Source - LSE Regulatory
RNS Number : 1139W
Trakm8 Holdings PLC
09 December 2019
 

9 December 2019

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 2019:

Financial Highlights

 

 

6 months to

6 months to

Year to 31

Change

 

30 Sept 2019

30 Sept 2018

March 2019

 

 

Unaudited

Unaudited

Audited

 

 

£000

£000

£000

 

Revenue

8,867

8,839

19,145

+0.3%

of which, recurring revenue1

4,885

5,117

10,087

-5%

Operating loss

(2,030)

(2,815)

(3,340)

+28%

Loss before tax

(2,197)

(2,926)

(3,563)

+25%

Adjusted operating loss before tax2

(1,583)

(2,454)

(1,452)

+35%

Loss after tax

(1,787)

(2,183)

(2,506)

+18%

Cash generated from operations

1,432

(421)

(1,752)

+440%

Net Debt3

(6,095)

(5,730)

(5,629)

-6%

Basic earnings per share

(3.57p)

(6.08p)

(6.20p)

+41%

Adjusted basic earnings per share

(2.53p)

(4.94p)

(1.89p)

+49%

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

 

Operating highlights

·      H1 2019 results improved year-on-year due to:

Improved levels of new orders leading to slightly higher revenues

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

Reduced overheads despite a £270k increase in non-cash amortisation and depreciation (net of IFRS16 impact) as a result of efficiency improvements implemented in FY2019

Significantly improved cash generation from operations due to significant reduction in losses and strong working capital actions, despite £1.01m R&D tax credit cash not received in the period due to HMRC delays

 

·      Continuation of new contract wins:

New contract awards with major clients By Miles, Altrad, and a number of other Fleet and Vehicle Leasing clients, all deployments commenced in H1 and continue into H2.

Installed base continues to grow in Fleet from existing and new customers offset by Insurance reductions:

§ Approximately 240,000 connections (Sept 2018: 250,000 connections), a decrease of 3,000 connections (1%) in the six month period since last year end.

 

·      Stronger H2 and FY2021 outlook:

Major automotive customer committed to a minimum of 45,000 units over next 12 months

Ingenie deployment commenced in November

Lexis Nexis expected to start deployment in January

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

Additional significant efficiency savings implemented

 

 

 

Outlook

The Board is confident that the second half of the year will be sufficiently improved over the first half to end the year meeting full year market expectations of increased revenues and modest adjusted profit before tax.

- 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 & Broker)

Tel: +44 (0) 20 7614 5900

Paul Shackleton, Head of Corporate Finance

Fraser Marshall, Head of Sales

www.arden-partners.com

 

 

 

 

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 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 240,000 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 Young Marmalade.

 

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 2019.

Revenues increased by 0.3% in the period to £8.87m (H1 2018: £8.84m). There was a reduction of £0.05m in Insurance and Automotive revenues and an increase in Fleet and Optimisation revenues of £0.08m. Only one of the 4 new insurance customers deployed during the period and the recurring revenue decline from our major insurance customer was not quite offset by the growth in new device sales. Our major automotive customer did not require any further devices from us during the period, however they have made a commitment of 45,000 units over the next twelve months.  The Board is encouraged that the decline in revenue has been arrested and the first two months of H2 are significantly ahead of last year.

Total recurring revenues decreased by 5% during the period to £4.89m (H1 2018: £5.17m), as a result of the decline in the revenue per unit in the insurance market and decline in install base of our largest insurance customer. Recurring revenues represent 55% of Group revenues (2018: 58%). There is an ongoing trend of lower service fees per unit for the same functionality.  At the period end we had approximately 240,000 units (Sept 2018: 250,000 units) reporting to our servers, being a decrease of 4% over the last twelve months. This is a decrease of 3,000 units (1%) since 31 March 2019.

Despite the market continuing to be adversely effected by the current uncertainty over Brexit and the economy in general Fleet units installed have increased by 1,000 units to 77,000 (1%) since March 2019.  This is due to improved level of performance from our Channel and Direct Fleet sales teams resulting in an increase in new orders especially in the mid-market.

Our largest insurance customer has continued to experience a decline in young driver policies and as a result the level of new policies written has been less than those not renewed or cancelled. By Miles, one of our newly secured customers has deployed a number of units but not sufficient to cover the decline elsewhere. In addition our major automotive customer has waited to start its marketing campaign into the current period. One major new insurance customer has now deployed in the current period and the other is expected to do so in January. Our volume automotive customer has committed to a minimum of 45,000 units over the current period and the first six months of FY2021. As a result, Insurance & Automotive connections reduced by 4,000 since March 2019, to 163,000 (-2%).

Gross profit margin has increased to 53% (2018: 43%), with cost of sales reducing by £0.82m to £4.17m (H1 2018 £5.00m), despite marginal increase in revenue. This is due to the vigorous actions taken over the past 12 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 efficiency actions are taken.

Total overhead costs, excluding exceptional costs reduced by £0.17m to £6.44m (H1 2018: £6.61m).  Excluding a £0.27m increase (net of IFRS16 impact) in depreciation and amortisation to £1.32m (H1 2018: £1.05m), overheads reduced by £0.44m year on year.  This is the result of the cost actions taken over the last 12 months.  In addition to this £0.44m reduction in overheads the level of R&D expenditure capitalised has reduced by £0.21m. Exceptional costs in the period include £0.23m associated with a headcount reduction activity undertaken at period end. This is part of preparing the Company for improved profitability going forward.

Financial position

Net cash inflow from operating activities was £1.43m (H1 2018: outflow of £0.42m), this is despite the R&D tax credit receipts of £1.01m failing to be received before period end due to HMRC delays (H1 2018: £0.97m received in August 2018). This good result, despite the losses incurred, is as a consequence of strong working capital management including a £0.62m reduction in inventory.

Our net debt as at September 2019 excluding the impact of the IFRS16 lease recognition was £6.10m (H1 2018: £5.73m) (31.3.2019: £5.63m) including £0.69m of cash (H1 2018: £2.00m). In addition, the Group at 30 September 2019 held an undrawn credit facility of £0.15m at HSBC. With the changes in the Net Debt as result of IFRS 16, Net Debt is £8.42m.

Strategy

The Group has been following the strategy outlined in the 2019 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. The long awaited deployment, in volume, with our insurance and automotive customers has now commenced. The Fleet teams are delivering new contract wins significantly ahead of the previous year and the pipeline for new opportunities is strong.

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 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.

Our third strategy has been to improve the efficiencies of our business in every possible way. We have been extremely successful in delivering the £2m reduction on all costs year-on-year promised last year.  We have continued to focus on this and have implemented a further £1.5m of annualised cost reductions at the end of the period. We will continue to seek efficiencies as we go forward. The next phase of these efficiencies will be as a result of investment in new lower cost hardware devices and, provided volumes increase as expected, in improved manufacturing and test equipment.

 

JOHN WATKINS

Executive Chairman

 

Unaudited Consolidated Statement of Comprehensive Income for the six months to 30 September 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to 30 September

Six months to 30 September

Year to
31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

Note

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

3

               8,867

               8,839

             19,145

Cost of sales

 

 

 

 

(4,174)

(4,995)

(8,890)

Gross profit

 

 

 

 

               4,693

               3,844

             10,255

 

 

 

 

 

 

 

 

Other income

 

 

 

4

                   213

                   278

                   436

 

 

 

 

 

 

 

 

Administrative expenses excluding exceptional costs

(6,435)

(6,614)

(12,101)

Exceptional administrative costs

 

 

7

(501)

(323)

(1,930)

Total administrative costs

 

 

 

 

(6,936)

(6,937)

(14,031)

 

 

 

 

 

 

 

 

Operating loss

 

 

 

 

(2,030)

(2,815)

(3,340)

 

 

 

 

 

 

 

 

Finance income

 

 

 

 

                       3

                       6

                     10

Finance costs

 

 

 

8

(170)

(117)

(233)

 

 

 

 

 

 

 

 

Loss before taxation

 

 

 

 

(2,197)

(2,926)

(3,563)

 

 

 

 

 

 

 

 

Income tax

 

 

 

 

                   410

                   743

               1,057

 

 

 

 

 

 

 

 

Loss for the period

 

 

 

 

(1,787)

(2,183)

(2,506)

 

 

 

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

 

 

Items that may be subsequently reclassified to profit or loss:

 

 

Exchange differences on translation of foreign operations

                       1

(3)

(5)

Total other comprehensive income

 

 

 

                       1

(3)

(5)

 

 

 

 

 

 

 

 

Total Comprehensive Loss for the period attributable to owners of the parent

 

5

(1,786)

(2,186)

(2,511)

 

 

 

 

 

 

 

 

Adjusted operating loss before tax

 

 

6

(1,583)

(2,454)

(1,452)

Loss before taxation

 

 

 

 

(2,197)

(2,926)

(3,563)

 

 

 

                   501

                   323

               1,930

IFRS2 Share based payments charge

 

 

 

                   113

                   149

                   181

 

 

 

 

 

 

 

 

Earnings per ordinary share (pence) attributable to owners of the Parent

 

 

 

 

 

 

 

 

Basic

 

 

 

9

(3.57)

(6.08)

(6.20)

Diluted

 

 

 

9

(3.57)

(6.08)

(6.20)

 

 

 

 

 

 

 

 

 

 

9

(2.53)

(4.94)

(1.89)

Adjusted diluted loss per share (pence)

 

9

(2.53)

(4.94)

(1.89)

 

 

 

 

 

 

 

 

The results relate to continuing operations.

 

 

 

 

Unaudited Consolidated Statement of Changes in Equity for the six months to 30 September 2019

 

 

 

 

 

 

 

 

 

Share capital

Share premium

Merger  reserve

Translation reserve

Treasury  reserve

Retained earnings

Total equity

 

£'000

£'000

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Balance as at 1 April 2018

     359

    11,750

     1,138

            208

(4)

       7,929

   21,380

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

Loss for the period

 -

                 -

             -

                  -

-

(2,183)

(2,183)

Other comprehensive income

 

 

 

 

 

 

 

Exchange differences on translation of overseas operations

-

-

-

(3)

-

-

(3)

Total comprehensive income

-

-

-

(3)

-

(2,183)

(2,186)

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Shares issued

2

50

-

-

-

-

52

IFRS 2 Share-based payments

-

-

-

-

-

149

149

Transactions with owners

2

50

-

-

-

149

201

Balance as at 30 Sept 2018

361

11,800

1,138

205

(4)

5,895

19,395

 

 

 

 

 

 

 

 

Comprehensive income

 

 

 

 

 

 

 

Loss for the period

-

-

-

-

-

(323)

(323)

Other comprehensive income

 

 

 

 

 

 

 

Exchange differences on translation of overseas operations

-

-

-

(2)

-

-

(2)

Total comprehensive income

-

-

-

(2)

-

(323)

(325)

 

 

 

 

 

 

 

 

Transactions with owners

 

 

 

 

 

 

 

Shares issued

139

2,891

-

-

-

-

3,030

IFRS2 Share-based payments

-

-

-

-

-

32

32

Tax recognised directly in equity

-

-

-

-

-

(38)

(38)

Transactions with owners

139

2,891

-

-

-

(6)

3,024

Balance as at 31 March 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

 

 

 

 

 

 

 

Shares issued

-

-

-

-

-

-

-

IFRS2 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

 

 

Unaudited Consolidated Statement of Financial Position as at 30 September 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

As at 30 September

As at 30 September

As at 31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

Note

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Intangible assets

 

 

 

10

21,490

20,282

21,165

Plant, property and equipment

 

 

13

3,636

1,823

1,432

Deferred income tax asset

 

 

 

 

39

122

-

Amounts receivable under finance leases

 

 

65

238

139

 

 

 

 

 

25,230

22,465

22,736

Current assets

 

 

 

 

 

 

 

Inventories

 

 

 

 

2,119

2,529

2,736

Trade and other receivables

 

 

 

6,710

6,789

8,345

Corporation tax receivable

 

 

 

 

1,320

576

1,050

Cash and cash equivalents

 

 

 

 

692

1,995

1,205

 

 

 

 

 

10,841

11,889

13,336

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

 

 

(5,750)

(6,604)

(6,307)

Borrowings

 

 

 

13

(1,652)

(1,221)

(1,237)

Provisions

 

 

 

 

(26)

-

(27)

 

 

 

 

 

(7,428)

(7,825)

(7,571)

 

 

 

 

 

 

 

 

Current assets less current liabilities

 

 

 

3,413

4,064

5,765

Total assets less current liabilities

 

 

 

28,643

26,529

28,501

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

 

 

(630)

(630)

(607)

Borrowings

 

 

 

13

(7,455)

(6,504)

(5,597)

Provisions

 

 

 

 

(137)

-

(115)

Deferred income tax liability

 

 

 

-

-

(88)

 

 

 

 

 

(8,222)

(7,134)

(6,407)

 

 

 

 

 

 

 

 

Net assets

 

 

 

 

20,421

19,395

22,094

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

 

 

11

500

361

500

Share premium

 

 

 

 

14,691

11,800

14,691

Merger reserve

 

 

 

 

1,138

1,138

1,138

Translation reserve

 

 

 

 

204

205

203

Treasury reserve

 

 

 

 

(4)

(4)

(4)

Retained earnings

 

 

 

 

3,892

5,895

5,566

Total equity attributable to owners of the parent

 

20,421

19,395

22,094

 

 

Unaudited Consolidated Cash Flow Statement for the six months to 30 September 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

Note

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Net cash generated from operating activities

 

12

1,432

(421)

(1,752)

 

 

 

 

 

 

 

 

Cashflows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

-

(2)

(103)

Purchases of software

 

 

 

 

(1)

(4)

(158)

Proceeds from sale of property

 

 

 

-

-

495

Capitalised Development costs

 

 

 

(1,488)

(1,713)

(3,413)

Net cash used in investing activities

 

 

 

(1,489)

(1,719)

(3,179)

 

 

 

 

 

 

 

 

Cashflows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issue of new shares

 

 

 

 

-

52

3,082

New bank loan

 

 

 

 

500

1,350

2,000

Repayment of bank loans

 

 

 

 

(505)

(537)

(2,026)

Repayment of obligations under hire purchase agreements

(281)

(85)

(187)

Interest paid

 

 

 

 

(170)

(117)

(205)

Net cash generated from financing activities

 

 

(456)

663

2,664

 

 

 

 

 

 

 

 

Net decrease in cash and cash equivalents

 

 

(513)

(1,477)

(2,267)

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,205

3,472

3,472

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

 

692

1,995

1,205

 

 

Notes To The Unaudited Consolidated Financial Statements

 

 

 

 

 

 

 

 

1.     Basis of preparation

 

 

 

 

 

 

 

 

The Group's interim results for the 6 months to 30 September 2019 (prior year 30 September 2018) were approved by the Board of Directors on 6 December 2019.

 

 

 

 

 

 

 

 

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 statement are the same as those set out in the Group's annual financial statements for the year ended 31 March 2019, except for the adoption of IFRS 16 (Leases) for the first time for the interim reporting period commencing 1 April 2019. The Group adopted IFRS16 on a modified retrospective basis, this is disclosed in note 13. 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 2019 have been delivered to the Registrar of Companies. The audit report of those accounts was unqualified, did not draw attention to any matters by way of emphasis and 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.

 

 

 

 

 

 

 

 

2.     Risks and uncertainties

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Board has considered the principal risks and uncertainties for the remaining half of the financial year and determined that the risk presented in the 31 March 2019 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. These are detailed on pages 20 to 21 of the 2019 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 continued 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, results, assets and liabilities are in respect of one Integrated Telematics Technology segment, Solutions.  Solutions represents the sale of the Group's full vehicle telematics and optimisation services, engineering services, professional services and mapping solutions to customers.

 

 

 

 

 

 

 

 

4.     Other income

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Grant income

 

 

 

 

213

278

449

R&D tax credit

 

 

 

 

-

-

5

R&D tax credit adjustment in respect of prior periods

-

-

(18)

 

 

 

 

 

213

278

436

 

 

 

 

 

 

 

 

5.     Loss per ordinary share attributable to the owners of the parent

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Loss attributable to the owners of the parent

(1,786)

(2,186)

(2,511)

 

 

 

 

 

 

 

 

6.    Adjusted loss before tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Loss Before Tax is monitored by the Board and measured as follows:

 

 

 

 

 

 

 

 

Loss Before Tax

 

 

 

 

(2,197)

(2,926)

(3,563)

Exceptional administrative costs

 

 

 

501

323

1,930

Share based payments*

 

 

 

 

113

149

181

Adjusted loss before tax

 

 

 

(1,583)

(2,454)

(1,452)

 

 

 

 

 

 

 

 

*Number restated for six months to 30 September 2018 from £147,000 to £149,000 as a result of a rounding adjustment.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7.      Exceptional costs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Acquisition costs

 

 

 

 

41

37

102

Integration and restructuring costs

 

 

 

227

7

707

Iranian bad debt

 

 

 

 

-

279

293

New product component refit costs

 

 

 

233

-

453

Exceptional communication correction costs

-

-

375

 

 

 

 

 

501

323

1,930

 

 

 

 

 

 

 

 

The acquisition costs incurred in 2020 and 2019 relate to non-underlying charges under two separate agreements linked to the acquisition in 2017.  The costs incurred are directly linked to the acquisition and not as part of the underlying business.  One agreement terminated on 31 July 2019, and the second agreement terminated on 31 March 2019.


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

 

The New product component refit costs relate to re-visit and material costs that have been incurred as we complete the project to remedy the issues that arose and were fixed in the previous financial year relating to significant component and software issues on a recently launched product.


Detailed explanation of prior year exceptional costs are detailed on page 58 of the 2019 Annual Report, a copy of which is available on the Group's website at www.trakm8.com.

 

 

 

 

 

 

 

 

8.      Finance costs

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Interest on bank loans

 

 

 

 

106

88

172

Amortisation of debts issue costs

 

 

 

14

14

28

Interest on Hire Purchase and similar agreements

50

15

33

 

 

 

 

 

170

117

233

 

 

 

 

 

 

 

 

 

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 to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

 

 

 

Loss the year after taxation

 

 

 

(1,787)

(2,183)

(2,506)

Exceptional administrative costs

 

 

 

501

323

1,930

Share based payments

 

 

 

 

113

149

181

Tax effect of adjustments

 

 

 

 

(95)

(61)

(367)

Adjusted loss after taxation

 

 

 

(1,268)

(1,772)

(762)

 

 

 

 

 

 

 

 

 

 

 

 

 

No.

No.

No.

 

 

 

 

 

'000

'000

'000

Number of Ordinary shares of 1p each

 

 

 

50,004

36,073

50,004

 

 

 

 

 

 

 

 

Basic weighted average number of Ordinary shares of 1p each

50,004

35,921

40,397

Diluted weighted average number of Ordinary shares of 1p each

50,004

35,921

40,397

 

 

 

 

 

 

 

 

Basic loss per share

 

 

 

 

(3.57p)

(6.08p)

(6.20p)

Diluted loss per share

 

 

 

 

(3.57p)

(6.08p)

(6.20p)

 

 

 

 

 

 

 

 

Adjust for effects of:

 

 

 

 

 

 

 

Exceptional costs

 

 

 

 

0.81p

0.73p

3.87p

Share based payments

 

 

 

 

0.23p

0.41p

0.45p

 

 

 

 

 

 

 

 

Adjusted loss earnings per share

 

 

 

 

(2.53p)

(4.94p)

(1.89p)

Adjusted diluted loss per share

 

(2.53p)

(4.94p)

(1.89p)

 

 

 

 

 

 

 

 

                     

 

10.      Intangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

Intellectual property

Customer Relationships

Development costs

Software

Total

 

 

£'000

£'000

£'000

£'000

£'000

£'000

Cost

 

 

 

 

 

 

 

As at 31 March 2018

 

10,417

1,920

100

10,621

1,875

24,933

Additions - Internal development

-

-

-

1,422

4

1,426

Additions - External purchases

-

-

-

291

-

291

Disposals

 

-

-

-

-

-

-

As at 30 September 2018

 

10,417

1,920

100

12,334

1,879

26,650

Additions - Internal development

-

-

-

1,422

140

1,562

Additions - External purchases

-

-

-

278

14

292

Disposals

 

-

-

-

-

-

-

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

Disposals

 

-

-

-

-

-

-

As at 30 September 2019

10,417

1,920

100

15,522

2,056

30,015

 

 

 

 

 

 

 

 

Amortisation

 

 

 

 

 

 

 

As at 1 April 2018

 

-

1,788

56

3,101

528

5,473

Charge for period

 

-

30

17

730

118

895

Depreciation on disposals

 

-

-

-

-

-

-

As at 30 September 2018

-

1,818

73

3,831

646

6,368

Charge for period

 

-

31

16

801

123

971

Depreciation on disposals

 

-

-

-

-

-

-

As at 31 March 2019

 

-

1,849

89

4,632

769

7,339

Charge for period

 

-

30

11

1,007

138

1,186

Depreciation on disposals

 

-

-

-

-

-

-

As at 30 September 2019

-

1,879

100

5,639

907

8,525

 

 

 

 

 

 

 

 

Net book amount

 

 

 

 

 

 

 

As at 30 September 2019

10,417

41

-

9,883

1,149

21,490

 

 

 

 

 

 

 

 

As at 31 March 2019

 

10,417

71

11

9,402

1,264

21,165

 

 

 

 

 

 

 

 

As at 30 September 2018

 

10,417

102

27

8,503

1,233

20,282

 

 

 

 

 

 

 

 

As at 31 March 2018

 

10,417

132

44

7,520

1,347

19,460

 

 

 

 

 

 

 

 

 

11.      Share Capital

 

 

 

 

 

 

 

 

 

As at 30 September 2019

As at 30 September 2018

As at 31 March 2019

 

 

No's

 

No's

 

No's

 

 

 

000's

£'000

000's

£'000

000's

£'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

36,073

361

50,004

500

 

 

 

 

 

 

 

 

Movement in share capital:

 

 

 

 

 

£'000

 

 

 

 

 

 

 

 

As at 1 April 2018

 

 

 

 

 

 

359

New shares issued

 

 

 

 

 

 

2

As at 30 September 2018

 

 

 

 

 

361

New shares issued

 

 

 

 

 

 

139

As at 31 March 2019

 

 

 

 

 

 

500

New shares issued

 

 

 

 

 

 

-

As at 30 September 2019

 

 

 

 

 

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.

 

 

 

12.      Reconciliation of cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Loss before taxation

 

 

 

(2,197)

(2,926)

(3,563)

Adjustments for:

 

 

 

 

 

 

 

Depreciation

 

 

 

 

334

157

313

Loss on disposal of fixed assets

 

 

 

-

-

(106)

Amortisation of intangible assets

 

 

 

1,186

895

1,866

Interest received

 

 

 

 

(3)

(6)

-

Bank and other interest charges

 

 

 

170

117

223

Share based payments

 

 

 

 

113

149

181

Operating cashflows before movement in working capital

(397)

(1,614)

(1,086)

 

 

 

 

 

 

 

 

Movement in inventories

 

 

 

 

617

27

(180)

Movement in trade and other receivables

 

 

1,750

4,261

1,732

Movement in trade and other payables

 

 

 

(573)

(3,985)

(3,214)

Movement in provisions

 

 

 

 

21

(85)

1

Cash generated from operations

 

 

 

1,418

(1,396)

(2,747)

 

 

 

 

 

 

 

 

Interest received

 

 

 

 

3

6

10

Income taxes received

 

 

 

 

11

969

985

Net cashflows from operating activities

 

 

1,432

(421)

(1,752)

 

 

 

 

 

 

 

 

                               

 

13.      IFRS 16 Leases

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Previously leases of property, plant and equipment were classified as either finance or operating leases under IAS 17. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.

 

 

 

 

 

 

 

 

Under IFRS 16 which the Group has adopted effective for the period starting 1 April 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and the finance cost. The finance cost is charged to profit and loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

 

 

 

 

 

 

 

 

The Group has applied IFRS 16 on a modified retrospective basis with practical expedients from the date of initial application (1 April 2019).

 

 

 

 

 

 

 

 

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

• The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
• The accounting for short term operating leases under IAS 17, for leases with a remaining term of less than twelve months as at the initial application date.
• The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
• The application of IFRS 16 to only those operating leases accounted for under IAS 17 as at the initial application date.

Upon transition, a lease liability has been recognised based on future lease payments discounted at an appropriate borrowing rate. Additionally, a right of use asset has been recognised along with a related lease liability. Within the income statement, the operating lease charge (£219,000) has been replaced by depreciation (£209,000) and interest expense (£29,000). This has resulted in a decrease in administrative expenses and an increase in finance costs.

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months to

Six months to

Year to

 

 

 

 

 

30 September

30 September

31 March

 

 

 

 

 

2019

2018

2019

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

 

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment - consistent with 2018 presentation and accounting policy

1,334

1,823

1,432

Changes due to new accounting policy - IFRS 16 - Right of use asset

2,302

-

-

Property, plant and equipment - consistent with 2019 presentation and accounting policy

3,636

1,823

1,432

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Borrowings - consistent with 2018 presentation and accounting policy

(1,242)

(1,221)

(1,237)

Changes due to new accounting policy - IFRS 16 - Short term leases

(410)

-

-

Borrowings - consistent with 2019 presentation and accounting policy

(1,652)

(1,221)

(1,237)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13.      IFRS 16 Leases (continued)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Borrowings - consistent with 2018 presentation and accounting policy

(5,545)

(6,504)

(5,597)

Changes due to new accounting policy - IFRS 16 - Long term leases

(1,910)

-

-

Borrowings - consistent with 2019 presentation and accounting policy

(7,455)

(6,504)

(5,597)

 

 

 

 

 

 

 

 

The adjustments above reflect the impact of IFRS 16 on the property leases for the Shaftesbury offices, Coleshill offices, Czech offices and leased cars. All new leases will be treated accordingly. A discount rate of 2.45% has been applied.

 

 

 

 

 

 

 

 

14.      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.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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