24th Oct 2013 13:39
LONDON (Alliance News) - Shares in Tracsis PLC declined Thursday after it posted lower pretax profits despite increases in revenues for the full year ended July 31.
Shares in Tracsis were trading down 7.9% at 188.00 pence Thursday afternoon.
The transportation software and technology company posted a pretax profit of GBP2.6 million, down from GBP3.0 million the previous year, due to high share-based payment charges in relation to the company's long-term incentive plan and one-off exceptional costs in relation to its April acquisition of traffic survey firm Sky High.
Revenues grew to GBP10.8 million from GBP8.7 million, with GBP3.2 million generated by acquisitions and GBP7.6 coming from continuing operations.
Revenues from continuing operations were hit by issues with UK rail franchising in the last year that have since been resolved. "Last year, the West Coast main line was awarded initially to First Group and then Virgin, who were the incumbent owners, lodged a complaint," Chief Executive Officer John McArthur told Alliance News. "It turned out the bids hadn't been measured on the same basis and that caused an awful lot of problems within the transport industry because effectively the Government put a freeze on the re-franchising process."
"The knock on effects had a wild scale," McArthur said, "that whole issue has now resolved."
Now that the Government's unfrozen that situation it has unlocked opportunities for companies like Tracsis. "That problem had actually given rise to a huge opportunity going forward," said McArthur, "Now there's a huge backlog of railway franchising to be done in the next five years."
The other issue is that, last year, Tracsis came off contract for its remote condition monitoring technology. Since the end of the full year, the company has since renewed and extended an existing agreement for another five years.
"Because we were out of contract last year that did lead to a small drop in volumes," said McArthur.
The company's acquisition of Sky High offers Tracsis a route into Australia, but the company is also looking to expand into the US and Europe. As for Sky High, the company expects the company to contribute around GBP8 million in its first full financial year.
The company posted a final dividend of 0.4 pence per share, bringing total payment for the year to 0.7 pence, an increase of 27% from 0.55 pence in the previous year.
Director Raymond Kwan resigned in January, and Chairman Rodney Jones stepped down in June. The company said it is currently in the process of replacing them.
"This has been a further year of growth for the group, which included the acquisition of Sky High," said Chief Executive Officer John McArthur in a statement. "As an acquisitive business, we continue to evaluate opportunities that would fit the group whilst also driving organic growth."
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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