Results in-line with February update, but below expectations set out at the start of the year
Companies: Trakm8 Holdings PLC
Shares in Trakm8 fell 6% early on Friday after the AIM-listed telematics provider told investors that its FY results were in-line with expectations but below its original forecasts set out at the start of the year.
Revenues rose 6% Yoy, with like-for-like sales up 7%, to £27m. Adj pre-tax profit is likely to be around £1m. The firm's recurring revenues rose 18% to £9.8m, with new orders up 37% on last year.
finnCap said it was relieved to see that the challenging year had finished in line with expectations set in the February update.
"The year-end net debt was down to £3.9m compared with our forecast £5.1m, assisted by an oversubscribed fundraising of £2.1m in March. After a year plagued by delayed contracts, new orders booked are up 37% YoY and the pipeline of significant opportunities continues to be very strong. Management remains confident in the prospects and continued progress on its strategy to build a major “data-driven insights company” in the transportation and logistics industry. An update on Q1 will be provided with the results in early July.
Investors should be keeping a close eye on Trakm8's financial position after its March £2.1m fundraise to reduce debt and underpin working capital requirements.
"The Directors and senior management invested £0.8m alongside institutional and other investors. As a result at year-end the Group had net debt of £3.9m, including cash and cash equivalents of £2.0m, and also has an available RCF of £3.3m to draw down upon if required."
On a positive note, the firm says it has completed a "substantial" overhead reduction exercise that should generate £1.5m of savings annually.
Executive Chairman John Watkins said the firm had made significant underlying progress despite the disappointment of having results worse than originally forecast at the start of the year. He added that the company had invested for growth and was hopeful of making progress on its strategy in the coming year:
"We have invested for future growth by expanding our engineering, sales and marketing teams, whilst eliminating excess costs. We have successfully integrated all our businesses with a focus on individual market sectors. This increased efficiency is expected to improve our profitability and competitive position in the coming years.
"The recent small placing has strengthened the balance sheet and provides greater flexibility to address our working capital requirements as we grow the business."