 
 Cash flows from financing activities 
 New bank loan                                                               -                    500        2,000 
 Repayment of bank loans                                                 (171)                  (505)      (1,440) 
 Repayment of obligations under lease 
  agreements                                                             (344)                  (281)        (630) 
 Interest paid                                                           (237)                  (170)        (386) 
 Net cash generated from financing activities                            (752)                  (456)        (456) 
                                                        ----------------------  ---------------------  ----------- 
 
 Net (decrease)/ increase in cash and 
  cash equivalents                                                       (124)                  (513)          460 
 
 Cash and cash equivalents at beginning 
  of period                                                              1,665                  1,205        1,205 
 
 Cash and cash equivalents at end of 
  period                                                                 1,541                    692        1,665 
                                                        ----------------------  ---------------------  ----------- 
 

Notes To The Unaudited Consolidated Financial Statements

 
 1. Basis of preparation 
 
 The Group's interim results for the 6 months to 30 September 2020 (prior 
  period 30 September 2019) were approved by the Board of Directors on 
  20 November 2020. 
 
 As permitted this Interim Report has been prepared in accordance with 
  UK AIM Rules for Companies and not in accordance with IAS 34 "Interim 
  Financial Reporting" and therefore is not fully in compliance with 
  IFRS. 
 
 Trakm8 Holdings PLC ("Trakm8") is a public limited company incorporated 
  in the United Kingdom under the Companies Act 2006. Trakm8 is domiciled 
  in the United Kingdom and its ordinary shares are traded on AIM, the 
  market operated by the London Stock Exchange plc. 
 
 The accounting policies adopted in the preparation of the interim financial 
  statements are the same as those set out in the Group's annual financial 
  statements for the year ended 31 March 2020. The Group adopted IFRS16 
  on a modified retrospective basis, this is disclosed in note 14. The 
  financial statements have been prepared on the historical cost basis 
  except for certain liabilities and share based payment liabilities 
  which are measured at fair value. 
 
 The interim financial statements have not been audited or reviewed 
  by Group's auditors pursuant to the Auditing Practice Board guidance 
  on 'Review of Interim Financial Information' and do not include all 
  of the information required for full annual financial statements. 
 
 The financial information contained in this report is condensed and 
  does not constitute statutory accounts of the Group within the meaning 
  of Section 434(3) of the Companies Act 2006. Statutory accounts for 
  the year ended 31 March 2020 have been delivered to the Registrar of 
  Companies. The audit report of those accounts was unqualified, but 
  did include an emphasis of matter due to the financial uncertainty 
  created within the economy by the Coronavirus pandemic resulting in 
  increased difficulty in forecasting future results for the Group. The 
  audit report did not contain a statement under Section 498(2) or (3) 
  of the Companies Act 2006. 
 
 Going concern 
 
 The consolidated interim financial statements are prepared on a going 
  concern basis. The directors report that, having reviewed current performance 
  and projections of its working capital and long term funding requirements, 
  including assessments against the covenants agreed with our bank and 
  downward sensitivity analysis, they are satisfied that the Group has 
  sufficient resources to continue in operation for the foreseeable future, 
  a period of not less than 12 months from the date of this report. Accordingly, 
  they continue to adopt the going concern basis in preparing the condensed 
  financial statements. 
 
  Exceptional Items 
 
  Exceptional items are those items that, in the Directors' view, are 
  required to be separately disclosed by virtue of their size or incidence 
  to enable a full understanding of the Group's financial performance. 
  See note 7 for further details. 
 
 
 2. Risks and uncertainties 
 
 The Board has considered the principal risks and uncertainties for the 
  second half of the financial year and determined that the risk presented 
  in the 31 March 2020 Annual Report, described as follows, also remain 
  relevant to the rest of the financial year: Significant operational 
  system failure; Cyber-attack and data security; Brexit and a deteriorating 
  economic climate; Operating in a fast-moving technology industry where 
  we will always be at risk from new products; Adverse mobile network 
  changes; Attracting and maintaining high-quality employees; Access to 
  long term and working capital; Electronic supply chain under constraint 
  and Covid-19 impacting internal and operational capacity and significant 
  economic impact. These are detailed on pages 20 to 22 of the 2020 Annual 
  Report, a copy of which is available on the Group's website at www.trakm8.com. 
 
 
 
 3. 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 revenue within these streams      Six months     Six months 
  are as follows:                                         to             to    Year to 
                                                30 September   30 September   31 March 
                                                        2020           2019       2020 
                                                   Unaudited      Unaudited    Audited 
                                                     GBP'000        GBP'000    GBP'000 
 Solutions:                                            7,321          8,867     19,550 
 Fleet and optimisation                                4,419          5,435     12,034 
 Insurance and automotive                              2,902          3,432      7,516 
                                               -------------  -------------  --------- 
 
 
 4. Other income 
 
 
                                                    Six months          Six months 
                                                            to                  to    Year to 
                                                  30 September        30 September   31 March 
                                                          2020                2019       2020 
                                                     Unaudited           Unaudited    Audited 
                                                       GBP'000             GBP'000    GBP'000 
 
 Grant income                                              103                 213        361 
 R&D tax credit                                              -                   -          4 
 R&D tax credit adjustment in respect 
  of prior periods                                           -                   -        (1) 
                                                           103                 213        364 
                                          --------------------  ------------------  --------- 
 
 
 5. Loss per ordinary share attributable to the owners of the parent 
 
 
                                        Six months     Six months 
                                                to             to    Year to 
                                      30 September   30 September   31 March 
                                              2020           2019       2020 
                                         Unaudited      Unaudited    Audited 
                                           GBP'000        GBP'000    GBP'000 
 
 Loss attributable to the owners 
 of the parent                               (727)        (1,786)    (1,100) 
                                     -------------  -------------  --------- 
 
 
 6. Adjusted loss before tax 
 
 
 Adjusted Loss Before Tax is monitored by the Board 
  and measured as follows: 
                                            Six months     Six months 
                                                    to             to     Year to 
                                          30 September   30 September    31 March 
                                                  2020           2019        2020 
                                             Unaudited      Unaudited     Audited 
                                               GBP'000        GBP'000     GBP'000 
 
 Loss Before Tax                                 (845)        (2,197)     (1,705) 
 Exceptional administrative costs                  442            501       1,296 
 Share based payments                               89            113         185 
 Adjusted loss before tax                        (314)        (1,583)       (224) 
                                        --------------  -------------  ---------- 
 
 
 7. Exceptional costs 
 
 
                                          Six months     Six months 
                                                  to             to    Year to 
                                        30 September   30 September   31 March 
                                                2020           2019       2020 
                                           Unaudited      Unaudited    Audited 
                                             GBP'000        GBP'000    GBP'000 
 
 Acquisition costs                                 -             41         52 
 Integration and restructuring 
  costs                                           97            227        602 
 Covid-19 costs                                  891              -        200 
 Furlough grant income                         (546)              -          - 
 New product component refit costs                 -            233        442 
                                                 442            501      1,296 
                                       -------------  -------------  --------- 
 

The integration and restructuring costs in the current year relate to an ongoing project to streamline and rationalise the operations of the business.

The Group has also incurred exceptional costs in the current financial year relating to the Covid-19 pandemic. These costs relate to a variety of overheads including employee costs, cancelled marketing events and bad debts resulting from Covid-19.

Furlough grant income relates to other income received from the Coronavirus Job Retention Scheme for employees furloughed as a result of Covid-19.

Detailed explanation of prior year exceptional costs are detailed on page 64 of the 2020 Annual Report, a copy of which is available on the Group's website at www.trakm8.com .

 
 8. Finance costs 
 
 
                                              Six months     Six months 
                                                      to             to    Year to 
                                            30 September   30 September   31 March 
                                                    2020           2019       2020 
                                               Unaudited      Unaudited    Audited 
                                                 GBP'000        GBP'000    GBP'000 
 
 Interest on bank loans                              191            106        284 
 Amortisation of debts issue costs                    21             14         32 
 Interest on Hire Purchase and similar 
  agreements                                          50             50        102 
                                                     262            170        418 
                                           -------------  -------------  --------- 
 
 
 9. Earnings Per Ordinary Share 
 

The earnings per Ordinary share have been calculated in accordance with IAS 33 using the profit for the period and the weighted average number of Ordinary shares in issue during the period as follow:

 
                                                           Six months        Six months 
                                                                   to                to        Year to 
                                                         30 September      30 September       31 March 
                                                                 2020              2019           2020 
                                                            Unaudited         Unaudited        Audited 
                                                              GBP'000           GBP'000        GBP'000 
 
 Loss the year after taxation                                   (732)           (1,787)        (1,093) 
 Exceptional administrative 
  costs                                                           442               501          1,296 
 Share based payments                                              89               113            185 
 Tax effect of adjustments                                       (84)              (95)          (246) 
 Adjusted (loss)/profit after 
  taxation                                                      (285)           (1,268)            142 
                                                  -------------------  ----------------  ------------- 
 
                                                                  No.               No.            No. 
                                                                 '000              '000           '000 
 Number of Ordinary shares of 
  1p each                                                      50,004            50,004         50,004 
 
 Basic weighted average number of Ordinary 
  shares of 1p each                                            50,004            50,004         50,004 
 Diluted weighted average number of Ordinary 
  shares of 1p each                                            50,004            50,004         50,004 
                                                  -------------------  ----------------  ------------- 
 
 Basic loss per share                                         (1.46p)           (3.57p)        (2.19p) 
 Diluted loss per share                                       (1.46p)           (3.57p)        (2.19p) 
 
 Adjust for effects of: 
 Exceptional costs                                              0.72p             0.81p          2.10p 
 Share based payments                                           0.18p             0.23p          0.37p 
 
 Adjusted basic (loss)/earnings 
  per share                                                   (0.56p)           (2.53p)          0.28p 
 Adjusted diluted (loss)/earnings per share                   (0.56p)           (2.53p)          0.28p 
 
 
 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 31 March 2019                  10,417         1,920             100       14,034     2,033    28,504 
Additions - Internal development          -             -               -        1,378         -     1,378 
Additions - External purchases            -             -               -          110        23       133 
Reclassification of right 
 of use assets                                                                             (153)     (153) 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 30 September 2019              10,417         1,920             100       15,522     1,903    29,862 
Additions - Internal development          -             -               -        1,385         -     1,385 
Additions - External purchases            -             -               -          283         -       283 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 31 March 2020                  10,417         1,920             100       17,190     1,903    31,530 
Additions - Internal development          -             -               -        1,200         -     1,200 
Additions - External purchases            -             -               -           20        24        44 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 30 September 2020              10,417         1,920             100       18,410     1,927    32,774 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
Amortisation 
As at 31 March 2019                       -         1,849              89        4,632       769     7,339 
Charge for period                         -            30              11        1,007       138     1,186 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 30 September 2019                   -         1,879             100        5,639       907     8,525 
Charge for period                         -            31               -          840       137     1,008 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 31 March 2020                       -         1,910             100        6,479     1,044     9,533 
Charge for period                         -            10               -          867       134     1,011 
                                   --------  ------------  --------------  -----------  --------  -------- 
As at 30 September 2020                   -         1,920             100        7,346     1,178    10,544 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
Net book amount 
As at 30 September 2020              10,417             -               -       11,064       749    22,230 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
As at 31 March 2020                  10,417            10               -       10,711       859    21,997 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
As at 30 September 2019              10,417            41               -        9,883       996    21,337 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
As at 31 March 2019                  10,417            71              11        9,402     1,264    21,165 
                                   --------  ------------  --------------  -----------  --------  -------- 
 
 
 
 11. Borrowings 
 
 
                            As at 30 September      As at 30 September        As at 31 March 
                                    2020                    2019                    2020 
                          ----------------------  ----------------------  ---------------------- 
                           Current   Non-Current   Current   Non-Current   Current   Non-Current 
                           GBP'000       GBP'000   GBP'000       GBP'000   GBP'000       GBP'000 
 Borrowings                  5,417         1,231     1,013         5,198     1,125         5,675 
 Right of use liability        679         1,941       639         2,257       656         2,162 
 Totals                      6,096         3,172     1,652         7,455     1,781         7,837 
                          --------  ------------  --------  ------------  --------  ------------ 
 
 
 All borrowings are held in sterling and the Directors consider their 
  carrying amount approximates to their fair values. 
 
 Borrowings comprise of the following loans: 
 A GBP5.0m term loan with HSBC. The loan is secured by a fixed and floating 
  charge on all the assets of the Group. It is repayable by monthly instalments 
  until 2021 and bears interest at a floating rate of 1.95% over base 
  rate. As at 30 September 2020 the Group owed GBP0.7m (30 Sept 2019: 
  GBP1.4m, 31 Mar 2020: GBP0.9m). 
 A GBP5.0m revolving credit facility with HSBC which is repayable in 
  full on 30 September 2021. The loan bears an interest rate of 4.5% 
  over LIBOR on the drawn amount and a fee of 0.8% on the undrawn facility. 
  As at 30 September 2020 the Group had drawn down GBP4.5m of this credit 
  facility (30 Sept 2019: GBP4.9m, 31 Mar 2020: GBP4.5m). 
 GBP1.5m growth capital loan with MEIF WM Debt LP. The loan bears a 
  fixed interest rate of 8% per annum and is repayable in 13 quarterly 
  instalments commencing on 30 June 2021. As at 30 September 2020 the 
  Group owed GBP1.5m (30 Sept 2019: GBPnil, 31 Mar 2020: GBP1.5m). 
 
 The Group's obligations under right of use assets are secured by the 
  lessors' title to the leased assets (see note 14). 
 
 
 12. Share Capital 
 
 
                                As at 30 September     As at 30 September     As at 31 March 
                                       2020                   2019                  2020 
                              ---------------------  ---------------------  ------------------ 
                                    No's                   No's                 No's 
                                   000's    GBP'000       000's    GBP'000     000's   GBP'000 
 Authorised: 
 Ordinary shares of 1p each      200,000    200,000     200,000    200,000   200,000   200,000 
 Allotted, issued and fully 
  paid: 
 Ordinary shares of 1p each       50,004        500      50,004        500    50,004       500 
 
 Movement in share capital:                                                            GBP'000 
 
 As at 1 April 2019                                                                        500 
                                                                                      -------- 
 As at 30 September 2019                                                                   500 
                                                                                      -------- 
 As at 31 March 2020                                                                       500 
 As at 30 September 2020                                                                   500 
                                                                                      -------- 
 

The Company currently holds 29,000 Ordinary shares in treasury representing 0.06% (2018: 0.08%) 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.

 
 13. Cash Generated from Operations 
 
 
                                                            Six months     Six months 
                                                                    to             to    Year to 
                                                          30 September   30 September   31 March 
                                                                  2020           2019       2020 
                                                             Unaudited      Unaudited    Audited 
                                                               GBP'000        GBP'000    GBP'000 
 
 Net loss before taxation                                        (845)        (2,197)    (1,705) 
 Depreciation                                                      380            334        699 
 Amortisation of intangible assets                               1,011          1,186      2,194 
 Exchange movements                                                  -              -        (7) 
 Interest received                                                (39)            (3)          - 
 Bank and other interest charges                                   262            170        406 
 Share based payments                                               89            113        185 
                                                   -------------------  -------------  --------- 
 Operating cash flows before movement in 
  working capital                                                  858          (397)      1,772 
 
 Movement in inventories                                           342            617        693 
 Movement in trade and other receivables                           659          1,750        589 
 Movement in trade and other payables                            (726)          (573)       (21) 
 Movement in provisions                                             21             21         42 
 Cash generated from operations                                  1,154          1,418      3,075 
 
 Interest received                                                  39              3         12 
 Income taxes received                                             862             11      1,028 
 Net cash inflow from operating 
  activities                                                     2,055          1,432      4,115 
                                                   -------------------  -------------  --------- 
 
 
 
 14. IFRS 16 Leases 
 

This note explains the impact of the adoption of IFRS16 Leases which the Group adopted with effect from 1 April 2019 on the group's financial statements. The Group principally leases real estate and vehicles. Leases are recognised as a right of use asset with a corresponding liability recorded at the date at which the leased asset is available for use by the Group.

The movements in right of use assets were as follows:

 
                                            Furniture, 
                             Freehold         fixtures     Computer       Motor 
                             property    and equipment    equipment    vehicles   Software     Total 
                              GBP'000          GBP'000      GBP'000     GBP'000    GBP'000   GBP'000 
 As at 1 April 2019             2,098                -            -         412          -     2,510 
 Reclassification*                  -              446          140           -        153       739 
 Lease additions                    -               63           35           -          -        98 
 Lease terminated                   -                -            -        (13)          -      (13) 
 Depreciation of right 
  of use assets                 (132)             (24)         (31)        (74)          -     (261) 
 As at 30 September 2019        1,966              485          144         325        153     3,073 
 Lease additions                    -                -            -         244          -       244 
 Lease terminated                   -                -            -        (24)          -      (24) 
 Depreciation of right 
  of use assets                 (132)             (25)         (31)       (101)          -     (289) 
 As at 31 March 2020            1,834              460          113         444        153     3,004 
 Lease additions                    -                -           76          79          -       155 
 Lease terminated                   -                -            -        (10)          -      (10) 
 Depreciation of right 
  of use assets                 (132)             (46)         (16)       (117)                (311) 
 As at 30 September 2020        1,702              414          173         396        153     2,838 
                           ----------  ---------------  -----------  ----------  ---------  -------- 
 

*Amounts previously recognised as finance lease assets have been reclassified to right of use assets upon transition to IFRS 16 on 1 April 2019.

 
 Lease liabilities by category at 30 September 
  2020 were as follows: 
 
 
                                Furniture, 
                 Freehold         fixtures     Computer    Motor 
                 property    and equipment    equipment     vehicles   Software   Total 
                  GBP'000          GBP'000      GBP'000      GBP'000    GBP'000   GBP'000 
 Current              272              117           15          204         71       679 
 Non-current         1482              166           44          196         53      1941 
 Total              1,754              283           59          400        124     2,620 
               ----------  ---------------  -----------  -----------  ---------  -------- 
 
 
 The maturity of lease liabilities at 30 September 2020 
  were as follows: 
 
 
                                      Furniture, 
                       Freehold         fixtures     Computer       Motor 
                       property    and equipment    equipment    vehicles          Software          Total 
                        GBP'000          GBP'000      GBP'000     GBP'000           GBP'000        GBP'000 
 Within 1 year              272              117           15         204                71            679 
 1 to 2 years               297               91           15         147                46            596 
 2 to 5 years               805               75           29          49                 7            965 
 More than 5 years          380                -            -           -                 -            380 
 Total                    1,754              283           59         400               124          2,620 
                     ----------  ---------------  -----------  ----------  ----------------  ------------- 
 
 
 15. Further Copies 
 

This statement, full text of the Stock Exchange announcement and the results presentation can be found on the Group's website www.trakm8.com and also from the registered office of Trakm8 Holdings PLC. The address of the registered office is: Roman Way, Roman Park, Coleshill, North Warwickshire, B46 1HG.

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