TIDMTRAK
RNS Number : 3948D
Trakm8 Holdings PLC
29 June 2021
29 June 2021
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Final Results
Trakm8 Holdings plc (AIM: TRAK), the global telematics and data
insight provider, announces its final results for the year ended 31
March 2021 (FY-2021).
FINANCIAL SUMMARY:
FY-2021 FY-2020 Change
Group revenue GBP16.0m GBP19.6m -18%
---------- ---------- -------
of which, Recurring revenue(1) GBP9.4m GBP9.8m -4%
---------- ---------- -------
Loss before tax (GBP1.9m) (GBP1.7m) +10%
---------- ---------- -------
Adjusted loss before tax(2) (GBP0.3m) (GBP0.2m) +53%
---------- ---------- -------
Loss after tax (GBP1.2m) (GBP1.1m) +9%
---------- ---------- -------
Net cash inflow generated from
operations GBP4.7m GBP4.1m +15%
---------- ---------- -------
Net debt(3) GBP4.9m GBP5.6m -13%
---------- ---------- -------
Basic loss per share 2.47p 2.19p +13%
---------- ---------- -------
Adjusted basic earnings per share(2) 0.07p 0.28p -75%
---------- ---------- -------
(1) Recurring revenues are generated from ongoing service and
maintenance fees
(2) Before exceptional costs and share based payments
(3) Total borrowings less cash and cash equivalents. FY-2021 net
debt excludes GBP1.9m IFRS 16 lease liability.
OPERATIONAL OVERVIEW
-- 3 periods of lockdown impacted revenues significantly by an estimated GBP4m.
-- Strong continued reduction in direct and indirect costs.
-- 4% increase to over 254,000 connected units in operation (FY-2020: 245,000).
-- New contract wins with four new Insurance companies.
-- Contract awards with the Parts Alliance and a major UK retailer.
-- A second significant European road side assistance company
launched in volume during the year.
-- R&D spend down 28%, however still GBP2.9m invested.
-- Successfully navigated a large number of supply chain challenges.
-- Renewed Banking facilities for 2 years through to 31 October
2023, including delayed capital repayments.
-- Recurring revenues continue to be significant although
slightly down from GBP9.8m to GBP9.4m.
OUTLOOK
-- Revenues in the current financial year from insurance clients
increasing following the resumption of driving tests with recent
device shipments 16% ahead of last year resulting in revenues to
end of May being 28% ahead of last year. However the recovery from
lockdown is slower than the corresponding period last year.
-- Fleet sales showing good progress with revenues in current
financial year to end of May 24% ahead of last year.
-- Group revenues in current financial year to end of May 26% ahead of last year.
-- Assuming no further lockdowns or unmanageable supply chain
issues the Company expects to return to pre-Covid-19 revenues and
deliver a profit.
- Ends -
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 1675 434 200
Jon Furber, Finance Director www.trakm8.com
Arden Partners plc (Nominated Adviser Tel: +44 (0) 20 7614 5900
& Broker)
Paul Shackleton www.arden-partners.com
Notes to Editors
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
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
EXECUTIVE CHAIRMAN'S STATEMENT
Results
FY 2021 was a year like no other in our memories. The impact of
Covid-19 on our personal and business lives has been huge. Trakm8
has been affected like so many others from its exposure to the
motor insurance industry; almost 6 months of no driving tests and
higher levels of vehicles registered off the road (SORN) resulted
in a much reduced pool of drivers buying new policies. However the
high level of recurring revenue (over 50% in FY-2021) mitigated the
impact of Covid-19 on the financial performance of the Group.
The first quarter of the year saw a significant reduction in
Fleet connections with high levels of attrition from small
customers and reductions in fleet size from some larger customers.
Thereafter, the level of Fleet connections stabilised with new
sales matching a return to a more normal level of losses from the
existing base.
The problems with the supply chain of electronic components have
been widely reported. The major IT suppliers had first grab of chip
manufacturing capacity and the car companies have had a battle to
get their demand met. As a result we, too, have had to fight our
corner. The benefit of a vertically integrated business is that our
engineers and purchasing teams can solve these challenges quickly.
As a result, the year's revenues were not impacted by these
issues.
The revenues of the business fell by 18% but the Group, with
lower direct and indirect costs posted a broadly similar adjusted
loss before tax of GBP0.3m (FY-2020: GBP0.2m). Connections grew by
4% to 254,000. The total number of fleet management connections
decreased by 9% over the year to 70,000 (FY-2020: 77,000).
Telematics for insurance/automotive connections increased by 10%.
At the year-end we had 184,000 insurance/automotive connections
(FY-2020: 168,000). Recurring service revenues reduced by 3.8% to
GBP9.4m (FY-2020: GBP9.8 m).
It was pleasing to maintain the strong cash generation of the
business with a cash flow from operations of GBP4.7m (FY-2020:
GBP4.1m). This resulted in a free cash flow of GBP2.1m (FY-2020:
GBP0.9m) and net debt reduced by GBP0.7m at GBP4.9m (pre-IFRS 16).
The Group had GBP2.4m cash on hand and an undrawn overdraft
facility of GBP0.5m. It was satisfying to see the vigorous actions
taken reduced the inventory in the business by GBP0.6m. The Company
also benefitted from GBP1.8m of HMRC deferred payments on
VAT/PAYE/NI, which is scheduled for repayment over the next two
financial years almost equally.
A broadly similar adjusted loss to the previous year on revenues
18% lower was achieved through the Group's continued focus on
improving efficiency of our operations and engineering activities.
Significant reductions in direct and indirect costs were delivered
during the year. The Company benefitted from the Job Retention
Support Scheme with GBP0.9m in cash received from the government.
The investment in engineering resources, whilst some GBP1.2m less
(GBP0.8m less if the cost of engineering resources on furlough are
included) than the previous year, has continued to deliver
market-leading software and hardware solutions. Trakm8's Insight
platform provides superb customer experience and data, enabling
vehicle operators to make significant improvements to operational
efficiencies and to reduce risk.
Renewed Banking facilities were agreed with HSBC for over two
years. The new agreements comprise a Term Loan of GBP5.3m and a
GBP0.5m overdraft facility. Capital repayments commence in
September 2021, with appropriate 'carve out' in covenants to cover
the Covid-19 impacted financial year. These facilities are in place
until October 2023. In addition, the capital repayment holiday of
our loan with Maven (GBP1.4m outstanding) has been extended, such
that repayments will now re-commence in September 2021. Interest on
the loans continues to be paid monthly.
Research and development ('R&D')
Trakm8 has maintained a significant level of investment in
R&D for another year although below the level of the previous
year. The Board believes that this level of investment is necessary
to retain a portfolio of market-leading technology. Trakm8
continues to focus on owning the intellectual property ('IP') we
use in our solutions, and we see this as one of our key competitive
advantages. Telematics systems are complex; but because we own all
the elements that encompass a solution (with the exception of the
mobile networks) we have the ability to understand and resolve
problems more easily than our competitors.
The R&D investment has concentrated on the development of
self-fit devices, additional improvements to camera solutions,
development of the feature set in Insight, and further development
of our Insurance Broker platform. As identified in previous years,
the requirement to do more for less cost remains a key strategy as
this widens the opportunity to expand the rate of growth as the
return on their investment for our customers improves.
Trakm8 was pleased to be granted another patent in the year,
bringing the total number of patents to four that Trakm8 holds to
protect its market leading IP in its software and hardware
solutions.
Governance
The Group has adopted the Quoted Companies Alliance's (QCA)
Corporate Governance Code for small and mid-size quoted companies,
which the Board considers the most appropriate for the size and
structure of the Group. More information can be found in the
Governance Report section of this report and our website.
Please see
https://www.trakm8.com/investor-relations/corporate-governance for
our full compliance statement.
Dividend
The Group does not propose to recommend a dividend for the year
at the forthcoming AGM. However, the Board will continue to review
its dividend policy in light of future results and investment
requirements.
People
The number of people Trakm8 employs has reduced further during
FY-2021 with reductions across the business. In total our staff
numbers have reduced by 10% over the year.
Working successfully in the Covid-19 remote working world has
been a credit to our colleagues. We have an exceptional team and I
would like to thank everyone for their hard work, dedication and
contribution to the ongoing success of the business.
Outlook
We start the new financial year assuming that the worst of the
impact of Covid-19 is behind us.
With April still in lockdown our Insurance deliveries continued
to be 55% lower than the peak of September/October 2020, however
May and June have started a growth phase, but at a slower rate than
the corresponding period last year. Currently Insurance devices
supplied amount to 16% more than the corresponding period last
year.
Fleet deliveries have been reasonably good with new unit
shipments 116% greater than the corresponding period last year.
More importantly the attrition during the period has been more
normal.
April and May revenues were 26% higher than the corresponding
period of the previous year.
We expect that this year will benefit from improved direct and
indirect costs as a result of actions taken last year. We do not
envisage utilising the Job Retention Scheme as much this year.
Based on no more lockdowns or unsurmountable supply chains
challenges we expect the revenues to return to pre-Covid-19 levels
and as a result return the group to profitability.
John Watkins
EXECUTIVE CHAIRMAN
28 June 2021
FINANCIAL REVIEW
TRADING RESULTS
2021 2020 Change
Group Revenue (GBP'000) 15,961 19,550 -18%
------- ------- -------
of which, Recurring Revenue
(GBP'000) 9,379 9,753 -4%
------- ------- -------
Loss before tax (GBP'000) 1,867 1,705 +10%
------- ------- -------
Adjusted Loss before tax(1)
(GBP'000) 342 224 +53%
------- ------- -------
Basic loss per share (p) 2.47 2.19 +13%
------- ------- -------
Adjusted basic earnings/(loss)
per share (p) 0.07 0.28 -75%
------- ------- -------
(1) Before exceptional costs and share based payments
Revenue
Group revenue decreased by 18% to GBP16.0m (FY-2020: GBP19.6m)
due to the impact of Covid-19. Fleet revenues decreased by 21% to
GBP9.5m and Insurance and Automotive revenues decreased by 14% to
GBP6.4m. Despite the last lockdown, revenues in H2 were 18% higher
than H1 due to recovery in trading after the first lock down. The
last lock down did impact trading, but not to the same extent as
the first lock down. The growth in H2 was driven by more normal
level of new business sales in Fleet and Optimisation, and by the
onboarding of new insurance customers and launch of the Automotive
connected car solution. Recurring revenue generated from service
and maintenance fees decreased by 4% to GBP9.4m (FY-2020: GBP9.8m)
due to the reduction in Fleet connections in H1 as a result of
Covid-19. This resulted in higher than normal levels of attrition
from small customers and some reduction in fleets in larger
customers.
Loss before tax
The Group reported a loss before tax of GBP1.9m (FY-2020:
GBP1.7m). The loss remained broadly similar to the prior year
despite the reduction in revenue resulting in GBP2.2m less Gross
Margin. This was achieved by a GBP2.3m reduction in total
administrative costs offset by GBP0.2m reduction in Grant Income.
Total administrative costs reduced by GBP2.3m of which GBP0.9m was
due to income received under the Coronavirus Job Retention Scheme,
GBP0.9m reduction in one off exceptional integration and
restructuring and new product component refit costs, GBP0.3m due to
lower headcount and GBP0.1m reduction in depreciation and
amortisation.
Adjusted Loss before tax
Despite the GBP3.6m reduction in revenue, the Group reported an
adjusted loss of GBP0.3m, only GBP0.1m higher than the prior year.
The GBP2.2m of reduction in Gross margin that resulted from the
revenue reduction was offset by GBP1.3m lower headcount costs, of
which GBP1.0m were reclassified to exceptional costs as they
related to the cost of employees whilst on furlough, and GBP0.3m
due to lower headcount. In addition other overheads (excluding
exceptional items and depreciation and amortisation) reduced by
GBP0.9m from lower marketing spend and other costs due to Covid-19,
grant income was GBP0.2m lower and depreciation and amortisation
was GBP0.1m lower .
Exceptional Costs
Exceptional costs total GBP1.3m (FY-2020: GBP1.3m) and primarily
include GBP2.1m of one-off costs relating to Covid-19. These
include costs of employees whilst on furlough of GBP1.6m, costs
relating to the cancellation of internal and external projects
totaling GBP0.5m and some costs relating to cancelled marketing
events and bad debts. These costs were offset by GBP0.9m received
under the Coronavirus Job Retention Scheme. Additionally GBP0.2m of
restructuring costs relating to initiatives to streamline and
rationalise the operations of the business were incurred.
Balance Sheet
2021 2020
GBP'000 GBP'000
-------- --------
Non-Current Assets 25,640 25,759
-------- --------
Net Current Assets 4,169 4,437
-------- --------
Non-Current Liabilities 9,687 9,017
-------- --------
Net Assets 20,122 21,179
-------- --------
Net Assets decreased by GBP1.1m to GBP20.1m (FY-2020: GBP21.2m)
reflecting the loss for the year, after adding back the IFRS2 Share
based payments charge.
Non-current assets decreased by GBP0.2m to GBP25.6m (FY-2020:
GBP25.8m). This is due to GBP0.5m reduction in right of use assets
due to depreciation offset by a GBP0.2m increase in Intangible
assets and GBP0.2m increase in Property, plant and equipment.
Intangible assets increased due to the continued investment in
development in both software and hardware with capitalised
development costs in the year totaling GBP2.3m (FY-2020: GBP3.2m),
offset by amortisation of GBP1.7m (FY-2020: GBP1.8m). Additionally
GBP0.2m was written off to exceptional costs relating to
capitalised software costs, due to Covid-19 resulting in an
internal software project being cancelled.
Cash Flow
2021 2020
GBP'000 GBP'000
-------- --------
Net Cash generated from operations 4,737 4,115
-------- --------
Investing activities (2,667) (3,199)
-------- --------
Free Cash Flow(1) 2,070 916
-------- --------
Financing activities (1,365) (456)
-------- --------
Change in Cash in Year 705 460
-------- --------
Net Debt(2) 4,887 5,643
-------- --------
(1) Cash generated from operating activities less cash used in
investing activities (excluding cash flows related to
acquisitions)
(2) Total borrowings less cash and cash equivalents. FY-2021 net
debt excludes GBP1.9m IFRS 16 lease liability.
Cash from operating activities improved by GBP0.6m during this
year to GBP4.7m (FY-2020: GBP4.1m), which included R&D tax
credit cash receipts of GBP0.9m (FY-2020: GBP1.0m). The R&D tax
credit cash receipt reflects the Group's investment in development.
The operational cash flow improvement is due to GBP0.6m improvement
year on year from improved working capital management. This
improvement in working capital includes GBP1.8m of HMRC deferred
payments for VAT, PAYE & NI. The Group has a Time to Pay
agreement with HMRC to repay this almost equally over the next two
financial years.
Free cash inflow of GBP2.1m (FY-2020: GBP0.9m) is due to the Net
Cash generated from operating activities as detailed above offset
by cash outflows from investing activities which decreased by
GBP0.5m to GBP2.7m (FY-2020: GBP3.2m).
Financing activities was an outflow of GBP1.4m (FY-2020:
GBP0.5m). The increased cash outflow is due to the previous year
including the receipt of the new GBP1.5m growth capital loan from
MEIF WM Debt LP, and lower loan capital repayments in the current
year due to deferment of capital repayments from 30 June 2020. The
current year also includes the refinance of the HSBC facilities
that resulted in a new GBP5.3m term loan repaying GBP4.5m
outstanding under the old HSBC credit facility and GBP0.7m under
the old term loan.
Net Debt
Net debt excluding IFRS 16 lease liability of GBP1.9m (FY-2020
GBP2.3m) reduced by GBP0.7m to GBP4.9m (FY-2020: GBP5.6m). Cash
balances total GBP2.4m (FY-2020: GBP1.7m) and total borrowings
including IFRS16 lease liability of GBP1.9m totals GBP9.1m
(FY-2020: GBP9.6m). Borrowing comprise GBP5.3m (FY-2020: GBP0.9m)
term loan with HSBC, GBP1.4m (FY-2020: GBP1.5m) term loan with MEIF
WM Debt LP, nil (FY-2020: GBP4.5m) amounts drawn under the old
GBP5m revolving credit facility with HSBC and GBP2.4m (FY-2020:
GBP2.8m) of obligations under Right-to-use lease liabilities. In
addition at the year end the Group has a GBP0.5m unused overdraft
facility with HSBC.
Consolidated Statement of Comprehensive Income For The Year Ended
31 March 2021
Note Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
REVENUE 4 15,961 19,550
Cost of sales (6,643) (7,991)
---------------------- -------------------------
Gross profit 9,318 11,559
Other income 5 194 364
Administrative expenses excluding exceptional
costs (9,585) (11,926)
Exceptional administrative costs 7 (1,342) (1,296)
---------------------- -------------------------
Total administrative costs (10,927) (13,222)
OPERATING LOSS 6 (1,415) (1,299)
Finance income 78 12
Finance costs 8 (530) (418)
---------------------- -------------------------
LOSS BEFORE TAXATION (1,867) (1,705)
Income tax 630 612
LOSS FOR THE YEAR (1,237) (1,093)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified
to profit or loss:
Exchange differences on translation of
foreign operations (3) (7)
---------------------- -------------------------
TOTAL OTHER COMPREHENSIVE INCOME (3) (7)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
ATTRIBUTABLE TO OWNERS OF THE PARENT (1,240) (1,100)
---------------------- -------------------------
LOSS BEFORE TAXATION (1,867) (1,705)
Exceptional administrative costs 1,342 1,296
IFRS2 Share based payments charge 183 185
---------------------- -------------------------
ADJUSTED LOSS BEFORE TAX 6 (342) (224)
LOSS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE
TO OWNERS OF THE PARENT
Basic 9 (2.47p) (2.19p)
Diluted 9 (2.47p) (2.19p)
The results relate to continuing operations.
Consolidated Statement of Changes in Equity For The Year Ended 31
March 2021
---------------------------------------------------------------------------------------------------------------------------------------------------
Note Share Share Merger Translation Treasury Retained Total
capital premium reserve reserve reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance as at 1 April
2019 500 14,691 1,138 203 (4) 5,566 22,094
Comprehensive
loss
Loss for the year - - - - - (1,093) (1,093)
Other
comprehensive
loss
Exchange differences
on translation of
overseas operations - - - (7) - - (7)
Total comprehensive
income - - - (7) - (1,093) (1,100)
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Transactions
with
owners
IFRS2 Share-based
payments charge - - - - - 185 185
Transactions with
owners - - - - - 185 185
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Balance as at 1 April
2020 500 14,691 1,138 196 (4) 4,658 21,179
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Comprehensive
loss
Loss for the year - - - - - (1,237) (1,237)
Other
comprehensive
loss
Exchange differences
on translation of
overseas operations - - - (3) - - (3)
Total comprehensive
loss - - - (3) - (1,237) (1,240)
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Transactions
with
owners
IFRS2 Share based
payments charge - - - - - 183 183
Transactions with
owners - - - - - 183 183
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Balance as at 31
March 2021 500 14,691 1,138 193 (4) 3,604 20,122
-------- ------------- ---------- ---------------- ---------------------- ------------------------- ----------------
Consolidated Statement of Financial Position As At 31 March 2021
------------------------------------------------------------------------------------------------------------------
Note As at 31 As at
March 2021 31 March
2020
ASSETS GBP'000 GBP'000
NON CURRENT ASSETS
Intangible assets 10 22,187 21,997
Property, plant and equipment 891 717
Right of use assets 2,512 3,004
Amounts receivable under finance leases 50 41
25,640 25,759
---------------------- --------------------
CURRENT ASSETS
Inventories 1,409 2,043
Trade and other receivables 6,679 7,854
Corporation tax receivable 690 863
Cash and cash equivalents 2,370 1,665
11,148 12,425
---------------------- --------------------
LIABILITIES
CURRENT LIABILITIES
Trade and other payables (5,417) (6,180)
Borrowings (855) (1,125)
Right of use liability (680) (656)
Provisions (27) (27)
(6,979) (7,988)
---------------------- --------------------
CURRENT ASSETS LESS CURRENT LIABILITIES 4,169 4,437
TOTAL ASSETS LESS CURRENT LIABILITIES 29,809 30,196
NON CURRENT LIABILITIES
Trade and other payables (1,546) (713)
Borrowings (5,815) (5,675)
Right of use liability (1,767) (2,162)
Provisions (190) (157)
Deferred income tax liability (369) (310)
(9,687) (9,017)
---------------------- --------------------
NET ASSETS 20,122 21,179
---------------------- --------------------
EQUITY
Share capital 11 500 500
Share premium 14,691 14,691
Merger reserve 1,138 1,138
Translation reserve 193 196
Treasury reserve (4) (4)
Retained earnings 3,604 4,658
TOTAL EQUITY ATTRIBUTABLE TO EQUITY HOLDERS
OF THE PARENT 20,122 21,179
---------------------- --------------------
The loss for the Company for the year determined in accordance with
the Companies Act 2006 was GBP257,000 (2020: loss GBP236,000).
The notes on pages 42 to 79 are an integral part of these consolidated
financial statements. These financial statements on pages 38 to 79
were approved by the Board of directors and authorised for issue
on 28 June 2021 and are signed on its behalf by:
John Watkins - Director Jon Furber -
Director
Consolidated Statement of Cash Flows For The Year Ended 31
March 2021
--------------------------------------------------------------------------------------------
Notes Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
NET CASH GENERATED FROM OPERATING
ACTIVITIES 12 4,737 4,115
------------------- ----------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and
equipment (330) (20)
Purchases of software (47) (23)
Capitalised development costs (2,290) (3,156)
NET CASH USED IN INVESTING ACTIVITIES (2,667) (3,199)
------------------- ----------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans 5,300 2,000
Loan arrangement fees (86) -
Repayment of loans (5,379) (1,440)
Repayment of obligations under lease
agreements (670) (630)
Interest paid (530) (386)
NET CASH GENERATED FROM FINANCING
ACTIVITIES (1,365) (456)
------------------- ----------------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 705 460
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 1,665 1,205
CASH AND CASH EQUIVALENTS AT OF
YEAR 2,370 1,665
------------------- ----------------------
Notes to the Consolidated Financial Statements
1 GENERAL INFORMATION
Trakm8 Holdings PLC ("Company") and its subsidiaries (together
the "Group") develop, manufacture, distribute and sell telematics
devices and services and optimisation solutions.
Trakm8 Holdings PLC is a public limited company incorporated in
the United Kingdom (registration number 05452547). The Company
is domiciled in the United Kingdom and its registered office address
is 4 Roman Park, Roman Way, Coleshill, West Midlands, B46 1HG.
The Company's Ordinary shares are traded on the AIM market of the
London Stock Exchange. The Company is registered in England and
is limited by shares.
The Group's principal activity is the development, manufacture,
marketing and distribution of vehicle telematics equipment and
services and optimisation solutions. The Company's principal activity
is to act as a holding company for its subsidiaries.
The consolidated financial statements are presented in Sterling
and all values are rounded to the nearest thousand (GBP'000) except
where otherwise indicated.
2 PREPARATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE
WITH IFRS
The Group's financial statements have been prepared in accordance
with International Financial Reporting Standards ("IFRS") and IFRS
Interpretations Committee ("IFRS IC") interpretations as endorsed
by the European Union, and with those parts of the Companies Act
2006 applicable to companies reporting under IFRS.
3 BASIS OF PREPARATION
The audited financial information included in this preliminary
results announcement for the year ended 31 March 2021 and audited
information for the year ended 31 March 2020 does not comprise
statutory accounts within the meaning of section 434 Companies
Act 2006. The information has been extracted from the audited statutory
financial statements for the year ended 31 March 2021 which will
be delivered to the Registrar of Companies in due course. Statutory
financial statements for the year ended 31 March 2020 were approved
by the Board of directors and have been delivered to the Registrar
of Companies. The report of the independent auditors for the year
ended 31 March 2021 and 2020 respectively on these financial statements
were unqualified and did not include a statement under section
498 of the Companies Act 2006.
These financial statements are prepared on a going concern basis
after assessing the principal risks. To monitor the future cash
position the Group produces projections of its working capital
and long term funding requirements covering 3 months in detail
and 1 and 2 year projections. These projections are updated on
a regular basis to reflect current trading and latest information
on future trading. The Group does have a substantial recurring
revenue base that accounts for 50% of revenues that provide a strong
underlying base, and the Group is still taking advantage of the
Job Retention scheme as trading recovers following relaxation of
lock down rules. Further consideration of other significant risks
and the mitigations the Group has developed are detailed in page
18 of the audited statutory financial statements.
The Group renewed its debt facilities with HSBC in March 2021.
The new agreement comprises a Term Loan of GBP5,300,000 and a GBP500,000
overdraft facility. Capital repayments commence in September 2021
at GBP86,000 per month with a final payment of the outstanding
balance on 31 October 2023, which is when these facilities are
in place until. In addition, the capital repayment holiday of our
loan with Maven (GBP1,400,000 outstanding) has been extended, such
that repayments will now recommence in September 2021. In addition
the company has reached an agreement with HMRC on a time to pay
agreement to spread GBP1,759,000 of VAT, PAYE & NI payment deferments
that resulted from the Covid-19 lockdowns almost equally over the
next two financial years. Covenants agreed with both HSBC and Maven
reflect the impact of trading due to Covid-19 over the preceding
twelve months, as such the main covenant test over the next financial
year relates to an absolute EBITDA tested quarterly through to
end of the financial year, with a cash flow cover and leverage
covenant only started to be tested in June 2022.
At the year end the Group has cash balances of GBP2,370,000 and
an unused overdraft facility of GBP500,000. The Groups latest projections
for twelve months from the date of signing the financial statements
show that the Group has sufficient cash resources and will meet
its covenants with ample headroom for the foreseeable future. The
Group has undertaken a number of adverse sensitivities against
its projections to reflect much slower recovery post the lock down
at the end of the last financial year. The Groups base line projection
has a 10% headroom against its EBITDA covenant, its downside sensitivity
analysis shows that a GBP2.4m reduction in revenue only reduces
EBITDA by 3%, with minimal impact on cash. This downside scenario
still passes all covenants with the Group having additional mitigating
actions not included in the projections. One of the current risks
is cost pressure and long lead times due to the electronics supply
chain being materially impacted by Covid-19. The Group is in a
strong position to mitigate that risk due to the strong long-term
relationships with its suppliers, and due to it being a fully vertically
integrated business which means the design engineers working closed
with supply chain. However, the Group's sensitivity analysis demonstrated
headroom in its latest projection of a 15% increase in component
prices. On this basis the Directors have a reasonable expectation
that the Group will have adequate financial resources to continue
in operation for the foreseeable future and therefore it is appropriate
to adopt the going concern basis of accounting in preparing the
financial statements.
4 SEGMENTAL ANALYSIS
The chief operating decision maker ("CODM") is identified as
the Board. It continues 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, assets and liabilities are
in respect of one Integrated Telematics Technology segment.
The Board as the CODM review the revenue streams of Integrated
Fleet, Optimisation, Insurance and Automotive Solutions ("Solutions")
as part of their internal reporting. Solutions represents the
sale of the Group's full vehicle telematics and optimisation
services, engineering services, professional services and mapping
solutions to customers.
A breakdown of revenues within these streams
are as follows:
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Solutions: 15,961 19,550
Fleet and optimisation 9,520 12,034
Insurance and automotive 6,441 7,516
----------------------- -----------------------
A geographical analysis of revenue by destination
is as follows:
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
United Kingdom 15,647 19,181
North America 4 7
Norway 2 -
Rest of Europe 293 67
Rest of World 15 295
15,961 19,550
----------------------- -----------------------
5 OTHER INCOME
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Grant income 194 361
R&D tax credit - 4
R&D tax credit adjustment in respect
of prior periods - (1)
194 364
----------------------- -----------------------
6 OPERATING LOSS
The following items have been included in arriving at operating
loss:
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Depreciation
- owned assets 156 149
- right of use assets 625 550
Amortisation of intangible
assets
- owned assets (see note
10) 1,992 2,194
Other operating lease rentals 13 80
Research and development
expenditure 637 896
Loss on disposal of property plant 318 -
and equipment
Loss on foreign exchange
transactions 1 2
Staff costs 6,465 6,730
Exceptional administrative
costs (note 7) 1,342 1,296
Auditors' remuneration
- Fees payable to the Company's auditors for
the audit of the parent
company and consolidated financial
statements 73 73
Adjusted loss before tax is monitored by the
Board and measured as follows:
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Loss before tax (1,867) (1,705)
Exceptional administrative
costs (note 7) 1,342 1,296
Share based payments 183 185
Adjusted loss before tax (342) (224)
----------------------- -----------------------
7 EXCEPTIONAL ADMINISTRATIVE
COSTS
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Acquisition costs - 52
Integration & restructuring
costs 168 602
New product component refit
costs - 442
Covid-19 costs 2,109 200
Furlough grant income (935) -
1,342 1,296
----------------------- -----------------------
The acquisition costs incurred in 2020 relate to non-underlying
charges under a separate agreement linked to the acquisition
in 2017. The costs incurred are directly linked to the acquisition
and not as part of the underlying business. This agreement terminated
on 31 July 2019.
The Group has incurred significant costs relating to its ongoing
project to streamline and rationalise the operations of the
business. This has resulted in the following non-underlying,
one-off costs:
- In the current and prior year, integration and restructuring
costs incurred relate to integrating the activities of Route
Monkey Limited and Roadsense Limited that were acquired in previous
financial years and include costs associated with office closures
and costs and profits incurred as part of its long-term real
estate plan.
- Restructuring costs incurred as a result of a headcount reduction
activity undertaken during the current financial year
The Product component refit costs incurred in the prior year
relate to significant component and software issues that arose
in 2019 on a new product. These issues were fixed by the end
of 2019. However significant re-visit and material costs were
incurred in previous financial year as a result of the project
to remedy these issues. No customers have been lost as a result
of these issues.
The Group also incurred exceptional costs in the current financial
year relating to the Covid-19 pandemic. These costs mainly
relate to the cost of employees whilst on furlough (GBP1,607,000)
and the cancellation of internal and external projects (GBP476,000),
and some costs relating to cancelled marketing events and bad
debts (GBP26,000).
Furlough grant income relates to other income received from
the Coronavirus Job Retention Scheme for employees furloughed
as a result of Covid-19.
8 FINANCE COSTS
Year ended Year ended
31 March 31 March
2021 2020
GBP'000 GBP'000
Interest on bank
loans 373 284
Amortisation of debt issue costs 37 32
Interest on right
of use assets 120 102
530 418
---------------------------- ----------------------------
9 EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated in accordance
with IAS 33 using the loss for the year and the weighted average
number of Ordinary shares in issue during the year as follows:
Year ended Year ended
31 March 2021 31 March 2020
GBP'000 GBP'000
Loss for the year after taxation (1,237) (1,093)
Exceptional administrative costs 1,342 1,296
Share based payments 183 185
Tax effect of adjustments (255) (246)
Adjusted profit for the year after
taxation 33 142
-------------------------------- ----------------------------
No. No.
Number of Ordinary shares of 1p
each at 31 March 50,004,002 50,004,002
Basic weighted average number of Ordinary
shares of 1p each 50,004,002 50,004,002
Diluted weighted average number of
Ordinary shares of 1p each 50,004,002 50,004,002
Basic loss per share (2.47p) (2.19p)
Diluted loss per share (2.47p) (2.19p)
Adjust for effects of:
Exceptional costs 2.17p 2.10p
Share based payments 0.37p 0.37p
Adjusted basic earnings per share 0.07p 0.28p
Adjusted diluted earnings per share 0.07p 0.28p
10 INTANGIBLE ASSETS
Goodwill Intellectual Customer Development Software Total
property relationships costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
COST
As at 1 April
2019 10,417 1,920 100 14,034 2,033 28,504
Reclassification
of
right of use
assets(a) - - - - (153) (153)
Additions -
Internal
developments - - - 2,763 - 2,763
Additions -
External
purchases - - - 393 23 416
----------------- ----------------- ----------------- -------------------- --------------- ----------
As at 31 March
2020 10,417 1,920 100 17,190 1,903 31,530
Additions -
Internal
developments - - - 2,119 - 2,119
Additions -
External
purchases - - - 171 47 218
Impairments - - - - (155) (155)
Disposals - - - (238) (36) (274)
As at 31 March
2021 10,417 1,920 100 19,242 1,759 33,438
----------------- ----------------- ----------------- -------------------- --------------- ----------
AMORTISATION
As at 1 April
2019 - 1,849 89 4,632 769 7,339
Charge for year - 61 11 1,847 275 2,194
----------------- ----------------- ----------------- -------------------- --------------- ----------
As at 31 March
2020 - 1,910 100 6,479 1,044 9,533
Charge for year - 10 - 1,733 249 1,992
Disposals - - - (238) (36) (274)
As at 31 March
2021 - 1,920 100 7,974 1,257 11,251
----------------- ----------------- ----------------- -------------------- --------------- ----------
NET BOOK AMOUNT
As at 31 March
2021 10,417 - - 11,268 502 22,187
----------------- ----------------- ----------------- -------------------- --------------- ----------
As at 31 March
2020 10,417 10 - 10,711 859 21,997
----------------- ----------------- ----------------- -------------------- --------------- ----------
As at 1 April
2019 10,417 71 11 9,402 1,264 21,165
----------------- ----------------- ----------------- -------------------- --------------- ----------
Goodwill arose in relation to the Group's acquisition of 100% of
the share capital of Roadsense Technology Limited (Roadsense), Route
Monkey Limited (Route Monkey), Box Telematics Limited (Box) and
DCS Systems Limited (DCS).
Since the acquisition Roadsense, Box, Route Monkey and DCS have
been incorporated into the Trakm8 business. These businesses have
therefore been assessed as one cash generating unit for an impairment
test on Goodwill.
The impairment review has been performed using a value in use calculation.
The impairment review has been based on the Group's budgets for
FY-2022 which have been reviewed and approved by the Board and projections
for FY-2023. Forecasts for the subsequent 3 years have been produced
based on 7% (a prudent growth rate for telematics market) growth
rates in revenue and EBITDA in each year. A net present value has
been calculated using a pre-tax discount rate of 10% (Group's weighted
average cost of capital) which is deemed to be a reasonable rate
taking account of the Group's cost of funds and an extra element
for risk. A terminal value has been calculated and included in the
discounted cash flow forecasts used within the model to fully support
the goodwill value. A growth rate of 2% was used to determine the
terminal value.
The forecast show sufficient headroom of cash flow above the net
assets value when we have performed sensitivity analysis:
1. An increase in the discount rate to 12%
shows headroom of GBP4m.
2. A decrease in the growth rate to 5% shows
headroom of GBP10m.
3. A decrease in the terminal growth rate to
1% shows headroom of GBP10m.
In addition, sensitivity analysis has been undertaken and indicates
that an impairment will be triggered by:
1. Decrease in annual growth rates from 7% to 2% and decrease in
terminal growth rate from 2% to 1% and increase the discount rate
from 10% to 11%.
Or triggered
by:
1. Decrease in net cash generated from operating activities for
FY-2022 and FY-2023 of 22%.
Amortisation expenses of GBP1,992,000 (2020: GBP2,194,000) have
been charged to Administrative expenses in the Consolidated Statement
of Comprehensive Income.
(a) Amounts previously recognised as finance lease assets have been
reclassified to right of use assets upon transition to IFRS 16 on
1 April 2019. Refer to Note 11 - Right of Use Assets for further
details.
11 SHARE CAPITAL
As at 31 March As at 31 March
2021 2020
No's GBP'000 No's GBP'000
Authorised: '000's '000's
Ordinary shares of 1p
each 200,000 2,000 200,000 2,000
Allotted, issued and
fully paid:
Ordinary shares of 1p
each 50,004 500 50,004 500
The Company currently holds 29,000 Ordinary shares in treasury
representing 0.06% (2020: 0.06%) 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 CASH GENERATED FROM OPERATIONS
As at 31 As at 31
March 2021 March 2020
GBP'000 GBP'000
Loss before
tax (1,867) (1,705)
Depreciation 781 699
(Profit)/Loss on disposal of 318 -
fixed assets
Net bank and other interest 487 406
Amortisation of intangible
assets 1,992 2,194
Exchange movement (3) (7)
Share based payments 183 185
----------------------- ---------------------
Operating cash flows before movement
in working capital 1,891 1,772
Movement in inventories 634 693
Movement in trade and other
receivables 1,166 589
Movement in trade and other
payables 70 (21)
Movement in provisions 33 42
----------------------- ---------------------
Cash generated from operations 3,794 3,075
Interest
received 78 12
Income taxes received 865 1,028
-----------------------
Net cash inflow from operating
activities 4,737 4,115
----------------------- ---------------------
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR DKFBPFBKDCAB
(END) Dow Jones Newswires
June 29, 2021 02:00 ET (06:00 GMT)
Trakm8 (LSE:TRAK)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Trakm8 (LSE:TRAK)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
