28th Apr 2008 07:00
Tracsis PLC28 April 2008 28 April 2008 TRACSIS PLC ("Tracsis" or "the Company") Interim results for the six months ended 31 January 2008 Tracsis Plc (AIM: TRCS) the specialist provider of labour optimisation software,is today issuing interim results for the six month period to 31 January 2008. Key Points: • Successful placing and admission to AIM on 26 November 2007 raising £2 million. • Trading in line with expectations - revenue in the period of £271,000 (6 months ended January 2007: £257,000). • Operating profits in the period of £14,000 (6 months ended January 2007: £116,000) after including £89,000 of exceptional and associated costs relating to our admission to AIM. • New client wins include Virgin Rail Group, Cross Country and Southeastern Railway. • All existing clients retained for year including First Group buses, First Scotrail, National Express East Coast, Northern Rail, Southern Railway, Arriva Trains Wales and Translink, demonstrating a high level of under-contract recurring licence revenue. • Continued investment into product development and research activities, including additional TrainTRACS functionality for short-term planning optimisation to help our clients increase their operational capabilities. • Board strengthened by the addition of three Non-Executives. Chief Executive Officer John McArthur commented: "Tracsis has made good progress over the last six months. The business hasdelivered another period of growth whilst at the same time coming to market viaan AIM flotation. We have secured significant relationships with Virgin RailGroup, Cross Country, Southern Railway and Southeastern Railway which arefurther endorsements in our product suite from some of the largest operators inthe industry. Looking forward to our year end, we are in a good position todeliver continued growth and are in the favourable position of having completecustomer retention, high recurring revenue, and a strong balance sheet." Enquiries:Tracsis Plc Tel: 0845 125 9162John McArthur, Chief Executive Officer Nexus PR Tel: 0207 451 7050Nicholas Nelson Zeus Capital Tel: 0161 831 1512Bobby FletcherAlex Clarkson Notes to editors:Tracsis PLC is a provider of resource optimisation software to transportcompanies in the passenger rail and bus industries. Their product suite can beused to automate and optimise the process by which labour schedules are createdand allows for this activity to be done with greater speed and with a highdegree of efficiency over existing methods. Tracsis has contracts in place with some of the largest transport operatorsthroughout the UK and operates a revenue model that provides for a highpercentage of recurring revenue. The company's goal is to become a leadingprovider of operational planning software to global transport markets. Chairman's and Chief Executive Officer's report We are pleased to report our interim results for the six month period to 31January 2008. The period has been one of continued good progress, with growthand further penetration into our core transport markets. We continue to investin our TrainTRACS and BusTRACS products and are in the process of strengtheningsales and marketing channels. Tracsis has achieved a number of key milestones in the past period: - Secured contractual relationships with a further 3passenger train operating companies (TOCs) - Virgin Rail Group, New CrossCountry (Arriva) and Southeastern Railway (Govia). - Carried out extensive product development which allowsour software to be used for short term planning (STP) exercises within the railindustry. These enhancements significantly broaden the scope of our product andincrease the value of our software offering. - We continue to explore opportunities into new markets,such as fleet optimisation in the aviation market, where Tracsis software hasthe potential to generate substantial efficiencies for prospective clients. - Strengthened the board with the appointment of Rod Jonesas Chairman, and John Nelson and Charles Winward as Non Executive Directors.Rod is currently Chief Executive Officer of Proactis Holdings plc, an AIM quotedprovider of spend control software. John is Chairman of First ClassPartnerships; a strategic consultancy business which services the UK andInternational rail industries. Charles is an Investment Manager at IP Groupplc, a listed company specialising in the commercialisation of intellectualproperty from research institutions. Financial overview Revenues in the period increased to £271,000 from £257,000 for the same periodlast year. The operating profit for the period has reduced £14,000 incomparison to £116,000 for the six months ended 31 January 2007, afteradditional costs totalling £89,000, relating to flotation, AIM regulatory andIFRS2 share accounting costs. Spending was in-line with budget for the periodas the Company has maintained tight cost control. Taking into account the effect of these items, the profit generated from salesis comparable to the same period last year, and this has been achieved in spiteof some 3 months trading disruption during the IPO process. At 31 January 2008Tracsis had cash balances of £2.27 million (six months ended 31 January 2007:£379,000) and remains entirely debt free. Outlook The directors are grateful to our staff, management and customers for theircontinued support, without which our progress would not be possible. We welcomeour new Non-Executive Directors to the business and believe their combinedexperience will accelerate our growth in the future. Our investment into Tracsis, our products and our people positions the Companywell for further growth and continued shareholder value. Rod Jones John McArthurChairman Chief Executive Officer 28 April 2008 Condensed interim income statement - unauditedFor the six months ended 31 January 2008 Six months Six months Year ended ended ended 31 January 31 January 31 July 2008 2007 2007 Note £'000 £'000 £'000 Revenue 271 257 742Administrative expenses:- Normal (194) (141) (335)- Exceptional 4 (63) - - (257) (141) (335)Operating profit 14 116 407Financial income 18 7 15Profit before tax 32 123 422Taxation (13) (27) (92)Profit for the period 19 96 330 Earnings per share (pence)Basic 5 0.28p 187.2p 634.0pDiluted 5 0.26p 178.4p 604.7p All activities relate to continuing operations. The Company has recognised no gains or losses other than the profit for theyear. Condensed interim balance sheet - unauditedAs at 31 January 2008 As at As at As at 31 January 31 January 31 July 2008 2007 2007 £'000 £'000 £'000AssetsNon-current assetsProperty, plant and equipment 6 7 8Current assetsTrade and other receivables 265 163 164Income taxCash and cash equivalents 2,268 379 715Total current assets 2,533 542 879 Total assets 2,539 549 887 LiabilitiesNon-current liabilitiesDeferred tax 5 - 2Current liabilitiesTrade and other payables 74 71 149Current tax liabilities 100 72 90Total current liabilities 174 143 239 Total liabilities 179 143 241 Net assets 2,360 406 646 Capital and reserves attributableto equity holders of the companyShare capital 70 - -Share premium reserve 1,735 17 17Share-based payments reserve 16 - 5Retained losses 539 389 624Total equity 2,360 406 646 Statement of changes in equity - unauditedFor the six months ended 31 January 2008 Share based Retained Share Share payments (losses)/ capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000Balance at 1 August 2006 - - - 353 353Retained profit for the six month periodended 31 January 2007 - - - 96 96Shares issued in the period - 17 - - 17Equity dividend paid - - - (60) (60)Balance at 31 January 2007 - 17 - 389 406 Balance at 1 August 2006 - - - 353 353Retained profit for the year - - - 330 330Share option charge in the year - - 6 - 6Adjustment for options subsequentlyexercised - - (1) 1 -Shares issued in the year - 17 - - 17Equity dividend paid - - - (60) (60)Balance at 31 July 2007 - 17 5 624 646 Balance at 1 August 2007 - 17 5 624 646Retained profit for the six month periodended 31 January 2008 - - - 19 19Share option charge in the period - - 16 - 16Adjustment for options subsequentlyexercised - - (5) 5 -Shares issued in the period 70 1,718 - (49) 1,739Equity dividend paid - - - (60) (60)Balance at 31 January 2008 70 1,735 16 539 2,360 Condensed interim statement of cash flows - unauditedFor the six months ended 31 January 2008 Six months Six months Year ended ended ended 31 January 31 January 31 July 2008 2007 2007 £'000 £'000 £'000Cash flows from operationsProfit for the period 19 96 330Adjustments for:Interest received (18) (7) (15)Income tax charge 13 27 92Depreciation 2 1 3Share option expense 16 - 6Decrease/(increase) in trade and other receivables (101) 130 143(Decrease) in trade and other payables (75) (90) (11)Net cash from operating activities (144) 157 548Income tax paid - - (46)Net cash flows generated from/(used in) operating (144) 157 502activitiesCash flows used in investing activitiesInterest received 18 7 15Purchase of property, plant and equipment - (1) (4)Net cash flows generated from investing activities 18 6 11Cash flows from financing activitiesProceeds from issue of equity shares 1,739 17 3Equity dividends paid (60) (60) (60)Net cash flows generated from/(used in) financing 1,679 (43) (57)activitiesNet increase in cash and cash equivalents 1,553 120 456Cash and cash equivalents at start of period 715 259 259Cash and cash equivalents at end of period 2,268 379 715 Notes to the interim reportFor the six months ended 31 January 2008 1. Accounting Policies Basis of preparation From 1 August 2007, the Company has adopted International Financial ReportingStandards (IFRS) as adopted by the EU in the preparation of the financialstatements. Prior to this accounting period, the Company prepared its audited annualfinancial statements under UK Generally Accepted Accounting Principles (UKGAAP). For periods commencing 1 August 2007, the Company is required to prepareits annual financial statements in accordance with IFRS as adopted by theEuropean Union. As the financial statements for the year to 31 July 2008 willinclude comparatives for the year ended 31 July 2007, the Company's date oftransition to IFRS is 1 August 2006 and the comparatives will be restated toIFRS. Accordingly, the financial information for the six months to 31 January2007 has been restated to present the comparative information in accordance withIFRS based on a transition date of 1 August 2006. Note 5 of this interimfinancial information sets out how the Company's previous financial position isaffected by the change to IFRS. The financial information for the six months ended 31 January 2008 and 31January 2007 is unaudited. The financial information does not constitute thefinancial statements for that period within the meaning of Section 240 of theCompanies Act 1985. The comparative figures for the year ended 31 July 2007were derived from the Company's audited financial statements for that period asfiled with the Registrar of Companies as restated for IFRS. Those accountsreceived an unqualified audit report which does not contain any statement unders237 (2) or (3) of the Companies Act 1985. Statement of compliance These condensed interim financial statements have been prepared in accordancewith International Financial Reporting Standard (IFRS) IAS 34, Interim FinancialReporting. They do not include all of the information required for full annualfinancial statements, and should be read in conjunction with the financialstatements of the Company as at and for the year ended 31 July 2007. These condensed interim financial statements were approved by the Board ofDirectors on 28 April 2008. The financial information has been neither audited nor reviewed pursuant toguidance issued by the Auditing Practices Board. Changes in Accounting Policies (a) Standards, interpretations and amendments to published standardseffective in 2007 but which are not relevant to the Company The following standards, amendments and interpretations to published standardsare mandatory for accounting periods beginning on or after 1 January 2007 butare currently not relevant to the Company's operations: - IFRIC 7, Applying the restatement approach under IAS 29, FinancialReporting in Hyperinflationary Economies (b) Standards, amendments and interpretations to published standardsnot yet effective Certain new standards, amendments and interpretations to existing standards havethe published that are mandatory for the Company's accounting periods beginningon or after 1 January 2008 or later periods and which the Company has decidednot to adopt early. These are: - International Accounting Standard 1 Presentation of FinancialStatements (IAS 1) (effective for accounting periods beginning or after 1January 2009, yet to be endorsed by the EU) replaces IAS 1 Presentation ofFinancial Statements (revised in 2003) as amended in 2005. - Amendments to IAS 32 Financial Instruments: Presentation and IAS 1Presentation of Financial Statements -Puttable Financial Instruments andObligations Arising on Liquidation (Effective for annual periods beginning on 1January 2009, with earlier application permitted (yet to be endorsed by the EU). - IAS 23, Borrowing Costs (revised) (effective for accounting periodsbeginning on or after 1 January 2009) - IFRIC 11, IFRS 2 - Group and Treasury Share Transactions (effectivefor accounting periods beginning on or after 1 March 2007) - IFRIC 12, Service Concession Arrangements (effective for accountingperiods beginning on or after 1 January 2008) - IFRIC 13, Customer Loyalty Programmes (effective for accountingperiods beginning on or after 1 July 2008) - IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, MinimumFunding Requirements and their Interaction (effective for accounting periodsbeginning on or after 1 January 2008). - Amendment to IFRS 2, Share-based payments: vesting conditions andcancellations (effective for accounting periods beginning on or after 1 January2009). Revenue Revenue is measured at the fair value of the consideration received orreceivable (excluding value added tax) derived from the provision of goods andservices to customers during the period. The Company derives revenue fromsoftware licences, post contract customer support and consultancy services. The Company recognises the revenue from the sale of software licences andspecified upgrades upon shipment of the software product or upgrade, when thereare no significant vendor obligations remaining, when the fee is fixed anddeterminable and when collectability is considered probable. Where appropriatethe Company provides a reserve for estimated returns under the standardacceptance terms at the time the revenue is recognised. Payment terms areagreed separately with each customer. Revenue from post contract customer support and consultancy services isrecognised on a straight line basis over the term of the contract. Revenuereceived and not recognised in the profit and loss account under this policy isclassified as deferred income in the balance sheet. Other products and services - Revenue allocable to other products and servicesis recognised as the products are shipped, or services are provided. Segment reporting A business segment is a distinguishable component of an enterprise that isengaged in providing an individual product or service or a group of relatedproducts or services and that is subject to risks and returns that are differentfrom those of other business segments. A geographical segment is adistinguishable component of an enterprise that is engaged in providing productsor services within a particular economic environment and that is subject torisks and returns that are different from those of components operating in othereconomic environments. Financial assets The Company classifies its financial assets into one of the categories discussedbelow, depending on the purpose for which the asset was acquired. The Companyhas not classified any of its financial assets as held to maturity. TheCompany's accounting policy for each category is a follows: Fair value through profit or loss: The Company does not currently have anyderivative financial instruments. Loans and receivables: These assets are non-derivative financial assets withfixed or determinable payments that are not quoted in an active market. Theyarise principally through the provision of goods and services to customers (e.g.trade receivables), but also incorporate other types of contractual monetaryasset. They are initially recognised at fair value plus transaction costs thatare directly attributable to their acquisition or issue, and are subsequentlycarried at amortised cost using the effective interest rate method, lessprovision for impairment. Impairment provisions are recognised when there is objective evidence (such assignificant financial difficulties on the part of the counterparty or default orsignificant delay in payment) that the Company will be unable to collect all ofthe amounts due under the terms receivable, the amount of such a provision beingthe difference between the net carrying amount and the present value of thefuture expected cash flows associated with the impaired receivable. For tradereceivables, which are reported net, such provisions are recorded in a separateallowance account with the loss being recognised within administrative expensesin the income statement. On confirmation that the trade receivable will not becollectible, the gross carrying value of the asset is written off against theassociated provision. The Company's loans and receivables comprise trade and other receivables andcash and cash equivalents in the balance sheet. Cash and cash equivalents includes cash in hand, deposits held at call withbanks, other short term highly liquid investments with original maturities orthree months or less. Financial liabilities The Company classes its financial liabilities into different categories,depending on the purpose for which the asset was acquired. The Company'saccounting policies for each relevant category is as follows: Fair value through profit or loss: The Company does not currently have anyderivative financial instruments. Other financial liabilities: Other financial liabilities include the followingitems: Trade payables and other short term monetary liabilities, which are recognisedat fair value. Share capital Financial instruments issued by the Company are treated as equity only to theextent that they do not meet the definition of a financial liability. TheCompany's ordinary shares are classified as equity instruments, net of issuecosts. Retirement benefits: Defined Contribution Schemes Contributions to defined contribution pension schemes are charged to the incomestatement in the year to which they relate. Share-based payments The Company has applied the requirements of IFRS 2 Share-based payments. Inaccordance with the transitional provisions, IFRS 2 has been applied to allgrants of equity instruments that were unvested as of 1 August 2006. Where equity settled share options are awarded to employees, the fair value ofthe options at the date of grant is charged to the income statement over thevesting period. Non-market vesting conditions are taken into account byadjusting the number of equity instruments expected to vest at each balancesheet date so that, ultimately, the cumulative amount recognised over thevesting period is based on the number of options that eventually vest. Marketvesting conditions are factored into the fair value of the options granted. Aslong as all other vesting conditions are satisfied, a charge is madeirrespective of whether the market vesting conditions are satisfied. Thecumulative expense is not adjusted for failure to achieve a market vestingcondition. Where the terms and conditions of options are modified before they vest, theincrease in the fair value of the options, measured immediately before and afterthe modification, is also charged to the income statement over the remainingvesting period. Where equity instruments are granted to persons other than employees, the incomestatement is charged with the fair value of goods and services received. Leased assets Where substantially all of the risks and rewards incidental to ownership of aleased asset have been transferred to the Company (a "finance lease"), the assetis treated as if it had been purchased outright. The amount initiallyrecognised as an asset is the lower of the fair value of the leased property andthe present value of the minimum lease payments payable over the term of thelease. The corresponding lease commitment is shown as a liability. The leasepayments are analysed between capital and interest. The interest element ischarged to the income statement over the period of the lease and is calculatedso that it represents a constant proportion of the lease liability. The capitalelement reduces the balance owed to the lessor. Where substantially all of the risks and rewards incidental to ownership are nottransferred to the Company (an "operating lease"), the total rentals payableunder the lease are charged to the income statement on a straight line basisover the lease term. The aggregate benefit of lease incentives is recognised asa reduction of the rental expense over the lease term on a straight line basis. The land and buildings element of property leases are considered separately forthe purposes of lease classification. Internally Generated Intangible Assets (Research and Development Costs) Expenditure on internally developed products is capitalised if it can bedemonstrated that: • it is technically feasible to develop the product for it to be sold;• adequate resources are available to complete the development;• there is an intention to complete and sell the product;• the Company is able to sell the product;• sale of the product will generate future economic benefits; and• expenditure on the project can be measured reliably. Capitalised development costs are amortised over the periods the Company expectsto benefit from selling the products developed. The amortisation expense isincluded within the administrative expenses line in the income statement. Development expenditure not satisfying the above criteria and expenditure on theresearch phase of internal projects are recognised in the income statement asincurred. Taxation The tax expense represents the sum of the tax currently payable and deferredtax. The tax currently payable is based on taxable profit for the year. Taxableprofit differs from net profit as reported in the income statement because itexcludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. TheCompany's liability for current tax is calculated using tax rates that have beenenacted at the balance sheet date. Deferred tax is provided in full, using the liability method, on temporarydifferences arising between the tax bases of assets and liabilities and theircarrying value in the financial statements. The principal temporary differences arise from depreciation on plant andequipment, tax losses carried forward and share options granted by the Companyto employees and directors. Deferred tax assets and liabilities are measured on an undiscounted basis at thetax rates that are expected to apply when the related asset is realised orliability is settled, based on tax rates and laws enacted or substantivelyenacted at the balance sheet date. Deferred tax assets are recognised to the extent that it is probable that futuretaxable profit will be available against which the temporary differences can beutilised. Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. Aswell as the purchase price, cost includes directly attributable costs and theestimated present value of any future unavoidable costs of dismantling andremoving items. The corresponding liability is recognised within provisions. Items of property, plant and equipment are carried at depreciated cost. Depreciation is provided on all items of property, plant and equipment so as towrite off the carrying value of items over their expected useful economic lives.It is applied at the following rates: Plant and equipment - 33% on cost Impairment of non current assets Where an indication of impairment is identified, the recoverable amount of theasset is estimated in order to determine the extent of the impairment loss (ifany). If the recoverable amount (higher of fair value less costs to sell andvalue in use of an asset) is estimated to be less than its carrying amount, thecarrying amount of the asset is reduced to its recoverable amount. Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liabilityin the Company's financial statements in the period in which the dividends areapproved by the Company's shareholders, or in the case of interim dividends,when paid. 2. Critical Accounting Estimates and Judgements The Company makes certain estimates and assumptions regarding the future.Estimates and judgements are continually evaluated based on historicalexperience and other factors, including expectations of future events that arebelieved to be reasonable under the circumstances. In the future, actualexperience may differ from these estimates and assumptions. The estimates andassumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities within the next financial year arediscussed below. Share-based payments The Company has equity settled share-based remuneration schemes for employees.The fair value of share options is estimated by using the Black-Scholesvaluation model, on the date of grant based on certain assumptions. Theseassumptions include, among others, expected volatility, expected life of theoptions and number of options expected to vest. 3. Segmental information Primary format - business segment In the opinion of the directors, the Company has one business segment, being thesale of resource optimisation software that assists with automating andoptimising the process of labour scheduling within the transport industry Secondary format - geographic segment The Company operates in the United Kingdom only and thus has only one geographicsegment. 4. Exceptional items During the period the company has incurred exceptional legal and professionalfees of £63,000 in respect of the Company's admission to AIM. 5. Earnings per share The calculation of basic and diluted loss per share is based upon the loss aftertax divided by the weighted average number of shares in issue during the period. Profit after Weighted tax average number EPS £'000 of shares (pence)Basic earnings per share6 months ended 31 January 2008 19 6,718,314 0.28p6 months ended 31 January 2007 96 51,288 187.20p12 months ended 31 July 2007 330 52,050 634.00p Diluted earnings per share6 months ended 31 January 2008 19 7,243,418 0.26p6 months ended 31 January 2007 96 53,813 178.40p12 months ended 31 July 2007 330 54,575 604.70p The following calculation illustrates earnings per share ("EPS") post Admission,taking account of the revised issued share capital immediately upon Admission.It has also been assumed that the share capital has remained constant at17,503,450 shares throughout the calculation period. Profit after Weighted tax average number EPS £'000 of shares (pence)Basic earnings per share - Pro forma6 months ended 31 January 2008 19 17,503,450 0.11p6 months ended 31 January 2007 96 17,503,450 0.55p12 months ended 31 July 2007 330 17,503,450 1.89p Diluted earnings per share - Pro forma6 months ended 31 January 2008 19 18,028,554 0.11p6 months ended 31 January 2007 96 18,028,554 0.53p12 months ended 31 July 2007 330 18,028,554 1.83p At 31 January 2008, there were 525,104 share options granted but not yetexercised. 6. Explanation of transition to IFRS The Company's financial statements for the year ending 31 July 2008 will be thefirst financial statements that comply with International Financial ReportingStandards (IFRS). The Company's financial statements prior to and including 31July 2007 had been prepared in accordance with Generally Accepted AccountingPrinciples in the United Kingdom (UK GAAP). As required by IFRS 1, the impact of the transition from UK GAAP to IFRS isexplained below. The accounting policies set out above have been appliedconsistently to all periods presented in this interim financial information andin preparing an opening IFRS balance sheet at 1 August 2006 for the purposes oftransition to IFRS. IAS 1 - Presentation of Financial Statements. The form and presentation in theUK GAAP financial statements has been changed to be in compliance with IAS 1.There are no adjustments arising from the transition to IFRS and therefore thereis no impact on the reported Income Statement or Balance Sheet. Consequently,no reconciliation between IFRS and UK GAAP has been provided. IAS 7 - Cash Flow Statements. The IFRS Cash Flow Statement, prepared under IAS7, presents cash flows in three categories: cash flows from operatingactivities, cash flows from investing activities and cash flows from financingactivities. Other than the reclassification of cash flow into the newdisclosure categories, there are no significant differences between theCompany's Cash Flow Statement under UK GAAP and IFRS. Consequently, no cashflow reconciliations are provided. Purchases of tangible fixed assets under UKGAAP have been reclassified to purchases of property, plant and equipment underIFRS. Company information Directors JC McArthur (Chief Executive Officer) R Kwan (Chief Technical Officer) JD Bamforth (Chief Financial Officer) RD Jones (Non-Executive Director) JG Nelson (Non-Executive Director) CS Winward (Non-Executive Director) Secretary JD Bamforth Registered Office Leeds Innovation Centre 103 Clarendon Road Leeds LS2 9DF Companyregistration number 05019106 Nominated Advisors Zeus Capital LimitedAnd Broker 3 Ralli Courts West Riverside Manchester M3 5FT Auditors HW Chartered Accountants Bridge House Ashley Road Hale Altrincham Cheshire WA14 2UT Solicitors Rosenblatt Solicitors 9-13 St Andrew Street London EC4A 3AF Principal bankers HSBC Bank plc City Branch 33 Park Row Leeds LS1 1LD Registrars Neville Registrars 18 Laurel Lane Halesowen West Midlands B63 3DA This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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