Contract win "extremely encouraging" says finnCap, as it sends shares up 13%
Companies: Trakm8 Holdings PLC
Shares in AIM-listed telematics firm Trakm8 jumped more than 13% on Thursday after the company announced that it had secured an initial contract by a roadside assistance technology firm to supply devices and data.
The deal, expected to launch this July, will see Trakm8 provide services for the client's roadside assistance partners across Europe, starting in the UK and Holland, and is expected to be extended to other markets in Europe afterwards:
"Trakm8 will provide its latest generation Connect 300 plug-in telematics device. Data supplied will be from the Trakm8connectedcare solution to monitor the vehicle health and usage based on Trakm8's extensive automotive diagnostic knowledge."
Trakm8 stock rose markedly on Thursday following the announcement, despite the fact that it didn't include any suggestion of contract value or impact on revenue forecasts. Nonetheless, CEO John Watkins did say it was "significant" and would provide earnings visibility for this financial year and "beyond".
"We are delighted to win another customer for Trakm8's automotive telematics solutions. We have been providing telematics on extended trial with our Trakm8connectedcare product for about 12 months. It is also encouraging that this solution is expected to be offered in multiple countries.
This contract is expected to be a significant one and provides additional visibility for our expectations for this financial year and beyond."
finnCap made no changes to its forecasts "at this stage" but added that it was "extremely" encouraging news:
"Following an extended 12-month trial, the initial contract will see a European launch in July and includes a number of devices, along with integration engineering fees. It will be significant in scale and will provide additional visibility for expectations in the current FY Mar 2018 and beyond."
Trakm8 has had a mixed past 12 months, with a series of poor trading updates hitting the share price significantly. Between November and March, the company had 70% of its value wiped off due to earnings downgrades. Today's news adds to the recent rally, with shares up more than 87% from its February lows.
