Interim Results
ITIS Holdings PLC
24 November 2005
ITIS Holdings plc (the 'Company' or 'ITIS')
Results for the six months ended 30th September 2005
ITIS Holdings plc, a leading road traffic information and data specialist, is
pleased to announce its results for the six months ended 30th September 2005.
Highlights
• Turnover up 37% to £6.3m (2004: £4.6m);
• Profit before tax £0.46m (2004: Loss of £1.54m) demonstrates significant
turnaround in performance;
• Strong cash balance of £4.7m up from £3.4m at 31st March 2005;
• Continued dominance of the RDS-TMC (Radio Data Service - Traffic Message
Channel) market through vehicle manufacturer and personal navigation device
customers;
• Important new data supply deal with TfL to provide historic and real time
data to the TfL Journey Planner website; and
• Agreement reached with the Highways Agency and Hampshire County Council
for the first deployment of CFVD (Cellular Floating Vehicle Data) in England
to address the continuing challenge of traffic congestion.
Stuart Marks, Chief Executive of ITIS Holdings plc, commented:
'With these first half year results the business has now achieved a second
consecutive half year profit and has been cash generative and profitable since
October 2004. Following the trading statement on 16th November 2005 I can
confirm that current trading in the UK is in line with market expectations and
ahead in some areas.
ITIS is a leading supplier of real time and historic traffic information with an
established operational infrastructure, focussed strategy and broad base of
clients and applications. We are encouraged by the continued interest worldwide
in our CFVD technology and we remain confident that it will become the leading
traffic technology based upon functionality and cost. The Board believe that we
are well positioned to take advantage of the growing demand for accurate and
cost effective traffic information.'
Financial Overview
For the six months ended 30th September 2005, Group turnover increased 37% to
£6.3m (2004: £4.6m). With the majority of the cost base fixed, this resulted in
a profit before taxation of £0.46m as against a loss before taxation of £1.54m
for the six month period to 30th September 2004. Whilst the turnover increased,
cost of sales actually fell due to reducing one element of the cost associated
with the collection of traffic incident data. These results demonstrate again
that our operational infrastructure is capable of supporting incremental
business and that we are able to control our costs effectively.
Cash balances at 30th September 2005 remained strong at £4.7m as against £3.4m
at 31st March 2005. During this period the company received cash proceeds of
£0.77m from the exercise of options.
Business Review
RDS-TMC (Radio Data Service - Traffic Message Channel)
ITIS continues to dominate the delivery of traffic information to vehicles,
personal navigation devices, PDA's and mobile phones. Our service is now
provided to sixteen car manufacturers; BMW, DaimlerChrysler, Ford, Jaguar, Land
Rover, Lexus, Mini, Mitsubishi, Nissan, Porsche, Renault, Saab, Subaru, Toyota,
Vauxhall (GM) and Volvo. On 21st September 2005 we announced that Toyota and
Lexus had renewed their contract with us for a further three years.
Aftermarket and portable device customers include AA Navigator, Alpine, Co
Pilot, Harman Becker, Kenwood, Naviflash, Navman, Pioneer, Siemens VDO, Sony
Europe, and Tom Tom.
Navigation systems are becoming cheaper and more mainstream both in the
aftermarket and with the vehicle manufacturers themselves. As an example, 45%
of orders for the new Lexus IS250 have the £2,710 Multimedia Pack specified
which amongst other things, includes satellite navigation. We expect to see
continued growth for satellite navigation systems. By the end of calendar year
2005, we are forecasting that over 150,000 navigation systems will be enabled
with the ITIS TMC service.
Our real time traffic information, which is a combination of speed and flow
records from Floating Vehicle Data (FVD) and incident information provided to us
under an exclusive contract with Trafficlink, gives us the highest quality data
across an unrivalled number of roads.
IVR's (Interactive Voice Response)
ITIS operates short dial traffic information services with the AA, Vodafone,
T-Mobile and various other networks. Whilst usage of this service varies
according to the weather and level of congestion, we have continually invested
in making our service easier to use and in providing the customer with greater
functionality in order to encourage repeat usage. Our customer numbers continue
to increase whilst usage, call duration and revenues all continue to grow
strongly.
GOVERNMENT
We now have two contracts with Transport for London (TfL). One contract
provides real time traffic data for use by TfL in their control room, and the
second provides data to TfL's Journey Planner website. Other public sector
contracts include the provision of historic data for England to the Department
for Transport (DfT) and control room applications to various local councils.
Under our agreement with the DfT, all local councils receive some historic data
from ITIS. In addition, we have enjoyed some success in selling real time data
and more detailed historic information to a small number of these councils.
Sales in this area take time because our data is relatively new and our
customers need to undertake rigorous evaluation. In the medium term, as demand
for traffic management tools becomes more intense, we are confident that this
will become an important revenue stream.
Government is reliant on the private sector to support its plans for better road
traffic information and our progress with organisations like TfL are indicative
of our future role. Many of the applications that we have developed in this
area provide us with important reference sites that have global relevance.
CELLULAR FLOATING VEHICLE DATA (CFVD)
CFVD depends on our highly developed algorithms and good quality data from
mobile networks. Cooperation from the networks and their ability to provide us
with the data we require can vary, not only from country to country but from
network to network. Given the critical nature of the networks' involvement, we
look for markets where we can develop a strong relationship with our chosen
network partner, combined with private or public sector revenues.
We have proven in the US, Belgium, Scotland and Israel that our technology is
robust, highly accurate and scalable. We also have the necessary experience to
handle complex and large deployments.
Profits growth in ITIS' UK business has been achieved with a largely fixed cost
base. CFVD operates in a similar way, with technology development costs being
incurred ahead of revenues. We have a significant R&D operation based in Israel
and a dedicated team in the UK, all whom are currently supporting existing
deployments and are developing further the software and algorithms. The size
and experience of the team is such that additional business can be accommodated
based on the existing infrastructure.
The strength of interest from potential customers is based upon not only our
technology but our proven business models in the UK. Both the private and
public sectors require a supplier that can not only deliver the data but that is
also experienced at deploying applications which are relevant to the end user
and can drive revenue. In this respect, ITIS is unique in being able to combine
these two resources.
CFVD - UK
We are pleased to announce today that we are taking the first steps to deploying
CFVD in England. Given our strong contacts with Government and the automotive
industry we believe that CFVD will open new revenue streams and supplement the
existing Floating Vehicle Data network to put ITIS in a unique position in being
able to merge these two complimentary data streams. The South East of England
experiences by far the worst congestion and it is on this area that we intend to
focus. Our first project will involve the Highways Agency and Hampshire County
Council and will initially cover the M3 corridor between the South coast and
London as well as strategic corridors along the M25 and M4, which will allow
detailed evaluation of both urban and interurban networks.
In Scotland we already supply Floating Vehicle Data to the Scottish Executive
and have been involved in a trial covering approximately 496 miles of interurban
roads around Edinburgh and to the east of the city. Our network partner, O2,
provides data for this and whilst we are pleased with the results we await
formal evaluation by the Scottish Executive. We believe that the deployment in
Scotland and England will provide solid foundations for us to further develop
CFVD across the UK.
CFVD - International
There is considerable interest worldwide regarding CFVD.
We have successfully completed the deployment of our technology in Antwerp,
Belgium with our project partners the Flemish Government and Proximus, the
largest mobile network in Belgium. The results of this initial deployment will
be made public in a joint statement with our partners and we believe there is
considerable scope to develop further our business in Belgium and across Europe.
In the US, our exclusive negotiations with the State of Missouri Department Of
Transportation to deploy CFVD state-wide are progressing. However, as announced
on Wednesday 16th November 2005, due to the timing for delivering some of the
associated milestones, it is highly unlikely that any revenues from this
contract will fall into this financial year.
Our deployment in the state of Maryland provides live flow and speed data and
travel times from 1,000 miles of roadways in Baltimore. As time goes on, the
Maryland Department of Transportation will have access to a growing data set
that will include travel times and speeds on expressways as well as major and
minor arterials. In partnership with Delcan.Net, we plan to expand the services
throughout the state and across the region to include services such as IVR and
customer access via the internet.
NavTrak
NavTrak traded strongly during the period under review and is benefiting from a
growing reputation and increasing sales from our principle automotive customers,
Bentley Motors, Land Rover, Ferrari and Maserati. We continue to develop our
business outside the UK by partnering with organisations who can support the
NavTrak brand and enable us to support our customers in their key markets.
Consistency and quality of service are very important to the automotive industry
and therefore the ability for a manufacturer to make one vehicle tracking
product standard throughout the world is an attractive proposition.
Current Trading & Prospects
As announced on 16th November 2005, our UK business continues to perform in line
with market forecasts and in some areas is better than expected. We are pleased
that the management team have been able to grow the UK business significantly
whilst expanding into new markets overseas.
Whilst we are disappointed that additional revenues from the US will be delayed,
we remain confident that CFVD will become the leading traffic technology based
on functionality and cost.
With our established infrastructure, experienced operational team and focussed
strategy, the Board is confident that we will continue to grow and trade
profitably and that our cash balances will increase accordingly.
Contact:
Stuart Marks, Chief Executive ITIS Holdings plc - 07768 454700
Ginny Pulbrook / Ged Brumby Citigate Dewe Rogerson - 0207 638 9571
Consolidated profit and loss account
Note Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Group turnover 7 6,289,853 4,604,880 10,159,268
Cost of sales (3,044,266) (3,518,780) (6,667,524)
__________ __________ __________
Gross profit 3,245,587 1,086,100 3,491,744
Operating costs (2,859,822) (2,730,358) (5,013,253)
__________ __________ __________
Operating profit (loss) 385,765 (1,644,258) (1,521,509)
Group interest receivable and similar income 73,214 100,404 176,943
Group interest payable and similar charges (729) (354) (1,414)
__________ __________ __________
Profit (loss) on ordinary activities before taxation 7 458,250 (1,544,208) (1,345,980)
Tax on profit (loss) on ordinary activities (6,528) (5,358) 136,417
__________ __________ __________
Profit (loss) on ordinary activities after taxation 451,722 (1,549,566) (1,209,563)
Minority interests (4,578) (4,876) (1,495)
__________ __________ __________
Profit (loss) for the financial period 447,144 (1,554,442) (1,211,058)
__________ __________ __________
Basic and diluted profit (loss) per ordinary share (p) 3 0.5 (1.6) (1.3)
__________ __________ __________
Consolidated statement of total recognised gains and losses
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Profit (loss) for the financial period 447,144 (1,554,442) (1,211,058)
Currency translation difference 1,893 3,571 (2,652)
__________ __________ __________
Total recognised gains (losses) relating to the period 449,037 (1,550,871) (1,213,710)
__________ __________ __________
Consolidated Balance Sheet
Note 30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Fixed assets
Intangible assets 733,109 963,704 848,407
Tangible assets 515,408 413,244 493,286
__________ __________ __________
1,248,517 1,376,948 1,341,693
__________ __________ __________
Current assets
Stocks 286,493 99,752 353,551
Debtors
- due within one year 3,189,698 2,143,808 2,963,417
- due after more than one year 55,000 740,196 70,000
Cash at bank and in hand 4,718,100 5,464,140 3,413,341
__________ __________ __________
8,249,291 8,447,896 6,800,309
Creditors: Amounts falling due within one year (3,605,133) (5,195,805) (3,797,421)
__________ __________ __________
Net current assets 4,644,158 3,252,091 3,002,888
__________ __________ __________
Total assets less current liabilities 5,892,675 4,629,039 4,344,581
Creditors: Amounts falling due after more than one year (811,536) (953,429) (403,177)
Provisions for liabilities and charges (109,766) (263,479) (195,493)
__________ __________ __________
Net assets 7 4,971,373 3,412,131 3,745,911
__________ __________ __________
Capital and reserves
Called-up share capital 5,230,270 5,186,286 5,186,286
Share premium account 38,070,740 37,342,877 37,342,877
Profit and loss account (38,338,018) (39,124,216) (38,787,055)
__________ __________ __________
Shareholders' funds 4,962,992 3,404,947 3,742,108
6
Minority Interests - equity 8,381 7,184 3,803
__________ __________ __________
Total capital employed 4,971,373 3,412,131 3,745,911
__________ __________ __________
Shareholders' funds may be analysed as:
Equity interests 1,745,124 187,079 524,240
Non-equity interests 3,217,868 3,217,868 3,217,868
__________ __________ __________
4,962,992 3,404,947 3,742,108
__________ __________ __________
Consolidated Cash Flow Statement
Note
Six months to Six months Year ended
to
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Net cash inflow (outflow) from operating activities 4 505,789 (576,777) (1,648,654)
__________ __________ __________
Returns on investments and servicing of finance
Interest element of finance lease rental payments (729) (354) (1,414)
Interest received 73,214 100,404 176,943
__________ __________ __________
Net cash inflow from returns on investments and servicing of finance 72,485 100,050 175,529
__________ __________ __________
Taxation
Foreign tax paid - - (2,579)
Research and development tax credit 128,613 78,137 78,137
__________ __________ __________
Net cash inflow from taxation 128,613 78,137 75,558
__________ __________ __________
Capital expenditure and financial investment
Purchase of tangible fixed assets (161,523) (78,193) (296,847)
Sale of tangible fixed assets - 9,200 9,200
Purchase of intangible fixed assets - - (816,170)
__________ __________ __________
Net cash outflow from capital expenditure (161,523) (68,993) (1,103,817)
__________ __________ __________
Cash inflow (outflow) before financing 545,364 (467,583) (2,501,384)
__________ __________ __________
Financing
Issue of share capital 771,847 - -
Capital element of finance lease rental payments (14,345) (114,345) (128,691)
__________ __________ __________
Net cash inflow (outflow) from financing 757,502 (114,345) (128,691)
__________ __________ __________
Increase (decrease) in cash 5 1,302,866 (581,928) (2,630,075)
__________ __________ __________
Notes (unaudited)
1. Accounting policies
The interim accounts have been prepared using accounting policies stated in the
Company's Report and Accounts for the year ended 31 March 2005 and have been
neither audited nor reviewed.
2. Preparation of the interim financial information
The summarised results for the six months to 30 September 2005 and the
comparative results for the half year to 30 September 2004 are non-statutory
accounts within the meaning of Section 240 of the Companies Act 1985 and have
not been reported upon by the auditors under Section 235 of the Companies Act
1985.
The comparative figures for the year ended 31 March 2005 are an abridged version
of the Company's full accounts and, together with other financial information
contained in these interim results, do not constitute statutory accounts of ITIS
Holdings PLC within the meaning of section 240 of the Companies Act 1985. The
statutory accounts for the year ended 31 March 2005 have been delivered
to the Registrar of Companies. The report of the auditors was not qualified and
did not contain a statement under Section 237 (2) and (3) of the Companies Act
1985.
3. Basic and fully diluted profit (loss) per ordinary share
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Profit (loss) for the financial period 447,144 (1,554,442) (1,211,058)
__________ __________ __________
Weighted average number of ordinary shares in issue 97,446,256 96,243,669 96,243,669
__________ __________ __________
Basic and fully diluted profit (loss) per ordinary 0.5 (1.6) (1.3)
share (p)
__________ __________ __________
4. Reconciliation of operating loss to cash outflow from operating activities
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Operating profit (loss) 385,765 (1,644,258) (1,521,509)
Depreciation and amortisation of licences 254,699 145,213 395,419
Decrease (increase) in stocks 67,058 57,162 (196,637)
(Increase) decrease in debtors (339,894) 563,665 267,399
Increase (decrease) in creditors 223,888 366,928 (463,545)
Decrease in provisions (85,727) (64,840) (132,836)
(Profit) loss on disposal of fixed assets - (647) 3,055
__________ __________ __________
Net cash inflow (outflow) from operating 505,789 (576,777) (1,648,654)
activities
__________ __________ __________
5. Reconciliation of net cash flow to movement in net funds
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Increase (decrease) in cash in the period 1,302,866 (581,928) (2,630,075)
Cash inflow from decrease in lease funding 14,345 114,345 128,691
__________ __________ __________
Change in net funds resulting from cash flows 1,317,211 (467,583) (2,501,384)
New finance lease - (57,381) -
Other non cash changes - - 242,619
Translation differences 1,893 3,571 (2,652)
__________ __________ __________
Change in net funds in the period 1,319,104 (521,393) (2,261,417)
Net funds brought forward 3,384,651 5,646,068 5,646,068
__________ __________ __________
Net funds carried forward 4,703,755 5,124,675 3,384,651
__________ __________ __________
6. Reconciliation of movements in Group shareholders' funds
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Profit (loss) for the financial period 447,144 (1,554,442) (1,211,058)
Other recognised gains and losses relating to the period 1,893 3,571 (2,652)
Issue of share capital 771,847 - -
__________ __________ __________
Net increase (reduction) in Group shareholders' funds 1,220,884 (1,550,871) (1,213,710)
Opening Group shareholders' funds 3,742,108 4,955,818 4,955,818
__________ __________ __________
Closing Group shareholders' funds 4,962,992 3,404,947 3,742,108
__________ __________ __________
7. Segmental analysis
The Directors are of the opinion that the Group operates in a single segment,
that of the provision of telematic products and services. Hence all turnover,
profits and net assets relate to this class of business.
Six months to Six months to Year ended
30 September 30 September 31 March
2005 2004 2005
Unaudited Unaudited Audited
£ £ £
Turnover by origin
United Kingdom 6,108,977 4,604,880 10,062,572
Other 180,876 - 96,696
__________ __________ __________
Group 6,289,853 4,604,880 10,159,268
__________ __________ __________
Turnover by destination
United Kingdom 6,103,852 4,604,880 10,032,846
Other 186,001 - 126,422
__________ __________ __________
Group 6,289,853 4,604,880 10,159,268
__________ __________ __________
Profit (loss) before taxation
United Kingdom 735,916 (1,352,849) (760,442)
Other (277,666) (191,359) (585,538)
__________ __________ __________
Group 458,250 (1,544,208) (1,345,980)
__________ __________ __________
Net assets
United Kingdom 4,960,939 3,409,229 3,734,528
Other 10,434 2,902 11,383
__________ __________ __________
Group 4,971,373 3,412,131 3,745,911
__________ __________ __________
8. Interim statement
A copy of this announcement will be circulated to all registered shareholders of
the Company and copies will be available for members of the public upon
application to the Registered Office at Station House, Stamford New Road,
Altrincham, Cheshire, WA14 1EP.
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