Trakm8 Holdings PLC Trading and Covid-19 Update (8800K)
April 27 2020 - 1:00AM
UK Regulatory
TIDMTRAK
RNS Number : 8800K
Trakm8 Holdings PLC
27 April 2020
27 April 2020
Trakm8 Holdings plc
("Trakm8", the "Group" or the "Company")
Trading and Covid-19 Update
Trakm8 Holdings plc (AIM: TRAK), the global telematics and data
insight provider today announces a trading update for its financial
year ended 31 March 2020.
Revenues for the full year ending 31 March 2020 of GBP19.6
million are in line with previous guidance and 2% more than last
year. However, Covid-19 impacted the Company in the last two weeks
of the year, delaying hardware shipments and contract awards with
our Fleet customers, compounded by installation companies unable to
work to install into our Fleet customers. In addition, a major UK
food retailer was unable to complete contract negotiations on a
significant optimisation opportunity due to their focus on meeting
the surge in consumer demand they faced.
Due to the strong cost reduction actions and considerable
success with several high value and high margin optimisation
software sales, the Group expects to achieve a very significantly
reduced adjusted loss for the financial year of circa GBP0.2m.
(FY-2019: Adjusted loss of GBP1.5m). The lost revenues in the final
two weeks of the financial year stopped us from meeting our target
of a modest adjusted profit.
Cash generation from operations has been much improved and at 31
March 2020 the Group net debt was GBP5.6m (GBP8.0m after IFRS 16
changes) which is the same as at 31 March 2019 and a GBP0.5m
reduction since Sept 2019. At the year end the Group had GBP1.7m of
cash on hand and a further GBP0.5m of available funds under our
revolving credit facility.
During the year Fleet connections increased by 1% to 77,000
(FY-2019: 76,000), Insurance & Automotive connections increased
by 1% to 168,000 (FY-2019: 167,000). Total connections increased by
1% to 245,000 (FY-2019: 243,000), which is 2% more than the 240,000
connections at Sept 2019 resulting from a return to growth in the
Insurance business unit.
Recurring Revenue in the year amounted to GBP9.8m representing
50% of Group revenues.
We are pleased to advise that in the final quarter of the year
major contract renewals have been secured with EON and Bibby and a
significant feature upgrade for Iceland Foods.
All our major Insurance customers are now up and running. In
addition the AA fully launched its Smart Breakdown service which is
reliant on our data and devices. However Covid-19 is impacting
volumes. We are pleased to announce that since year end two other
insurance companies have now launched with Trakm8 solutions and two
more are contracted to launch shortly. Trakm8 is pleased to have
launched two more self-fit products for the insurance market, which
we hope will mitigate the inability to have fitted to vehicle
devices.
Current trading is reduced particularly in our Fleet business
due to the impact of the lock-down for our customers in some
business sectors. This is compounded by the difficulty of not being
able to undertake installations into vehicles for those fleets
continuing to work, some of whom are even busier than before.
Trakm8, with market leading self-fit solutions, is providing
telematics services for a number of customers as an interim
measure. As part of our contribution to support customers at this
difficult time Trakm8 is making available its newly launched SaaS
optimisation platform for SME at no cost for the period of the lock
down.
Trakm8 has successfully set up working from home for most of our
functions. We have retained a core capability to manufacture and
distribute product out of our Coleshill factory and have
established back up capability should Coleshill temporarily have to
close due to Covid-19 restrictions. The supply chain is continuing
to provide components and we have safety inventory in the business
and supply chain.
We are continuously reviewing our expenditure and cost base. We
have taken advantage of the Government Job Support Scheme and have
currently 63 staff furloughed. We have and will continue to take
the cash flow benefit of deferred payments of PAYE/NI and VAT. We
are investigating with our Bank potential support under the CBILS
Scheme. With more than GBP2million of available cash and
substantial recurring revenue base Trakm8 will manage the cash
position carefully into the medium term as the duration and the
severity on our markets of the effect of Covid-19 becomes
clearer.
Unsurprisingly with the current high levels of uncertainty,
Trakm8 is not able to predict the outcome for the financial year
ending 31(st) March 2021. As the situation becomes clearer we will
be pleased to provide guidance.
- Ends -
For further information:
Trakm8 Holdings plc
John Watkins, Executive Chairman Tel: +44 (0) 167 543 4200
Jon Furber, Finance Director www.trakm8.com
Arden Partners plc (Nominated Adviser Tel: +44 (0) 20 7614 5900
& Broker)
Paul Shackleton www.arden-partners.com
About Trakm8
Trakm8 is a UK based technology leader in fleet management,
insurance telematics, connected car, and optimisation. Through IP
owned technology, the Group analyses data collected by its
installed base of telematics units to fine tune the algorithms that
are used to produce its' solutions; these monitor driver behaviour,
identify crash events and monitor vehicle health to provide
actionable insights to continuously improve the security and
operational efficiency of both company fleets and private
drivers.
The Group's product portfolio includes the latest data analytics
and reporting portal (Trakm8 Insight), integrated
telematics/cameras/optimisation, self-installed telematics units
and one of the widest ranges of installed telematics devices.
Trakm8 has over 245,000 connections.
Headquartered in Coleshill near Birmingham alongside its
manufacturing facility, the Group supplies to the Fleet,
Optimisation, Insurance and Automotive sectors to many well-known
customers in the UK and internationally including the AA, Saint
Gobain, EON, Iceland Foods, Scottish Power, Direct Line Group,
LexisNexis and Ingenie.
Trakm8 has been listed on the AIM market of the London Stock
Exchange since 2005.
www.trakm8.com / @Trakm8
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END
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