17th Mar 2014 15:11
LONDON (Alliance News) - Tracsis PLC Monday said it expects its full-year results to exceed current market forecasts, as it saw pretax profit rise in the half year ended January 31, boosted by its acquisition of Sky High Technology Ltd.
Tracsis provides software and services for the passenger rail and bus services in the transport industry.
The company raised its interim dividend by 17% to 0.35 pence from 0.30 pence, and added that it was committed to following its progressive dividend policy.
It posted a pretax profit of GBP2.3 million in the half, up from GBP1.7 million in the previous year, as revenue rose to GBP9.8 million from GBP4.7 million, boosted by the company's acquisition of Sky High.
Transport industry services provider Sky High, which Tracsis acquired in April 2013, boosted revenues in its data capture and passenger counting business to GBP5.4 million from GBP523,000 in the previous year.
In Tracsis's track-condition monitoring technology division, the company secured a five-year framework agreement extension with its largest customer, under which a GBP2.2 million initial order was received, although revenues were down from the previous year due to the timing of orders received and renegotiations with the customer. It expects revenues in this division to be stronger in the second half.
Although the heavy storms and flooding in the UK at the start of the year did not specifically boost Tracsis' sales, it may result in a higher profile for the company's track-condition monitoring technology.
"There's a far bigger awareness of damage of faults that might effect the track," Chief Executive John McArthur told Alliance News. "Bad weather can also lead to slippages of embankments, where you've got hillsides are close to tracks, and one of the areas that there's questions about is whether or not we can monitor movement in non-track assets. If the land around the track starts moving or subsiding, Network Rail wants to know about that because that's will be the precursor to the track being damaged."
Tracsis expressed confidence in beating expectations for the full year, as its second half had started well. The company said that it was evaluating a "number of exciting opportunities", and looking to accelerate its overseas strategy in 2014.
"The focus over the next twelve months will be Australia and the US," McArthur said. "I think the US is the exciting bit because of the pilot we've got going on there."
"The economic climate in Australia is still six to twelve months behind the UK, but moving in there has been relatively straightforward," McArthur said.
In terms of the rest of the financial year, MacArthur said that a key challenge will be looking at potential acquisitions.
"The challenges for us are finding good businesses to come together with. We've done five in five years which is great. We've got a growing cash-pile which is a nice problem to have, but we want to put that cash pile to use," MacArthur said.
"The challenge for me and the Finance Director is to utilise that cash. Part of it will go on product development and growing the team, but the bulk of that money is there to find new businesses," he said, adding: "Our criteria is quite specific, to make the shortlist, the bar is actually quite high."
Shares in Tracsis were trading up 9.2% at 260.39 pence Monday afternoon.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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