JOURNEO PLC

Earnings Release • Mar 26, 2024

National Storage Mechanism | Additional information

RNS Number : 2282I

Journeo PLC

26 March 2024

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 March 2024

Journeo plc

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

Final results for the year ended 31 December 2023

Journeo plc (AIM: JNEO), the information systems and transport technical services group, is pleased to announce its final results for the year ended 31 December 2023.

Financial highlights

·    Revenue increased 118% to £46.1m (2022: £21.1m)

·    Gross profit increased 84% to £14.3m (2022: £7.8m)

·    Adjusted profit before tax* increased 325% to £4.0m (2022: £1.0m)

·    Profit before tax increased 312% to £3.7m (2022: £0.9m)

·    Cash and cash equivalents at 31 December 2023 were £8.1m (2022: £0.5m)

·    Diluted earnings per share of 17.96 pence (2022: 9.80 pence)

Operational highlights

·    Acquisitions of Infotec and MultiQ are expanding the reach of Journeo's solutions into new markets, both domestic and international.

·    Continued investment in Research and Development as a core component of the Company's strategy.

·    Investment to increase capacity at our Ashby-based Infotec manufacturing and production facility.

·    Significant new contract wins throughout the year, including £1m award from Transport for Wales (TfW) for country-wide content management solution.

·    Extension of Arriva framework to supply CCTV and associated services for new and retrofit vehicles.

·    Retained all ISO 9001, 14001, 27001 and 45001 accreditations and Cyber Security and ICO certification.

*  Excluding acquisition costs and share-based payments

Russ Singleton, CEO of Journeo plc, said: " I am very pleased with the progress we have made towards reaching our goal of becoming a market leader in our field. Our strengthening intellectual property and increased barriers to entry into our markets are helping us establish defendable market positions. Each year, we are growing our recurring revenue base as well as our sales order book, providing us with greater forward earnings visibility. Together with healthy cash balances, we are able to invest further in our technologies and business.

The acquisitions of Infotec and MultiQ have performed well since joining the Group, extending our capabilities and geographic reach. We continue to seek out complementary acquisitions that can provide Journeo with access to adjacent markets or increase the services we deliver into our current markets.

As we entered 2024, we did so with momentum in our strategy, which is enabling us to deliver valuable products, software, and services for our customers. Our strong order book, growing sales pipeline, and increasing leadership positions give us confidence in our ability to further grow the business."

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 Capital Markets Limited - Nominated Adviser and Broker K aty 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.

·    Journeo AB (based in Stockholm, Sweden): technical services provider to public transport customers in Sweden.

In the last 4 years, the Company has invested over £6 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's Statement

This has been a transformational and successful year for Journeo. We generated strong organic growth in our Fleet Systems and Passenger Systems businesses, as well as non-organic growth through the acquisitions of Infotec in January and MultiQ in September. As a result, the Group's capabilities within its established markets, and its ability to enter new markets and territories has grown significantly. The Group's strategy is delivering positive results, demonstrated by the increased adoption of our technologies and software with new and existing clients, and our strong financial performance. The Group's sales are increasingly based on our own intellectual property which is driving an increase in recurring revenues from our SaaS platforms, and sales of our specialist products and services to customers in the UK, the Nordics and the USA.

Trading results

Group underlying profit increased by 270% to £4.3m for the year ended 31 December 2023 (2022: £1.2m). Overall sales increased by 118% to £46.1m (2022: £21.1m) and gross profit increased by 84% to £14.3m (2022: £7.8m).

Overall sales increased by 118% to £46.1m (2022: £21.1m) and gross profit increased by 84% to £14.3m (2022: £7.8m). Organic sales growth was 20% and organic gross profit growth was 2%.

Fleet sales increased by 31% to £16.3m (2022: £12.5m) as bus operators continued to increase investment, backed by Government stimuli. Gross profit increased to £3.9m (2022: £3.7m) with margins decreasing to 24% (2022: 30%) as significant levels of hardware with a future SaaS benefit were installed and supply chain and other cost increases impacted across the majority of the financial year.

Passenger sales increased by 5% to £9.0m (2022: £8.6m). Margins fell slightly to 44% (2022: 47%), as a result of cost pressures during the year.

The Infotec and MultiQ acquisitions delivered sales of £20.8m and gross profit of £6.4m. Margins were 30% at Infotec and 48% at MultiQ.

Underlying administrative expenses increased to £10.1m (2022: £6.7m) reflecting the significant growth in the Group. Investment was made in Research and Development and other teams during the year and inflationary cost pressures were felt.

Profit before tax was £3.7m (2022: £0.9m).

Diluted earnings per share (EPS) was 17.96p (2022: 9.80p). Cash and cash equivalents at the end of the year were £8.1m (2022: £0.5m).

Markets

The goal of Carbon Net Zero emissions by 2050 remains a significant challenge for the UK Government and many of its counterparts on the global stage. Whilst the 2024 General Election could signal a change in transport strategy for the UK Government, we do not anticipate a major shift from the current approach that has seen the promotion of, and investment in, sustainable public transport. The adoption of mass public transport is one of the keys to delivering a Carbon Net Zero future for the UK, and we continue to develop, implement and manage underlying technology systems that will contribute to enabling that future. The momentum that Journeo has achieved as a technology and solutions company, selling a mixture of software, hardware and services to domestic and international markets, is a result of close collaborative work with our customers, as we support them to meet new and emerging challenges.

Environmental, social and governance

Over the past two years, we have been working to formalise our approach to sustainability and identify our key areas of focus.  The integration of recent acquisitions has required us to expand our approach to collecting Group-wide data and we are committed to ensuring our Carbon Reduction Plan is published within 2024.

Areas on which we targeted to take leading positions, however, have taken significant steps forward.  The introduction of an employee assistance programme and assessment of new human resources software systems will support our existing process and ensure that, as we grow, Journeo remains an employer of choice for emerging talent.  This, coupled with leading the market in product developments such as the introduction of new open standards, are markers for our commitment to the continued development of the Group.

People

Over the course of the year, the Board was strengthened with the appointment of Barnaby Kent as an independent Non-executive Director and through an active recruitment programme and two acquisitions, we have seen the number of people that make Journeo a dynamic, successful and exciting place to work, grow. I am delighted that the new team members share our values and commitment to customers, and would like to take the opportunity to extend my thanks to everyone at Journeo once again.

Outlook

Our strategy is to grow Journeo through a combination of close bonding with our customers, engineering excellence and technology leadership, supported by targeted acquisitions of businesses that share our ethos and provide a route to market for our core capabilities.

We look to the future with a growing sense of confidence. The execution of our strategy has momentum and is enabling us to deliver valuable products, software and services for our customers whilst continuing to deliver strong financial performance and growth for our shareholders. The increasing barriers to entry into our sector are helping us to establish defendable market positions.

Our strong cash position is allowing us to invest in the business and ensure the long-term prosperity and profitable growth of the Group. We continue to seek out complementary acquisitions which can provide Journeo with access to adjacent markets or increase the services we deliver into our current markets. Further, through deep industry insight, research and development, and close customer relationships we are moving into leadership positions within sectors of our target markets.

We entered 2024 with a strong order book, a growing sales opportunity pipeline, and reduced reliance on third-party technology. This gives us the confidence that we will continue to deliver on market expectations.

Mark Elliott

Non-Executive Chairman

26 March 2024

Chief Executive's report

Introduction

In the past year, the Group has made significant progress towards its aim of becoming a market-leading provider of intelligent transport systems.

Our long-term success is underpinned through our investment in developing the technology and solutions that meet the needs of our customers today and prepare them for the challenges of tomorrow. The strategic acquisitions of Infotec, which has provided enhanced access to the rail market and the Group's first US-based contracts; and MultiQ, which provides intelligent transport system solutions to customers in Denmark, Iceland and Sweden, are extending the reach and capability of our established businesses.

We continue on this trajectory whilst being mindful of the risks that remain in our target market sectors. The long-term impacts that the COVID-19 pandemic have had on the transport sector cannot be understated. A dramatic increase in the number of people working from home, easy access to credit and the expansion of internet shopping continues to suppress the number of people using public transport. That being said, adoption of mass public transport remains the only viable solution to reduce emissions generated by the movement of people and provide a meaningful contribution to achieving Carbon Net Zero.

The investments being made by local authorities, transport network ruling bodies and fleet operators to make public transport a more efficient, safer and reliable way to travel is placing increased reliance on the type of solutions that Journeo provides.

Operational review

Fleet Transport Operator Systems

I am pleased to report strong revenue growth from Fleet Transport Operator Systems, increasing sales by 31% to £16.3m (2022: £12.5m). Margins were lower than the prior year mainly due to the technology-mix of sales with a future SaaS revenue benefit. There was a small improvement in margins during the second half of the year and this improvement is expected to continue throughout 2024.

The performance for the year was in line with management expectations and we expect to see further improvement while we grow our brand and technology presence in rail markets. In March o2023, we announced a £0.6m contract with CrossCountry Rail for the upgrade of legacy systems previously installed by Journeo in 2012. The upgraded camera systems were connected to the Journeo Portal, providing stakeholders such as CrossCountry teams, Network Rail and the British Transport Police with direct access to footage for rapid incident management.

In April 2023, we announced a one-year extension to our Framework Agreement with Arriva UK Bus, through to April 2024. Separate to Journeo's three-year fleet-wide SaaS contract (announced in November 2021), the extension builds on the relationship between Journeo and Arriva, that has been in place since 2010.

We continue to see progress in our Airport Passenger Transport solutions. In March 2023 we announced a new five-year extension to our software and support contract at Gatwick Airport, valued at £0.5m. Shortly after this we received a purchase order from First Bus to install our software at East Midland Airport, extracting further value from our IP-backed solutions.

With operators reliant on our solution at six major airports in the UK and Ireland, we are looking to leverage our position to expand our presence at home and overseas.

Passenger Transport Infrastructure Systems

The performance of our Passenger Transport Infrastructure business was in line with management expectations, delivering a 5% growth in revenues to £9.0m (2022: £8.6m). Margins were lower than in 2022, however, we are pleased to see the sales progress in the business and believe it has the potential to outstrip its current performance through changes and cost efficiencies that we are implementing.

The acquisition of Infotec gives Journeo the power to consolidate its display technologies, streamline supply chains and exercise greater control over production costs. Simultaneously, Journeo is working to migrate the EPIX Content Management System to a SaaS solution, the Journeo Portal. Historically, local authority budgets have been directed towards capital expenditure, and so not invested in subscription-based solutions. However, this is starting to change as customers realise the value of the continuous improvement that is the cornerstone of cloud-based technologies.

A notable development during the year was a £1.0m software and service contract from Transport for Wales (TfW). This first-of-its kind contract seeks the disaggregation of software services for Real Time Passenger Information (RTPI) estates from the displays that are located within urban and rural areas. Disaggregation enables local authorities to purchase displays from any provider, as long as they operate on open industry standards. Journeo is at the forefront of developing these standards and we expect to see the first displays migrate to the platform within the first half of this financial year. Since the year end Cardiff City Council and TfW has invested a further £1.6m in Journeo displays technology to be connected to the new platform.

In September 2023, Journeo received £2.25m in purchase orders for RTPI displays technology and associated software services from Hertfordshire County Council. Hertfordshire County Council supported in the development of the Bus Back Better strategy and is focussed on driving improvements within their transport network. Journeo has enjoyed a 20-year relationship with Hertfordshire and is working closely with the authority as they drive improvements in their transport network. Whilst unavoidable delays to install the technology have restricted our ability to realise the value in the contract across 2023, the obstacles have now been overcome and will benefit the Group in 2024.

A purchase order of £2.0m from a Northern Transport Partnership was also received in September 2023. The project is an expansion of the partnership's RTPI estate that, following several successful years of close collaboration, is now one of the largest RTPI estates in the country and is comparable in size and complexity with the system in London.

The Passenger Transport Infrastructure business enters 2024 with its strongest ever order book and a clear strategy to improve operating margins.

Infotec

The acquisition of Infotec via a significantly over-subscribed placing and retail offer, was an important step in Journeo's evolution. In addition to strong revenues of £19.7m and a gross margin of 29.8%, longer-term value will be realised across the Group through the consolidation of technologies and efficiencies in manufacturing.

Since the acquisition we have invested £0.4m to enhance surface mount production capacity, resulting in significantly reduced production lead times. The investment is enabling us to keep pace with a large US-based contract whilst also maintaining momentum for orders won in our domestic markets.

We were pleased to announce purchase orders from Network Rail and Northern Trains totalling £2.4m. These awards reflect the market-leading position Infotec has within the UK rail industry, supplying approximately 80% of rail stations. The displays are recognised for their robustness and longevity, and the continuing advancement in technology offers a high level of repeat business.

Significant progress has been made to integrate Infotec into Journeo. By working more closely we will leverage synergies in the technologies we provide, with the aim of improving the margins delivered by all operating companies in the Group.

MultiQ

The acquisition of MultiQ Denmark A/S ("MultiQ") was completed in September 2023 for a total consideration of €2.5m on a debt-free, cash-free, basis. This provides Journeo with an established, full-service provider of Intelligent Transport Systems (ITS) to fleet operator and local authorities in the Nordic region. With a strong history of developing and supplying public information systems for bus, including fleet management software and on-board passenger infotainment, MultiQ was part of a larger group that was acquired by the Swedish company Vertiseit AB in May 2022.

The pure ITS focus of MultiQ is a good fit for Journeo and will provide access into Nordic and Northern European markets and the strong SaaS-based sales approach delivers approximately 40% recurring revenue.

Central services

The Group's growth over the last 12 months has necessitated developments to our organisational structure, and investment in our Finance and HR teams to enhance transparency and reporting capabilities. We are assessing our business systems where we see opportunities for consolidation and improvement.

Journeo strives to maintain its position as a trusted and responsible member of the business community, delivering our customers solutions that can be relied upon for quality, robustness and security. We are working closely with our supply chain partners and system providers, monitoring the impact of global events to maintain the supply of essential components. Throughout the course of 2023, we maintained all ISO and cyber accreditations, demonstrating our commitment to maintaining governance and quality systems.

Finally, we are continuing our work on ESG, with a further update available in the sustainability section of the Company's 2023 Annual Report. We maintain honest and open communication with our customers, and carried out an online customer survey during the year which has provided valuable insight into why customers place their faith in us and what we can do better, as we continue to deliver operation-critical solutions to vehicle fleets and the wider transport infrastructure network.

Russ Singleton

Chief Executive

26 March 2024

Consolidated statement of comprehensive income for the year ended 31 December 2023

	Notes	2023 £'000	2022 £'000
Revenue	2,3	46,092	21,123
Cost of sales		(31,782)	(13,354)
Gross profit	3	14,310	7,769
Underlying administrative expenses		(10,075)	(6,730)
Other income		49	119
Underlying profit		4,284	1,158
Acquisition costs		(289)	-
Share-based payments		(22)	(45)
Total administrative expenses and other income		(10,337)	(6,656)
Operating profit		3,973	1,113
Net finance expense		(240)	(207)
Profit before taxation		3,733	906
Taxation charge	4	(760)	(3)
Profit for the year being total comprehensive income attributable to owners of the parent		2,973	903
Profit per share Basic	5	18.64p	10.33p
Diluted		17.96p	9.80p

Consolidated statement of changes in equity for the year ended 31 December 2023

	Share capital £'000	Share premium account £'000	Retained earnings £'000	Total equity shareholders' funds £'000
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
Profit and total comprehensive income for the year	-	-	2,973	2,973
Proceeds from issue of new shares	503	7,092	-	7,595
Share-based payments	-	-	22	22
Balance at 31 December 2023	6,753	8,266	(2,281)	12,738

Consolidated statement of financial position at 31 December 2023

		2023 £'000	2022 £'000
Assets
Non-current assets
Goodwill		4,058	1,345
Other intangible assets		2,685	1,300
Property, plant and equipment		1,585	504
Deferred tax asset		189	-
Trade and other receivables		40	41
		8,557	3,190
Current assets
Inventories 4		6,868	3,455
Trade and other receivables		12,212	8,130
Cash and cash equivalents		8,116	533
		27,196	12,118
Total assets		35,753	15,308
Equity and liabilities
Shareholders' equity
Share capital		6,753	6,250
Share premium account		8,266	1,174
Retained earnings		(2,281)	(5,276)
Total equity		12,738	2,148
Non-current liabilities
Deferred revenue		2,841	2,304
Other payables		207	-
Loans and borrowings		163	40
Deferred tax liability		25	-
Lease liabilities		756	225
Provisions		2,234	271
		6,226	2,840
Current liabilities
Trade and other payables		9,921	5,796
Deferred revenue		5,831	1,552
Loans and borrowings		64	2,616
Lease liabilities		195	121
Provisions		778	235
		16,789	10,320
Total equity and liabilities		35,753	15,308

Consolidated statement of cash flows for the year ended 31 December 2023

	Notes	2023 £'000	2022 £'000
Net cash flows from operating activities	6	1,664	(587)
Cash flows from investing activities Purchases of property, plant and equipment Purchases / generation of intangible assets		(434) (789)	(58) (628)
Acquisition costs		(289)	-
Net cash inflow on acquisitions		3,030	-
Net cash flows from investing activities		1,518	(686)
Cash flows from financing activities
Cash flows from issue of new loans		215	891
Principal element of lease repayments		(266)	(170)
Repayment of loans		(2,643)	(15)
Issue of shares		7,095	-
Net cash flows from financing activities		4,401	706
Net increase / (decrease) in cash and cash equivalents		7,583	(567)
Cash and cash equivalents at beginning of year		533	1,096
Effect of foreign exchange rate changes		-	4
Cash and cash equivalents at end of year		8,116	533

Notes to the consolidated financial statements for the year ended 31 December 2023

1.   Basis of preparation

The Group financial statements are prepared in accordance with International Financial Reporting Standards and IFRIC interpretations issued and effective (or adopted early) and endorsed by the United Kingdom at the time of preparing these financial statements and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention, except financial instruments and share-based payments, which are prepared in accordance with IFRS 9 and IFRS 2 respectively. A summary of the more important Group accounting policies is set out below.

The individual financial statements of each Group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each Group entity are expressed in Sterling (£), which is the presentation currency for the consolidated financial statements. The numbers in the financial statements are rounded in £'000 for presentation purposes for year ended 31 December 2023 with prior year comparatives being for the year ended 31 December 2022.

Going concern

The Group's business activities, together with factors likely to affect its future development, performance and position, are set out in the Strategic Report along with the principal risks and uncertainties.

The Group's net underlying profit for the year was £4,284k (2022: £1,158k). As at 31 December 202 3 the Group had net current assets of £10,407k (2022: £1,798k) and net cash reserves of £8,116k (2022: £533k).

The Directors have prepared Group cash flow projections for the period to 30 June 2025 based on latest forecasts that show that the Group will be able to operate within the Group current funding resources with significant headroom.

As with all businesses there are particular times of the year where our working capital requirements are at their peak. The Group is well placed to manage these business risks effectively and the Board reviews the Group's performance against budgets and forecasts on a regular basis to ensure action is taken where needed. The Directors also monitor a rolling cash flow forecast, and key management review working capital movements and requirements on a daily basis.

The projections, taking account of reasonably possible changes in trading performance, indicate that the Group will operate within available facilities throughout the projection period and therefore, based on these projections, 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 12 months from the date of these financial statements. The Directors therefore continue to adopt the going concern basis in preparing the financial statements.

2.   Revenue and other income

The revenue split between good and services is:

	2023 £'000	2022 £'000
Goods	38,402	15,621
Services	7,690	5,502
	46,092	21,123
Contract works included in goods	6,994	7,599

3.   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 loss on the same basis as set out in the consolidated statement of comprehensive income, no further reconciliation is considered to be necessary.

Revenue and gross profit

	Revenue 2023 £'000	Gross profit 2023 £'000	Revenue 2022 £'000	Gross profit 2022 £'000
Fleet Systems	16,332	3,949	12,494	3,711
Infotec	19,669	5,862	-	-
MultiQ	1,139	542	-	-
Passenger Systems	9,045	3,957	8,629	4,058
Intersegment sales	(93)	-	-	-
Total	46,092	14,310	21,123	7,769

Major customers

In the year, one customer within each of the Fleet Systems and Infotec segments accounted for over 10% of Group revenue at 11% and 17% respectively. In the prior year, there was one Fleet Systems customer that accounted for over 10% of revenue at 16%.

Underlying profit

	2023 £'000	2022 £'000
Fleet Systems	583	690
Infotec	3,697	-
MultiQ	153	-
Passenger Systems	115	740
	4,548	1,430
Central	(264)	(272)
Underlying profit	4,284	1,158

Reconciling to profit / (loss) before interest and tax

2023	Underlying operating profit / (loss) £'000	Acquisition costs £'000	Share-based  payments £'000	Operating profit / (loss) £'000	Profit / (loss) before interest and tax £'000
Fleet Systems	583	-	(11)	572	572
Infotec	3,697	-	-	3,697	3,697
MultiQ	153	-	-	153	153
Passenger Systems	115	-	(11)	104	104
	4,548	-	(22)	4,526	4,526
Central	(264)	(289)	-	(553)	(553)
	4,284	(289)	(22)	3,973	3,973

2022	Underlying operating profit / (loss) £'000	Share-based payments £'000	Operating profit / (loss) £'000	Profit / (loss) before interest and tax £'000
Fleet Systems	690	(23)	667	667
Passenger Systems	740	(22)	718	718
	1,430	(45)	1,385	1,385
Central	(272)	-	(272)	(272)
	1,158	(45)	1,113	1,113

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.

	Assets 2023 £'000	Liabilities 2023 £'000	Net assets 2023 £'000	Assets 2022 £'000	Liabilities 2022 £'000	Net assets 2022 £'000
Fleet Systems	8,754	(3,736)	5,018	8,134	(3,627)	4,507
Infotec	6,477	(8,999)	(2,522)	-	-	-
MultiQ	2,645	(534)	2,111	-	-	-
Passenger Systems	5,679	(7,774)	(2,095)	5,156	(6,744)	(1,588)
	23,555	(21,043)	2,512	13,290	(10,371)	2,919
Goodwill	4,058	-	4,058	1,345	-	1,345
Cash and borrowings	8,116	(641)	7,475	533	(2,656)	(2,123)
Unallocated	24	(1,331)	(1,307)	140	(133)	7
Total	35,753	(23,015)	12,738	15,308	(13,160)	2,148

Geographical segments

	Revenue 2023 £'000	Gross profit 2023 £'000	Revenue 2022 £'000	Gross profit 2022 £'000
UK	36,739	9,840	20,538	7,316
International
- Scandinavia	1,507		458
- Other EU	8		38
- Non-EU	7,838		89
Total international	9,353	4,470	4,470	453
Total	46,092	14,310	14,310	7,769

Assets and liabilities by location

	2023 £'000	2022 £'000
Assets
UK	32,948	14,662
International	2,805	12
Total assets	35,753	14,674
Liabilities
UK	(22,467)	(12,508)
International	(548)	(19)
Total liabilities	(23,015)	(12,527)

4.  Taxation

(a) Analysis of charge in year:

	2023 £'000	2022 £'000
Current tax
UK corporation tax on the profit for the year (19% and 25%)	704	-
Swedish corporation tax on the profit for the year (22%)	7	3
Danish corporation tax on the profit for the year (22%)	49	-
Total tax charge for the year	760	3

(b) Factors affecting the total tax charge for the year

The tax assessed for the year differs from the standard rate of corporation tax in the UK at 23% (2022: 19%). The differences are explained below:

	2023 £'000	2022 £'000
Profit before tax	3,733	905
Profit multiplied by standard rate of corporation tax in the UK of 23% (2022: 19%)	859	172
Effects of:
Expenses not deductible for tax purposes	(305)	(150)
Change in unrecognised deferred tax assets	217	4
Income not taxable	(11)	(23)
Total tax charge for the year	760	3

(c) Deferred tax asset / (liability)

The unrecognised and recognised deferred tax assets / (liability) comprise the following:

Group	Unrecognised		Recognised
2023 £'000	2022 £'000	2023 £'000	2022 £'000
Tax losses	1,138	724	189	-
Accelerated capital allowances	(350)	(94)	(25)	-
	788	630	164	-

The Group has £4,552,000 of unutilised tax losses (2022: £3,813,000) which may be carried forward indefinitely.

5.  Profit per Ordinary Share

Basic earnings per share (EPS) is calculated by dividing the earnings attributable to Ordinary Shareholders by the weighted average number of Ordinary Shares in issue during the year.

For diluted earnings, the weighted average number of Ordinary Shares in issue is adjusted to assume conversion of all dilutive potential Ordinary Shares.

Group	2023		2022
Profit £'000	Per share amount Pence	Profit £'000	Per share amount Pence
Basic EPS
Profit attributable to Ordinary Shareholders	2,973	18.64p	903	10.33p
Diluted EPS
Profit attributable to Ordinary Shareholders	2,973	17.96p	903	9.80p

Details of the weighted average number of Ordinary Shares used as the denominator in calculating the earnings per Ordinary Share are given below:

	2023 '000	2022 '000
Basic weighted average number of shares	15,945	8,741
Dilutive potential Ordinary Shares	605	470
Diluted weighted average number of shares	16,550	9,211

6.  Reconciliation of operating profit to net cash inflow from operating activities

	2023 £'000	2022 £'000
Profit for the year	2,973	903
Adjustments for:
- Finance expense	240	207
- Depreciation of property, plant and equipment	378	224
- Amortisation of intangible fixed assets	753	494
- Share-based payment expense	22	45
- Foreign exchange rate	(13)	-
- Acquisition costs	289	-
- Increase / (decrease) in provisions	2,506	(34)
Operating cash flows before movement in working capital	7,148	1,839
Decrease / (increase) in inventories	295	(1,846)
Decrease / (increase) in receivables	1,609	(1,564)
Increase / (decrease) in payables	(6,560)	1,166
Cash inflow / (outflow) from operations	2,492	(405)
Income taxes paid	(658)	(3)
Interest paid	(170)	(179)
Net cash inflow / (outflow) from operating activities	1,664	(587)

7.  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:

	£'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 £8,218k (including deferred consideration of £1,000k). Acquisition-related costs amounting to £132k were incurred.

Identifiable net assets

The fair value of identifiable net assets acquired as part of the business combination amounted to £6,482k.

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 an underlying profit of £3,697k for the period from 18 January 2023 to the reporting date. Revenue for the period to the reporting date was £19,669k. In the twelve months to 30th December 2022 Infotec sales were approximately £16,520k with profit before tax of £2,646k

8.  Businesses Acquired - MultiQ Denmark A/S

On 19 September 2023, the Group acquired 100% of the equity of MultiQ Denmark A/S ("MultiQ"), a Denmark based business.

MultiQ is a leading full-service provider of Intelligent Transport Systems ("ITS") with customers in Denmark, Sweden and Iceland.

The details of the business combination are as follows:

	£'000
Fair value of consideration
Amount Settled in Cash	1,089
Deferred Consideration	413
Total Consideration	1,502
Identifiable net assets (recognised at fair value):
Property, plant and equipment	573
Tax Assets	267
Inventories	660
Trade and other receivables	1,084
Cash	110
Total assets	2,694
Equity and liabilities
Trade and other payables	(1,450)
Deferred revenue	(81)
Tax liabilities	(138)
Total Liabilities	(1,669)
Net Assets	1,025
Goodwill on Acquisition	477
Consideration settled in cash	1,502
Cash and cash equivalents acquired	110
Net cash outflow on acquisition	(1,392)

Consideration transferred

The acquisition of MultiQ was settled in cash amounting to £1,502k (including deferred consideration of £413k). Acquisition-related costs amounting to £157k were incurred.

Identifiable net assets

The fair value of identifiable net assets acquired as part of the business combination amounted to £1,026k.

Goodwill

Goodwill is primarily related to the core growth expectations that are expected from combining MultiQ and Journeo technologies and upselling this to existing customers.

MultiQ contribution to the Group results

MultiQ generated an underlying profit of £153k for the period from 20 September 2023 to the reporting date. Revenue for the period to the reporting date was £1,139k. In the twelve months to 30 December 2022 MultiQ sales were approximately £4,425k with a loss before tax of £32k.

9.  Availability of audited accounts

Copies of the 2023 audited accounts will be made available following the announcement of the date of our AGM. They will also be available on the Group's website ( www.journeo.com ) for the purposes of AIM Rule 26 and will be posted to shareholders in due course.

ENDS

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