8th Jul 2019 10:02
(Alliance News) - Trakm8 Holdings PLC on Monday sunk to a pretax loss for financial 2019 due to a sharp drop in revenue.
Shares in the company, which provides fleet tracking services and dashboard camera systems, plummeted 22% in morning trade to 17.45 pence each.
In the 12 months to March 31, Trakm8 recorded a pretax loss of GBP3.6 million compared with GBP500,000 profit the year before.
Trakm8's revenue fell 35% year-on-year to GBP19.1 million from GBP29.4 million. The company blamed "sales related challenges" and contract delays for "significantly" hurting revenue.
"Financial 2019 was a disappointing year in terms of financial results. We failed to meet our revenue, profit and cash generation expectations due to a number of sales related events," said Executive Chair John Watkins. "Our largest customer had a significant reduction in market share in the young driver insurance market reducing revenues and installed base. We had expected reductions due to lower prices at the customer when the contract had been renewed early in the year but this only compounded the loss of the reduced volume."
Watkins said the company expected the volume from new insurance customers to make a "material difference" to its second half, but delays in their programmes "significantly" hit revenue.
He continued: "The delays in programme launch of the connected car proposition by breakdown companies was unexpected and substantially impacted revenues particularly in the second half. The Fleet Management sales team simply failed to win enough business to meet our expectations. Change was needed and the replacement with new resources started to make a significant difference in the final quarter of the year but it was too little, too late."
Looking forward, Trakm8 said it is being "prudent" with its outlook. The company pointed to market expectations of a "relatively modest recovery" of about low double digit growth in revenue with a "small" adjusted profit.
Trakm8 said it has started the new financial year with new contract awards from two further insurance companies and is already seeing revenue from the deals. The company said the new contract wins are expected to "strongly impact" the second half.
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