Source - LSE Regulatory
RNS Number : 8800K
Trakm8 Holdings PLC
27 April 2020
 

27 April 2020

Trakm8 Holdings plc

("Trakm8", the "Group" or the "Company")

Trading and Covid-19 Update

Trakm8 Holdings plc (AIM: TRAK), the global telematics and data insight provider today announces a trading update for its financial year ended 31 March 2020.

Revenues for the full year ending 31 March 2020 of £19.6 million are in line with previous guidance and 2% more than last year. However, Covid-19 impacted the Company in the last two weeks of the year, delaying hardware shipments and contract awards with our Fleet customers, compounded by installation companies unable to work to install into our Fleet customers.  In addition, a major UK food retailer was unable to complete contract negotiations on a significant optimisation opportunity due to their focus on meeting the surge in consumer demand they faced.  

Due to the strong cost reduction actions and considerable success with several high value and high margin optimisation software sales, the Group expects to achieve a very significantly reduced adjusted loss for the financial year of circa £0.2m. (FY-2019: Adjusted loss of £1.5m).  The lost revenues in the final two weeks of the financial year stopped us from meeting our target of a modest adjusted profit.

Cash generation from operations has been much improved and at 31 March 2020 the Group net debt was £5.6m (£8.0m after IFRS 16 changes) which is the same as at 31 March 2019 and a £0.5m reduction since Sept 2019.  At the year end the Group had £1.7m of cash on hand and a further £0.5m of available funds under our revolving credit facility.

During the year Fleet connections increased by 1% to 77,000 (FY-2019: 76,000), Insurance & Automotive connections increased by 1% to 168,000 (FY-2019: 167,000). Total connections increased by 1% to 245,000 (FY-2019: 243,000), which is 2% more than the 240,000 connections at Sept 2019 resulting from a return to growth in the Insurance business unit.

Recurring Revenue in the year amounted to £9.8m representing 50% of Group revenues.

We are pleased to advise that in the final quarter of the year major contract renewals have been secured with EON and Bibby and a significant feature upgrade for Iceland Foods.   

All our major Insurance customers are now up and running.   In addition the AA fully launched its Smart Breakdown service which is reliant on our data and devices.  However Covid-19 is impacting volumes.  We are pleased to announce that since year end two other insurance companies have now launched with Trakm8 solutions and two more are contracted to launch shortly.  Trakm8 is pleased to have launched two more self-fit products for the insurance market, which we hope will mitigate the inability to have fitted to vehicle devices.

 

Current trading is reduced particularly in our Fleet business due to the impact of the lock-down for our customers in some business sectors.  This is compounded by the difficulty of not being able to undertake installations into vehicles for those fleets continuing to work, some of whom are even busier than before. Trakm8, with market leading self-fit solutions, is providing telematics services for a number of customers as an interim measure.  As part of our contribution to support customers at this difficult time Trakm8 is making available its newly launched SaaS optimisation platform for SME at no cost for the period of the lock down.

Trakm8 has successfully set up working from home for most of our functions. We have retained a core capability to manufacture and distribute product out of our Coleshill factory and have established back up capability should Coleshill temporarily have to close due to Covid-19 restrictions. The supply chain is continuing to provide components and we have safety inventory in the business and supply chain.

We are continuously reviewing our expenditure and cost base. We have taken advantage of the Government Job Support Scheme and have currently 63 staff furloughed.  We have and will continue to take the cash flow benefit of deferred payments of PAYE/NI and VAT.  We are investigating with our Bank potential support under the CBILS Scheme.  With more than £2million of available cash and substantial recurring revenue base Trakm8 will manage the cash position carefully into the medium term as the duration and the severity on our markets of the effect of Covid-19 becomes clearer.  

Unsurprisingly with the current high levels of uncertainty, Trakm8 is not able to predict the outcome for the financial year ending 31st March 2021.  As the situation becomes clearer we will be pleased to provide guidance.

- 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

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 analytics and reporting portal (Trakm8 Insight), integrated telematics/cameras/optimisation, self-installed telematics units and one of the widest ranges of installed telematics devices. Trakm8 has over 245,000 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, Scottish Power, Direct Line Group, LexisNexis and Ingenie.

 

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

 

www.trakm8.com / @Trakm8

 

 


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