For immediate release
13 April 2018
Trakm8 Holdings plc
('Trakm8' or the 'Group')
Full Year Trading Update
Notice of Results
Trakm8 Holdings plc (AIM:TRAK), a leading telematics and data supplier to global markets, is pleased to provide the following trading update for its financial year ended 31 March 2018 (the 'Period').
During the Period, the Group achieved 26% growth in its core Solutions business to £26.9 million which has driven 13% year-on-year headline revenue growth to over £30 million. This has been achieved despite a year-on-year reduction of £2.2 million following the Group fully exiting the contract electronic manufacturing business to focus on the manufacture of hardware devices for the fleet, insurance and automotive markets. The Board expects that 2018/19 will be the final period of this year-on-year decline in product revenues, which will be approximately £2.0 million. The Group has now ceased all activities outside of the provision of Telematics Services. The number of connections in the Period increased by 31% to 251,000 from 191,000. Recurring revenue during the Period increased by 11% to £10.9 million and year-end net debt reduced by £0.5 million to £3.4 million (31 March 2017: £3.9 million).
The Group has continued to secure new contract wins and extensions, including new contracts with a global vehicle leasing company and Truline, part of the EVO Group of Companies, and an expanded contract with Scottish Power respectively. These are in addition to previously announced new contracts secured and contract extensions.
Customer demand for the RoadHawk 600 4G integrated camera has been better than anticipated with almost 3,000 devices already installed. As outlined at the time of the interim results in November 2017, the outcome for the full year was dependent on existing customer contracts where there was a level of uncertainty of end user demand. Although revenues from existing customer contracts were lower than anticipated, recent order entry has been strong. In addition to this, several new contract wins have moved into the first quarter of the new financial year.
The Group's digital strategy, launched in November 2017, is targeting the SME fleet market, a sector which Trakm8 has not historically been focused on. The online sale of solutions has gained good traction and is now showing potential to be a significant contributor to Group revenues over the medium to long term.
Recent product launches include several next generation hardware devices which offer outstanding performance and competitiveness. To meet the anticipated demand for these devices from existing and new customers, the Group is planning to assemble these new hardware devices with increased levels of automation.
As previously announced, the Group achieved an annualised operational cost reduction of over £1.5 million as the business continued its major project to streamline its activities and during the year closed the Group's offices in Livingston and Bodmin. The activities undertaken in these locations have been absorbed within the remainder of the Group's activities. These cost savings have enabled the Group to deploy greater resources towards sales and marketing, which is in line with its stated strategy.
Trakm8 recently completed a rationalisation and simplification process of its legal entities to consolidate its trading activities. Additionally, an ERP-wide implementation programme was launched to migrate to a platform provided by Epicor, which the Board believes will lead to further operational and reporting improvements for the Group.
The Board remains confident in Trakm8's future prospects and an update on trading for the current financial year will be provided in conjunction with the 2017/18 final results.
Notice of Results
The Group expects to announce its final results for the year ended 31 March 2018 on Monday, 2 July 2018. An analyst briefing given by John Watkins (Executive Chairman) and Jon Furber (Finance Director), will be held at 09.30am on the day of the Final Results at the offices of Buchanan (107 Cheapside, London EC2V 6DN).
John Watkins, Executive Chairman of Trakm8, commented: "Following a strong performance in the first half of the current financial year, I am pleased to report continued progress with headline double digit revenue growth achieved despite our strategic decision to exit from sub-contract manufacturing. Importantly, underlying Solutions revenue increased by over 25% and we have continued to focus on improving efficiencies in all aspects of our business, whilst continuing to invest in engineering, sales and marketing.
"It is also encouraging to note that the AA has commenced the roll out to its private members of Car Genie, its connected car product. This move by the AA has potential to considerably increase the number of connections for Trakm8.
"Given the successful mix of new contract awards, increased sales and marketing investment and robust demand from our existing customers, the Board anticipates that we will maintain positive momentum in revenue generation in our core Telematics Solutions business as the market continues to be rich in opportunities. We view the future of Trakm8 with much optimism."
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
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For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman
Tel: +44 (0) 1747 858 444
Jon Furber, Finance Director
Arden Partners plc (Nominated Adviser & Broker)
Tel: +44 (0) 20 7614 5900
Paul Shackleton / Ruari McGirr / Alex Penney
Henry Harrison-Topham / Chris Lane / Tilly Abraham
Tel: +44 (0) 20 7466 5000
Trakm8 is a UK based technology leader in fleet management, insurance telematics, optimisation and dashboard camera systems. 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 telematics based solutions; these score driver behaviour, monitor vehicle health and continuously improve the security and operational efficiency of both private drivers and company fleets.
The Group's product portfolio includes cameras (including the recently launched integrated telematics camera), self-installed telematics units and technology to eliminate distracted driving due to mobile phones.
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, Direct Line Group and Young Marmalade.
Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.
www.trakm8.com / @Trakm8
This information is provided by RNS