Trading Update

Journeo PLC

01 August 2023

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the UK version of the EU Market Abuse Regulation (2014/596) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended and supplemented from time to time.

1 August 2023

Journeo plc

("Journeo, "Company" or "the Group")

Trading Update

Journeo plc (AIM: JNEO), a leading provider of information systems and technical services to transport operators and local authorities, announces a trading update for the six months ended 30 June 2023 ("H1 2023"), and provides an update on the Company's trading expectations through to 2025.

Highlights

·    Acquisition of IGL Limited ("Infotec") completed on 18 January 2023 following successful £7.35m fundraising

·    Group revenues increase by 145% to £21.8m

o  41% organic growth in core business revenue (from £8.9m to £12.5m)

o  £9.3m revenue from Infotec

·    Sales order intake increased to £18m including £4.2m from Infotec providing increased visibility into H2 2023 and beyond

·    Order book carried forward into H2 2023 of £27m and sales opportunity pipeline over £55m

·    Number of connections to SaaS platform increased 20% from 10,000 to 12,000 generating monthly recurring revenues

·    Profit before tax increased to £1.7m

·    Revenue for the full year is expected to be £41m, significantly ahead of current market expectations, with profit expected to be marginally ahead

·    Cash balance of £11.3m, including advance payments from customers of £3.5m

Journeo had a strong H1 2023 with revenue of £21.8m (H1 2022: £8.9m), an increase of 145% over H1 2022. Fleet Systems revenue increased by 61% to £7.9m (H1 2022: £4.9m) and Passenger Systems revenue increased by 16% to £4.6m (H1 2022: £4.0m).

The Infotec business acquired in January 2023 delivered revenue of £9.3m in the period from acquisition to 30 June 2023.

Sales of lower margin products were higher than expected in H1 2023 and this is expected to continue throughout most of H2 2023, with margins increasing in FY2024 as the effect of component shortages in supply chains improve and the sales business mix changes.

The Company expects a broadly similar performance in H2 2023 with revenue for the full year expected to be significantly ahead of current market expectations and profit before tax for the full year expected to be marginally ahead of current market expectations, demonstrating the Company's resilience and ability to maintain its performance despite the challenging macro-economic environment.

Cash balance at 30 June 2023 was £11.3m, including payments in advance of £3.5m (H1 2022: £1.2m). The Company invoice discounting facility remains at £2.75m.

The Company continues to invest in the research and development of future technologies and software with a focus on low-power, low latency designs, where high-performance, reliability and sustainability form the basis of the products and services road map.

Journeo expects to achieve £42m revenue in FY2024 and is targeting £50m in FY2025 with improved net profit margins, as we look to consolidate on some of the exceptional contracts in FY2023 and continue to drive bottom line profit growth.

The Company will provide further details on the first half performance in its interim results in September 2023.

Russ Singleton, Chief Executive of Journeo plc commented:

"The first half of this year has seen the Group enter a transformational stage in its development following the acquisition of Infotec in January and generate strong organic and acquisitive growth. Revenues increased 145% to £21.8m, delivering a pre-tax profit of £1.7m. We entered H2 2023 with a £27m order book, a £55m sales opportunity pipeline and expect revenue for the full year to be £41m, with profit marginally ahead of current market expectations. The integration is going well with finance, HR, new product design and marketing working together and a number of cross selling initiatives underway to broaden the customer base, increase sales, annual recurring revenues and margins.".

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

For further information, please contact:

Journeo plc Russ Singleton/ Nick Lowe	[phone]
Cenkos Securities - Nominated Adviser and Broker Katy Birkin/ Callum Davidson	[phone]

Notes to editors:

Journeo plc is a leading Intelligent Transport Systems provider, delivering solutions in towns, cities, airports and the public transport networks that connect them. The Company works extensively with local and combined authorities, Network Rail and many of the largest multinational transport operators, supporting them as systems converge towards a more efficient and sustainable future.

The business currently has three operating companies:

·    Journeo Fleet Systems Ltd: CCTV video surveillance to improve passenger & driver safety, telematics for vehicle and driver performance monitoring, real-time communications for remote condition monitoring and automatic passenger counting.

·    Journeo Passenger Systems Ltd: design, manufacture, installation, and management of hardware and software for electronic public transport information systems, in and around towns, cities, ferry terminals and airports which includes smart-ticketing and wayfinding.

·    Infotec Ltd: design, advanced manufacture, installation and software management of information displays hardware for rail applications in stations, on-platform and on-vehicle.

In the last 4 years, the Company has invested over £5 million in research and development, enabling it to design and supply powerful innovative solutions for 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, scalable products and services that can integrate with existing technology while preparing for future advancements.

 

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