Further positive trading update – Tracsis Plc is a leading provider of software and technology led products and services within the transportation industry, traffic and pedestrian rich environments is pleased to provide an update on current trading and developments across the Group.
Acquisition of Sky High plc (“Sky High”)
Integration of Sky High is underway and progressing well. The acquisition was incorporated into the wider Group’s trading as of 17 April 2013. The elimination of surplus PLC related overheads combined with other immediate synergies has enabled both cost savings and performance improvements. This has led to an enhanced operating margin for Sky High and management expectation is that the newly acquired business will make a good contribution to the Group’s overall performance for the period to 31 July 2013.
Condition Monitoring
This area of the business has performed extremely well during the current financial year, and has secured strong orders from outside of the framework agreement.
The Group is currently involved in negotiations with a major customer to continue the next phase of a significant Framework Agreement for its condition monitoring technology. The timing of the prospective contract extension indicates that potential major orders for the Group are expected in late 2013 or early 2014, assuming successful renewal. A further update will be provided in due course.
Rail market at large
The Group welcomes the recent developments within the rail industry regarding the lifting of the embargo on UK rail re-franchising. A new franchise bidding timetable has been released by the Department of Transport and this presents a very busy period of work for the entire industry which will commence imminently. Tracsis has entered into a long term agreement with one of the major operating Groups for retention of its consultancy and software services, and expects to work with most of the other bidders in varying capacities. Looking ahead, the next few years should be a period of stability in the consultancy and software offering and allow the Group to invest in a broader range of products and services.
Outlook
The Group is pleased to announce that revenues for the year ending 31 July 2013 are forecast to be in excess of £10m and underlying profits are in line with previous market expectations.
Following the acquisition of Sky High, the Group’s cash position is c. £6m. Tracsis continues to aggressively manage costs and has maintained a prudent approach to how it undertakes investment decisions. The business remains debt free, actively manages cash reserves and remains committed to a strategy of delivering shareholder value through a combination of acquisitive and organic growth.
John McArthur, Chief Executive Officer commented:
“The progress made since the acquisition of Sky High has been very pleasing and we are excited by the opportunities presented to us in the new markets using technology and services familiar to us.
“We look forward to updating the market in due course on further developments, and in concurrence with the positive industry indicators, we will work to drive further shareholder value through organic growth and acquisition.”
