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TRAKM8 HOLDINGS PLC — Earnings Release 2015
Jul 6, 2015
7984_10-k_2015-07-06_7df9c98c-da00-46b9-a246-385d8388124a.html
Earnings Release
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RNS Number : 2049S
Trakm8 Holdings PLC
06 July 2015
6 July 2015
TRAKM8 HOLDINGS PLC
('Trakm8' or 'the Group' or 'the Company')
Final Results
for year ended 31 March 2015
Trakm8, the AIM-listed designer, developer and manufacturer of GPRS based hardware and software for the vehicle placement and security market, is pleased to announce its results for the year ended 31 March 2015.
Financial highlights
· Results ahead of expectations
· Revenue up 95% at £17.9m (2014: £9.2m)
· Recurring revenues up by 65% to an annualised £7.45m (2014: £4.6m)
· Like for like orders received up 38% during the year
· Adjusted EBITDA* £2.60m (2014: £1.24m)
· Adjusted profit before tax* £1.82m (2014: £0.88m)
· Profit before tax £1.70m (2014: £0.40m)
· Adjusted earnings per share* 6.24p (2014: 4.08p)
· Strong cash position £3.4m
· Significantly increased banking facilities agreed
Operating highlights
· Significant recurring revenue growth
· Major contracts secured with Marmalade and Saint-Gobain
· Successful integration of BOX Telematics Ltd and ongoing consolidation of their telematics systems with Trakm8's
· Encouraging order pipeline and sales opportunities
Current trading and post year end events
· Completion of £3.3m acquisition of the trade and assets of DCS Systems Ltd ("DCS")
· Strengthening of the Board with second independent non-executive appointed
· Year to date revenues are ahead of last year and management now expect to modestly exceed previous market expectations for the year
· Continuing to secure significant customer contracts
* before exceptional costs and share based payments
John Watkins, Executive Chairman of Trakm8 said:
"I am pleased to report on another excellent year for Trakm8 with our results being ahead of expectations. Our strategy of increasing the numbers of units reporting to our servers is proving very successful. Strong growth in installed units and the consequent service revenues has been at the core of significantly improved financial results.
"We are confident that our investments in acquisitions, operational efficiency improvements, engineering resources, new products and additional sales resources together with the benefit of new contract wins will positively impact the new financial year and beyond.
"Overall, the first three months of trading are ahead of last year and we now expect to modestly exceed previous market expectations for the year ending 31 March 2016."
A presentation for analysts is being hosted today (6 July 2015) at 9.15am for 9.30am at finnCap's offices. For further information, please contact MHP Communications on [email protected].
-ends-
For further information please contact:
| Trakm8 Holdings plc | 01747 858444 |
| John Watkins, Executive Chairman | |
| James Hedges, Finance Director | |
| MHP Communications (Financial PR to Trakm8) | 020 3128 8100 |
| Reg Hoare / Jade Neal | |
| finnCap (Nomad & Broker to Trakm8) | 020 7220 0500 |
| Ed Frisby / Christopher Raggett - corporate finance Joanna Weaving - corporate broking |
Notes to Editors
About Trakm8
Trakm8, the M2M telematics company using Big Data analytics to improve driver behaviour is a leading technology designer, developer and manufacturer of telematics products and solutions.
The Group, based in Shaftesbury, Dorset, distributes its hardware and software through a network of distributors worldwide. In addition the Group provides vehicle monitoring and tracking services direct to the B2B market. Trakm8's IP owned products and services allow vehicles and drivers to be monitored, allowing organisations to manage deliveries and services, or track stolen vehicles down to five metres.
Recently Trakm8 has developed the T10 product range, which includes a self-installed telematics device. The Group's services also include a driver behaviour management solution that reduces fuel consumption by 10% or more and reduces the risk of accidents. This is complemented by a logistics routing and scheduling package, integrated tachograph data reporting facilities, and the ability to read vehicle DTCs (Diagnostic Trouble Codes) reducing serviceability downtime. The Group's customers include the AA, Saint-Gobain, EON, Direct Line Group, & Young Marmalade.
Trakm8 has been listed on the AIM market of the London Stock Exchange since 2005.
www.trakm8.com / @Trakm8
Trakm8 Holdings PLC
EXECUTIVE CHAIRMAN'S STATEMENT
Introduction
I am pleased to report on another excellent year for Trakm8 with our results being ahead of expectations. Our strategy of increasing the numbers of units reporting to our servers is proving very successful. Strong growth in installed units and the consequent service revenues has been at the core of significantly improved financial results.
As part of the strategy to develop the Group organically, Trakm8 has successfully introduced a number of new products and software solutions that have been well received by the market. These products and solutions are distributed by our Trakm8 and BOX brands into all market segments. The Group now has market leading Fleet Management solutions and has introduced the latest in Insurance risk, First Notification of Loss ("FNOL") and crash reconstruction software. The Group has also established market leading automotive vehicle diagnostic expertise for over-the-air vehicle condition monitoring and service predictions.
The strength of the Trakm8 financial model is that it delivers very strong cash generation. Our operating cash flow before movement in working capital for the year was £2.60m (2014: £0.80m), and the year-end cash balance was £3.4m.
Organic revenue growth at Trakm8 was 73% supplemented by a full 12 months of trading in BOX Telematics Ltd ("BOX").
The year saw significant investment by the Group in improving many elements of the operations of the businesses. Most of the internal activities were consolidated to minimise costs and maximise effectiveness. A major IT infrastructure investment improved our ERP, CRM and QA processes. A second new assembly line for electronic PCB assembly was purchased in anticipation of the higher levels of demand for our hardware devices.
Due to higher margins than anticipated when we issued our trading statement in April 2015 we have reported a slightly higher than expected pre tax profit of £1.7m and which compares to last year's result of £0.40m.
Board Changes and Post Year End Events
Following the year end we decided to strengthen the Board in line with the rapid growth of the Group. We were delighted to welcome Bill Duffy to the Board as the second Independent Non-Executive Director. Bill brings a wealth of experience and expertise. We also decided Sean Morris Group Engineering Director and Mark Watkins Group Operations Director should join the Board. These appointments are expected to enhance our corporate governance and ensure we have the management team to implement our growth plans and integrate acquisitions successfully.
We also announced that we have recently completed the acquisition of the trade and assets of DCS. This business trades predominantly as RoadHawkTM supplying camera systems into the vehicle market. The integration of camera technology into telematics based fleet and insurance solutions represent real opportunities for future growth.
Operational Review
Trakm8's core activity is the provision of integrated fleet management and insurance telematics based services. Trakm8 also undertakes bespoke development and integration of our data into the customer's own Management Information systems. Customers include Direct Line Insurance, the AA, Eon and Saint-Gobain Group.
BOX was purchased in October 2013 and the business has been successfully integrated into the Trakm8 Group. Our Development, Customer services, Technical support and Finance teams have been combined for both companies and hardware and software platforms are largely consolidated.
Following the integration of BOX the Group now accounts for all its trading in the single integrated telematics technology segment. We continue to report the revenues in a number of streams.
Revenues at Trakm8 increased by 73% to £9.3m and this was supplemented by £8.6m of revenues from the full year contribution from BOX. In addition BOX supplied £1.8m of telematics devices to Trakm8. The Group gross margin percentage was 45.2% for the year (2014: £57.2%). This drop was due to the inclusion of a full year of BOX trading which has lower margin contract manufacturing revenues. In addition we have reanalysed sim costs to be part of our cost of sales. Adjusted Earnings before interest, tax, depreciation, amortisation and share based payments ("Adjusted EBITDA") increased to £2.6m (2014: £1.2m).
The success in both Fleet Management and Insurance solutions during the period has increased the numbers of units reporting to our servers to over 102,000. The recurring revenues amounted to an annualised £7.45m. This represents an increase of 65% over the previous year end. Significantly the March recurring revenue also exceeded the Group underlying overheads in the month for the first time in the Group's history.
We have broadened the customer base both in the UK and internationally. Significant contract wins with SAGA in Norway, Downton, Saint-Gobain and Marmalade were announced along with a wide range of smaller orders.
Sales of hardware as discrete devices were 12% lower at Trakm8 but were supplemented with £6.1m from a full 12 months trading at BOX. The largest revenue generator in this segment is the JCB Live Link telematics device. Sales of T10 hardware extended the number of clients buying telematics devices.
Improved manufacturing capacity and quality was introduced early in the financial year enabling a higher output to be achieved. As a result over 100,000 telematics devices were built during the period.
Whilst the sales of hardware to third party integrators helps us to ensure our manufactured cost of products are as low as can be achieved, these revenues are at lower margins and have no on-going recurring revenues.
During the year the Company significantly expanded its engineering resources including a new leadership team. It has delivered excellent product derivatives of the T10, Swift and Insurance solutions.
A significant part of our engineering effort is directed towards the use of the data we generate to create powerful algorithms for the prediction of risk, vehicle service requirements including battery status, and crash event identification (FNOL). We have employed mathematicians to help us analyse our Big Data and we anticipate substantial benefits as we seek to monetise the value and analysis of this asset over the coming years. We believe that Trakm8 is establishing a market leading position in this field. This, along with the emphasis we place on automotive expertise, gives us a unique capability when compared to our conventional competitors.
We have found that skills and features developed for the insurance sector once integrated into the fleet management solutions have expanded the customer base as a result. We have also expanded our sales team to support the company's growing customer base. Particular focus has been given to build a senior corporate sales team focussing on major clients.
It is pleasing to report that our start-up sales activity in Prague is now self-funding and further expansion of the sales and support team is planned to grow revenues in the region.
At the time of our Interim Statement we announced we had a record number of opportunities in our sales pipeline and it was pleasing to bring a number of these to a positive conclusion. Most of these did not impact the results during the period significantly, but are expected to benefit the new financial year. We have continued to build the sales pipeline and remain confident that many of these opportunities will also be secured over the next 12 months. We continue to have a large number of trials in progress.
Trakm8 also undertakes bespoke software development for customers. The customer specific application engineering has been a major feature of the product development team as larger customers have demanded their particular requirements. These in turn help to improve our core products.
A number of projects this year were associated with several customers in the UK, Europe and USA. The largest project was for the Direct Line Group.
Outlook
The Board is confident that our investments in acquisitions, operational efficiency improvements, engineering resources, new products and additional sales resources together with the benefit of new contract wins will positively impact the new financial year and beyond. Overall the first three months of trading are ahead of last year and we now expect to modestly exceed previous market expectations for the year ending 31 March 2016.
The acquisition of the trade and assets of DCS brings an associated product line, customer base and the established RoadHawkTM camera brand to Trakm8. We expect to develop the products, integrating them into our portfolio and to expand the customer base through the existing sales channels. DCS is expected to be an immediately earnings enhancing acquisition.
Although our primary strategy this year is to focus on maintaining strong organic growth and to maximise the potential of DCS, we continue to assess opportunities which augment growth through further selective acquisitions. Any acquisition being considered will need to meet our clearly defined market segment objectives and financial criteria. To that end we have agreed a £2m increase in our debt facility with HSBC bringing it to £5.7m, of which £3.7m has been drawn.
Lastly, I would like to thank all the Trakm8 staff for their exceptional commitment and hard work in order to accomplish the significant progress made over the past twelve months.
John Watkins
EXECUTIVE CHAIRMAN
Trakm8 Holdings PLC
STRATEGIC REPORT
The Directors present their Strategic Report on the Group for the year ended 31 March 2015.
Business Review and Principal Activities
Trakm8 Holdings PLC and its subsidiaries ("the Group") design, manufacture and sell fleet management and insurance solutions and associated hardware components. These solutions are used in a wide variety of applications from heavy duty commercial vehicles to light CVs, cars, earth moving equipment and a number of niche applications such a golf carts and industrial cleaning machines.
The solutions provide data for customers to more effectively use their vehicles by reducing journey times, reducing fuel consumption and accidents, improving utilisation and serviceability, expense tracking, and integration into customers ERP systems.
The data is also used to identify driver profiles for risk prediction, trigger cash alerts, assist in crash reconstruction and to predict vehicle service requirements.
The market for these solutions is growing as the cost of providing them reduces and the benefit of the data is becoming more valuable. Indeed the scale of the opportunity and the rate of growth could be materially increased if the solutions' costs could be further significantly reduced.
However, the competition is also growing and there remains pricing pressure being mitigated by the increased functionality of the solutions. The market remains largely fragmented although consolidation is occurring, particularly driven by interest in the space from venture capital companies.
Trakm8 and BOX have consolidated most of the operational and finance functions. They share common engineering hardware and software solutions, only maintaining separate sales and marketing channels. As a result Trakm8 too has been playing a part in the consolidation process underway in this market.
The results for the year show a 95% increase in our revenues to £17.9m (2014: £9.2m) and an adjusted EBITDA of £2.60m (2014: £1.24m). Strong organic growth and the supplemented BOX installed base has grown the installed base of units reporting to our servers with recurring revenues now accounting for 31% of our total turnover.
Statement of Financial Position
The Group has a strong balance sheet as at 31 March 2015 with net assets of £7.0m (2014: £5.1m). We continued our investment in the business with £0.36m spent on new plant and IT assets together with £0.86m on development costs enhancing our solutions for calculating insurance risk, First Notification of Loss, crash detection and vehicle diagnostic data.
Our cash balances at the year end were £3.4m (2014: £2.9m) and total bank borrowings were £2.8m (2014: £2.3m). During the year the Group repaid the outstanding Clydesdale loan of £2.0m with a new facility from HSBC comprising a £3m term loan repayable over 5 years plus a new 3 year £1m revolving credit facility which had not been drawn as at 31 March 2015.
Strategy
The Group strategy remains to provide machine to machine ("M2M") products and services that grow the installed base of connections with service revenues, thus ensuring predictable revenues and cash flows. We will continue to increase our focus on utilisation of the accumulating server data to create the algorithms that will improve the fuel economy scoring and the driver insurance risk calculations, crash event identification and reconstruction. Trakm8 installed vehicles cover over two billion miles each year.
This data along with the statistical analysis now available with latest computing techniques will continue to drive the next stages of improved returns on investment in the technology. It will also create opportunities in itself to drive both sales of data and devices as part of the use of Big Data for marketing and promotion planning by retailers.
Trakm8 will also utilise its extensive vehicle electrical knowledge to drive vehicle service algorithms to reduce breakdowns, improve serviceability and reduce cost of ownership. This too will drive increased opportunities for telematics and data within the automotive aftermarket and road side assistance sectors.
Trakm8 will provide hardware and software solutions on a stand-alone basis to third parties so long as they are part of Trakm8's core offerings.
The long term strategy is to expand from our UK centric base for solutions and introduce the business model into new markets. The market for our solutions is growing across the globe. Trakm8 can be one of the providers to benefit from this and grow into a very significant business. This strategy provides the shareholders with the prospect of continued increase in shareholder value over the medium and long terms.
Organic Growth
The Group will continue to drive organic growth through widening the customer base, increasing the range of solutions offered and broadening the geographic coverage. Trakm8 has built a strong and profitable base in the UK and will consider expanding into new territories.
With every size of vehicle type now addressed from the smallest fleets to the largest, from passenger cars to heavy duty trucks and industrial equipment, Trakm8 has a sales channel and product suitable for all.
Trakm8 will continue to invest heavily in engineering new products and solutions to ensure that these are market leading.
Acquisitions
After the year end the Group announced it had acquired on 16 June 2015 the business and assets of DCS Systems Ltd ("DCS") for a cash consideration of £3.3 million. DCS specialises in the design and distribution of camera systems for the motor vehicle, bicycle and security markets. DCS's last unaudited accounts for its financial year ending 30 April 2015 reported revenues of £2.8 million and profit before tax of £0.6 million. The acquisition was funded from the Group's existing cash and bank facilities.
The Group will continue to seek acquisitions that complement our organic growth strategies. These will be businesses in the M2M and Big Data space, where we can drive value for the shareholders and enhance the range of markets and services we address.
John Watkins
EXECUTIVE CHAIRMAN
Trakm8 Holdings PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2015
| Notes | 2015 | 2014 | |
| £ | £ | ||
| REVENUE | 4 | 17,853,436 | 9,193,073 |
| Cost of sales | (9,791,655) | (3,931,987) | |
| ---------------------------------------- | ------------------------------------------ | ||
| Gross profit | 8,061,781 | 5,261,086 |
| Administrative expenses before exceptional costs | (6,301,424) | (4,398,516) | |
| ---------------------------------------- | ------------------------------------------ | ||
| OPERATING PROFIT before exceptional costs | 5 | 1,760,357 | 862,570 |
| Exceptional administrative costs | 6 | - | (433,351) |
| ---------------------------------------- | ------------------------------------------ | ||
| OPERATING PROFIT | 1,760,357 | 429,219 | |
| Finance income | 388 | 2,618 | |
| Finance costs | 7 | (58,439) | (35,314) |
| ---------------------------------------- | ------------------------------------------ | ||
| PROFIT BEFORE TAXATION | 1,702,306 | 396,523 |
| Income tax | (13,241) | 74,955 | |
| ---------------------------------------- | ----------------------------------------- | ||
| PROFIT FOR THE YEAR ATTRIBUTABLE TO THE OWNERS OF THE PARENT | 1,689,065 | 471,478 | |
| OTHER COMPREHENSIVE INCOME | |||
| Items that may be subsequently reclassified to profit or loss: | |||
| Currency translation differences | (4,460) | (3,150) | |
| -------------------------------------- | ------------------------------------------ | ||
| TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO OWNERS OF THE PARENT | 1,684,605 | 468,328 | |
| \======================== | \======================== |
| EARNINGS PER ORDINARY SHARE (PENCE) ATTRIBUTABLE TO OWNERS OF THE PARENT | |||
| Basic | 8 | 5.84p | 2.01p |
| Diluted | 8 | 5.48p | 1.90p |
| \========================= | \========================= |
There were no discontinued operations in 2015 or 2014. Accordingly the results relate to continuing operations.
| Trakm8 Holdings PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 March 2015 |
||||||||
| Share capital | Share premium | Merger reserve |
Translation reserve | Treasury reserve | Retained earnings | Total equity attributable to owners of the parent | ||
| £ | £ | £ | £ | £ | £ | £ | ||
| Balance as at 1 April 2013 | 194,147 | 1,751,152 | 509,837 | 203,213 | - | (135,340) | 2,523,009 | |
| Comprehensive income | ||||||||
| Profit for the year | - | - | - | - | - | 471,478 | 471,478 | |
| Other comprehensive income | ||||||||
| Exchange differences on translation of overseas operations |
- | - | - | (3,150) | - | - | (3,150) | |
| Total comprehensive income | - | - | - | (3,150) | - | 471,478 | 468,328 | |
| Transactions with owners | ||||||||
| Shares issued | 94,591 | 1,981,909 | - | - | - | - | 2,076,500 | |
| Share placing fees | - | (91,500) | - | - | - | - | (91,500) | |
| Sale of own shares | - | - | - | - | - | 101,750 | 101,750 | |
| IFRS2 Share based payments | - | - | - | - | - | 53,989 | 53,989 | |
| Transactions with owners | 94,591 | 1,890,409 | - | - | - | 155,739 | 2,140,739 | |
| Balance as at 1 April 2014 | 288,738 | 3,641,561 | 509,837 | 200,063 | - | 491,877 | 5,132,076 | |
| Comprehensive income | ||||||||
| Profit for the year | - | - | - | - | - | 1,689,065 | 1,689,065 | |
| Other comprehensive income | ||||||||
| Exchange differences on translation of overseas operations |
- | - | - | (4,460) | - | - | (4,460) | |
| Total comprehensive income | - | - | - | (4,460) | - | 1,689,065 | 1,684,605 | |
| Transactions with owners | ||||||||
| Shares issued | 1,000 | 11,500 | - | - | - | - | 12,500 | |
| Reclassification of previous Treasury share transactions | 67,076 | - | - | (23,250) | (43,826) | - | ||
| Sale of own shares | - | 37,263 | - | - | 11,625 | - | 48,888 | |
| IFRS2 Share based payments | - | - | - | - | - | 116,932 | 116,932 | |
| Transactions with owners | 1,000 | 115,839 | - | - | (11,625) | 73,106 | 178,320 | |
| Balance as at 31 March 2015 | 289,738 | 3,757,400 | 509,837 | 195,603 | (11,625) | 2,254,048 | 6,995,001 |
| Trakm8 Holdings PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March 2015 |
||||
| Notes | 2015 | 2014 | ||
| £ | £ | |||
| NON CURRENT ASSETS | ||||
| Intangible assets | 3,599,307 | 3,249,408 | ||
| Property and equipment | 1,299,565 | 1,157,222 | ||
| Deferred income tax asset | 665,688 | 753,134 | ||
| ---------------------------------- | ------------------------------------------ | |||
| 5,564,560 | 5,159,764 | |||
| ---------------------------------- | ------------------------------------------ | |||
| CURRENT ASSETS | ||||
| Inventories | 1,493,417 | 1,280,609 | ||
| Trade and other receivables | 4,911,525 | 3,269,643 | ||
| Cash and cash equivalents | 3,407,959 | 2,910,786 | ||
| ---------------------------------- | ------------------------------------------ | |||
| 9,812,901 | 7,461,038 | |||
| ---------------------------------- | ------------------------------------------ | |||
| CURRENT LIABILITIES | ||||
| Trade and other payables | (5,430,702) | (5,035,873) | ||
| Borrowings | (575,644) | (499,992) | ||
| Provisions | (92,193) | - | ||
| ---------------------------------- | ------------------------------------------ | |||
| (6,098,539) | (5,535,865) | |||
| ---------------------------------- | ------------------------------------------ | |||
| CURRENT ASSETS LESS CURRENT LIABILITIES | 3,714,362 | 1,925,173 | ||
| TOTAL ASSETS LESS CURRENT LIABILITIES | 9,278,922 | 7,084,937 | ||
| NON CURRENT LIABILITIES | ||||
| Borrowings | (2,236,001) | (1,791,675) | ||
| Provisions | (47,920) | (161,186) | ||
| ---------------------------------- | ------------------------------------------ | |||
| NET ASSETS | 6,995,001 | 5,132,076 | ||
| \======================== | \======================== |
EQUITY
| Share capital | 9 | 289,738 | 288,738 |
| Share premium account | 3,757,400 | 3,641,561 | |
| Merger reserve account | 509,837 | 509,837 | |
| Translation reserve | 195,603 | 200,063 | |
| Treasury reserve | (11,625) | - | |
| Retained earnings | 2,254,048 | 491,877 | |
| ----------------------------------- | ------------------------------------------ | ||
| TOTAL EQUITY ATTRIBUTABLE TO OWNERS OF THE | 6,995,001 | 5,132,076 | |
| PARENT | \======================== | \======================== |
These financial statements were approved by the Board of Directors and authorised for issue on 6th July 2015 and are signed on their behalf by:
J Watkins J Hedges
Director Director
Trakm8 Holdings PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2015
| 2015 | 2014 | ||||||
| £ | £ | ||||||
| NET CASH INFLOW FROM OPERATING ACTIVITIES | 1,127,641 | 1,936,262 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Interest received | 388 | 2,618 | |||||
| Acquisition of subsidiary undertaking (net of cash acquired) | (5,175) | (2,991,500) | |||||
| Purchases of property, plant and equipment | (355,087) | (302,510) | |||||
| Proceeds from sale of plant and equipment | 9,888 | 10,000 | |||||
| Capitalised development costs | (861,849) | (614,551) | |||||
| ---------------------------------------- | ------------------------------------------ | ||||||
| NET CASH USED IN INVESTING ACTIVITIES | (1,211,835) | (3,895,943) | |||||
| ---------------------------------------- | ------------------------------------------ | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Issue of new shares | 12,500 | 1,985,000 | |||||
| Sale of Treasury shares | 48,888 | 101,750 | |||||
| New bank loan | 3,000,000 | 2,500,000 | |||||
| Repayment of loans | (2,480,021) | (1,096,416) | |||||
| Repayment of obligations under hire purchase agreements | - | (25,000) | |||||
| ---------------------------------------- | ------------------------------------------ | ||||||
| NET CASH FROM FINANCING ACTIVITIES | 581,367 | 3,465,334 | |||||
| ---------------------------------------- | ------------------------------------------ | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 497,173 | 1,505,653 | |||||
| --------------------------------------- | --------------------------------------- | ||||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 2,910,786 | 1,405,133 | |||||
| --------------------------------------- | --------------------------------------- | ||||||
| CASH AND CASH EQUIVALENTS AT END OF YEAR | 3,407,959 | 2,910,786 | |||||
| \======================== | \======================== | ||||||
Trakm8 Holdings PLC
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2015
1. GENERAL INFORMATION
Trakm8 Holdings PLC ("Company") and its subsidiaries (together the "Group") manufacture, distribute and sell telematics devices and services.
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 Lydden House, Wincombe Business Park, Shaftesbury, Dorset, SP7 9QJ. The Company's Ordinary shares are traded on the AIM market of the London Stock Exchange.
The Group's principal activity is the manufacture, marketing and distribution of vehicle telematics equipment and services. The Company's principal activity is to act as a holding company for its subsidiaries.
2. AUTHORISATION 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 accounting policies set out have been applied consistently to all periods presented in these consolidated financial statements made up to 31 March 2015.
These financial statements are presented on a going concern basis. The Group has cash balances of £3,407,962 at 31 March 2015 and the Directors have a reasonable expectation that the Group will have adequate financial resources to continue in operation for the foreseeable future.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates and management to exercise its judgement in the process of applying the Group's accounting policies.
4. SEGMENTAL ANALYSIS
The chief operating decision maker ("CODM") is identified as the Board and as per the Executive Chairman's Statement, the CODM now define all it'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, results, assets and liabilities are in respect of one Integrated Telematics Technology segment.
The CODM review the revenue streams of Integrated Fleet Management and Insurance Solutions (Solutions) and Hardware as Discrete Devices (Products) as part of their internal reporting. Products is the sale of hardware through the Group's distributors. Solutions represents the sale of the Group's full vehicle telematics service to customers, engineering services, professional services and mapping solutions.
A breakdown of revenues within these streams are as follows:
| 2015 | 2014 | |
| £ | £ | |
| Solutions | 10,981,695 | 5,784,866 |
| Products | 6,871,741 | 3,408,207 |
| - -- ---------- ------------------------ | - -- ---------- ------------------------ | |
| 17,853,436 | 9,193,073 | |
| \======================= | \======================== |
A geographical analysis of revenue by destination is as follows:
| 2015 | 2014 | ||||||
| Products | Solutions | Total | Products | Solutions | Total | ||
| £ | £ | £ | £ | £ | £ | ||
| United Kingdom | 6,174,260 | 10,268,761 | 16,443,021 | 2,691,092 | 5,583,851 | 8,274,943 | |
| USA | 191,744 | 98,534 | 290,278 | 211,176 | 4,835 | 216,011 | |
| Canada | 226,146 | 360 | 226,506 | 210,233 | - | 210,233 | |
| Norway | - | 377,043 | 377,043 | 4,887 | 170 | 5,057 | |
| Rest of Europe | 46,760 | 132,040 | 178,800 | 34,577 | 94,705 | 129,282 | |
| UAE | 175,880 | - | 175,880 | 222,056 | - | 222,056 | |
| Rest of World | 56,951 | 104,957 | 161,908 | 34,186 | 11,305 | 135,491 | |
| -------------------- | ----------------- | ----------------- | -------------------- | -------------------- | -------------------- | ||
| 6,871,741 | 10,981,695 | 17,853,436 | 3,408,207 | 5,784,866 | 9,193,073 | ||
| \======================= | \======================= | \======================= | \======================= | \======================= | \======================== |
All non current assets are located in the UK with the exception of £5,023 (2014: £5,835) which are held in Europe.
5. OPERATING PROFIT
The following items have been included in arriving at operating profit:
| 2015 | 2014 | |
| £ | £ | |
| Depreciation - owned fixed assets - assets on hire purchase |
202,159 - |
102,300 16,667 |
| Amortisation of intangible assets | 517,125 | 202,208 |
| Operating lease rentals | ||
| Land and buildings | 51,862 | 47,411 |
| Other | 142,838 | 105,781 |
| Research and development expenditure | 350,177 | 26,797 |
| Loss on foreign exchange transactions | 18,227 | 13,373 |
| Staff costs | 4,479,252 | 2,892,974 |
| 2015 | 2014 | |
| £ | £ | |
| Auditors' remuneration Fees payable to the Company's auditor for the audit of the parent |
||
| company and consolidated financial statements | 10,000 | 8,760 |
| Fees payable to the Company's auditor for other services: | ||
| The audit of the Company's subsidiaries | 30,000 | 26,475 |
| Tax advisory services | 7,500 | 3,900 |
| \==================== | \==================== |
Adjusted EBITDA is monitored by the Board and measured as follows:-
| 2015 | 2014 | |
| £ | £ | |
| Operating Profit | 1,760,357 | 429,219 |
| Add back: | ||
| Depreciation | 202,159 | 118,967 |
| Amortisation | 517,125 | 202,208 |
| EBITDA | 2,479,641 | 750,394 |
| Exceptional administrative costs | - | 433,351 |
| Share based payments | 116,932 | 53,989 |
| ___________________________________________________ | _____________ | |
| Adjusted EBITDA | 2,596,573 | 1,237,734 |
| \======================= | \======================= |
6. EXCEPTIONAL COSTS
| 2015 | 2014 | |
| £ | £ | |
| Acquisition costs | - | 365,512 |
| Integration costs | - | 67,839 |
| ________________________________________ | ________________________________________ | |
| - | 433,351 | |
| \=================== | \=================== |
The acquisition costs related to the purchase of BOX Telematics Limited in October 2013. The integration costs related to the reorganisation of management following the acquisition. These costs have been included as part of Administration costs.
7. FINANCE COSTS
| 2015 | 2014 | |
| £ | £ | |
| Interest on bank loans | 58,439 | 35,314 |
| \=================== | \=================== |
8. EARNINGS PER ORDINARY SHARE
The earnings per Ordinary share have been calculated using the profit for the year and the weighted average number of Ordinary shares in issue during the year as follows:
| 2015 | 2014 | ||
| £ | £ | ||
| ### Earnings for the year after taxation | 1,689,065 | 471,478 | |
| \============================== | \======================== | ||
| No. | No. | ||
| ### Number of Ordinary shares of 1p each | 28,973,821 | 28,873,821 | |
| ### Basic weighted average number of Ordinary shares of 1p each | 28,944,151 | 23,476,997 | |
| Basic weighted average number of Ordinary shares of 1p each (diluted) | 30,823,153 | 24,767,077 | |
| = | |||
| Basic Earnings per share | 5.84p | 2.01p | |
| Adjust for effects of: Exceptional costs Share based payments Adjusted earnings per share |
- 0.40p 6.24p |
1.84p 0.23p 4.08p |
|
| Diluted earnings per share | 5.48p | 1.90p | |
| ====================== == | ====================== == |
9. SHARE CAPITAL
| 2015 | 2014 | |||
| No's '000's |
£ | No's '000's |
£ | |
| ## Authorised | ||||
| Ordinary shares of 1p each | 200,000 | 2,000,000 | 200,000 | 2,000,000 |
| \======================== | \======================== | \======================== | \======================== | |
| ## Allotted, issued and fully paid | ||||
| Ordinary shares of 1p each | 28,974 | 289,738 | 28,874 | 288,738 |
| \======================== | \======================== | \======================== | \======================== |
Movement in share capital:
| 2015 | 2014 | |||||
| £ | £ | |||||
| As at 1 April 2014 | 288,738 | 194,147 | ||||
| ## New shares issued | 1,000 | 94,591 | ||||
| ## As at 31 March 2015 | 289,738 | 288,738 | ||||
The Company currently holds 75,000 Ordinary shares in treasury representing 0.5% 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 28,898,821.
10. CASH GENERATED FROM OPERATIONS
| 2015 | 2014 | ||||
| £ | £ | ||||
| Reconciliation of profit before tax to net cash flow from operating activities: | |||||
| Profit before tax | 1,702,306 | 396,523 | |||
| Depreciation | 202,159 | 118,967 | |||
| Bank and other interest | 58,051 | 32,696 | |||
| Amortisation of intangible assets | 517,125 | 202,208 | |||
| Share based payments | 116,932 | 53,989 | |||
| --------------------------------- | --------------------------------- | ||||
| Operating cash flows before movement in working capital | 2,596,573 | 804,383 | |||
| Movement on retranslation of overseas operations | (3,764) | (2,634) | |||
| Movement in inventories | (212,808) | 250,694 | |||
| Movement in trade and other receivables | (1,641,882) | (1,041,130) | |||
| Movement in trade and other payables | 394,829 | 1,848,741 | |||
| Movement in provisions | (21,073) | - | |||
| ---------------------------------- | ---------------------------------- | ||||
| Cash generated from operations | 1,111,875 | 1,860,055 | |||
| Interest paid | (58,439) | (35,314) | |||
| Income taxes received | 74,205 | 111,521 | |||
| ----------------------------------- | ----------------------------------- | ||||
| Net cash inflow from operating activities | 1,127,641 | 1,936,262 | |||
| \===================== | \===================== | ||||
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PKPDDFBKDKOK
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