28 April 2021
Trakm8 Holdings plc
("Trakm8", the "Group" or the "Company")
Year End Trading 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 2021.
Revenues for the full year ending 31 March 2021 of £16.0 million are in line with previous guidance and 18% less than last year. As expected, Covid-19 materially impacted the Company in the last three months of the year, with significantly reduced hardware shipments to our Insurance customers and with a less significant, but meaningful, impact on Fleet customers.
Due to the strong cost reduction actions the Group expects to achieve an adjusted loss for the financial year in line with previous guidance of circa £0.3m. (FY-2020: Adjusted loss of £0.2m).
Cash generation from operations has been strong and at 31 March 2021 the Group's net debt was £4.9m (£6.8m after IFRS 16 changes) which is £0.8m lower than at 31 March 2020 and a £0.7m reduction since Sept 2020. At the year end the Group had £2.4m of cash on hand and a further £0.5m of available funds under an overdraft facility.
During the year connections increased by 4% to 254,000 (FY-2020: 245,000). Fleet connections reduced by 10% to 70,000 (FY-2020: 77,000), Insurance & Automotive connections increased by 9% to 184,000 (FY-2020: 168,000). Despite the increase in Insurance & Automotive connections, revenues were lower in the financial year from Insurance & Automotive as a result of the strategy to broaden the footprint outside young driver telematics which has resulted in new commercial offerings with lower revenue per unit, but still maintaining gross margins. Recurring Revenues in the year amounted to £9.4m representing 59% of Group revenues, 4% lower than the prior year due to the reduction in the higher value Fleet connections.
We were pleased to advise during the year that major contract awards were received from The Parts Alliance Group and from a major UK Retailer. As predicted, further insurance client wins were also secured.
Further new products and solutions were introduced to the market that will continue to improve the costs and functionality of the solutions we sell.
The Company believes Covid-19 lockdowns have reduced revenues in the financial year by almost £4m and as a result, profitability. However, the Company has benefitted from £0.9m from the Job Retention scheme support and from £1.8m VAT, PAYE & NI payment deferments. The Company has reached agreement with HMRC on a time to pay agreement to spread this liability almost equally over the next two financial years. The Company has encountered many component shortages but through the vertical integration of design and manufacturing hardware has managed to avoid this having an adverse impact on revenues.
Bank Facilities Update
Trakm8 is pleased to announce a renewal of our facilities with HSBC. The new agreements comprise a Term Loan of £5.3m and a £0.5m overdraft facility. Capital repayments commence in September 2021, with appropriate 'carve out' in covenants to cover Covid-19. These facilities are in place until October 2023. In addition, the capital repayment holiday of our loan with Maven (£1.4m outstanding) has been extended, such that repayments will now re-commence in September 2021. Interest on the loans continues to be paid monthly.
Covid-19 has continued to have an impact during April and there remains some ongoing uncertainty for the coming months. The resumption of driving tests occurred only on 22nd April and so it is too early to know when there will be an increased take up of telematics insurance policies. Demand in the fleet sector is already improving.
Subject to there not being any further Covid-19 related lockdowns or significant component supply issues that cannot be resolved quickly, the Company is confident that the financial performance will significantly improve for the new financial year and expect revenues will revert to pre-Covid levels, which with recently lower costs should lead to a profitable business for the year.
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For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman
Tel: +44 (0) 167 543 4200
Jon Furber, Finance Director
Arden Partners plc (Nominated Adviser & Broker)
Tel: +44 (0) 20 7614 5900
Paul Shackleton, Head of Corporate Finance
Simon Johnson, Head of Sales
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 254,000 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, The Parts Alliance Group, 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