TIDMTRCS
RNS Number : 7474U
Tracsis PLC
08 April 2021
8 April 2021
Tracsis plc
('Tracsis', 'the Company' or 'the Group')
Unaudited Interim results for the six months ended 31 January
2021
Tracsis, a leading provider of software, hardware, data
analytics/GIS and services for the rail, traffic data and wider
transport industries, is pleased to announce its unaudited interim
results for the six months ended 31 January 2021.
Financial Highlights:
-- Revenue decreased to GBP22.2m (H1 2020: GBP26.4m), with
growth in the Rail Technology & Services Division offset by
lower sales in our Events and Traffic Data businesses as expected
due to ongoing Covid-19 restrictions on their end markets
-- GBP6.1m decrease in revenue in those businesses directly
impacted by Covid-19. Revenue growth of 5% across the rest of the
Group before the contribution from prior period acquisitions(+)
-- Adjusted EBITDA* of GBP5.4m (H1 2020: GBP5.6m) only slightly
lower than the same period last year, including the positive impact
of cost reduction actions taken in response to the pandemic
-- Cash balances of GBP20.8m with no Covid deferrals due to be
paid (31 July 2020: GBP17.9m, 31 January 2020: GBP26.0m)
-- No interim dividend declared. The Board continues to review
the situation and is committed to restoring the dividend policy at
the earliest appropriate date
Operational Highlights:
-- Further growth in higher margin Rail Technology &
Services Division, as well as in Data Analytics / GIS
-- Continuing to implement a number of large multi-year rail contracts won in previous years
-- Two large multi-year rail opportunities in the final stages of contract award
-- Traffic Data and Events business units continue to win new
projects but at significantly reduced levels
-- Cost reduction actions tracking in line with expectations
-- Group integration activities progressing well
Post period end Highlights:
-- Appointment of Andy Kelly as Chief Financial Officer
-- Remote condition monitoring hardware and software contract
win with major transit agency in North America
-- Launch of new Group-wide branding to improve collaboration and enhance market awareness
-- Strengthened the Group's transport consultancy offering
through the acquisition of Flash Forward Consulting Ltd
-- Encouraging start to Q3 trading with high activity levels across large parts of the Group
(+) Group revenue growth excluding the Events, Traffic Data and
Delay Repay businesses where activity levels were impacted by
Covid-19; and excluding iBlocks that was acquired in March
2020.
* Earnings before finance income & expense, tax,
depreciation, amortisation, exceptional items, other operating
income, share-based payment charges and share of result of equity
accounted investees. See note 10 for reconciliation.
Chris Barnes, Chief Executive Officer, commented:
"I am pleased with the first half performance which was in line
with our expectations and I'm encouraged by the trading momentum in
the business as we move through the third quarter. The entire
Tracsis team has done an outstanding job over the past 12 months in
protecting jobs and employee wellbeing, in identifying and winning
new business and in robustly responding to the challenges linked to
Covid-19.
We have a significant pipeline of large multi-year opportunities
across our Rail Technology and Services Division in both UK and
international markets, and in our Data Analytics/GIS business unit.
In addition, we are now starting to see an increase in new business
enquiries across those businesses that have been hardest hit by the
Covid pandemic and this is driving increased confidence around
future growth prospects.
We continue to focus on integration and consolidation activities
which alongside the launch of a new Group-wide Tracsis brand will
increase the opportunities for R&D collaboration and cross
selling. We remain committed to pursuing organic and acquisitive
growth supported by a strong balance sheet."
Presentation and Overview video
Tracsis is hosting an online presentation open to all investors
on Tuesday 13 April 2021 at 1.30pm UK time. Anyone wishing to
connect should register here:
http://bit.ly/TRCS_FY21_interim_results_retail
A video overview of the results featuring CEO Chris Barnes and
CFO Andy Kelly is available to view here:
http://bit.ly/TRCS_H1_overview
Enquiries:
Tracsis plc Tel: 0845 125 9162
Chris Barnes, CEO / Andy Kelly, CFO
finnCap Ltd Tel: 020 7220 0500
Christopher Raggett / Charlie Beeson, Corporate Finance
Andrew Burdis, Corporate Broking
Alma PR Tel: 020 3405 0205
David Ison / Helena Bogle / Kieran Breheny / Joe Pederzolli
tracsis@almapr.co.uk
The information communicated in this announcement is inside
information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No. 596/2014.
Chairman & Chief Executive Officer's Report
The Group has reported first half performance in line with
management's expectations. There was further growth in the Rail
Technology & Services Division, where activity levels remain
high. As anticipated, there were Covid-19 related headwinds in the
Events and Traffic Data business units. Cost reduction actions
taken last summer in response to these headwinds are tracking in
line with expectations.
Results Summary
H1 revenue of GBP22.2m was GBP4.2m lower than the prior year (H1
2020: GBP26.4m). Revenues in the Rail Technology & Services
Division grew, with the impact of Covid-19 limited only to the
effect of lower passenger numbers on delay repay transaction
revenues. This growth was offset, however, by lower revenue in our
Events and Traffic Data businesses as a result of Covid-19
restrictions on their end markets. The estimated total adverse
impact to revenue from Covid-19 for the Group was GBP6.1m across
the Events, Traffic Data and Delay Repay businesses. There was
revenue growth of 5% versus H1 20 across the rest of the Group,
before the GBP1.3m revenue contribution from iBlocks that was
acquired in March 2020.
Despite the reduction in revenue, adjusted EBITDA* of GBP5.4m
was only GBP0.2m lower than the prior year (H1 20: GBP5.6m). This
reflects the positive impact of cost reduction actions taken in
response to the pandemic, which delivered a benefit to EBITDA
versus the comparative period last year of GBP1.3m. In addition the
Group has claimed through the Coronavirus Job Retention Scheme in
respect of furloughed staff in the period, with support to the
Income Statement of GBP0.5m.
Statutory profit before tax of GBP1.1m is GBP1.3m lower than the
prior year (H1 20: GBP2.4m). In addition to the GBP0.2m decrease in
adjusted EBITDA*, this includes GBP0.5m higher amortisation of
acquired intangible assets following the acquisition of iBlocks in
March 2020; GBP0.4m relating to the unwinding of previously
discounted contingent consideration balances in accordance with
IFRS accounting standards; and GBP0.3m exceptional charge relating
to deal costs and the fair value of contingent consideration.
A summary of the Group's results is set out below:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------- ----------- ----------- --------
Revenue 22,239 26,365 47,998
Adjusted EBITDA (note 10) 5,431 5,586 10,463
Adjusted Pre-Tax Profit
(note 10) 4,655 4,805 8,581
Profit before tax 1,102 2,419 4,111
--------------------------- ----------- ----------- --------
*Earnings before finance income & expense, tax,
depreciation, amortisation, exceptional items, other operating
income, share-based payment charges and share of result of equity
accounted investees. See note 10 for reconciliation.
Revised Segmental Structure
As reported in the Group's final results for the year ended 31
July 2020, the Group has been reorganised into a new segmental
structure in order to better align with key areas of future
transport industry growth. Segmental performance in both the
current and prior periods reflects the new segmental structure, as
summarised below:
Rail Technology & Services
-- Rail Operations & Planning (includes Bellvedi)
-- Digital Railway / Infrastructure
o Remote condition monitoring hardware and data acquisition
(MPEC)
o Safety and risk management software and asset visualisation
(OnTrac)
-- Customer Experience
o Transit and ticketing solutions (iBlocks)
o Automated delay repay
Data, Analytics, Consultancy & Events
-- Traffic Data Capture & Analysis
-- Event Transport Planning and Management (includes SEP and CTM)
-- Data Analytics / GIS (Compass Informatics)
-- Transport Consultancy (includes Tracsis Passenger Analysis)
Data Analytics / GIS and Transport Consultancy operate across
the whole of the Group, but are reported within the Data,
Analytics, Consultancy & Events segment. The Group's previous
segmental structure included Rail Consultancy within the Rail
Technology & Services segment.
Trading Progress and Prospects
Rail Technology & Services
Activity levels in this segment remain high. The Covid-19
pandemic has resulted in a significant decrease in rail passenger
numbers, however this has had only a modest impact on Tracsis'
performance as the majority of our products and services are
derived from the operational requirements of running and
maintaining the railway. They are integral to the rail industry
delivering its future vision for a digital railway. Our first half
performance demonstrates the robustness of our business model in
this regard and we have a significant pipeline of future
opportunities.
Summary segment results:
Revenue GBP12.1m (H1 2020: GBP10.9m)
Adjusted EBITDA* GBP3.8m (H1 2020: GBP3.9m)
Profit before Tax GBP3.4m (H1 2020: GBP3.8m)
The Division has delivered further revenue growth in the period.
It continues to benefit from high levels of recurring software
revenue, and revenue from multi-year contract wins in previous
years. The impact of Covid-19 was limited to delay repay revenues,
with fewer people travelling due to Government restrictions. This
was more than offset by the contribution from iBlocks, the smart
ticketing business acquired in March 2020. Adjusted EBITDA* margin
of 31% was lower than the comparative period last year, reflecting
the phasing of contract milestones for development work undertaken
in the period. These milestones will be delivered in the second
half of this financial year.
We have two large rail opportunities in the final stages of
contract awards, and all parts of the Division have been involved
in major multi-year tenders, some in international markets. Many of
these opportunities involve recurring software licence
revenues.
Rail Operations & Planning
Total revenues from the Group's rail operations & planning
software and hosting offerings were GBP4.9m (H1 2020: GBP4.8m).
This takes account of the various revenue streams from our TRACS,
ATTUne, COMPASS, and Retail & Operations product suites.
Software sales continue to benefit from high renewal rates from
existing customers, and also from multi-year contract wins from
previous years which we are currently implementing for our clients.
Work continues on implementing our TRACS Enterprise product at
three major Train Operating Companies which were secured in
previous years, and which are expected to go-live during the
summer. Bellvedi continues to perform well, and the ATTUne product
forms an integral part of the overall TRACS Enterprise solution. We
continue to see large multi-year TRACS Enterprise opportunities in
both the passenger and freight sectors of the industry.
Digital Railway & Infrastructure
Total revenues across the Digital Railway and Infrastructure
offerings increased by 9% to GBP5.8m (H1 2020: GBP5.3m). This
includes the revenue from remote condition monitoring (MPEC) which
continued to see strong demand from our core UK client base, and
from our safety and risk management product suites within OnTrac
where activity was dominated by design and development work on our
RailHub product suite as part of a funded enterprise licence
opportunity. Both businesses have a strong pipeline of large
contract opportunities.
Post period end we announced the award of new contracts for the
supply of remote condition monitoring hardware and software to a
major North American transit agency, which will expand our
installed base into a new growth market.
Rail Customer Experience
Revenue of GBP1.4m increased by GBP0.6m (H1 2020: GBP0.8m). As
anticipated, the reduction in rail passenger numbers as a result of
Covid-19 restrictions resulted in a reduction in delay repay
transaction revenues. This business continues to operate from a
modest cost base. The decrease in revenue from delay repay was more
than offset by the revenue contribution from iBlocks which was
acquired in March 2020. We are seeing good levels of interest in
iBlocks' smart ticketing product offering, which is well aligned
with future passenger requirements as Covid-19 restrictions are
lifted. We have a number of contract opportunities under
discussion.
Data, Analytics, Consultancy & Events
As anticipated, the Covid-19 restrictions continue to have a
significant impact on the end markets of our Events and Traffic
Data businesses. In both cases, we believe the underlying demand
remains strong and that activity levels will progressively return
to normal as restrictions are lifted. The timing of this remains
uncertain, and we therefore retain a cautious outlook for the
second half of this financial year.
The Data Analytics / GIS market continues to offer attractive
opportunities for growth and has been largely unaffected by
Covid-19. We have a strong pipeline of opportunities and are
actively looking to expand our capability and client base to
accelerate growth in this area.
Our consultancy business continues to perform well and has been
strengthened by the post period end acquisition of Flash Forward
Consulting and the subsequent launch of a broader Transport
Consultancy offering.
Summary segment results:
Revenue GBP10.2m (H1 2020: GBP15.5m)
Adjusted EBITDA* GBP1.6m (H1 2020: GBP1.6m)
Profit before Tax GBP1.2m (H1 2020: GBP1.1m)
The Data, Analytics, Consultancy & Events Division has
performed in line with management's expectations, despite ongoing
Covid-19 related challenges. As anticipated, there was lower
activity in the Events and Traffic Data businesses as a result of
the impact of restrictions on their end markets. Cost reduction
measures have been implemented in this part of the Group to ensure
that we proactively manage the cost base through this period. There
was good growth in our data analytics / GIS revenue where activity
levels have been unaffected by the pandemic. Despite lower revenue,
adjusted EBITDA* was maintained in line with H1 20 as a result of
the cost reduction actions.
Traffic Data
H1 21 revenue of GBP3.2m was GBP2.1m lower than the prior year
(H1 20: GBP5.3m). This was due to the impact of Covid-19 related
restrictions, which resulted in work being postponed or cancelled
as the prevailing traffic conditions were not representative of
client needs. The main exception was the National Road Traffic
Census which has continued and was a valuable source of revenue in
the period. Work on the Spring and Summer 2021 elements of this has
now started.
Event Transport Planning & Management
Revenues were significantly impacted by Covid-19, with a number
of events cancelled or postponed due to the pandemic. As a result,
revenue of GBP2.2m in the first half was GBP3.3m lower than the
same period last year (H1 20: GBP5.5m). Despite these headwinds,
there remains a level of underlying activity that has supported the
business through this challenging period. Additionally the business
has won new work with new and existing customers, which will help
to support H2 and future revenues. However, overall activity levels
remain significantly lower than normal while Covid restrictions are
in place.
Data Analytics / GIS
Compass Informatics has continued to perform well in the period,
delivering GBP3.0m revenue in the first half (H1 2020: GBP2.6m)
with high activity levels across Irish and UK customers. In the
period Compass Informatics went 'live' with an innovative new
product that is now used by three water utilities to manage the
regulated use of biosolids in agriculture, and continued to develop
a range of innovative mobile apps and data analytics tools for
other clients across the rail, bus, environmental and utilities
sectors. The business has a strong pipeline of new
opportunities.
Transport Consultancy
Consultancy revenues of GBP1.8m compare with GBP2.1m in the same
period last year. Rail Consultancy revenue increased by 12%,
however this was offset by lower activity in Passenger Analytics.
Post period-end, the Group's consulting offering across the
transport industries was expanded through the acquisition of Flash
Forward Consulting. The combined business was launched as Tracsis
Transport Consultancy on 1(st) March 2021, and will offer
consultancy services that cover all areas of the Group.
Strategy Update
The Group's growth strategy is unchanged, and is focused on
organic growth supplemented by M&A.
Organic Growth
There are opportunities for continued growth in all areas of the
Rail Technology & Services Division, supported by strong market
fundamentals. All of our rail businesses are involved in major
multi-year tenders, which give us confidence in our ability to
continue to drive organic growth. Our strategy is to pursue growth
opportunities in each of the four areas outlined below, supported
by collaborative product development and increased levels of
cross-selling:
-- Operational Performance Software
-- Remote Condition Monitoring
-- Safety and Risk Management Software and Asset Visualisation
-- Smart Ticketing
In the Data, Analytics, Consultancy & Events Division we are
focused on growing our Data Analytics / GIS and Consultancy
businesses through targeted investment, and on maximising the
'bounce back' in our Events and Traffic Data business units as the
Covid recovery continues.
Acquisitions
Our strategy is to continue to supplement organic growth with
M&A, with a focus on software, technology and Data
Analytics/GIS businesses that have a good level of high quality,
recurring revenue. Our M&A strategy is supported by a strong
balance sheet and good levels of cash generation, and we continue
to actively pursue acquisition opportunities.
On 26 February 2021 we completed the acquisition of Flash
Forward Consulting Ltd, a UK based transport consultancy business
operating predominantly across the rail and bus sectors. It has a
well-established senior level network across the transport owning
groups, local and central transport governing authorities and
Network Rail, and offers a range of strategic and practical
technical consulting services. The acquisition expands the Group's
consulting offering to customers across the transport
industries.
Operations
Alongside executing this growth strategy, the Group continues to
make progress in implementing a more closely integrated operating
model. A shared services model has been adopted in core support
functions including health & safety, HR, risk management and
quality. This will be extended to the finance function in the
second half of this financial year. The Innovation Hub launched
last year is facilitating enhanced R&D collaboration across the
Group and post period end a new Group-wide brand was launched that
ensures all parts of the Group will share a consistent brand
identity which will broaden the awareness of the Group's breadth of
products and services across the transport industry.
Covid-19
The impact of the Covid pandemic has been felt most in our Data,
Analytics, Consultancy and Events Division, where activity levels
in the Events and Traffic Data end markets have decreased as a
result of the ongoing restrictions. We expect these activity levels
to progressively return to normal as restrictions are lifted. The
impact of the pandemic on the Rail Technology & Services
Division has been modest as the majority of our products and
services are derived from the operational requirements of running
the railway, rather than being directly linked to revenue from
passenger numbers. The estimated total adverse impact to revenue
from Covid-19 for the Group as a whole in H1 21 was GBP6.1m. We
have implemented cost reduction actions in response to the
pandemic, and have utilised the UK furlough scheme to minimise
permanent headcount reductions.
Our priority throughout the pandemic has been to safeguard the
health, welfare and safety of our people and to protect as many
jobs as possible. The response of our teams has been outstanding.
We have largely moved to remote homeworking across the Group,
whilst ensuring that our product and service offerings have been
able to continue. Health and wellbeing support was implemented and
is ongoing and we conduct regular employee surveys to ensure that
we can quickly respond to any areas of concern. We have followed
Government guidelines to implement health & safety and social
distancing measures, to ensure that all of our sites are
Covid-secure.
Dividend
The Board does not consider it appropriate to pay an interim
dividend for the six months ended January 2021. The Board is
committed to restoring the progressive dividend policy at the
earliest appropriate date.
Board
Further to the announcement on 28 September 2020, Andy Kelly was
appointed Chief Financial Officer post-period end on 1 February
2021, replacing Max Cawthra. The Board would like to thank Max for
his significant contribution to Tracsis over the past decade.
Financial position
The Group continues to have significant levels of cash and
remains debt free. Cash balances at 31 January 2021 were GBP20.8m
(31 July 2020: GBP17.9m, 31 January 2020: GBP26.0m). Cash
generation remains strong; net cash flow from operating activities
of GBP3.6m was GBP0.9m higher than H1 20 reflecting favourable
movements in working capital that reflect normal trading patterns.
The Group has paid all VAT, PAYE and Corporation Tax due in the
period and has not taken advantage of any Government support in
respect of taxes. It has claimed grant money in respect of
furloughed staff in the period, with support to the Income
Statement of GBP0.5m.
A summary of cash flows is set out below:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 January 31 January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------- ------------ ------------ ---------
Net cash flow from operating
activities 3,587 2,670 10,553
Net cash flow used in investing
activities (63) (279) (15,401)
Net cash flow used in financing
activities (660) (450) (1,336)
Movement during the period 2,864 1,941 (6,184)
--------------------------------- ------------ ------------ ---------
Summary and Outlook
The Board was pleased with the first half performance, with
continued growth in Rail Technology & Services, and Group
adjusted EBITDA* maintained close to H1 last year despite revenue
headwinds in the Data, Analytics, Consultancy & Events
Division.
We begin the second half of the year with confidence in the
strength of our financial position and with high activity levels
across large parts of the Group. There has been an encouraging
start to Q3 trading. The Board's expectations for the year to 31
July 2021 remain unchanged.
Activity levels are high in our Rail Technology and Data
Analytics / GIS businesses with high levels of recurring revenues.
We are making good progress in delivering multi-year contracts that
were won in prior years, and are in the latter stages of contract
award for two large multi-year rail opportunities. We are involved
in large multi-year tenders in our rail businesses, and post period
end we have won new contracts for the supply of remote condition
monitoring hardware and software to a major North American transit
agency.
We believe activity levels in the Events and Traffic Data
businesses will progressively return to normal as Covid-19
restrictions are lifted. The timing of this remains uncertain, and
we therefore retain a cautious outlook for the second half of this
financial year for these businesses. We will continue to
proactively manage costs whilst the Covid-19 pandemic impacts the
Group.
Our strategy has not changed and we remain committed to our
growth and investment plans. The positive growth drivers in our
core markets are unchanged, and we believe that there are good
opportunities for Tracsis to deliver sustainable revenue growth
while continuing to drive strong cash performance and continuing to
pursue M&A opportunities.
Chris Cole Chris Barnes
Non-Executive Chairman Chief Executive Officer
8 April 2021
Tracsis plc
Condensed consolidated interim income statement for the six
months ended 31 January 2021
Unaudited Unaudited
6 months 6 months Audited
ended 31 ended Year
January 31 January ended
2021 2020 31 July
2020
Note
GBP'000 GBP'000 GBP'000
Revenue 3 22,239 26,365 47,998
Cost of sales (6,007) (10,463) (16,796)
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Gross profit 16,232 15,902 31,202
Administrative costs (14,624) (13,291) (26,779)
3,
Adjusted EBITDA * 10 5,431 5,586 10,463
Depreciation (776) (781) (1,882)
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Adjusted profit ** 10 4,655 4,805 8,581
Amortisation of intangible
assets (2,126) (1,628) (3,599)
Other operating income - - 376
Share-based payment charges (665) (566) (1,050)
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Operating profit before
exceptional
items 1,864 2,611 4,308
Exceptional items:
Impairment losses 4 - - (1,155)
Other 4 (256) - 1,270
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Operating profit 1,608 2,611 4,423
Finance income 6 42 76
Finance expense 5 (408) (30) (79)
Share of result of equity
accounted investees (104) (204) (309)
Profit before tax 1,102 2,419 4,111
Taxation (325) (472) (1,234)
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Profit for the period 777 1,947 2,877
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Other comprehensive income
Foreign currency translation
differences (49) (71) 21
Total recognised income for
the period 728 1,876 2,898
-------------------------------- ----- ----------------------------------------------- ------------ ----------
Earnings per ordinary share
Basic 6 2.66p 6.76p 9.95p
Diluted 6 2.58p 6.56p 9.67p
* Earnings before finance income and expense, tax, depreciation,
amortisation, exceptional items, other operating income,
share-based payment charges and share of result of equity accounted
investees - see note 10
** Earnings before finance income and expense, tax,
amortisation, exceptional items, other operating income,
share-based payment charges, and share of result of equity
accounted investees. - see note 10
Tracsis plc
Condensed consolidated interim balance sheet as at 31 January
2021
Unaudited Unaudited Audited
At 31 January At 31
At 31 January July
2021 2020 2020
Note GBP'000 GBP'000 GBP'000
------------------------------------------- ----- -------------- -------------- --------
Non-current assets
Property, plant and equipment 3,312 3,564 3,581
Intangible assets 52,251 37,184 54,376
Investments - equity 50 350 50
Loans due from associated undertakings - 250 -
Investments in equity accounted
investees 935 894 1,039
Deferred tax assets 1,035 744 877
------------------------------------------- ----- -------------- --------------
57,583 42,986 59,923
------------------------------------------- ----- -------------- -------------- ----------
Current assets
Inventories 386 384 430
Trade and other receivables 7,335 8,452 6,382
Cash and cash equivalents 20,784 26,045 17,920
------------------------------------------- ----- -------------- -------------- ----------
28,505 34,881 24,732
------------------------------------------- ----- -------------- -------------- ----------
Total assets 86,088 77,867 84,655
------------------------------------------- ----- -------------- -------------- ----------
Non-current liabilities
Lease liabilities 883 689 986
Contingent consideration payable 11 6,216 4,975 5,587
Deferred tax liabilities 7,828 5,701 8,234
14,927 11,365 14,807
------------------------------------------- ----- -------------- -------------- ----------
Current liabilities
Lease liabilities 1,025 931 1,128
Trade and other payables 13,160 13,329 13,509
Contingent consideration payable 11 1,653 1,151 1,747
Current tax liabilities 891 793 439
------------------------------------------- ----- -------------- -------------- ----------
16,729 16,204 16,823
------------------------------------------- ----- -------------- -------------- ----------
Total liabilities 31,656 27,569 31,630
------------------------------------------- ----- -------------- -------------- ----------
Net assets 54,432 50,298 53,025
------------------------------------------- ----- -------------- -------------- ----------
Equity attributable to equity holders of the Company
Called up share capital 117 115 116
Share premium reserve 6,386 6,364 6,373
Merger reserve 5,420 3,921 5,420
Retained earnings 42,520 39,952 41,078
Translation reserve (11) (54) 38
------------------------------------------- ----- -------------- -------------- ----------
Total equity 54,432 50,298 53,025
------------------------------------------- ----- -------------- -------------- ----------
Tracsis plc - Consolidated statement of changes in equity
For the six months ended 31 January 2021
Unaudited Share
Share Premium Merger Retained Translation
Capital Reserve Reserve Earnings Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 August
2019 115 6,343 3,921 37,545 17 47,941
Impact on
initial
application
of IFRS
16 (net of
tax) - - - (106) - (106)
Total
comprehensive
income for the
period
Profit for the
six
month period
ended
31 January
2020 - - - 1,947 - 1,947
Other
comprehensive
income for
the period
ended 31
January
2020 - - - - (71) (71)
--------------- --------- ---------------------- ------- ------------------------- ----- -------
Total
Comprehensive
income for
the period - - - 1,947 (71) 1,876
--------------- --------- ---------------------- ------- ------------------------- ----- -------
Transactions
with
owners of the
Company
Share based
payment
charges - - - 566 - 566
Exercise of
share
options - 21 - - - 21
--------------- --------- ---------------------- ------- ------------------------- ----- -------
At 31 January
2020 115 6,364 3,921 39,952 (54) 50,298
--------------- --------- ---------------------- ------- ------------------------- ----- -------
Audited
--------------- --------- ------------------ ------- ------------------------- -----
At 1 August
2019 115 6,343 3,921 37,545 17 47,941
Impact on
initial
application
of IRS 16
(net of tax) - - - (106) - (106)
Total
comprehensive
income for the
period
Profit for the
year
ended 31 July
2020 - - - 2,877 - 2,877
Other
comprehensive
income for
the year
ended 31 July
2020 - - - - 21 21
--------------- --------- -------------- ------ ------- ------------------------- --------------
Total
Comprehensive
income for
the period - - - 2,877 21 2,898
--------------- --------- -------------- ------ ------- ------------------------- --------------
Transactions
with owners
of the
Company
Dividends - - - (288) - (288)
Share based
payment
charges - - - 1,050 - 1,050
Exercise of
share options - 30 - - - 30
Shares issued
as
consideration
for business
combinations 1 - 1,499 - - 1,500
--------------- --------- -------------- ------ ------- ------------------------- --------------
At 31 July
2020 116 6,373 5,420 41,078 38 53,025
--------------- --------- -------------- ------ ------- ------------------------- --------------
Tracsis plc - Consolidated statement of changes in equity
(continued)
For the six months ended 31 January 2021
Unaudited Share
Share Premium Merger Retained Translation
Capital Reserve Reserve Earnings Reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 August
2020 116 6,373 5,420 41,078 38 53,025
Total
comprehensive
income for the
period
Profit for the
six
month period
ended
31 January
2021 - - - 777 - 777
Other
comprehensive
income for
the period
ended 31
January
2021 - - - - (49) (49)
--------------- ---------- --------- ---------- ----------- ------------- --------
Total
Comprehensive
income for
the period - - - 777 (49) 728
--------------- ---------- --------- ---------- ----------- ------------- --------
Transactions
with
owners of the
Company
Share based
payment
charges - - - 665 - 665
Exercise of
share
options 1 13 - - - 14
--------------- ---------- --------- ---------- ----------- ------------- --------
At 31 January
2021 117 6,386 5,420 42,520 (11) 54,432
--------------- ---------- --------- ---------- ----------- ------------- --------
Tracsis plc
Condensed consolidated interim statement of cash flows for the
six months to 31 January 2021
Unaudited Unaudited
Six months Six months Audited
to to Year ended
31 July
31 Jan 2021 31 Jan 2020 2020
Note GBP'000 GBP'000 GBP'000
----------------------------------------- ----- ------------ ------------ ------------
Operating activities
Profit for the period 777 1,947 2,877
Finance income (6) (42) (76)
Finance expense 408 30 79
Depreciation 776 781 1,882
Profit on disposal of plant & equipment - - (12)
Non-cash exceptional items 172 - (320)
Other operating income - - (376)
Amortisation of intangible assets 2,126 1,628 3,599
Effect of foreign exchange adjustments (49) (71) 21
Share of result of equity accounted
investees 104 204 309
Income tax charge 325 472 1,234
Share based payment charges 665 566 1,050
----------------------------------------- ----- ------------ ------------ ------------
Operating cash inflow before changes
in working capital 5,298 5,515 10,267
Movement in inventories 44 (3) (49)
Movement in trade and other receivables (967) 1,219 5,121
Movement in trade and other payables (356) (3,571) (3,875)
----------------------------------------- ----- ------------ ------------ ------------
Cash generated from operations 4,019 3,160 11,464
Interest received 4 42 76
Interest paid - (30) (79)
Income tax paid (436) (502) (908)
----------------------------------------- ----- ------------ ------------ ------------
Net cash flow from operating activities 3,587 2,670 10,553
----------------------------------------- ----- ------------ ------------ ------------
Investing activities
Purchase of plant and equipment (63) (222) (387)
Proceeds from disposal of plant
and equipment - - 66
Acquisition of subsidiaries (net
of cash acquired) - - (13,852)
Payment of contingent consideration 11 - (57) (1,228)
Net cash flow used in investing
activities (63) (279) (15,401)
----------------------------------------- ----- ------------ ------------ ------------
Financing activities
Dividends paid - - (288)
Proceeds from the exercise of share
options 14 21 30
Lease liability payments (688) (471) (1,089)
Lease liability receipts 14 - 11
Net cash flow used in financing
activities (660) (450) (1,336)
----------------------------------------- ----- ------------ ------------ ------------
Net increase/(decrease) in cash
and cash equivalents 2,864 1,941 (6,184)
Cash and cash equivalents at beginning
of period 17,920 24,104 24,104
Cash and cash equivalents at end
of period 20,784 26,045 17,920
----------------------------------------- ----- ------------ ------------ ------------
Notes to the consolidated interim report
For the six months ended 31 January 2021
1 Basis of preparation
Tracsis plc (the 'Company') is a company domiciled in England.
The condensed consolidated interim financial report of the Company
as at and for the six months ended 31 January 2021 comprises the
Company and its subsidiaries (together referred to as the 'Group').
The principal activities of the Group are the provision of
software, services and technology for the rail industry ('Rail
Technology & Services'), along with traffic surveys,
consultancy, event planning and traffic management, and data
analytics including software development ('Data, Analytics,
Consultancy & Events) (see note 3).
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
year ended 31 July 2020, which have been prepared in accordance
with International Financial Reporting Standards ("IFRS") as
adopted by the European Union.
These interim condensed consolidated financial statements and
accompanying notes are neither audited nor reviewed, do not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006 and do not include all the information and
disclosures required in annual statutory financial statements. They
should be read in conjunction with the Group's Annual Report and
Accounts for the year ended 31 July 2020 which are available on the
Group's website. Those statutory accounts were approved by the
Board of Directors on 4 December 2020 and have been filed with
Companies House. The report of the auditors on those accounts was
unqualified.
The principal risks and uncertainties are largely unchanged from
the previous year. These risks and uncertainties are expected to be
unchanged for the remainder of the financial year. Further details
are provided on pages 9 to 13 of the Annual Report & Accounts
for the year ended 31 July 2020. The Board considers risks on a
periodic basis and has maintained the key risks as follows, on a
Group wide basis:
-- Rail industry structure changes
-- Project Delivery
-- Cyber Security Incident
-- Attraction and retention of key employees
-- Technological changes
-- Brand reputation
-- Regulatory breach
-- Coronavirus (Covid-19) - disruption to the Data, Analytics, Consultancy and Events Division
-- Reduced government spending
-- Reliance on certain key customers
-- Competition
-- Health & Safety
-- Customer pricing pressure
-- Integration risk
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, the Directors continue to adopt
the going concern basis in preparing this interim financial
information. The Group is debt free and has substantial cash
resources. At 31 January 2021 the Group had net cash and cash
equivalents totalling GBP20.8m. The Board has considered future
cash flow requirements taking into account reasonably possible
changes in trading financial performance amid the timing
uncertainty related to the recovery from Covid-19.
The condensed consolidated interim financial information was
approved for issue on 8 April 2021.
2 Accounting Policies
The accounting policies applied by the Group in these interim
financial statements are the same as those applied by the Group in
its audited consolidated financial statements for the year ended 31
July 2020 and which will form the basis of the 2021 Annual Report.
The basis of consolidation is set out in the Group's accounting
policies in those financial statements.
The preparation of the interim financial statements requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expenses. Estimates
and judgements are continually evaluated and are based on
historical experience and other factors, such as expectations of
future events and are believed to be reasonable under the
circumstances. Actual results may differ from these estimates. In
preparing these interim financial statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those applied to the audited consolidated financial
statements for the year ended 31 July 2020.
There have been no new accounting standards or changes to
existing accounting standards applied for the first time from 1
August 2020 which have a material effect on these interim results.
The Group has chosen not to early adopt any new standards or
amendments to existing standards or interpretations.
3 Revenue and Segmental analysis
a) Revenue
Sales revenue is summarised below:
Six months Six months Year
ended ended Ended
31 January 31 January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
--------------------------------------- ----------- ----------- --------
Rail Technology & Services 12,057 10,903 23,441
Data, Analytics, Consultancy & Events 10,182 15,462 24,557
Total revenue 22,239 26,365 47,998
--------------------------------------- ----------- ----------- --------
Sales revenue has been split between the Rail Technology &
Services segment and the Data, Analytics, Consultancy & Events
segment for these interim results. See note 3b for further detail
of this change. Comparative periods have been re-stated to reflect
these segments.
A geographical analysis of revenue is provided below:
Six months Six months Year
ended 31 ended 31 ended
January January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
------------------- ----------- ----------- ---------
United Kingdom 18,723 23,621 41,529
Europe 3,338 2,611 6,127
North America 21 75 57
Rest of the World 157 58 285
Total 22,239 26,365 47,998
------------------- ----------- ----------- ---------
b) Segmental Analysis
As reported in the Group's final results for the year ended 31
July 2020, the Group has been reorganised into a new segmental
structure in order to align with key areas of future transport
industry growth. The Group has divided its results into two
segments being 'Rail Technology & Services' and 'Data,
Analytics, Consultancy & Events'. The comparatives included in
these interim results have been re-stated to reflect the new
segmental structure.
In accordance with IFRS 8 'Operating Segments', the Group has
made the following considerations to arrive at the disclosure made
in these financial statements. IFRS 8 requires consideration of the
Chief Operating Decision Maker ("CODM") within the Group. In line
with the Group's internal reporting framework and management
structure, the key strategic and operating decisions are made by
the Board of Directors, who review internal monthly management
reports, budgets and forecast information as part of this.
Accordingly, the Board of Directors are deemed to be the CODM.
Operating segments have then been identified based on the
internal reporting information and management structures within the
Group. From such information it has been noted that the CODM
reviews the business as two operating segments, receiving internal
information on that basis. The management structure and allocation
of key resources, such as operational and administrative resources,
are arranged on a centralised basis.
Reconciliations of reportable segment revenues, profit or loss,
assets and liabilities and other material items
Information regarding the results of the reportable segments is
included below. Performance is measured based on segment profit
before income tax, as included in the internal management reports
that are reviewed by the Board of Directors. Segment profit is used
to measure performance. There are no material inter-segment
transactions, however, when they do occur, pricing between segments
is determined on an arm's length basis. Revenues disclosed below
materially represent revenues to external customers.
Six months ended 31 January 2021
Rail Technology Data, Analytics,
& Services Consultancy Unallocated
& Events Total
GBP000 GBP000 GBP000 GBP000
------------------------------------ ---------------- ----------------- -------------- --------
Revenues
Total revenue for reportable
segments 12,057 10,182 - 22,239
Consolidated revenue 12,057 10,182 - 22,239
------------------------------------ ---------------- ----------------- -------------- --------
Profit or loss
EBITDA for reportable segments 3,790 1,641 - 5,431
Amortisation of intangible
assets - - (2,126) (2,126)
Depreciation (355) (421) - (776)
Exceptional Items (net) - - (256) (256)
Share-based payment charges - - (665) (665)
Share of result of equity
accounted investees - - (104) (104)
Interest receivable/payable(net) (21) (18) (363) (402)
------------------------------------ ---------------- ----------------- -------------- --------
Consolidated profit before
tax 3,414 1,202 (3,514) 1,102
------------------------------------ ---------------- ----------------- -------------- --------
Six months ended 31 January 2020
Rail Technology Data, Analytics,
& Services Consultancy Unallocated
& Events Total
GBP000 GBP000 GBP000 GBP000
--------------------------------------- ---------------- ----------------- -------------- --------
Revenues
Total revenue for reportable
segments 10,903 15,462 - 26,365
Consolidated revenue 10,903 15,462 - 26,365
--------------------------------------- ---------------- ----------------- -------------- --------
Profit or loss
EBITDA for reportable segments 3,944 1,642 - 5,586
Amortisation of intangible
assets - - (1,628) (1,628)
Depreciation (222) (559) - (781)
Share-based payment charges - - (566) (566)
Share of result of equity accounted
investees - - (204) (204)
Interest receivable/payable(net) 30 (18) - 12
--------------------------------------- ---------------- ----------------- -------------- --------
Consolidated profit before tax 3,752 1,065 (2,398) 2,419
--------------------------------------- ---------------- ----------------- -------------- --------
Year ended 31 July 2020
Rail Technology Data, Analytics,
& Services Consultancy
& Events Unallocated Total
GBP000 GBP000 GBP000 GBP000
------------------------------------ -------------------------- ----------------- -------------- ---------
Revenues
Total revenue for reportable
segments 23,441 24,557 - 47,998
Consolidated revenue 23,441 24,557 - 47,998
------------------------------------ -------------------------- ----------------- -------------- ---------
Profit or loss
EBITDA for reportable segments 8,633 1,830 - 10,463
Amortisation of intangible
assets - - (3,599) (3,599)
Depreciation (589) (1,293) - (1,882)
Exceptional items (net) - - 115 115
Other operating income - - 376 376
Share-based payment charges - - (1,050) (1,050)
Interest receivable/payable(net) 33 (36) - (3)
Share of results of equity
accounted investees - - (309) (309)
Consolidated profit before
tax 8,077 501 (4,467) 4,111
------------------------------------ -------------------------- ----------------- -------------- ---------
31 January 2021
Rail Technology Data, Analytics,
& Services Consultancy
& Events Unallocated Total
GBP'000 GBP000 GBP000 GBP000
------------------------------------ -------------------------- ----------------- -------------- -----------
Assets
Total assets for reportable
segments (exc. cash) 5,676 5,357 - 11,033
Intangible assets and investments - - 53,236 53,236
Deferred tax assets - - 1,035 1,035
Cash and cash equivalents 12,563 6,093 2,128 20,784
Consolidated total assets 18,239 11,450 56,399 86,088
------------------------------------ -------------------------- ----------------- -------------- -----------
Liabilities
Total liabilities for reportable
segments (11,836) (4,123) - (15,959)
Deferred tax - - (7,828) (7,828)
Contingent consideration - - (7,869) (7,869)
Consolidated total liabilities (11,836) (4,123) (15,697) (31,656)
------------------------------------ -------------------------- ----------------- -------------- -----------
31 January 2020
Rail Data,
Technology Analytics,
& Services Consultancy Unallocated Total
& Events
GBP'000 GBP000 GBP000 GBP000
----------------------------------- ---------------------- ------------- -------------- ---------
Assets
Total assets for reportable
segments (exc. cash) 4,854 7,546 - 12,400
Intangible assets and investments - - 38,678 38,678
Deferred tax assets - - 744 744
Cash and cash equivalents 10,426 4,803 10,816 26,045
Consolidated total assets 15,280 12,349 50,238 77,867
----------------------------------- ---------------------- ------------- -------------- ---------
Liabilities
Total liabilities for reportable
segments (10,603) (5,139) - (15,742)
Deferred tax - - (5,701) (5,701)
Contingent consideration - - (6,126) (6,126)
Consolidated total liabilities (10,603) (5,139) (11,827) (27,569)
----------------------------------- ---------------------- ------------- -------------- ---------
31 July 2020
Rail Data,
Technology Analytics,
& Services Consultancy Unallocated Total
& Events
GBP'000 GBP000 GBP000 GBP000
----------------------------------- ---------------------- ------------- -------------- ---------
Assets
Total assets for reportable
segments (exc. cash) 5,070 5,323 - 10,393
Intangible assets and investments - - 55,465 55,465
Deferred tax assets - - 877 877
Cash and cash equivalents 11,103 4,827 1,990 17,920
Consolidated total assets 16,173 10,150 58,332 84,655
----------------------------------- ---------------------- ------------- -------------- ---------
Liabilities
Total liabilities for reportable
segments (11,562) (4,500) - (16,062)
Deferred tax - - (8,234) (8,234)
Contingent consideration - - (7,334) (7,334)
Consolidated total liabilities (11,562) (4,500) (15,568) (31,630)
----------------------------------- ---------------------- ------------- -------------- ---------
4 Exceptional items
Six months Six months Year
ended 31 ended 31 ended
January January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
---------------------------------------- ----------- ----------- ---------
Impairment losses - - 1,155
Contingent consideration fair value
adjustment 172 - (1,475)
Legal and professional fees in respect
of acquisitions(1) 84 - 205
Total 256 - (115)
---------------------------------------- ----------- ----------- ---------
(1) Legal and professional fees incurred in relation to the
acquisition of Flash Forward Consulting Limited, which completed on
26 February 2021
5 Finance Costs
Six months Six months Year
ended 31 ended 31 ended
January January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
-------------------------------------- ----------- ----------- ---------
Interest on lease liabilities 38 30 73
Net foreign exchange loss 7 - 6
Unwind of discount on liabilities(1) 363 - -
Total 408 30 79
-------------------------------------- ----------- ----------- ---------
(1) See note 11 Contingent Consideration
6 Earnings per share
Basic earnings per share
The calculation of basic earnings per share for the Half Year to
31 January 2021 was based on the profit attributable to ordinary
shareholders of GBP777,000 (Half Year to 31 January 2020:
GBP1,947,000, Year ended 31 July 2020: GBP2,877,000) and a weighted
average number of ordinary shares in issue of 29,163,000 (Half Year
to 31 January 2020: 28,795,000, Year ended 31 July 2020:
28,919,000), calculated as follows:
Weighted average number of ordinary shares
In thousands of shares
Six months Six months Year
ended 31 ended 31 ended
January January 31 July
2021 2020 2020
Issued ordinary shares at start of period 29,123 28,749 28,749
Effect of shares issued related to business
combinations - - 76
Effect of shares issued for cash 40 46 94
Weighted average number of shares at
end of period 29,163 28,795 28,919
--------------------------------------------- ----------- ----------- ---------
Diluted earnings per share
The calculation of diluted earnings per share for the Half Year
to 31 January 2021 was based on the profit attributable to ordinary
shareholders of GBP777,000 (Half Year to 31 January 2020:
GBP1,947,000, Year ended 31 July 2020: GBP2,877,000) and a weighted
average number of ordinary shares in issue after adjustment for the
effects of all dilutive potential ordinary shares of 30,149,000
(Half Year to 31 January 2020: 29,665,000, Year ended 31 July 2020:
29,740,000).
Adjusted EPS
In addition, Adjusted Profit EPS is shown below on the grounds
that it is a common metric used by the market in monitoring similar
businesses. A reconciliation of this figure is provided below:
Six months Six months Year
ended 31 ended 31 ended
January January 31 July
2021 2020 2020
GBP'000 GBP'000 GBP'000
Profit attributable to ordinary shareholders 777 1,947 2,877
Amortisation of intangible assets 2,126 1,628 3,599
Share-based payment charges 665 566 1,050
Exceptional items (net) 256 - (115)
Other operating income - - (376)
---------------------------------------------- ----------- ----------- ---------
Adjusted profit for EPS purposes 3,824 4,141 7,035
---------------------------------------------- ----------- ----------- ---------
Weighted average number of ordinary
shares
In thousands of shares
-------------------------------------------- ------- ------- -------
For the purposes of calculating Basic
earnings per share 29,163 28,795 28,919
Adjustment for the effects of all dilutive
potential ordinary shares 986 870 821
-------------------------------------------- ------- ------- -------
For the purposes of calculating Diluted
earnings per share 30,149 29,665 29,740
-------------------------------------------- ------- ------- -------
Basic adjusted earnings per share 13.11p 14.38p 24.33p
Diluted adjusted earnings per share 12.68p 13.96p 23.66p
-------------------------------------------- ------- ------- -------
7 Seasonality
The Group offers a wide range of products and services within
its overall suite, meaning that revenues can fluctuate depending on
the status and timing of certain sales. Some of these are exposed
to high levels of seasonality for example:
-- The Group's Data, Analytics, Consultancy & Events
division derives significant amounts of revenue from work taking
place at certain times of the year and is highly exposed to
seasonality, in particular for SEP and CTM which has a very high
level of seasonality based on the timing of events, but also
Traffic Data where work typically takes place when the weather
conditions are more predictable;
-- Ontrac and Compass Informatics both perform some significant
software development projects and the specific timing of these can
vary depending on the commercial terms;
-- Revenues from remote condition monitoring are also driven by
the size and timing of significant orders received from major
customers;
-- Finally, the timing of certain software licence renewals, new sales, and also major project implementations along with consultancy offerings can also impact on when work is performed, revenues are delivered and therefore recognised.
As such, the overall Group continues to be exposed to a high
degree of seasonality throughout the year and reporting period. It
is anticipated that the impact of Covid-19 will continue to affect
the Group in the second half of this financial year, predominantly
impacting our Events and Traffic Data business units due to ongoing
Covid-19 related restrictions on their end markets. It is expected
that activity levels in the Events and Traffic Data businesses will
progressively return to normal as lockdown restrictions are
lifted.
8 Dividends
The Board does not consider it appropriate to pay an interim
dividend for the six months ended January 2021. The Board is
committed to restoring the progressive dividend policy at the
earliest appropriate date.
9 Related party transactions
The following transactions took place during the year with other
related parties:
Purchase of Amounts owed to
goods and services related parties
H1 2021 H1 2020 FY 2020 H1 2021 H1 2020 FY 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- -------- -------- -------- --------
Citi Logik Limited (1) - - - - - -
Nutshell Software Limited
(1) 26 63 13 63 - -
Vivacity Labs Limited (1) 174 176 404 37 51 4
WSP UK Limited (2) - 5 - - - -
Sale of Amounts owed by
goods and services related parties
H1 2021 H1 2020 FY 2020 H1 2021 H1 2020 FY 2020
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- -------- -------- -------- -------- -------- --------
WSP UK Limited (2) 1,368 1,190 2,706 - 33 495
Citi Logik Limited (1) - - - - - -
Vivacity Labs Limited (1) 1 20 - - - -
Nutshell Software Limited
(1) 15 - 14 10 - -
(1) Citi Logik Limited, Nutshell Software Limited and Vivacity
Labs Limited are related parties by virtue of the Group's
shareholding in these entities.
(2) WSP UK Limited (WSP) is a company which is connected to
Chris Cole who serves as non-executive Chairman of Tracsis plc and
also of WSP Global Inc, WSP's parent company. Sales to WSP took
place at arm's length commercial rates and were not connected to Mr
Cole's position at WSP.
In the financial statements for the year ended 31 July 2020 and
the interim results to 31 January 2020 Nexus Leeds Limited was
identified as a related party through its connection to the
University of Leeds. Having assessed this entity at 31 January 2021
against the criteria set out in IAS 24 Related Party Disclosures
the entity no longer meets the definition of being a related party,
and consequently disclosure of transactions is no longer
required.
10 Reconciliation of adjusted profit metrics
In addition to the statutory profit measures of operating profit
and profit before tax, the Group quotes Adjusted EBITDA and
Adjusted profit. These figures are relevant to the Group and are
provided to provide a comparison to similar businesses and are
metrics used by Equities Analysts who cover the Group as they
better reflect the underlying performance of the Group, and its
ability to generate cash. The largest components of the adjusting
items, being depreciation, amortisation, share based payments, and
share of associates, are 'non cash' items and so are separately
analysed in order to assist with the understanding of underlying
trading. Adjusted EBITDA is defined as earnings before finance
income and expense, tax, depreciation, amortisation, exceptional
items, other operating income, share-based payment charges and
share of result of equity accounted investees. Adjusted EBITDA can
be reconciled to statutory profit before tax as set out below:
Six months Six months
ended 31 ended 31 Year ended
January January 31 July
2021 2020 2020
GBP'000 GBP000 GBP000
------------------------------------- ----------- ----------- -------------
Profit before tax 1,102 2,419 4,111
Finance expense / (income) -
net 402 (12) 3
Share-based payment charges 665 566 1,050
Exceptional items - net 256 - (115)
Other operating income - - (376)
Amortisation of intangible assets 2,126 1,628 3,599
Depreciation 776 781 1,882
Share of result of equity accounted
investees 104 204 309
Adjusted EBITDA 5,431 5,586 10,463
-------------------------------------- ----------- ----------- -------------
Adjusted profit is defined as earnings before finance income and
expense, tax, amortisation, exceptional items, other operating
income, share-based payment charges, and share of result of equity
accounted investees. Adjusted profit can be reconciled to statutory
profit before tax as set out below:
Six months Six months
ended 31 ended 31 Year ended
January January 31 July
2021 2020 2020
GBP'000 GBP000 GBP000
----------------------------- ----------- ----------- -------------
Profit before tax 1,102 2,419 4,111
Finance expense/(income) -
net 402 (12) 3
Share-based payment charges 665 566 1,050
Exceptional items - net 256 - (115)
Other operating income - - (376)
Amortisation of intangible
assets 2,126 1,628 3,599
Share of result of equity
accounted investees 104 204 309
Adjusted profit 4,655 4,805 8,581
------------------------------ ----------- ----------- -------------
Adjusted EBITDA reconciles to adjusted profit as set out
below:
Six months Six months
ended 31 ended 31 Year ended
January January 31 July
2021 2020 2020
GBP'000 GBP000 GBP000
----------------- ----------- ----------- -------------
Adjusted EBITDA 5,431 5,586 10,463
Depreciation (776) (781) (1,882)
Adjusted profit 4,655 4,805 8,581
------------------ ----------- ----------- -------------
11 Contingent Consideration
During the financial year ended 31 July 2019, the Group acquired
Cash & Traffic Management Limited, Compass Informatics Limited
and Bellvedi Limited. Under the share purchase agreements in place
for each of these acquisitions, contingent consideration is payable
which is linked to the profitability of the acquired businesses for
a two to four year period post acquisition. The maximum amount
payable is GBP750,000 for Cash & Traffic Management Limited,
EUR2,000,000 for Compass Informatics Limited and GBP7,900,000 for
Bellvedi Limited. The fair value at 31 January 2021 is assessed at
GBP119,000 for Cash & Traffic Management Limited, GBP1,029,000
for Compass Informatics Limited and GBP3,381,000 for Bellvedi
Limited. In the financial year ended 31 July 2020 the Group
acquired iBlocks Limited. Under the share purchase agreement in
place for this acquisition contingent consideration is payable
which is linked to the profitability of the acquired business for a
three year period post acquisition. The maximum amount payable is
GBP8,500,000, and the fair value of the amount payable was assessed
at GBP3,340,000 at 31 January 2021.
The movement on contingent consideration can be summarised as
follows:
31 January 31 January 31 July
2021 2020 2020
GBP000 GBP000 GBP000
----------------------------------------- ----------- ----------- --------
At the start of the year 7,334 6,183 6,183
Arising on acquisition - - 3,854
Cash payment - (57) (1,228)
Fair value adjustment to Statement
of Comprehensive Income 172 - (1,475)
Unwind of discounting (finance expense) 363 - -
At the end of the period 7,869 6,126 7,334
----------------------------------------- ----------- ----------- --------
The ageing profile of the remaining liabilities can be
summarised as follows:
31 January 31 January 31 July
2021 2020 2020
GBP000 GBP000 GBP000
------------------------------- ----------- ----------- --------
Payable in less than one year 1,653 1,151 1,747
Payable in more than one year 6,216 4,975 5,587
Total 7,869 6,126 7,334
------------------------------- ----------- ----------- --------
12 Events after the Balance Sheet date
On 1 February 2021 Andrew Kelly was appointed to the role of
Chief Financial Officer replacing Max Cawthra who stepped down on
31 January 2021.
On 26 February 2021 the Group acquired Flash Forward Consulting
Limited a transport consultancy busines operating predominantly
across the rail and bus sectors. The overall consideration for this
acquisition was GBP1.5m, plus a further cash payment of circa GBP1m
reflecting the net current asset position of the business. The
Group is currently evaluating the fair value of the assets and
liabilities acquired.
Further information for Shareholders
Company number: 05019106
Registered office: Nexus
Discovery Way
Leeds
LS2 3AA
Directors: Chris Cole (Non-Executive Chairman)
Chris Barnes (Chief Executive Officer)
Andrew Kelly (Chief Financial Officer)
Lisa Charles-Jones (Non-Executive Director)
Liz Richards (Non-Executive Director)
Mac Andrade (Non-Executive Director)
Company Secretary: Andrew Kelly
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