TIDMTRAK
RNS Number : 3455Z
Trakm8 Holdings PLC
14 September 2022
14 September 2022
Prior to publication, the information contained within this
announcement was deemed by the Company to constitute inside
information as stipulated under the UK Market Abuse Regulation.
With the publication of this announcement, this information is now
considered to be in the public domain.
Trakm8 Holdings plc
('Trakm8' or the 'Group')
Trading and Strategy Update and Issue of Convertible Loan
Notes
Trading and Strategy Update
Trakm8 Holdings plc (AIM:TRAK), the global telematics and data
insight provider, provides the following trading update.
The Board is pleased to announce that the Group remains on
target to meet market expectations for revenues and adjusted profit
for the current financial year.
Trakm8 previously advised on 26 April 2022 that the results for
this financial year were expected to be significantly second half
weighted due to contract renewal timings. The Group's growing
connected base is now expected to further impact this weighting. As
a result, whilst the performance of Trakm8 in the second half of
the year is expected to enable the Group to meet market
expectations as highlighted above, the Group will be loss making in
the first half of the year.
The Board has been reviewing the Group's strategy and operations
in light of the significant success Trakm8 is enjoying in the
Insurance, Automotive and Optimisation sectors. It believes it is
important to build on this success and ensure resources are
available to enable Tarkm8 to address a narrower part of the
connected vehicle market with more focussed products, targeting
enterprise sales across all its chosen markets. The Board is also
conscious that Trakm8 has moved out of the development phase of its
platform "Trakm8 Insight" into a more mature phase and that this
should be reflected in its operations. Finally, the refresh of
Trakm8's hardware platforms to overcome previously announced
component availability challenges has been completed.
Reflecting the opportunities available to the Group and
completion of the developments highlighted above, the Board has
decided to significantly reduce the engineering investment Trakm8
has been making, in conjunction with reducing its sales and
marketing resources and associated support functions. As a result,
Trakm8 has commenced a consultation process with its staff with a
view to reducing Group headcount substantially which, together with
related efficiency improvements, will reduce overheads by
approximately GBP2.4 million in a full year. The costs associated
with this headcount reduction, which are estimated to be
approximately GBP0.8 m, will be financed from the proceeds of a
convertible loan note issue, further details of which are set out
below.
While these initiatives will not impact the Group's trading
performance in the financial year ending 31 March 2023, the Board
anticipates that the initiatives should provide a platform for the
Group's profitability to be materially improved in the year ending
31 March 2024.
Issue of Convertible Loan Notes
Trakm8 is pleased to announce a fundraise via the issue of
GBP1,580,000 nominal of 12% Convertible Unsecured Loan Notes
(together the "Loan Note"). The primary purpose of the Loan Note
issue is to provide the Group with the working capital required to
complete the strategic refocus of the business outlined above.
The Loan Note, which contains customary terms of default, will
have a two-year term from its issue date, being 14 September 2022,
and will attract interest, payable quarterly, from this date until
repayment on 13 September 2024. No application has been or will be
made to any Recognised Investment Exchange for the listing of, or
for permission to deal in, the Loan Note. The Loan Note is
convertible at a conversion price of 17.10p, a ten per cent.
discount to the closing mid-market price of a Trakm8 ordinary share
on 13 September 2022, the last practicable date prior to this
announcement. The terms of the Loan Note prohibit the Company from
entering into any further unsecured loans. In addition, in the
event that the Company undertakes an equity funding raising in
excess of GBP0.5m prior to repayment of the Loan Note, the
conversion price of the Loan Note will be adjusted to a 10 per
cent. discount to the price of that equity funding, provided the
equity funding is at a lower price than the closing mid-market
price of a Trakm8 ordinary share on 13 September 2022. In the
absence of a default event, the principal sum of the Loan Note will
be repaid or converted, in full or in part, at the option of the
Note holder at the maturity date of 13 September 2024 into Trakm8
ordinary shares and will not be redeemed. The Trakm8 ordinary
shares so issued will rank pari passu in all respects with the
existing ordinary shares currently in issue.
Microlise Group plc, a 20% shareholder in Trakm8, will be
subscribing for GBP1,000,000 nominal of the Loan Note. In addition,
certain directors of the Company will also be subscribing for the
Loan Note in the following amounts: John Watkins GBP400,000; Tim
Cowley GBP60,000; and Matt Cowley GBP60,000.
Related party transaction disclosure
Microlise Group plc is a substantial shareholder of the Group in
accordance the AIM Rules for Companies (the "AIM Rules") and John
Watkins, Tim Cowley and Matt Cowley are directors of Trakm8
(together the "Connected Loan Note Subscribers"). The Connected
Loan Note Subscribers are therefore related parties of the Group
for the purposes of the AIM Rules. Participation in the Loan Note
by the Connected Loan Stock Subscribers is a related party
transaction under the AIM Rules. The independent Directors of
Trakm8 consider, having consulted with the Group's nominated
adviser, Allenby Capital Limited, that the terms of the
participation in the Loan Note by the Connected Loan Note
Subscribers are fair and reasonable insofar as the Group's
shareholders are concerned.
- Ends -
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 1675 434 200
Jon Edwards, Chief Financial Officer www.trakm8.com
Allenby Capital Limited (Nominated Tel: +44 (0)20 3328 5656
Adviser & Broker)
David Hart/ Vivek Bhardwaj, Corporate www.allenbycapital.com
Finance
Tony Quirke, Sales and Corporate Broking
About Trakm8
Trakm8 is a UK based technology leader in fleet management,
insurance telematics, connected car, and optimisation. Through IP
owned technology, the Group uses AI data analytics collected from
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 264,000 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, GSF, Direct Line Group, Ticker and
Ingenie.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005. Trakm8 is also recognised with the LSE Green
Economy Mark.
www.trakm8.com / @Trakm8
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