TIDMJNEO
RNS Number : 5863N
Journeo PLC
26 September 2023
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the UK version of the EU Market Abuse Regulation (2014/596) which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended and supplemented from time to time.
26 September 2023
Journeo plc
("Journeo, the "Company" or the "Group")
Interim results for the six months ended 30 June 2023
Journeo plc (AIM: JNEO) a leading provider of information
systems and technical services to transport operators and local
authorities, announces its interim results for the six months ended
30 June 2023 ("H1 2023").
Financial headlines
-- Group revenue grew by 146% to GBP21.8m (H1 2022: GBP8.9m)
-- On a like-for-like basis (excluding Infotec) revenues grew 41% to GBP12.5m
o Fleet revenue increased 61% to GBP7.9m (H1 2022: GBP4.9m)
o Passenger revenue increased 16% to GBP4.6m (H1 2022:
GBP4.0m)
-- Infotec revenue contribution of GBP9.3m since acquisition in January 2023
-- Group gross profit increased 77% to GBP6.4m (H1 2022:
GBP3.3m) and by 35% to GBP3.9m on a like-for-like basis
-- Underlying profit before depreciation and amortisation
increased 277% to GBP2.5m (H1 2022: GBP0.7m).
-- Cash and cash equivalents at the end of the period increased
to GBP11.3m (H1 2022: GBP1.2m) of which GBP3.5m was customer
payments in advance.
-- Basic undiluted profit per share of 9.03p (H1 2022: 1.92p)
Acquisition and Placing
-- Acquired IGL Limited ("Infotec") for an aggregate consideration of GBP8.7m
-- Acquisition funded primarily by way of Placing of GBP7m (net
of expenses), also enabling the repayment of Loan Notes
Operational headlines
-- Record order book as at 30 June 2023 of GBP27m
-- Number of connections generating monthly recuring revenue on
SaaS-based Journeo Portal reached 12,000 connections in H1 2023 (FY
2022: 10,000 and H1 2022: 5,000)
-- Integration of Journeo's EPIX system with Journeo Portal
progressing well and once complete will mark a shift towards the
new industry standard open protocol, enabling the connection of all
transport displays
-- Secured contracts with Transport for Wales and Cardiff City
Council totalling GBP2.6m which will see displays technology
migrate onto open standards delivering valuable recurring
revenue.
-- Arriva UK Bus framework agreement extended to April 2024 to
provide high-definition CCTV systems and nationwide support
services
Russ Singleton, CEO of Journeo plc, said:
"I am delighted with the results for the six months ended 30
June 2023. Journeo underwent a step-change during the period,
delivering a strong performance on a like-for-like basis as we grow
our sales pipeline and increase the number of valuable recurring
revenue connections to our SaaS cloud-based solutions. The
acquisition of Infotec is accelerating Journeo's growth into the
rail market, complementing our fleet operator and passenger
infrastructure systems and providing us with opportunities that
would previously have been inaccessible to us.
The second half started strongly with an order book of GBP27m
which has been enhanced by further contract awards and a GBP55m
sales pipeline, as well as the acquisition of MultiQ, strengthening
our position in the Nordic region.
We are focused on continuing this momentum while integrating the
two businesses and are confident in meeting our financial targets
for the year end."
A digital copy of this announcement will be available on the
Group's website: www.journeo.com .
For further information, please contact:
Journeo plc
Russ Singleton/ Nick Lowe +44 (0) 203 651 9166
Cavendish Securities plc - Nominated Adviser and Broker
Katy Birkin/ Callum Davidson +44 (0) 207 220 0500
Notes to editors:
Journeo plc is a leading Intelligent Transport Systems provider,
delivering solutions in towns, cities, airports, and the public
transport networks that connect them. The Company works extensively
with local and combined authorities, Network Rail and many of the
largest multinational transport operators, supporting them as
systems converge towards a more efficient and sustainable
future.
The business has five operating companies:
-- Journeo Fleet Systems: CCTV video surveillance to improve
passenger & driver safety, telematics for vehicle and driver
performance monitoring, real-time communications for remote
condition monitoring and automatic passenger counting.
-- Journeo Passenger Systems: design, manufacture, installation,
and management of hardware and software for electronic public
transport information systems, in and around towns, cities, ferry
terminals and airports which includes smart-ticketing and
wayfinding.
-- Infotec: design, advanced manufacture, installation and
software management of information displays hardware for rail
applications in stations, on-platform and on-vehicle.
-- MultiQ (based in Aarhus, Denmark): full-service provider of
Intelligent Transport Systems ("ITS") with customers in Denmark,
Sweden and Iceland.
-- 21st Century AB (based in Stockholm, Sweden): technical
services provider to public transport customers in Sweden.
In the last 4 years, the Company has invested over GBP5 million
in research and development, enabling it to design and supply
powerful innovative solutions for customers' complex requirements
and the demands of modern public transport. With an Internet of
Things ("IoT") approach and open standards, together with
field-proven and reliable engineering, Journeo is able to offer
flexible, scalable products and services that can integrate with
existing technology while preparing for future advancements.
Chairman and Chief Executive's review
Overview
The Board is pleased to report the results for the six months
ended 30 June 2023 ("H1 2023"), which are in line with management's
expectations. The Group is continuing to deliver strong growth
across all operating companies, increasing revenues in all areas of
operation. This performance reflects the ongoing need to invest in
public transport and its supporting infrastructure, encouraging
reduced usage of personal vehicles to deliver a greener future.
The first half of this year has seen the Group enter a
transformational stage in its development, following the
acquisition of Infotec in January 2023.
Strategic progress
The strategy for the Group is being driven by the ongoing
requirements of our customers to deliver high-quality, affordable
public transport. UK Government funding is providing both fleet
operators and local authorities an opportunity to invest in
solutions that simultaneously increase their operational efficiency
and facilitate their push to achieve their net zero ambitions.
Our continued investment to develop solutions that aid customers
to achieve these ambitions has been the cornerstone of our organic
development. The increase in use of our low-power infrastructure
solutions, coupled with the adoption of our SaaS cloud-based
solutions are testament to the critical role Journeo's technology
plays in helping customers meet their goals. However, whilst this
organic growth is pleasing, there is more that we can achieve.
The Board has, for many years, sought to reinforce the Group's
organic growth through innovation and with acquisitions that
provide the opportunity to broaden the customer base, deepen
capabilities and access thematically linked adjacent markets. In
January 2023, Journeo completed the acquisition of IGL Limited,
together with its subsidiaries ("Infotec"), the UK market leader in
rail display signage and post period, Journeo completed the
acquisition of MultiQ A/S Denmark ("MultiQ"), a leading
full-service provider of Intelligent Transport Systems ("ITS") with
customers in Denmark, Sweden and Iceland.
The Group will publish its first Carbon Reduction Plan (CRP)
assessing our Scope 1 and Scope 2 emissions in 2024, signalling
further progress on our Environmental, Social and Governance (ESG)
journey.
Financial performance
Revenue increased by 146% to GBP21.8m (H1 2022: GBP8.9m) and by
41% on a like-for-like basis to GBP12.5m, excluding Infotec.
Revenue by segment
H1 2023 H1 2022 FY 2022
GBP'm GBP'm GBP'm
---------------------------------- -------- ---------------- --------------
Passenger Infrastructure Systems 4.6 4.0 8.6
Fleet Transport Operator Systems 7.9 4.9 12.5
Like for like revenue 12.5 8.9 21.1
---------------------------------- -------- ---------------- --------------
Infotec 9.3 _ _
---------------------------------- -------- ---------------- --------------
Group revenue 21.8 8.9 21.1
---------------------------------- -------- ---------------- --------------
Gross profit increased 77% to GBP6.4m (H1 2022: GBP3.3m) with
gross profit margin at 29%. On a like-for-like basis gross profit
was GBP3.9m with margin at 35%.
Gross profit by segment
H1 2023 H1 2022 FY 2022
GBP'm GBP'm GBP'm
---------------------------------- ------------- -------------- ------------------
Passenger Infrastructure Systems 2.0 1.9 4.1
Fleet Transport Operator Systems 1.9 1.4 3.7
Like for like gross profit 3.9 3.3 7.8
---------------------------------- ------------- -------------- ------------------
Infotec 2.5 _ _
---------------------------------- ------------- -------------- ------------------
Group gross profit 6.4 3.3 7.8
---------------------------------- ------------- -------------- ------------------
Underlying profit before depreciation and amortisation increased
277% to GBP2.5m (H1 2022: GBP0.7m).
Cash and cash equivalents at the end of the year increased to
GBP11.3m (H1 2022: GBP1.2m) of which GBP3.5m was customer payments
in advance.
Acquisition and fund raising
In January 2023, we completed the acquisition of Infotec for an
aggregate consideration of GBP8.7m
To primarily finance the acquisition, the Group raised GBP7m
(net of expenses) in a significantly oversubscribed placing and
retail offer.
The fund raising also enabled the Company to repay Loan Notes,
originally issued in 2016, that supported the Company in its
earlier growth.
Research and Development
Our customer-led Research and Development ("R&D") is an area
of the business that fuels growth and enables the Group to access
sales opportunities that were previously not attainable. We
continue to invest in Journeo's future, supporting the efforts of
our R&D teams.
The Journeo Portal, our cloud-based SaaS platform for managing
intelligent transport systems continues to attract new and existing
customers. Building on the 10,000-connection target we reached in
2022, the platform has gained a further 2,000 connections in the
first half of the year, generating additional monthly recurring
revenue per connection.
The Development Team is making good progress on one of our key
objectives for 2023, the migration of our EPIX content management
software into the Journeo Portal, which will consolidate the
customer interface into a single web-based application. The scope
of this integration was extended following the GBP1m award from
Transport for Wales (TfW) to provide their new, nationwide Welsh
Bus Data Content Management System (WBDCMS). Early conversations
are ongoing with other large transport authorities to upgrade them
to this new, more powerful feature-rich platform.
Our new cloud-based software will benefit Journeo in terms of
additional SaaS revenue, reducing the number of systems to maintain
and administer. In addition, it will also enable users to manage
the operational efficiency of both on-vehicle and in-street
systems; an ever-increasing need as authorities move to franchise
and enhanced partnership models for managing their transport
networks.
Passenger Infrastructure Systems
The Passenger Infrastructure Systems business continues to
provide consistent growth, delivering a 16% increase in
year-on-year growth to a revenue of GBP4.6m (H1 2022: GBP4m). This
trajectory is in line with management expectations and we are
pleased to see the continual progress the business is making,
coupled with the ever-increasing footprint of our technologies in
major urban centres and rural communities throughout the UK.
Margins were slightly lower than the same period last year, at
43.4% (H1 2022: 46.6%), reflecting the competitive nature of public
tenders.
In early March of this year, we announced the award of a GBP1m
software and services contract from TfW. The solution is a paradigm
shift for the industry, removing local authorities from
single-supplier lock-ins and delivering a solution that is based
upon collaboration and the use of open standards. The WBDCMS
solution will be based upon the delivery of the integration of
Journeo's EPIX content management system into the Journeo Portal
and, once delivered, will enable the nationwide transport authority
to connect all transport displays in the country to our solution,
with each display connection delivering valuable recurring revenue
to Journeo.
This success was quickly followed at the end of March, with the
announcement of contracts worth GBP1.6m for displays technology in
Wales comprising a GBP1m contract award with Cardiff City Council
and GBP0.6m contract with TfW. All new displays will connect to the
new WBDCMS when it is complete and will be operated in the interim
through our current system. There is a clear strategy across Wales
to improve the provision of transport information and migrate
people onto Public Transport.
The new displays, and indeed the WBDCMS, will all communicate
using a new industry standard open protocol, based on MQTT
communication protocols, in development by the not-for-profit
industry body, the Real Time Information Group (RTIG). Journeo are
the first to have deployed any displays using this protocol,
following the installation of the first tranche of displays in the
City of Edinburgh.
Fleet Transport Operator Systems
The Fleet Transport Operator Systems business has delivered a
strong 61% revenue growth in the first half of 2023, achieving
sales of GBP7.9m (H1 2022: 4.9m). Margins were lower than for the
same period last year, at 23.5% (H1 2022: 28.7%), mainly due to the
technology-mix of sales completed in the first half of this year.
Margins are expected to improve during H2 2023.
The framework agreement extension with Arriva UK Bus, announced
in April of this year, extends the framework to April 2024 and is
currently expected to generate approximately GBP1.1m in revenue.
The framework is separate to Journeo's three-year fleet-wide SaaS
contract (announced in November 2021) with Arriva UK Bus and
enables Journeo to provide high-definition CCTV systems and
nationwide support services.
Journeo's relationship with Arriva UK Bus has been established
since 2010 and this ongoing commitment from the nation's third
largest operator (outside of London) demonstrates the confidence
that large, multinational companies have in working with Journeo to
deliver business-critical systems.
We have a strong sales pipeline within rail as we continue to
deliver our powerful solutions into the sector. Developments in our
rail applications coupled with the acquisition of Infotec, have
already created cross-selling opportunities across the rail
industry. Proposals have been provided to customers in readiness
for the commencement of Control Period 7 in April 2024.
Airport Passenger Transport Solutions
The unique capabilities of Journeo's Airport Passenger Transport
Solutions continue to be adopted within the industry.
In April 2023, the Company announced that East Midlands Airport
would be joining London Gatwick Airport, London Stansted Airport
and London Heathrow Airport in having passenger transfer solutions
managed and optimised by Journeo's software-led solutions. A
smaller implementation than its predecessors, the work at East
Midlands Airport, being completed on behalf of First Bus who will
be running the operation, demonstrates the flexibility of the
system to work in any environment where the challenge is to move
passengers to or away from a single point of focus, such as a
terminal building.
Work is expected to commence on this latest implementation
shortly, following the completion of Dublin Airport.
In March of this year, Gatwick Airport awarded Journeo a GBP0.5m
five-year extension to the support contract for Journeo's first
airport bus transfer management application, originally installed
in 2017.
Infotec
The Infotec business has performed well since the completion of
the acquisition on 18 January 2023 and has delivered strong revenue
of GBP9.3m in the period. Margins of 27.2% were below historical
levels as a result of a large, high-volume contract to supply
specialist displays. This contract is scheduled to complete during
H1 2024.
Integration of the businesses is progressing smoothly. An
initial step taken was to bolster Infotec's manufacturing
capabilities with a GBP0.4m investment in surface mount production
capacity, alongside retaining focus on the continuing development
of its core technologies. This has already significantly reduced
production lead times.
Appointments
To enhance the strength and diversity of experience of the Board
of Directors, Barney Kent was appointed to the Board in March 2023
as an Independent Non-executive Director. Barney brings a wealth of
knowledge to Journeo, with over 20 years' technology and M&A
leadership, including a decade with Ideagen plc as Chief Operating
Officer before its $1.3bn acquisition in 2022 by a private equity
firm.
Market update
Our strategy to closely bond with customers and develop the
technologies and services they require to help them make mass
public transportation an attractive and cost-effective alternative
for members of the public, underpins our confidence and drives our
growth.
Whilst passenger numbers in all areas of the UK continue to lag
behind pre-Covid levels, to achieve its carbon Net Zero goals it
will be essential for the UK to invest in a clean and efficient
public transportation system.
Work with Local Authority customers, to identify projects for
our solutions that can be funded through remaining Transforming
Cities Funding, Bus Service Improvement Plan funding and City
Regional Sustainable Transport Settlements is ongoing and continues
to present the Company with significant opportunities.
In respect of rail travel, the commencement of Control Period 7
in April 2024, currently backed by GBP44bn of funding, is expected
to generate new opportunities for Journeo.
We work closely with our partners in our supply chains and hold
strategic levels of stock of key components to our solutions.
The public transport industry is placing increasing focus on
cyber-security and our secure-by-design approach is welcomed by
customers, backed by our ISO27001 and Cyber Essentials
accreditations.
ESG update
The Group continues to focus on important Environmental, Social
and Governance (ESG) and in 2024 will publish a Carbon Reduction
Plan, which will baseline Scope 1 and Scope 2 emissions and set
targets.
Outlook
The first half of this year has seen the Group enter a
transformational stage in its development following the acquisition
of Infotec in January and generate both strong organic and
acquisitive growth, which is continuing into H2 2023.
As anticipated following the acquisition of Infotec there are a
number of cross selling initiatives underway to broaden the
customer base and to increase sales, annual recurring revenues and
margins.
The Board continues to seek complementary acquisitions to
support growth and as announced on 20 September 2023, the Company
completed the acquisition of MultiQ. On behalf of the Board and all
of us at Journeo, we would like to extend a warm welcome to our new
colleagues in Denmark.
We entered H2 2023 with a GBP27m order book and a GBP55m sales
pipeline. This together with trading and further orders won since
the start of H2 2023 gives the board confidence that we will meet
our financial targets and that the Company continues to trade in
line with market expectations.
We continue to develop products the industry needs and with the
substantial central government financial support being provided we
continue to view the future of Journeo with confidence.
Consolidated statement of comprehensive income
for the six months ended 30 June 2023
Unaudited Unaudited
six months six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
================================================== ================= =============== ====================
Revenue (notes 4,5) 21,824 8,879 21,123
Cost of sales (15,425) (5,616) (13,354)
================================================== ================= =============== ====================
Gross profit 6,399 3,263 7,769
Other income 49 119 119
Underlying administrative expenses before
depreciation and amortisation (3,993) (2,730) (6,013)
================================================== ================= =============== ====================
Underlying profit before depreciation and
amortisation 2,455 652 1,875
Depreciation and amortisation (500) (344) (717)
Share-based payments (13) (24) (45)
Acquisition costs (132) _ _
Administrative expenses (4,589) (2,979) (6,656)
================================================== ================= =============== ====================
Operating profit 1,810 284 1,113
Finance expense (146) (117) (207)
================================================== ================= =============== ====================
Profit before taxation from continuing operations 1,664 167 906
Taxation charge (260) _ (3)
================================================== ================= =============== ====================
Profit for the period being total comprehensive
profit attributable to owners of parent 1,404 167 903
================================================== ================= =============== ====================
Profit per share (note 6)
Basic 9.03p 1.92p 10.33p
Diluted 8.72p 1.84p 9.80p
================================================== ================= =============== ====================
All results derive from continuing operations.
Consolidated statement of changes in equity shareholders'
funds
for the six months ended 30 June 2023
Total equity
Share capital Share premium Retained shareholders'
GBP'000 GBP'000 earnings funds
GBP'000 GBP'000
====================================== =============== =============== ========== ==============
Balance as at 1 January 2022 6,250 1,174 (6,224) 1,200
Profit and total comprehensive income
for the period - - 167 167
Share-based payments - - 24 24
====================================== =============== =============== ========== ==============
Balance at 30 June 2022 6,250 1,174 (6,033) 1,391
====================================== =============== =============== ========== ==============
Balance at 1 January 2022 6,250 1,174 (6,224) 1,200
Profit and total comprehensive income
for the year - - 903 903
Share-based payments - - 45 45
====================================== =============== =============== ========== ==============
Balance at 31 December 2022 6,250 1,174 (5,276) 2,148
Proceeds from issue of new shares 486 6,851 - 7,337
Profit and total comprehensive income
for the period - - 1,404 1,404
Share-based payments - - 13 13
====================================== =============== =============== ========== ==============
Balance at 30 June 2023 6,736 8,025 (3,859) 10,902
====================================== =============== =============== ========== ==============
Consolidated statement of financial position
at 30 June 2023
Unaudited Unaudited 31 December
30 June 30 June 2022
2023 2022 GBP'000
GBP'000 GBP'000
============================== ========= ========= ===========
Assets
Non-current assets
Goodwill (note 7) 3,581 1,345 1,345
Other intangible assets 1,998 1,216 1,300
Property, plant and equipment 1,589 528 504
Trade and other receivables 40 41 41
============================== ========= ========= ===========
7,208 3,130 3,190
============================== ========= ========= ===========
Current assets
Inventories 7,463 2,544 3,455
Trade and other receivables 9,631 8,009 8,130
Cash and cash equivalents 11,300 1,207 533
============================== ========= ========= ===========
28,394 11,760 12,118
============================== ========= ========= ===========
Total assets 35,602 14,890 15,308
============================== ========= ========= ===========
Equity and liabilities
Shareholders' equity
Share capital 6,736 6,250 6,250
Share premium account 8,025 1,174 1,174
Retained earnings (3,859) (6,033) (5,276)
============================== ========= ========= ===========
Total equity 10,902 1,391 2,148
============================== ========= ========= ===========
Non-current liabilities
Deferred revenue 2,810 1,506 2,304
Loans and borrowings 205 596 40
Lease liabilities 698 246 225
Deferred Tax 25 - -
Provisions 925 263 271
============================== ========= ========= ===========
4,663 2,611 2,840
============================== ========= ========= ===========
Current liabilities
Trade and other payables 8,323 3,442 5,178
Deferred revenue 8,758 5,557 1,552
Loans and borrowings 412 1,097 2,616
Lease liabilities 150 108 121
Tax liabilities 414 460 618
Provisions 1,980 224 235
============================== ========= ========= ===========
20,037 10,888 10,320
============================== ========= ========= ===========
Total equity and liabilities 35,602 14,890 15,308
============================== ========= ========= ===========
Consolidated statement of cash flows
for the six months ended 30 June 2023
Unaudited Unaudited
six months six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
======================================================= ==================== =================== ===============
Net cash from operating activities (note 8) 2,472 600 (587)
======================================================= ==================== =================== ===============
Cash flows from investing activities
Purchases of property, plant and equipment (382) (71) (58)
Purchases of intangible fixed assets (281) (285) (628)
Acquisition costs (132) - -
Net cash inflow on acquisition 4,423 - -
======================================================= ==================== =================== ===============
Net cash from investing activities 3,628 (356) (686)
======================================================= ==================== =================== ===============
Financing activities
Cash flow from financing activities 206 3 891
Principal element of lease repayments (131) (43) (170)
Issue of Shares 6,837 - -
Repayment of loans (2,244) (90) (15)
======================================================= ==================== =================== ===============
Net cash from financing activities 4,668 (130) 706
======================================================= ==================== =================== ===============
Net increase / (decrease) in cash and cash equivalents 10,768 114 (567)
Cash and cash equivalents at beginning of period 533 1,096 1,096
Effect of foreign exchange rate changes (1) (3) 4
======================================================= ==================== =================== ===============
Cash and cash equivalents at end of period 11,300 1,207 533
======================================================= ==================== =================== ===============
Notes to the interim financial statements
for the six months ended 30 June 2023
1. Basis of preparation and approval of interim statement
The financial information for the six months ended 30 June 2023
and for the six months ended 30 June 2022 is unaudited.
The interim financial statement for the six months to 30 June
2023 does not include all of the information required for full
annual financial statements and should be read in conjunction with
the consolidated financial statements for the year ended 31
December 2022.
The financial information has been prepared on the basis of
IFRSs that the Directors expect to be applicable as at 31 December
2023.
The accounting policies adopted in the preparation of the
interim financial statements are consistent with those set out in
the Group's Annual Report and Financial Statements 2022, which were
prepared in accordance with IFRSs.
This interim financial statement does not comprise statutory
accounts within the meaning of Section 435 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2022 were
approved by the Board on 28 March 2023 and delivered to the
Registrar of Companies. The report of the auditor on those accounts
was unqualified, did not contain an emphasis of matter paragraph
and did not contain any statement under Section 498(2) or Section
498(3) of the Companies Act 2006.
AIM-listed companies are not required to comply with IAS 34
'Interim Financial Reporting' and accordingly the Company has not
applied this standard in preparing this report.
The interim financial statement was approved by the Board of
Directors on 26 September 2023.
2. International Financial Reporting Standards
The Group follows the standards and interpretations issued by
the International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee of the
IASB and endorsed by the UK that are relevant to its
operations.
3. Going concern
The Group's business activities together with factors likely to
affect its future development, performance and position were set
out in the Strategic Report and Chairman's Statement of the 2022
Annual Report and the principal risks and uncertainties were set
out in the Strategic Report. The Directors have reviewed the cash
flow forecasts for the period up to and including 31 December
2024.
Based on the above, the Directors have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the foreseeable future and for at least twelve months
from the date of the report. For this reason the Directors continue
to adopt the going concern basis in preparing the financial
statements.
4. Revenue
The revenue split between goods and services is:
Unaudited
Unaudited six months Year ended
six months ended 30 31 December
ended 30 June 2022 2022
June 2023 GBP'000 GBP'000
GBP'000
========================================= ============= =================== ===============
Revenue
Goods 18,138 6,349 15,621
Services 3,686 2,530 5,502
========================================= ============= =================== ===============
21,824 8,879 21,123
========================================= ============= =================== ===============
Construction contracts included in goods 4,102 3,435 7,599
========================================= ============= =================== ===============
5. Segmental reporting
IFRS 8 requires operating segments to be determined on the basis
of those segments whose operating results are regularly reviewed by
the Board of Directors (the Chief Operating Decision Maker as
defined by IFRS 8) to make strategic decisions.
As the Board of Directors reviews revenue, gross profit and
operating profit on the same basis as set out in the consolidated
statement of comprehensive income, no further reconciliation is
considered to be necessary.
Unaudited Unaudited
six months six months Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
GBP'000 GBP'000 GBP'000
================================= ==================== =================== ===============
Revenue
Fleet Transport Operator Systems 7,893 4,901 12,494
Infotec 9,303 - -
Passenger Infrastructure Systems 4,627 3,978 8,629
================================= ==================== =================== ===============
21,823 8,879 21,123
================================= ==================== =================== ===============
Gross profit
Fleet Transport Operator Systems 1,858 1,409 3,711
Infotec 2,534 - -
Passenger Infrastructure Systems 2,007 1,854 4,058
================================= ==================== =================== ===============
6,399 3,263 7,769
================================= ==================== =================== ===============
Underlying profit
Fleet Transport Operator Systems 352 119 690
Infotec 1,580 - -
Passenger Infrastructure Systems 161 330 740
================================= ==================== =================== ===============
2,093 449 1,430
=================================
Central (270) (141) (272)
================================= ==================== =================== ===============
Underlying profit 1,823 308 1,158
================================= ==================== =================== ===============
Reconciling to profit before interest and tax
Underlying Share-based Operating
profit/(loss) payments profit/(loss)
GBP'000 GBP'000 GBP'000
--------------------------- -------------------------------------------------------- ------------ -----------------
Fleet Transport Operator
Systems 352 (7) 345
Infotec 1,580 - 1,580
Passenger Infrastructure
Systems 161 (6) 155
=========================== ======================================================== ============ =================
2,093 (13) 2,080
Central (270) - (270)
=========================== ======================================================== ============ =================
Total 1,823 (13) 1,810
=========================== ======================================================== ============ =================
Net assets
Net assets attributed to each business segment represent the net
external operating assets of that segment, excluding goodwill, bank
balances and borrowings, which are shown as unallocated amounts,
together with central assets and liabilities.
Unaudited Unaudited Year ended
six months six months 31
ended ended 30 December
30 June June 2022 2022
2023 GBP'000 GBP'000
GBP'000
================================= =========== =========== ==========
Assets
Fleet Transport Operator Systems 8,456 5,703 8,134
Infotec 7,084 - -
Passenger Infrastructure Systems 5,181 6,636 5,156
20,721 12,339 13,290
Goodwill 3,581 1,345 1,345
Cash and borrowings 11,300 1,207 533
Unallocated - (1) 139
================================= =========== =========== ==========
35,602 14,890 15,307
================================= =========== =========== ==========
Liabilities
Fleet Transport Operator Systems (4,518) (3,387) (3,627)
Infotec (11,328) - -
Passenger Infrastructure Systems (8,237) (8,419) (6,744)
================================= =========== =========== ==========
(24,083) (11,806) (10,371)
Cash and borrowings (617) (1,693) (2,656)
Unallocated - - (134)
================================= =========== =========== ==========
(24,700) (13,499) (13,161)
================================= =========== =========== ==========
Net assets / (liabilities)
Fleet Transport Operator Systems 3,938 2,315 4,507
Infotec (4,244) - -
Passenger Infrastructure Systems (3,056) (1,782) (1,588)
================================= =========== =========== ==========
(3,362) 533 2,919
Goodwill 3,581 1,345 1,345
Cash and borrowings 10,683 (486) (2,123)
Unallocated - (1) 5
10,902 1,391 2,146
================================= =========== =========== ==========
6. Profit per Ordinary Share
Details of the weighted average number of Ordinary Shares used
as the denominator in calculating the basic and diluted earnings
per Ordinary Share are given below:
Unaudited Unaudited
six months six months
ended 30 ended 30 Year ended
June 2023 June 2022 31 December
000 000 2022
000
======================================== ==================== =================== ===============
Basic weighted average number of shares 15,551 8,741 8,741
Dilutive potential Ordinary Shares 560 386 470
======================================== ==================== =================== ===============
16,111 9,127 9,211
======================================== ==================== =================== ===============
7. Goodwill
Goodwill acquired in a business combination is allocated at
acquisition to the cash-generating unit (CGU) that is expected to
benefit from that business combination. The Group has two CGUs
which are its three operating segments, Fleet Systems , Passenger
Systems and Infotec. The carrying amount of goodwill has been
allocated to the CGUs as follows:
21st Century
Passenger
Systems
Limited Infotec
GBP'000 GBP'000 Total
======================================= ============ ========= =====
Deemed cost:
At 1 January 2022 1,345 - 1,345
======================================= ============ ========= =====
At 30 June 2022 1,345 - 1,345
======================================= ============ ========= =====
At 31 December 2022 and 1 January 2023 1,345 - 1,345
======================================= ============ ========= =====
At 30 June 2023 1,345 2,236 3,581
======================================= ============ ========= =====
The Group tests goodwill annually for impairment as at 31
December, or more frequently if there are indications that goodwill
might be impaired.
The recoverable amounts of the CGUs are determined based on a
value-in-use calculation which uses cash flow projections based on
financial budgets and business plans approved by the Directors
covering a five-year period. Cash flows beyond that period have
been extrapolated in perpetuity assuming no growth, which the
Directors consider to be a conservative approach.
The key assumptions for the value-in-use calculations are those
regarding discount rates and sales forecasts.
The discount rates needed to equate the net present value from
these cash flows to the carrying value of goodwill are compared to
the required rate of return from the CGU based upon an assessment
of the time value of money, prevailing interest rates and the risks
specific to the CGU. If this discount rate is in excess of the
required rate of return then it is assumed that no impairment has
occurred to the carrying value of goodwill.
The discount rates are as follows:
Unaudited Unaudited
six months six months
Year ended
ended 30 ended 30 31 December
June 2023 June 2022 2022
% % %
================== ==================== =================== ================
Passenger Systems 13 13 13
================== ==================== =================== ================
Infotec 13 N/A N/A
================== ==================== =================== ================
The discount rates used are based on the Board's judgement
considering macroeconomic factors and reflecting specific risks in
each segment such as the nature of the market served, the
concentration of customers, cost profiles and barriers to
entry.
Passenger Systems also has intangible assets, which are
considered in the same value-in-use calculations as goodwill.
The Passenger Systems cash flow projections used to determine
value in use are based upon assumptions of sales, margins and cost
bases. Of these assumptions, the value in use is most sensitive to
the level of sales. Margins are fixed in the forecast based upon
past experience; the cost base is similarly based upon past
experience and will vary depending upon the level of sales. In
accordance with the requirements of IAS 36 our value-in-use
calculations do not include cash flows from restructurings to which
the Group is not yet committed.
The level of sales is the key assumption used in the cash flow
forecast. Sales have been determined by management using estimates
based upon past experience and future performance with reference to
market position and the sales pipeline. The macroeconomic
environment has improved and there continues to be an increase in
the number and size of contracts available. The 2023 forecast
predicts sales growth of 4%. The remaining four years are based
upon compound sales growth of 5%.
The value-in-use calculation supports the carrying value of the
CGU with headroom of GBP7,301k. A sensitivity analysis has been
performed on the impairment test. The Directors consider that an
absolute change in the key sales assumption is possible and a
reduction in the sales forecast in 2023 of 10% would result in
headroom remaining in the current carrying value of goodwill in
relation to Passenger Systems of GBP4,385k. If sales forecasts were
down 20% across the whole period and overheads remained unchanged
then there would be headroom of GBP1,468k.
Based on the review the discount rate applied to equate the net
present value of the forecast cash flows to the carrying value of
goodwill and the intangible assets was 77%, whereas the required
rate of return of the CGU is 13%.
In view of this, the Directors consider that no impairment of
goodwill or intangible assets is required.
8. Cash generated from operations
Unaudited Unaudited
six months six months Year
ended ended ended
30 June 30 June 31 December
2023 2022 2022
GBP'000 GBP'000 GBP'000
====================================================== =========== =========== ============
Profit for the period 1,404 167 903
Adjustments for:
- Finance expense 146 117 207
- Depreciation of property, plant and equipment 231 109 224
- Amortisation of intangible fixed assets 269 235 494
- Share-based payment expense 13 24 45
- Acquisition expenses 132 _ -
- Profit on disposal of fixed assets 1 _ -
- Decrease / ( increase) in provisions 399 (52) (34)
====================================================== =========== =========== ============
Operating cash flows before movement in working
capital 2,595 600 1,839
Increase in inventories (961) (936) (1,846)
Decrease / (increase) in receivables 2,988 (1,519) (1,564)
Increase / (decrease) in payables (1,824) 2,557 1,166
Cash inflow / (outflow) from operations 2,798 702 (405)
Income taxes paid (207) _ (3)
Interest paid (119) (102) (179)
====================================================== =========== =========== ============
Net cash inflow / (outflow) from operating activities 2,472 600 (587)
====================================================== =========== =========== ============
9. Businesses Acquired - Infotec Group of Companies
On 18 January 2023, the Group acquired 100% of the equity of IGL
Limited, together with its subsidiaries ("IGL" or "Infotec"), all
UK-based businesses.
Infotec is a leading provider of innovative display solutions
and is the UK's leading rail passenger information equipment
provider, with over 15,000 displays in operation. Infotec services
approximately 80 per cent. of the UK's rail network
The details of the business combination are as follows:
Unaudited
GBP'000
==================================================== =============
Fair value of consideration
Amount Settled in Cash 7,218
Deferred Consideration 1,000
Consideration Shares 500
Total Consideration 8,718
==================================================== =============
Identifiable net assets (recognised at fair value):
Other intangibles 1,301
Property, plant and equipment 264
Inventories 3,047
Trade and other receivables 3,980
Cash 12,641
Total assets 21,233
==================================================== =============
Equity and liabilities
Trade and other payables (5,422)
Deferred revenue (6,883)
Tax liabilities (446)
Provisions (2,000)
==================================================== =============
Total Liabilities (14,751)
==================================================== =============
Net Assets 6,482
==================================================== =============
Goodwill on Acquisition 2,236
==================================================== =============
Consideration settled in cash 8,218
Cash and cash equivalents acquired 12,641
Net cash inflow on acquisition 4,423
==================================================== =============
Consideration transferred
The acquisition of Infotec was settled in cash amounting to
GBP8,218k (including deferred consideration of GBP1,000k).
Acquisition related costs amounting to GBP132k were incurred.
Identifiable net assets
The fair value of identifiable net assets acquired as part of
the business combination amounted to GBP6,482k.
Separable intangible assets
One separable intangible asset was identified at acquisition,
being the acquired customer relationships. The acquired customer
list was valued by assessing a discounted cashflow based on
expected customer attrition rates and using the Group discount
factor of 13%. The useful life has been estimated at 5 years.
Goodwill
Goodwill is primarily related to the core growth expectations
that are expected from combining Infotec and Journeo technologies
and upselling this to existing customers.
Infotec contribution to the Group results
Infotec generated a profit of GBP1,472k for the period from 18
January 2023 to the reporting date. Revenue for the period to the
reporting date was GBP8,953k. In the six months to 30(th) June 2022
Infotec sales were approximately GBP6,762k with profit before tax
of GBP1,120k. In the twelve months to 30(th) December 2022 Infotec
sales were approximately GBP16,520k with profit before tax of
GBP2,646k.
10. Post balance sheet events
On 19 September 2023, Journeo plc acquired 100% of the share
capital of MultiQ Denmark A/S ("MultiQ). MultiQ is a leading
full-service provider of Intelligent Transport Systems ("ITS") with
customers in Denmark, Sweden and Iceland.
Due to the short timeframe between completion of the acquisition
and approval of these financial statements, it was not possible to
reliably estimate the fair values of assets and liabilities or the
goodwill associated with the acquisition.
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END
IR DZGZLVKNGFZM
(END) Dow Jones Newswires
September 26, 2023 02:00 ET (06:00 GMT)
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