Trading Statement

RNS Number : 2773W

Journeo PLC

10 December 2019

 

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR").

10 December 2019

Journeo plc

("Journeo" or "the Company")

Trading Update and Placing

Journeo plc (AIM: JNEO), the information systems and transport technical services group, is pleased to announce the following trading update and detail of a placing of new ordinary shares to raise up to £1.2 million.   

Trading in the second half has been satisfactory and the overall result for the year ending 31 December 2019 is expected to be in line with market expectations. Pleasingly and consistent with the strategic positioning of the Company, the second half has seen considerable interest for the Company's products and services and has resulted in some potentially significant contract awards and confirmations.  In total approximately £9 million of new business has been confirmed in Q4 for delivery in 2020 and beyond.

Passenger Information Systems

The Company previously reported that market conditions in the UK passenger information sector were encouraging, and that the Company's technology innovations were competing well and attracting significant interest; at the half year end the order book was some 50% higher as compared with prior year. It is anticipated that revenues for the year will be ahead of last year with a large carry forward order book, and the segment is expected to produce a profitable contribution.

In October, the Company announced it had been made aware of the recommendation of a £2.9m contract for the provision of real time passenger information systems for the City of Edinburgh bus network. Contractual negotiations are now at an advanced stage and the anticipated value of the project over its duration is expected to increase to £4.8m, with one important element worth £0.8m scheduled to be completed early in H1 2020.

The company has also been notified by a North of England transport partnership that a contract has been awarded to a Tier-1 contractor for the Company's passenger information systems technology for a value of approximately £2.0 million. The project is due to commence this month and is one of the first tranche of the Transforming Cities Funded ("TCF") projects. The transport partnership will have full control of the content displayed on-street and will be able to support transport information with rich-media content and disruption messaging through Journeo's content management software.

Finally, the Company has also been notified that it has been awarded the contracts for Lots 1, 2 and 3 of the Electronic Bus Stop display supply - OJEU Contract reference 2019/S 189-459067 - from Nottinghamshire County Council. As this is a framework arrangement, there is no specific value attached to the awards but the contract duration encompasses tranche 2 of the Transforming City Fund projects. Lot 1 will include the Company's new high brightness LED displays, Lot 2 will include high-definition thin film transistor (TFT) displays and Lot 3 will be including the Company's new ultra-low power solutions. In aggregate the value of work expected to be undertaken will be material to the Company.

Fleet Services

During the year the Company secured initial orders from National Express, adding to a list of many of the largest multi-national and multi-modal fleet operator customers. In the UK these large-scale operators represent approximately 40% market share and a number also provide transit services to more specialised niche-market segments. One example of this is a contract worth £1.5m including 5-year support services, with the option to extend to 8 years, with National Express at Stansted Airport.  The contract will see the supply of its technology on-bus and at car park bus stop locations along with operational and management reporting software.

Historical data reveals that bus operators typically replace around 5% to 7% of their fleets each year and many of the Company's long-term framework contracts are modelled on these levels. Whilst many fleet operators have continued to replace older vehicles, in the last year this has been somewhat below the 5% level, particularly in the case of the Company's largest fleet customers.

However, in addition to providing nationwide service and support, the Company has benefited from a number of operators electing to carry out higher-margin mid-life refresh of older vehicles and their on-board systems. 

Placing

The Company has separately announced this morning that it is carrying out a fundraising to raise up to £1.2 million, before expenses, via an unconditional placing of up to 2,400,000 New Ordinary Shares at a price of 50 pence per share (the "Placing Price"). It is intended that the net proceeds of the Placing will be used to strengthen the Company's balance sheet to help secure pipeline prospects, to fund growth, R&D and marketing and to provide additional working capital.

Russ Singleton, CEO of Journeo plc, said: "I am delighted with the progress we are making in our transition towards becoming an IP based technology company with a strategy to develop powerful and market leading customer solutions. Our focus on future proofing our technologies whilst delivering improved economic metrics is being well received, and with the orders confirmed for 2020 and beyond, it is clear our approach is starting to gain traction.  The proceeds of the Placing will enable us to build and accelerate on the progress already being made.

"Our progress is all the more pleasing given the difficult market conditions facing many public transport fleet operators and the associated supply chain. To counteract some of these effects we have been developing technologies which provide more cost effective and efficient support services to our fleet customers.  This approach is attracting considerable interest from a number of existing and new fleet customers both in the UK and abroad, as it has the ability to improve the economics of providing CCTV and associated on-board IT systems support, regardless of the numbers of new vehicles entering the market."

A digital copy of this announcement will be available on the Groups' website: www.journeo.com

For further information, please contact:

Journeo plc Russ Singleton/ Nick Lowe	[phone]
WH Ireland - Nominated Adviser and Broker Mike Coe/ Chris Savidge	[phone]
Communications Portfolio Ariane Comstive	[phone]

Notes to editors:

Journeo plc, formerly 21st Century Technology plc, is the specialist provider of advanced information systems and transit related technical services to towns, cities, and local authorities.  The Company works with many of the UK's largest multinational public transport operators, supporting them towards the creation of smarter-cities.

The business comprises two segments:

·    Fleet Systems solutions, including CCTV video surveillance to improve passenger & driver safety, vehicle and driver performance monitoring, real-time on-board IT subsystems management and automatic passenger counting; and

·    Passenger Systems solutions, including design, manufacture, installation and management of all the hardware and software for electronic passenger information systems, smart-ticketing and wayfinding.

In the last few years, the Company has invested heavily in research and development, enabling it to design and supply the very best solutions in order to meet customers' complex requirements and the demands of modern public transport.  With an Internet of Things (IoT) approach and open standards, together with field-proven and reliable engineering, Journeo is able to offer flexible and scalable products and services that can integrate with existing technology while preparing for future advancements.

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