Tracsis revenues ahead of expectations, acquisitions performing well

In a Trading Update today, Tracsis announced its FY 2016 revenues and updated the market on progress across its core business as well as key acquisitions. The positive update highlights that the business is performing in line with expectations and acquired companies appear to be performing well. Full year revenue is comfortably ahead expectations and EBITDA and profit are expected to be in line following the inclusion of one-off costs related to acquisitions and disposals.

Shares are up over 5% in early trading today and have rallied over 23% since the encouraging contract win in North America, announced last week.

Core business and acquisitions performing well

Tracsis highlight that the core business is performing "in line with expectations" and that the two acquired companies, Ontrac and SEP, trading well and performing "to expectation":

"Rail Technology & Services Division...once again experienced good organic growth and continues to expand

Traffic & Data Services Division grew their market position and remain the foremost traffic data business within the UK

Ontrac securing several major orders for its software products, hosting and bespoke development work

SEP experiencing a record year of trading bolstered by a busy summer calendar of events whilst working on several intra-Group technology initiatives"

Tracsis has announced FY 2016 Revenues of £32m with a strong H2 delivering £18m. It highlights this is ahead of expectations but also that it expects EBITDA and profit to be in line following one-offs:

"Revenues for the year were in excess of £32m (2015: £25.4m, a rise of 26%) which is comfortably ahead of market expectations

H2 revenues exceeded £18m (H1 2016: £14.3m), and profitability was also stronger in the second half (H1 2016: EBITDA £3.4m, Adjusted Profit £3.0m)."

Whilst revenue appears to be ahead of market expectations, Management maintain guidance for FY 2016 profits at in line, citing one off costs that the business experieced related to its two acquitions and one disposal:

"Adjusted EBITDA and Adjusted Profit for the year ended 31 July 2016 are expected to be in line with market expectations

Profit before Tax will include the exceptional costs incurred in relation to the acquisitions made (i.e. legal and due diligence costs) and the disposal of the Australian non-core operations which crystallised a non-cash loss."

Another company experiencing no Brexit impact

Tracsis also comment on how trading across the group has been affected by the EU Referendum vote. Like many other companies that have reported recently, it has seen no material impact on trading:

"Following the EU Referendum decision, the Group has not experienced any material change in business activity or demand for its products and services.  Whilst it is too early to assess the long term implications of this decision, the Group has not made any changes to financial forecasts in light of this."