Tracsis plc - Final results
05 Dec 2008
Maiden Preliminary Results following year of continued growth
and profitability Tracsis Plc (AIM: TRCS) the specialist provider
of labour optimisation software and consultancy services to the
transport industry, announces preliminary results for the year
ended 31 July 2008.
Key Points:
* Trading profitably in line with
expectations:
* Revenue up 8% to £805,000
(2007: £742,000).
* Profit before tax of
£393,000 (2007: £422,000) after charging
£61,000
(2007: £6,000) in
respect of the fair value of stock options.
* Contracts signed or in negotiation
for revenue of over £1.5 million for
the year ending 31 July
2009.
* Placing and admission to AIM on 27 November 2007 raising
£1.7 million (net
of expenses).
* Strong and growing balance sheet. At year
end:
* Net assets of £2.59 million
(2007: £646,000).
* Cash balances of £1.9
million (2007: £715,000).
* The Company is debt free.
* Significant client wins in the year including Virgin West
Trains, Arriva
Cross Country and Southeastern Railway.
* Since the year end the Company has completed a further
placing and the
acquisition of profitable rail consultancy RWA
Rail Limited on 5 August
2008. Tracsis and RWA Rail operate within the
same sector and have a
similar customer profile; the enlarged group
will benefit from
cross-selling opportunities and an enhanced
business delivery capability.
* Favourable market drivers suggest continued growth for the
future, most
notably a rise in UK passenger rail journeys and
derived revenue.
John McArthur, Chief Executive Officer, commented:
"Following our introduction to AIM in November 2007 the Company
delivered another year of profitable growth whilst at the same time
establishing itself as a public company and completing the
acquisition of RWA Rail Limited, which has significantly enhanced
the service capability and growth potential of the Group. We
continue to maintain a tight grip on costs and a prudent approach
to investment and financial exposure to ensure we retain our
profitability. Our
balance sheet remains strong with healthy cash reserves and no
debt.
"Looking ahead, Tracsis is uniquely positioned to work with
transport operators to deliver software and consultancy services
which provide tangible financial and operational benefits. In tough
economic conditions, passenger transport markets continue to grow
and we believe this trend will continue throughout 2009 as bus and
rail become increasingly attractive modes of transport. The year
ahead presents us with the opportunity to extend our customer base
and continue working with clients on a number of new product
initiatives. We will evaluate further strategic acquisitions where
suitable and anticipate good
trading in the period ahead."
Enquiries:
Tracsis
Plc
0845 125
9162
John McArthur, Chief Executive
Officer
Haggie Financial
LLP
0207 417
8989
Nicholas Nelson/Kathy
Boate
Zeus
Capital
0161 831
1512
Bobby Fletcher/Alex
Clarkson
Tracsis Plc
Chairman and Chief Executive Officer's Statement
Introduction
We are pleased to report on a year of
continued growth, development of the business and a financially
healthy company, making inroads into the transport market. These
results cover a period of corporate activity which included the
initial placing and admission to AIM (completed November 2007),
followed by the Company's first acquisition of RWA Rail Limited
(completed 5 August 2008), more details of which are set out
below.
Business Description
Tracsis Plc is a provider of resource optimisation software and consultancy services to companies in the passenger transport industries (primarily passenger bus and rail). The Company's core product suite is used to automate and optimise the process by which labour schedules are created and allows for this activity to be done with greater speed and with a higher degree of efficiency than existing methods. The Company has contracts in place with some of the largest transport operators throughout the UK and operates a revenue model that provides a high percentage of recurring revenue. The Company's goal is to become a leading provider of operational planning software and consultancy services to global transport markets.
Financial Summary
Following our admission to AIM a year ago, we are pleased to
report maiden results showing that trading has been profitable and
in line with expectations. Revenue for the year increased 8% to
£805,000 (2007: £742,000). Profit before tax for the
year amounted to £393,000 (2007: 422,000) which is stated
after charging £61,000 (2007: £6,000) in respect of a
fair value charge for stock options. The Company has a stronger
balance sheet, with net assets of £2,592,000 as at 31 July
2008 (2007: £646,000). The Company has cash and cash
equivalents totalling £1,898,000, a substantial increase from
the balance of £715,000 at 31 July 2007. Furthermore, the
Company has no bank debt or long term liabilities. Our new client
wins this year include some of the largest and most complex
rail
operators in the UK and were testament to our continued investment
in client support and product innovation which is rapidly securing
our position as the leading provider of resource optimisation
software. Looking forwards, we have good visibility of over
£1.5 million revenue for the year ending 31 July 2009 with a
significant portion of this already secured under contract.
Trading Progress
During the year the Company has made good trading progress, with
growth into the core transport markets. At the interim stage, we
reported that a number of key milestones had been achieved. Notable
amongst these was the securing of contracts with a further three
passenger train operating companies (TOCs): West Coast Trains
(Virgin Rail Group), Cross Country (Arriva) and Southeastern
Railway (Govia). This was accomplished partly through the
strengthened sales and marketing channels, which have been
significantly expanded since January. We plan to increase our range
of products and, in collaboration with one of our existing
customers, are nearing the completion of a new intelligent
rostering suite. This will be a compatible downstream solution that
interfaces with our core scheduling product and should lead to new
revenues from both new and existing customers. Overall, due to
underlying growth in public transport markets, the Company has
remained largely insulated from the general economic downturn. The
Directors believe that, although cautious in terms of investment
and expenditure, our clients continue to look for innovative
solutions to provide a more effective delivery of passenger
services whilst managing overhead cost. Moreover, recent trading
reports from the major publicly quoted rail and bus companies paint
a picture of growth. Expectations are of this continuing in
the
face of changing socio-economic pressures in Britain, which favour
a shift towards public transport (especially passenger rail). There
was a 7.1% increase in rail passenger journeys through 2007-2008
compared to the same period over 2006-2007, now totalling 1.2
billion per annum. As commuters make the change to rail travel
there has been a 10.8% increase in revenue generated by rail
passengers over the last year, with fares alone
accounting for some £5.6 billion. Any rise in passenger
demand should in turn drive additional rail services and the
supporting infrastructure in back office planning capabilities such
as those provided by Tracsis.
RWA Rail acquisition
On 18 July 2008, the Company announced the acquisition of RWA Rail Limited ("RWA") for an initial cash consideration of £580,000 and the issue of 1,084,113 new Ordinary Shares. RWA is a provider of consultancy services to the rail sector, focusing on operational and strategic planning. Accordingly this will enable the enlarged group to provide a wider range of services to a more diverse client base. As Tracsis and RWA operate within the same sector and have a similar customer profile, the enlarged group will benefit from cross-selling opportunities and an enhanced business delivery capability. RWA generated revenue of £1,019,000 in the year ended 31 March 2008 resulting in EBIT of £293,000. We welcome Robert Watson, the founder and Managing Director of RWA to the Board in his new capacity as Chief Operating Officer of Tracsis. Robert brings with him valuable experience and knowledge of UK and international rail markets and his addition is a huge benefit to the enlarged group.
Staff
The above acquisition brings the complement of employees to 25 split across our Leeds and Loughborough locations. The Board would like to thank management and staff for their commitment and hard work during a year of rapid evolution for the Company.
Outlook
Tracsis remains uniquely positioned to continue growing organically and via opportunistic acquisitions. The Company has developed good relationships with major transport operators within a market that continues to grow, and can be reactive to future growth opportunities due to a strong financial position. We believe the year ahead presents good potential to extend our customer base and we anticipate a favourable trading period ahead.
Rod
Jones
John McArthur
Chairman
Chief Executive Officer
The full text of this announcement is available on RNS.
