Final Results
TRACSIS PLC
("Tracsis" or "the Company")
Maiden Preliminary Results following year of continued growth and profitability
Tracsis Plc (AIM: TRCS) the specialist provider of labour optimisation software
and consultancy services to the transport industry, announces preliminary
results for the year ended 31 July 2008.
Key Points:
* Trading profitably in line with expectations:
* Revenue up 8% to £805,000 (2007: £742,000).
* Profit before tax of £393,000 (2007: £422,000) after charging £61,000
(2007: £6,000) in respect of the fair value of stock options.
* Contracts signed or in negotiation for revenue of over £1.5 million for
the year ending 31 July 2009.
* Placing and admission to AIM on 27 November 2007 raising £1.7 million (net
of expenses).
* Strong and growing balance sheet. At year end:
* Net assets of £2.59 million (2007: £646,000).
* Cash balances of £1.9 million (2007: £715,000).
* The Company is debt free.
* Significant client wins in the year including Virgin West Trains, Arriva
Cross Country and Southeastern Railway.
* Since the year end the Company has completed a further placing and the
acquisition of profitable rail consultancy RWA Rail Limited on 5 August
2008. Tracsis and RWA Rail operate within the same sector and have a
similar customer profile; the enlarged group will benefit from
cross-selling opportunities and an enhanced business delivery capability.
* Favourable market drivers suggest continued growth for the future, most
notably a rise in UK passenger rail journeys and derived revenue.
John McArthur, Chief Executive Officer, commented:
"Following our introduction to AIM in November 2007 the Company delivered
another year of profitable growth whilst at the same time establishing itself
as a public company and completing the acquisition of RWA Rail Limited, which
has significantly enhanced the service capability and growth potential of the
Group. We continue to maintain a tight grip on costs and a prudent approach to
investment and financial exposure to ensure we retain our profitability. Our
balance sheet remains strong with healthy cash reserves and no debt.
"Looking ahead, Tracsis is uniquely positioned to work with transport operators
to deliver software and consultancy services which provide tangible financial
and operational benefits. In tough economic conditions, passenger transport
markets continue to grow and we believe this trend will continue throughout
2009 as bus and rail become increasingly attractive modes of transport. The
year ahead presents us with the opportunity to extend our customer base and
continue working with clients on a number of new product initiatives. We will
evaluate further strategic acquisitions where suitable and anticipate good
trading in the period ahead."
5 December 2008
Enquiries:
Tracsis Plc 0845 125 9162
John McArthur, Chief Executive Officer
Haggie Financial LLP 0207 417 8989
Nicholas Nelson/Kathy Boate nicholas.nelson@haggie.co.uk
Zeus Capital 0161 831 1512
Bobby Fletcher/Alex Clarkson
Tracsis Plc
Chairman and Chief Executive Officer's Statement
Introduction
We are pleased to report on a year of continued growth, development of the
business and a financially healthy company, making inroads into the transport
market.
These results cover a period of corporate activity which included the initial
placing and admission to AIM (completed November 2007), followed by the
Company's first acquisition of RWA Rail Limited (completed 5 August 2008), more
details of which are set out below.
Business Description
Tracsis Plc is a provider of resource optimisation software and consultancy
services to companies in the passenger transport industries (primarily
passenger bus and rail). The Company's core product suite is used to automate
and optimise the process by which labour schedules are created and allows for
this activity to be done with greater speed and with a higher degree of
efficiency than existing methods.
The Company has contracts in place with some of the largest transport operators
throughout the UK and operates a revenue model that provides a high percentage
of recurring revenue. The Company's goal is to become a leading provider of
operational planning software and consultancy services to global transport
markets.
Financial Summary
Following our admission to AIM a year ago, we are pleased to report maiden
results showing that trading has been profitable and in line with expectations.
Revenue for the year increased 8% to £805,000 (2007: £742,000).
Profit before tax for the year amounted to £393,000 (2007: 422,000) which is
stated after charging £61,000 (2007: £6,000) in respect of a fair value charge
for stock options.
The Company has a stronger balance sheet, with net assets of £2,592,000 as at
31 July 2008 (2007: £646,000). The Company has cash and cash equivalents
totalling £1,898,000, a substantial increase from the balance of £715,000 at 31
July 2007. Furthermore, the Company has no bank debt or long term liabilities.
Our new client wins this year include some of the largest and most complex rail
operators in the UK and were testament to our continued investment in client
support and product innovation which is rapidly securing our position as the
leading provider of resource optimisation software. Looking forwards, we have
good visibility of over £1.5 million revenue for the year ending 31 July 2009
with a significant portion of this already secured under contract.
Trading Progress
During the year the Company has made good trading progress, with growth into
the core transport markets.
At the interim stage, we reported that a number of key milestones had been
achieved. Notable amongst these was the securing of contracts with a further
three passenger train operating companies (TOCs): West Coast Trains (Virgin
Rail Group), Cross Country (Arriva) and Southeastern Railway (Govia).
This was accomplished partly through the strengthened sales and marketing
channels, which have been significantly expanded since January. We plan to
increase our range of products and, in collaboration with one of our existing
customers, are nearing the completion of a new intelligent rostering suite.
This will be a compatible downstream solution that interfaces with our core
scheduling product and should lead to new revenues from both new and existing
customers.
Overall, due to underlying growth in public transport markets, the Company has
remained largely insulated from the general economic downturn. The Directors
believe that, although cautious in terms of investment and expenditure, our
clients continue to look for innovative solutions to provide a more effective
delivery of passenger services whilst managing overhead cost.
Moreover, recent trading reports from the major publicly quoted rail and bus
companies paint a picture of growth. Expectations are of this continuing in the
face of changing socio-economic pressures in Britain, which favour a shift
towards public transport (especially passenger rail).
There was a 7.1% increase in rail passenger journeys through 2007-2008 compared
to the same period over 2006-2007, now totalling 1.2 billion per annum. As
commuters make the change to rail travel there has been a 10.8% increase in
revenue generated by rail passengers over the last year, with fares alone
accounting for some £5.6 billion.
Any rise in passenger demand should in turn drive additional rail services and
the supporting infrastructure in back office planning capabilities such as
those provided by Tracsis.
RWA Rail acquisition
On 18 July 2008, the Company announced the acquisition of RWA Rail Limited
("RWA") for an initial cash consideration of £580,000 and the issue of
1,084,113 new Ordinary Shares. RWA is a provider of consultancy services to the
rail sector, focusing on operational and strategic planning. Accordingly this
will enable the enlarged group to provide a wider range of services to a more
diverse client base.
As Tracsis and RWA operate within the same sector and have a similar customer
profile, the enlarged group will benefit from cross-selling opportunities and
an enhanced business delivery capability. RWA generated revenue of £1,019,000
in the year ended 31 March 2008 resulting in EBIT of £293,000.
We welcome Robert Watson, the founder and Managing Director of RWA to the Board
in his new capacity as Chief Operating Officer of Tracsis. Robert brings with
him valuable experience and knowledge of UK and international rail markets and
his addition is a huge benefit to the enlarged group.
Staff
The above acquisition brings the complement of employees to 25 split across our
Leeds and Loughborough locations. The Board would like to thank management and
staff for their commitment and hard work during a year of rapid evolution for
the Company.
Outlook
Tracsis remains uniquely positioned to continue growing organically and via
opportunistic acquisitions. The Company has developed good relationships with
major transport operators within a market that continues to grow, and can be
reactive to future growth opportunities due to a strong financial position. We
believe the year ahead presents good potential to extend our customer base and
we anticipate a favourable trading period ahead.
Rod Jones John McArthur
Chairman Chief Executive Officer
Tracsis Plc
Income statement
for the year ended 31 July 2008
2008 2007
£000 £000
Revenue 805 742
Administrative expenses (505) (335)
Operating profit 300 407
Finance income 93 15
Profit before tax 393 422
Taxation (94) (92)
Profit for the year 299 330
Earnings per share
Basic (pence per share) 2.47 15,870.61
Diluted (pence per share) 2.37 15,136.33
All of the above activities are continuing.
Tracsis Plc
Balance sheet
at 31 July 2008
2008 2008 2007 2007
£000 £000 £000 £000
Assets
Non-current assets
Plant and equipment 6 8
Deferred tax 18 -
Total non-current assets 24 8
Current assets
Trade and other receivables 1,081 164
Cash and cash equivalents 1,898 715
Total current assets 2,979 879
Total assets 3,003 887
Liabilities
Non-current liabilities
Deferred tax - 2
Total non-current liabilities - 2
Current liabilities
Trade and other payables 302 149
Current tax liabilities 109 90
Total current liabilities 411 239
Total liabilities 411 241
TOTAL NET ASSETS 2,592 646
Capital and reserves attributable
to equity holders of the company
Share capital 70 -
Share premium reserve 1,641 17
Share based payments reserve 61 5
Retained earnings 820 624
TOTAL EQUITY 2,592 646
Tracsis Plc
Statement of changes in equity
for the year ended 31 July 2008
Share Share-based
Share Premium Payments Retained
Capital Reserve Reserve Earnings Total
£000 £000 £000 £000 £000
Balance at 31 July 2006 - - - 353 353
Changes in equity for 2007
Profit for the year - - - 330 330
Total recognised income and - - - 330 330
expense for the year
Share option charge - - 6 - 6
Adjustment for options - - (1) 1 -
subsequently exercised
Issue of share capital - 17 - - 17
Dividends paid - - - (60) (60)
Balance at 31 July 2007 - 17 5 624 646
Changes in equity for 2008
Profit for the year - - - 299 299
Total recognised income and - - - 299 299
expense for the year
Share option charge - - 61 - 61
Adjustment for options - - (5) 7 2
subsequently exercised
Issue of share capital 70 1,624 - (50) 1,644
Dividends paid - - - (60) (60)
Balance at 31 July 2008 70 1,641 61 820 2,592
Tracsis Plc
Cash flow statement
for the year ended 31 July 2008
2008 2007
£000 £000
Cash flows from operating activities
Profit before tax 393 422
Finance income (93) (15)
Depreciation 5 3
Share based payments 61 6
Operating cash flows before 366 416
movements in working capital
(Increase)/decrease in trade and (917) 143
other receivables
Increase/(decrease) in trade and 153 (11)
other payables
Cash (used in)/generated by (398) 548
operations
Tax paid (93) (46)
Net cash (used in)/generated from (491) 502
operating activities
Cash flows from investing activities
Purchases of property, plant and (3) (4)
equipment
Finance income received 93 15
Net cash generated from investing 90 11
activities
Cash flows from financing activities
Issue of share capital (net of 1,644 3
expenses)
Dividends paid to equity (60) (60)
shareholders
Net cash generated from financing 1,584 (57)
activities
Net increase in cash and cash 1,183 456
equivalents
Cash and cash equivalents at start 715 259
of year
Cash and cash equivalents at end of 1,898 715
year
Tracsis Plc
Notes to the preliminary announcement
1. (a) Basis of preparation
This is the first time the Company has prepared its financial statements in
accordance with IFRSs, having previously prepared its financial statements in
accordance with UK GAAP accounting standards. Details of how the transition
from UK accounting standards to EU adopted IFRS has affected the Company's
reported financial position, financial performance and cash flows are given in
note 1. (c) below.
The financial information on the Company set out above does not constitute
`statutory accounts' within the meaning of section 240 of the Companies Act
1985.
This preliminary report was approved by the Board of Directors on 4 December
2008. The statutory accounts for the year ended 31 July 2008 have not been
filed with the Registrar of Companies, but will be delivered to the Registrar
of Companies following the Company's Annual General Meeting and will also be
available on the Company's website at www.tracsis.com.
The financial information for the year ended 31 July 2008 has been extracted
from the Company's audited statutory accounts upon which the auditors issued an
unqualified opinion. The report did not contain a statement under section 237
(2) or (3) of the Companies Act 1985 and did not include reference to any
matters to which the auditors drew attention by way of emphasis without
qualifying their report.
The figures for the year ended 31 July 2007 have been extracted from the
statutory accounts which have been filed with the Registrar of Companies. The
auditors' report for the 2007 accounts was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
1. (b) Changes in Accounting Policies - First time adoption
In preparing the financial statements, the Company has elected to apply the
following transitional arrangements permitted by IFRS 1 `First-time Adoption of
International Financial Reporting Standards':
* IFRS 2 `Share-based payments' has been applied to employee options granted
after 7 November 2002 that had not vested by 1 January 2006.
The Company has made estimates under IFRSs at the date of transition, which are
consistent with those estimates made for the same date under UK GAAP unless
there is objective evidence that those estimates were in error, i.e. the
Company has not reflected any new information in its opening IFRS balance
sheet, but reflected that new information in its income statement for
subsequent periods.
1. (c) Explanation of transition to IFRS
The Company's financial statements for the year ended 31 July 2008 are the
first financial statements that comply with International Financial Reporting
Standards (IFRS). The financial statements prior to and including 31 July 2007
had been prepared in accordance with Generally Accepted Accounting Principles
in the United Kingdom (UK GAAP).
As required by IFRS 1, the impact of the transition from UK GAAP to IFRS is
explained below. The accounting policies set out above have been applied
consistently to all periods presented in this financial information and in
preparing an opening IFRS balance sheet at 1 August 2006 for the purposes of
transition to IFRS.
Presentational adjustments:
IAS 1 - Presentation of Financial Statements. The form and presentation in the
UK GAAP financial statements has been changed to be in compliance with IAS 1.
There is no impact on the balance sheet at date of transition or at 31 July
2008 nor on the profit for the year ended 31 July 2007.
Adjustments to reported loss and net assets:
There are no adjustments arising from the transition to IFRS and therefore
there is no impact on the reported Income Statement for the Company for the
year ended 31 July 2007, nor on the Balance Sheet for the Company at 31 July
2007 and 31 July 2006. Consequently, no reconciliation between IFRS and UK GAAP
has been provided.
IAS 7 - Cash Flow Statements. The IFRS Cash Flow Statement, prepared under IAS
7, presents cash flows in three categories: cash flows from operating
activities, cash flows from investing activities and cash flows from financing
activities. Other than the reclassification of cash flow into the new
disclosure categories, there are no significant differences between the
Company's Cash Flow Statement under UK GAAP and IFRS. Consequently, no cash
flow reconciliations are provided. Purchases of tangible fixed assets under UK
GAAP have been reclassified to purchases of property, plant and equipment under
IFRS.
2. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to
ordinary shareholders by the weighted average number of ordinary shares in
issue during the year. Diluted earnings per share is calculated by adjusting
the weighted average number of ordinary shares in issue to assume the
conversion of all dilutive potential ordinary shares.
The Company has one class of dilutive potentially ordinary shares: those share
options granted to employees where the exercise price is less than the average
market price of the company's ordinary shares during the year.
Profit for Weighted Earnings per
the period average number share
£'000 of shares (pence)
Basic earnings per share
Year ended 31 July 2008 299 12,081,414 2.47
Year ended 31 July 2007 330 2,082 15,870.61
Diluted earnings per share
Year ended 31 July 2008 299 12,606,516 2.37
Year ended 31 July 2007 330 2,183 15,136.33
The weighted average number of ordinary shares for the purposes of diluted
earnings per share reconciles to the weighted average number of ordinary shares
used in the calculation of basic earnings per share as follows:
2008 2007
Weighted average number of ordinary shares 12,081,414 2,082
used in the calculation of basic earnings
per share
Shares deemed to be issued in respect of 525,102 101
employee share options
Weighted average number of ordinary shares 12,606,516 2,183
used in the calculation of diluted earnings
per share
3. Events after the balance sheet date
On 5 August 2008, the Company acquired the entire issued share capital of RWA
Rail Limited. The acquisition price comprised initial consideration of the
issue of 1,084,113 new ordinary shares at 53.5p per share and cash
consideration of £580,000. Deferred consideration of up to £145,000 in cash and
up to 271,029 new ordinary shares is payable subject to satisfaction of certain
performance criteria following the acquisition. The fair value of the shares to
be issued was based upon the market price of shares in Tracsis plc.
The following table shows the amounts to be recognised at the acquisition date
for assets and liabilities acquired.
£'000
Debtors 597
Cash at bank 362
Creditors due within one year (291)
Provisions for liabilities and (2)
charges
Fair value of net assets acquired 666
The carrying value of the assets and liabilities immediately before acquisition
equates to the fair values above.
In addition on 5 August 2008 the Company issued 373,832 new ordinary shares of
0.4p each pursuant to a placing of shares to raise additional working capital
for the Company. The shares were issued at a price of 53.5p per share for total
cash consideration of £200,000.
4. Publication of Annual Report and Accounts
In accordance with AIM Rule 20, Tracsis plc confirms that its Annual Report and
Accounts for the year ended 31 July 2008 will shortly be sent to all
shareholders and will then be available for download from the Company's website
at www.tracsis.com.
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