Final Results
ITIS Holdings PLC
15 June 2005
ITIS Holdings plc (the 'Company' or 'ITIS')
Preliminary results for the year ended 31st March 2005
ITIS Holdings plc, a leading UK road traffic information and data specialist, is
pleased to announce its preliminary results for the year ended 31st March 2005.
Highlights
• Maiden post-tax profit of £0.34m in second half of the year;
• Turnover up 44% to £10.16m (2004: £7.06m);
• Loss after taxation for the year reduced by 80% to £1.21m (2004: £6.14m);
• Year end cash balance remains strong at £3.41m with the Group expected to
generate cash in the current year;
• Continued dominance of the RDS-TMC market with sixteen vehicle
manufacturers now offering our traffic service as standard with navigation;
• New contracts won since interim statement to supply traffic data to
DaimlerChrysler, Land Rover, Mini, Mitsubishi Motors Europe, Porsche Cars,
Renault, Vauxhall and Volvo; and Co-Pilot, Harman Becker, Sony Europe and
Tom Tom;
• Deployment results for Cellular Floating Vehicle Data (CFVD, formerly
known as Estimotion) ahead of expectations;
Stuart Marks, Chief Executive of ITIS Holdings plc, commented:
'We are delighted to announce a maiden profit for the second half of the year
and significantly increased turnover and reduced losses for the year as a whole.
We believe we have succeeded in creating a fixed cost traffic information
business with a portfolio of services which our customers clearly value.
This year we remain confident of continued growth across all of our businesses
and of further contract wins for our CFVD technology, which will make it an
increasingly important contributor to the Group.'
Financial Overview
For the year ended 31st March 2005 Group turnover increased by 44% to £10.16m
(2004: £7.06m). With the majority of the cost base fixed, this resulted in the
loss after taxation for the year reducing by 80% to £1.21m (2004: £6.14m). There
were no exceptional costs during the year (2004: exceptional costs of £0.75m
relating to the impairment of a fixed asset no longer used by the Group and a
provision for onerous leases). Cost saving measures implemented during 2004
have resulted in a £1.67m (25%) fall in distribution and administrative
expenses.
These results demonstrate again that ITIS' operational infrastructure is capable
of supporting incremental business without substantial increases to its cost
base.
Cash usage in the second half of the year included the payment on 1 October 2004
of $1.5m (approximately £816k) deferred consideration to the vendors of
Estimotion. Cash balances at 31 March 2005 remained strong at £3.41m (2004:
£6.05m). The Group is expected to be cash generative in the current year.
Business Review
RDS-TMC
RDS-TMC remains our most important service and is currently provided to sixteen
car manufacturers and virtually the entire aftermarket satellite navigation
sector. During the year we completed new OEM contracts with DaimlerChrysler,
Land Rover, Mini, Mitsubishi Motors Europe, Porsche Cars, Renault, Vauxhall and
Volvo; and Co-Pilot, Harman Becker, Sony Europe and Tom Tom. We expect to see
continued increased demand for factory fitted navigation systems and as TMC is
standardised on these, we remain optimistic for the growth prospects of this
business. By the end of calendar year 2005, we are forecasting to have over
150,000 navigation systems enabled with the ITIS TMC service
An important growth area in navigation has been in the PDA (Personal Digital
Assistant), PND (Personal Navigation Device) and Smart Phone market which has
given rise to significant further opportunities for us to sell our data. ITIS'
focus on the development of content enables us to work closely with the hardware
manufacturers in this fast growing market to integrate traffic. We now provide
our traffic content exclusively to Co-pilot, Route 66 and Tom Tom and we are
very close to finalising agreements with the other major vendors in this market.
The key to the business' continuing success is the quality of our traffic
information; a combination of Floating Vehicle Data and incident information,
provided to us under an exclusive contract from Trafficlink, the UK's leading
provider of traffic information to the media market. The data is broadcast
using Classic FM and selected radio stations, owned by Scottish Radio Holdings,
to provide the only truly national broadcast TMC service. Our RDS-TMC service
in the UK is the largest commercial deployment of this technology anywhere in
the world and we intend to maintain our leadership whilst growing market size.
We believe that we can capitalise on our unchallenged expertise in the
integration of incident data and flow data and the utilisation of broadcast
technology to deliver real time information to the driver in new markets outside
of the UK where we will be able to offer CFVD to supplement available incident
data.
Government
Both national and local level feedback on our performance during the first year
of our contract to provide historic FVD to the Department for Transport has been
very encouraging and this contract is providing an important reference for the
company and its technology as we expand outside the UK, especially in our
negotiations with State Department of Transportation prospects in the US.
We have been actively marketing FVD to all local authorities. This had led to
several contracts and we have a significant amount of work in progress. We
believe that this area will continue to grow and become an important revenue
stream for us.
CFVD
As previously reported, the implementations of CFVD for the Maryland Department
of Transportation in Baltimore (USA), the Flemish Government in Antwerp
(Belgium) and for the Scottish Executive have all gone to plan and the quality
of information produced has exceeded customer expectations. In particular, the
speed of incident detection and the granularity of information have established
CFVD as the most cost effective way to monitor traffic flows accurately on
highways and in urban areas. It was important for us to demonstrate that the
technology worked outside Israel and we have chosen to do this by inviting
customers to undertake real time drive tests and to compare their experience
with what we were reporting.
Having demonstrated the effectiveness of the CFVD technology in a number of
reference cities we are now actively promoting its advantages. Vital to the
success of CFVD is the development of relationships with the cellular networks
covering each potential deployment and agreements with them for the provision of
the base data required, typically on a revenue shared basis.
Over the last few months we have concluded that the potential market for CFVD is
vast. ITIS has the unique advantage of experience in application development as
well as existing contracts with Governments and the automotive sector, and we
will use these to position the Company competitively.
Last month we announced an exciting new partnership with Delcan.NET, a US based
provider of transportation management and traveller information systems. ITIS
has collaborated with Delcan to establish its North American CFVD project in
Baltimore (Maryland, USA). This agreement will enable ITIS to access public
agencies in a cost effective and rapid manner without incurring business
development costs and operational infrastructure. Our reference sites in
Baltimore and Antwerp have attracted a lot of interest from around the world and
in the USA, especially where we are in advanced negotiations with four other
states to provide a similar service to that offered in Baltimore. Likewise,
interest in Europe and in the Far East is expected to lead to further
deployments of the CFVD technology.
NavTrak
NavTrak has performed very well this year and we have developed good
relationships with several vehicle manufacturers including Bentley Motors, Land
Rover, Ferrari and Maserati. In April 2005, NavTrak gained Thatcham Category 5
accreditation, which is the new insurance standard for stolen vehicle tracking
systems.
We are pleased to announce that due to the success of NavTrak as an accessory on
the Bentley Continental GT, NavTrak will now be offered on the new Bentley
Continental Flying Spur saloon and, from next year, has been selected as the
only approved Tier 1 supplier to Bentley across Europe. Our strategy for
NavTrak is to work directly with vehicle manufacturers to minimise the
administration and marketing costs associated with selling this type of product
in the aftermarket.
Current Trading & Prospects
The Board believes that recent achievements, including the maiden profit for the
second half of the year, puts the Group in a strong position, both in the UK and
overseas, to develop and capitalise on the investments of the past few years.
We will continue to focus on our core markets of the automotive and public
sectors and to utilise our considerable experience to become a leading company
in the global traffic information market.
The current financial year has started well and will include initial revenues
from a number of new RDS-TMC customers. The Board is confident that ITIS will
sustain its exciting high growth.
Contact:
Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700
Ginny Pulbrook, Director Citigate Dewe Rogerson - 0207 282 2945
ITIS Holdings plc
Preliminary announcement of results for the year ended 31 March 2005
Consolidated profit and loss account
2005 2004
£ £
Group turnover 10,159,268 7,057,890
Exceptional direct costs - (362,583)
Other cost of sales (6,667,524) (6,496,959)
Cost of sales (6,667,524) (6,859,542)
________________ ________________
Gross profit 3,491,744 198,348
Distribution costs (122,948) (235,786)
Exceptional administrative expenses - (383,790)
Other administrative expenses (4,890,305) (6,066,367)
Administrative expenses (4,890,305) (6,450,157)
________________ ________________
Group operating loss (1,521,509) (6,487,595)
Interest receivable and similar income 176,943 270,902
Interest payable and similar charges (1,414) (1,607)
________________ ________________
Loss on ordinary activities before taxation (1,345,980) (6,218,300)
Tax on loss on ordinary activities 136,417 75,558
________________ ________________
Loss on ordinary activities after taxation (1,209,563) (6,142,742)
Minority interests (1,495) (2,308)
_______________ _______________
Loss for the financial year (1,211,058) (6,145,050)
_________ _________
p p
Basic and diluted loss per ordinary share
(1.3) (6.3)
_________ _________
All activity has arisen from continuing operations.
Consolidated statement of total recognised gains and losses
2005 2004
£ £
Loss for the financial year (1,211,058) (6,145,050)
Currency translation difference (2,652) 2,194
_______________ _______________
Total recognised losses relating to the year (1,213,710) (6,142,856)
_________ _________
Consolidated balance sheet at 31 March 2005
2005 2004
£ £
Fixed assets
Intangible assets 848,407 981,062
Tangible assets 493,286 414,077
________________ ________________
1,341,693 1,395,139
________________ ________________
Current assets
Stocks 353,551 156,914
Debtors
- due within one year 2,963,417 2,705,050
- due after more than one year 70,000 817,186
Cash at bank and in hand 3,413,341 6,046,068
________________ ________________
6,800,309 9,725,218
Creditors: Amounts falling due within one year (3,797,421) (4,539,723)
________________ ________________
Net current assets 3,002,888 5,185,495
________________ ________________
Total assets less current liabilities 4,344,581 6,580,634
Creditors: Amounts falling due after more than one year (403,177) (1,294,189)
Provisions for liabilities and charges (195,493) (328,319)
________________ ________________
Net assets 3,745,911 4,958,126
_________ _________
Capital and reserves
Called-up share capital 5,186,286 5,186,286
Share premium account 37,342,877 37,342,877
Profit and loss account (38,787,055) (37,573,345)
________________ ________________
Shareholders' funds 3,742,108 4,955,818
Minority interests - equity 3,803 2,308
________________ ________________
Total capital employed 3,745,911 4,958,126
_________ _________
Shareholders' funds may be analysed as:
Equity interests 524,240 1,737,950
Non-equity interests 3,217,868 3,217,868
________________ ________________
3,742,108 4,955,818
_________ _________
Consolidated cash flow statement for the year ended 31 March 2005
Notes 2005 2004
£ £
Net cash outflow from operating activities 2 (1,648,654) (4,975,838)
________________ ________________
Returns on investments and servicing of finance
Interest element of finance lease rental payments (1,414) (1,607)
Interest received 176,943 275,902
________________ ________________
Net cash inflow from returns on investments and servicing of finance 175,529 274,295
________________ ________________
Taxation
Foreign tax paid (2,579) -
Research and development taxation credit 78,137 241,431
________________ ________________
Net cash inflow from taxation 75,558 241,431
________________ ________________
Capital expenditure and financial investment
Purchase of tangible fixed assets (296,847) (293,375)
Sale of tangible fixed assets 9,200 -
Purchase of intangible fixed assets (816,170) (173,570)
Sale of intangible fixed assets - 362,475
________________ ________________
Net cash outflow from capital expenditure (1,103,817) (104,470)
________________ ________________
Cash outflow before financing (2,501,384) (4,564,582)
________________ ________________
Financing
Purchase of own shares under Treasury Regulations - (435,443)
Issue of shares to minorities - 147
Capital element of finance lease rental payments (128,691) (110,046)
________________ ________________
Net cash outflow from financing (128,691) (545,342)
________________ ________________
Decrease in cash in the year 3 (2,630,075) (5,109,924)
_________ _________
Reconciliation of movements in Group shareholders' funds for the year ended 31 March 2005
2005 2004
£ £
Loss for the financial year (1,211,058) (6,145,050)
Other recognised gains and losses relating to the year (2,652) 2,194
Purchase of own shares - (435,443)
________________ ________________
Net reduction in Group shareholders' funds (1,213,710) (6,578,299)
Opening Group shareholders' funds 4,955,818 11,534,117
________________ ________________
Closing Group shareholders' funds 3,742,108 4,955,818
_________ _________
Notes
1. Basis of Preparation
The financial information set out in this preliminary announcement does not
constitute the Group's statutory accounts for the years ended 31 March 2004 or
2005, but is derived from those accounts. Statutory accounts for the year ended
31 March 2004 have been delivered to the Registrar of Companies.
The auditors have reported on the accounts for the years ended 31 March 2005 and
2004: their reports were unqualified and did not contain a statement under
section 273(2) or (3) of the Companies Act 1985.
The financial information set out in this preliminary announcement has been
prepared on the basis of the accounting policies as stated in the accounts for
the year ended 31 March 2004.
A copy of the annual report and accounts will be circulated to all shareholders
of the company shortly and copies will also be available for members of the
public upon application to the registered office at Fifth Floor, Station House,
Stamford New Road, Altrincham, WA14 1EP and on the website www.itisholdings.com.
2. Reconciliation of operating loss to net cash outflow from operating activities
2005 2004
£ £
Operating loss (1,521,509) (6,487,595)
Depreciation and amortisation of licenses 395,419 372,072
Impairment losses - 362,583
(Increase) decrease in stocks (196,637) 611,951
Decrease in debtors 267,399 4,893
Decrease in creditors (463,545) (168,061)
(Decrease) increase in provisions (132,836) 328,319
Loss on disposal of fixed assets 3,055 -
________________ ________________
Net cash outflow from operating activities (1,648,654) (4,975,838)
_________ _________
3. Reconciliation of net cash flow to movement in net funds
2005 2004
£ £
Decrease in cash in the year (2,630,075) (5,109,924)
Cash outflow from decrease in lease financing 128,691 110,046
________________ ________________
Change in net funds resulting from cash flows (2,501,384) (4,999,878)
Other non cash changes 242,619 -
Translation differences (2,652) 2,047
________________ ________________
Change in net funds in the year (2,261,417) (4,997,831)
Net funds brought forward 5,646,068 10,643,899
________________ ________________
Net funds carried forward 3,384,651 5,646,068
_________ _________
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